Green Infrastructure CAC Meeting Business Case for Don Mills Channel Flood Control Infrastructure
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Presentation on the application of Cost Benefit Analysis to water resources engineering projects, including for municipal flood control as part of Municipal Class Environmental Assessment infrastructure projects and city-wide programs. Evaluation of green infrastructure (Low Impact Development (LID)) capital costs and grey infrastructure costs.
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Green Infrastructure CAC Meeting Business Case for Don Mills Channel Flood Control Infrastructure
- 1. Green Infrastructure CAC Meeting Business Case for Don Mills Channel Flood Control Infrastructure Robert J. Muir, M.A.Sc., P.Eng. Manager, Stormwater, City of Markham September 27, 2019 - Toronto, Ontario 1
- 2. OUTLINE 1) Infrastructure Cost Policies 2) History of Cost-Benefit Analysis 3) Research Gaps and National Guidelines 4) Green Infrastructure Costs 5) Markham Case Study – Don Mills Channel Flood Control 2
- 3. Provincial Policy Statement (2014): “Infrastructure … shall be provided in a coordinated, efficient and cost-effective manner ….” Infrastructure for Jobs and Prosperity Act (2015) O. Reg. 588/17 (2017) : Asset management plans must show “For each asset category, the lifecycle activities that would need to be undertaken … and the costs of providing those activities.” These activities must also consider “the lowest cost to maintain the current levels of service” Class Environmental Assessments (2015): For wastewater projects “Economic Environment includes commercial and industrial land uses and activities. It also includes the financial costs associated with the alternatives, including construction, operation, maintenance, and property costs.” Regulating Infrastructure Cost in Ontario 3 Provincial Policy Statement 2014 Infr. for Jobs and Prosperity O Reg 588/17 Municipal Class EAs
- 4. History of Cost-Benefit Analysis (CBA) 4 • Long-standing requirement to evaluate feasibility of flood reduction projects: Eckstein 1958: “Feasibility is interpreted to mean that ‘the benefits, to whomever they may accrue, are in excess if the estimated costs’, following a requirement specified in the Flood Control Act of 1936.” Watt 1989: “It is therefore reasonable to require that all projects that provide or improve flood protection be justified economically before public funds are allocated” “benefits should exceed cost by a sufficient margin” https://files.onhttps://nparc.nrc-cnrc.gc.ca/eng/view/accepted/?id=7b18d8c9-6c5f-425f-8338-ac4a24f8170bario.ca/infrastructure_update_2017-_eng_0.pdf Watt 1984:
- 5. Made-in-Ontario Environment Plan • “This plan will ensure we balance a healthy environment with a healthy economy.” • Highlights frustration of taxpayers who see “hard-earned tax-dollars being put towards policies and programs that don’t deliver results”. 5 https://prod-environmental-registry.s3.amazonaws.com/2018-11/EnvironmentPlan.pdf Ontario Environment Plan:
- 6. 6 National Research Council Guidelines • NRC is developing Guidelines on Undertaking a Comprehensive Analysis of Benefits, Costs and Uncertainties of Storm Drainage Infrastructure in a Changing Climate https://drive.google.com/open?id=1W8CT2iEs-vdE-KhT87B441k8ciQZ13SL National Research Council Guidelines Scope of Work :
- 7. Green Infrastructure Capital Cost Review • Costs from various sources (1200+ projects) confirmed magnitude of costs needed for High (flood & CSO control) and Low (watershed) control. 7 https://www.cityfloodmap.com/2018/05/are-lids-financially-sustainable-in.html https://www.cityfloodmap.com/2018/07/green-infrastructure-capital-and.html Ontario & Alberta Tenders, Philadelphia 2018, EPA Summary : Philadelphia Clean Waters, NY Costs : Ontario & Alberta Tenders Philadelphia Clean Waters / SWM Program New York State $581,000 per ha $783,000 per imp. ha $857,000 per ha EPA BMP Database $208,000 per ha High 38.9 mm Low 6.6 mm
- 8. Intact Centre on Climate Adaptation Weathering the Storm: Developing a Canadian Standard for Flood- Resilient Existing Communities Insurance Bureau of Canada Combatting Canada’s Rising Flood Costs: Natural Infrastructure is an underutilized option Natalia Moudrak Dr.Blai r Feltmate Some Research Overstates Benefits, Incomplete on Costs • Cites ‘meta-analysis’ benefits as real “Performance monitoring results” for flood damage reduction (e.g., Pelly’s Lake wetland case study). • Omits cost-effectiveness of the recommended measures: “cost rankings are not normalized with consideration of performance effectiveness” • However Press Release promotes “solutions that can be deployed practically and cost-effectively within communities” 8 https://goo.gl/Y3vWzx ICCA Weathering the Storm Report Review: https://goo.gl/iCFoyS IBC Report Review STORM WARTS:
