Integrating Green Building Measures into Capital Planning ...aea.us.org/wp-content/uploads/2015/12/D6-Ted-Toon.pdf · Security Systems Clock Systems Property / Site Roadways / Driveways

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Building Bridges to Net Zero

Integrating Green Building Measures into Capital Planning for HUD Assisted and Public

Housing Programs

Evolution of HUD's Green Capital Needs Assessment, and the new CNA eTool

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Housing Programs

Public Housing PNAs and Energy Audits

‹#›MULTIFAMILY BUILDINGS 2015: BUILDING BRIDGES TO NET ZERO

HUD Public Housing Program• In existence since the mid‐1930s• Low cost loans subsidized original construction• 1.1 million residential units in more than 3000 communities• Property is owned by Public Housing Authorities (PHAs)• Eligibility threshold is less than 30% of AMI• Serves the neediest in our country‐the safety net• 60% are elderly or disabled• Program serves approximately one quarter of eligible families


Public Housing Assistance Model • Inattention to the cost of ongoing maintenance • First major crisis in mid 1960s• Capital Fund and Operating Fund grants subsidize rents • Replacement Reserves are prohibited• Rents are capped at 30% of tenant household income• 2010 Condition Needs Assessment‐$26B backlog, $6B annual• Capital Fund reduced by 23% 2011 through 2015• Inventory loss of 10,000 units annually


Utility Funding and Energy Conservation Model

• Utilities are reimbursed to PHAs through the Operating Fund• 3 year Rolling Base payment based upon utility cost• Very short term payback for energy conservation• Energy Audits required every 5 years though there are no quality standards


RESULT

• Lack of incentive in the Public Housing Program for long term capital planning or for energy conservation

• Performance and success among PHAs bridges a huge spectrum depending largely upon the motivation, structure of the PHA, local commitment to public housing

• Even in this environment, net zero or near net zero projects have been completed and high‐quality low rent housing in good repair is available.

• Leverage


Incremental Evolution to Market Processes

• Asset Management Program• 2005 Energy Policy Act‐integrate capital and utility planning• Capital Fund Financing Program $4.5 Billion since 2000• Energy Performance Contracting $2 Billion + since 2000• American Recovery and Reinvestment Act (ARRA)‐$6 Billion • Rental Assistance Demonstration (RAD) converting 185,000 units to Section 8 housing. $1 Billion invested for first 10% of conversions


Progress

• Physical Needs Assessment Standards proposed• Energy Audit Standards proposed (ASHRAE II)• GPNA tool and protocol developed and made available for voluntary use

• Congressional authority for replacement reserves has been requested

• Congressional authority for broader energy conservation incentives have been requested


Change in Public Housing

• Changing the culture of Public Housing from a charitable model to a business model

• Risk Assessment• Tools and incentives to leverage federal funds and to access opportunities

• Access the traditional real estate market resources • Project based long term strategic planning• Position PHAs to survive to continue to provide the safety net


HUD LINKS

• Physical Needs Assessment webpage– http://portal.hud.gov/hudportal/HUD?src=/program_offices/public_indian_housing/programs/ph/capfund/physicalassessment

• Green Physical Needs Assessment Tool (GPNA)– http://portal.hud.gov/hudportal/HUD?src=/program_offices/public_indian_housing/programs/ph/capfund/gpnatool

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Housing Programs

Green Physical Needs Assessment (GPNA): What Is It, Why, and What Can It Do For You?


Public in 2010, NYSE: AMRC

One of the largest independent energy services companies

$650 million annual revenue

Over 1000 employees throughout North America with 64 offices in 36 states

HUD Experience led to understanding PHA’s challenges and broader facility issues

3 billion sq ft assessed; 50,000 + buildings

Capital Planning Expertise

Unique link to HUD’s GPNA database

Smart Investment Decisions – Asset Management

Ameresco

Sample of GPNAslast 18 Months

COLUMBIA SC MINNEAPOLIS MNMUNCIE IN FORT WAYNE INLANSING MI MARSHFIELD WI (PCA)NEW ALBANY IN (PCA) NORTH CHICAGO ILEDGERTON WI ALLEN OHAITKIN MN NEW ULM MN

CARLTON MN INTERNATIONAL FALLS MNELY MN ITASCA MNHIBBING MN VIRGINIA MN

Ameresco and the GPNA


The Need for Portfolio PlanningThe Need for Portfolio Planning


What is Asset Sustainability ?

I: A PLAN to leave your assets in as

good of shape, if not better, than you found them

II: Effectively COMMUNICATING the needs, and building winning, defensibleBUSINESS CASES


What is the GPNA?

GPNA = Green Physical Needs Assessment

The GPNA forms the basis for the PHA’s strategic planning and the establishment of goals and objectives contained in its PHA Plan. It provides the PHA with an estimates that quantifies the capital requirements for the entire portfolio of the PHA, which can and often will be in excess of current funding from HUD. Using these estimates, PHAs can prioritize their needs and look to leverage their capital funds with other funding, to better preserve their housing stock to meet the mission and goals of the PHA Plan.

