The U.S. Resiliency Council (USRC) Goals, Objectives and Founding Principles

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1 The U.S. Resiliency Council (USRC) Goals, Objectives and Founding Principles Evan Reis 1 and Ronald L Mayes 2 1 Co-Founder of USRC; Senior Managing Engineer and Director of Business Strategies, Hinman Consulting Engineers, One Bush Street, Suite 510, San Francisco, CA 94104; PH (415) ; FAX (415) ; EReis@hce.com 2 Acting ED USRC; Staff Consultant, Simpson Gumpertz & Heger Inc., 100 Pine Street, Suite 1600, San Francisco, CA 94111; PH (415) ; FAX (415) ; rlmayes@sgh.com ABSTRACT Building on the work of the SEAONC Existing Buildings Ratings Committee over the past eight years, and the recommendations of an Applied Technology Council (ATC) User s workshop, in 2011 the U.S. Resiliency Council (USRC) was formed as a 501(c)3 nonprofit organization to be the administrative vehicle for implementing a rating system for buildings subjected to natural and man-made hazards. Measuring and improving the resiliency of the country s building stock is a national imperative. Current methods to define and evaluate resiliency are often inconsistent and lack both standardization and verification. The USRC will issue either transaction or verified ratings, much like the US Green Building Council issues LEED ratings. Ratings will benefit building owners, lenders, tenants, and government jurisdictions by increasing the value of well-designed properties and providing a means to quantify risk. Policy makers will use USRC ratings to compare and prioritize relative risks and to form a basis for developing long-term resilience policy. This paper describes the goals and objectives, the organizational structure, and the founding principles of the USRC. Another paper in this session (Mayes and Reis, 2015) discusses the need for a building rating system, the potential users, the information it provides, and the measures that will be used to maintain the long-term credibility of the system. Two additional papers describe the two evaluation methodologies (ASCE 31/41 translation, Hohbach et.al. 2015, and FEMA P58, Haselton et.al. 2015) that will initially be used to determine the earthquake ratings. THE UNITED STATES RESILIENCY COUNCIL The mission of the USRC is to be the administrative vehicle for implementing a building performance rating system. As such, it promotes and implements a rating system, educates the public about hazards associated with buildings, accredits engineers and other professionals to perform ratings, and provides technical reviews

2 of ratings for conformance to the technical methodologies. The confluence of a series of events has led to an increase in urgency and an acceleration in USRC development activities. These include: (1) completion of the FEMA P-58 methodology quantifying performance in terms of repair cost, repair time, and casualties; (2) the development of the SEAONC Earthquake Performance Rating System (EPRS) which envisioned the first translation between existing engineering tools and a building rating system; and (3) the high-profile effort in the City of Los Angeles to identify and mitigate their seismic risk, as announced by the Mayor in November These events have resulted in the technology, vision, and demand needed to make the vision of a building rating system a reality. BACKGROUND AND VISION OF THE USRC Based on the recommendations of an ATC User s workshop that was held in 2011, an attendee, Eric Von Berg, (Past President of the California Mortgage Banker s Association), proposed the formation of a non-profit organization to be the implementation organization for a rating system to express the earthquake performance of buildings. Fortuitously a month earlier Evan Reis and Kevin Moore had registered the U.S. Resiliency Council (USRC) as a 501(c)3 nonprofit organization. These two concepts were combined and the USRC was launched in 2011 as an embryonic non-profit organization to become the administrative vehicle for implementing a rating system. The four co-founders of the USRC were Eric Von Berg, Ronald Mayes, Evan Reis and Kate Stillwell. Ronald Mayes was appointed the Acting Executive Director in October The vision for the USRC is that it will play a similar role that U.S. Green Building Council (USGBC) performs for sustainable design. It will provide a non-profit organization to promote and implement a rating system and educate the public about seismic and other hazard risks (hurricane/tornado, flood and blast) associated with buildings. It will also bring together all stakeholder groups concerned about the safety of buildings into leadership and advisory positions. In late September 2013, the Founders decided to determine if there was sufficient interest in the earthquake and structural engineering community to support start-up funding to enable the launch of the organization. By late April 2014, in excess of $500,000 in funds had been committed over a two-year timeframe by those firms and organizations that desired to become Founding Members. There are a total of 64 Founding Members, and all are listed on the USRC web site ( In June 2014, the first organizational meeting of the Founding members was held to develop the organizational structure and operational procedures of the USRC with a goal to formally launch the organization as quickly as practicable. The Founding Members met 11 times prior to the launch of the USRC. At the Founding Members (FM) second meeting, they authorized the formation of two major committees, as shown in the organizational chart of Figure 1 the Interim Technical Advisory Committee (TAC) and the Interim Stakeholders Advisory Committee (SAC).

