Des Moines city leaders are looking to push businesses to assess their energy and water use and to make improvements that could help save the companies money.

The Des Moines City Council is expected early next year to consider an ordinance that would require commercial and multifamily residential buildings of more than 25,000 square feet to do the assessments beginning in 2020. There has been talk of requiring the owners of larger buildings, those of more than 50,000 square feet, to show that they have made specific improvements — or possibly face fines — starting in 2024 if their overall energy scores based on a U.S. Environmental Protection Agency software program were in the bottom half nationally. Each building would verify performance once every five years.

Des Moines Mayor Frank Cownie has long pushed sustainability issues, and the city government has made many changes over the years to clean up its act. In addition, Cownie has participated in international climate talks in Copenhagen, Paris, Warsaw, Bonn, China, and South Korea. Three times he met with actor Robert Redford at Redford’s Sundance resort beginning in 2005 to discuss, with mayors and school superintendents, how local governments can help with climate change. Redford has made it clear that he believes waiting for Congress to act is a mistake, and he turned to local governments to help push action. He brought Cownie and other mayors into the discussion.

Those were high-level discussions, but the talk is hitting home now. 

Cownie said the international climate news — including a major U.S. report released Nov. 23, the day after Thanksgiving — have made it clear that people, agriculture and the economy are all threatened by climate change and cutting fossil fuel use is essential. 

“Some people say, ‘Why would you do this?’” Cownie said of the city’s move to force the issue. “But I have hundreds who want us to do it better and faster. You can’t just do it out of hand. You have to bring everyone along. 

“It’s become more and more obvious to people that there is a problem with the environment and there are things that we could do to improve things not only for today but for future generations,” Cownie said in an interview. “We have to somehow or another increase our ambition to want to do that. Part of it is through education and part of it is through an ordinance.” 

At a recent workshop, council members split on the ordinance, especially the part about forcing improvements at private businesses. “Businesses can make a really good business case for doing it,” Cownie said. “They can see how they rank compared with other buildings their size. They can decide, ‘Hey, how can we do better?’ Then they can move on to, ‘What would it cost?’ The cost of energy isn’t going to get any cheaper.”

Exactly what the businesses do to save energy and power would be up to execs. It could be better windows, building insulation, a new roof, a different heating and cooling system, or simply making sure everything is working properly, and together. Though it is controversial, the city staff has considered implementing fines for the scofflaws — to go with awards that were offered in a voluntary program that gained little traction. “There are carrots and sticks we can set out there,” Cownie said. “The first step is to get everybody to do the study and to see where they are. They can see if there is a great amount of improvement we can make in the city as a whole.”

Des Moines has set a goal of reducing greenhouse gas emissions by 28 percent before 2025. All new city government buildings are required to meet Leadership in  Energy and Environmental Design [LEED] standards or higher. Cownie also signed a pact with mayors in 2015 formalizing the commitment to reduce heat-trapping gas emissions. 

Cownie used his own business, Cownie Furs on Ingersoll Avenue, as a test case. Through wide-ranging improvements to the facility — and a change in cooling system — the business now saves about $1,700 a month on water and $1,200 a month on gas and electric bills. The monthly water bill dropped from $1,800 to less than $100 after a water-based cooling system was replaced with a more conventional electric system. A $1,500 monthly electric bill dropped to $300 after windows and insulation were improved.

Cownie wants to see the business building self-monitoring — called benchmarking — completed. A discussion of next steps could come later. The city staff sees the discussion as a natural extension of building codes, which already have an energy component, said Laura Graham, city sustainability coordinator and assistant to City Manager Scott Sanders.

The software the city uses gives a percentile rank for each building. The Energy Star Portfolio Manager takes four to eight hours to complete, once a year, said city consultant Kent Newman, who is helping Graham lead work on the ordinance. 

Cownie would like to see local buildings at the 70th percentile or above for efficiency nationally. When the city government benchmarked its 35 buildings this year, about half were above the 50th percentile, and half below, Newman said. The ordinance is aimed at commercial, industrial and multifamily buildings, but, “we wanted to lead by example,” Newman said of the Des Moines city government. 

“The idea is to move this forward,” Councilman Josh Mandelbaum, who worked on a task force with Councilman Bill Gray, told his council colleagues at the workshop. “People don’t do this naturally, because they focus on other parts of their business, and they aren’t even aware of the opportunities for savings.”

“We tried to take into account input we got from building owners,” Mandelbaum said. “What we tried to craft was a compromise position. We’re trying to get buy-in.” For example, some buildings would be required to have scores above the 50th percentile — not a higher percentage as originally envisioned, he added.

It takes a score of 75 or higher to be Energy Star Certified. Newman said there are 66 certified buildings in the Des Moines metro, 62 of them in Des Moines proper. Fifty-eight are Des Moines school district buildings. 

Councilwoman Linda Westergaard was less enthusiastic about the ordinance. “For a building over 50,000 square feet, that could be a $1 million investment. That is more money than somebody would want to do,” she said. 

Westergaard also was concerned about the city staffing needed to track the businesses’ efforts.

“I hear from residents every day, and they aren’t telling me they want to make sure the guy down the street at the Hy-Vee store is being energy efficient. They want their roads. They want their services.”  

Newman said his grant from the national City Energy Project runs through June, and the city is looking for funding to extend his contract.  

“We were one of the first 10 cities to sign up” for the project, said Graham. “We can’t do it on our own. The businesses can’t do it on their own. It kind of takes a team to make that work. So we signed up to be a beta city to evaluate how our community was doing on sustainability issues.” 

Des Moines was the 10th city to file a framework in 2015. The city got three stars — the lowest of the three rankings offered. Graham said that ranking now is under review a second time, and she’s hoping the city moves up to four stars. Five stars is the highest ranking. 

