In recent years, environmental regulations have begun to emerge as a municipal responsibility more than ever before.  Storm-water pollution, toxic mold and lead paint legislation are the most current examples.  Because the State has already adopted a sustainable building policy for its governmental buildings, it is reasonable to assume that many of these requirements will, before long, begin to filter down to the local level.  Expanded requirements for controlling pollution run-off and reducing the flow of debris to landfills are already anticipated in the near future. 

It is this trend, as well as the current direction of the design community toward an increased emphasis on sustainable building practices, that has contributed to the development of the Green Building and Construction Debris Ordinances.  Within the City, the Blue Ribbon Task Force for Affordable Housing has also noted sustainability as a goal for its future programs.

Sustainable Program Background

Both the Green Building Ordinance and the Construction Waste Ordinance are being proposed as voluntary measures.  Feedback from the building and development community emphasized the importance of this feature of the programs.  The majority of those responding were supportive of the programs and what they are intended to achieve, but they also believed that time was required to begin to adjust design and construction practices, identify cost-effective materials, and incorporate appropriate recycling standards into construction projects.  Voluntary programs will also allow the City to refine its requirements by evaluating results from program participants and modifying the sections that are unclear, ineffective, or cumbersome.    

The majority of programs offered through other city and county jurisdictions are, at this time, voluntary for private developers.  Most cities that have adopted sustainable building policies have done so for public buildings, libraries, and schools.  In addition, most privately-owned LEED (Leadership in Energy and Environmental Design) structures have been corporate buildings as opposed to speculative office or retail developments.   

Sustainable Program Organization

There are three parts to the proposed programs :

(1) State mandated storm-water pollution prevention requirements,

(2) California Integrated Waste Management Board�s (CIWMB) landfill diversion requirements, and

(3) LEED, and the LEED Supplement for California State Facilities. 

Because each part can be affected independently by state action, each has been developed separately, while remaining as a part of the overall programmatic goal.

1.  Storm-Water Pollution Prevention

The storm-water pollution prevention measures are already mandated by the Regional Water Quality Control Board under the City�s NPDES (National Pollution Discharge Elimination System) permit for specific types of projects.  These are not voluntary requirements, and if they do apply to a project, the requirements must be met.  The intent for their inclusion as a part of the green building program is to encourage pollution prevention measures beyond the minimums established by the Water Board, and to encourage the incorporation of pollution controls into projects where specific post-construction requirements do not currently apply.

For example, a surface parking lot of less than 25 cars may not be required to install treatment devices.  By including storm-water controls into this program, we hope to encourage exempt projects such as this to include some of the treatment control measures, whether it is a catch basin filter, or simply diverting surface flow to landscaped areas for infiltration.

2.  Construction and Demolition Debris Diversion

The Construction and Demolition Debris Diversion Ordinance was developed by both the Public Works Department and the Building Division as a proactive measure anticipating possible increases in the landfill diversion requirements by the California Integrated Waste Management Board.  While the City of Burbank has met its current state mandated goals, other cities have been unable to meet their prescribed diversion rate and have been forced to implement stricter mandatory waste control ordinances.  By establishing the debris diversion program in advance of any new, or additional, state mandated requirements, the City will have the opportunity to implement a pilot program, and collect and distribute information to the community in order to reduce the impact of any future diversion requirements.

The intent of the Diversion Ordinance is to promote recycling of construction and demolition debris and divert the waste from landfills.  The U.S. EPA (Environmental Protection agency) estimates that there is approximately 136 million tons of construction and demolition debris generated in the U.S. annually, or 2.8 lbs/person/day.  Using these numbers, we can estimate approximately about 54,000 tons of construction waste being generated annually in Burbank.  Recently representatives from Public Works and Building visited Downtown Diversion, a new recycling facility in Los Angeles, that accepts and sorts construction debris.  They estimate that their recycling rate is about 80%.  This could translate into as much as 43,000 tons of the construction debris in Burbank being diverted from landfills. 

