**Discussion of the FY 2006 Risk Methodology and**

**the Urban Areas Security Initiative**

**FY 2006 Risk Methodology Overview**

-   The FY 2006 DHS risk methodology represents a major step forward in
    the analysis of the risk of terrorism faced by our Nation's
    communities. Tremendous gains have been made in both the quality and
    specificity of information and analysis incorporated within the
    model, yielding the most accurate estimation possible of the
    *relative* risk of prospective grant candidates. The methodology is
    designed to inform a policy decision regarding the allocation and
    investment of Federal grant funding, and should not be confused with
    an estimate of *absolute* risk faced by candidate areas.

```{=html}
<!-- -->
```
-   In the FY 2006 model, risk is treated as a function of three
    variables:

    -   Threat, or the likelihood of a type of attack that might be
        attempted

    -   Vulnerability, or the likelihood that an attacker would succeed

    -   Consequence, or the impact of an attack occurring

```{=html}
<!-- -->
```
-   Fundamentally, the FY 2006 methodology addresses two separate, but
    complementary, types of risk: ***asset-based risk*** and
    ***geographically-based risk***. Considered together, these two
    calculations provide an estimate of total terrorism risk, evaluating
    both risks to assets as well as risk to populations and geographic
    areas. This is accomplished using a common, scalable risk model that
    is internally consistent across all homeland security grants in FY
    2006, supporting DHS' broader objective of achieving consistency in
    national risk management efforts.

**Calculating Risk**

-   [Asset-based risk]{.underline} is a function of the risk of
    terrorism to potential targets within a geographic area. It accounts
    for the combined risks associated with the various types of assets
    within the "footprint" of each individual grant candidate.
    (Footprints for grant candidates were defined as follows: state
    boundary for States; combined city limits plus 10-mile buffer for
    Urban Areas; commercial waterway plus 2-mile buffer for ports.)
    Asset-based risk allows DHS to strategically evaluate the likelihood
    of a terrorist attack against assets based on Intelligence Community
    assessments and the consequences that attack could have.

***Asset-based Risk*** =

Total consequence of the loss of a particular asset type given a
specific attack mode

*x*

Vulnerability of a particular asset type given a specific attack mode

*x*

Combined intent and capability of an adversary to utilize a specific
mode of attack

-   [Geographically-based risk]{.underline} is derived from certain
    prevailing attributes or characteristics intrinsic to a geographical
    area that may contribute to its risk of terrorism. This approach
    incorporates types of threat data that are independent of a
    specific, identifiable asset, such as reports on possible
    threatening activities within a given geographic area. Similarly,
    through this approach, DHS can consider variables such as population
    or general characteristics such as a border that are not linked to
    one particular type of asset.

***Geographically-based Risk*** =

Consequences derived from geographic attributes of the candidate area

*x*

Vulnerability attributes of the candidate area

*x*

Threat related to the candidate area

**Enhancements to the FY 2006 Risk Analysis Process**

-   Significant enhancements have been incorporated into the FY 2006
    risk analysis process, including:

    -   The development of a common and scalable risk model,

    -   Greater depth and breadth in infrastructure data,

    -   Improved attribution of threat and law enforcement activity
        data,

    -   The incorporation of strategic threat analysis from Intelligence
        Community products,

    -   The inclusion of urbanized areas outside official city limits in
        order to better encourage regionalization, and

    -   The incorporation of transient populations, such as tourists and
        commuters.

```{=html}
<!-- -->
```
-   In FY 2006, DHS has taken a major step forward in its risk analysis,
    developing a robust model which evaluates both risks to assets as
    well as risk to populations and geographic areas.

-   The formula has progressed from a simple count of "high" and "low"
    criticality and numbers of threat reports in FY 2003 to a fully
    risk-based computation that is attack-scenario based and uses
    infrastructure-specific vulnerability and consequence estimates.

-   At the same time, DHS has expanded the number of infrastructure
    types considered in the analysis from 14 in FY 2003 to 38 in
    FY 2006. The FY 2006 approach evaluates risk to well over 120,000
    specific infrastructures; it also incorporates strategic threat
    analysis from the Intelligence Community along with law enforcement
    investigations, credible and less-credible threat reports, and
    suspicious incident reporting received from local, State and other
    Federal agencies.

-   The levels of complexity of the formula and data calculations have
    likewise increased markedly from FY 2003 to FY 2006. For example, in
    FY 2003, three primary equations were used in the risk analysis; in
    FY 2006, over 4,100 equations were used. For FY 2003, approximately
    1,500 calculations were made, in contrast to more than 3 billion
    calculations in FY 2006. FY 2005 UASI formulations were represented
    within a spreadsheet of about 72,000 cells; if the FY 2006 UASI
    calculations could be included in a spreadsheet, it would contain
    more than 20 million cells.

-   DHS anticipates additional enhancements during the course of FY 2006
    to continue the evolution of the risk methodology. Future focus
    areas include developing a more sophisticated understanding of the
    cascading effects of attacks and improved data and knowledge.

