February 24, 2004

SUBJECT: 2002-0076 - City of Sunnyvale - Adoption of polices and an ordinance to promote and create incentives for sustainable development in the disciplines of: sustainable sites, water efficiency, energy and atmosphere, materials and resources and indoor environmental quality. (Negative Declaration)

REPORT IN BRIEF

Sustainable development and green building policies were identified as an area of study by both staff, as an administrative study item in 2001, and by the City Council, as a study issue for 2002. A joint study session with the City Council and Planning Commission was held in January 2003 to develop an informal work plan.

The goals of sustainable development and green buildings are to reduce the usage of resources in construction and operation of buildings and provide better indoor environmental quality for building occupants. Staff has researched existing policies and ordinances that achieve these goals and existing programs in other jurisdictions. There are two basic approaches to a green building sustainability program: (1) develop a customized program for Sunnyvale, or (2) adopt an existing program such as the US Green Building Council’s model LEED (Leadership in Energy and Environmental Design) program. LEED is designed mainly for office and industrial buildings.

Two case studies were completed to determine how typical new Sunnyvale buildings would perform based on the LEED rating system. Additional construction costs for various levels of LEED certification were estimated. The findings determined that the additional construction cost for certain LEED credits and compliance may be minimal.

Although LEED programs are in the development stages for retail and single-family residential projects, there are existing guidelines that can be used to encourage the community to include green building design features into new construction.

Based on staff research and findings, staff is recommending an approach based on the following principles:

• Leadership from the City by working to incorporate green building and sustainable practices into the operation of City facilities,
• Incentives for private development, and
• Education of the community 

Following is a summary of the staff recommendation:

City Facilities and City Staff

Adopt a Council Policy that encourages sustainable development as follows:

• Include green building design features in new construction, remodeling, and maintenance of City facilities.
• Prior to the planning or design of any new City facility over 10,000 square feet of conditioned space, short-term and long term costs and environmental benefits of LEED certification with the US Green Building Council will be considered by the City Council.
• As material specifications and standards for maintenance and remodeling of City facilities are reviewed, sustainable design practices will be considered by staff.
• Provide staff training and education in the green building industry and advances in green building products, as budgets permit. 

Private Development

Adopt a Council Policy and ordinance that encourages and provides incentives for sustainable development as follows:

• Allow an additional 5% Floor Area Ratio (FAR) without a Use Permit for buildings located in the industrial zoning districts (excluding the Moffett Park Specific Plan area) when the building is designed and intended for LEED Certification.
• New residential construction shall be encouraged to use green building design and construction techniques as outlined in the Alameda County Waste Management Authority’s Home Remodeling: Green Building Guidelines.
• Provide education and resources to the community to encourage sustainable development and green building design features. 

Because development in the Moffett Park area will be guided by a Specific Plan, the above recommendations do not apply to this area. The specific sustainable development and green building program for Moffett Park will be reviewed and approved at a separate public hearing on the Specific Plan. However, staff has included preliminary findings and recommendations in this report. No action is required for these recommendations at this time.

This item was heard by the Planning Commission at a public hearing on January 26, 2004 (minutes included as Attachment H). The Planning Commission recommended approval in accordance with the staff recommendation with one minor change to the Council Policy (including the term “recyclable materials”). The Council Policy has been updated to reflect the Planning Commission modification.

BACKGROUND

In 2001 Community Development Department staff identified an administrative item to research sustainable development practices and programs. This research was part of on-going staff education on current development trends.

At the December 2001 City Council Study Issues workshop, the Council ranked the Energy Regulations and Green Building Policies and Guidelines (Attachment A) for study in 2002. As staff started to research the issue it realized that the issue would take more staff time to complete than planned. Combined with the lack of full staff at that time, the issue was extended and listed as a continuing item for 2003. In January 2003 a joint study session was held with City Council and Planning Commission to provide an informal work plan for 2003.

Sustainability and sustainable development can have many different interpretations and meanings to different people. There is a wide array of definitions used that range from economic to social to environmental. Staff has reviewed numerous definitions and selected the following from the World Commission on Environment and Development, 1987:

Sustainability is meeting the needs of the present without compromising the ability of future generations to meet their own needs.

Development and the built environment have a significant effect on the environment and resources. Buildings consume or are responsible for:

• 40% of the world's total energy use
• 30% of raw materials consumption
•  25% of timber harvest
• 35% of the world’s CO₂ emissions
• 16% of fresh water withdrawal,  
• 40% of municipal solid waste destined for local landfills
• 50% of ozone-depleting CFCs still in use.
• Negative effects on watersheds, habitat, air quality, and community transportation patterns

(Source: Worldwatch Paper #124).

