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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 08/12/2014 - CLIMATE ACTION PLAN - FRAMEWORKDATE: STAFF: August 12, 2014 Lucinda Smith, Environmental Sustainability Director WORK SESSION ITEM City Council SUBJECT FOR DISCUSSION Climate Action Plan - Framework. EXECUTIVE SUMMARY The purpose of this work session is to summarize the framework and timeframe for the Climate Action Plan (CAP) update and seek feedback from City Council. In April, City Council asked that an ad hoc committee be formed to develop a proposed updated Climate Action Plan that describes the steps the community can take to achieve a greenhouse gas emissions reduction goal of 20% below 2005 levels by 2020, and 80% below 2005 by 2030, and carbon neutrality (a 100% reduction in net greenhouse gas emission) by the year 2050. The Citizen Advisory Committee has been convened and consultants and staff are preparing for analysis. The CAP will be developed through a systematic process that identifies strategies to reduce emissions from building energy usage, energy supply, transportation, and waste that, when summed, will meet the reduction goals. Costs for implementing the strategies will also be estimated. Alternative implementation rates will be evaluated and discussed with the objective to develop a recommended pathway to present to City Council. Public awareness and engagement is critical to success, so key “narrative” concepts are proposed that can describe and communicate the impacts and opportunities to the community from an updated Climate Action Plan. Staff wishes to seek Council feedback on these concepts so that the analysis process will deliver results in a format that is useful. Additionally, staff will review anticipated timing of deliverables to City Council and seek feedback. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED 1. What input does City Council have on the timing of an updated CAP? 2. Does City Council support the “narrative” concepts proposed to describe the opportunities and impacts of a draft updated CAP? 3. What other feedback does City Council have regarding the information presented? BACKGROUND / DISCUSSION I. Charge In light of increasing urgency to take action to address climate change and significant advancements in technology and market opportunities, City Council passed Resolution 2014-028 in April 2014, establishing aspirational greenhouse gas reduction objectives for 2030 and 2050. The economic case for taking action is further underscored by the following two reports that have been released since April 2014. “The Cost of Delaying Action to Stem Climate Change”, released by the White House on July 29, 2014, states that the net cost to mitigate CO2 emissions will increase by approximately 40 percent for each decade of delay. The higher cost can be attributed to both greater economic damages associated with higher temperatures and CO2 concentrations, and the cost increase of mitigating more CO2 later. <http://www.whitehouse.gov/sites/default/files/docs/the_cost_of_delaying_action_to_stem_climate_change.pdf> Another report, “Risky Business: The Economic Risks of Climate Change in the United States” (June 2014), was led by a bi-partisan group of political and business leaders including Henry Paulson, Tom Steyer, Michael August 12, 2014 Page 2 Bloomberg, Robert Rubin, and Olympia Snowe. This report makes it clear that human-induced climate change leading to rising temperatures will directly and indirectly cost the country hundreds of billions of dollars by the end of the century. http://www.4cleanair.org/sites/default/files/Documents/Risky_Business_Report.pdf <http://www.4cleanair.org/sites/default/files/documents/risky_business_report.pdf> The Rocky Mountain Institute’s “Stepping Up” report informed the consideration of the 2030 objective to reduce emissions 80% below 2005 by 2030. The paper draws on the best practices, technology trends, and plausibly achievable goals for customer adoption and suggests that Fort Collins can achieve 80% reduction below 2005 by 2030 while growing the local economy and creating multiple benefits for the community. RMI’s findings suggest community-wide reductions could be achieved through:  Reducing building energy use 31% through efficiency  Achieving carbon neutral electricity by 2030  Reducing transportation emissions by 48% While the Stepping Up paper and other analyses on GHG goal alternatives form an important analytical launch point for the CAP update, further consideration of best practice strategies, locally feasible adoption rates and financing approaches, and a more detailed assessment of benefits, costs and triple bottom line impacts is necessary to develop a credible CAP for Fort Collins. The magnitude of this task should not be underestimated. Achieving 80% reduction by 2030 will have far-reaching implications for our community. Analysis clearly shows that we cannot achieve this level of reduction through efficiency and