**Stakeholder Feedback and the FY 2006 Risk Methodology**

-   In May 2005, DHS hosted a one-day stakeholders meeting in
    Washington, D.C. to solicit input and feedback on the FY 2005 risk
    formula used to determine eligible Urban Areas and associated
    funding allocations for the UASI Program.

-   Attendees included key representatives from 12 States/Urban Areas,
    as well as representatives from the National Sheriff's Association,
    International Association of Chiefs of Police, International
    Association of Emergency Managers, Grand Lodge Fraternal Order of
    Police, International Association of Fire Chiefs, and Major Cities
    Chiefs.

-   All of the recommendations on the risk methodology from the
    stakeholders were incorporated into the FY 2006 model.

**FY 2006 UASI Eligibility**

-   The FY 2006 UASI program recognizes the shared nature of risk across
    regional metropolitan areas, which both 9/11 and Hurricanes Katrina
    & Rita have illustrated, and does a better job of accounting for
    that in the risk analysis process. The FY 2006 UASI program also
    more finely focuses candidate eligibility while providing broader
    coverage of critical assets and populations nationally.

-   To identify jurisdictions for inclusion in the data count phase, all
    cities with a population greater than 100,000 and any city with
    reported threat data during the past fiscal year were identified.
    Cities on this list with shared city boundaries were then combined
    into a single candidate area. A 10-mile buffer was then drawn from
    the border of that city or combined candidate area to establish the
    geographical area in which data was evaluated. All candidate areas
    with a combined population of greater than 200,000 were then
    considered in the final analysis.

-   The pool of candidates eligible to apply for the FY 2006 UASI
    Program represents 46 Urban Areas. These candidate Urban Areas
    include 121 cities with a population of greater than 100,000 and
    account for approximately 20% of the population of the United
    States. In addition, the 46 eligible Urban Areas in FY 2006
    represent 53 of the 57 Urban Areas previously designated as
    participants in the program.

-   In FY 2006, the top 35 Urban Areas identified through the risk
    analysis were identified as eligible candidates. This included 42
    previously designated Urban Areas.

-   In addition, 11 Urban Areas that participated in the program in FY
    2005 but did not fall within the top 35 Urban Areas in the FY 2006
    risk analysis have been extended eligibility for one additional
    grant cycle in FY 2006. This extended eligibility reflects feedback
    to DHS from stakeholders on the criticality of providing sustainment
    funding to existing Urban Areas across fiscal years. This innovation
    in Urban Area eligibility determination provides greater
    transparency in the process and fosters enhanced long-term planning
    for Urban Areas participating in the program.

-   Any Urban Area not identified as eligible through the risk analysis
    process for two consecutive grant cycles will not be eligible for
    continued funding under the UASI program in the second grant cycle;
    this will not preclude the Urban Area from future participation in
    the program should it be identified as eligible through the risk
    analysis in a future year. Urban Areas will continue to be eligible
    to receive funding from other DHS programs, including the State
    Homeland Security Program and the Law Enforcement Terrorism
    Prevention Program.

**FY 2006 UASI Program Governance and Administration**

-   UASI program participants, not the Federal government, define the
    regional groupings that best achieve and sustain risk-based target
    levels of capability. This approach provides greater flexibility in
    defining Urban Areas in a manner that reflects each area's unique
    geopolitical realities and in designing the governance structures
    that will guide program implementation.

-   The UASI program continues to allow flexibility for each Urban Area
    to design a program governance process that supports their specific
    requirements and dynamics, while still furthering regional
    collaboration in support of the National Preparedness Goal. To that
    end, each Urban Area is required to establish an Urban Area Working
    Group (UAWG) to steer program implementation. Membership in the UAWG
    must provide either direct or indirect representation for all the
    jurisdictions that comprise the defined Urban Area.

```{=html}
<!-- -->
```
-   FY 2006 marks a shift in the way UASI funds will be awarded. In
    previous years, Urban Areas knew their funding allocations prior to
    submitting grant applications. The FY 2006 UASI program addresses
    need for the first time as a criterion in determining grant awards.
    Applicants will be asked to submit an Investment Justification
    requesting resources to undertake specific initiatives that tie to
    the Urban Area Homeland Security Strategy and the National
    Preparedness Goal.

-   Applications will be evaluated by peers and subject matter experts
    based on how effectively the proposed solutions address regional
    areas of need. Addressing National, State, and regional priorities
    and reducing need will serve to mitigate the overall risk facing the
    Urban Area. Coordinating risk-reduction measures on a regional basis
    strengthens collective defenses. Jurisdictions that share risk can
    prepare more efficiently, and respond more effectively through
    development of interconnected and complementary systems.