Sustainable development is the practice of sustainability that focuses on the built environment. Building materials and design, construction techniques, and building operations and maintenance all have environmental impacts that can be minimized. Green Building practices promote construction of buildings that are healthier for the occupants and healthier for the environment. Following is the definition proposed by staff for sustainable development:

Sustainable development is a practice designed to use natural resources in a manner which does not eliminate, degrade, or diminish their usefulness for future generations.

EXISTING POLICY

Although Sunnyvale does not have a single policy for sustainability, there are many policies and code requirements throughout different departments/divisions that are designed to achieve the goals and purpose of a sustainable development program. Following are examples of programs, policies, and ordinances that encourage sustainability and sustainable development in Sunnyvale:

20-Year Budget

Sunnyvale’s 20-year budget forecast allows the long-term benefits of sustainable practices to be understood. For example, if something costs $100,000 today and it can be determined that this is less than the present value of savings over the next 20 years, it makes sense to do it. An example of this type of benefit of the 20-year budget is the photovoltaic cells on the new Senior Center. The present value of the savings in electricity costs over the next 20 years is greater than the installation costs today.

Solid Waste and Recycling

Council Policy 7.1.6 - Recycled Paper Procurement Policy requires the purchase of recycled paper and paper goods when it is economically feasible to do so.

The Solid Waste Program’s mission is to reduce the amount of refuse disposed and to provide reliable, competitively-priced, and environmentally sound services for waste reduction, recycling, and solid waste collection and disposal. An important component of the City’s diversion effort is the Sunnyvale Materials Recovery and Transfer (SMaRT) Station and Drop-off Center where recyclables and yard trimmings are sorted, processed and marketed; the remaining garbage is hauled to Kirby Canyon Landfill in San Jose for disposal.

Storm Water Runoff

Municipal Code Section 12.60.010 provides regulations for reducing the amount of pollutants that are discharged from the storm drainage system. The storm drain system is for the control of flooding only and the water that enters the drains is not treated before emptying into local creeks that flow to South San Francisco Bay. Regulating pollutants entering the storm drain system is done during construction, by inspecting on-going industrial and commercial facilities, educating business operators, and responding to reports of spills or dumping.

The California Regional Water Quality Control Board also requires that Sunnyvale City facilities reduce the usage of pesticides in order to reduce impacts on urban streams. Sunnyvale has established an integrated pest management policy that significantly restricts the selection of pesticides only to times when their use can be justified, after other options have been considered, and when application methods used will prevent the contamination of storm water and urban streams.

Water Treatment and Usage

Municipal Code Section 12.04.010 provides requirements for water treatment of usage. The Water Pollution Control Plant’s mission is to protect public health, safety, property and the quality of the Bay. This is done by treating water from the sewerage system before it is discharged to the Bay. While consistently meeting this goal, the Plant reuses many byproducts of the treatment process. These include producing electricity and mechanical power from waste gases, recovering heat from engines, producing an alternative to soil for daily landfill cover or a soil amendment for agricultural and pasture land, and supplementing the city water supply by producing recycled water distributed through a separate system for non-potable uses (e.g. landscape irrigation).

Landscape Practices

Municipal Code Section 19.38.070 provides landscape standards and requirements. Water conserving plants are to be installed in 70% of all landscaped areas for most multi-family residential, commercial and industrial sites. Additionally, for new parking lots, trees are to be planted and maintained to ensure that at least 50% of the parking area will be shaded within 15 years which reduces the heat island effect.

Air Quality

The Air Quality Sub-Element’s goal is to improve Sunnyvale’s air quality and reduce the exposure of its citizens to air pollutants. This improvement is achieved through a series of policies and action statements such as promoting spare the air days and nights, reducing automobile emissions through traffic and transportation improvements, and promoting pedestrian, bicycle and transit modes of travel.

Transportation Demand Management

Transportation Demand Management (TDM) is a general term for strategies that result in more efficient use of transportation resources. TDM programs are generally required for high intensity office and industrial development.

California Title 24 Energy Requirements

The State of California has probably the most stringent energy conservation standards in the country. The Energy Efficiency Standards for Residential and Nonresidential Buildings were established in 1978 in response to a legislative mandate to reduce California's energy consumption. The standards are updated every few years and most recently in 2001. According to California Energy Commission, the standards (along with standards for energy efficient appliances) have saved more than $20 billion in electricity and natural gas costs. It is estimated the standards will save $57 billion by 2011.