conservation alone. Fundamental shifts in energy supply will be required. It will also require unprecedented community buy-in, and landmark deployment of capital investments. These changes will help to mitigate risks to the community that exist with a predominantly coal-based electricity supply and likely future costs for carbon. II. CAP Resources Fort Collins is fortunate to have a wide breadth of expertise available to help innovate a pathway to a transformed energy future that City Council has asked to see. The Brendle Group is leading the analysis of strategies and scenarios and developing cost and savings estimates associated with an updated CAP. They are developing a modeling platform that will incorporate key outputs from the work of Rocky Mountain Institute and Platte River to analyze alternative combinations of GHG reduction strategies. The Rocky Mountain Institute, through external foundation funding, will lead the engagement of local and national technical experts on customer adoption strategies and public and private financing models in six subsector areas:  Vehicle miles traveled (VMT) reductions  Efficient and electric vehicle adoption  Demand response participation  Efficient upgrades and energy management in buildings  Distributed solar PV adoption  Widespread transition from natural gas to electricity for building heating To date, three meetings have been held with staff experts to gain insights on transportation, renewable energy, and building energy efficiency. During August and September, additional insights from national and local experts will be obtained. Recognizing that electricity use comprises half of the community’s GHG emissions, the CAP update will coordinate closely with Platte River Power Authority as they update their Integrated Resources Plan. Earlier this year, City Council approved an Intergovernmental Agreement with Platte River to complete additional modeling analyses to address the 80% reduction by 2030 objective. Platte River will model sets of strategies agreed upon August 12, 2014 Page 3 by the City and Platte River and provide information on associated carbon reductions and impacts to wholesale electric costs to the municipality. An Ad Hoc Citizen Advisory Committee of 23 members representing key stakeholder perspectives has been convened. The CAC will provide various perspectives, discuss alternatives, provide technical expertise, and develop a recommended CAP for Council consideration. Attachment 1 identifies the participants in the CAC. The CAC has been convened and has met twice to date. The Committee has developed and voted to support a set of Guiding Principles, with minor amendments to be finalized in August. They voted to support the Business As Usual forecast assumptions and continued use of the standardized GHG inventory format used by the City, and are considering possible additional areas for the CAP to address such as components of life-cycle impacts. The CAC members were polled as to their interest in which triple bottom line aspects should be evaluated and preliminarily indications show support for investigating health, safety impacts and impacts on housing affordability and jobs. III. CAP Analysis Framework Business As Usual Emission Forecast A forecast has been developed of future community GHG emissions under a Business as Usual (BAU) state (Attachment 2). This BAU forecast will be amended following standard protocol to develop an adjusted BAU forecast that incorporates known mandated future changes including the state Renewable Portfolio Standard and the federal vehicle fuel efficiency standards. With the release of the Environmental Protection Agency’s (EPA’s) Clean Power Plan that proposes carbon pollution standards under Section 111(d) of the Clean Air Act, a new element is introduced into the CAP planning process. While the draft regulations will be discussed and debated for some time, the proposal is for Colorado to reduce its power plant emission 35% below 2012 levels by 2030. The CAP planning team proposes to include GHG reductions that would occur under Colorado Clean Power Plan in the adjusted BAU Forecast. GHG Reductions Needed Analyses indicate that community emissions will need to be reduced by 588,000 MTCO2e in 2020 from the Business As Usual case to meet the 2020 goal, and 2.4 million MTCO2e in 2030, from business as usual case. Table 1. GHG Reductions Needed to meet Planning Objectives Year Business As Usual Projections (MTCO2e) Emissions Goal (MTCO2e) Needed Reductions below BAU (MTCO2e) 2020 2,532,000 1,944,000 588,000 2030 2,904,000 486,000 2,418,000 2050 3,615,000 0 3,615,000 CAP Focus Areas The updated Climate Action Plan will identify high level strategies needed to meet the GHG reduction objectives, organized into the following categories:  Efficient Built Environment  Energy Supply and Distribution  Transportation  Waste August 12, 2014 Page 4 The CAP will also highlight strategies that will reduce risks from a changing climate and increase our