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101-Staff Report.pdf COMMUNITY DEVELOPMENT DEPARTMENT CITY HALL 1010300 TORRE AVENUE •CUPERTINO, CA 95014-3255 TELEPHONE: (408) 777-3308 www.cupertino.org CITY COUNCIL STAFF REPORT Meeting: May 3, 2011 Subject Green Building Ordinance, MCA-2010-04, andamendment to the City's Fee schedule Recommended Action 1.Conduct first reading of Ordinance No. 11-2076amending Chapter 16.58 of the Cupertino Municipal Code, Green Building Standards Code Adopted(Attachment A); and 2.Adopt draftResolution11-amending the City’s adopted Fee Schedule to incorporate Green Building deposit fees(Attachment B). Description Application: MCA-2010-04 Applicant: City of Cupertino Location: Citywide Application Summary: Municipal Code Amendment to adoptan ordinanceamending Chapter 16.58 of the Cupertino Municipal Code, Green Building Standards Code Adopted (See Attachment A, Ordinance No. 11-2076) and adopt related fees and deposits (See Attachment B, DraftResolution). BACKGROUND On February 1, 2011, the City Council reviewed the draft Green Building Ordinance and directed staff to: 1.Revisethe draft ordinanceto be consistent with the Santa Clara County Cities Associations’ Phase II Recommendations and the additional changes that Council discussed; and 2.Provide acost analysis of representative projects, including asingle-family, multi-family and office development, whichprovideestimates of the total cost of development, including the additional cost to comply with the proposed Green Building Ordinance requirements(Attachment D). Public comments received duringand subsequent tothe public hearing included: Clarify when and what part of a remodeling project is subject to theordinance requirements; for renovations and additions, requirements should only apply to the scope of the work. The draftordinanceexceeds the Cal Green building code standards and can make the cost of a development project infeasible. Verification requirements could affect the tenancy of buildings if the requirement thresholds are so low that it will affect whether tenant improvements and upgrading can take place. Certification costs add significantly to the development costs for commercial developments, including the additional administration, architectural design and time costs to construct a project. Do not provide incentives that reduce parking requirements or increase floor area ratio allowances. Ordinance should not exceed the Cal Green building code standards, and should not apply to tenant improvements. Since the February 1, 2011 Council meeting, the City has becomeaware that some local cities, including the Cities of Mountain View and Palo Alto, have recently merged their green building ordinances with their locally adopted 2010 California Green Building Standards Code (Cal Green). This was essentially done as a result of thenew Cal Green building codes thattook effect on January 1 of this year. Merging these two codes essentially allowed them to integrate all of the green building measures into one ordinanceand preventshaving to subsequently amend the green building ordinance requirements every time the Cal Green building codes are amended. Additionally,the changemoves the green building measures into the local building codes. Merging of these two codes would basically entail amending Chapter 16.58 of the Cupertino Municipal Code, and makinglocal amendments to the Cal Green building codesto reflect the Green Building Ordinance requirements. DISCUSSION The combined draft ordinance (See Attachment A, Ordinance No. 11-2076)merges the Green Building Ordinancethatthe Council had reviewed at its February 1, 2011 meeting into Chapter 16.58 of the Cupertino Municipal Code. A copy of the current Chapter 16.58 is included (See Attachment C) with strikeouts showing the sections that have been deleted. However, the key components of the draft Green Building Ordinance, including all changesrecommended by the Council,have been incorporatedand are outlined below in this report. Section 16.58.220 Table 101.10 (Requirements) The following table illustrates the progression from and a comparison of the Phase II Recommendations, the Planning Commission recommended draft Green Building Ordinance requirements, and the Revised Draft Green Building requirements per the February 1, 2011 City Council meeting. The revised changesreflect Council’sdirection to be consistent with the Phase II Recommendations and to incorporate other items discussed by Council. Type of Phase II Planning Commission Revised Draft Green Building ProjectRecommendationsRecommended Draft Green Requirement per the 2/1/11 Building OrdinanceCity Council Discussion Residential –Single-Family & Multi- Single-Family (SF R) & All Single-Family and Multi- New Family < 9 homes: Multi-Family (MFR) < Family: Construction 9 homes: Minimum: GPR min. 50 pts or (Single Minimum: GPR min. 85 pts or LEED Certified w/Third Party Family & GPR Rated (50 pts min.) LEED Certified w/Formal Certification Multi- or LEED