CITY OF ENCINITAS CITY COUNCIL AGENDA REPORT Meeting Date: July 18, 2012 TO: VIA: FROM: Mayor and City Council Members Gus Vina, City Manager Paul Bussey, Finance Department Planning & Building Department Patrick Murphy, Director Kerry Kusiak, Senior Planner II SUBJECT: Adoption of Resolution 2012-63 to waive building permit fees for basic energy efficiency permits (solar photovoltaic, solar water heating, electric vehicle home charging, natural gas vehicle home refueling) and provide an equivalent fee reduction for more complex energy efficiency permits. BACKGROUND: On May 9, 2012, staff presented to Council a report on permitting and fees for energy efficiency permits, including solar photovoltaic (PV), home charging systems for electric vehicles (EV) and home refueling stations for natural gas vehicles. Council directed staff to return with a resolution to waive building permit fees for basic energy efficiency permits and provide an equal reduction for more complex energy efficiency permits for a period of one year as a means of encouraging citizens, property owners and business owners in the City to pursue installation of these energy efficiency systems. Additionally, Council requested that staff contact the City s contract building permit and inspection services provider, EsGil Corporation, to ascertain whether they would be interested in participating in the City s efforts to reduce the costs of energy efficiency permits. ANALYSIS: Adoption of Resolution 2012-63, attached hereto as Exhibit CC-1, would provide a waiver of all fees associated with obtaining a building permit for the installation of basic energy efficiency measures, specifically for the installation of solar photovoltaic (PV) systems, solar water heating systems, home charging systems for electric vehicles (EV), and home refueling stations for natural gas vehicles. For more complex installations of energy efficiency systems where additional plan checking and inspection services are required, Resolution 2012-63 would provide a fee reduction equivalent to the fees waived for basic energy efficiency system installations. As per the attached 07/18/2012 ITEM #06 1
letter from EsGil Corporation dated June 14, 2012 (Exhibit CC-2), EsGil has agreed to partner with the City in this effort and reduce by 50% the fees charged to the City for providing plan check, permitting, and inspection services for basic energy efficiency permits and an equivalent reduction for more complex energy efficiency permits for a period of one year. A table showing the anticipated yearly cost to the City for providing the waiver of basic permitting fees and reduction of more complex permitting fees is attached hereto as Exhibit CC-3. Resolution 2012-63 establishes August 1, 2012 as the commencement date of the fee waiver/reduction. To promote the fee waiver/reduction, staff will create and distribute a promotional flyer to citizens, contractors, developers, and providers of the included energy efficiency systems. The flyer will include EsGil as a partner in the City s efforts to promote the installation of energy efficiency systems. Additionally, staff will develop a short, simple survey to discover the reasons that citizens, property owners and businesses chose to install energy efficiency systems, and the part that the fee waiver/reduction played in influencing that decision. Following completion of final inspection for permits related to these energy efficiency systems, the survey will be distributed to the contractors who installed the systems and to the property owner and/or business owner of the property/business where the system was installed. In July, 2013, staff will return to Council with a report detailing the number of energy efficiency systems installed, the costs to the City of providing the fee waiver/reduction, and the results of the survey. An updated chart showing the number of permit issued for these types of energy efficiency systems through June 30, 2012 is attached hereto as Exhibit CC-4. FISCAL IMPACTS: The anticipated costs to the City for the elimination or reduction of building permit fees for the installation of energy efficient systems are shown in the attached chart (Exhibit CC-3). Typically, expected revenue from