$$V(h(y_0)-h(\mu_0))=V(h(y_0))+V(h(\mu_0))$$
is used to compute a prediction interval. The prediction variance consists of a component due to the variance of having a single observation and a prediction variance.
algo.farrington.threshold(pred,phi,alpha=0.01,skewness.transform="none",y)
"none"
, "1/2"
, or "2/3"
.y
together with the median of the predictive distribution.