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Questions for the Record from the

April 30, 2008, Pre-Disaster Mitigation Hearing: Responses provided by Brent Woodworth on behalf of the Multihazard

Mitigation Council of the National Institute of Building Sciences Q1. The conclusions in your report are quite compelling. One dollar spent on pre- disaster mitigation provides $4 in future benefits. I am interested in your methodology to come up with the $4 benefits number. Please explain. A1. The study was structured to quantify the future savings from hazard mitigation activities related to earthquake, wind, and flood funded through three major natural hazard mitigation grant programs (the Hazard Mitigation Grant Program, Project Impact, and the Flood Mitigation Assistance Program). Two types of mitigation activity were addressed: “project” mitigation, which includes physical measures to avoid or reduce damage from disasters (e.g., elevating, acquiring, or relocating structures threatened by floods and strengthening structures to resist earthquake and wind forces) and “process” mitigation, which includes activities that lead to policies, practices, and projects that reduce risk (e.g., assessing vulnerability and risk, educating decision-makers, and fostering adoption of strong building codes). The study involved two interrelated components. The first component, a benefit-cost analysis, estimated the future savings from FEMA mitigation grant expenditures. This component was quantitative and used a statistically representative sample of FEMA- funded mitigation grants so that results could be generalized for the entire population of FEMA mitigation grants. The unit of analysis for this component was the individual FEMA-funded grant. The second study component, community studies, assessed the future savings from mitigation activities through empirical research on FEMA-funded mitigation activities carried out in community contexts. The community studies were both quantitative and qualitative and examined mitigation activities in a purposive sample of communities. The community studies examined all FEMA mitigation grants received by the selected communities since the programs began in 1988. It provided insights into mitigation effectiveness by exploring how mitigation activities percolate throughout the community in the form of synergistic activities ─ mitigation efforts that would not have occurred had it not been for the original FEMA grant. The unit of analysis was the individual community. These communities were blindly selected to represent predetermined demographic categories. Both components employed common methodologies to the extent possible. HAZUS®MH was used to estimate direct property damage from earthquake and hurricane wind. Supplemental methods were used to assess direct property loss from flood and tornado, business interruption loss for utilities, environmental and historic preservation benefits, and process mitigation activities.

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Benefits were defined as losses to society avoided. The benefits considered in the analysis included: reduced direct property damage (e.g., buildings contents, bridges, pipelines); reduced direct business interruption loss (e.g., damaged industrial, commercial or retail facilities); reduced indirect business interruption loss (e.g., ordinary multiplier or “ripple” effects); reduced nonmarket damage (e.g., environmental damage to wetlands, parks, and wildlife and damage to historic structures); reduced human losses (e.g., deaths, injuries, homelessness); reduced cost of emergency response (e.g., ambulance service, fire protection). Costs considered were taken from the FEMA grants database and included both the federal share of costs and the local match. The study also estimated the effect FEMA grants have on the federal treasury by reducing the amount of federal funds that would need to be spent on disaster response and recovery (and thereby increasing the amount that could be spent on other government programs/projects). Note that the estimates of benefits to society as a whole and the effects on the federal treasury are not additive. The benefits to society are savings of real resources (i.e., reduced casualties, reduced property losses, reduced business interruptions, etc.), and the effects on the federal treasury include economic transfers that may not represent savings of real resources. Reduced damage means that additional federal funds would remain available for other non disaster-related uses. Q2. There have been many suggestions regarding tightening building codes and zoning codes to help prevent damage in disasters. Does your organization have an opinion of those suggestions? A2. One of the most cost-effective ways of reducing the risk of losses from natural hazards is to ensure that up-to-date building codes with requirements that reflect the risks threatening a jurisdiction are adopted for new construction and adequately enforced. If coupled with appropriate land-use and zoning regulations, code adoption/enforcement can contribute substantially to community resilience and sustainability. NIBS/MMC has long advocated and provided programs that foster the development of appropriate risk- reducing building code provisions and convenes groups of expert volunteers to help in this work. While NIBS/MMC does not believe that any single set of code provisions would suit all U.S. communities, we do believe that code adoption and enforcement should be part of programs aimed at helping communities prepare for and/or recover from natural disaster events. Because not all communities have sufficient resources to maintain a building safety department of their own, programs should be developed that will facilitate code adoption/enforcement through cooperation with the national model code groups and neighboring communities. Q3. Your report mentions project mitigation which focuses on physical measures to avoid or reduce damage, and process mitigation which is more focused on policies, and practices. Is one more effective than the other? Is one more cost effective than the other? A3. The benefits and costs of project mitigation activities are more easily measurable than those of process activities and it was in recognition of this fact that the NIBS/MMC study