permitting and inspection fees for energy efficient systems would be approximately $38,800 per year, of which approximately $24,300 would be paid to EsGil Corporation for providing contract building permit and inspection services. Eliminating these fees for basic installations and reducing them by an equivalent amount for more complex installations would result in revenue reduction of approximately $14,500 for the City portion of the typical fees charged, and a cost to the general fund of approximately $24,300 for payment to EsGil Corporation for the provision of contracted building permit and inspection services. However, EsGil has agreed to partner with the City in the effort to promote and encourage the installation of energy efficient systems by reducing by 50% the amount charged to the City for providing building permit and inspection services for these installations for the one-year period of the program. This will reduce the anticipated City general fund cost of this program to approximately $12,150. Combined with an anticipated revenue reduction of $14,500, the total one-year cost to the City for providing the elimination or reduction of fees is anticipated to be approximately $26,650. RECOMMENDATION: Adopt Resolution 2012-63 to waive or reduce building permit fees for energy efficiency permits (solar photovoltaic, solar water heating, electric vehicle charging, natural gas vehicle home refueling). 07/18/2012 ITEM #06 2
ATTACHMENTS: Exhibit CC-1 Resolution 2012-63 Exhibit CC-2 Letter from EsGil Corporation dated June 14, 2012 Exhibit CC-3 Table of anticipated costs to the City Exhibit CC-4 Chart of energy efficiency permits issued 07/18/2012 ITEM #06 3
Exhibit CC-1 Resolution 2012-63 07/18/2012 ITEM #06 4
RESOLUTION 2012-63 A RESOLUTION OF THE CITY OF ENCINITAS CITY COUNCIL WAIVING OR REDUCING BUILDING PERMIT FEES FOR THE INSTALLATION OF ENERGY EFFICIENT SYSTEMS INCLUDING SOLAR PHOTOVOLTAIC, SOLAR WATER HEATING, ELECTRIC VEHICLE HOME CHARGING, AND NATURAL GAS VEHICLE HOME REFUELING SYSTEMS WHEREAS, the City of Encinitas Climate Action Plan includes residential and nonresidential building strategies to promote energy efficient measures, including renewable energy installations such as solar photovoltaic and solar water heating systems, as a means to reduce greenhouse gas emissions; and WHEREAS, the City of Encinitas Energy Road Map states that city government can play an important role in influencing the energy attitudes and actions of local residents and businesses by being a resource for information on energy efficient measures and promoting energy efficiency programs; and WHEREAS, the City desires to continue to be a local leader in improving energy efficiency, thereby contributing to cleaner air, reducing greenhouse gas emissions, and reducing government expenditures of taxpayer dollars and citizen expenditures for energy use; and WHEREAS, as a part of the City s leadership role in promoting energy efficiency, the City Council support measures that promote and encourage the installation of energy efficient systems; and WHEREAS, the reduction of permitting fees for energy efficient measures has been shown to be and effective measure to encourage their installation; and WHEREAS, the City s contracted building permit plan check and inspection services provider, EsGil Corporation, has agreed to partner with the City and join in the effort to encourage the installation of energy efficient systems by reducing the amount charged to the City by 50% for providing building permit and inspection services related to energy efficient systems for one year. NOW, THEREFORE, the City Council of the City of Encinitas hereby resolves as follows: 1. That the foregoing recitals are true and correct. 2. For a period of one year beginning August 1, 2012, the following fees, including the component fees of permit issuance fees, electric permit fees, plumbing permit fees, plan check fees, City overhead fees, and Planning Department minor plan check fees, for building permits related to basic energy efficient system installations shall not be charged to the building permit customer: a. Solar photovoltaic and solar water heating systems permit fees totaling $318.67. 07/18/2012 ITEM #06 5
