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HomeMy WebLinkAboutStaff Report 196-09_____________________________________________________________________________________________ CMR: 196:09 Page 1 of 8 TO: HONORABLE CITY COUNCIL ATTENTION: FINANCE COMMITTEE FROM: CITY MANAGER DEPARTMENT: PLANNING AND COMMUNITY ENVIRONMENT DATE: MARCH 31, 2009 CMR: 196:09 SUBJECT: Recommendation to City Council on Adoption of Green Building Program Review Fee RECOMMENDATION: Staff recommends that the Finance Committee recommend that City Council adopt the proposed Green Building Review Fee as outlined in Tables 2 and 3 (attached) for implementation of the City’s green building ordinance and programs. BACKGROUND AND DISCUSSION: In June 2008, the City Council approved the Green Building Ordinance, which added Chapter 18.44 to the Palo Alto Municipal Code. The new ordinance required all non-residential construction greater than 500 square feet and some renovation projects, based on size and valuation, to meet established minimum levels of compliance with the U.S. Green Building Council (USGBC) LEED rating system. It also required all residential new construction greater than 1,250 square feet and renovations greater than a $75,000 valuation to meet established minimum levels of compliance with the Build It Green (BIG) Green Point Rated rating system. The City Council later approved a new ordinance which added Chapter 16.18 to the Palo Alto Municipal Code to establish local energy efficiency standards to supplement the 2005 California Energy Code. _____________________________________________________________________________________________ CMR: 196:09 Page 2 of 8 On April 27, 2009, the City Council will consider proposed amendments to the Construction & Demolition (C&D) Ordinance to enhance levels of diversion of construction and demolition debris from the landfill if approved. The enhanced levels of diversion will double the number of projects covered by C&D debris requirements. The C&D debris fees were enacted in FY05 at $225.00 per permit in the Public Works section of the municipal fee schedule and have remained at that same fee level since that time. Staffing and Implementation Needs For the past several years there has been 1.0 FTE staff person allocated to manage the Construction and Demolition (C&D) Debris Diversion Program, though the C&D component has not generally required the full time efforts of that position. In the Green Building Ordinance CMR approved in June 2008, staff recommended hiring an additional 0.5-1.0 FTE staff person to manage the green building program, and noted that such a request and an accompanying fee would return at the midyear. Due to the current economy, and lack of revenue to support a new 0.5-1.0 FTE staff position for the green building program, the additional position has not been filled. In October 2008, however, the City hired a staff person with expertise in both C&D debris diversion and green building (at 1.0 FTE) in the C&D position, in an attempt to cover both programs until additional staffing could be dedicated. The C&D debris program fees currently being collected are only supporting about 0.5 FTE for the C&D staff person (the remainder is funded by the Refuse Fund), who has now been managing both growing programs for the past five months with the help of available interns. The proposed C&D debris ordinance amendments will increase the number of C&D applications required to be reviewed. Thus, with the expected continued decrease in planning and building workload in the upcoming 2009-2010 fiscal year, staff believes the need for C&D and green building review services can be accommodated by using an existing planner position to focus on green building, and by designating one of the existing building inspector specialist positions to address the building component of energy efficiency and project commissioning. Table 1 _____________________________________________________________________________________________ CMR: 196:09 Page 3 of 8 attached outlines more detail about how the staff envisions a near-term staffing structure for green building review. Proposal The proposed green building fees would cover staff’s time in implementing the green building program, and the method by which it was calculated is detailed in Table 2. The total fees proposed for each type of project are listed in Table 2 in row 14. For example, for the highest fee on the residential side for project type A, a large new home construction project, the proposed green building review fee will cost $545 plus the $225 C&D review fee. Smaller homes, additions and remodels would pay lesser fees for green building review. These fees do not include the fees the applicant has to pay to USGBC (US Green Building Council) or BIG (Build It Green) to be recognized by these entities, nor does it include the cost the applicant pays to hire special expertise in green building, such as a LEED AP or Green Point Rater. For new homes, these costs generally range from $1,500 to $2,500 per home. Using $750,000 as an example of construction costs for a large new home, those fees would be approximately 0.2 - 0.3% of the total construction cost. The additional city green building fee would add less than 0.1% more. The payback in energy and other cost savings from green building regulations will likely more than exceed the fees. Details of the Green Building Program Fee The functions covered by the proposed green building fee are broken down as follows:  25% Education, Promotion and Outreach: This includes answering questions at the counter about the green building ordinance, green building practices, BIG, GPR, LEED , and the CA Green Building Code, creating educational pieces, arranging education tours, updating the Development Center kiosk with rebates and other event information, holding trainings open to the public, recognition, and providing case studies online.  