HUD GPNA FAQs


The Sustainable Asset Management Process

Confidential & Proprietary Copyright 2012

Know Your Needs

Capital Replacements

Energy Audit

Know Your Unfunded Liability

Needs minus Funds

Data Analysis

Address the Gap

Standards and Targets

Strategies

This is the GPNA!

Sustainable Asset Management Process


Step 1Step 1: Know Your Needs - GPNA Data:

PHYSICAL NEEDS ASSESSMENT

Visually assess all major building systems:• What needs to be fixed/replaced now?• What will need to be replaced over the next 20 years?• How much will it cost and when?• Is it a high priority?


Step 1: Basic Asset Details

Facility Name Facility Age Facility Size Number of Floors Facility Type:

Office Administration Parking Structures Etc.

Basic Asset Details Required:


Step 1: Component Inventory

• Mechanical Heating Systems Ventilation Systems Air Conditioning Plumbing / Drainage Building Controls Fire Prevention

ElectricalPower & DistributionInterior LightingExterior LightingEmergency PowerFire Alarm SystemComm / IT SystemsSecurity SystemsClock Systems

Property / Site Roadways / Driveways Paving & Walkways Retaining Walls Landscaping Fencing Underground Utilities

Architectural / Structural Roofing, Windows, Exterior Doors Foundation & Exterior Walls Flooring & Ceilings Interior Walls / Doors / Millwork Painting & Window Coverings Accessories & Equipment


HUD Energy Audit Rule◊ The EA Rule requires evaluation of

Core ECM’s– Building Envelope

– Heating, Cooling and Mechanical Equipment

– HVAC Controls

– Plumbing Systems

– Power and Lighting Systems

– Appliances

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◊ Evaluation of Advanced ECM’s (Optional)– Fuel conversions (e.g., electric or propane to gas)

– Energy generating technologies (e.g., solar, geothermal)

– Conservation technologies (e.g., building energy management systems, xeriscaping)


Step 1: Validated Condition Report


ComponentComponent : Replacement

Value

Last Major Action Year

Component : Brief DescriptionOverall

ConditionYear 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7

A10 Foundations $ 5,096 1902 The foundation walls appear to GoodA20 Basement Construction $ 48,256 1902 Poured concrete basement floor. GoodB2010 Exterior Walls $ 20,000 1986 Aluminum siding. GoodB2020 Exterior Windows $ 9,454 1996 Windows and caulking. Good $ 9,800B2030 Exterior Doors $ 20,467 1902 The majority of doors were GoodB30 Roofing $ 2,846 2002 Asphalt shingle roof. GoodC1020 Interior Doors $ 23,774 1902 Doors. Poor $ 23,774C1030 Fittings $ 15,844 2005 Kitchen. GoodC3010 Wall Finishes $ 19,500 2005 Wall finishes. Good $ 3,400 $ 3,400 $ 3,400C3020 Floor Finishes $ 9,815 2005 Hardwood flooring. GoodC3020 Floor Finishes $ 9,815 2005 Ceramic tile. GoodC3020 Floor Finishes $ 9,815 2005 Carpet. Good $ 245C3030 Ceiling Finishes $ 13,790 2005 Paint on plaster ceilings. Good $ 1,720 $ 1,720 $ 1,720D2010 Plumbing Fixtures $ 44,834 2005 Plumbing fixtures. GoodD2020 Domestic Water Distribution $ 24,461 1995 Water supply piping. GoodD2030 Sanitary Waste $ 22,968 1902 Sanitary Waste Piping Fair $ 22,968

D2040 Rain Water Drainage $ 2,220 1967Eaves troughs, downspouts, soffit, and fascia.

Poor $ 1,560

D2095 Domestic Water Heaters $ 2,941 2003 Gas fired water tank. FairD3023 Furnaces $ 2,434 1997 Forced air gas furnace. Good $ 12,400D3045 Exhaust Ventilation Systems $ 2,517 2005 Exhaust fans. Good $ 900D5010 Electrical Service And Distribution $ 11,830 1902 Electricity is distributed to all GoodD5021 Branch Wiring $ 44,845 1902 GoodD5022 Lighting Equipment $ 9,937 2005 Lighting fixtures. Good

D5037 Fire Alarm System $ 2,772 2003Smoke detectors and pull stations.