3.  Green Building and Sustainable Architecture

The development of the Green Building Program is a companion project to the Construction and Waste Debris Ordinance.  Research for the Green Building Program included reviews of the U.S. Green Building Council standards, the Sacramento Cool Community Program, the Department of Energy�s Smart Community Network, and existing ordinances adopted by the State of California, the cities of Seattle, WA, Austin, TX, San Jose, Los Angeles, Santa Monica, Long Beach, and San Diego, as well as by the County of Alameda. 

This program, based on the U.S. Green Building Council�s (USGBC) LEED rating system, establishes energy efficiency and sustainability standards for developers and builders to incorporate into their projects.  The LEED system is considered to be a holistic approach to building design.  That is, it incorporates not only energy efficiency and water conservation, but site selection and site redevelopment, recycled content building materials, alternative transportation, landscape design, exterior light pollution, indoor air quality, and building operations. 

The Green Building Program establishes three levels of sustainability including:

       �         Level I:   Meeting stormwater and debris diversion goals

       �         Level II:  Meeting a 50% LEED goal as well as stormwater and diversion goals, and

       �         Level III: Achieving LEED certification.

The USGBC currently offers LEED rating systems in the following categories:

       �         New Commercial and Industrial Buildings,

       �         Existing Buildings,

       �         Core and Shell Development (Pilot Program), and

       �         Commercial Interiors (Pilot Program

       �         A rating system is beginning to be developed for housing.

While sustainable buildings generally exceed average construction costs, the primary benefits are seen over the lifetime of the building.  In general, LEED buildings are 25%-30% more efficient, and worker productivity is estimated to save approximately $600-$1,000/ employee/year.  The premium for construction of a LEED building is, however, estimated to be about $3 - $5/ sf, which can substantially increase the initial costs for a speculative developer.  This premium is also why LEED buildings tend to be corporate projects where lifetime cost savings can be calculated.    

As with the other parts of this program- storm-water pollution prevention and debris diversion- the implementation of this ordinance is in anticipation of efficiency requirements that have already been adopted for State-owned buildings.  Within the past month, the Building Division was contacted by the State Sustainability Task Force concerning implementation of green building policies within the City of Burbank.  Their effort is to gather data about current programs, and, again, we would anticipate that this will result in future state mandated building requirements.

The Building Division is also a member of the U.S. Green Building Council (USGBC).  This provides us with direct access to the latest information and standards available, and allows us to be in contact with others in the green building community.  The Building Division is also on the Sustainability Task Force contact list, and we receive regular updates from the CIWMB. 

Program Incentives

Incentives offered to private developers for participation in other jurisdictions tend to be somewhat scarce and focus primarily on the lifetime benefits of reduced energy costs and worker productivity to promote participation.  When incentives are offered they include:

�         Energy and water conservation retrofit programs.  These are similar to the Residential Rebate Programs and the Business Rebate Programs already offered by Burbank Water and Power.

      �         Rebates offered by other utilities such as The Gas Company.

      �         Grant programs for green building projects.  The City of Portland, Oregon offers this type of incentive system.

    �         �Process-based� incentives that include expedited plan check, zoning incentives (i.e. density bonuses), and consideration of technologies that are not currently allowed by the building code.  Cities such as Long Beach have focused on these types of incentives.

The Board of Building and Fire Code Appeals has recommended that, while the ordinances should remain voluntary, a more economically attractive incentive package would be required to generate interest from speculative developers.  In their view, fees for services, such as plan check and permit fees, that are seen by developers as necessary costs to provide a well-built, code compliant structure are not necessarily, or by themselves, the appropriate economic incentives.  They recommend that consideration be given to allowing LEED certification in-lieu of the Arts In Public Places requirement, or the Development Impact Fees.  For Green Building compliance this could not be an in-lieu fee, of course, but would require actual LEED certification for the project.      

The following are additional considerations for determining fee waivers for sustainable projects:

1. In general, we can separate a project into the following sustainable categories:

        �         Energy- lighting and mechanical systems, insulation, windows, cool roofs, and renewable energy such as photovoltaic systems.

        �         Water Conservation- plumbing fixtures, reclaimed water, and landscaping

        �         Materials- new construction, demolition, and building operations to control trash and recyclables.

        �         Air Quality- daylighting, low VOC materials, mechanical systems, and other low-emmission equipment.

       �         Sustainable Sites- site disturbance and reuse, stormwater management, light pollution, and alternative transportation including carpooling, electrical charging stations, bicycling and shower facilities.

It is important to determine if only selected categories, or if all categories will be eligible for a fee waiver.  For example, if an existing residence is proposing to replace existing single glazed windows with new energy efficient windows, or if new insulation is proposed, etc, it must be  determined if that type of work, by itself, qualifies for the waiver. 

It must be considered that for a $100,000 addition and remodel the building fees will be about $1,200 ($400.00 plan check fee and $800.00 permit fee).  It is not atypical in a remodel for the computer energy modeling to consider the addition only.  This method allows the existing portion home to keep its single glazed windows and add no additional insulation.  If the energy model does not require the existing portion of the residence to upgrade, the most prudent financial decision for the owner may be to upgrade existing windows and add insulation if these will qualify for the waiver.  The additional cost of insulation and replacing windows would be offset by the fee waiver.

It would then be important to establish a threshold for the waiver.  Would additional insulation alone qualify, and would it qualify if it were only added to the attic and under-floor area, or would it have to be installed in the walls also?  In the same $100,000 addition, adding insulation to the existing attic and under-floor area could be accomplished by the owner at a minimal cost.  With a full $1200 fee waiver, the owner would most likely come out ahead, while the City would be performing plan check and inspection services without fees. 

It may be that it could qualify for the waiver only in the amount of the work proposed.  For example, if the cost for additional insulation was $1,000, it is possible that the waiver be in that amount leaving a balance of $200 to be paid for the building permit?

Another approach may be similar to the disabled accessibility requirements that are based on an upgrade allowance, which is determined by 20% of the construction cost of the project.  In the same way, a cost breakdown could be required to determine the cost of the efficiency features in relation to the overall construction cost.  If it met a minimum percentage, we could then grant the waiver.  For example, the same $100,000 residential project could meet the waiver requirement by installing low-e windows in the entire house as well as the addition, installing or upgrading attic, floor, and wall insulation, installing high performance HVAC units, and sealing all ducting, if that work, which would be over and above the basic energy requirements, was valued at $10,000 (using a 10% example). 

2. Many of these installations may only be a part of a larger project.  Even a photovoltaic system may require structural upgrades to the existing building resulting in both a building permit and an electrical permit.  We must consider whether all related permits are eligible or only the electrical permit that is directly associated with the renewable energy source.

A recent installation was divided into three separate permits- a building permit for foundations for exterior equipment, an electrical permit for the photovoltaic system itself, and a building permit for structural upgrades required for mounting the photovoltaic panels.  In this case, all permits are related to the system.  It cannot be installed without all work being completed.  However, only the electrical permit is specifically for the photovoltaic system itself.  

3. Similarly, it must be determined whether both the plan check fee and the permit fee should be waived or only the permit fee.  In some cases, there may be consultant charges.  In the case of a photovoltaic system, the Division�s electrical consultant reviews the plans for the system, while the structural is reviewed in house.  There are often expenses related to the permit beyond staff time. 

In cases where an entire project may be a LEED certified project, consideration must be given to the impact of a full fee waiver.  Typically on a large office building project, there is a building permit, grading permit, shoring permit, electrical, mechanical, and plumbing permit.  On a building like this there are consultant fees for structural, mechanical, electrical, and plumbing plan review.  Mechanical plan review for a LEED building may also require increased plan check time because of the more complex HVAC systems. 

For a LEED building it may be impossible to separate the sustainable features from standard features because the building is certified on the basis of holistic design principles.  Yet to waive the entire fee will cost the City more than staff time, there will be out of pocket expenditures to specialized consultants.

4. Whether or not possible fee waivers affect only the Building Division�s permit fees or whether it also will affect other fees, such as DR or CUP, Fire, Public Works, Parks, BWP, Arts In Public Places, and Development Impact fees must also be reviewed.

