US Army Corps of Engineers BUILDING STRONG ® Cost Effectiveness and Incremental Cost Analyses Using IWR Planning Suite Planning Principles & Procedures.

US Army Corps of Engineers

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Cost Effectiveness and Incremental Cost Analyses Using IWR Planning SuitePlanning Principles & Procedures – FY11

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Learning Objectives

To explain what are Cost Effectiveness & Incremental Cost Analyses (CE/ICA)

To explain why CE/ICA are conducted in evaluating ecosystem restoration alternatives► How can procedures be used in decision-making?

To explain how IWR Planning Suite software can be used to perform CE/ICA procedures

To demonstrate examples of CE/ICA from ecosystem restoration projects

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References

Planning Guidance (ER 1105-2-100) (www.usace.army.mil/inet/functions/cw/cecwp/)

► Chapters 2 & 3► Appendix E, Civil Works Missions & Evaluation Procedures

“Procedures Manual: Cost Effectiveness and Incremental Cost Analyses”► (IWR Report 95-R-1) (www.iwr.usace.army.mil/)

“Lessons Learned from CE/ICA”► IWR Report 02-R-5 (www.iwr.usace.army. mil/)

“IWR Planning Suite User’s Guide”► Draft IWR Report, Nov 2006 (www.iwr.usace.army. mil/)

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References (cont’d)

Indian River Lagoon – South Project Implementation Report ► Section 6► (Jacksonville District, March 2004)

(www.evergladesplan.org)

Elizabeth River, Virginia Ecosystem Restoration Project Feasibility Report ► (Norfolk District, 2000) (www.cenao.usace.army.mil)

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Why do CEA/ICA?

What are CEA/ICA?What are CEA/ICA?

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Why do CE/ICA?Why do CE/ICA?

ENVIRONMENTAL OUTPUTSENVIRONMENTAL OUTPUTS

Environmental benefits not in $

Therefore no B/C

Can still compare costs and benefits

ENVIRONMENTAL OUTPUTSENVIRONMENTAL OUTPUTS

Environmental benefits not in $

Therefore no B/C

Can still compare costs and benefits

TRADITIONAL OUTPUTS

Compare costs and benefits

Traditional benefits measured in $

TRADITIONAL OUTPUTS

Compare costs and benefits

Traditional benefits measured in $

BC Ratio = $ Benefits/$ CostsBC Ratio = $ Benefits/$ Costs

Net Benefits = $ Benefits - $ CostsNet Benefits = $ Benefits - $ Costs

BC Ratio = $ Benefits/$ CostsBC Ratio = $ Benefits/$ Costs

Net Benefits = $ Benefits - $ CostsNet Benefits = $ Benefits - $ Costs

$$

OUTPUTOUTPUT

$$

OUTPUTOUTPUT

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BenefitBenefit

CostCost

AnalysisAnalysis

BenefitBenefit

CostCost

AnalysisAnalysis

CostCost

EffectivenessEffectiveness

AnalysisAnalysis

CostCost

EffectivenessEffectiveness

AnalysisAnalysis

IncrementalIncremental

CostCost

AnalysisAnalysis

IncrementalIncremental

CostCost

AnalysisAnalysis

Increased InformationIncreased Information

for Decision Makingfor Decision MakingIncreased InformationIncreased Information

for Decision Makingfor Decision Making

CostCost

ObliviousOblivious

DecisionDecision

MakingMaking

CostCost

ObliviousOblivious

DecisionDecision

MakingMaking

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What are CE/ICA?What are CE/ICA?

Alternative Restoration

Plans

Plan Outputs

No Action Plan 0 Habitat Units

Green Plan 950 Habitat Units

Red Plan 950 Habitat Units

Blue Plan 1,000 Habitat Units


Plans

Plan Outputs

No Action Plan 0 Habitat Units

Green Plan 950 Habitat Units

Red Plan 950 Habitat Units

Blue Plan 1,000 Habitat Units

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Plan Comparison: CEAPlan Comparison: CEA


Plans

Plan Outputs

Plan Costs

No Action Plan 0 Habitat Units $0

Green Plan 950 Habitat Units $500,000

Red Plan 950 Habitat Units $ 750,000

Blue Plan 1,000 Habitat Units $ 1,000,000


Plans

Plan Outputs

Plan Costs





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Plan Comparison: CEAPlan Comparison: CEA


Plans

Plan Outputs

Plan Costs






Plans

Plan Outputs

Plan Costs





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Plan Comparison: ICAPlan Comparison: ICA


Plans

Plan Outputs

Plan Costs





Plans

Plan Outputs

Plan Costs




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Results of Incremental Cost AnalysisResults of Incremental Cost Analysis

