[CEUS-earthquake-hazards] The balance

[Joe Tomasello]

Zhenming, et al:

 

I agree whole heartedly.  I would only add that each community should be
free to make their own seismic mitigation policy.  

 

This is the way it's been done in the past; it should be remembered that
building codes are the purview of the states not the federal government..
Actually, the 1997 NEHRP provisions were novel in that they came from the
Federal government and were handed down to the states.  If any resistance
was meet FEMA simply threatens to withdraw funds for disaster response; at
least that's what happened in Tennessee. 

 

A top down formulation of building codes costs private (non-government)
building owners to the benefit of the government. Determining issues beyond
life safety and collapse protection, such as limiting economic loss and
having event resistant functionality, is the right of the building owner,
(from my vantage point there is no negotiation on the limits of these
rights).

 

In addition the top down approach makes for some strange politics. As an
example, FEMA, the prime agency funding for the National Earthquake Hazard
Reduction Program (NEHRP), in 2003, insisted that Tennessee pass stringent
seismic requirements using the carrot and stick approach. At one time,
citing large economic losses in California related to earthquakes, FEMA's
Mitigation Director Mr. A. Todd Davison strongly recommended that the
Tennessee Department of Commerce & Insurance pass a stringent seismic
regulations. He went on to say that the consequences for failing this was
the withdrawal of  funding for emergency response for such things as the
tornados experienced in Jackson Tennessee in 2003. At the same time he
offered no cost/benefit relationship for the region to justify the stringent
requirements; that is except to cite the billions of dollars lost as a
result of Northridge.  He suggested that not passing stringent seismic
requirements would result Federal agencies being "forced to reevaluate the
availability of Federal programs within applicable portions of the State."
In effect, the adoption of stringent mitigation means that the cost would be
borne by the consumer and taxpayer while the grants and funding would be
sent to the state. The state eventually adopted strong seismic provisions.
Partly because Memphis never had a single fatality, injury, or a single
building collapse as a result of an earthquake, the requirements were
modified opting for a more moderate seismic hazard approach; that is until
FEMA could produce a cost benefit study that would show a net advantage its
citizens. 

 

 

Joseph Tomasello, PE

5880 Ridge Bend Rd.

Memphis, TN 38120

 

Phone:

(901) 761-2016 office

(901) 821-4968 direct

(901) 412-8217 mobile

From: Wang, Zhenming [mailto:zmwang at email.uky.edu] 
Sent: Friday, January 11, 2008 7:09 AM
To: Rogers, David; Joe Tomasello;
ceus-earthquake-hazards at geohazards.cr.usgs.gov
Cc: Seth Stein
Subject: RE: Re: [CEUS-earthquake-hazards] The balance

 

I agree with David that any mitigation policy should be debated openly. But
so far, many of the policies made for seismic hazard mitigation are not
based on scientific facts and open discussions. The society makes mitigation
policies based on risk, not hazard information.  It would be helpful for
making sound seismic hazard mitigation policies if geo-scientists and
engineers can define and discuss the true seismic hazard and risk in the
central US.

 

Zhenming

 

  _____  

From: ceus-earthquake-hazards-bounces at geohazards.cr.usgs.gov
[mailto:ceus-earthquake-hazards-bounces at geohazards.cr.usgs.gov] On Behalf Of
Rogers, David
Sent: Wednesday, January 09, 2008 6:01 PM
To: Joe Tomasello; ceus-earthquake-hazards at geohazards.cr.usgs.gov
Cc: Seth Stein
Subject: Re: [CEUS-earthquake-hazards] The balance

 

Joe 

 

This isn't a new issue; the CA Seismic Safety Commission has had to deal
with these kinds of issues for years.  The figure I'd be suspicious of is
the $110 billion being suggested by the California Healthcare Association,
which is a trade organization that lobbies for favorable legislation on
behalf of hospital owners and operators - many of which are wealthy
corporations.  They consistently oppose legislation that mandates increased
government regulations or costs. They are the same organization that fought
against hospitals being required to have their own onsite power generation
back in the early 1960s, asserting that it would be cost-prohibitive and
never be utilized sufficiently to justify the costs, etc. etc.   And they
had numbers that "proved" their case, because CA hadn't experienced a
sizable earthquake near a metropolitan area between 1906-71 (the utilization
calculation would be very different today, esp. with the summertime power
brownouts).  These sorts of organizations and lobbyists always throw out
huge dollar values to justify their cases - e.g. if you put that regulation
on us, it will put us out of business and it will costs billions and
billions of dollars, etc. etc.   There will be a cost, but what that actual
cost will end up being is usually inflated significantly by trade
organizations when they are opposing proposed legislation.  That's just the
way the lobbying game is played.