ability to adapt to climate change. GHG Reduction Strategies GHG reduction strategies are being defined as impactful projects or programs designed to address a specific sector or major emissions source, and will be the base unit for which CAP analysis will be conducted. Strategies are envisioned to be on the order of 100,000 - 300,000 MTCO2 reduction. Strategies will be characterized quantitatively and qualitatively: Quantitative:  Annual GHG emissions reduction potential  Cumulative GHG emissions avoided by 2020, 2030, and 2050  First cost ($) and annual cost/savings ($/year)  Net present value/return on investment and/or simple payback  Cost effectiveness ($/ton avoided over time) Qualitative:  Level of uncertainty  Technical feasibility  Funding feasibility  Political feasibility  Climate adaptation synergies Strategies are being developed to address components of the community GHG inventory and will be looked at as a system. It is anticipated strategies will cover the following areas: Curb emissions growth (i.e., address the difference between the BAU forecast and baseline (~ 2 strategies) Reduce energy use and waste (~ 8 strategies) o Buildings  Residential  Commercial/industrial o Transportation  Personal vehicles  Commercial/institutional fleets o Waste Switch to lower carbon fuels (~8 strategies) o Electric o Natural gas o Transportation fuels Cross-Cut and Integrate (~ 2 strategies) The table below provides examples of the types of big building block strategies that will be considered for the CAP update. Strategies are being compiled from a variety of sources including best practices nationally and internationally, Citizen Advisory Committee ideas and expertise, strategies identified in the “Stepping Up” report, strategies contained in existing City plans, and ideas that are working now or in development in Fort Collins and our region August 12, 2014 Page 5 Table 2. Examples of CAP Strategies Overarching Approach Example Strategy Title Description & Potential Tactics Curb Emissions Growth Green Building Drive incrementally downward to net zero energy for new construction and major redevelopments Reduce Energy Use and Waste Energy Efficiency Implementation at Scale Through massive adoption and investment implement energy efficiency at scale Reduce Energy Use and Waste Road to Zero Waste Waste reduction and recycling plan for the City with the aim for zero waste by 2030 Switch to Lower Carbon Fuels Renewable Energy - Utility Scale Model different levels of utility scale renewables, energy efficiency and distributed generation. Coordinate with PRPA IRP. Cross-Cutting & Integration Local Offsets/ Sequestration 'Over generate' local electricity supplies or leverage local sequestration opportunities to generate local offsets to address emissions sources that are more difficult to mitigate directly (e.g., airline travel) Details and justifications for various strategy assumptions will be informed by the work of RMI in convening local and national experts. This will also inform setting of interim reduction targets in time or by sector. CAP Scenarios Strategies will be combined into alternative scenarios that represent different pathways to the reduction targets. Scenarios will be created by “dialing up or down” key design variables within strategies. For example, one scenario could emphasize local investments in Fort Collins, and another could optimize strategy assumptions to minimize total costs. A limited number of scenarios will be analyzed. Since there will be over-lapping or synergistic impacts when combining strategies, a triple bottom line assessment will be prepared for alternative scenarios, and compared to a status quo or base case scenario. The triple bottom line assessment will look qualitatively (and to the extent practical) quantitatively at the scenario alternatives. Potential analysis of the scenario may include costs and savings derived for residents, businesses, and the City government, sources of investment to achieve these social benefits and costs, and job creation or other economic metrics. When quantifying the cost implications, the CAP analysis will consider a “Cost of Carbon” as one frame of reference, just as Platte River Power Authority will do in their analysis for the Integrated Resource Plan. Proposed Narrative for the CAP Knowing that community awareness and buy-in will be critical to achieving the transformation needed, the CAP planning team has carefully deliberated on the best approach to illustrate information about the CAP. Attachment 3 outlines the proposed narrative the CAP Team believes can best reveal the climate action and thus facilitate meaningful community dialogue before Council consideration. The proposed concepts, or “chapters” of the narrative include: August 12, 2014 Page 6 5. Vision for the Future 6. Next Steps Final decision about the desired narrative will inform the model inputs, outputs and linkages of the various modeling platforms being conducted that will influence the