DISCUSSION

Extensive policies and ordinances exist to support sustainability and sustainable development in Sunnyvale. However, the City does not have a “green building program.” Based on staff research, there are two possible approaches: (1) a customized program for Sunnyvale, or (2) adoption of US Green Building Council’s (USGBC) program. Several jurisdictions have designed and developed a green building program specific to their jurisdiction. The benefit of this type of program is that it would be specifically tailored to Sunnyvale’s goals, needs, and desires. However, this type of program would be  very expensive to develop because it would require the hiring of a consultant and extensive staff training and training for the community.

The other option would be to adopt (or modify) the green building program designed by the US Green Building Council (USGBC), called LEED. LEED stands for Leadership in Energy and Environmental Design. The USGBC is a national coalition of leaders from across the building industry who work together to promote buildings that are environmentally responsible, profitable and healthy places to live and work. The LEED program provides an extensive list of green building design options. Design professionals can choose to implement options that work best for each specific project. It is a performance based program that provides design flexibility for each individual project, rather that a prescriptive program that sets the same requirements for all projects. A rating is given to the project based on the type and number of green

building design options achieved. Following is a detailed description of the LEED program.

LEADERSHIP IN ENERGY AND ENVIRONMENTAL DESIGN (LEED)

LEED (Leadership in Energy and Environmental Design) was first introduced by the US Green Building Council (USGBC) in 1998. It is a voluntary program based on national standards for developing high-performance, sustainable buildings. The LEED program was created to:

• define "green building" by establishing a common standard of measurement
• promote integrated, whole-building design practices
• recognize environmental leadership in the building industry
• stimulate green competition
• raise consumer awareness of green building benefits
• transform the building market  

LEED provides a complete framework for assessing building performance and meeting sustainability goals. Based on scientific standards, LEED emphasizes state-of-the-art strategies for sustainable site development, water savings, energy efficiency, materials selection and indoor environmental quality. LEED recognizes achievements and promotes expertise in green building through a comprehensive system offering project certification, professional accreditation, training and practical resources.

LEED offers 69 different credits for new construction and major renovations of existing non-residential buildings and multi-family residential buildings four or more stories. LEED does not yet have a program for single-family residential or multi-family residential up to three stories.

The LEED checklist (Attachment B) lists all of the credits available through the program. However, because many of the credits are based on project site or services available to the site, each individual development project will be able to achieve different credits. LEED is a performance based program that provides the project design team the ability to select which credits they will achieve and how it will be designed. Following is the LEED rating system:

• Certified – 26-32 points
• Silver – 33-38 points
• Gold – 39-51 points
• Platinum – 52-69 points 

In August 2003, there were 852 projects registered with the USGBC for LEED certification (140 in California). The majority of these projects are still in the design and construction phase. After the project is completed, the design team submits documentation to the USGBC showing how each credit was obtained and achieved. Once the information has been verified by the USGBC, the LEED certification is awarded. This typically takes about four months after the building is completed. There are a total of 62 projects that have completed the  LEED process and earned certification (9 in California). Although this number may appear low, the program has only existed for about five years. In 2003 alone, 441 buildings (of the total 852) were registered with the intent for future certification.

ALAMEDA COUNTY WASTE MANAGEMENT GUIDELINES

Although LEED does not yet offer a green building program for single-family or multi-family (up to three stories), the are guidelines for single-family homes. The Alameda County Waste Management Authority developed and published Home Remodeling: Green Building Guidelines. This is a document designed for use by professional contractors and homeowners to offer the following:

• Cost-effective suggestions to minimize construction-related waste
• Create healthier and more durable homes
• Reduce operating costs for homeowners
• Support local manufacturers and suppliers of resource-efficient building materials
• Methods to reduce the impacts of building communities; including solid waste management, water conservation, energy efficiency and resource conservation.

The practices contained in these Guidelines were selected for their viability in today’s market and their ability to promote sustainable building. The Guidelines were developed through a partnership among local developers, architects, contractors, green building experts and staff of the Alameda County Waste Management Authority and Recycling Board. The Table of Contents and Introduction to this document are included as Attachment C for reference to this staff report. The complete document can be found at:

http://www.stopwaste.org/fssearch.html.

WHAT OTHER CITIES ARE DOING

City of San José

The City of San José has a Green Building Program that was adopted in 2000. As part of the program, a policy was adopted to incorporate green building principles and practices into all city owned and operated facilities. A modified version of LEED was adopted, dubbed San José LEED, which is the standard LEED program including local amendments. As of July 1, 2002, all City of San José facilities are to be designed to meet the San José LEED Certified rating; however, registration and approval from the USGBC is not required. The San José LEED program uses the same credits and rating system as the model LEED program, but the City of San José requires certain credits be achieved (e.g. storm water management).