Alter-natives Plans

Plan Costs

Plan

Outputs

Incre-mental Cost

Incre-mental Output

Incre-mental

Cost/ Unit Output

No Action Plan

$0 0 HU’s

$0

0 HU’s $0

Green Plan

$500,000 950 HU’s

$500,000

950 HU’s ~$526

Blue Plan

$1,000,000 1000 HU’s

$500,000

50 HU’s $10,000

Alter-natives Plans

Plan Costs

Plan

Outputs

Incre-mental Cost

Incre-mental Output

Incre-mental

Cost/ Unit Output

No Action Plan

$0 0 HU’s

$0

0 HU’s $0

Green Plan

$500,000 950 HU’s

$500,000

950 HU’s ~$526

Blue Plan

$1,000,000 1000 HU’s

$500,000

50 HU’s $10,000

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Why do CEA/ICA?Why do CEA/ICA?

To make more informed decisions…

about good financial investments.

To make more informed decisions…

about good financial investments.

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CEA/ICA are NOT…CEA/ICA are NOT…

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CEA/ICA are NOT...

NOT (a substitute for the) planning process NOT measurement technique NOT way to minimize requirements NOT in addition to, but instead of... NO single right way NO single right answer

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CEA/ICA are ...

Tools to inform environmental investment decision-making.

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Who does CEA/ICA?Who does CEA/ICA?

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Interdisciplinary

Plan formulator Biologist Economist Cost estimator Real estate specialist Decision maker Other disciplines

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Multi-Stakeholder

Corps Local sponsor Local, State, and other Federal

agencies Interest groups Others

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How do you do CEA/ICA?How do you do CEA/ICA?

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Before you start, you need:

Solutions

Costs

Outputs

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Solutions = Solutions =

OUTPUT

CO

ST

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Solutions

Management measures►Examples: dredging, planting, harvesting,

aerating, substrate improvement, fencing Alternative plans

►Fully-formulated alternatives►Different sites

Programs►Examples: Louisiana coastal wetlands, Upper

Mississippi River Env. Mgt. Plan

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A1 D2 H0S1

A1 D2 H0S1

Plan Alternative Example

Substrate Improvement = S

Aquatic Plant Harvesting = H

Dredging = D

Aeration = A

(Cubic Yards)140,000 = D1185,000 = D2220,000 = D3

No Action = H021 Acres = H142 Acres = H263 Acres = H3

“Perform aeration, dredge 185,000 cubic yards of sediment, do no aquatic plant harvesting, and improve the substrate.”

Improve Substrate = S1

Perform Aeration = A1

Plan alternative broken down:Perform Aeration is A1Dredge 185,000 Cubic Yards is D2Do not harvest (No Action) is H0Improve Substrate is S1

No ActionNo Aeration = A0

No Dredging = D0No Harvesting = H0

No Substrate = S0

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Solutions Incur Costs Solutions Incur Costs

$0

$20

$40

$60

$80

$100

CO

ST

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Cost Components

Implementation costs►construction►operation & maintenance►monitoring►LERRD

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Solutions Produce Output Solutions Produce Output

0 20 40 60 80 100

OUTPUT

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Environmental Outputs No universal environmental output Increases in ecosystem value & productivity,

quantity & quality Traditional outputs

►physical dimensions (acres of spawning habitat, stream miles restored)

►population counts (number of breeding birds, increases in target species)

►“habitat units” ►diversity indices

Annualized

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Environmental Outputs Make the connection between planning objectives &

outputs

Ex: Conceptual ecological models: sources -> stressors -> effects - > attributes - > HSI’s -> habitat units

Example: CEM for “St. Lucie Estuary”Source (agric runoff) -> Stressor (elevated phosphorus levels) -> Effect (increased algal blooms) -> Attribute (decreased estuarine WQ levels) -> Performance Measure (phosphorus load) -> HSI (oyster) -> HU’s (acres x oyster HSI)

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Sample Results: Average Annual Wetlands HU’s

Figure 6-C. Change in Wetlands HU's over Period of Analysis

0100002000030000400005000060000

Year

HU

's

No Action Alt 6 Alt 5 Alt 4 Alt 3 Alt 2

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Solutions, Costs and Outputs

CEA/ICA … Bringing it all togetherCEA/ICA … Bringing it all together

OUTPUT

CO

ST

OUTPUTIN

CR

EMEN

TAL

CO

ST

COST EFFECTIVENESS ANALYSISCOST EFFECTIVENESS ANALYSISCOST EFFECTIVENESS ANALYSISCOST EFFECTIVENESS ANALYSIS INCREMENTAL COST ANALYSISINCREMENTAL COST ANALYSISINCREMENTAL COST ANALYSISINCREMENTAL COST ANALYSIS

