Benefit Cost Analysis

For all construction-oriented projects (e.g., structural flood improvements, elevations, and buyouts) to be eligible for FIF funding, both the costs and the benefits of proposed projects must be quantified and reported – that is, a Benefit Cost Analysis (BCA). The benefits may include a variety of items including, but not limited to, property losses avoided, risk of injuries or fatalities prevented, and economic disruption or environmental losses avoided.

A Benefit/Cost Ratio (BCR) is the result of a BCA. A BCR must be reported as a number with at least one decimal place (e.g., “1.1”). A BCR greater than or equal to 1.0 is generally preferred to justify investments in the construction of flood projects. If the reported BCR for the proposed project is less than 1.0, the applicant must provide a detailed explanation for why the applicant considers the project to be justified, including a discussion of the primary benefits of the project, if any, that could not be quantified and were therefore not included in the BCR calculation. As currently drafted in the SFY 2024-2025 FIF Intended Use Plan, BCRs are not required to be provided for the following FIF funded project types:

  • Flood Management Evaluations (FME) Category (Formerly Category 1)
  • Flood Management Strategies (FMS) Category (Formerly Category 4)
  • Federal Award Matching Funds if the following are true:
    • If a project has an associated BCA developed and reviewed for a federal award. Verification of the prior BCA approval is required.
    • When a federal grant program generally requires a BCA, but specifically exempts it for certain projects (e.g., projects with lesser costs or non-construction projects), then the TWDB will also not require a BCA for FIF consideration. However, the TWDB will require a BCA if the proposed project is construction-oriented.

BCA Tools

There are no specific BCA tools that must be used in determining the BCR. Free BCA tools that can be utilized include the following:

BCA Guidance

BCA Contact

For questions on BCA, please send an email to TWDBBCA@twdb.texas.gov and FIF@twdb.texas.gov.

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