outcome of this project. III. CAP Engagement and Coalition Building It is clear that community engagement and support will be necessary to meet the GHG planning objectives. One of the Citizen Advisory Committee’s Guiding Principles recognizes “Education, awareness-raising, and partnership building are all critical to achieving significant greenhouse gas reduction in Fort Collins.” Phase I outreach will include presentations and discussions with stakeholder groups to identify interests and concerns. Ultimately, tapping the community for their ideas and expertise, building community ownership of interim goals and strategies, and offering opportunities to participate in pilot programs and solution development will be critical to success. Phase II will involve a broader and deeper level of community engagement is needed as well to create systemic change that can be sustained over time. In addition to community input on the CAP, broader regional coalition building will be important. Both Denver and Boulder are also undertaking updates to their Climate Action Plans in 2014. Boulder City Council provided preliminary direction to formulate a strategy to achieve 80% GHG reductions below 1990 levels by 2050. As part of that effort, Boulder will be engaging in a newly branded community climate action campaign that will provide visual and thematic integration with the actions being developed, and developing an implementation plan based on the new goal and interim targets, including a series of short- term pilot projects that will set the stage for larger-scale implementation strategies. Denver is working to release an updated Climate Action Plan in the Fall of 2014 intended to document how they will achieve a 2020 goal of reducing community-wide greenhouse gas emissions to or below 1990 levels. The plan will also set longer-term goals and identify the strategies that will be needed to achieve them. Similarly, Denver is focused on actions to reduce emissions in key sectors. Platte River Power Authority is now working with all its member communities to develop an updated Integrated Resource Plan for the future that will address carbon reductions and associated costs through increasing natural gas generation (vs. coal), renewable energy sources, and demand side management programs. There may be opportunities to partner with other communities along the Front Range in discussions about how to mutually investigate options to decarbonize the energy supply and increase transportation efficiencies while minimizing cost. IV. CAP Timeframe Per the April 1 Resolution 2014-028, City Council requested an updated CAP that identifies the steps the community will need to take to reach goals in 2020, 2030 and 2050 to be available for consideration by the end of 2014. Subsequent Resolution 2014-044, supporting an Intergovernmental Agreement between Platte River and the City for Platte River to complete extra modeling of electric supply options and costs, indicated that modeling would be delivered by the end of January 2015. If preliminary results are available earlier, they will be folded into CAP modeling processes. In order for the CAP to incorporate Platte River model outputs and to conduct adequate public outreach on a draft plan, staff proposes delivering a draft CAP to the Council towards the end of the first quarter of 2015, instead of by December 2014. August 12, 2014 Page 7 Table 3. Project Schedule Climate Action Plan Update July Aug Sep Oct Nov Dec Jan Feb - Mar Refine Baseline and Forecast X X Identification of Opportunities (Metrics, Strategy Characterization) X X X Technical Analysis X X X X X X Triple Bottom Line Analysis of Scenarios X X X Updated CAP Document X X Engagement Activities X X X X X X X X Council Sessions Aug 12- Framework Oct 28- Strategy analysis Dec 9 Scenarios and impact Council action? ATTACHMENTS 1. CAC Member List (PDF) 2. BAU Forecast (PDF) 3. CAP Draft Narrative Components (PDF) 4. Powerpoint presentation (PDF) Environmental Services Department 215 North Mason PO Box 580 Fort Collins, CO 80522 970.221.6600 970.224.6177 Fax fcgov.com/environmentalservices 2014 Climate Action Plan Update Citizen Advisory Committee Members (Alternate in parentheses) Group Participant Air Quality Advisory Board Rich Fisher Economic Advisory Commission Glen Colton (Michael Rechnitz) Energy Board Marge Moore (Stacey Baumgarn) Natural Resources Advisory Board Harry Edwards (Joe Piesman) Transportation Board Sara Frazier National Technical Honor Society Olivia Stowell Suraj Renganathan Fort Collins Sustainability Group Eric Levine (Hunter Buffington) Transition Fort Collins Bill DeMarco Sustainable Living Association Kellie Falbo Sierra Club Mark Easter Fort Collins Housing Authority Chad Martinez Columbine Health Yvonne Myers Healthier Communities Coalition Stacey Clark Colorado State University Scott Denning Poudre School District John Holcombe (Stu Reeve) Fort Collins Board of Realtors Francie Martinez North Fort Collins Business Association