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Cost Effective Plans:

No other plan produces same output for less cost

No other plan produces more output for same or less cost

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Best Buy Plans:

Subset of cost effective plans Most efficient in production Greatest increases in output for least

increases in cost Lowest incremental costs per unit of

output

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Step-by-step process:

Plan formulation Cost effectiveness analysis Incremental cost analysis Decision making

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VERSION 3.33VERSION 3.33

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IWR-Planning SuiteIWR-Planning SuiteIWR-Planning SuiteIWR-Planning Suite

• Software version of CE/ICA proceduresSoftware version of CE/ICA procedures•Automates tedious mathAutomates tedious math

•Allows you to do more complicated analysesAllows you to do more complicated analyses•Tables & graphs as record of analysesTables & graphs as record of analyses

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IWR-Planning SuiteIWR-Planning SuiteIWR-Planning SuiteIWR-Planning Suite

• Available on web Available on web • Website: Website: www.pmcl.com/iwrplanwww.pmcl.com/iwrplan

– InstructionsInstructions– Student tutorialStudent tutorial– User’s GuideUser’s Guide

• For on-line help, click on “?”For on-line help, click on “?”

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IWR Planning Suite IWR Planning Suite BasicsBasics

• Assists in plan formulation Assists in plan formulation • Builds “all plan combinations” Builds “all plan combinations” • 52 solutions, 20 scales each52 solutions, 20 scales each• Also, fully formulated alternativesAlso, fully formulated alternatives• Dependency & combinability relationshipsDependency & combinability relationships

• No limit on number of variables, including:No limit on number of variables, including:• CostsCosts• 1 or more outputs1 or more outputs• Other “effects”Other “effects”• “ “Derived” outputs (formulaic combinations of other variables)Derived” outputs (formulaic combinations of other variables)

•Performs CE/ICAPerforms CE/ICA• CEA: Cost effective plansCEA: Cost effective plans• ICA: Best buy plansICA: Best buy plans

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IWR Planning Suite FeaturesIWR Planning Suite Features

AnalyticalAnalytical • Multiple planning setsMultiple planning sets• ConstraintsConstraints• Sensitivity – variable & solutionSensitivity – variable & solution• Automated Editing – non-additive effectsAutomated Editing – non-additive effects• Exclude solutionsExclude solutions• Multi-planning set comparisonsMulti-planning set comparisons• “ “Plans of Interest” Plans of Interest” ReportingReporting• Multiple display/ report optionsMultiple display/ report options• Import/ Export optionsImport/ Export options

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IWR Planning Suite FeaturesIWR Planning Suite Features

Comprised of modules:Comprised of modules:• Plan Editor Plan Editor

• also “framework” for other modules also “framework” for other modules • Plan Generator Plan Generator

• builds combinationsbuilds combinations• Plan Analysis Plan Analysis

• performs CE/ICAperforms CE/ICA• Multi-criteria Decision Analysis (forthcoming) Multi-criteria Decision Analysis (forthcoming)

• scores & ranks alternativesscores & ranks alternatives

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CE/ICA Applied to Elizabeth River Ecosystem Restoration Project

CE/ICA Applied to Elizabeth River Ecosystem Restoration Project

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CE/ICA Applied to Elizabeth River CE/ICA Applied to Elizabeth River Ecosystem Restoration ProjectEcosystem Restoration Project

CE/ICA Applied to Elizabeth River CE/ICA Applied to Elizabeth River Ecosystem Restoration ProjectEcosystem Restoration Project

SouthernBranch

Eastern BranchNWestern Branch

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Elizabeth River Ecosystem Restoration

Planning objectives: ► Overall, restoration of the Elizabeth River’s aquatic &

wetlands ecosystems ► Specifically:

• Wetlands restoration

• Sediment quality restoration

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Elizabeth River Looking NorthElizabeth River Looking North

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Wetlands Loss: Since 1944Wetlands Loss: Since 1944

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Wetlands & Sediments SitesWetlands & Sediments Sites

Somme Avenue

Sugar Hill

Crawford Bay

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Scuffletown Creek Future WithoutScuffletown Creek Future Without

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Scuffletown Creek Future With RestorationScuffletown Creek Future With Restoration

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Woodstock Park Future WithoutWoodstock Park Future Without

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Woodstock Park Future With RestorationWoodstock Park Future With Restoration