b. Electric vehicle home charging system permit fees totaling $274.45. c. Natural gas home refueling system permit fees totaling $451.33. 3. For a period of one year beginning August 1, 2012, for more complex energy efficient system installations requiring plan check and inspection services above and beyond those required for basic systems, the building permit customer shall receive a discount to the plan check and permit fees charged equivalent to the amounts stated above. 4. Each applicant, and the related property and/or business owner, that applies for a building permit for the listed energy efficient systems shall be given a survey to ascertain the impact that the fee waiver or reduction had on influencing the decision to pursue installation of the energy efficient system. 5. Not later than July 2013, staff shall return to Council with a report on the results of the program, including the total cost to the City incurred by waiving or reducing the above fees, the total contribution to the program of EsGil Corporation due to the reduced fees charged to the City, the impact the waiver or reduction had on influencing the decision to install an energy efficient system, and the total number of each type of energy efficient systems installed. PASSED AND ADOPTED this 18 th day of July, 2012, by the following vote, to wit: AYES: NAYS: ABSENT: ABSTAIN: Jerome Stocks, Mayor City of Encinitas ATTEST: Kathy Hollywood City Clerk of the City of Encinitas 07/18/2012 ITEM #06 6
Exhibit CC-2 Letter from EsGil Corporation dated June 14, 2012 07/18/2012 ITEM #06 7
EsGil Corporation But/ding Safety Plan Review Services June 14,2012 In Partnership with Government for Building Safety Mr. Patrick Murphy Director of Planning and Building City of Encinitas 505 S. Vulcan Avenue Ënciliitas, Càliforliia 92024~3633 Re: Energy EffiCiency Permits Dear Patrick: This is in response to your letter of May 31,2012, regarding energy efficiency periiits. You described the city's desire to encourage alternate energy sources through reducing/eliiiinating certain fees. Coul1cil requested that you ask us to be part of this effort. We. have looked closely at our costs associated with providing plan reviews and inspections forthese types of permits. We have found that our revenues just match the expenses for these projects; however, we would like to team with the city in an effort to promote energy demand. To that end, we propose to reduce our fees by 50% for the types of permits described in your letter, for a period of one year. Thank you for the team effort in this process. We look forward to working with you on all upcoming projects. Sincerely, EsGiI Corporation #'$ Kurt Culver President 9320 Chesapeake Drive, Suite 208. San Diego, CA 92123. (858) 560-1468. Fax (858) 560-1576. ww.esgil.com 07/18/2012 ITEM #06 8
City of rencinitas pfånning aná Cßuiúfng (Jepartment Current pfånning (Jiviion 505 S. 'Vuú:anjIvenue, P.ncinitas, Caúfornia 92024-3633 May 31,2012 Kurt Culver EsGil Corporation 9320 Chesapeake Drive, Suite 208 San Diego, CA 92123 Dear Kiirt: On May 9, 2012, the City Council received a report discussing the potential reduction or elimination of the City pern1it fees for energy efficiency permits. Energy efficiency permits include: solar photovoltaic, solar water heating, electric vehicle charging, and natual gas vehicle home refueling. The Council directed staff to return with a resolution adopting a new fee schedule for these permits waiving the permit fees for a one year pilot period. They also asked if EsGil Corporation would contribute to this effort. The purose of this effort is to encourage and promote use of alternate energy within the community. Within the one year period the City wil evaluate whether ths waiver of fees influenced people in their choice for becoming more energy efficient. It is also unkown if this program would continue beyond the one year pilot period. The proposal is to waive the standard permit fee as identified below. For energy efficiency permits that exceed the standard fee, the cost of the permt would be the actual cost less the.. standard fee. STANDARD PERMIT FEE Permit type EsGiI Permit City Overhead City fee Total* & Plan Check (Planning) Fee Solar PV, Solar Water Heater $20050 $68.17 $50.00 $318.67 EV home charging station $167.50 $56.95 $50.00 $274.45 Natural gas home refueling $299.50 $101.83 $50.00 $451.33 (No plan check) *Pages 5 and 6 of the attachment identity the estimated number of permits in Solar and EV home charging stations and the total estimated fiscal impact for one year. %f: (760) 633-2710; ifaj' (760) 633-2818 07/18/2012 ITEM #06 9
