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© 2012 ARCADIS 25 June 2013 1
Triple Bottom Line Analysis
for Green Infrastructure A Case Study
Imagine the result
© 2012 ARCADIS 25 June 2013 2
• Explain Green Infrastructure (GI) as a
strategy for stormwater management
• Describe the value proposition for GI
• Explain the basic process for Triple
Bottom Line value analysis
• Describe the elements of an incentives
framework program to encourage Low
Impact Development (LID)
Learning
Objectives
© 2012 ARCADIS 25 June 2013 3
Strategy Green Infrastructure as a
Strategy for Managing
Stormwater Runoff
© 2012 ARCADIS 25 June 2013 4
• Stormwater management strategy that
mimics natural hydrologic processes
• GI is integrated combination of infiltration,
evapotranspiration, storage, water
harvesting and re-use
• Typically employing “high performance
landscaping” or functional landscaping
What is Green Infrastructure?
© 2012 ARCADIS 25 June 2013 5
Courtesy City of Philadelphia
© 2012 ARCADIS 25 June 2013 6
Courtesy City of Philadelphia
© 2012 ARCADIS 25 June 2013 7
• Shifting perspectives in stormwater
management - volume management
• Regulatory changes
• Sustainability – triple bottom line (TBL)
Why Green
Infrastructure?
http://www.lakecountyil.gov/Stormwater/LakeCountyWatersheds/BMPs/Bioswale.htm
Fundamental Issue: Altered Water Balance
Water balance for an average year
© 2012 ARCADIS 25 June 2013 9
• EPA and States requiring 80%-95% rainfall frequency SOV as a essential means of water quality improvement
• Integrated site design and Green Infrastructure being incorporated in many MS4 permits
• Volume-based approaches being incorporated into local rules
• CSO rules are incorporating GI
Regulatory
Changes
© 2012 ARCADIS 25 June 2013 10
GI values…more than just stormwater
management
• GI supports sustainable communities
• Decision to go “green” is made at executive
level
• A value-based decision that directly impact
the public realm
Value
Proposition
“Green infrastructure cleans the air and water, replenishes
aquifers, reduces flooding, and moderates the climate. And
the benefits go beyond improving the environment” (Green Infrastructure a Landscape Approach, APA 2013)
“Out of sight, out of mind”
© 2012 ARCADIS 25 June 2013 11
Beyond Water
© 2012 ARCADIS 25 June 2013 12
An Integrated Multi-discipline Approach
• Cisterns store/reuse > 20,000 gallons of runoff and AC condensate
• Planting mixes provide additional 90,000 gallons of water storage capacity for plant uptake + serve as a water quality BMP
• Tree trenches store 17 gallons per linear foot = total 4,200 gallons
• Total 114,200 gallons = 2.5 inch rainfall
© 2012 ARCADIS 25 June 2013 13
Hard
Dirty
Scary
Expensive
Green
Clean
Safe
Affordable
Clean our Water
Revitalize our Neighborhoods and Business Districts
Chattanooga’s Strategic Plan for Green Infrastructure
© 2012 ARCADIS 25 June 2013 14
Using all of the tools of local government
• New City Stormwater Manual • New standards
• New methodology
• Technical incentives
• Integration of landscaping
• New process
• Options
• New City Stormwater Code
• Unified Land Development Code
• Incentive and Credit Program for GI/LID
What is
Chattanooga
Doing?
© 2012 ARCADIS 25 June 2013 15
Policies for Progressive Watershed
Management
Adopt Green Infrastructure Stormwater
Management
Encourage Efficient Parking
Design Complete, Smart Streets
Promote Efficient, Compact
Development
Protect Natural Resources
(Including Trees and Open Spaces)
© 2012 ARCADIS 25 June 2013 16
TBL Process Applying a Triple Bottom Line
Analysis for Chattanooga
What is Triple
Bottom Line
(TBL)?