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Solutions - Elizabeth River

Wetlands Restoration - 11 sites:► Sugar Hill, Carolanne Farms, Somme Ave, Scuffletown

Creek, NW Jordan Bridge, Crawford Bay, Woodstock Park, Lancelot Dr, Grandy Village, ODU Drainage Canal, Portsmouth City Park

At wetlands sites:► Excavation, filling, regrading with suitable soils, erosion

protection► Brush clearing, exotic species removal ► Planting native marsh vegetation

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Solutions - Elizabeth River Sediment Contamination:

► Originally, 4 sites considered – Scuffletown Creek, Scotts Creek, Campostella Bridge, Eppinger & Russell site

► 3 Alternative clean-up levels at Scuffletown Creek (0.8, 0.6, 0.4 SQV levels)

► Clean-up levels a function of amount of sediment dredged► Clean-up process: environmental dredging, sediment

transportation, sediment treatment as required, sediment disposal

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Scuffletown Creek

SQV Contaminant LevelsBlue = 0.4 (Minimum)Green = 0.6 (Medium)Red = 0.8 (Maximum)

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Cost Components - Wetlands

Implementation costs►Site prep, earthwork, landscaping►maintenance►periodic monitoring►real estate, disposal

Avg annual equivalent►50-yr life, 6 3/8% discount rate, FY 2000

prices

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Cost Components - Sediments

Implementation costs►cubic yards sediment removed, transport

material to DMMA, remediation, disposal► initially, 2 sets of costs based on dredging depth

Avg annual equivalent►50-yr life, 6 3/8% discount rate, FY 2000 prices

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Environmental Outputs – Wetlands - 2 Methods

Habitat Evaluation Procedure► habitat units for clapper rail

Functional Assessment Score► primary production► fish & wildlife habitat► water quality► erosion buffer► flood buffer► aesthetics► public access & educational value

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Sediments Clean-Up Outputs

• Reduced Sediment Toxicity• Improved Bottom Community Health and Diversity• Reduced Fish Cancers• Improved Sediment Quality

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Elizabeth River Elizabeth River Wetlands Case Wetlands Case StudyStudy

Elizabeth River Elizabeth River Wetlands Case Wetlands Case StudyStudy

SouthernBranch

Eastern BranchNWestern Branch

Location TotalImplementation

Costs

AverageAnnualCosts1

AnnualHabitat Units(from HEP)2

AnnualFunctional

AssessmentScore2

Sugar Hill, Portsmouth $136,876 $9,600 0.25 7.06

Carolanne Farms, VABeach

$297,431 $20,700 1.05 32.54

Somme Avenue, Norfolk $308,610 $21,400 0.54 14.75

Scuffletown, Chesapeake $87,781 $6,200 0.28 6.92

NW Jordan Bridge,Portsmouth

$237,564 $16,500 1.14 31.61

Crawford Bay, Portsmouth $355,413 $24,700 1.18 35.67

Woodstock Park, VABeach

$499,738 $34,600 1.52 48.24

Lancelot Drive, VA Beach $1,583,079 $109,400 4.49 133.25

Grandy Village, Norfolk $1,124,410 $77,800 3.99 166.70

ODU Drainage Canal,Norfolk

$175,795 $12,300 0.56 18.76

Portsmouth City Park,Portsmouth

$333,369 $23,200 0.67 23.52

1 Average annual equivalent costs derived using an interest rate of 6-5/8%.

2Full realization of benefits is anticipated in year 3. Linear interpolation of benefits is assumed

between years one and three.

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Enter Cost & Environmental Output Data (Wetlands)

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Perform CE/ICA: Wetlands Restoration - HEP

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Formulate All Plan Combinations (2,048)

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Cost Effectiveness Analysis (92 CE Plans)

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Cost Effective & Best Buy Plans

First Best Buy Plan:First Best Buy Plan:

NW Jordan BridgeNW Jordan Bridge

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Incremental Cost Analysis (11 Best Buys)

A = Sugar Hill A = Sugar Hill G = Woodstock PkG = Woodstock Pk

B = Carolanne FarmsB = Carolanne Farms H = Lancelot DrH = Lancelot Dr

C = Somme Ave C = Somme Ave I = Grandy VillageI = Grandy Village

D = ScuffletownD = Scuffletown J = ODU DrainageJ = ODU Drainage

E = NW Jordan BrE = NW Jordan Br K = Prtsmth City PkK = Prtsmth City Pk

F = Crawford BayF = Crawford Bay

EE +I+I +B+B+F+F+J+J+D+D+G+G +H+H

+K+K+A+A+C+C

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Incremental Cost DisplayIncremental Cost Display