- 9. Intact Centre on Climate Adaptation Weathering the Storm: Developing a Canadian Standard for Flood- Resilient Existing Communities Insurance Bureau of Canada Combatting Canada’s Rising Flood Costs: Natural Infrastructure is an underutilized option Natalia Moudrak Dr.Blai r Feltmate Some Research Overstates Costs (Flood Damages) & Risks • Average flooded basement cost overstated based on actual claim data. • Frequency of extreme 100- year storms overstated based on Environment and Climate Change Canada Engineering Climate Datasets observations. 9 http://bit.ly/2lxUYzK http://bit.ly/2lsWWBg CBC Ombudsman Review of 100 Year Storm Frequency: Flooded Basement Cost Review CBC Ombudsman (Sept. 2019):
- 10. Intact Centre on Climate Adaptation Weathering the Storm: Developing a Canadian Standard for Flood- Resilient Existing Communities Insurance Bureau of Canada Combatting Canada’s Rising Flood Costs: Natural Infrastructure is an underutilized option Reconciling Assessments of Flood Reduction Benefits • NRC guideline research suggests expected annual flood damages as: – $695 - 819 M in Canada – $262 - 289 M in Ontario – $6.4 – 7.1 M in Markham • Don Mills Channel estimated annual damages – $1.7 M • Niagara Escarpment “vegetation structure providing storm protection and flood control”: – $314 M (9-19% above total Ontario flood damages) 10 http://bit.ly/2kMDpeZ Don Mills Class EA Report : http://bit.ly/2lZ5q2Z Natural Capital:
- 12. Don Mills Channel Estimated Extent of Flooding – August 2005 Storm 12 Shallow Deep
- 15. Preferred: Central Storage (incl. Property Acquisition) & Culvert Upgrades 15 Average Annual Damages Decrease from $1.7M to $0.2 M ($1.6M Annual Benefit)
- 16. Alternative Evaluation - Financial • Class EA process requires assessment of costs, no formal cost-benefit analysis. • ESR identified for each alternative annual: – Costs: capital and long-term O&M – Benefits: deferred flood damages • Payback periods to recover cost varied used to rank alternative cost-effectiveness: – Central storage 28 years – Distributed storage (LID) 87 years – Property acquisition 208 years • Disaster Mitigation Adaptation Fund Return on Investment assessment of preferred: – Benefit / Cost = 2.8 (insured only) 16 0 50 100 150 200 250 Payback Period (Years) http://bit.ly/2nzQOI1 Class EA Study:
- 17. 1 10 100 1000 10000 Downspout Program. Backwater Valve Pgm. Sanitary Upgrades Storm Upgrades Green Infr. Retrofit Option Markham Flood Control Program Benefit / Cost Analysis Cost ($M) $3 M $1300/ha $27 M $11,000/ha $253 M $120,000/ha $1.7 B $726,000/ha http://bit.ly/2m7r5GF Flood Control Cost / Benefit Analysis for Grey & Green Options (WEAO 2019) : 17 Flood Control Benefit/Cost = 2.52 Flood Control Benefit/Cost = 0.02
- 18. Accounting for Triple Bottom Line Benefits • Assessed qualitatively in the Don Mills Channel Class EA study – Environmental benefits of floodplain restoration not quantified or monetized • City-wide cost-benefit analysis of conventional and green options considered (WEAO 2019) monetized benefits including: – Flood control benefits (improving accuracy with claim data) – Watercourse erosion repair prevention (small value) – Willingness-to-pay for water quality improvements (high uncertainty) 18
- 19. Conclusions • Cost-benefit analysis for infrastructure investments is making a comeback (mandatory for disaster mitigation grant applications (DMAF)). • NRC’s upcoming cost-benefit guidelines can support more consistent & thorough cost-benefit analyses, improving reliability & decision making. • Markham projects and programs evaluate grey and alternative green infrastructure strategies and show: – Central storage/wetland facility preferred in Don Mills Channel – City-wide Flood Control Program (extensive grey infrastructure projects, strategic green projects) is cost-effective with benefits more than double the costs. – Benefits for green infrastructure warrant study of willingness to pay for quality improvements given low benefit/cost ratios. 19
- 20. Thank You Questions ? More Rob : Blog: www.CityFloodMap.com Podcast: Open During Construction on iTunes Twitter: @RobertMuir_PEng More City of Markham : Web: www.markham.ca Twitter: @CityofMarkham 20
Editor's Notes
- Let’s start by reviewing the policies and regulations that compel us to consider cost for infrastructure. Look at how cost-benefit analysis has been applied in the past. Review green infrastructure cost questions. Then look at some recent case studies where cost-benefit analysis has been applied and look ahead to national guidelines I’m involved in. Then wrap up with a Markham case study that assesses grey, green and blended strategies for flood control and also other watershed benefits. How can the case study guide provincial policies and the national guidelines.