30% Review prior to Building Permit: This includes ensuring the Green Point Rater (GPR) or LEED accredited Professional (LEED AP) credentials are accurate and current, that the applicant is claiming the required number of points across specified categories, _____________________________________________________________________________________________ CMR: 196:09 Page 4 of 8 and that the plans have been reviewed and are complete with green building information. In addition, every couple of applications are audited to ensure that the LEED AP and GPR are doing a satisfactory job.  20% Review at Final Inspection: This includes ensuring the project has been recognized by Build It Green or the USGBC. For some projects this includes review of construction documentation such as commissioning reports, Indoor Air Quality implementation, and ensuring that green materials that were specified were actually installed.  25% Ordinance Maintenance, Performance Tracking, and Program Evolution: This includes tracking the performance of all building projects to report to Council, keeping current on the evolution of LEED, BIG, CA Green Building Code, ASHRAE 189, utility incentives, new technologies and strategies to keep the program current and effective. Please see the attached Table 2 for a more detailed breakdown of these costs. Program Revenue Projections In the FY09 midyear, initial Green Building Program revenue was budgeted very conservatively at $20,000. For FY10 and FY11, program revenue is budgeted conservatively at $50,000 per year. The actual revenue will be monitored closely and any adjustments will be reflected in either the respective midyear or during the regular budget process. As with any new program, the revenues will need to prove themselves before additional upward adjustments can be made. ALTERNATIVES: 1. Do not impose a green building fee. Costs would thus not be recovered for approximately 0.50 – 1.0 FTE, but the City would provide the services as an incentive for green building. 2. Reduce the fee for single-family residential to cover only the design and construction review (but not administration, education and monitoring), which would decrease the fees by more than 50% (see table below). Commercial and multi-family fees would remain as proposed. 3. Adopt a flat fee ($225) to match the C&D fee. This would recover a portion of city costs but would not directly correlate the fee with the size or complexity of the project. CONCLUSION: Staff is continually keeping abreast of changes to the green building rating systems referenced and state and national green building codes being developed. At present green building rating systems have been excellent market driving tools at getting owners and builders to build green, but as the City looks into the future of green building, when a green building is just a building, this will probably look very different. The Building Division will probably play a much larger role in review and inspection, and there will probably be less reliance on rating systems because it is the norm. The City should be building capacity to review and support green buildings, and prepare for the California Green Building Code’s stringency and enforcement in the future. PREPARED BY: __________________________________ KRISTIN HEINEN Green Building Specialist DEPARTMENT HEAD: __________________________________ CURTIS WILLIAMS Interim Director Planning and Community Environment CITY MANAGER APPROVAL: __________________________________ JAMES KEENE City Manager ATTACHMENTS: A. Table 1: Green Building Staffing B. Table 2: Proposed Green Building Fees Makeup by Hour and Expense C. Table 3: Proposed Green Building Fees _____________________________________________________________________________________________ CMR: 196:09 Page 5 of 8 _____________________________________________________________________________________________ CMR: 196:09 Page 6 of 8 Table 1 Green Building Staffing Planning and Building Staff anticipates that, with appropriate funding, the following staff structure is needed for full implementation of the City’s Green Building ordinances and programs over the coming 2-3 years: 1.0 FTE Green Building Program Specialist/Planner:  Manage the Green Building and C&D Debris Diversion Programs  Maintain City ordinances and policies relating to both programs  Review residential and non-residential covered green building projects that must be verified by the City  Participate in regional, state and national committees, and events to ensure the programs are current  Participate in intergovernmental City sustainability efforts  Track and report program performance, specifically in relation to City GHG reduction goals  Consult with community members and design professionals about green building and C&D debris diversion successful practices, technologies, and costs and benefits  Coordinate training internally for staff and externally for the community  Maintain a green point rater and approved facility lists  Recognize City green building and provide case studies  Maintain a green building website 0.50-1.0 FTE C&D/Green Building Program Associate Planner:  Accept applications on a day-to-day basis and review for completeness  Review covered projects that only have to comply with the C&D debris ordinance or only have to make a “good faith effort” under the green building program for accuracy  Input applications into the green building tracking