Flood-control projects hinge on economic impact numbers

The Army Corps of Engineers has identified 14 options in Fargo-Moorhead for flood control ranging from levees and flood walls to massive ditches that would divert the river's flow. But there's a catch; for a plan to gain federal approval, the benefit to taxpayers must be greater than the project cost.

Fargo-Moorhead narrowly averted a catastrophic flood this spring. Next week, the Corps holds public meetings to outline options for long-term flood control.

The weather gods smiled and emergency levees held. Had those levees failed, damage would have been nearly $2 billion.

Spending $1 billion on a flood control project to prevent $2 billion in damage should be an easy decision, right?

Not exactly, and that's something Army Corps of Engineers Project Manager Aaron Snyder struggles to explain to local residents.

"You drive through Fargo-Moorhead and you see all the infrastructure and everything that's out there and you say if there was a flood almost all of this would be damaged," Snyder said. "It's like if you can't justify a project here where can you justify a project. So it is difficult to explain to the public exactly why the Corps does it the way they do."

The way the Corps does it involves a complex economic analysis.

On one side of the ledger is the project. Let's say it costs a $1 billion. But, similar to a mortgage on your house, that cost has to be amortized or spread over the life of the project.

On the other side of the ledger is the potential damage from a flood; let's say $2 billion. Corps Project Management Chief Tom Crump said that number also needs to stand the test of time since, statistically, there won't be $2 billion in damage every year.

"We certainly take that large number into account," Crump said. "But then we have to use statistics and probabilities to figure out what are the chances of that event happening in any given year in the future. We take that very large number and convert it to a well this is the amount that would happen in any one given year."

And this is where it gets complicated. Corps staff has been gathering economic data about Fargo-Moorhead for months.

Corps economist Kevin Bluhm said up to a dozen people are working on the data. The value of everything that could be damaged is calculated; every building, every street, every sewer. The effect of flooding on every business is analyzed.

Bluhm said those numbers are checked and double checked since the complex computer analysis is only as good as the data that's entered.

"This one is pretty challenging because it is very unique," Bluhm said. "The entire developed metro area is relatively close or not adjacent to the flood plain. So we've got almost all of our infrastructure and structures at risk. That makes it very sensitive.

"We've got to make sure we are spot on with our elevation information and we have to make sure everything is entered right because it's very critical, very sensitive to that," he said.

Bluhm said the Fargo-Moorhead project is so large and complex they've broken the data into five files.

"We're actually running five different files at a time for each scenario," he said. "So we've basically got to push the button five times to come up with one answer."

Some economic losses aren't part of the equation. If the local grocery store is flooded, the business loss isn't counted. The assumption is people will buy groceries somewhere, so the national economy isn't affected, and that's the key measure. Since federal taxpayers will pay much of the project cost the economic benefits must be part of the national economy.

There are three other secondary factors considered as well. The regional economy, environmental quality and social effects are all analyzed.

Project manager Aaron Snyder said Corps project guidelines are currently being rewritten and things like environmental and social effects could have more weight in the future.

"So with that in mind we also wanted to make sure we covered all the other aspects and made sure we did a really robust job," Snyder said. "Because if we don't and they change in the middle there's a potential they could make us go back and reanalyze things and we don't want to have that happen."

There's one other wild card; the Corps convened a panel of experts to study whether flooding is likely to be more common in the Red River valley in the future. The results could help tip the scales in favor of a larger project.

The Corps will decide on the most feasible project by early next year. And for anyone who wants to check their math, the detailed analysis will be available for review by April.

Public Meeting Details:

- Oct. 20, at the Howard Johnson -townhouse Room 301 3rd Ave N. , Fargo

- Oct. 21, at Hagen Hall Science Lab 104 Minnesota State University Moorhead.

Open house at 6 p.m., formal presentation at 7 p.m. followed by question and answer session

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