E: NW JORDAN BRIDGE First 1.14 HU $ 14,474 EACH

I: GRANDY VILLAGE Next 3.99 HU $ 19,499 EACH

B: CAROLANNE FARMS Next 1.05 HU $ 19,714 EACH

F: CRAWFORD BAY Next 1.18 HU $ 20,932 EACH

J : ODU DRAINAGE CANAL Next 0.56 HU $ 21,964 EACH

D: SCUFFLETOWN CREEK Next 0.28 HU $ 22,143 EACH

G: WOODSTOCK PARK Next 1.52 HU $ 22,763 EACH

H: LANCELOT DRIVE Next 4.49 HU $ 24,365 EACH

K: PORTSMOUTH CITY PARK Next 0.67 HU $ 34,627 EACH

A: SUGAR HILL Next 0.25 HU $ 38,400 EACH

C: SOMME AVE Next 0.54 HU $ 39,630 EACH

E: NW JORDAN BRIDGE First 1.14 HU $ 14,474 EACH

I: GRANDY VILLAGE Next 3.99 HU $ 19,499 EACH

B: CAROLANNE FARMS Next 1.05 HU $ 19,714 EACH

F: CRAWFORD BAY Next 1.18 HU $ 20,932 EACH

J : ODU DRAINAGE CANAL Next 0.56 HU $ 21,964 EACH

D: SCUFFLETOWN CREEK Next 0.28 HU $ 22,143 EACH

G: WOODSTOCK PARK Next 1.52 HU $ 22,763 EACH

H: LANCELOT DRIVE Next 4.49 HU $ 24,365 EACH

K: PORTSMOUTH CITY PARK Next 0.67 HU $ 34,627 EACH

A: SUGAR HILL Next 0.25 HU $ 38,400 EACH

C: SOMME AVE Next 0.54 HU $ 39,630 EACH

EE +I+I +B+B +F+F+J+J+D+D+G+G +H+H

+K+K+A+A+C+C







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Ranking of Best Buy Plans by Benefit Assessment Methodology

Best BuyPlan

Habitat Assessment Method Wetlands FunctionalAssessment Method

1 NW Jordan Bridge Grandy Village2 Above, plus Grandy Village Above, plus NW Jordan Bridge3 Above, plus Carolanne Farms Above, plus Carolanne Farms4 Above, plus Crawford Bay Above, plus ODU Drainage

Canal5 Above, plus ODU Drainage

CanalAbove, plus Crawford Bay

6 Above, plus Scuffletown Creek Above, plus Woodstock Park7 Above, plus Woodstock Park Above, plus Lancelot Drive8 Above, plus Lancelot Drive Above, plus Scuffletown Creek9 Above, plus Portsmouth City

ParkAbove, plus Portsmouth CityPark

10 Above, plus Sugar Hill Above, plus Sugar Hill11 Above, plus Somme Avenue Above, plus Somme Avenue

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What do you do with the results?What do you do with the results?

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ER 1105-2-100

Recommend the NER Plan “… justified alternative & scale having the maximum

excess of monetary & non-monetary beneficial effects over monetary & non-monetary costs.”

“...occurs where the incremental beneficial effects just equal the incremental costs, or alternatively stated, where the extra environmental value is just worth the extra costs.” (App. E-28.e(1))

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Is it Worth it?Is it Worth it?

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Decision MakingDecision Making

GuidelinesGuidelines

CEA/ ICA ResultsCEA/ ICA Results

Is it worth it?Is it worth it?

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Is it Worth it?Is it Worth it?

Decision making guidelines:Decision making guidelines:• output targetoutput target• output thresholdsoutput thresholds• cost limitcost limit• breakpointsbreakpoints• unintended effectsunintended effects• does it make sense?does it make sense?

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+K+K+A+A+C+C

Output TargetOutput Target

Targ

et

Targ

et

Targ

et

Targ

et

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Output TargetOutput Target

Targ

et

Targ

et

Targ

et

Targ

et

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+K+K+A+A+C+C

Output ThresholdsOutput Thresholds

Min

imu

mM

inim

um

Maxim

um

Maxim

um

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Output Thresholds

Maxim

um

Maxim

um

Min

imu

mM

inim

um

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Total Cost Limit

Cost LimitCost LimitCost LimitCost Limit

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Breakpoints

BreakpointsBreakpointsBreakpointsBreakpoints

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EE +I+I +B+B +F+F+J+J+D+D+G+G +H+H

+K+K

+A+A

+C+C

Breakpoints

BreakpointBreakpointBreakpointBreakpoint

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Intended and Unintended Effects

