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HomeMy WebLinkAbout2000-05-09 - AGENDA REPORTS - CMTY ENERGY EFFICIENCY PGM (2)AGENDA REPORT City Manager Approval Item to be presented by:Ruben Barrera NEW BUSINESS DATE: May 9, 2000 SUBJECT: COMMUNITY ENERGY EFFICIENCY PROGRAM DEPARTMENT: Planning & Building Services RECOMMENDED ACTION Receive the report and adopt a resolution directing staff to implement the Community Energy Efficiency Program (CEEP), working with members of the Building Industry Institute, local builders, California Energy Commission staff, building industry consultants, environmental groups and local utilities. That the City Council authorize a total fee subsidy of $24,000 for a two-year program. That the City Council authorize a transfer of funds in the amount of $4,000 from City Council contingency, Account No. 1240-7401 to Account No. 3710-8001 to cover the proposed subsidy for the remainder of FY `99-'00; and that the City Council authorize $16,000 to be included in the FY `00-'01 budget to cover the proposed subsidy during FY `00- '01. BACKGROUND New home starts are booming in California. In 1998, California added more than 93,000 new homes. In 1999, that number jumped to 130,000. This pace is expected to continue through this year. Up and down the coast from San Diego to San Francisco, local government building officials are processing record numbers of new residential building permits. New housing starts in the City of Santa Clarita are expected to outpace the national average well into this decade. Decisions that are made in the design and construction of new homes can create impacts that we will live with for many years. Santa Clarita has the opportunity to ensure that some of the new homes built here are energy efficient and "sustainable." By being aware of alternatives and substituting more resource -efficient products and practices, we can easily enhance the cost effectiveness and quality of our homes while strengthening our Southern California economy. 1 -6-1 Arenda ltem:JS3 In response to the City Council's interest in sustainable development and "green building standards," the City's Building and Safety Division researched existing "green builder" programs, seeking to learn from the best programs in the country. Staff hoped to find a worthwhile program, or successful components of different programs, to b for consideration in Santa Clarita. ring to the City Green builder programs are increasing in popularity in the United States. These programs differ from community -wide energy programs in that they focus on one, manageable area: new residential construction. By focusing only on new residential construction (as opposed to also including commercial development and/or public buildings, and/or transportation programs) city governments generally report quicker, more meaningful success and higher participation rates. Other areas, such as city -owned buildings, can easily be added later once the program delivers results in the first phase, for new residential construction. A recent national survey of the ten largest green builder programs in the United States found that most programs focus on marketing, while delivering very little energy savings, if any. For example, one program in New Mexico awards the builder a "Green Star" if he/she simply builds to code! The same survey discovered that many city -sponsored programs struggle early by trying to do too much, too soon. For example, the first formal green builder program in the country (started in 1990) in Austin, Texas, struggled for years because planners did not include builders in the formative stages of the program. Furthermore, after beginning the program, most participants found the forms and processes too confusing and cumbersome. (These challenges have been solved, and Austin's program now thrives.) Staff found one model that does deliver significant energy savings, the Community Energy Efficiency Program. The primary goal of the Community Energy Efficiency Program is to shift residential building practices toward approaches that conserve energy, water and other natural resources, thereby contributing to the preservation of the environment. This model was developed in 1999 through the joint efforts of the Building Industry Institute (BII)--the non-profit arm of the California Building Industry Association (CBIA), local government building officials, the California Energy Commission, CBIA members, and building industry consultants. It is designed to encourage energy efficiency by providing time and/or cost saving incentives to participating builders. Program Highlights The program is voluntary, and easy to administer. Community Energy Efficiency Program homes are designed and built to be 30% more energy efficient than the 1993 Model Energy Code, or approximately 25% more efficient than the Title 24 energy conservation requirements of the state code which the City already enforces. In addition, there are mandatory requirements for mechanical design by a licensed engineer, and inspections and/or diagnostics of all energy-related features associated with mechanical equipment in new homes. Builders basically agree to do five things when they join the program. They agree to ensure that: The home has an HVAC system designed to Air Conditioning Contractors of America requirements (ACOA Manual J, D, and S), and that an engineer registered in the State of California stamps/certifies the design. This ensures that the heating and air conditioning system is properly designed and engineered to be most energy efficient, and goes beyond state law, which does not require these systems to be designed by an engineer; ❑ The home has a CHEERS computer analysis completed which demonstrates that the home scores an 86 or greater, which is equivalent to an EnergyStar "5 Star" Rating. This rating confirms and documents that the building surpasses the required energy conservation features mandated by the California Building Code, which the City currently enforces during the course of the permit process; ❑ California Energy Commission tight duct criteria require duct leakage of less than 6%. This requirement is significantly above and beyond what homebuilders are required to do under Title 24 energy efficiency regulations. This requirement is especially important, since many CEEP homebuilders achieve 30% above code through two primary measures —tightening ducts and installing spectrally selective glass. Energy Commission, building industry leaders and Lawrence Berke ❑ The builder must use formal contractor scopes of work designed by the Caly staff, ley Laborator and notify installing subcontractors (insulation, windows, and HVAC) that the scopes work will be used as the basis for quality inspections; and of ❑ The home has undergone CHEERS inspection and diagnostic evaluation by a certified and neutral third party to ensure conformance with strict construction and installation standards for specified equipment and other building features. The detailed inspection covers insulation, caulking, windows, water heating, furnace heating, AC efficiency, and both duct blaster and blower door tests. The City's Building and Safety staff would continue to review plans and construction