It’s a Waste of Tax Dollars

Upon review of the City of Calgary (“the City”) Permanent Flood Barrier Assessment Report , BRFM is of the opinion that the City’s cost benefit analysis is unrealistic given that costs are missing from their estimates, benefits are overstated and the cost benefit analysis has some invalid or broad based assumptions that require further explanation. At face value the proposed flood berm for the community of Bowness is a waste of taxpayers’ money.

In the spring of 2017, Calgary City council approved The Flood Mitigation Measures Assessment Report(1) that includes the construction of dykes in four Bow River communities, including Bowness. If the project proceeds, the two dykes in Bowness will extend roughly between the CP Rail tracks and Shouldice Bridge, for a total distance of 3-4km. The City is planning a break between the two dykes; the City refers to each section as “Bowness North” and “Bowness South”, respectively.

The average height of the proposed dyke is approximately 1 metre (3.3 feet) but may be as high as 2.0 metres (6.6 feet) on some properties. BRFM has been told that the dyke could be some combination of earthen berm and wall and the width of the berm could be as wide as 9 metres (30 feet).

First let’s look at the estimated costs of the Bowness berm
The City of Calgary has estimated the Bowness berm cost to be $24.65 million, plus a 50% buffer for accuracy. The cost estimate reported in the Permanent Flood Barrier Assessment Report(2) was summarized as follows:

It's a Waste of Tax Dollars

It is important to note that the estimated cost is for “overland protection” only and does not include the cost of protection against groundwater flooding. Yet one could conclude from two surveys conducted by Leger for the City of Calgary from May 21 to June 13, 2019(2) that groundwater is a major concern in Bowness. Survey respondents were asked what they thought the source of flooding was in Bowness in 2013.

  • Most Bowness community residents surveyed believe that the 2013 flood was mainly groundwater flooding or an equal mix of both groundwater and overland (79% for riverside residents and 90% for non-riverside).

The Permanent Flood Barrier Assessment also identified other costs that were omitted from their estimate, namely stormwater or drainage systems, erosion protection, legal costs, cost of capital and environmental costs.

Table 1 indicates that the actual “flood protection” cost comes in at $4.4 million, or 18% of the overall cost estimate.

For comparison, the Province of Alberta estimated approximately $40 million for the Bragg Creek flood barrier, after conceptual design. The Bragg Creek Barrier is expected to be of similar length – approximately 4km.

One can easily argue that the estimated cost is greatly underestimated.

What about the estimated benefits?

According to flood inundation modeling, completed by Associated Engineering , few assets will be protected by the proposed berm. Please see the maps described in The Berm Won’t Work, reason 3 & 4.

The City concedes that the berm is intended to be ‘complementary’ to the addition of ‘upstream mitigation’ (i.e. a dam). The Province is currently in the very preliminary stages of studying upstream options and state on their website that a solution is at least 12 years in the future. A berm without this upstream mitigation in place will provide little or no benefit to Bowness residents or other Calgary communities.

Associated Engineering modeled the damages from flooding assuming that main floors of buildings in Bowness are 0.3 metres (1 foot) above grade whereas, City Administration has stated that most buildings’ main floor are above the 1:100 level. This choice of assumption (0.3 metres) artificially inflates main floor damage in the event of a flood for any building with a 1:100 year flood elevations about 0.3 metres and consequently overstates the benefit side of the Benefit Cost Ratio (BCR).

What does this mean?

This means that Council made a decision to proceed with the berm project with inaccurate benefit cost analysis.

If a cost is excluded, it artificially inflates the BCR. Invalid assumptions used to estimate the benefits also artificially inflate the BCR. Why wouldn’t the City generate estimates and calculate BCRs on the most probable outcome? We asked the City why they did not base their costs on the berm build in Inglewood and why they omitted costs. The City answered that the estimate they made was good enough. We pointed out to the City that when we ran the numbers with only a single assumption corrected, the cost went up by 40%. The City replied that they could look for missed benefits to counteract the missed costs.

If you were estimating costs and benefits for expenditures at your own house, wouldn’t you estimate what you expect the costs to be and plan for that? It’s interesting that the City seems to choose erroneous assumptions that result in making the project look better.

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(1) City of Calgary. (2016). Flood Mitigation Measures Assessment. Calgary: City of Calgary.
(2) Associated Engineering (2018), Permanent Flood Barrier Protection Assessment, report for the City of Calgary.