Tenet 3 Flood Risk is a Present Value

Tenet 3. Flood Risk is a Present Value $

Flood Risk Hazard: Probability of Flood Level Risk: Probability of Consequences (3) includes any flood control failure probability at each Location-Specific Full-Spectrum Flood Hazard Level 1. Safety § Fatalities § Injuries § Health Impacts Management goal is Prevention PRIMARILY: EVACUATE! Alternative measures require design for extreme hazard & rigorous Factors of Safety

Flood Risk 2. Economic/Financial § Damages— Buildings, Contents, Autos, Facilities, Infrastructure, Resources Expenses— Temporary Relocation, Clean-up § Lost Income— Business Activity/Taxes § Economic/Financial consequences for flooding can be priced! Management goal is Timely Recovery Clean-up/Repair/Rebuild/Restore to Pre-Flood Status NOT Prevention 3. Social/Cultural/Historic/Ecologic Management goal is subject to priorities

Most approaches aimed at economic/financial consequences; are NOT sufficient for public safety! New Orleans Regional Levee Officially Designated: Hurricane & Storm Damage Risk Reduction System

The focus of this presentation is wise management of flood economic risk on the part of households, businesses, and communities to provide for Timely Recovery.

Flood Hazard Curve Location-Specific Full-Spectrum Scientific Guesstimate

Flood Economic Risk Curve Location-Specific Full-Spectrum Scientific Guesstimate Total cost at each hazard level

Integrate Flood Economic Risk Curve Expected Annual Cost $2, 100

Actuarial Cost � Further integrate Expected Annual Cost over many similar locations/exposures across many independent regions � Helps “average out” input random errors � Reduces the location-specific Scientific Guesstimate � Used in insurance � Very long, well-established history in risk management for fire, wind, drought, hard freeze, & other hazards

Cumulative Expected Annual Cost Long-Term Exposure: 30 Years $2, 100 x 30 = $63, 000

Adjust for Future Hazard Increase $73, 000

Plus Inflation $122, 400

Flood Economic Risk Present Value Impact on Property Value $54, 000

Aggregation of Flood Economic Risk � Expected Annual Costs & Present Value for multiple individual locations are easily aggregated over § § Watersheds Neighborhoods Communities Regions � To assess § § Area-wide flood economic risk Management options supporting Timely Recovery

Tenet 3. Flood Risk is a Present Value $

Thank You! Questions/Comments? Please Share! bobjacobsenpe@gmail. com www. bobjacobsenpe. com 225. 678. 2414