LAND OWNERSHIP IMPACT ON OTHER SPECIES RESIDENTIAL RELOCATION

NO ACTION NOT APPLICABLE NO IMPACT NONE

E STATE NO IMPACT NONE

E + I STATE -5 NONE

E + I + B STATE -15 NONE

E + I + B + F STATE AND PRIVATE -20 5 HOMES

E + I+ B + F + J STATE AND PRIVATE -7 17 HOMES

LAND OWNERSHIP IMPACT ON OTHER SPECIES RESIDENTIAL RELOCATION

NO ACTION NOT APPLICABLE NO IMPACT NONE

E STATE NO IMPACT NONE

E + I STATE -5 NONE

E + I + B STATE -15 NONE

E + I + B + F STATE AND PRIVATE -20 5 HOMES

E + I+ B + F + J STATE AND PRIVATE -7 17 HOMES







EE +I+I +B+B +F+F+J+J+D+D +G+G +H+H

+K+K+A+A+C+C

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Does it make sense?

Red face test

test

“Idiot” test

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ER 1105-2-100

“Selecting the NER plan requires careful consideration of the plan that meets planning objectives and constraints and reasonably maximizes environmental benefits while passing tests of cost effectiveness and incremental cost analyses, significance of outputs, acceptability, completeness, efficiency, and effectiveness.” (Appendix E, E-41)

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ER 1105-2-100

Additional factors to consider: ► Partnership context

• higher priority to those projects planned in cooperation with other Federal resource agencies & regional & national interagency programs

► Reasonableness of costs

• decision-maker ascertains that the benefits are really worth the costs

► Rarely will the NER plan not be among the best buy plans (App. E, E-41)

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Elizabeth River - National Ecosystem Restoration Plan

Wetlands: ► 9 of 11 candidate restoration sites (ranked sites up to & including

Portsmouth City Park) - 19.5 acres► Cost effective, 9th best buy plan► On functional score, sharp breakpoint after P. City Park► On HEP score, breakpoint before P. City Park► Include P. City Park: only site on Western Branch (completeness),

complements city’s plan for site, public access & educational value (acceptability)

Sediment Restoration:► Medium level clean-up (0.6 SQV)► Cost effective, 1st best buy plan - lowest cost per unit of clean-up benefit

of any alternative► Sharp breakpoint after medium (0.6 SQV) level► Substantial benefits include reduced toxicity & contamination, improved

benthos & aquatic resources

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NER Plan - Additional Decision Criteria Significance - Ches. Bay Agreement - Region of

Concern, priority urban area; LOC’s Local Legacies program; Eliz. River Project - Watershed Action Plan to restore river

Scarcity - historic wetlands loss, few “available” sites; toxic sediments - scarcity of aquatic life: low diversity, biomass, high cancer rates

Acceptability - ERP, Watershed Action Team: clean-up & wetlands #1 & #2 critical areas

Non-Federal sponsors - all 4 juris., VA, ERP Effectiveness - addresses 2 greatest problems, large

geographic area, interconnected to natural system Efficiency - passes tests of CE/ICA

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CE/ICA Applied to Indian River Lagoon – South Comprehensive Everglades Restoration Plan Project

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CE/ICA Applied to Indian River Lagoon – South CE/ICA Applied to Indian River Lagoon – South

Ecosystem Restoration ProjectEcosystem Restoration Project

Study Area

• Martin Co.• St. Lucie Co.• Small part of Okeechobee Co.

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Problems: Water Quality

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Problems: Water Quantity

…too much

…too little

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Problems: Timing & Hydroperiod

Wrong timing & distribution of flows

Ditched and drained wetland systems

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IRL-S Objectives & Constraints

Restore Ecological Values: Re-establish a natural pattern of freshwater flows to the St Lucie Estuary (SLE) & Indian

River Lagoon (IRL) Improve water quality in the SLE and IRL Improve habitat for estuarine biota Increase spatial extent & functional quality of watershed wetlands & native

upland/wetland mosaic Increase diversity & abundance of native plant & animal species, including threatened &

endangered species Improve Economic Values & Social Well-Being: Increase water supply Maintain existing flood protection Improve opportunities for tourism, recreation, & environmental education Improve commercial & recreational fisheries

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Development of Alternative Plans

Potential features/components: Reservoirs for above ground storage of freshwater runoff Stormwater treatment areas (STAs) for water quality treatment of captured flows Restoration of historic native upland/ wetland habitat Natural areas for storage of freshwater runoff Natural areas for water quality treatment Enhanced estuarine habitats utilizing artificial habitat methods Muck remediation in the SLR & SLE Hydrologic diversions within the watershed to mimic historic/ natural flow patterns Enhance estuarine health through restoration of North Fork of the SLR

