Tuesday, March 19, 2013

Catastrophic Community Planning

Catastrophes don’t happen very often and because of that planning for them is typically neglected. As a result, property management companies and the communities they represent will consider it from time to time; but often that action doesn't go beyond preparing an appropriate plan. Property managers are rarely chastised for focusing on immediate community needs.  Therefore, if they are confident they can facilitate any pressing emergencies; it’s a good beginning in their eyes. They trust there is enough practical experience in their company and the associations they represent as a whole to deal with an unlikely catastrophe. Of course, there’s always the catastrophe insurance to fall back on.

There are two types of disasters; Everybody’s Catastrophe and Your Catastrophe.  Hurricanes Andrew and Debby are two examples of Everybody’s Catastrophes.  Each of these events created a steep learning curve for those communities that were unprepared. However, if your association experiences a significant impact, so will everybody else's. Each of these disasters found a level of acceptance from the community board members due to the widespread issues facing that region. Most people understand there will be difficulties until conditions return to normal. In these situations there is a fair chance the unprepared community can muddle its way through the issue, though not without tremendous growing pains.
Now to disasters that ARE your problem. A catastrophe that IS your problem has a different dynamic because your board members may quickly come into play in disturbing ways e.g. Your:

·        Board Members want speedy advice regarding the financial impact of the event or they will “vote with their feet” and find new representation.
·        Owners will want to know how it will affect their properties.
  • Board members of how you will maintain their facilities
  • Board members  will want to know the expected length of any facility interruption
Your property manager needs to act decisively and communicate effectively to demonstrate the catastrophe is under control.  However, without prior preparation, it may take days to gain control of the situation and develop the message.  If your board members begin to react negatively your management continuity problem becomes a secondary issue. You are facing a crisis.  Of course the “Elephant in the Room” issue is you may quickly discover it won’t be business as usual. As you develop your recovery plan you may find you are actually in crisis mode.  I should be fair to assume a Property Management Company without a recovery plan won’t have a crisis management plan.

Property management companies who realize the potential for disaster facing them and their customers will find that the answer is not as easy as it may initially sound. Developing a community continuity plan (CCP) for immediate use will take more than a few hours at a white board with an admin assistant.  Unfortunately, once you develop a CCP; the devil is in the detail. An annual update won’t be anywhere near adequate if you are looking for a perfect disaster mitigation program. The plan must be regularly updated because your catastrophe could occur tomorrow. Therefore you need to ensure the people delegated responsibility to activate strategies are still on deck.   Also, your communities may have changed and the plans will be out of date. 

When you combine the effort to create the CCP with the challenge to keep it up to date and the likelihood of the event occurring it results in most people not having a CCP.
It’s perplexing how people often treat risk management strategies as all or nothing. “If we can’t have a complete solution, we won’t have anything”. However, you can take the middle road. Conducting a community continuity risk assessment will enable you to flatten the learning curve, to some extent.  I recommend you consider spending a couple of hours with key managers and a whiteboard to assess the need for a CCP. 

This involves identifying your Critical Community Functions by considering the following scenarios e.g.
·        Denial of access to a community (flooding, evacuation zone, road blockages...)
·        Failure of emergency personnel to deliver materials or services

Then apply the following assessment.
1.    Identify who is responsible for each Critical Community Function
2.    Identify the Maximum Allowable Outage for each Critical Community Function
3.    Consider the mitigating strategies readily available and determine the Time To Recovery for each Critical Community Function

If your Time to Recovery exceeds Your Maximum Allowable Outage you add it to a shortlist of Critical Community Functions requiring a CCP. You can then assess the complexity and cost of developing the mitigating strategies for each CCP required. You may be pleasantly surprised to find that you need very few of these strategies. The senior management team can agree to progressively develop the necessary CCP mitigation strategies to reduce the risk. If they opt not to proceed the challenge of the vertical learning curve will be clear. This minimal effort may deliver peace of mind.

Time Saver:
Avoid trying to identify the most likely scenario which will interrupt your communities.  You are better to simply assume an inability of a community to function in the short term and proceed immediately to consider the Maximum Allowable Outage and Time to Recovery.  Example: A community  in Tampa, FL based its community continuity plan on a flooding due to a hurricane and instead, a power line sparks a fire in the community center. However, the mitigation strategies remained completely relevant.  The cause of the interruption wasn’t the key issue.  It was:

1.    The evacuation strategy of the community.
2.    The ability of local fire and rescue to be contacted in a timely manner to mitigate increased damage.
3.    Disclosure to the insurer prior to the event who provided for additional restoration costs if needed to mitigate the loss and ensure no additional cost would be passed on to the community.

Google Author: Harry Burnard

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