Loss of Function

1
Unit 4

• Loss of Function

2
Unit 4 Objectives

• After completing this unit, you will be able to
• Explain when and why you should include loss of
  function among the benefits of a mitigation
  project.
• Incorporate loss of function of a building into a
  BC analysis by obtaining and entering
  displacement costs and the value of lost
  public/nonprofit services into the LD Module.

3
Unit 4 Objectives (Cont.)

• After completing this unit, you will be able to
• Incorporate loss of function of a road or bridge
  into a BC analysis by obtaining and entering the
  cost per day of a road closure, a continuity
  premium (if appropriate), and the number of days
  it will take to re-open the road.

4
Unit 4 Objectives (Cont.)

• After completing this unit, you will be able to
• Incorporate loss-of-function costs for a utility
  into a BC analysis by obtaining and entering the
  cost for normal services, the normal volume of
  service, and the number of days it will take to
  restore service.
• Given a mitigation project scenario involving a
  utility, recognize the range of costs associated
  with a loss of function that might be factored
  into a continuity premium.

5
Loss of Function

• Buildings

6
Loss of FunctionBuildings

• Building loss of function is comprised of
• Displacement Costs
• Loss of Public/Nonprofit Services

7
Displacement Costs

• Types and examples of displacement costs
• Monthly Rent
• Other Monthly Displacement Costs
• Furniture rental
• Extra commuting costs
• One-time displacement costs
• Round-trip moving costs
• Utility hookups

8
Calculating Displacement Costs

• Monthly Costs x Displacement Time
• One-Time Costs
• Total Displacement Cost

9
Displacement Time Algorithm

• Damages Displacement Time
• lt 10 0 days
• 10 30 days
• gt 10 30 days 8 days per 1 over 10
• No more than 365 days

10
Displacement Time Algorithm

• Damages Displacement Time
• lt 10 0 days
• 10 30 days
• gt 10 30 days 8 days per 1 over 10
• No more than 365 days

Example 25 Damages Displacement Time 30 days
8 days x 15 30 120 150 days
11
Sample Displacement Cost Calculation
Rent 1,050 Furniture Rental 350 Extra
Commuting Costs 224
Displacement Time 150 days ? 30 days/month

• 1,624/month x 5 months
• 375
• 8,495 Displacement Costs

Moving Costs 250 Utilities Hookup 125
12
Loss of Public or Nonprofit Services

• If any public or nonprofit services are
  interrupted due to damages to the building in
  which they are provided, the value of the lost
  services should be included among both Before-
  and After- Mitigation Damages in a BC analysis.

13
Loss of Public or Nonprofit Services

• A function of
• Value of services to society
• Functional downtime

14
Value of Public orNonprofit Services

• Annual Budget
• The ANNUAL BUDGET of a public/nonprofit service
  is generally used as an estimate of the value of
  the service to society.

15
Annual Budget for Library

• Example
• The annual budget, excluding staff costs, is
  245,000.
• A library employs six full-time equivalent (FTE)
  staff at an average cost (including benefits) of
  42,000.
• What is the librarys total annual budget?

16
Post-Disaster Continuity Premium

• The Post-Disaster Continuity Premium indicates
  how much extra daily cost the tenant agencies
  would be willing to spend to maintain agency
  functions after a disaster.
• The magnitude of the Post-Disaster Continuity
  Premium depends on how critical the services are
  in the post-disaster environment.

17
Loss of Public or Nonprofit Services

• A function of
• Value of services to society
• Functional downtime

18
Functional Downtime

• The FUNCTIONAL DOWNTIME is the time during which
  an agency/organization is unable to provide its
  services due to flood damage.

19
Functional Downtime
20
Functional Downtime for Library

• Example
• A library employs six full-time equivalent (FTE)
  staff at an average cost (including benefits) of
  42,000.
• The annual budget, excluding staff costs, is
  245,000.
• In a 50-year flood, the water is 1 foot above the
  FFE of this 2-story (w/o basement) library.
• What is the functional downtime?

