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HomeMy WebLinkAboutMemo - Read Before Packet - 4/20/2021 - Memorandum From Ryan Mounce Re: Read Before Memo: Item 29 - Board And Commission Updates - Adopting A Revised Policy For Reviewing Service Plans Of Metropolitan (Metro) Districts281 North College Avenue P.O. Box 580 Fort Collins, CO 80522.0580 970.221.6376 970.224.6134 - fax Planning, Development & Transportation MEMORANDUM DATE: April 19, 2021 TO: Mayor Troxell and City Councilmembers THRU: Darin Atteberry, City Manager Kyle Stannert, Deputy City Manager Caryn Champine, Director of Planning, Development & Transportation Paul Sizemore, Interim Community Development & Neighborhood Svcs. Director FROM: Ryan Mounce, City Planner RE: Read Before Memo: Item #29 Board & Commission Updates The purpose of this memo is to share updated Board & Commission discussions and draft Board minutes which were unavailable when agenda materials were originally published for Item #29 - Adopting a Revised Policy for Reviewing Service Plans of Metropolitan Districts. Background Staff has been working on developing an evaluation tool for the review of new residential Metro Districts in a highly iterative process with stakeholders, including multiple Boards and Commissions. In early April, staff attended second meetings with both the Planning and Zoning Board and the Energy Board to share the latest revisions to the evaluation system. Planning and Zoning Board Staff shared an earlier version of the evaluation tool with the Planning and Zoning Board in February. The Board recommended (5-2) that City Council not adopt the evaluation system and directed staff to continue refining the tool. Board discussion included: Concerns about the degree of cost recovery versus public benefits. Questions and concerns about the size and goals behind elements promoting accessory dwelling units and smaller unit sizes. Interest in adding flexible, innovation-driven options to the system. Whether these goals should be tied to metro districts or simply applied city-wide. A revised version of the evaluation system was presented to the Planning and Zoning Board at their April meeting incorporating the following changes: Added and revised options in the Housing and Energy Conservation categories to further promote end-user cost benefits. Additional unit size categories added in the housing category (unit sizes between 800- 2,200 square feet) to promote a wider range of housing sizes and housing types which are underrepresented in Re-inserted several innovation options to promote limited flexibility. At their April meeting, the Board recommended (7-0) that City Council adopt the evaluation system. Draft Board minutes remain unavailable at this time. Energy Board Staff also shared the Metro District evaluation system with the Energy Board in February and the Board enthusiastically recommended (8-0) Council adopt the system. In the intervening period, the energy requirements of the system were revised based on additional stakeholder input and further staff evaluation which determined it would be infeasible to obtain the required points in the energy categories as the evaluation system was originally developed. Staff updated the evaluation system by adjusting the number of points required and adding additional prescriptive options related home heating/cooling, energy demand response programs, and home ventilation requirements. The revised energy options were shared with the Board at their April meeting. Discussion centered around the changes to the proposed system and concerns the revisions resulted in options that were no longer ambitious enough. The Board recommended (8-0) Council adopt the system with the addition of requirements for balanced home ventilation and third-party verification of home energy performance following construction. 1. requirements to include balanced home ventilation for those options which options require independent, third-party inspection and verification of energy performance. These changes were included in the original AIS materials. ENERGY BOARD REGULAR MEETING DRAFT ABRIDGED FOR METRO DISTRICTS REVISION UPDATE April 8, 2021 5:30 pm Remote Zoom Meeting ROLL CALL Board Members Present: Jeremy Giovando, Bill Becker, Alan Braslau, Marge Moore, Steve Tenbrink, John Fassler, Sue McFaddin, Dan Gould Board Members Absent: OTHERS PRESENT Staff Members Present: Adam Bromley, Christie Fredrickson, Tim McCollough, Cyril Vidergar, John Phelan, Leland Keller, Brad Smith, Mark Cassalia, Samantha Littleton, Ryan Mounce, Paul Sizemore Platte River Power Authority: Trista Fugate Members of the Public: Bill Althouse METRO DISTRICTS REVISION UPDATE Ryan Mounce, Planner, City Brad Smith, Energy Code Specialist Paul Sizemore, Interim Deputy Director, Community Development & Neighborhood Services (attachments available upon request) Mr. Sizemore said the City has an existing policy (adopted in 2018) for evaluating Residential Metro Districts, which gives broad guidance on the types of public benefits a development must provide to be considered, but the guidance is very loose. Last year, Council asked Staff to take a new approach and propose an update to the policy that would guarantee the benefits of the metro districts are extraordinary. Staff brought a proposed update to the Energy Board in February, which the Board was supportive of, but Staff has since identified some fundamental issues with the scoring system and the way it was written. Tonight, Staff will be reviewing the changes to the scoring system with the Energy Board, and ultimately will be seeking a recommendation and feedback from the Board. Some of the biggest challenges staff heard about the new evaluation system included the impact of additional developer cost versus consumer cost savings, raising the standards too high could discourage smaller regional developers, and that it is challenging