Economic
Social Environmental
Sustainability
© 2012 ARCADIS 25 June 2013 18
TBL
Analysis
Process
Economic, community, and environmental factors
Costs and benefits of LID/GI
Conventional vs. Green - Net Present Value
Sensitivity analysis estimates range of costs/benefits
© 2012 ARCADIS 25 June 2013 19
TBL
Possible
Factors
Dir
ect
Fa
cto
rs Stormwater infrastructure
Annual maintenance
Energy use
Water treatment
Energy use for water transport
Property values
Jobs
Flooding
Water quality
Air quality
© 2012 ARCADIS 25 June 2013 20
TBL
Possible
Factors
Non-M
ark
et
Facto
rs
Recreation
Health
Aesthetics
Noise pollution
Community cohesion
Urban agriculture
Habitat
Public education
© 2012 ARCADIS 25 June 2013 21
Estimating
TBL
Factors
Property Values
• Health
• Aesthetics
• Noise pollution
• Community cohesion
• Urban agriculture
Other Measures
• Recreation
• Habitat
• Public education
© 2012 ARCADIS 25 June 2013 22
Net Present
Value
Principle
T = Planning horizon (number of years)
t = time period horizon (year by year)
Nt = Net benefits in period t
i = discount rate
Net Present Value = 30 years of costs – 30 years of benefits in
today’s dollars
© 2012 ARCADIS 25 June 2013 23
Challenges to
Opportunities
Chattanooga TBL Case Study
© 2012 ARCADIS 25 June 2013 24
• Commercial example
• What if recently developed site was
subject to new stormwater runoff
regulations?
• Target site as-built: conventional
stormwater infrastructure
• Proposed reconfiguration applied
effective LID/GI design
• Residential example
• More flexibility with hypothetical site
Two Sites –
Numerous
Outcomes
© 2012 ARCADIS 25 June 2013 25
Approach to
TBL
Monte Carlo
Simulation
© 2012 ARCADIS 25 June 2013 26
Target Center
As-Built
© 2012 ARCADIS 25 June 2013 27
Target Center
Proposed
Reconfiguration
© 2012 ARCADIS 25 June 2013 28
Commercial
Example Costs Benefits
Reduced Water
Quality Fees
Energy Savings & Air Quality
Annual Maintenance
Construction
28
© 2012 ARCADIS 25 June 2013 29
Estimated Net Present Value (NPV) of TBL
($2,000,000)
($1,500,000)
($1,000,000)
($500,000)
$0
$500,000
$1,000,000
$1,500,000
Year 1 Years 2 -30
Annual
Longer Roof Life
Air Quality
Energy Use
O&M
Water QualityFees
© 2012 ARCADIS 25 June 2013 30
Residential
Example Costs Benefits
© 2012 ARCADIS 25 June 2013 31
Residential Estimated NPV of TBL
($5,000)
$0
$5,000
$10,000
$15,000
$20,000
Year 1 Years 2-30 Annual
Improved Aesthetics
Air Quality
Energy Use
Recreation
Maintenance
Construction CostSavings
© 2012 ARCADIS 25 June 2013 32
• TBL can be used to evaluate alternative
projects
• Example – MSDGC Long-Term Control Plan
(LTCP) green projects
• Example – DWSD proposal for GI evaluation
Applying
TBL in Our
Work
© 2012 ARCADIS 25 June 2013 33
• TBL varies by scale
• Common perception that “going
green” costs more is not always the
case
• Mitigation fees could tip balance
toward GI approach
What Does
It All Mean?