**VISIUAL REPRESENTATION OF FY 2006 UASI RISK MODEL**

![](media/image1.wmf)

![](media/image2.wmf){width="4.99375in" height="3.7534722222222223in"}

![](media/image3.png){width="8.125in" height="4.852777777777778in"}

  --------- --------------- ---- -------------- ---- ----------- ---- ------------- ---- -----------------
  **URBAN                                                                                
  AREAS**                                                                                

  AZ        Phoenix Area\*  FL   Miami Area     LA   New Orleans NJ   Jersey        OR   Portland Area
                                                     Area             City/Newark        
                                                                      Area               

  CA        Anaheim/Santa        Orlando Area   MA   Boston Area NV   Las Vegas     PA   Philadelphia Area
            Ana Area                                                  Area\*             

            Bay Area             Tampa Area\*   MD   Baltimore   NY   Buffalo            Pittsburgh Area
                                                     Area             Area\*             

            Los             GA   Atlanta Area   MI   Detroit          New York City TN   Memphis Area
            Angeles/Long                             Area             Area               
            Beach Area                                                                   

            Sacramento      HI   Honolulu Area  MN   Twin Cities OH   Cincinnati    TX   Dallas/Fort
            Area\*                                   Area             Area               Worth/Arlington
                                                                                         Area

            San Diego       IL   Chicago Area   MO   Kansas City      Cleveland          Houston Area
            Area\*                                   Area             Area               

  CO        Denver Area     IN   Indianapolis        St. Louis        Columbus Area      San Antonio Area
                                 Area                Area                                

  DC        National        KY   Louisville     NC   Charlotte        Toledo Area\* WA   Seattle Area
            Capital Region       Area\*              Area                                

  FL        Fort Lauderdale LA   Baton Rouge    NE   Omaha       OK   Oklahoma City WI   Milwaukee Area
            Area\*\*             Area\*              Area\*           Area\*             

            Jacksonville                                                                 
            Area                                                                         
  --------- --------------- ---- -------------- ---- ----------- ---- ------------- ---- -----------------

\*FY 2005 Urban Areas eligible for sustainment funding through the FY
2006 UASI program; any Urban Area not identified as eligible through the
risk analysis process for two consecutive years will not be eligible for
continued funding under the UASI program.

\*\* In FY 2006, Fort Lauderdale is included as a candidate Urban Area.
However, Ft. Lauderdale currently resides within the existing, defined
Miami Urban Area. In moving forward on implementation in FY 2006, it is
the intent of DHS to further strengthen the regional approach already
developed in the area not to fragment existing structures.

**ASSET AND GEOGRAPHIC PARAMETERS USED IN FY 2006 UASI RISK MODEL**

**ASSET TYPES USED IN ASSET-BASED RISK CALCULATIONS**

  -------- ------------------------------ -------- ---------------------------
  **\#**   **Urban Area Asset Types**     **\#**   **Urban Area Asset Types**

                                                   

  1        Chemical Manufacturing         20       National Health Stockpile
           Facilities                              Sites

  2        City Road Bridges              21       NG Compressor Stations

  3        Colleges and Universities      22       Non Power Nuclear Reactors

  4        Commercial Airports            23       Nuclear Power Plants

  5        Commercial Overnight Shipping  24       Nuclear Research Labs
           Facilities                              

  6        Convention Centers             25       Petroleum Pumping Stations

  7        Dams                           26       Petroleum Refineries

  8        Electricity Generation         27       Petroleum Storage Tank
           Facilities                              Farms

  9        Electricity Substations        28       Potable Water Treatment
                                                   Facilities

  10       Enclosed Shopping Malls        29       Primary And Secondary
                                                   Schools

  11       Ferry Terminals - Buildings    30       Railroad Bridges

  12       Financial Facilities           31       Railroad Passenger Stations

  13       Hospitals                      32       Railroad Tunnels

  14       Hotel Casinos                  33       Road Commuter Tunnels

  15       Levees                         34       Stadiums

  16       LNG Terminals                  35       Tall Commercial Buildings

  17       Maritime Port Facilities       36       Telcomm-Telephone Hotels

  18       Mass Transit Commuter Rail &   37       Trans Oceanic Cable
           Subway Stations                         Landings

  19       National Monuments and Icons   38       Theme Parks
  -------- ------------------------------ -------- ---------------------------

**CONSEQUENCE, VULNERABILITY, AND THREAT PARAMETERS USED IN
GEOGRAPHICALLY-BASED RISK CALCULATIONS**

  -------- ------------------------------ -------- ------------------------------------
  **\#**   **Urban Area Geographic        **\#**   **Urban Area Geographic Attributes**
           Attributes**                            

                                                   

  1        Defense Industrial Base        13       Population - Commuter
           Facilities                              

  2        FBI Basic Cases                14       Population-City 10 Mile Buffer Zone
                                                   Night Census

  3        FBI Special Cases              15       Population-Visitor

  4        I-94 Visitors Countries of     16       Port Population
           Interest Destination City               

  5        IC - Credible Threat           17       Port Population Density

  6        IC - Less Credible Threat      18       I-94 Port of Entry/Border Crossings
                                                   Countries of Interest

  7        ICE Basic Cases                19       Port of Entry/Border Crossings Total
                                                   Throughput

  8        ICE Special Cases              20       Suspicious Incidents - Credible

  9        Special Events                 21       Suspicious Incidents - Less Credible

  10       Length of Nuclear WIPP route   22       Vessels of Special Interest
           within city buffer                      

  11       Military Bases                 23       National Health Stockpile

  12       Urban Area                     24       Rail Daily Ridership
  -------- ------------------------------ -------- ------------------------------------