Certified. Verification. Family) Alternate Reference Standard:Third Party Certification SF R & MFR SF R & MFR Minimum: GPR min. 50 pts or GPR Rated (50 pts min.) LEED Silver w/Third Party or LEED Silver Certification (Option: GPR min. 75 pts which is equivalent to LEED Silver) Alternate Reference Standard: Third Party Certification Residential –Single-Family Single-Family (renovation): SF R<$100K permit Renovation/existing floor area: valuation; or <500 sq.ft. Exempt Addition addition; or FAR Minimum: Cal Green (Single- increase <50%: Mandatory (for new portions Family & only) w/Informal Verification. Multi- BIG Elements checklist Family) or LEED checklist SF $100K-$200K permit valuation;or 500-1,000 sq.ft.add’n: BIG Elements 25-49 pts. or LEED Certified SF R $200K+ permit valuation; or 1,000 sq. ft.add’n; or FAR increase of 50%: GPR Rated (min. 50 pts.) or LEED Certified Type of Phase II Planning Commission Revised Draft Green Building ProjectRecommendationsRecommended Draft Green Requirement per the 2/1/11 Building OrdinanceCity Council Discussion Small Multiple-Family Multiple-Family (minor Multiple-Family (minor Renovation (TBD):renovation):renovation): GPR checklist or Minimum: Cal Green Exempt Mandatory w/Informal applicable LEED checklistVerification. Multi-Family (major Multiple-Family (major Large MFR (TBD): renovation)–Renovations renovation)–Renovations and/or additions that comprise at and/or additions with a Floor GPR 50 pts. or applicable least 10,000 square feet, and Area Ratio (FAR) increase LEED Certified replace or alter the HVAC >50% and at least 10,000 system and at least two of the square feet, and replace or alter following: building envelope, the HVAC system and at least hot water system and lighting two of the following: building system.envelope, hot water system and lighting system: Minimum: GPR min. 75 pts or Minimum: GPR min. 50 pts or LEED Certified w/Informal LEED Certified (applicable Verification or LEED EBOM only to the area of Certified w/Formal Verification.renovation/addition) w/City Reviewor LEED EBOM w/Third Party Certification. Alternate Reference Standard: ThirdParty Certification Non-Small, <5,000 sq.ft.:Small, < 10,000 sq.ft.:Small, sq.ft.: Residential– LEED checklistMinimum: Cal Green Minimum: Cal Green New Mandatory w/Informal Mandatory* w/City Review Construction Verification. Alternate Reference Standard: Third Party Certification Type of Phase II Planning Commission Revised Draft Green Building ProjectRecommendationsRecommended Draft Green Requirement per the 2/1/11 Building OrdinanceCity Council Discussion Mid-size, 5,000 –25,000 Mid-size, > 10,000 –25,000 sq. Mid-size, 10,001 sq.ft.– sq.ft.:ft.: 50,000sq.ft.: LEED Certified Minimum: LEED Certified Minimum: LEED Certified w/Informal Verification w/City Review Alternate Reference Standard:Third Party Certification Large, 50,001 or more sq.ft.: Large, >25,000 sq.ft.:Large, 25,001 or more sq.ft.: Minimum: LEED Silver w/ LEED SilverMinimum: LEED Silver w/ Third Party Certification Formal Verification. Alternate Reference Standard:Third Party Certification Small projects: Non-Minor Renovations/Additions:Minor Residential -Renovations/Additions: LEED Checklist Renovations/ Minimum: Cal Green AdditionsMinimum: Cal Green Mandatory w/Informal Mandatory* w/City Review Verification.(applicable only to the scope of work of the renovation/addition). Alternate Reference Standard:Third Party Certification Large w/o HVAC:2 of 4 Major Renovation–Major Renovation– systems are touched + > Renovations and/or additions Renovations and/or additions 10,000sq.ft.+ > permit that comprise at least 10,000 that comprise at least 10,000 valuation of $1 million square feet, and replace or alter square feet, and replace or alter permit valuation:the HVAC system and at least the HVAC system and at least two of the following: building two of the following: building LEED Certified w/o envelope, hot water system and envelope, hot water system and prerequisiteslighting system.lighting system. Large w/HVAC: 2 of 4 Minimum: 10,000–25,000 sq.Minimum: 10,000–50,000 sq. systems are touched, one ft.--LEED Certified w/ ft.--LEED Certified being HVAC + > 10,000 Informal Verification or LEED (applicable only to the area of sq.ft.+ > $1 million EBOM w/Formal Verification.the renovation/addition) with permit valuation: Type of Phase II Planning Commission Revised Draft Green Building ProjectRecommendationsRecommended Draft Green Requirement per the 2/1/11 Building OrdinanceCity Council Discussion City Reviewor LEED EBOM LEED Certifiedw/Third Party Certification Minimum: 50,001sq.ft.or Minimum: 25,001sq.ft.or more –LEED Certified more –LEED Certified w/Formal Verification or LEED (applicable only to the area of EBOM w/Formal Verification.the renovation/addition) w/Third Party Certification or LEED EBOM w/Third Party Certification Alternate Reference Standard:Third Party Certification Not AddressedFor projects with both residential Fornew and Mixed Use and non-residential components, renovation/addition projects