© 2012 ARCADIS 25 June 2013 34
• Framework for Incentives for GI and
LID
• Case Study: Chattanooga
• “The 3rd Bottom Line”
Incentives:
Boosting
the Bottom
Line
© 2012 ARCADIS 25 June 2013 35
• A mechanism for achieving the goals
and objectives of the Water Quality
Program
• A means of promoting Sustainable
Development
• A means of financial participation of
the private sector
• A means to fund public Green
Infrastructure projects
Program
Objectives
© 2012 ARCADIS 25 June 2013 36
Incentive: “inducement or tangible reward for
desired action”
A key component for of a balanced municipal
land management program
“incentives can be performance based and financial”
Types: • Stormwater fee discounts
• Fee-in-lieu
• Zoning upgrades, expedited permitting, reduced
requirements
• Grants, rebates, financing, tax/fee credits
• Awards, recognition, certifications
Funding,
Financing
Incentives1
1Data from 50+ MS4’s
© 2012 ARCADIS 25 June 2013 37
Incentives
Program
Framework
Extend to developers and
owners
Tailored to development type
and watershed
Marketable SOV credit expressed in CF of storage
Offsite mitigation fee at 150% of cost for balance
of SOV
Credit and grants for retrofits
Expedited approval process and
recognition awards
© 2012 ARCADIS 25 June 2013 38
• Performance Based Water Quality Fee
Credits (Owner)
• Stay-on-volume (SOV) Credits (Owner)
• Mitigation Fees (Developer)
• ERU based, or
• BMP cost based (CNT)
• Mitigation Credits (issued as a marketable
certificate to Developer)
Incentive
Mechanisms/
Elements
© 2012 ARCADIS 25 June 2013 39
• The value of volume (SOV) credits can
be based on the NPV of City’s WQ Fee
rate for a 1” storm event
• Example: 1 ERU yields 266 cu.ft. for 1”
rainfall event. 1 ERU is assessed at
$115.20 per year.
• NPV = $2,534/266 cu. ft. = $9.25 or
$14.25 @ 150 %
(Empirical data indicates that these costs may be
conservative)
Mitigation Fee
Calculation Example
(ERU Based)
© 2012 ARCADIS 25 June 2013 40
YES
YES
NO
NO YES
Demonstrate
Safe
Conveyance
25-YR
NEW DEVELOPMENT
Impaired
Watershed?
Capture and
Manage 100% of
1” Rainfall (SOV)
Capture and
Manage 100% of
1.6” Rainfall (SOV)
Capture and
Manage More
Than Standard?
Eligible for WQ Fee
Credit
and
Mitigation Credit
80% TSS
Treatment
On-Site of
balance
Meet Peak Rate
Control
Standards
Manage 1.5x Volume of
balance up to 1” Off-Site
or
Mitigation Fee (1.5x Cost)
NO YES
YES YES
Decision Process-Mitigation Incentives and Fees
© 2012 ARCADIS 25 June 2013 41
B C
En
tity Performance Standards &
Incentives
New Development
Site (except
S.Chickamauga Creek
Watershed)
New Development Site
(S.Chickamauga Creek
Watershed)
WQ Fee Credits per 12294, 10/6/2009 (1) NA NA
Maintenance/Certification Annual Annual
Baseline SOV Standard 1 inch SOV 1.6 inch SOV
Mitigation Fee Baseline Portion of SOV not metPortion of SOV not met
up to 1 inch
Earned Credit Eligibility Baseline >1 inch SOV >1.6 inch SOV
80% TSS removal WQv less SOV met WQv less SOV met
Design Offset of Peak Flow per Manual per Manual
1 WQ Fee Volume Reduction Credit
10% credit for each 0.1
increase in SOV>1.0 ,
50% max
10% credit for each 0.1
increase in SOV>1.6 , 50%
max
2 WQ Fee Peak Flow Reduction Credit NA NA
3 Volume Mitigation Fee $14.25/ cu. ft (2) $14.25/cu.ft. of SOV not
met
$14.25/cu.ft. of SOV not
met up to 1.0 inch
4Volume Mitigation Credit in cu.ft.