projects for compliance with other state energy conservation requirements not included under the proposed program. Incentives to Participate Recent discussions with Santa Clarita developers and homebuilders indicate two incentives to be the most attractive to increase participation in the program: 1) Fast -tracking the project during the permitting process; and 2) limited permit fee subsidies to partially offset the developer's costs to design and build more efficient buildings. Staff proposes a two-year pilot program to be limited to four builders per quarter for participation on a first -come -first-served basis, with a 10% plan check fee subsidy to help developers offset the cost of building to a higher standard of energy efficiency. The subsidy should not exceed $250 per home or $1,000 per development project during the first year and limited to $125 per home and $500 per development project during the second and final year of the program. The first and second years of the program would cost the City a total of $24,000 with this proposal. $1,000 max. per development project x 4 projects x 4 quarters per year = $16,000 total, Pt year $500 max. per development project x 4 projects x 4 quarters per year = $8,000 total, 2nd year Total Program Costs = $24,000 If successful, the program will help create a market for EnergyStar homes that will encourage builders to construct to the higher standards without the need for City incentives beyond the pilot program period. If fully utilized, the program will generate an estimated 900 EnergyStar homes (assuming sixteen 60 -lot development projects participate) during the two-year pilot, representing a significant increase in energy savings and reduced impact to the Santa Clarita Valley's air quality. Under this program, staff also proposes to offer "fast-track" permit processing for incentive to participating in the program participating builders. This feature was identified by local builders as the greatest process would offer the greatest cost sav. A significant time reduction in the permitting ings to builders and do most to help offset the builder's added construction and engineering costs. The "fast-track" feature would be coordinated and administered by the Building and Safety Division. Local builders also expressed interest in a program whereby participating builders would receive local recognition for their efforts in contributing toward building a sustainable community. Such recognition would go a long way toward marketing the benefits of such energy conserving features in new homes. Benefits to Santa Clarita Some of the benefits to the City of Santa Clarita from participating in this program, include: 1) Significant improvement in the quality of plans submitted by builders, thereby reducing review time by City staff and minimizing costly mistakes in the field, - 2) Reduced resource and time requirements for energy plan check and field inspections, - 3) The program is flexible and can be individually tailored to Santa Clarita; 4) It is a CUSTOMER -FOCUSED initiative—it is designed to make business easier and more efficient between the City and one of its most important constituencies—the homebuilding industry; 5) The program focuses on independent, third party verification of code -surpassing energy efficiency improvements and measuring the results, to ensure that energy efficiency improvements are installed, and actually deliver the savings projected to the City of Santa Clarita. The homes are inspected before and after construction to make sure builders are building substantially above what is required under California law; 6) This is the only local government energy efficiency program in the country where 100% of the homes built under the program meet nationally -recognized EnergyStar requirements (managed by the U.S. Environmental Protection Agency and the U.S. Department of Energy) --it is not simply a "marketing program;" 7) It is a VOLUNTARY, MARKET-DRIVEN PROGRAM—it is not a mandate; 8) It is a tool for the City to use—it is not intended to replace local government building officials. It is a tool that should make the City's Building and Safety staff's jobs more efficient; 9) It is a proven, tested program, with successful experience in other Southern California local governments (Chula Vista, San Diego County, etc.); environmental savings. The program can rack up those savings re10) It focuses on one area first—energy efficiency—to achieve signifiively quickly, and energy and lat can be adapted later to include solid waste and other green building measures; total control of the program 11) It is a relatively easy program to administer—Santa Clarita building official maintains , and the program fits easily into existing building permit processes. There is no prerequisite training required of City employees; and 12) The program brings both environmental and economic savings, through reduced emissions, and energy dollars that stay with Santa Clarita residents. One of the distinguishing features of this model is that the homes built through the program are inspected and rated by an independent third party. Homes are inspected by certified CHEERs raters both before AND after construction. This feature is different than most green builder programs in the United States, where inspections are rare, and "self -certification" by the contractor/installer is the norm. Under thsavings are more likely to accrue to the City of Santa Clarita, and thelsavings are more likely to be accurately measured. Third party verification provides added security to City staff without adding an unnecessary layer of bureaucracy. Through the end of calendar year 2000, a California utility is offering free technical assistance to help encourage builder and local government participation. The local technical assistance and implementation support is available to local governments on a first -come -first served basis. Professionals are available to work with our staff to tailor this Program to our needs. Regardless of this technical assistance offer, staff believes the program to be worthy of implementation. ALTERNATIVE ACTIONS In lieu of the proposed two-year pilot program, the Council may consider an alternate one-year pilot program. This alternate would include the fee subsidy and "fast-track" permitting for one-year as a participation incentive feature. In lieu of the proposed two-year program with fee subsidies, the Council may consider a two-year pilot program without the fee subsidies. This alternate would include the "fast-track" permitting feature for the full two years. An alternate program without participation incentives is not recommended, as it may not generate significant interest in the development community. FISCAL IMPACT The proposed two-year program, if fully utilized by developers, will have an impact to the City's general fund of $24,000 over a two-year period. An alternate one-year program, if fully utilized by developers, will impact the City's general fund in the amount of $16,000. An alternate two-year program that includes the fast-track plan review incentive,but excludes the fee subsidy will have a negligible cost impact to the City. ATTAC—HMENTS Resolution No. 00- bldg/ceepagn2.doc