The program also encourages green buildings and sustainable development through educational programs, community outreach, and professional staff assistance. Informational links and resources are provided on the San José web site (http://www.ci.san-jose.ca.us/esd/GB-HOME.HTM).

City of Pleasanton

The City of Pleasanton adopted an ordinance in 2002 that requires all new city-sponsored and privately funded commercial buildings over 20,000 square feet of conditioned space to be LEED Certified. Registration and certification with USGBC is encouraged but it is not required. The downtown area and historic buildings are exempt from this ordinance. All buildings are encouraged to be designed to meet the intent of LEED. Informational links and resources are provided on the Pleasanton web site:

(http://www.ci.pleasanton.ca.us/planning_commdev.html).

In order to enforce this ordinance, Pleasanton has hired a green building consultant to assist in review of projects to determine if they meet the LEED Certification intent. Additionally, the city provides consultants to work with developers to educate them on the process and requirements. Extensive staff training has also been necessary.

City of Santa Monica

The City of Santa Monica has developed and adopted a city-wide sustainable program. The program includes a series of polices that support a whole city approach to sustainability including green buildings, education, outreach, storm water, transportation, and purchasing. There are various municipal code ordinance and standard development requirements established to achieve the sustainable goals; however, there is not a formal green building program.

On its web site, Santa Monica provides a tool to assist developers in determining what type of green building practices can be used and also provides a list of additional suggestions (http://pen.ci.santa-monica.ca.us/environment/policy/construction/policies.htm).

City of Portland, Oregon

The City of Portland has also implemented a sustainable development policy that includes energy, solid waste, recycling, and green building components. Portland does not have a green building rating system. The city does have an Office of Sustainable Development with staff who provide assistance to developers to help them find grants and low interest loans for funding green building projects.

City of Seattle, Washington

In 1998 the City of Seattle developed a Sustainable Building Policy that requires all new City-funded projects and renovations over 5,000 square feet of occupied space to achieve a LEED Silver rating. All capital construction which falls under this policy is budgeted to meet at minimum the LEED Silver rating. Budget planning and life cycle cost analysis to achieve a higher rating of Gold or Platinum is encouraged. Additionally, the policy strongly encourages staff to attend LEED training. Other than standard municipal code requirements, Seattle does not mandate green building or LEED certification for private development.

Seattle also has a sustainable building program which provides information to the community about green building benefits and provides resources for materials. Informational links and resources are provided on the City web site (http://www.ci.seattle.wa.us/dclu/Sustainability/).

CASE STUDIES

The Sunnyvale Municipal Code has many requirements for development that are similar to many of the LEED credits. In order to determine the level that new buildings in Sunnyvale may achieve, two consultants were hired to analyze two typical new buildings. Determinations were made as to the number of LEED credits each building may earn under the existing conditions and the costs associated with additional each credit. The new Senior Center building and the office building at Mathilda Avenue and Java Drive (occupied by Yahoo!) were selected for the case studies.

The intent of these case studies was to determine how “typical” new Sunnyvale buildings perform in relation to LEED and what the cost implications would be if the same projects were required to meet the various LEED levels.

Each study was conducted based on readily accessible information and the cost estimates are based on construction costs. Additional design costs and the administrative costs associated with submitting an application to the USGBC and potential construction delays are not included in the studies. For reference, it is staff’s understanding that design costs are increased by about 1% for designing a LEED building. The total design costs are generally 15% of the total building construction. Therefore, the additional LEED building design costs are about 0.15% of the construction cost.

Senior Center

The Steinberg Group (who were the project architects for the Senior Center) completed the case study. The Steinberg Group has associates on staff who are LEED Accredited Professionals who were able to complete this study. The study results (Attachment D) are broken into five sections and the following table summarizes the findings:

It is important to note that for the base building, the photovoltaic system installed at the Senior Center was not included in the analysis. This is because this type of system in fairly expensive to install ($598,000 at the Senior Center) and is not typical in a standard City building. If the photovoltaic system were included, the base building would have achieved 13 LEED credits. The credits associated with the photovoltaic system were applied to the LEED Platinum level.

Office Building

RMW Architects designed the site and shell of the office buildings at the southeast corner of Mathilda Avenue and Java Drive (occupied by Yahoo!). They also have architects on staff who are LEED Accredited and were able to complete the case study for these buildings. Although RMW Architects did not design the interior tenant improvements for these buildings, the study does include basic assumptions about the costs and materials used.

The study received from RMW does not include the costs of the interior tenant improvements. However, staff believes that the tenant improvement costs should be included because they are part of the total construction costs of the buildings. Staff estimated the tenant improvement costs to be about $9 million dollars. The following table summarizes the study results (Attachment E) including the estimated tenant improvement costs: