Report to Hydrology Laboratory, Office of Hydrology, National Weather Service, NOAH, Dept. of Commerce, Contract 6 -35229 / The value of a forecast system in preventing urban property damage depends on the accuracy of the forecasts, the time at which they are received, the response by the floodplain dweller and the êfficacy of that response. A systems model of the overall flood forecast -response system is developed. Evaluation of the system is accomplished by a decision theoretic methodology. A case study is done for Milton, Pennsylvania, which evaluates the present system and potential changes to it. It is concluded that the sequential nature of the forecast sequence must be considered in modeling the flood forecast -response system if a meaningful evaluation of the economic value of the system is to be obtained. Methodology for obtaining the parameterization of the model from the available data is given. Computer programs have been written to handle a good portion of the calculations. While more work is needed on obtaining accurate parameterization of certain parts of the model, such as the actual response to forecasts; use of the procedures and programs as they now stand produces reasonable evaluations.