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drew the distinction between them. The benefits of buyouts of repetitively flooded homes are clear – the homes are no longer at risk and consequently there will be no subsequent damage to those properties. The cost of programs to develop adequate code provisions and land-use regulations to lessen flood damage and to promote adoption of those requirements can be measured, but measuring the benefits of these process activities is complicated because the results of these activities are difficult to quantify. Essentially, future savings from process mitigation activities are achieved when local and state leaders and building and infrastructure owners incorporate mitigation concepts into day-to-day decisions. Activities that raise hazard awareness and inspire land use planning, code enforcement, and community-wide participation are essential ingredients to reducing disaster losses. Policies and practices are eventually realized through physical projects, avoided hazardous areas, and appropriate new development. However, we have no accepted methodology for linking process outputs with loss saving outcomes. Nevertheless, the NIBS/MMC believes that a combination of project and process activities is most appropriate from a cost-benefit standpoint. Further, a blend of both types of activity conducted in a community setting where those at risk identify their priorities often will achieve the most long-term success and become a part of the fabric of community life. Recent events show that nature always has something new to challenge us; therefore, hazard mitigation needs to become one of the issues that all Americans consider when deciding where to live and how to build their homes and businesses. Q4. The eight communities used in your study, did they represent a representative sample of communities applying for grants? How were they chosen? A4. The eight communities were selected using purposive sampling techniques to represent the characteristics of communities that had received grants from FEMA for mitigation activities. The National Emergency Management Information System (NEMIS) data file received on July 23, 2003, was used to identify the population from which the communities were selected. To be eligible for consideration, communities had to:

1. Have received grants from FEMA whose objective was to mitigate damage from earthquakes, flood, or wind (coastal storm, hurricane, severe storm, tornado, typhoon).

2. Be at high risk for earthquakes, flood, or wind hazard(s).

3. Be a single jurisdiction identified with a legal title as a city, town, borough, village or county within one of the 50 states.

4. Have both project and process (includes Project Impact) activities funded.

5. Have received FEMA grants that totaled at least $500,000.

6. Have received no more than 15 grants. One hundred thirteen (113) communities met Criteria 1 and 3 through 6, but only 76 communities were at high risk of at least one hazard.

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Communities were sorted and quota limits were set to maximize the probability that the communities selected for study varied in: (1) the combination of grants they had received from FEMA (earthquake only, wind only, flood only, earthquake and flood, wind and flood, earthquake, wind and flood); (2) whether they were at high risk of earthquake, flood, and/or wind; (3) community population (10,000-49,999; 50,000-499,999; 500,000 and over); and (4) FEMA region. Information about the 76 eligible communities was written on pieces of paper. The 76 pieces of paper were placed in a basket, shaken up, and the first community was drawn. The process was repeated until all communities were drawn. The papers were shuffled between each draw. Once a community was drawn and either accepted or rejected for inclusion in the sample, it was permanently removed from the pool of eligible communities. . . . Data was collected in four phases: pre-interview activities; formal telephone interviews; field visits; and data or information processing. Pre-interview activities included the collection of documents, reports, and other data that could be used both in benefit-cost analysis and in identifying knowledgeable persons to interview in each community. Persons identified in each community were interviewed by telephone using a standardized interview guide. Respondents were asked about existing hazard mitigation regulations or laws, their knowledge of current natural hazard risks, their knowledge of community hazard mitigation activities, their knowledge of specific FEMA-sponsored mitigation activities and their effectiveness, their knowledge of any partnerships that were key in affecting mitigation for the community, and referral information for other knowledgeable persons in the community. Documents or written records for each community were collected from four locations: the FEMA Regional Office, the state emergency management office, in the community during field investigations, and on the Internet. For each community, the first documents collected were the Hazard Mitigation Grant Program (HMGP) grant, Flood Mitigation Assistance grant, and Project Impact grant files listed in National Emergency Management Information System (NEMIS) at the FEMA Regional Office. Similar files were collected at the state emergency management office with the expectation that there would be overlap but that some unique items not found in the federal files would be found in the state files. After two community studies, it was determined that the files at the FEMA Regional Office and the state emergency management office were virtually identical and subsequent searches at the state emergency management office were foregone. Field investigations took place after telephone interviews had been completed and the mitigation grant and Project Impact files had been reviewed. Field investigations had two goals: to find information needed to complete computational analyses and to conduct a broader search for information, independent of information contained in the federal and regional files or gathered in telephone interviews. The focus was on collecting written documents, compact discs, videos, and other records rather than opinions and perceptions.