Bryan Watkins Downtown Business Association Holly Wright Avago Dianne Ewing New Belgium Brewing Dana Villeneuve Rocky Mountain Innosphere Mike Freeman Clean Energy Cluster Tom Ghidossi (Lisa Rephlo) ATTACHMENT 1 1 CAP “Business As Usual Forecast” Figure 1. BAU Forecast Assumptions Used to Generate BAU Forecast Population: Growth rates are based on Colorado Department of Local Affairs (DOLA) population projections for the Fort Collins Loveland Metropolitan Statistical Area. DOLA uses a compound annual growth rate. For informational purposes, the calculated mean growth rates are 1.87% for the period 2014-2020 and 1.39% for 2021-2050. Electricity: Growth rates are based on Fort Collins Utilities’ detailed forecasts through 2034 extrapolated out to 2050 and also include transmission losses and Excel energy user data. These projections are then averaged with the DOLA growth rate projections for the population of the City. An average electricity growth rate of 1.75% can be calculated for 2014-2020 and 1.06% for 2021-2050. Attachment 2 2 Natural Gas: The compound annual growth rate for natural gas is based on data compiled for the Mountain region by the U.S. Energy Information Administration. For information purposes, an average growth rate of 0.08% can be calculated for this time period. Transportation: Projections are based on vehicle miles traveled (VMT) models from North Front Range Metropolitan Planning Organization (NFRMPO) calibrated in 2011 with local demographic and traffic count data, showing and average annual 0.94% growth rate for VMT. Air Travel: Projections are based on per capita emission levels in 2013, grown by the DOLA population projections. Solid Waste: Projections are based on the per capita solid waste generation value of 4.85 lbs/person/day calculated for Fort Collins in 2013 and the DOLA population projections. CAP Draft Narrative Components I. What are the risks and consequences of Fort Collins’ Business As Usual approach? (10%) This section will demonstrate why the status quo exposes the community to significant economic, social, and environmental risk and will address: a. Multiple dimensions along which energy strategy affects and shapes the community’s wellbeing. b. Consequences and impacts to the community from defaulting to a business-as-usual approach. c. Risks of heavy dependence on “single” fuel energy solutions like coal (for electricity) and oil (for transportation). d. Tenets of a proactive CAP approach that emphasizes diversification and enhanced local control over a wider range of energy and climate options. II. What are the opportunities associated with accelerated climate action? (10%) This section will demonstrate why this plan is necessary and will address: a. Benefits (qualitative and quantitative) to residents, businesses, and the community at large from accelerated climate action. b. Examples of other communities and cities that are beginning to reap benefits from aggressive climate action. c. Qualitative advantages of being a leader, especially at the scale and speed proposed in this CAP. d. Reasons why Fort Collins is uniquely positioned to pursue acceleration. III. What do we need to do to meet the goals? (30%) This section will describe the specific scenarios and strategies analyzed and will: a. Set a context for brief discussion of where Fort Collins stands today. b. Provide and discuss overarching accelerated targets for the community at large. Will include a comparison of community-wide emissions trajectories and emissions source profiles for business-as-usual vs. accelerated scenario(s). c. Describe and quantify targets per focus area (e.g. buildings, transport, electricity, waste) and/or contributing sector (e.g. new build and existing buildings, vehicle miles traveled, electric vehicles, solar PV, etc.) Will include discussion of the required adoption targets and rates associated with various measures and technologies. IV. What does this mean for the community? (30%) This section will describe and discuss the ramifications of acceleration for Fort Collins’ community members and stakeholders, including: a. Benefits/impacts to daily lives. Attachment 3 b. Costs and Benefits; Changes in cost structure: (i) what materials and services need to be purchased and how much does it cost? (ii) estimated costs and benefits for community at large and example estimated impacts for key community sectors , and (iii) scalable funding and financing options c. Sizing the effort: How does accelerating support other goals the community embraces and compare to achievements already demonstrated by Fort Collins? V. Presenting a vision of the future (10%) This section seeks to paint a colorful picture of what the future could look like in Fort Collins in 2030, less than two decades away. Potential vignettes include: a. Narratives of “a day in the life” for different community members b. Visuals that illustrate changes to where and how resources flow (energy, money, services and benefits) throughout