The following example compares estimated premium costs for LEED certification to some City fees:

The USGBC estimates that the construction premium for a LEED building averages $3 to $5 per square foot.  For a 50,000 sf building this would be a premium of $150,000 to $250,000.  However, this can range from a low of approximately 1% for LEED Certified buildings (+-$1.15/ sf), +-2 % for LEED Silver and Gold (+-$2.30/ sf), to 6.5% for LEED Platinum ($7.50/sf), all based on average construction valuation for offices of $115.00/sf (ICC standard valuation for a core and shell office building).  More specifically, we end up with premiums of $57,500 for LEED Certified, $115,000 for LEED Silver and Gold, and $375,000 for LEED Platinum.     

The average construction valuation for a 50,000 sf office building at $115/sf would be about $5,750,000.  This would result in a building permit fee of approximately $37,500 ($15,500 for plan check and strong motion fees, and $22,000 for permit fees).  Additional Building Division fees would include electrical, mechanical, and plumbing permits ($900 for plan check and $3,400 in permit fees), and shoring and grading permits ($1,000 for plan check fees, and $2,200 for permit fees).  The maximum Development Impact Fee would be approximately $294,000.  The Arts In Public Places Fee would be 1%, or $57,500 (These estimates, including the permit fee, do not consider construction of a subterranean parking garage).

Staff recommends that a percentage of the Building Division fees be waived based on the level of sustainability defined in the Green Building Ordinance as follows: 

• Level I sustainability  5% fee waiver (permit fee only, does not apply to plan check fee)

• Level II sustainability 10% fee waiver (permit fee only, does not apply to plan check fee), and

• Level III sustainability 15% fee waiver (permit fee only, does not apply to plan check fee).

This allows the Division to cover costs for plan check services and inspection services, while providing some relief for the applicant.  In addition, staff recommends that any proposed LEED certified building be provided with expedited City approval services based on registration with the USGBC for certification at the time of submittal. 

However, as stated in item #3 in Sustainable Program Organization above, the primary benefits of a green building are seen over the life of the building and are related to energy savings, health, and productivity.  Because there is an up-front premium associated with these benefits, the additional construction costs cannot be mitigated solely by permit fee waivers.  The decision to develop a LEED certified building will most likely not be based on fees alone.  The marketability of the building, higher lease rates that may be associated with increase air quality monitoring, and other economic factors may affect a developer�s decision as much, or more, as a fee savings. 

The Community Development Department

To encourage developer participation in projects in which the City is involved, the Redevelopment Agency will be distributing sustainable building and LEED publications as a part of its project negotiations.  The Building Division has purchased two USGBC publications, Making The Business Case For High Performance Green Buildings and  LEED, Green Building rating System for use as public education and information tools. 

Review by Departments, Agencies, and Private Industry

The Green Building Ordinance followed the introduction of the Debris Diversion Ordinance.  Both ordinances were introduced to the Board of Building and Fire Code Appeals, distributed to all City departments for comment, and finally sent to the State�s �Sustainable Building Task Force�, private developers, builders, and contractors.  Both ordinances were again recently discussed at a public hearing of the Building and Fire Code Appeals Board prior to the City Council Study Session.

Program Summary

In addition to benefiting the City by reducing energy loads and the size of the waste stream, the Green Building and Construction Waste Diversion Programs allow Burbank to more easily achieve many of the goals that we anticipate being required of the City in the future.  Certainly stormwater regulations will become stricter, the waste stream will be required to be reduced, and worker productivity will become more critical.  All of these concerns, as well as alternative transportation, light pollution, and recycled materials, are addressed within the scope of our sustainable building and waste diversion programs.  While we are not the first city to implement such policies, this program allows Burbank to become one of the leaders in a rapidly developing area of the building and construction industry.

Recommendation

Staff recommends that the City Council direct the staff to introduce the Green Building and Sustainable Architecture Ordinance and the Construction and Demolition Debris Diversion Ordinance for adoption.

Attachments:

Exhibit A:  Green Building and Sustainable Architecture Ordinance

Exhibit B:  Construction and Demolition Debris Diversion Ordinance

Exhibit C:  Green Building and Sustainable Architecture Reference Manual

Exhibit D:  Standard Urban Stormwater and Urban Runoff Management Programs (BMC Ch. 7, Art. 19)

Exhibit E:  Municipal Storm Water and Urban Runoff Discharges Manual

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