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Searches on the Internet were conducted throughout the community studies to locate documents, to prepare questions during field investigations, and to find information that could not be located in the field. The communities examined in this study:

1. Freeport, New York; 2. Hayward, California; 3. Horry County, South Carolina; 4. Jamestown, North Dakota; 5. Jefferson County, Alabama; 6. Multnomah County, Oregon; 7. City of Orange, California; and 8. Tuscola County, Michigan.

Q5a. I applaud your thoughts on page 4 about not letting cost-benefit analysis be the sole determination regarding the effectiveness of pre-disaster mitigation grants. Do you think there is a way to work into the grant process some evaluation of these more indirect benefits? A5a. Yes. However, the way that this might be done today would be less precise than how it might be done after additional knowledge about indirect benefits flow from FEMA- funded projects (see the answer to question 5c below about the added knowledge that would be required to accomplish this with precision). All that can be said with reasonable confidence today is that communities with a commitment to mitigation and have a history of mitigation would have higher indirect benefits than those without an established commitment and programs. Q5b. Are grants evaluators prohibited from considering indirect benefits? A5b. Our study did not include grants made under DMA 2000 and we have not been involved in any way with evaluation of the grant proposals; thus, we cannot directly answer this question. Nevertheless, what we can say is that it is important to remember that communities which might rank lower in terms of indirect benefits might benefit the most from FEMA-funded mitigation project since they might have the least pre-project mitigation in place (see the answer to question 6a below for an explanation why). Q5c. How would you try to quantify some of the non-cost benefit aspects of mitigation in order to make them a part of the cost benefit analysis? A5c. As noted in the MMC study, quantifying some of the costs and benefits for indirect benefits is difficult and we succeeded only partially. What would be needed to do this with confidence would be to measure in some standardized way the added benefits of FEMA- funded mitigation projects on a representative sample of FEMA-funded mitigation projects in the nation. This research project would be costly but it is necessary to determine the statistical coefficients that would enable us to predict added benefits flowing from funded projects in different kinds of communities for different hazards. These coefficients would

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be needed to quantify added benefits in a way that would enable them to be added with confidence to future cost benefit analyses for new proposed projects. Applicants should be asked to discuss the non-cost benefits anticipated from the proposed mitigation project and to explain their importance. A qualitative description of these benefits would give insight into the reasons why the local and state applicant agencies value the proposal. Federal reviewers should give great weight to state and local views of their own needs especially when these needs are expressed in mitigation plans prepared pursuant to DMA 2000. Finally, it would be extremely helpful if DMA 2000 and/or other relevant legislation like the Stafford Act that provide either pre- or post-disaster mitigation funds were amended to provide some funding mechanism to support the systematic collection and maintenance of post-disaster data. These data would permit the hazards community to learn precisely which mitigation measures perform well in terms of limiting damage/losses and in what sorts of events and community situations. Q5d. Do you think that this would be a reason to award some or all of the grants on a formula basis rather than a competition? A5d. Since the nation lacks the empirical data to quantify the added benefits of FEMA funded mitigation projects with reasonable confidence (see the answer to question 5c. above), it is difficult to answer this question on the quantitative basis used in the question. The question, however, can be answered on a qualitative basis. Qualitatively, we know that communities with local commitment and/or mitigation programs in place have higher added benefits than those without them. This dichotomous scale could be used to prioritize the “potential for added benefits” in some project formula for project mitigation applications. Conversely, communities who fall into the lower rank of this dichotomous scale (no community commitment to mitigation) might be ranked in the higher end of the dichotomy for “process mitigation grants” intended to develop that commitment and a local program. Q6a. You also place great emphasis on community wide cooperation. Would you advocate that pre-disaster grants have more of a community-based focus rather than individual projects??? A6a. FEMA-funded predisaster mitigation grants foster additional non-FEMA funded mitigation activities and projects in local communities. But, FEMA-funded predisaster mitigation grants maximize this added benefit when they occur in communities that already have an ongoing mitigation program (or set of mitigation activities) in place before the FEMA-funded mitigation project happens. In other words, it’s about the local community mitigation context rather than the character of the FEMA-funded project itself. What this suggests is that a separate program to install local commitment to mitigation in the nation’s communities would maximize the added benefits of individual mitigation grants (e.g., a “Project Impact-like” program). It also suggests that grants for “project mitigation” would have increased added benefits if they followed grants for “process mitigation” that develop

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local community mitigation commitment and programs in communities that lack them before “project grants” occurred. Q6b. Does that extend to non-profits that offer cross jurisdictional or regional groups for planning on disaster mitigation? A6b. Yes. Any activity that fosters the development of local community commitment and local programs for mitigation would enhance the context for community-specific project mitigation grants to have maximized added benefits. This certainly would extend to non-profits that offer cross jurisdictional or regional groups for planning on disaster mitigation (assuming, of course, that those non-profits are effective at reaching their intended goals).