21
Loss of Function in the LD Module

• You MUST
• 1. Enter the annual budget of the
  public/nonprofit services and, if appropriate, a
  continuity premium in the Loss of Function
  section of the module.
• 2. Enter Loss-of-Function Times in the Damages
  sections of the LD Module.

22
Loss of Function

• Roads/Bridges

23
Loss of Function

• Utilities

24
Electric Power

• Studies by the Electric Power Research Institute
  of the economic impact of losing electric power
  came up with a range of economic impacts ranging
  from about 1.00 to 5.00 per kWh of lost service.

25
Determining Loss of Function for Electric Power
1. Get the normal cost of power.
2. Get the normal volume used for the area.
3. Add a continuity premium (1 to 5 per kWh).
4. Finally, estimate the outage time from past
historic events and/or expert opinion - both
BEFORE and AFTER mitigation.
26
Potable Water
1. Get the normal cost of water.
2. Get the normal volume used for the area.
3. Add a continuity premium.
4. Finally, estimate the loss of function time
from past historic events and/or expert opinion -
both BEFORE and AFTER mitigation.
27
Wastewater Treatment

• Normal Cost of Service
• Comparable to potable water and can be derived
  from annual operating cost data.
• Continuity Premium
• Requires estimating the environmental impact of
  releasing partially treated or untreated water
  into a stream or river.
• Estimating environmental impact is an advanced
  skill beyond the scope of this training.

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Unit 4 Summary

• Loss of function for
• Buildings
• Roads and bridges
• Utilities

29
Unit 4 SummaryLoss of Function Buildings

• Building loss of function is comprised of
• Displacement Costs
• Loss of Public/Nonprofit Services

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Unit 4 SummaryLoss of Function Buildings

• Displacement Cost
• monthly cost x displacement time one-time
  costs
• Displacement Time Algorithm

Damages Displacement Time lt 10 0 days
10 30 days gt 10 30 days 8 days per 1
over 10
31
Unit 4 SummaryLoss of Function Buildings

• To determine the loss of public or nonprofit
  services, you MUST
• 1. Enter the annual budget of the
  public/nonprofit services and, if appropriate, a
  continuity premium in the Loss of Function
  section of the LD Module.
• 2. Enter Loss-of-Function Times in the Damages
  sections of the LD Module.

32
Unit 4 SummaryLoss of Function Roads/Bridges

• To determine the economic impact of a road or
  bridge closure, you must obtain the following
  data
• 1. Daily volume of traffic flow
• 2. Average delay or detour time per vehicle
• 3. Economic impact value (e.g., 18, based on DOT
  Memo data)
• 4. Emergency or Commercial Traffic Premium Per
  Hour of Delay
• 5. Functional Downtime (Entered in
  Loss-of-Function Time column of Damages Before
  and After Mitigation tables)

33
Unit 4 SummaryLoss of Function Utilities

• FEMA mitigation projects deal primarily with
• Water
• Wastewater
• Electric power

34
Unit 4 SummaryLoss of Function Utilities

• To determine the economic impact of a loss of
  utility service, you must know or obtain the
  following data
• 1. Unit of service
• 2. Unit of time
• 3. Volume of service
• 4. Normal value per unit of service
• 5. Post-disaster continuity premium per unit of
  time
• 6. Number of days of loss of function

35
Unit 4 SummaryLoss of Function Utilities
Continuity Premiums for Utilities
Utility
Continuity Premium Guidance
Electric
1.00 to 5.00 per kWh lost service.
Potable Water
Derive lower-bound estimates of specific impacts
such as the cost to replace drinking water with
bottled water.
Wastewater Treatment
Requires analysis of environmental impactan
advanced skill.
36
Unit 4 Summary

• Remember
• Some mitigation projects for buildings and many
  mitigation projects for roads, bridges, and
  utilities are designed in large part to reduce
  loss-of-function impacts of important services.
• Loss of function should not be ignored.
• Ignoring loss of function underestimates
  benefits.