Aggregation of benefits is when the benefits and costs of two or more individual structures or project components (referred to as mitigation actions in the BCA Toolkit) are strategically combined to create an average or composite BCR for a mitigation project overall. This approach allows individual structures or project components that are not cost-effective on a stand-alone basis to borrow excess benefits from cost-effective project elements or structures. Aggregation of benefits aims for optimal risk reduction while retaining project cost-effectiveness with an average BCR greater than or equal to 1.0.
An evaluation of the cost-effectiveness of a project should include all mitigation activities contained in the project application’s scope of work. This may include various activities in multiple jurisdictions. It may also include combining benefits derived from mitigation activities associated with multiple hazards, such as wind and flood, if part of the same project. Aggregation of benefits must occur within the same HMA program and within a single subapplication (i.e., a subapplication is typically composed of multiple properties or sites and/or project types).
It is appropriate to aggregate benefits when the projects and groups within them are related in some aspect, and the project’s BCR will be greater than or equal to 1.0 because of aggregating benefits. Based on these criteria, many HMA projects could gain an advantage through the aggregation of benefits, although some project types, such as the aggregation of benefits in property acquisition and structure demolition projects, present more obvious opportunities than others. If the overall BCR of an aggregated project is greater than or equal to 1.0, the project is deemed cost-effective and meets the regulatory requirements under the Robert T. Stafford Disaster Relief and Emergency Assistance Act.[188]
The purpose of the aggregation of benefits is to increase the number of cost-effective mitigation projects to maximize risk reduction in hazard-vulnerable communities. HMA encourages the consideration of aggregating benefits, as aggregation allows applicants and subapplicants to mitigate a greater number of structures or a larger area of the community than if each structure or project component were analyzed separately. In other words, aggregation of benefits expands opportunities for cost-effective mitigation by efficiently distributing all existing project benefits and not leaving potential benefits on the table.
Aggregation of benefits can be implemented across jurisdictional boundaries such as county lines, state lines and watershed boundaries. Aggregation of benefits can also take place across different project types, such as aggregation of benefits for a project combining structure elevation and wind retrofit, or flood and seismic retrofits. While aggregation of benefits across multiple hazards is less common, this form of aggregation is allowable if the BCA is deemed cost-effective. Applicants and subapplicants must maintain complete documentation for each structure included in the aggregation.
While undertaking aggregation of benefits is highly encouraged, there is a potential for increased administrative oversight and project management as projects increase in complexity and geographic extent. This complexity may be further increased when working across jurisdictional boundaries or project types.
Applicants and subapplicants may use project scoping/advance assistance, management costs or technical assistance funding to help address administrative and project management challenges. The FEMA BCA Helpline can also provide support and guidance with questions regarding the aggregation of benefits.
D.1.1. Aggregation Of Pre-Calculated Benefits – Multiple Properties Within A Subapplication
Subapplications may include multiple properties that use different approaches to demonstrating cost-effectiveness. Using a hybrid approach, the subapplicant may choose a subset of properties to which to apply pre-calculated benefits. The average cost of these properties must be below the designated pre-calculated benefit amount. The subapplicant would then analyze the remaining properties using the BCA Toolkit (or other FEMA-approved methodology), and the project costs and benefits for this subset would be aggregated to develop a composite BCR, which must be greater than or equal to 1.0. The application of excess benefits from the pre-calculated structures cannot be applied to the structure(s) being analyzed with the BCA Toolkit or any other FEMA-approved method.