(value = $9.25/cu.ft.) (3)
> 1 inch up to 2 yr. 24 hr
storm
> 1.6 inch up to 2 yr. 24 hr
storm
5 Expedited Permit/Plan Approval Process Prequalification Required Prequalification Required
6Grants (based on availability of
mitigation fund-retrofit only)NA NA
7 Recognition Awards (criteria TBD) Eligible Eligible
Be
nc
hm
ark
Cri
teri
aC
red
its
, In
ce
nti
ve
s, a
nd
Fe
es
Ow
ne
r W
Q
Fe
e C
red
its
De
ve
lop
er
Mit
iga
tio
n
Cre
dit
s-F
ee
s
Gra
nts
Aw
ard
s
© 2012 ARCADIS 25 June 2013 42
REDEVELOPMENT
BROWNFIELDS
HIGH DENSITY > 7/ac
VERTICAL DENSITY(FAR > 2 or > 18
units/ac
MIXED USE & TRANSIT ORIENTED (< .5 mi.)
Capture & Manage 100% of 0.9” Rainfall
Additional Eligible Volume Credit up to
50% Max total for each additional development category
80% TSS Treatment On-Site of Balance
Meet Peak Rate Control
Standards
AND
NO
Eligible for WQ Fee Credit
and
Volume Mitigation Credit
YES
Capture & Manage
More SOV Than 0.9”
YES
Decision Process-Mitigation Incentives and Fees
© 2012 ARCADIS 25 June 2013 43
En
tity Redevelopment Sites
(incl Brownfields) per
TN068063, 3.2.5.2.1
Development Sites
(Density>7/ac.; FAR >2,
Mixed use and Transit;
per TN068063, 3.2.5.2.1)
Non-residential
Retrofit Site (4)
Residential Retrofit (4)
NA NA NA NA
Annual Annual Annual At completion
0.9 inch SOV 0.9 inch SOV 0.1 inch SOV 0
NA NA NA NA
>0.5 inch SOV >0.5 inch SOV >0.1 inch SOV NA
WQv less SOV met WQv less SOV met NA NA
per Manual per Manual per Manual NA
110% credit for each 0.1
increase SOV > 0.9, 50%
max
10% credit for each 0.1
increase SOV > 0.9, 50%
max
10% credit for each 0.1
inch increase SOV > 0.1
, 50% max
NA
2 NA NA% reduction in 2 yr 24 hr
up to 50% creditNA
3$14.25/cu.ft. of SOV not
met up to 0.5 inch
$14.25/cu.ft. of SOV not
met up to 0.5 inchNA NA
4> 0.5 inch up to 2 yr. 24 hr
storm
> 0.5 inch up to 2 yr. 24 hr
storm
> 0.1 inch up to 2 yr. 24
hr stormNA
5 NA NA NA NA
6 NA NA Based on specific BMP Based on specific BMP
7 Eligible Eligible Eligible Eligible
Be
nc
hm
ark
Cri
teri
aC
red
its
, In
ce
nti
ve
s, a
nd
Fe
es
Ow
ne
r W
Q
Fe
e C
red
its
De
ve
lop
er
Mit
iga
tio
n
Cre
dit
s-F
ee
s
Gra
nts
Aw
ard
s
© 2012 ARCADIS 25 June 2013 44
• Explain Green Infrastructure (GI) as a
strategy for stormwater management
• Describe the value proposition for GI
• Explain the basic process for Triple
Bottom Line value analysis
• Describe the elements of an incentives
framework program to encourage Low
Impact Development (LID)
Learning
Objectives
Revisited
© 2012 ARCADIS 25 June 2013 45
Peter E. Yakimowich PE Sr. Consultant, ARCADIS U.S., Inc. 1210 Premier Drive, Suite 200 Chattanooga, TN 37421 [email protected] T: 423 756 7193 | M: 423 596 9492
Carol Malesky Red Oak Consulting - Principal Consultant -Financial Services [email protected] Malcolm Pirnie / ARCADIS U.S., Inc. 222 S Main Street, Suite 300 Akron, OH 44308 T. 330.515.5696 | M. 330.245.9196 F. 330.374.1095
Contacts
© 2012 ARCADIS 25 June 2013 46
Shevchenko Park, Philadelphia