© 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

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© 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

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© 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 Peter.Yakimowich@arcadis-us.com T: 423 756 7193 | M: 423 596 9492

Carol Malesky Red Oak Consulting - Principal Consultant -Financial Services carol.malesky@arcadis-us.com 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