3 The TAC committee met 14 times prior to the launch of the organization. It consisted of 42 members with one representative from each structural engineering FM firm and 2 representatives each from the Structural Engineers Association of California (SEAOC), Structural Engineers Association of Central California (SEAOCC), Structural Engineers Association of Northern California (SEAONC), Structural Engineers Association of Southern California (SEAOSC), and Structural Engineers Association of San Diego (SEAOSD). There were approximately 32 active members of TAC. The interim SAC consisted of 45 members from the user community and meet a total of five times providing valuable information to the FMs and TAC as they developed the technical and organizational issues prior to launch of the USRC. Figure 1. Organizational Structure of the USRC. FEATURES OF THE USRC RATING SYSTEM The key features of the USRC and its Rating System were developed by the SEAONC Buildings Rating Committee (2008, 2009, 2011, 2012, and 2015) and identified in the ATC 71-2 workshop of March 2011, funded by FEMA, and organized by ATC with help from the SEAONC Buildings Ratings Committee. Attendees included stakeholders representing building owners, investors and tenants from industries including healthcare, high technology, education, government, real estate, and finance. Participants identified deficiencies in current practices for the assessment of building risks. They identified several key characteristics for a rating system to be successful and to achieve widespread use. These included: Multiple dimensions including safety, damage, and downtime

4 Hazard levels consistent with current codes to assess safety, and possibly shorter return periods to evaluate damage and downtime Rating symbols / indicators that communicate the level of performance in a simple and effective way A quality control and qualification system A requirement that licensed engineers produce ratings for commercial buildings Estimation of performance based on a defined, absolute scale rather than relative only to other buildings A cost structure reflecting the level of evaluation necessary to prepare the rating The essential features of the USRC RATING SYSTEM are given Table 1. More detailed descriptions of the definitions are provided in the companion paper by Mayes and Reis 2015 and are summarized as follows: Table 1. Summary Definitions of USRC Ratings. Safety Repair Cost Recovery 5«Injuries and blocking of exit paths unlikely 4«Serious injuries unlikely 3«Loss of life unlikely 2«Loss of life possible in isolated locations 1«Loss of life likely in the building 5«Minimal Damage (<5%) 4«Moderate damage (<10%) 3«Significant damage (<20%) 2«Substantial damage (<20%) 1«Severe damage (40%+) NE Not Evaluated 5«Within hours to days 4«Within days to weeks 3«Within weeks to months 2«Within months to a year 1«More than one year NE Not Evaluated The three dimensions, or components, of a Rating System are Safety, Repair Cost, and Time to Regain Basic Function.

5 The Safety Rating addresses the physical health and safety of building occupants during the earthquake shaking and through egress The Repair Cost Rating addresses the financial loss associated with repairs needed to restore the pre-earthquake condition The Time to Regain Basic Function addresses the time needed to restore the building's capacity to support the basic intended functions of its preearthquake use and occupancy; thus, this means "functional recovery," as opposed to re-occupancy or full recovery The three dimensions are conceptually independent. A 3-star Safety Rating, for example, does not imply and is not implied by a 3-star Repair Cost Rating or a 3-star Recovery Rating. A safety rating is always required. All three dimensions shall be reported even if one or two of them are not evaluated, as this communicates to the users that earthquake performance is about all three dimensions, although one or more of the dimensions maybe more relevant to different stakeholders. Each rating level is represented by 1 to 5 "stars." More stars indicate more desirable performance. In addition to the symbolic representation (the stars), each level also has a brief name and a longer, more complete definition (see Mayes and Reis, 2015). In general, Ratings are intended to correspond to average performance given a single earthquake with a return period of 10% in 50 years. The five rating levels are expected to capture practically all of the current building stock. However, it is neither the intent nor the expectation that the five rating levels represent equal portions of the building population. Rather, the highest rating levels will only be assigned where the building's design explicitly sought exceptional performance relative to a typical new building of normal occupancy. In addition to the five rating levels, the Repair Cost and Time to Regain Basic Function dimensions have a "Not Evaluated" option for cases where the underlying methodology does not justify or support a specific rating. The Not Evaluated option may also be used where a rating for that dimension is not required for the rating program. Where industry and regulatory precedents exist, the rating levels are set to respect them. Otherwise, the rating levels are intended to respect the perspective of rating users (owners, tenants, lenders, regulators), as opposed to more academic or theoretical perspectives of some engineers and researchers. RATING TYPES TRANSACTION OR VERIFIED Transaction ratings are primarily used for financial and real estate transactions and are not for public display or to be used in marketing materials. They are limited to three stars in each of the three dimensions, and one in every seven ratings of a