- There are many drivers for assessing infrastructure cost efficiency in Ontario from the high level PPS goals saying infrastructure should be coordinated, efficient and cost effective. To do that we have to look at whole systems. And the Jobs and Prosperity Act says our asset management plans have to look at lifecycle costs of our activities – holistically – end to end and maintain service levels at the lowest cost. And Class EA’s behind many of our projects look at cost of alternatives – all costs, construction and long term O & M. We need to look at whole systems and whole lifecycles to understand costs.
- This is a long standing principle in water resource management where we accept that projects like those providing flood protection must be justified economically, benefits exceeding costs. Eckstein said that feasibility means that benefits are in excess of costs This goes back to the 1930’s in the US. In the past cost benefit analysis was done for large projects and the US Army Corp of Engineers produced guidance for it and encouraged system-wide analysis. Watt in Hydrology of Floods in Canada reminds us that flood protection must be economically justified. Benefits should exceed costs.
- Environmental planning in Ontario is now taking a turn towards greater consideration of costs. As the Ontario Environment Plan says, balancing environment and economy. And that is to avoid frustration with policies and programs that don’t deliver results.
- So NRC is developing guidelines to help support reliable , consistent benefit cost analysis and also to consider uncertainties and a changing climate. These are team members. Markham’s Flood Control Program is one of the case studies. Given the gaps in some of the recent reports and challenges I’ve see in some DMAF applications these guidelines will not come soon enough.
- A closer look. I’ve compiled 24 Ontario project costs, reviewed details for Philadelphia’s Clean Water Pilot – that’s over 1100 projects, and over a hundred New York projects and the overall cost of $800,000 per impervious hectare or 5-600,000 are justified so we are looking at half a trillion dollar in Ontario capital cost.
- And as a result can overstate benefits and have an incomplete look at costs. [REVIEW SLIDE] So there can be a lot of hype surrounding analysis that may not be thorough, complete or reliable.
- And as a result can overstate benefits and have an incomplete look at costs. [REVIEW SLIDE] So there can be a lot of hype surrounding analysis that may not be thorough, complete or reliable.
- And as a result can overstate benefits and have an incomplete look at costs. It is important to reconcile potential benefits based on claims data and estimated benefits from other means. So lets look at top down claims-based flood damages 700-800 million a year in Canada Over 250 million in Ontario Markham’s share is around 7 million A This is to show how top down claims benefits can get out of
- This shows Markham’s Flood Control activities (LIST THEM) and their costs – notes it’s a log scale. We have sanitary downspout disconnection and backwater valve subsidies - No Regrets Programs. Grey infrastructure. Sanitary and storm sewer upgrades – 27 million and 253 million Green infrastructure. These are enhanced and engineered assets like infiltration trenches and bioswales. 1.7B for a quarter of the city. No regrets programs cost a million or so each. $1300 per hectare. Sanitary upgrades 27 million and storm upgrades 253 million. That’s 11 thousand to 120 thousand per hectare. Green infrastructure 1.7 billion for a quarter of the city. $726 thousand per hectare, sized for flood control benefits, over 50 mm storage. Whats in our program now are the first 4 items – we do have one large wetland retrofit in one project though – but mostly its grey infrastucture and pipe upgrades.
- .. for DMAF grant applications. This is great news because we have scare resources and have to prioritize funding. .. better decision making. That means project prioritization and policy making. Ideally something like the Treasury Board follows now for new regulations.