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IRL-S Outputs Used for CE/ICAFor each alternative, estimate:

► Average annual outputs -

• Oyster habitat units • Benthic habitat units • SAV habitat units • Wetlands requiring 100% restoration habitat units • Wetlands requiring 50% restoration habitat units • Uplands habitat units • Combined estuary habitat units • Combined watershed habitat units • Estuary & watershed combined index (normalized) • Estuary & watershed combined index (normalized &

estuary given four times the weight)

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Example of IRL-S Outputs: Average Annual Oyster HU’s

Figure 6-D. Change in Estuarine Oyster Habitat (HU's) over Period of Analysis

0

100

200

300

400

500

600

700

800

900

1000

Year

HU

's

No Action Alt 6 w/ arthab Alt 6Alt 6 w/o CERP Alt 5 w/ arthab Alt 5Alt 5 w/o CERP Alt 4 w/ arthab Alt 4Alt 4 w/o CERP Alt 3 w/ arthab Alt 3Alt 3 w/o CERP Alt 2 Alt 2 w/o CERP

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IRL-S Costs & Outputs Used for CE/ICA

Alt 2 Alt 3 Alt 4 Alt 5 Alt 6 Alt 7a Alt 7b Alt 7 Variable Average Ann. Cost ($1,000) $30,594 $67,000 $80,622 $76,379 $76,320 $64,501 $28,909 $93,378 Cost w/ Art Oyster Habitat NA $67,315 $81,252 $77,009 $76,951 NA NA NA Cost w/ Art SAV Habitat NA $67,002 $80,626 $76,383 $76,325 NA NA NA Cost w/ both Art Habitats NA $67,317 $81,256 $77,014 $76,955 NA NA NA Oyster AAHU’s 192 505 771 771 771 771 0 771 Artificial Oyster Habitat 0 3 3 3 3 0 0 0 SAV AAHU’s 204 517 783 783 783 783 0 783 Artificial SAV Habitat 0 3 5 5 5 0 0 0 Benthic AAHU’s 628 1,635 2,491 2,491 2,491 2,491 0 2,491 All Estuarine AAHU’s 1,024 2,663 4,053 4,053 4,053 4,053 0 4,053 Wetlands 100% AAHU’s 0 14,361 23,791 27,699 27,699 0 27,699 27,699 Wetlands 50% AAHU’s 0 12,843 18,049 12,835 12,835 0 12,835 12,835 Uplands AAHU’s 0 27,182 27,475 13,149 13,149 0 13,149 13,149 All Watershed AAHU’s 0 54,386 69,315 53,683 53,683 0 53,683 53,683

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Cost Effectiveness Analysis Results: Combined Estuary HU’s

Alt 4

Alt 3

Alt 5Alt 6 w/ artificial Oyster & SAV (best buy)

Alt 2

Alt 7a(best buy)

Alt 7b

Alt 7

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CEA: All Plans Arrayed by Increasing Output – Total Estuary Habitat Units

Alternative Average Annual Cost ($1000)

Output Average Cost per

Output ($1000) Cost Effective?

Without Plan 0 0 N/A Alternative 7b 28,909 0 N/A Alternative 2 30594 1,024 29.88 Yes Alternative 3 67,000 2,657 25.22 Alternative 3 w/ artificial SAV habitat 67,002 2,660 25.19 Alternative 3 w/ artificial oyster habitat 67,315 2,660 25.31 Alternative 3 w/ artificial SAV & oyster habitat

67,317 2,663 25.28

Alternative 7a 64,501 4,045 15.95 Yes Alternative 6 76,320 4,045 18.87 Alternative 5 76,379 4,045 18.88 Alternative 4 80,622 4,045 19.93 Alternative 7 93,378 4,045 23.08 Alt 6 w/ artificial oyster 76,951 4,048 19.01 Alt 5 w/ artificial oyster 77,009 4,048 19.02 Alt 4 w/ artificial oyster 81,252 4,048 20.07 Alt 6 w/ artificial SAV 76,325 4,050 18.85 Yes Alt 5 w/ artificial SAV 76,383 4,050 18.86 Alt 4 w/ artificial SAV 80,626 4,050 19.91 Alt 6 w/ oyster & SAV 76,955 4,053 18.99 Yes Alt 5 w/ oyster & SAV 77,014 4,053 19.00 Alt 4 w/ oyster & SAV 81,256 4,053 20.05

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ICA: Cost Effective & Best Buy Plans Arrayed by Increasing Output – Total Estuary Habitat Units

Alternative Average Annual Cost

($1000)

Output Average Cost Per Output ($1000)

Incremental Average

Annual Cost ($1000)

Incremental Output

Incremental Cost Per Output ($1000)

Best Buy?