 

We've dealt with a similar, but smaller issues here in Missouri, whenever
legislation is proposed (almost every year) to require skilled care and
convalescent facilities to furnish onsite remote power generation  -- they
spend huge amounts of money to repress such legislation, asserting that it
will "bankrupt" them and that their facilities are "barely scrapping by"
because their patient fees are controlled by Medicare, etc., etc., etc.
That's what the SAY anyway ... but, when you see the slick lawyers doing
their lobbying, you sort of get the felling that SOMEBODY is making enough
money in the skilled care facility business to hire high-powered lobbyists..


 

So, there's always two sides to every tale.  I would agree that, as
engineers or planners, we should always be examining the cost-benefit
ratios.  But, we should also realize that the actual dollar losses incurred
by a natural or man-caused disaster are far beyond the figures predicted in
FEMA models like HAZUS. Just look at the economic impact of the 9/11
attacks; the two World Trade Center towers are only a tiny fraction of the
actual economic loss caused by their collapse.  

 

So, these issues should be debated out in the open, realizing that most
people come to the table with specific agendas...In raising that issue, your
concern is valid.        

 

Dave Rogers

Missouri Seismic Safety Commission

 

J. David Rogers, Ph.D., P.E., R.G., C.E.G., C.H.G.
Karl F. Hasselmann Chair in Geological Engineering
Department of Geological Engineering
129 McNutt Hall, 1400 N. Bishop Avenue
Missouri University of Science & Technology
Rolla, MO 65409-0230
(573) 341-6198 voice
(573) 341-6935 fax
E-mail: rogersda at mst.edu
URL: www.mst.edu/~rogersda

Formerly the University of Missouri-Rolla

  

  _____  

From: ceus-earthquake-hazards-bounces at geohazards.cr.usgs.gov
[mailto:ceus-earthquake-hazards-bounces at geohazards.cr.usgs.gov] On Behalf Of
Joe Tomasello
Sent: Wednesday, January 09, 2008 1:51 PM
To: ceus-earthquake-hazards at geohazards.cr.usgs.gov
Cc: 'Seth Stein'
Subject: [CEUS-earthquake-hazards] The balance

 

Buddy:

 

I'd like to offer the following for your e-mail discussion group:

 

 

Natural disasters such as earthquakes create complex situations for policy
makers. The difficulty lies in the balance between the costs of mitigation
and the actual risk. Failing this, policy makers could find themselves
dealing with unintended consequences such as those experienced by the
hospital industry in California.  If it's worth the expense in any one
region it would be California; but looking at the hospital industry in
California we don't see it.

 

Earthquake risks in California are, to some degree, statistically
predictable; being a near certainty that a moderate to strong earthquake
will occur somewhere on the west coast during a single generation of the
built environment. California attempted to balance public safety with
mandated seismic mitigation in a knee jerk reaction to the 1994 Northridge
earthquake California's Legislature passed Senate Bill 1953 (SB 1953). The
bill was an unfunded mandate to retrofit, rebuild, or close; a free lunch
for California taxpayer. However, over the past decade the consequences of
the mandate caused a once sound hospital system transform into one of the
nation's foremost financial basket cases.

 

As in California, policy makers in the New Madrid Seismic Zone are led to
believe that earthquake mitigation costs are small, having little effect on
the built environment. California's mitigation program entails retrofitting
all acute care hospitals or re-building nearly 70 million square feet. The
pace of construction is limited to approximately 1.5 million to 2 million
square feet per year due in large part to the ability of regulatory agencies
to keep up. Furthermore it takes upward of 10 years to design and build a
new hospital.  "The lengthy process for review and approval of hospital
construction and retrofitting projects is far too long. Economic growth is
being thwarted; jobs are being lost; and patient safety is being
compromised."[i]  The result is that it will take nearly 30 years to
complete all the construction required by SB 1953. [ii] The extended
deadline is 2013.

