Average total costs of flooding is estimated to rise to $1.5 Bn a year by 2040 if left unchecked. Matthews must improve its long term resilience
*Assuming total loss of at risk property
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Predicted Cost of No Mitigation
Nuisance Flood in Millions Big Flood Cost in Millions Flood Insurance Total
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Stakeholder Perspective:Matthews has 4 proposed infrastructure options for improving the city’s resilience, 1) Elevating all buildings above FEMA base flood elevation, 2) building a berm spanning the coastline, 3) creating a living shoreline, and 4) creating combination solution. However, the initial budget of $500m is gone. Matthews must find an innovative solution for funding this initiative.
Conundrum peak believes that Matthews can fully fund the project, reduce the financial impact of tidal flooding by 40-45%, & create recurring, sustainable revenue sources for the city
Matthews can reduce financial impact of flooding by 40-45%
Matthews should construct a 1 mile berm, add 2 miles of additional wetlands, refit streets with permeable pavement, and add additional infrastructure
Diminish rising annual costs
Execute on combination of Natural & Structural Elements
Matthews can increase tourism and recreation opportunities, maintain local beaches, create safer roads, and decrease in-town noise levels
Create streams of new social value
Create new habitats for natural wildlife, reverse beach erosion, trap harmful pollutants, slow tidal energy, and flooding occurrences
Reverse negative environmental trends
Implement big data and predictive analytic tools that prevent growth of flood insurance rates by accurately predict risk profiling
Incentivize digital business model innovation
Option 1: Elevating all buildings above FEMA base flood elevation
Financial Social Environmental- $2.3 Bn in construction
costs
- Does not avoid business interruption
+ Avoids $525 M in damages in the event of a 100-year storm
+ No maintenance Cost
- Does not avoid business interruption
- Heavy short term interruption from mass construction
● No long term environmental impact.
● Does not reverse current trends
Option 2: constructing a berm spanning the 3 mile coastline
Financial Social Environmental
+ $7.9m in construction costs
+ $1.5m avoided in business interruption
+ Avoids $426.5 M in damages in the event of a 100-year storm
- Obstructs views
- Obstructs beach access
+ Preserves beach
- Cut off tidal marshes from the ocean
- Habitat disruption for native plants and animals
+ Slows beach erosion
- Traps runoff inland and increases chances of adjacent flooding
Option 3: Create a living shoreline
Adjust costs for wetland
Financial Social Environmental
- $480M in construction costs (3 sq miles)
+ Avoids some business interruption
+ Avoids $301 M in damages in the event of a 100-year storm
- $0.5 M yearly maintenance
- Wetland Banking payback range $300m - $1.25b
- Loss of beach
- Decrease of beach tourism
+ Increased tourism for wetlands
+ Increased of wetland recreation opportunities
+ Reverse erosion
+ Expand natural habitats
+ Counteract wetland losses
+ Build up natural shoreline and mitigate future flooding
http://www.ecosystemmarketplace.com/pages/dynamic/web.page.php?section=biodiversity_market&page_name=uswet_market
Option 4: Utilize structural & Natural Elements
Financial Social Environmental
- $324 M to construct * $320 M Wetands (2 sq miles) * $2.6 M Berm (1 mile) * $1.1 M Perm. Pavement
+ $1.5 M avoided in business interruption
+ Avoids $400 M in damages in the event of a 100-year storm
+ $2 M yearly maintenance
+ Wetland Banking payback range $200m - $836m
Wetlands:- Minimal loss of beach
+ Increased tourism
Berm:- Obstructs views
- Obstructs beach access
+ Slows beach erosion Permeable Pavement:
+ Attractive
+ Safer in wet conditions
+ Quieter than roads
Wetlands:+ Reverse erosion
+ Create habitats
+ CO2 Mitigation
+ Build up natural shoreline and mitigate future flooding
Berm:- Disrupt habitats
Permeable Pavement:+ Traps harmful pollutants
http://www.ecosystemmarketplace.com/pages/dynamic/web.page.php?section=biodiversity_market&page_name=uswet_market
The combination solution proves to be the most fiscally responsible option while providing the most social benefit and reversing negative environmental trends
Financial Social Environmental
Elevate Buildings ✖ ✖ -
Construct Physical Barrier ✓ ✖ ✖
Create a Living Shoreline ✓ - ✓
Utilize Structural & Natural Elements ✓ ✓ ✓
In addition to implementing a a combination solution, we suggest an additional 7 mile boardwalk and trail system to maximize social impact
• Boardwalk costs are flexible, ranging from $8m -$10m dependent on materials quality.
• The boardwalk brings accessibility to the beach, city, and wetlands
• Brings total cost of the project to $332m – $334m
Project Timeline
0 Years● Receive funds● Berm and boardwalk
construction begins● Wetland preparation
& planting● Permeable pavement
construction begins
2-3 years● Permeable
Pavement, Berm Completed
● Boardwalk construction continues
● Wetland construction begins
3-6 Year ● Boardwalk
Completed ● Wetland
construction continues
6-10 Years● Wetland
Completed
http://cascadiaprairieoak.org/wp-content/uploads/2014/12/Wetland-Prairie-Guide-FINAL-8_25_14-1.pdf
Wetland funding scenarios $320 Million
• Allow private investors to develop wetlands and sell credits: Revenues between $200m - $836m
• Reduces risk as well as capital needed
• Sales can be split into parcels
Public Private Partnerships
• Could be used in stages to build wetlands
• Wetland credit sales to fund future rounds
• Would significantly increase the implementation timeline
Municipal Bonds
• Much too small to establish significant wetlands
Grants
http://www.dat.state.md.us/sdatweb/taxrate.htmlhttp://www.ecosystemmarketplace.com/pages/dynamic/web.page.php?section=biodiversity_market&page_name=uswet_market
A B C
• Small enough to be handled by tax base
• Covers $2.6M berm costs.• High flood mitigation for small
investment
Municipal Bonds
• There are many non-point source pollution grants and Chesapeake Bay preservation funds that could help fund permeable pavement projects.
• Confident we can cover $1.1 M needed for permeable pavement. Up to $2 m available.
Grants
Berm and permeable pavement funding scenarios $3.7 Million
A A
http://dnr.maryland.gov/watersheds/pubs/planninguserguide/tools/Tool4FundingResources.pdf
• Can be directly voted on by the community
• Bond can easily be supported by property tax base of $42 M
Municipal Bonds
• Scale of the project is suitable for private donation
• Citizens will directly enjoy the benefits
• Similar projects such as the Boise River Park have targets to receive $6.3M in private funding. Timeline could span 10+ years
Private Donations
Boardwalk funding scenarios$8 million
http://www.dat.state.md.us/sdatweb/taxrate.htmlhttp://www.ecosystemmarketplace.com/pages/dynamic/web.page.php?section=biodiversity_market&page_name=uswet_market
A B
Comparables:● The Climate Corporation uses IoT devices and
applications to monitor and accurately predict crop yields. Data is for developing risk profile for climate insurance, allows for claim filing when yield losses are predicted. Adjusters deployed based on advanced forecasting.
● CSC ClimatEdge offers probabilistic climate analytics to general insurance providers allowing them to make business decisions based on climate risks. Current application is for tornado monitoring but flood applications are being developed.
● Marcell device monitors temperature, humidity, resistivity, and moisture. Alerts homeowners of incidents of property damage such as broken water mains.
The insurance industry is currently transforming from digital innovation. IoT devices allow for more accurate damage prediction, immediate claim filing, & increased confidence in risk profiling.
http://innovationtrail.org/post/home-monitoring-device-aims-prevent-property-damagehttp://climate.com/company/press/releases/over-50-million-acres-of-climate-basic-on-farms-across-the-u-s/http://www.csc.com/innovation/insights/109257-weather_and_flood_data_services_csc_climatedge
Predictive analytics provides a compelling use case for NFIP providers. FICO has outlined the following use cases:
Benefits:• Improves margins by selecting
and pricing risks
• Focus limited resources on exceptional cases
• Differentiate insurance services through faster response times
• Lower loss ratio to help mitigate risks
• Drive down insurance rates
Outcomes• Precisely assess risks
presented by commercial insurance clients
• Automated underwriting powered by predictive analytics
• Better understand the sources of drivers of risk
• Demonstrate to reinsurers clear ability to consistently and accurately rate book of business
http://www.fico.com/en/wp-content/secure_upload Predictive_Models_Commercial_Insurance_Underwriting_2116PS.pdf
Predictive analytics create a virtuous cycle which leads to long term sustainable behavior
Collect Real-Time data from NOAA & NWS as
well as IoT devices
Enable predictive analytics for flood related damages
Insurance providers actively manage risk
profile
Insurance pricing becomes more dynamic
and decreases for Matthews
Citizens can monitor risk profile and change
behavior
Citizens will be more ready to implement infrastructure solutions that impact their personal risk profile
Social impact bond model is ideal for incentivizing private innovation for public projects
• Pay for Success bonds currently used for social impact projects, but potential to expand to environmental issues
• Metric-based maturity-No upfront cost to the town-Payment only once benefits have
been realized in the form of lower insurance
• $3m bond is ample for funding private IoT business modelshttp://www.whitehouse.gov/omb/factsheet/paying-for-success
To conclude, it is not too late for Matthews to implement an achievable and sustainable infrastructure project to improve flood resilience.
Matthews can reduce financial impact of flooding by 40-45%
Matthews should construct a 1 mile berm, add 2 miles of additional wetlands, refit streets with permeable pavement, and add additional infrastructure
Diminish rising annual costs
Execute on combination of Natural & Structural Elements
Matthews can increase tourism and recreation opportunities, maintain local beaches, create safer roads, and decrease in-town noise levels
Create streams of new social value
Create new habitats for natural wildlife, reverse beach erosion, trap harmful pollutants, slow tidal energy, and flooding occurrences
Reverse negative environmental trends
Implement big data and predictive analytic tools that prevent growth of flood insurance rates by accurately predict risk profiling
Incentivize digital business model innovation