Without Plan $0 0 N/A N/A N/A N/A

Alternative 2 $30,594 1,024 $29.88 $30,594 1,024 $29.88

Alternative 7a

$64,501 4,045 $15.95 $64,501 4,045 $15.95 1st Best Buy

Alternative 6 w/ artificial SAV

$76,325 4,050 $18.85 $11,824 5 $2,364.80

Alternative 6 w/ artificial SAV & oyster

$76,955 4,053 $18.99 $12,454 8 $1,556.75 2nd Best Buy

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Cost Effectiveness Analysis Results: Combined Watershed & Estuary (Weighted) Index

Alt 4 (Alt 4 w/ artificial SAV & w/ artificial oyster & SAV are Best Buys)

Alt 3

Alt 5

Alt 2

Alt 7a

Alt 7b

Alt 7

Alt 6 ( Alt 6 w/ artificial SAV is a Best Buy)

BUILDING STRONG®

Cost Effective Plans: Combined Watershed & Estuary (Weighted) Index

Alt 7a

Alt 7b

Alt 6’s

Alt 4’s

Note: In addition to Alts 6 & 4, those same alternatives w/ SAV artificial habitat & w/ both oyster & SAV artificial habitat are also cost effective, but the symbols overlap on this figure and are difficult to distinguish.

Alt 2

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Incremental Cost Analysis Results: Combined Watershed & Estuary (Weighted) Index

Alt 6 w/ artificial SAV habitat

Alt 4 w/ artificial SAV habitat

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Summary of CE/ICA Results

Output Alt 2 Alt 3 Alt 4 Alt 5 Alt 6 w/ SAV

Alt 6 w/ oyster & SAV

Alt 7a Alt 7b

Total Estuary

Cost Effect

Cost Effect Cost Effect & Best Buy

Cost Effect & Best Buy

Total Watershed



Combined Index

Cost Effect

Cost Effect

Cost Effect Cost Effect

Cost Effect


Combined Weighted Index

Cost Effect



Cost Effect

Cost Effect

Cost Effect

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Telling the Story: Rationale for Alt 6

Best meets planning objectives:► Restoration of estuarine aquatic ecosystem (> all other alts)► Increased spatial extent of watershed wetlands & uplands (secondary objective)

Reasonably maximizes ecosystem output while passing tests of:► Cost effectiveness► (Best Buy) Incremental Cost Analysis (Alt 6 w/ artificial SAV)

Provides 95% outputs of largest alternative (Alt 4), yet costs $53.4 million less than Alt 4

Lowest per unit costs of all alts in production of all outputs (Alt 6 w/ artificial SAV) Why include artificial habitat?

► Low total cost of artificial habitat increment ($630k aaec)► “Jump-start” in benefits provides immediate results► Builds public support by demonstrating “restoration” quickly► Strong inter-agency/ stakeholder support

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Uses of CEA/ICA:

Formulation Evaluation & Comparison Selection

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ApplicabilityApplicability

• Restoration and mitigationRestoration and mitigation• All scopes of problemsAll scopes of problems• All scales of projectsAll scales of projects• All phases of workAll phases of work• All types of resourcesAll types of resources• Many agencies and interestsMany agencies and interests

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Challenges

K.I.S.S. - don’t go too fast too soon Set-up - getting started

► Formulation of management measures► Selection, measurement of outputs

Commensuration (multiple metrics)

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BenefitsBenefits

• Flexibility- Handles various resources & approaches- From simple to complex

• Rational, equitable approach• Saves time• Saves costs

- Greatest “bang for the buck”• Allows you to focus on what’s important• It’s easy• More informed decisions!

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Visit IWR’s Homepagewww.iwr.usace.army.mil

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Visit the Visit the IWR-PLANIWR-PLAN Homepage Homepage www.pmcl/com/iwrplan

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OUTPUT

CO

ST

COST EFFECTIVENESS ANALYSISCOST EFFECTIVENESS ANALYSISCOST EFFECTIVENESS ANALYSISCOST EFFECTIVENESS ANALYSIS

Questions?

OUTPUT

INCR

EM

EN

TAL

CO

ST

INCREMENTAL COST ANALYSISINCREMENTAL COST ANALYSISINCREMENTAL COST ANALYSISINCREMENTAL COST ANALYSIS

US Army Corps of Engineers BUILDING STRONG ® Cost Effectiveness and Incremental Cost Analyses Using IWR Planning Suite Planning Principles & Procedures.

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