Report - PEER - University of California, Berkeley

Benefit–cost ratio(BCR) 2.5UC Berkeley – Stanley Hall21.55%discount10.501 5 10 20 30 40 50Building Life (years)Benefit $0.1 $0.6 $1.1 $1.7 $2.1 $2.4 $2.5Cost $1.2 $1.2 $1.2 $1.2 $1.2 $1.2 $1.2Figure 5. Ratio of benefits to costs for use of unbonded braces in place ofconventional braces.Recognizing the uncertainties involved, the basic parameters were varied toexplore the sensitivity of the results to the basic assumptions. The analysis did notinclude direct consideration of some potential losses that are difficult to quantify.These include the loss of research faculty that might move to other institutions whilerepairs are made to the building, the losses associated with on-going experiments, andthe sizable effect of the loss of the facility on the economy of the local community.The analysis, coupled with these qualitatively expressed considerations, providedsufficient evidence to support the investment in the enhanced system.Enhanced Performance ObjectivesSan Leandro is a city on the San Francisco Bay, about eight kilometers from theHayward Fault. Recently a national chain of automobile dealerships proposed tobuild a new sales and repair facility in the city. The projected cost of the building is$5 million with an inventory value of $2 million and projected gross annual revenueof nearly $4 million. The owner’s lender required earthquake insurance in order tofinance the project because of the proximity of the site to a major earthquake fault.The best quote on earthquake insurance the owner could find was $150,000 per year.The owner had both a long-term interest in reducing future potential losses, and adesire to reduce the amount of earthquake insurance the bank would require.Using tools available today, an analysis was performed to estimate potentiallosses in a design level earthquake. The analysis suggested that for a large earthquakeon the nearby fault, repair costs would approach about 40% of the replacement cost ofthe building. Most lenders require that this expected loss be less than 20% to removeinsurance requirements. The design engineer developed an enhanced structural designthat would reduce the expected losses. The design added structural elements and109