software  Assist with tasks under the Green Building Specialist, in particular with regards to training and green building tours 0.50 FTE Energy Engineer Reviewer/Inspector:  Review projects for compliance with California Energy Code Title 24, Part 6. Specifically reviewing energy models and T24 reports  Consult with design professionals on how to make their projects more energy efficient  Inspect green building projects during and after construction to ensure energy efficiency measures are being correctly installed and operated as outlined in energy models  Assist with education and compliance with commissioning practices Table 2. Proposed Green Building Fees Makeup by Hour and Expense Table Key Row 1 Project Type Non-Residential A. New Construction ≥ 25,000 sf B. New Construction ≥ 5,000 sf and < 25,000 sf C. New Construction ≥ 500 sf and < 5,000 sf D. Renovation ≥ 5,000 sf and ≥ 50% of building sf and ≥ $500,000 Valuation E. Renovation with ≥ $100,000 Valuation F. Demolition Permits, or Projects Not Covered in Project Types A.- E. with ≥ $75,000 Valuation Residential A. Single Family new Construction ≥ 2,550 sf B. Single Family new Construction ≥ 1,250 sf and < 2,550 sf C. New Construction or addition < 1,250 sf Renovations greater than $75K Valuation D. Multi Family New Construction of 3 or More (attached) Units E. Multi Family Additions and/or Renovations with ≥ $100,000 Valuation F. Demolition Permits, or Projects Not Covered in Project Types A.-C. with ≥ $75,000 Valuation Row 2 Education/Promotion & Questions This includes answering questions at the counter about the green building ordinance, green building practices, USGBC and BIG, creating educational pieces, updating our kiosk with rebates and other event information, having trainings open to the public, recognition, and providing case studies online. Please note that some applicants are going to need more assistance and review than others based on their level of knowledge and experience with green building. Unfortunately, we can not come up with a fee matrix based on this. Row 3 Design Review (Permit) This includes ensuring the project is on track to be green prior to building permit issuance. In the case of a home, this would be ensuring the application has been completed and signed; the green point rater is actually a green point rater that the applicant is claiming the required number of points and across categories that the plans have been reviewed and are complete with green building information. For a commercial project this could be ensuring the project is registered with the USGBC, a LEED AP is on the project team, and for some project types reviewing all submittals (plans, specs, energy reports) for compliance. Row 4 Construction Review (Final Insp.) This includes ensuring the project has been recognized by BIG or USGBC, and that the project received the required number of points. For some project types this includes reviewing all after construction submittals such as commissioning and indoor air quality reports. Row 5 Administrative This includes maintaining the green building application files and database, updating and maintaining the Palo Alto Green Building Guide, tracking and approving application through the Accela system. Row 6 Performance Tracking Tracking the performance of all building projects to report to Council in a comprehensive database that includes information such as energy, water and waste reduction performance, certain key indoor air quality indicators, number of projects by project type and how many points scored. Row 9 Direct Costs This includes ordinance maintenance , employee training to stay current on the evolution of LEED, BIG, CA Green Building Code, ASHRAE 189, utility incentives, new policies, products, technologies and strategies, consultant fees (every three years to update ordinance with energy code), and memberships with USGBC/Green Point Rated. _____________________________________________________________________________________________ CMR: 196:09 Page 7 of 8 _____________________________________________________________________________________________ CMR: 196:09 Page 8 of 8 Table 3: Proposed Green Building Fees PLANNING & COMMUNITY ENVIRONMENT DEPARTMENT Planning 2008 FEE 2009 FEE Multiple fees below may apply to a single development project, however, when this fee schedule requires a deposit, only the deposit shall be collected. Processing costs for all permits will be billed against that deposit. If the project requires an environmental impact report or other study requiring outside consultants, a deposit equal to 100% of consultant costs shall be collected in addition to any other deposit or fee required. Green Building Program Fees Residential: A. Single Family new Construction ≥ 2,550 sf1 $545.00 B. Single Family new Construction ≥ 1,250 sf and < 2,550 sf1 $418.00 C. New Construction or addition < 1,250 sf and/or Renovations ≥ $75,0001 $272.00 D. Multi Family New Construction of 3 or More (attached) Units1 $618.00 E. Multi Family Additions and/or Renovations with ≥ $100,000 Valuation1 $327.00 F. Demolition Permits, or Projects Not Covered in Project Types A.- C. with ≥ $75,000 Valuation1 $72.00 Non-Residential: A. New Construction ≥ 25,000 sf1 $709.00 B. New Construction ≥ 5,000 sf and < 25,000 sf1 $800.00 C. New Construction ≥ 500 sf and < 5,000 sf1 $600.00 D. Renovation ≥ 5,000 sf and ≥ 50% of building sf and ≥ $500,000 Valuation1 $782.00 E. Renovation with ≥ $100,000 Valuation1 $327.00 F. Demolition Permits, or Projects Not Covered in Project Types A.- E. with ≥ $75,000 Valuation1 $72.00 1 Plus, if applicable, Construction & Demolition Ordinance fee under Refuse Fund on page 21-4.