6 Certified Rating Professional (CRP) is given a technical review. Verified ratings are for public display either in the entrance of a building or for use in marketing materials. Every verified rating is subjected to either a technical or elevated review. GOALS OF THE USRC The goals of the US Resiliency Council is to be the administrative vehicle for implementing rating systems for buildings for earthquakes, hurricanes and tornadoes, floods and blasts, and to educate the building industry and the general public about these risks. The USRC will: Use information and market forces to incentivize action Bring together diverse stakeholders and technical experts into leadership and advisory positions Promote quality, usability, and fairness to increase public acceptance, adoption, and implementation The goal is to create an outcome in which building performance in earthquakes and other natural disasters such as hurricanes and tornadoes, floods, and blast loadings are more widely understood. CHALLENGES ASSOCIATED WITH A RATING SYSTEM The challenges associated with the creation of a rating system are significant. A rating system must be technically rigorous, but easily understood by non-technical audiences. It must communicate complex engineering ideas about performance measures and hazard levels, but in a sound-bite fashion. It must be reliable and repeatable, but easy (and inexpensive) to implement. It must provide a realistic assessment of potential seismic risk, but should not be so conservative that most buildings end up with a low rating. Finally, it must represent a consensus opinion from broad-based representation within the engineering community, while also considering input from stakeholder groups that do not come from engineering backgrounds. In an effort to take advantage of the opportunity that currently exists, the USRC has formed a diverse coalition of financial supporters (i.e., Founding Members), and organized a series of technical and administrative committees, with the commitment to resolve the technical, legal, and organizational challenges to achieve a launch of the organization in late OPERATIONAL CONSIDERATIONS Aside from the technical challenges associated with a building rating system, the USRC faces legal, organizational, and financial challenges to resolve. The USRC Interim Governance Board developed a set of bylaws that have been adopted, as well as operating policies and procedures. An expanded Board of Directors has been elected by the Founding Members and held its first meeting on May 28, The

7 new Board will now lead the organization; obtain legal protections; and develop a viable business and financial model (including costs for ratings, certification, and auditing) for long-term sustainability of the organization. The future will include marketing, education, training, and outreach activities to engineers and stakeholders. Expanded USRC Board of Directors Ronald Mayes (Founder - Simpson Gumpertz & Heger Inc.) Eric Von Berg (Founder Newmark Capital, Past President Mortgage Bankers Association) Evan Reis (Founder - Hinman Consulting Engineers) Sharyl Rabinovici (Social science and public policy) Sorrel Hanson (FM Global) Tom Tobin (Public Policy) Michael Bade (Campus Architect University of California, San Francisco) Johanna Cunningham (Association Executive for Apartments Association) Michael Cochran (Weidlinger Associates, Inc. Past President of SEAOC) David Friedman (F/E and non-profit expertise) Chris Poland (Consultant, formerly with Degenkolb Engineers member NIST resilience efforts) MEETING THE CREDIBILITY CHALLENGE Select features of the USRC rating process technical review and certification are a direct response to stakeholders perceived need to reconcile systems currently in use. Existing risk quantification metrics are subject to real or perceived distortion and manipulation within the marketplace. Abuses have been documented in most buyerpay rating systems, including collateralized bond ratings, appraisals for subprime mortgages, and the current PML system for natural hazard (earthquake and hurricane) risk. There is inherent pressure on such a system where the buyer of the rating has the most to gain from it being below a market threshold, to the point where the current PML rating system has become essentially unreliable. Sarbanes Oxley has pushed the accounting industry to meet this credibility challenge by having an audit of the audits process where those CPAs that meet certain criteria and agree to be subject to this annual review of their audit reports are allowed to audit SEC reviewed companies. The USRC will use a similar technical review process. The deficiencies with the current state of the PML process have been catalogued (Meyer, 2004) and primarily rest on 1) the definition of PML itself, and 2) the process by which the PML is calculated. With respect to the latter, the main concern is the common use by both engineers and non-engineers of methods that do not have