Projects each use shall comply with the with residential and non- minimum requirements stated residential components,each above.use shall comply with the mandatory measures to this code by the City of Cupertino, and with the requirements applicable to each use, and with the requirements applicable to the use that comprises the majority of the project’s permitted square footage. Note: * CalGreen Mandatory requirements shall only be applied to elements included in the scope of a project. Sections 16.58.130 and 16.58.140 Residential New Construction, Single-Family and Multi- Family Residential Tobe consistent with the Phase II Recommendation, threshold levels have been increased to differentiate between less than 9 homes (whether single-family or multi-family) and 9 homes or more. To be consistent with the Phase II Recommendation, the Minimum Requirement has been lowered from 85 Green Point Rated (GPR) points to 50 GPR points. However, the LEED requirements remain the same as the Planning Commission recommended for the two threshold levels of development. Option to New Construction, Single-Family and Multi-Family Residential As proposed, the minimum Phase II LEED requirement for 9 homes or more is either 50 GPR points or LEED Silver. However, given that 50 GPR points fall short of theLEED Silver certification level (75 GPR pointsequivalent),the Council couldconsider an option to raise the minimum GPR points to 75 pointsto make the GPR and LEED points comparable. Sections 16.58.160 through 16.58.180 Non-Residential New Construction Modify the mid-size new construction threshold requirement from 10,001-25,000 square feet to 10,001–50,000square feet, and the large-size new construction threshold to 50,001 or more square feet. Section 16.58.150 Residential, Renovation/Addition Exempt all single-family and minor multiple-family renovations/additions from the ordinance requirements. Modify the requirements defining major multiple-family renovations/additionsas an increase to the floor area ratio (FAR) greater than or equal to 50%,and at least 10,000 square feet,and replacement or alteration of the HVAC system and at least two of the following: building envelope, hot water system and lighting system. Section 16.58.190 through 16.58.200 Non-residential, Renovation/Addition Modifythe threshold level requirements from 10,001-25,000 square feet to 10,001–50,000 sq.ft.square feetrequiring LEED Certified with City Review, and 50,001 or more square feet requiring LEED Certified with Third Party Certification. Section 16.58.210 Mixed-Use The City’s green building consultant, Global Green, recommends that we further clarify the requirements for mixed use projects by adding language that states the applicable requirement shall be the requirement for the use that comprises the majority ofthe project’s square footage. This would eliminate the need for applicants and staff to track two separate checklists, one for residential requirements and another for non-residential requirements, which could become cumbersome to manage. The wording would be amended to add the italicized wording as follows: “For new and renovation/addition projects with residential and non-residential components, each use shall comply with the mandatory measures of the California Green Building Standards Code and any amendments to this code by the City of Cupertino, and with the requirements applicable to the use that comprises the majority of the project’s permitted square footage.” Section 16.58.230 Alternate green building standards Alternate green building standards section has been incorporated based upon the previous draft Green Building Ordinance. Changes include moving the approval authority of alternate standards to the Building Official as other cities have done by moving these regulations to the building code;removing the reference of alternate standard examples since these may change over time and new standards may be developed; and removing the required finding that the “project will meet or exceed the applicable minimum and/or exemplary standards” since exemplary standards have been removed and it is difficult to equate one standard to another. Section 16.58.240 Verification This section has been revised to replace referencesto “Formal Verification” with “Third Party Certification” and “Informal Verification” with “City Review.These references have also been replaced throughout the ordinance in Table 101.10. This clarification has been made to more accurately identify the process and requirements that a project will either require review by the City or certification through a third party rating system to meet the verification requirement. Green Building Refundable Deposits/Fee Schedule In the resolution (See Attachment B, Resolution to amend the Fee Schedule) to amend the Fee Schedule, the Council recommendedto: Halve the Planning Commission recommended deposits for Third Party Certificationand for Single-Family Residential City Review, resulting in: Green Building Deposit –Third Party