Building Performance Standards – Insights for Consideration

The Fort Collins Area Chamber supports the concept of deploying 2050 sales tax dollars in the form of enhanced incentives to drive voluntary participation in decreasing energy use in commercial buildings.

• The overarching purpose for considering the adoption of Building Performance Standards is to address global climate conditions. If this truly represents the desire of the community, the community must be willing to make substantial investments in its successful pursuit.
• With significantly enhanced incentives and the potential to blunt some of the effects of higher utility rates, more property owners and tenants will recognize economic benefits to justify their own investment.
• The private sector should not have to compete with the City itself for the use of financial incentives earmarked for efficiency projects. As a public entity, municipal improvement projects should be considered within the 2-year budget process.

As commercial building owners, tenants and their representatives, we are adamantly opposed to Building Performance Standards as it is expected to be presented for the City Council consideration on Tuesday, December 2.

We don’t believe a penalty-based program of this scale and complexity can be considered without first addressing the following concerns:

• Though revenue projections from the 2050 sales tax, utility and bag fees have been provided, a program budget has not yet been devised.
  • What will it cost to stand up the program?
  • What will it cost to administer the program over time?
  • What will the City charge property owners to fund the program?
  • What will it cost the City to bring public buildings into compliance?
  • How can a policy of this nature be considered without understanding its basic operational costs?
  • And no details have been provided on the design of the incentive program. What will the incentive program create for businesses looking to avoid a fine or penalty?

• The legal basis for less intensive programs adopted by the state of Colorado and the City and County of Denver is currently being litigated in federal court. Why would the Fort Collins City Council invite separate legal action prior to gaining clarity for a more expansive program presented to City Council?
  • In an environment of shrinking tax revenue, which beneficial opportunities will be sacrificed in order to fund on-going legal expenses?

• How will property vacancy affect benchmarking data and compliance upon subsequent use?
  • How will change of use be addressed over time?
  • Will high intensity uses, such as food service and technology centers, be discouraged from locating within our community?
  • How will mixed-use residential properties be treated if we are to minimize impacts on the cost of housing?

• Affordability is topic of great concern. How will this program adversely impact economic opportunity for marginalized communities and emerging entrepreneurs?
  • Small, local property owners and tenants will carry the greatest burden under this program. With finite capital resources, hard choices will be made to either invest in buildings or invest in people.  We believe this is a false choice.

• At the time it was launched, a 6-month pilot program would produce “Robust technical support including onsite assessment, energy advising, and a report outlining pathways to BPS compliance; Contractor bids to understand today’s cost of potential upgrades; and, Candid feedback from participants to illuminate the process including benefits and challenges”
  • Throughout the process, the words and work product from City staff has made clear mandatory compliance under the preferred standards would be adopted. In spite of extensive feedback from participants, the program remains largely intact.
  • A sample of 6 buildings was evaluated. Only 1 property was completed – LED lighting for a City Parks facility – no other contractor bids were collected due to the “pilot timeline or participant purchasing constraints”.  Instead, all cost figures presented to the Council are nothing more than estimates.
  • Assuming some effort was made to secure contractor bids for all projects, yet only one project was bid in 6 months, imagine hundreds of property owners scrambling for the same technology, equipment and skilled technicians to comply with the proposed standards.
  • Costs will accelerate while delivery times will lengthen, further eroding the appeal and effectiveness of the program.

• We are aware of constrained supply chains, increased complexity of international trade, workforce preparedness, and utility cost inflation. None of these issues are adequately considered within the material presented to Council to date.
  • Will scheduled utility cost increases (2 to 3 times overall consumer inflation) over the foreseeable future provide sufficient incentive for building owners to undertake efficiency improvements without mandates?
  • Skilled technicians are in high demand across the country. What efforts must be taken to assure both the City and private contractors will have access to a qualified workforce to implement the program?

• Previous voluntary efficiency programs have largely addressed those opportunities considered economically feasible within reasonable payback periods. Forcing property owners and tenants to direct capital toward projects that are not economically sound endangers the viability of our local economy and threatens the financial ruin of employers and their employees.
  • Why would an employer choose to locate in a community that treats it source of revenue with such contempt?

• At a time of tremendous economic uncertainty, asymmetrical cost-drivers and softening growth indicators, we expect our leaders to look beyond singular objectives.
  • Demonstrable and comprehensive costs and benefits must be well understood and broadly communicated.
  • Fort Collins operates within a global economy with regional competition. Artificially raising the cost and complexity of locating in Fort Collins exacerbates troubling demographic and economic trend lines.  [See: https://www.commonsenseinstituteus.org/colorado/research/housing-and-our-community/a-snapshot-of-fort-collins-demographic-future?mc_cid=9ebce65147&mc_eid=159be91c49]

City of Fort Collins Resources
https://ourcity.fcgov.com/bps

City Council Work Session
https://meetings.municode.com/adaHtmlDocument/index?cc=FORTCOLLCO&me=e14dfc17a3534e37a27d58b64e6eff0c&ip=True