8 a sound technical basis, or the gaming of the methods to achieve a PML beneath the required threshold. When this happens buyers of properties 1) are not presented with the true financial measure of the potential asset risk, and 2) are not able to effectively develop strategies to manage or mitigate risks to their employees and business operations. Similar to the USGBC, the USRC will adopt a certification program for professional engineers. Certification will require specific knowledge of structural engineering and the performance of buildings subject to different natural and man-made hazards. The USRC will develop training materials and offer courses and workshops to enhance the technical skills of rating professionals. USRC certification as a Certified Professional Rater (CRP) will lead to a high level of technical competence and consistency in delivering USRC Ratings. The USRC provides quality control in the form of a technical or elevated review of the rating types. In general, each USRC Certified Rating Professional is responsible for the quality of the Rating, just as he or she is responsible for the quality of the underlying seismic evaluation that the rating is based upon. The USRC requires either a technical or elevated review for every verified rating prior to the issuance of the verified rating. The USRC will perform a technical review of one in seven randomly selected transaction ratings performed by each USRC Certified Rating Professional (CPR). If a serious discrepancy is found as a part of a technical review, then it will be referred to the USRC Rating Review Committee (RRC) for disposition. The RRC will decide the seriousness of the discrepancy and will have the authority to review prior ratings and/or require technical review of up to the next 5 ratings from that Certified Rater Professional (CRP) at the CRP s expense. If egregious gaming of the system is deemed to have occurred, then the RRC may, at its discretion, refer the CRP to the USRC Discipline Committee for loss of their Certification subject to USRC policies on disciplinary action and appeals. CONCLUSIONS The creation of the US Resiliency Council comes at a time when the federal government has recognized the need for long-term resiliency planning of its infrastructure, critical facilities, and communities. The steadily increasing economic and social losses in U.S. disasters, and the awareness of the potential effects of catastrophic events on an increasingly dense and unprepared population, are a clear call for more consistently-applied assessment techniques to measure building resiliency. The financial and real estate sector is under scrutiny in terms of its ability to assess risk and measure the quality of its assets. Existing risk quantification metrics are subject to real or perceived distortion and manipulation within the marketplace. The deficiencies with the current state of the PML process have been catalogued with a

9 significant concern being the common use by both engineers and non-engineers of methods that do not have a sound technical basis, and the gaming of the methods to achieve a PML beneath the required threshold. The USRC offers a technically defensible and replicable methodology for implementing a consistent and measurable rating system. Ratings will build upon existing technical standards and cover a range of natural and man-made hazards. USRC will provide accreditation, training and peer review, and either verified or transaction ratings that will be usable by both the public and private sector, by building owners and occupants, for financial and safety assessments. REFERENCES ATC (2008). NEHRP Workshop on Meeting the Challenges of Existing Buildings Part 1: Workshop Proceedings, ATC-71, Applied Technology Council, Redwood City, California. ATC (2011). Proceedings: Workshop on a Rating System for the Earthquake Performance of Buildings, ATC-71-2, Applied Technology Council, Redwood City, California. ATC (2014). Proceedings of FEMA-Sponsored Workshop on Communicating Seismic Performance Metrics in Design Decision-Making, ATC-58-4, Applied Technology Council, Redwood City, California. Haselton, C., McDonald et.al. (2015). U.S. Resiliency Council FEMA P58 Evaluation Methodology, Proceedings of the 2015 ATC&SEI Conference on Improving the Seismic Performance of Existing Buildings and Other Structures, San Francisco, December Hohbach, D., Bello, M., and McCormick et.al. (2015). SEAONC Earthquake Performance Rating System, Proceedings of the 2015 ATC&SEI Conference on Improving the Seismic Performance of Existing Buildings and Other Structures, San Francisco, December 2015 Mayes, R. L., and Reis, E. (2015). The U.S. Resiliency Council and the Building Rating System, Proceedings of the 2015 ATC&SEI Conference on Improving the Seismic Performance of Existing Buildings and Other Structures, San Francisco, December 2015National Academies, 2011, Grand Challenges in Earthquake Engineering Research, A Community Workshop Report, The National Academies Press, Washington, D.C. SEAONC Existing Buildings Committee, Building Ratings Subcommittee (2009). Report Cards for Buildings: A Proposed Rating System for Earthquake Performance, Proceedings of the 2009 ATC&SEI Conference on Improving the Seismic Performance of Existing Buildings and Other Structures, San Francisco, December SEAONC Existing Buildings Committee, Building Ratings Subcommittee (2011). SEAONC Rating System for the Expected Earthquake Performance of Buildings, Proceedings, 80 th Annual Convention, Structural Engineers Association of California.

10 SEAONC Existing Buildings Committee, Building Ratings Subcommittee (2012). SEAONC s Earthquake Performance Rating System: Translating ASCE 31-03, Proceedings, 81st Annual Convention, Structural Engineers Association of California. Stillwell, K., Mayes, R., Ansari, M., Bello, M., Bittleston, M., Blaney, C., Bonowitz, D., Bravo, E., Hobach, D., McCormick, D., and Roche, A. (2008). Report Cards for Building Seismic Safety: A Proposed Rating System for Earthquake Performance of Buildings, Proceedings, Structural Engineers Association of California Annual Convention, Kohala Coast, Hawaii.