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<br />determines the conveyance and flow timing characteristics of tl;e <br />systeM. The hydrology of the region (nature and severity of floods) <br />represents the complex rainfall-runoff relationships and can be <br />characterized by either historic streamflow or synthetic flood <br />events. <br /> <br />The performance of the system is measured hy the ability to <br />reduce the intensity of flooding. The reduction in the intensity <br />of floOding can be viewed from both economic and public safety or <br />risk viewpoints. Economically, the performance can be measured <br />by the reduction in the expected value of annual damages. Risk <br />refers to the chance (prObability) of being flooded. The risk <br />performance is commonly referred to as the degree of protection. <br /> <br /> <br />The economic characterization of the system is accomplished by <br /> <br /> <br />assigning the damage potential of reaches of streams in the basin <br /> <br /> <br />to index locations (termed damage centers) that usually are coin- <br /> <br /> <br />cident with the 'control points' referred to previously. The deter- <br /> <br /> <br />nlination of expected annual damages requires coordination of the <br /> <br /> <br />damage potential with the flow exceedence frequency relationships. <br /> <br /> <br />The flow exceedence frequency relationships are also needed to <br /> <br /> <br />determine residual risk. <br /> <br /> <br />The scope of the 'system' therefore includes the physical repre- <br />sentation of the system, (sites, storage, costs, stream conveyance <br />and basin hydrology) and the economic representation of consequences <br /> <br />4 <br />