to simultaneously achieve both housing, and energy and water conservation objectives. Board member Braslau said, as staff has noted, the premise of Metro Districts is extraordinary; it is contradictory to say setting the standards too high is a bad thing. It is his opinion if the developers cannot or do not want to participate when the bar is set high, then they should not participate. Metro districts should remain extraordinary, and the City should not lower the bar to be average. Mr. Mounce said the City does not have a lot of experience with residential metro districts, and subsequently staff is relying heavily on evidence and data from other communities along the front range. Under the new evaluation system, the outcome areas are weighted: Energy Conservation (10 points), Housing (5 points), Water Conservation (10 points: 7 outdoor, 3 indoor), Neighborhood Livability (5 points). Major public infrastructure, such as transit improvements and enhancements, will be evaluated on a case-by-case basis. Additionally, points will not be transferrable across categories, so even if a developer has excess points in Neighborhood Livability, they will not accumulate above and beyond that ENERGY BOARD REGULAR MEETING to meet the 30 points. Mr. Mounce noted the community has very ambitious housing and energy related goals and these goals have strong alignment with recently adopted policies and plans (ex. Our Climate Future and Housing Strategic Plan). This is also a way to focus on reducing the cost burden of energy and water to residents within a metro district. Staff is trying to find the intersectionality in balancing the objectives of acceptance (homebuyers often look for the largest house they can afford, and may not demand features that reduce impact), community benefit (conservation measures reduce homeowner cost burden), practicality (adds complexity to development process), costs (may become prohibitive if requirements are excessive). There were adjustments made to the Energy Conservation evaluation (as well as others), after meeting with different stakeholders who expressed it would be very difficult, if not unachievable to attain the points needed. Mr. Mounce said he understands that lowering the bar may be perceived as contradictory, but noted it is of equal importance to strike a balance between cost, practicality, acceptance, and community benefit. City staff met with representatives from Mandalay homes, a medium-sized home builder who operates primarily in the Flagstaff and Prescott, AZ areas. Mandalay has won several awards and constructed over 1,000 ZERH homes (Zero Energy Ready Homes), and they offered insight into the previous system. developer, particularly one who operates out of state, when there are already many developers on the panel. Mr. Mounce clarified that the changes made to the point system were not a direct result of the discussions had with Mandalay Home, but they were used as additional data points. Vice Chairperson Moore commented that without metro districts, it becomes very cost prohibitive for developers to install the necessary infrastructure for residential developments. New single family lots are in high demand to meet housing market. Mr. Mounce said the revision to the Energy Conservation evaluation focuses on providing more choices to satisfy energy conservation targets, with an emphasis on practical solutions. He also acknowledged that the points will increase over the next few years as code requirements are expanded. The new point targets are as follows: 7 Points: Net Zero Energy 4 Points: DOE (Department of Energy) Zero Energy Ready Home Performance Path Certified 4 Points: HERS (Home Energy Rating System) index of 47 or less without solar 3 Points: Prescriptive Compliance Path to Enhanced Energy Efficiency with wall R-Value of 28 or ERI (Energy Rating Index) of 40 3 Points: Build 5% of homes to Passive House Standard 3 Points: District Heating and Cooling for Neighborhood 2 Points: Geothermal Heat Pump or Cold Climate Air Source Heat Pump 1-3 Points: Solar powered (50/75/100%) 1-3 Points: Smart storage and grid interactivity 1-3 Points: Air source heat pump electric water heater 1 Point: In-home EV charging 1 Point: Build air-tight homes at less than or equal to 1.5 ACH50 (air changes per hour at 50 pascals pressure differential) with balanced whole dwelling ventilation 1 Point: Qualifying thermostat connected to utility demand response program ENERGY BOARD REGULAR MEETING Chairperson Becker wondered if the targets have any natural overlap, making it easier to hit 10 points, or if they stand independently. Staff said that some are designed to work together but added that they largely still stand independently in order to maximize efficiency. Board member Fassler said he advocates for balanced ventilation with heat recovery everywhere. incentivize builders to go in that direction. Cutting the energy conservation target from 15 points to 10 is or Climate goals. Metro districts are supposed to be extraordinary; Fort Collins is a Choice City and builders want to come here and build, there is no need to lower the bar. Mr. Phelan he encouraged the Board to look at this proposal independently of the previous version presented to the Board in February. The point totals changed, the individual scoring and weighting changed, and the list of items changed. He also reminded the Board that this will be evaluated on a two-year cycle to keep above and beyond building code. Mr. Smith added that under the previous proposal, staff and builders could not create a path to reach 15 points. Now, the option menu changed dramatically and better aligns with the direction as City to meet the OCF targets as well as has an attainable (but challenging!) path to reach the point threshold. He outlined a potential path to 10 points: 1. 4 Points: DOE (Department of Energy) Zero Energy Ready Home Performance Path Certified 2. 