Reduction in building fees as an incentive for energy efficiency permits is a widely accepted approach to encourage and promote reducing energy demand. This approach also demonstrates a local agencies commitment toward energy reduction. It is hoped that the EsGil Corporation would beable to paricipate in this effort by reducing your costs to the City for some or all of the permit costs. Let me know your thoughts and what level, if any, is workable with you. It might be helpful to meet to discuss this issue and ways that this may be accomplished. As always, it is a privilege to work with EsGil in handling our building permit process. Your professionalism and commitment to the industry is greatly appreciated. cc: Kerry Kusiak, Senior Planner II Attachment: May 9, 2012. Council Agenda Report,. - 2-07/18/2012 ITEM #06 10
Exhibit CC-3 Table of anticipated costs to the City 07/18/2012 ITEM #06 11
Solar PV, solar water heater Standard permit fees Fee type permits! yearly Fee vear revenue EsGil fees permit issuance fee $35.50 100 $3,550.00 electrical or plumbing permit fee $132.00 100 $13,200.00 IDlan check fee $33.00 100 $3,300.00 total $200.50 100 $20,050.00 City fees Citv overhead $68.17 100 $6,817.00 Planninq minor Dian check fee $50.00 100 $5,000.00 total $118.17 100 $11,817.00 Total all fees to customer $318.67 100 $31,867.00 EV home charging station Standard permit fees Fee type permits! yearly Fee vear revenue EsGil fees permit issuance fee $35.50 25 $887.50 electrical Dermit fee $132.00 25 $3,300.00 total $167.50 25 $4,187.50 City fees Citv overhead $56.95 25 $1,423.75 Planninq minor Dian check fee $50.00 25 $1,250.00 total $106.95 25 $2,673.75 Total all fees $274.45 25 $6,861.25 Costs to waive all fees to customer Revenue 50% EsGil permits! General loss fees* vear Fund cost $17.75 100 ($1,775.00) $66.00 100 ($6,600.00) $16.50 100 ($1,650.00) $100.25 100 ($10,025.00) ($68.17) 100 ($6,817.00) ($50.00) 100 ($5,000.00' ($118.17) 100 ($11,817.00) $0.00 100 ($21,842.00) Waived City fees (revenue loss) City general fund cost Total City cost ($11,817.00) ($10,025.00) ($21,842.00) Costs to waive all fees to customer Revenue 50% EsGiI permits! yearly loss fees* vear revenue $17.75 25 ($443.75) $66.00 25 ($1,650.00' $83.75 25 ($2,093.75) ($56.95) 25 ($1,423.75) ($50.00\ 25 ($1,250.00) ($106.95) 25 ($2,673.75) $0.00 25 ($4,767.50) Waived City fees (revenue loss) City general fund cost Total City cost Natural gas home refueling - simple/standard plan (no plan check) Standard permit fees Fee type permits! yearly Fee vear revenue EsGiI fees permit issuance fee $35.50 plumbing permit fee $132.00 electrical Dermit fee $132.00 total $299.50 City fees Citv overhead $101.83 Planninq minor Dian check fee $50.00 total $151.83 Total all fees $451.33 ($2,673.75) ($2,093.75) ($4,767.50) Costs to waive all fees to customer Revenue 50% EsGiI permits! yearly loss fees* vear revenue $17.75 $66.00 $66.00 $0.00 $149.75 ($101.83) ($50.00) ($151.83) $0.00 Total anticipated program cost to City for 1 year EsGiI anticiapted contribution for 1 year ($26,609.50) $12,118.75 Have not received any natural gas home refueling permit requests. Would expect volume to be low. *EsGil has agreed to partner with the City and join in the effort to encourage the installation of energy effcient systems by reducing the amount charged to the City for these permits by 50% for a period of one year. 07/18/2012 ITEM #06 12
Exhibit CC-4 Energy Efficiency Permits Issued 07/18/2012 ITEM #06 13
Energy Efficiency Permits Issued 138 100 "C CI :i rn l2 rn.. 'ẹ. CI C. 80 20 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Fiscal Year -+ Roof-mounted Solar PV _ Ground-mounted Solar PV.. Roof-mounted Solar Water Heaters -- Home Electric Vehicle Charging.. Total All Permit Types Total Permits Issued Roof PV IGround PVIRoof H20 IHome EV 1 Total 4881 121 251 581 583 -.1 07/18/2012 ITEM #06 14