Fort Collins in an accelerated scenario. VI. Near-term next steps (10%) This section will identify near-term action items and programs that will set the community on an accelerated pathway, including: a. A discussion of existing, “shovel-ready,” and in-development programs, along with anticipated timelines and near-term impacts to emissions. b. A description of near-term actions that Council will be asked to consider. City Council Work Session August 12, 2014 1 Fort Collins Climate Action Plan Update ~ Framework ATTACHMENT 4 2 1. What input does City Council have on the timing of an updated CAP? 2. Does City Council support the “narrative” concepts proposed to describe the opportunities and impacts of a draft updated CAP? 3. What other feedback does City Council have regarding the information presented? Direction Sought 3 City Council Direction (April 2014) ….describe the steps the Fort Collins community will need to take to achieve a community-wide greenhouse gas emissions reduction *goal of • 20% by the year 2020 • 80% by the year 2030 • 100% by the year 2050 (carbon neutrality) *Goal reductions relative to 2005 levels 4 CAP Resources Community • Citizen Advisory Committee • Boards • Public Consultants • Brendle Group • Rocky Mountain Institute • Modeling agreement with Platter River Power Authority Subject Matter Experts • City staff • Local • National 5 Goals • 20% by 2020 • 80% by 2030 • Neutral by 2050 Targets: Sub-goals that inform the pathway to the goal(s) Interim timeline targets Targets by focus area Focus Areas: Categories by which the plan will be organized • Efficient Built Environment • Energy Supply & Distribution • Transportation • Waste CAP Analysis Framework 6 Tactic: Implementation steps, best practices, or activities that support the design and implementation of strategies Examples • Community engagement to drive adoption • Consumer-oriented technology apps to drive behavior change Strategy: Address a specific sector or major emissions source Strategy Categories • Curb Emissions Growth • Reduce Energy Use and Waste • Switch to Lower Carbon Fuels • Cross-Cutting & Integrating Scenario: Combination of strategies showing a pathway to the goal Examples • Acceleration Scenario • Least Cost scenario Metric: Quantitative and qualitative evaluation criteria for analyzing and comparing strategies and scenarios Examples • Annual emissions reductions • First-cost, Ongoing costs / savings • Social impacts • Economic impacts CAP Analysis Framework (Cont’) 7 Emissions Forecast - Business As Usual 8 Strategy Development Curb emissions growth Reduce energy use and waste Buildings o Residential o Commercial/industrial Transportation o Personal vehicles o Commercial/institutional fleets Waste Switch to lower carbon fuels Electric Natural gas Transportation fuels Cross-Cut and Integrate 9 Strategy Examples Overarching Approach Example Strategy Title Curb Emissions Growth Green Building Reduce Energy Use and Waste Energy Efficiency at Scale Reduce Energy Use and Waste Road to Zero Waste Switch to Lower Carbon Fuels Renewable Energy - Utility Scale Cross-Cutting & Integrating Local Offsets/ Sequestration 10 Analysis • Best practice research • Sector specific / interim targets • Reduction strategies / various scenarios through 2030 • First-cost, ongoing costs/savings, return on investment o with and without a cost of carbon • Costs and savings by key sector • Integration with climate adaption strategies • Triple bottom line analysis • Platte River Power Authority Modeling 11 Cost of Carbon 11 90 80 70 60 50 40 30 20 10 $/ton 2014 2018 2022 2026 2030 2034 2038 Source: Synapse – 25 utility CO2 price forecasts 12 CAP Narrative Concepts • Risks of Fort Collins’ current energy and climate strategy • Opportunities associated with accelerated climate action • What do we need to do to meet the goals? • What does this mean for the community? • Vision of the future • Potential near-term next steps 13 Phase I (Introduce the topic, identify community questions, seek ideas) • Civic and Stakeholder Group Presentations • Web: fcgov.com/climateprotection • Social media, articles • Citizen Advisory Committee - public comment first 10 minutes Public Engagement 14 Proposed Schedule Climate Action Plan Update July Aug Sep Oct Nov Dec Jan Feb - Mar Baseline and Forecast Identification of Opportunities (Metric, strategy characterization) Technical Analysis Triple Bottom Line Analysis of Scenarios Updated CAP Document Engagement Activities Council Sessions Aug 12- 28-Oct 9-Dec TBD 15 1. What input does City Council have on the timing of an updated CAP? 2. Does City Council support the “narrative” concepts proposed to describe the opportunities and impacts of a draft updated CAP? 3. What other feedback does City Council have regarding the information presented? Direction Sought 1. Risk of Inaction or Business As Usual action 2. Opportunities associated with accelerated action 3. What we need to do to meet the goals 4. What this means for the community