Good

D5091 Exit & Emergency Light Systems $ 1,200 2001 Emergency lighting. Poor $ 2,550D5098 Electric Baseboard Heat 1902 GoodE1041 Residential Appliances $ 8,580 2001 Refrigerators, freezers, and Poor $ 1,200E1042 Laundry Room Equipment $ 10,000 1902 Washers and dryers. Good $ 600G2010 Roadways $ 1,200 1902 Driveway. Poor $ 1,200G2020 Parking Lots $ 9,500 1902 Parking Lot. Poor $ 9,500G2030 Pedestrian Paving $ 1,217 2004 Concrete pad. GoodG2040 Site Development $ 1,529 1991 Fencing. GoodG2050 Landscaping $ 1,200 1902 Plantings and landscaping. The Good $ 1,200G3030 Storm Sewer $ 3,000 1902 Surface drainage. The property is GoodG4020 Site Lighting $ 1,000 1986 Site Lighting Good

$ 29,084 $ 10,700 $ 22,968 $ 0 $ 6,865 $ 5,120 $ 28,520

Cumulative Renewal Requirement = $ 29,384 $ 39,785 $ 62,753 $ 62,753 $ 69,618 $ 74,738 $ 103,258Funding : Cumulative = $ 3,025 $ 6,050 $ 9,074 $ 12,099 $ 15,124 $ 18,149 $ 21,174

Unfunded Liability = $ 26,359 $ 33,735 $ 53,679 $ 50,654 $ 54,494 $ 56,589 $ 82,085(Benchmark Cost based on Template) FCI = 7.91% 14.65% 20.74% 21.98% 23.82% 25.37% 30.24%

FCI without Funding 8.77% 16.38% 23.32% 25.43% 28.13% 30.54% 36.27%

Step 1: Life Cycle Report

‹#›MULTIFAMILY BUILDINGS 2015: BUILDING BRIDGES TO NET ZEROConfidential & Proprietary Copyright 2011

Step 1: Know Your Needs - 20 year forecast


Renewal Costs Per Year

Unfunded Liability

Life Cycle Output


Unfunded Liability =Needs ‐ Funding

Step 2: Know your Unfunded Liability


Anticipated Funding Level

Step 2: Know your Unfunded Liability - Projected Capital Needs


Step 2: Know your Unfunded Liability Projected Total Liability


Unfunded Liability

Step 2: Know your Unfunded Liability Projected Unfunded Liability


Unfunded Liability Reduction

FCI Migration

FCI Reduction Strategy


Step 3 Addressing the Gap


Gap to Fill

Sustainability Target

Step 3 Addressing the Gap – Set a target


Step 3 Addressing the Gap - Facility Condition Index (FCI)

Industry Standard Index Used to Track Condition Performance of Facilities / Portfolios

FCI =Renewal and Repair Costs

Replacement Cost

GOOD Range: FCI (0% - 5%)FAIR Range: FCI (5% - 10%)POOR Range: FCI (10%-30%)

CRITICAL Range: FCI (> 30%)

FCI TargetFCI Target


FCI (Current Year)

FCI (Year 5)

FCI (Year 10)

FCI (Year 15)

FCI (Year 20)

FCI (Year 25)

0.0% 10.0% 9.7% 29.0% 49.3% 54.1%

0.3% 7.4% 13.5% 19.9% 48.0% 51.2%

17.5% 31.6% 42.0% 50.9% 53.5% 55.4%

4.5% 8.5% 22.0% 33.8% 45.8% 49.4%

5.3% 5.0% 15.4% 37.1% 42.9% 48.2%

0.0% 0.0% 3.4% 6.3% 9.5% 30.5%

2.9% 7.0% 25.2% 37.0% 42.1% 46.0%

20.6% 29.5% 34.2% 44.5% 64.1% 68.1%

6.6% 14.4% 24.7% 25.6% 44.1% 55.5%

7.0% 8.0% 24.4% 30.6% 38.5% 55.9%

26.1% 30.9% 37.4% 42.8% 47.9% 49.9%

0.0% 0.0% 1.4% 17.9% 33.6% 40.6%

Asset AAsset BAsset CAsset DAsset EAsset FAsset GAsset HAsset IAsset JAsset KAsset L


Step 3 Addressing the Gap - FCI Analysis


Critical FCI

Poor FCI

Step 3 Addressing the Gap - Projected Facility Condition Index


Critical FCI

Poor FCI

Step 3 Addressing the Gap - Projected Funding Target


Step 3 Addressing the Gap - Capital Creation Strategies

Energy Conservation

Renewable Solutions

Maintenance Optimization

Consolidation Strategies

Redevelopment Strategies

RAD

Tax Credits

Leveraged Capital Creation Strategies:

Real EstateStrategies

MaintenanceOptimization

RenewableSolutions

Energy Conservation

RedevelopmentRe-Purposing

Strategies

Optimized Capital

CreationStrategies


Gap to Fill


Step 3 Addressing the Gap – Set a target


ReducedUnfunded Liability

Short Term Energy Savings

Capital Creation Strategy


Reduced Unfunded Liability

Maintenance and Operating Savings




Longer Term Savings Strategies





Real Estate & Community PartnershipStrategies



Extended Life = 16 Years

5%

10%

30%

FCI Reduction Strategy


Sustainable Asset Management – Summary and Q&A

Questions?

Know Your Needs

Know Your Unfunded Liability

Addressing the Gap

Documents

Integrating Green Building Measures into Capital Planning ...aea.us.org/wp-content/uploads/2015/12/D6-Ted-Toon.pdf · Security Systems Clock Systems Property / Site Roadways / Driveways