 

The size and scope of most of these projects are very large and expensive.
Compliance could cost California hospitals as much as $110 billion dollars.
The original estimate assumed that the number of patients and the number of
beds would generally remain the same.  However, modern design standards are
most effective with facilities 35% to 60% larger[iii]. Thus, the scope of
each construction project will increase as will the overall cost; perhaps as
much as 20%.  [iv] In California construction costs are rising at an annual
rate of more than 14 percent above the Consumer Price Index resulting in
construction costs more than 40 percent higher for comparable facilities in
other states.[v] In my view this increase is likely to continue do to
regulatory oversight, the limited number of qualified contractors, as well
as the annual inflation of material costs. In California, a fully furnished
and equipped acute care facility (labor and materials) costs $1,000 per
square foot.  Since the SB 1953 mandates affect for-profit, non-profit and
publicly owned organizations most all projects will be financed.  Depending
on the terms of the loan the cost in current dollars for an acute care
facility the square foot cost can exceed $2,800; comparatively normal office
construction in Tennessee is roughly a third the cost per square foot. 

 

Looking at FEMA's annualized earthquake losses[vi] we find the relationship
of Cost vs. Benefit even more lopsided. FEMA reports that California will
experience a loss of approximately $3,167.5/$Million of infrastructure each
year as a result of earthquakes. Looking at the same 50 year period,
California can expect to lose approximately 15.8% of the present value of
hospitals. Thus, California's acute care infrastructure, worth approximately
$48 Billion [my estimate - C. Duane Dauner, President and Chief Executive
Officer, California Healthcare Association, Statement "Heath Care Scene in
California," May 10, 2001, suggested 24 Billion.], should expect a loss of
approximately $7.6 Billion due to earthquake. We find that California is
spending $110 Billion to offset a loss of $7.6 Billion; a cost benefit
relationship greater than 14.  Over the past 10 years, we've asked FEMA for
a Cost vs. Benefit analysis for the New Madrid Seismic Zone.  So far we
haven't seen anything that would come close to suggesting that the public
would benefit spending limited resources. 

 

There are a more subtle negative consequences resulting from forcing acute
care facilities to close because they don't meet mandated requirements.
California is experiencing a critical closure of hospitals with the closure
of over 50 hospitals in the 10 year period between 1995 and 2005. More than
3,000 acute care beds have been removed from service between 2001 and 2005.
In the five year period prior (1995 to 1999) 23 hospitals closed. Unfunded
mandated seismic requirements are creating a stampede for funding, usually
in the form of bonds.  The median credit ratio of California hospitals had
nosed dived to the junk-bond status.  The money needed to retro fit
California hospitals is drying up. [vii] "Nobody can bear the burden [of SB
1953 unfunded mandate]"[viii]  Here in the New Madrid Seismic Zone we're
told that the cost is minimal. 

 

"Seismic upgrades are important. But mandating them during the worst
economic time in the history of California hospitals is like ordering a
homeowner to fix a dilapidated porch on a house that's on fire. Right idea.
Wrong time."[ix] How many doctors and nurses could have been hired in lieu
of spending the money on hospital infrastructure? Just how many lives will
be saved? How many lives will be lost because of the loss of acute care
facilities? Who pays, the bottomless pocket of the taxpayer? Each of the 35
million people in California will need to pay $3,143 (per capita state and
local taxes were roughly $1,600 in 1996).  Are the people of California
going to be willing to forfeit three times their current tax burden? 

 

If the benefits (reduction of earthquake related economic loss or lives
lost) don't outweigh the costs in California, how can they be justified in
the New Madrid Seismic Zone? 

 

 

Joseph Tomasello, PE

5880 Ridge Bend Rd.

Memphis, TN 38120

 

Phone:

(901) 761-2016 office

(901) 821-4968 direct

(901) 412-8217 mobile




  _____  




  _____  




  _____  




  _____  




  _____  


  _____  

[i] California Heathcare Association Statement on the Hospital Construction
Plan Review and Area Compliance Process before the California Performance
Review Commission, U.C. Riverside, August 13, 2004.

[ii] Ibid., 4

[iii] Ibid., 41

[iv] Ibid., 8

[v] Ibid., 30

[vi]  FEMA 366  Hazus 99 Estimated Annualized Earthquake Losses for the
United States, February 2001, 16

[vii] California HealthCare Foundation, The Financial Health of California
Hospitals, June 2007, 2-13

[viii] Ibid., (interviews with key unnamed health care leaders), B-6

[ix] The Press Democrat, Another hospital falls, what killed Sutter Medical
Center - and what will it mean to families like mine, January 14, 2007

-------------- next part --------------
An HTML attachment was scrubbed...
URL: http://geohazards.usgs.gov/pipermail/ceus-earthquake-hazards/attachments/20080111/4fce0727/attachment-0002.html