1 Point: Build air-tight homes at less than or equal to 1.5 ACH50 (air changes per hour at 50 pascals pressure differential) with balanced whole dwelling ventilation a. (keep in mind, ZERH only requires 2.0 ACH50, so this will be a stretch to lower by .5 3. 2 Points: Geothermal Heat Pump or Cold Climate Air Source Heat Pump 4. 1-3 Points: Air source heat pump electric water heater a. Peak Partners Program, and receive 3 points Mr. Smith said the path outlined above is a significant difference from what is being built in town right now. This will also get another review and update in two years with the new code cycle. Staff is hoping this stretch will help raise the bar within the community as well as attract new builders to the community builders need to want to do a metro district enough to want to participate in these plans, because they forward, albeit not the whole way, in that direction. Board member McFaddin explained that the builders get to borrow infrastructure money at 4% instead of 18%, and they get to finance it over 20 years instead of over six years. This is a huge economic benefit to the developer, and the builder should give something back to the community and the homeowners. Lowering the bar is not representative of being a Choice City, and perhaps the City needs to consider if prohibitive to the developers in the community being able to do a metro district, or if the City did away with metro districts altogether, then the City would also be losing out on the potential of the benefits. Mr. Smith said the proposal is in alignment with OCF and City efficiency programs and understanding there will be another evaluation in two years, as well as another building code which will ratchet the standard up. Mr. Phelan said this structure is consistent and similar with the outcomes with Northfield ENERGY BOARD REGULAR MEETING under the prior policy. Board member Braslau asked if there are paths under the new evaluation that would allow developers to bypass third-party commissioning for insulation. He is concerned there are efficiency paths to hit the point threshold but may lack basics such as insulati building code, and that developers are required to pick at least one of the following options to begin: Zero Energy Ready Home Performance Path Certified, HERS index of 47 or less without solar, Prescriptive Compliance Path to Enhanced Energy Efficiency w/ wall R-Value of 28 or ERI of 40, or Net Zero Energy. Mr. Smith also said the evaluation defines a path as Performance, which is a path to compliance, and requires third-party commissioning. Board member Giovando wondered if staff has yet quantified how metro districts (under either evaluation) Mr. Phelan said this would be the first step (in a series) towards carbon neutral buildings by 2030. Board member Fassler said unless there are code officials on board, none of this will matter. The City needs to enforce what it states as required, so third-party verification needs to be mandated. Our climate is changing quickly, and we are not getting there fast enough. Board member Gould said he is confused about the ask to include third-party verification, because he assumed these kinds of inspections are already part of the process. Mr. Smith said the City is inspecting homes and they are using third-party verifiers under the Performance Path that would be a typical HERS rater. By using the term Performance Path, it requires the builder to follow the SPA (Simulated Performance Alternative) path to compliance, which is a HERS rating, which requires a third-party verification. If a builder is pursuing a Zero Energy or Zero Energy Ready home, or a HERS index of 47, they are going to employ a third-party verifier. The only option that would not require a third-party verifier is the Prescriptive Compliance path, but under that path the envelope the standards for windows, ventilation, and airtightness are higher than under the Performance Path. Board member Gould wondered what the pathway is if no metro district is proposed for the property in code, etc.). Board member McFaddin said there is, and will continue to be, plenty of development in the City with or without metro districts, but they offer an extraordinary financial benefit to the developer in exchange for extraordinary community and homeowner benefits. Board member Giovando wondered if even under the circumstances of meeting the point threshold, if Council or staff can request an improvement or deny an application if they believe the developer is not meeting the intent of the program. Mr. Mounce said Council does not have approve an application, even if the service plan meets the point threshold in the evaluation, there is room for discretion and critique of the service plan. Board member McFaddin moved the Energy Board support an amendment to the City of Fort Collins Metropolitan (Metro) District policy by adopting a Residential Metro District Evaluation system, with the addition of required balanced ventilation systems and third-party verification standards. Board member Tenbrink seconded the motion. Board member Fassler proposed a friendly amendment to the motion language; specifying that the third- party verifier should be certified by HERS. Mr. Smith reiterated that Performance Path is the SPA path to compliance. By designating the City of Fort Collins requires verification ENERGY BOARD REGULAR MEETING through a third-party HERS rater registered under the Residential Energy Services Network with a HERS certificate. Board member McFaddin moved the Energy Board support an amendment to the City of Fort Collins Metropolitan (Metro) District policy by adopting a Residential Metro District Evaluation system, with the addition of required balanced ventilation systems and Performance Path verification. Board member Tenbrink seconded the motion. Discussion: No additional discussion. Vote on the motion: It passed unanimously 8-0