Certification Project TypePlanning Commission Revised Deposits per 2/1/11 RecommendationCouncil discussion $2/sq.ft., max. $2,000$2/sq. ft., max $ 1,000 Single-Family $2/sq.ft., min. $40,000/ $2/sq. ft., min. $ 20,000/ Multi-Family max. $75,000max. $40,000 Residential $2/sq.ft., min. $70,000/ $2/sq. ft., min. $35,000/ Non-Residential max. $150,000max. $75,000 For projects requiring City Review, the fee schedule will note that the cost of review will reflect consultant costs to review the project.For initial deposits, staff proposes $500 for Single-Family homes, $1500 for Multi-family Residential and $1500 for Non-residential projects. Option for Fee Schedule The Council may consider the deposit amounts as recommended by the Planning Commission for City Reviewsince these deposit amounts are closely reflective of the actual certification costs. Voluntary Requirements to Obtain Incentives Section has been removed based on Council discussion to remove the proposed incentives in the draft ordinance.As a result, the “exemplary standards” in the table have been removed as well. Options for Incentives One incentive that the Council recommended for further discussion and consideration is to allow increased floor area ratio (FAR) of up to 10% over that allowed in the Municipal Code. Should Council wish to incorporate this incentive, a section regarding incentives and exemplary standards can be added back into the draft ordinance. Other incentives that the Council may consider include expedited building permit processing for projects that exceed Green Building Ordinance requirements and/orawarding a plaque/recognition to the applicant. Staff is reviewing an expedited fee for projects and proposes to bring this back during the mid-year budget adjustment for FY2011-2012. If the Council wishes to offer incentives for projects that exceed the Green Building Ordinance requirements, exemplary standards can be added back into the draft ordinance and projects that met the requirements could be offered the expedited process at no cost or a reduced cost at that time. The Council may also choose to create a program to recognize projects that exceed the Green Building standards by awarding a plaque or other recognition. Section 16.58.260 Exemptions Staff has modified this section to allow for additional unforeseen exemptions, in addition to historical or atypical energy-related projects.Moving these requirements to the building code will allow exemptions to be granted by the Building Official.This is consistent with the codes for other cities such as Mountain View and Palo Alto. Cost Analysis of Reference Projects In response to the Council’s request, the City’s Green Building consultant, Global Green, prepared an analysis (See Attachment D) of how the proposed Green Building Ordinance requirements would impact development costs of projects in the City.An analysis was conducted of three development projects approved by the City within the past five years representing a single-family development, multi-family development and commercial development, to generate a rough estimate of the additional costs that would be incurred as a result of meeting the proposed Green Building Ordinance requirements. The estimate is based upon additional modifications that would be required for these projects to achieve LEED Certification, which include minor design modifications and modifications to meet the energy performance and ventilation prerequisite requirements of LEED.More specifically, the analysis considered that these projects needed: Upgraded mechanical system designs Modified landscape plans to reduce water use Environmentally preferable building materials, such as recycled-content, low-emission and locally manufactured materials Stormwater management systems Increased diversion requirements for construction and demolition waste from 50% to 75% Additional construction verification measures A summary of these representative projects and the estimated costs to meet the Green Building Ordinance requirements are illustrated below. The analysis essentiallydetermined that the percentage cost increase over meeting the Cal Green building standards was in the range of 1% - 2.2%, which is in line with incremental cost studies that have determined the incremental cost of achieving LEED Certification ranges from 0% to 5% of total construction costs, with most projects experiencing 3% or less of an increase in costs. The reason these are estimates is that LEED and GPR are performance-based, which allows flexibility in the type of green measures that can be incorporated into a project, leading to different choices regarding credit selection and the costs associated with achieving those credits. Single-Family Multi-Family Commercial Office Residential Residential Building DevelopmentDevelopment 1 $450$900$900 Registration 1 Design$2,500$4,000$10,000 2 Energy Systems$952$12,880$145,020 3 Materials$1,785$24,000$72,510 $1,000$10,000$25,000 Construction 4 Verification(HERS)(HERS)(Commissioning, M&V) 5 $2,500$7,500$25,000 Documentation Preparation $1,500$3,500$2,250 Certification/Provider 6 Fee Total Incremental $10,687$62,780$280,680 Cost 7 Cost/Sq.Ft. $4.49$1.94$2.90 Percent Cost Increase2.2%1.0%1.5% 1.From USGBC web site 2.Assumes 25, 40 and 100 hours at an average cost of $100/hr. 3.Based on Mountain View Energy Reach Code Cost-Effectiveness Study: $0.40/sq.ft.average for residential and $1.50/sq.ft.for non-res, 4.Assumes average incremental cost of $0.75/sq.ft. 5.Based on typical costs for current Global Green projects 6.Davis Energy Group LEED for Homes fee schedule, GBCI fee schedule 7.Assumes $200 per square foot average cost of construction Based on results for similar project types in the Mountain View Energy Reach Code Cost- Effectiveness Study, the estimated annual energy savings is $115/year for the single-family house, $1,600/yearfor the multi-family, and $18,000/yearfor the non-residential building. Additional savings would result from reduced water use and lower maintenance costs. The projects may also experience more rapid appreciation or higher assessed value at time of sale. Chamber of Commerce Legislative Action Committee On March 3, 2011, staff presented the comparison table of the Phase II Recommendations, Planning Commission recommended draft ordinance, and reviseddraft Green Building requirements per the February 1, 2011 Council meeting, to the Chamber of Commerce Legislative Action Committee. Staff presented the revised draft ordinance requirements as a result of Council’s direction to conduct outreach to the community to gauge the community’s feedback on the draft ordinance requirements. Staff received many constructive comments including: Revised draft ordinance is more palatable to the community LEED Silver is an industry standard for any commercial development over 25,000 sq.ft. Communication to the public about the policies, implementation and enforcement is important Exemptions for economic hardship should be considered Consider incentivesfor exemplary standards Consider providing in-house certification, rather than a third-party certification. This saves time by providing more flexibility so applicant can work directly with staff to resolve issues rather than working with a third-party or outside consultants Define “minor” versus “major” renovation Explain the deposits/fees Provide a final draft ordinance for the Chamber to review before adoption Building Standards Commissionand Effective Date of Ordinance The combined Cal Green/Green Building Ordinance will require approval from the Building Standards Commission (BSC) prior to the date that the ordinance will take effect. The Building Standards Commission must approve the ordinance to allow for the local amendments to the California Green Building Standards Code (Cal Green), since the local amendments exceed the minimum Mandatory Requirement of the CalGreen. The City may tentatively approve of the combined ordinance during which time an application can be submitted to the Building Standards Commission. The Planning Commission suggested that a six month grace period be provided after adoption of the ordinance and before the ordinance takes effectto allow applicants adequate time to get information about the new regulations prior to preparation of project drawings and submitting building permits.Based on the City Attorney’s recommendation to provide a date certain that would be easier to remember, staff suggests January 1, 2012 as the effective date. Staffbelieves this would allow for sufficient time to submit and receive approval from theBuilding Standards Commission before the ordinance would take effect. Filing to the Building Standards Commission will require that the City make findings to exceed the Mandatory Requirements of the Cal Green building codes.These findings are included as Exhibit B of Ordinance No. 11-2076. Environmental Review The proposed ordinance is considered statutorily exempt from the California Environmental Quality Act (CEQA) guidelines pursuant to Section 15308 since this is an action by a regulatory agency for the protection of the environment and assures the maintenance, restoration, enhancements or protection of the environment where the regulatory process involves procedures for protection of the environment. _____________________________________ Prepared by:Aki Honda Snelling, Senior Planner Reviewed by:Gary Chao, City Planner and Aarti Shrivastava, Community Development Director Approved for Submission by:David W. Knapp, City Manager Attachments: Attachment A: Ordinance No. 11-2076 Attachment B: Draft Resolution to amend the Fee Schedule Attachment C: Chapter 16.58 of the Cupertino Municipal Code with strikeouts Attachment D: Global Green Cost Analysis of Reference Projects Attachment E:February 1, 2011 City Council Minutes Attachment F:February 1, 2011 City Council Report Attachment G:Planning Commission Resolution No. 6615 Attachment H: Email of February 18, 2011 from Myron Crawford Attachment I:Email of March 5, 2011 from Myron Crawford