Councilman Gray wasn’t sure fines are the way to move things along. 

“We don’t know where everyone’s going to come in once they start benchmarking,” Gray said at the workshop. “A lot of them might be OK. But there was a lot of pushback: ‘You’re going to ask me to invest a lot in infrastructure to try to get to a score of 50, so we thought rather than penalize them I would like to see us incentivize them.”

In an interview, Graham said any fines would likely be under $1,000. 

Councilman Joe Gatto had mixed feelings, too. “I think it’s very good, some of the things you’re talking about,” he told the council. “I chose to do it myself. But as far as a government mandating us to do that, and then to insist on a fine if we don’t do it — I struggle with that.”

Councilman Chris Coleman saw the potential for building owners to pass along added costs in higher rents; Mandelbaum and Cownie said that the work should actually save landlords money, freeing money for capital improvements or additional hiring. 

John Bergman, vice president of real estate management at Hubbell Realty, participated in the city’s series of meetings on the proposal. He’s all for benchmarking — but not for required improvements and fines. He stopped short of saying Hubbell would sue over the ordinance if those were included, in part because the company is not sure how the final ordinance will look. 

“We’re in a gentle growth phase” on sustainability, Bergman said of the Greater Des Moines market. “One of the drivers will be the city ordinance. That will probably take it from a gentle to a more aggressive growth phase.

“I think that’s positive. We’ve really kind of, in my opinion, as an industry kind of backed away from being very attuned to sustainability,” Bergman said. “It has to with the low-hanging fruit. It has to do with our own laziness. The easy parts are done.

“And when we talk about sustainability we have to understand what we’re talking about — the people, the planet and the profits,” Bergman said. “Sustainability has to be good for the people, it has to be good for society and it has to make sense for how we and they operate together. It has to be good for the environment. It has to be good for the economy. It has to make financial sense. ”

He’s not sure if the city ordinance is on the right track.

“That is the million-dollar question,” Bergman said. “I haven’t seen the final ordinance yet, so I can’t say I’m in support of it or not supportive. 

Though he was involved in the process, Bergman said “there was not strong representation from the commercial real estate industry.” Graham said a series of public meetings and focus groups gave building owners plenty of chances to chime in.

Hubbell has been benchmarking its buildings for 35 years, so that isn’t an issue, Bergman said. But he said the ordinance could be tough for small or medium-sized companies that don’t have staffs to deal with the tracking and related changes. They would have to hire firms to help. 

“I’m more of a carrot guy in this,” Bergman said. “Let’s give people a standard. And if they make that standard, let’s reward them and give them a pat on the back and tell them ‘good job.’ We were going down the route of more stick than carrot, making people face fines or have to do retrocommissioning,” a process in which equipment is tuned and checked to make sure it works efficiently with the whole, say, heating system. Or a special audit. Those things can cost $10,000 to $20,000.”

There has to be a better way, Bergman said.  

“Well, you know, I’ve done my best to hit the mark and I didn’t make it. How can you incent me? How can we work together to help me get there? Are there resources available?” Bergman asked. 

Asked if he has the votes to pass some form of the ordinance, Cownie said he’s hopeful at least a requirement that businesses monitor their water and power consumption — and compare it to other businesses using a free EPA software package — wins approval. 

Newman said, as an example, that if the 522 commercial buildings in Des Moines that are over 50,000 square feet lowered their energy demand, “it’s a huge financial impact on the community. I mean, we’re talking millions and millions of dollars that they’re saving, freeing up money for more investment, for stimulating jobs.”

As the ordinance draft stood at one point, buildings of more than 50,000 square feet that had an energy score below 50 would or had not shown a certain percentage improvement since the benchmarking in 2019 would have to provide “performance verification” starting in 2024. 

There would be a range of actions the building owners could take, which are intended to be “really flexible,” Graham said. 

Twenty percent of the buildings subject to the ordinance would be targeted for action each year, Graham said. Newman said that means the “performance verification” would only be required of each building once every five years. 

The fines remain a question mark. “We are really limited on what we can do with fines,” Graham said. It would likely be under $1,000, she added. City lawyers are still reviewing options.

Newman said the city decided to move toward an ordinance when its Energize Des Moines program drew just 3 percent of the buildings over 25,000 square feet, and 6 percent of the buildings were in Energy Star. 

Newman said national data show that just benchmarking, or tracking, water and energy use usually results in a 3 percent per year improvement. 

Kevin Nordmeyer, an architect with BNIM — a firm that helped create the LEED system in the 1990s — said he’s noticed a slowdown in some of the efficiency work. You certainly still see it, in new regents university buildings, on private campuses, at the new Kum & Go headquarters in downtown Des Moines and elsewhere, he said.

However, “there hasn’t been the push for LEED in recent years that there was in the early days,” Nordmeyer said. “A lot of people will still ask us to consider sustainable values, but not necessarily go through the LEED process.” 

One trend is to look at areas larger than one building, to examine regional sustainability, Nordmeyer said. And single-building efforts are looking at more than energy and water use, and considering light, the comfort for workers, the availability of food, and other factors, he added. 

Nordmeyer worked as director of the Iowa Energy Center — which has now been moved from Iowa State University to the Iowa Economic Development Authority — from 2009 to 2011. At that time, 1,200 public buildings around Iowa were benchmarked. At least 400 appeared to not meet code levels for sustainability.

Nordmeyer served on a work group studying the proposed city ordinance and shared his experiences in benchmarking public buildings.

Similar ordinances have been discussed or adopted in St. Louis, Salt Lake City, Denver, Orlando and Los Angeles. Newman said Des Moines would be one of the smaller cities to attempt the legislation.