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HomeMy WebLinkAboutMINUTES - 08142001 - SD.11 TO: BOARD OF SUPERVISORS .•E_s_ L'=°� ontra FROM: INTERNAL OPERATIONS COMMITTEE Costa DATE: August 7, 2001 �° i v' County i ST'4 L1� SUBJECT: SUSTAINABLE COUNTY BUILDINGS COU SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION RECOMMENDATIONS: 1. ACCEPT the report of the Internal Operations Committee regarding the adoption of a life- cycle costing approach in the development of future County facility projects. 2. ACKNOWLEDGE that the goals of the County's sustainable building policy are to ensure that County facilities are models of energy, water use, and materials efficiency, while providing healthy, productive and comfortable indoor environments for employees, customers, and clients. 3. RECOGNIZE that the establishment of strict sustainability criteria with regards to specific building components may not be� desirable given the continuing evolution of building technology, and the potential for conflicts between such criteria and building regulations for certain types of facilities, such as detention facilities. 4. CONCUR that it is nevertheless important that the staff of the Department of General Services and the County Administrator's Office stay abreast of emerging building technologies that may provide benefits to the County in the future. 5. AGREE that whenever it is practical, cost-effective and affordable, these emerging building technologies should be incorporated into the design of both future major remodel and new building projects. CONTINUED ON ATTACHMENT: YES SIGNATURE: RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE APPROVE OTHER SIGNATURE(S): L 1&0 I JOHN GIOIA,CHAIR MARK DeSAULNIERv— ACTION OF BOARD ON APPROVE AS RECOMMENDED OTHER VOT OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE AND CORRECT COPY OF AN ACTION TAKEN UNANIMOUS(ABSENT `-� 1 AND ENTERED ON THE MINUTES OF THE BOARD OF SUPERVISORS ON THE DATE AYES: NOES: SHOWN. ABSENT: ABSTAIN: ATTESTED0AA&oA,c_.,+ 14, 2001 CONTACT: LAURA LOCKWOOD(925)335-1093 JOHNSWEETEN,CLERK OF THE BOARD OF SUPERVISORS AND COUNTY ADMINISTRATOR CC: COUNTY ADMINISTRATOR,CAPITAL PROJECTS DIRECTOR GENERAL SERVICES DIRECTOR GENERAL SERVICES ARCHITECTURAL MANAGER INTERNAL OPERATIONS COMMITTEE STAFF BY EPUTY I Sustainable County Building Guideline's August 6, 2001 Internal Operations Committee Page 2 6. ESTABLISH the following sustainability guidelines for all County buildings: ... II a. County buildings should be sited at locations that are adjacent or near public transit whenever possible. b. For new building projects over $1,000,000 in costs, the County should provide employee bike lockers, showers, adequate parking areas to allow for vanpools and carpools, and alternate fuel and/or recharging stations for both individuals' and County fleet vehicles. The County should also try to add these features to existing facilities during major building remodels, space and funds permitting. c. Adequate areas should be ;allocated in both new and existing facilities for storage and collection of recyclable materials. 7. DIRECT the County Administrator to develop Administrative Bulletins that address the use of a life-cycle costing approach on future County facility projects and establish the above- referenced sustainability guidelines for County buildings. FISCAL IMPACT: Use of a life-cycle costing approach in the development of future building designs may result in higher consultant fees on County'I projects, as this approach will require more upfront analysis and evaluation of building systems. In addition, the materials costs of facility projects may be higher, as more efficient equipment and durable materials tend to be relatively expensive. Given that the goal of life-cycle costing is to evaluate the overall long-term costs of a facility, these incremental increases in building costs should be accepted only if they will result in sufficiently lower operating costs over the life of the facility. While the addition of bike lockers, showers, and parking facilities for vanpools, carpools, and alternate fuel refueling and recharging stations will not be relatively expensive items to incorporate into new County building projects, they may prove expensive and/or difficult to achieve given space limitations at existing County facilities. II BACKGROUND: I On December 5, 2000, the Board of Supervisors referred to the Internal Operations Committee the responsibility for the development of principles, policies and design guidelines for sustainable County buildings. Sustainable (or "green") buildings are those designed, constructed and operated as a single, integrated system that attempts to conserve energy and natural resources, protect human health, preserve local and regional environmental quality, and maximize durability and long-term value. I The Internal Operations Committee hast reviewed various aspects of the sustainable building design approach, including the Leadership in Energy and Environmental Design (LEED) program. The LEED program evaluates and scores a project based on a broad range of building system and site selection criteria, and if a project reaches a high enough score, it is certified as a "green" building. It should)be noted that the LEED program is primarily focused on good environmental outcomes without consideration of cost in relation to these outcomes. I While our Committee ultimately decided not to recommend that the County participate in the LEED program, most of the building system components evaluated by LEED have been incorporated into the list of critical building components that will be evaluated on a life-cycle cost basis on future County building projects. In this way, the Board of Supervisors can assure that future County facilities will be designed and constructed in a manner that promotes both sustainable building design► and fiscal responsibility. Life-Cycle Costing for Future County Facility Projects The primary reason for life-;-cycle cost analysis on County projects is to demonstrate that operational ',savings are sufficient to justify the additional investment cost to the County. This type of analysis can be used for everything from small remodeling efforts to large-scale new building projects, in order to assure that taxpayers dollars are used in the most cost- effective fashion possible. Determining the Base Case In order to evaluate if a proposed project or type of building system is cost- effective, both its upfront cost's and on-going savings must be compared to a base case on a present value basis over a pre-defined period of time. On existing buildings, life cycle, cost analysis assumes the base case is a continuation of existing conditions where no upfront investment costs are required but there are (presumably) higher energy, water, operations, or maintenance costs over time. For new buildings or mandatory retrofit projects (e.g. replacing a non- functioning HVAC system), the base case is generally the potential project alternative with the lowest investment-related cost over the study period. Life-cycle costing is particularly effective in determining the optimal efficiency choice when several different project alternatives are available. A good example of this is evaluating the appropriate level of insulation in a building. For a given climate',zone, energy cost environment, and building type, there is a point where the incremental cost of greater levels of insulation do not produce sufficient additional energy savings to be cost- effective. Life-cycle costing should not just be confined to energy decisions, but used when evaluating various other aspects of building design, including water use, landscaping options, and materials selection. Alternate Measures of Cost-Effectiveness In cases where the County has mutually exclusive projects under consideration with limited budget resources available (e.g. evaluating energy conservation projects proposed for different buildings), the County will need 1 to evaluate these projects against each other by measuring their relative cost- effectiveness. The adjusted rate of return, (AIRR) is a measure of the annual percentage yield from a project investment over a given study period. It provides a relative measure of the cost-effectiveness of various project alternatives and is best used when comparing projects over the same time period. Theoretically, if the County had sufficient resources, all projects should be funded if their AIRR is above the County's own cost of fiends (which is generally between 4.5% to 6%, depending on market conditions). Of course, this is not possible, but AIRR would nevertheless allow decision- makers to select those projects that provide the highest return on our capital dollars. Another good measure of cost-effectiveness that is particularly appropriate when evaluating projects that have different useful lives is the savings/investment ratio (SIR). Each project is measured as to the present value savings achieved over time given the initial amount of investment required. Many public and private sector companies use simple, short payback criteria when evaluating projects for funding. As the table below illustrates, this method has its limitations. 'Some projects may have a longer payback period, but are nevertheless good investments given the useful- life of the project. Even a project with ,a five-year payback is economically viable when compared to the County's. cost of funds so long as the useful life of the project extends at least 7 years. The table also provides an analysis of three potential energy projects under consideration for funding. In this analysis, Examples I and III are two real- life projects that meet the criteria for funding, since they both greatly exceed the county's own cost of capital. Example I1 is a more hypothetical example, which was included to'Alustrate a project that would most likely be rejected for funding if capital budget resources are scarce since it provides only marginal savings above the base case. 2 Internal Rates of Return and Savings/Investment Ratios Consistent with Various Payback Periods and Project Lifetimes County Cost of Capital averages 4.5%to 6% Payback Period Useful Life 2 years 3 years 4 years 5 years 6 years 7 years 8 years 9 years 10 years 7 years 98%: ::`^ 4'4%.: "'...:24%; : . .:::13% 5% 0% 10 ears 100°/u:!::s:::: ii49%':`: :` 30°70`''::i. ;;'20°1u i:':;t`''::1°4%0 9% 5% 2% 0% Y ::..:..,....:.. 15 years 100%.:..:::.........50-/0::>: :...:.,...:..3..3.:/0: ; 24./o.;::r; 18%..:..:.:.:,.:.:.1._4.9 11% 9% 7% Example 1. Lighting Retrofit at Los Medanos Health Center Upfront Cost of New Ballasts, Lights 54,000 Rebate from PGE (9,000) Net Cost of New Ballasts, Lights 45,000 Estimated Energy Savings per Year 9,960 Useful Life of Equipment 7 Estimated Payback Period 4.5 Rate of Return 18% Meets'•;1=u.iding:Griteria': Savings/Investment Ratio 1.30 Example I Cool Roof Replacement Upfront Cost of Cool Roof 50,000 Less Rebate from CEC (3,000) Net Cost of Cool Roof 47,000 Estimated Energy Savings per Year 6,000 Useful Life of Equipment 10 Estimated Payback Period 7.8 Rate of Return 6% Marginal Project Savings/Investment Ratio 1.01 Example Ill. Direct Digital Controls at Summit Center Upfront Cost of Equipment, Installation 200,000 Estimated Energy Savings per Year 68,400 Useful Life of Equipment 15 Estimated Payback Period 2.9 Rate of Return 52% M..eets;F'uriding Criteiia Savings/Investment Ratio 3.67 3 II I • • 11II Critical Building Components that Should Be Evaluated in the Future Below are key building components that in the future should be evaluated using a life-cycle cost approach by the General Services Department and/or by outside consultants during the development of both new County buildings as well as when planning major building remodels (defined as projects whose budget exceeds $100,000 in construction costs): 1. Energy and Atmosphere a. HVAC systems, I'with the goal of optimization of performance over life of equipment b. Use of renewable energy systems (i.e. solar photovoltaic systems and solar,hot water systems) c. Use of landscape; exterior design and cool roofs to reduce heat islands d. Use of under floor ducting e. Appropriate level,of building insulation f. Solar orientation of building and. site I 2. Water Efficiency a. Water use reduction strategies b. Landscape irrigation techniques c. Use of innovative 'wastewater technologies 3. Materials and Waste Management a. Use of durable, refurbished, recycled content, and/or rapidly renewable material's b. Use of certified wood-based materials 4. Indoor Environmental Quality a. Indoor air quality standards b. Techniques to increase ventilation effectiveness c. Low-emitting materials d. Controllability of systems by individuals e. Day lighting and views f. Indoor lighting strategies g. Use of operable windows I 4 • I1 Board Policies for All County Buildings The Board of Supervisors may want to adopt certain sustainability guidelines for all County buildings, such as the following: 1. County buildings should be sited at locations that are adjacent or near public transit whenever possible. 2. The County should provide employee bike lockers, showers, adequate parking areas to allow, for vanpools and carpools, and alternate fuel and/or recharging stations as part of future building projects, and should also try to add these features to existing facilities during major building remodels, space permitting. 3. Adequate areas should be allocated in both new and existing facilities for storage and collection of recyclable materials. s