ADMINISTRATIVE REPORT Date: May 23, 1996 Dept. File No. STRUCDES TO: Vancouver City Council FROM: City Building Inspector SUBJECT: Structural Design Review Pilot Project RECOMMENDATIONS A. THAT Council approve the proposed Structural Design Review pilot project as detailed in this report at an annual cost estimated to be $400,000.00. B. THAT Council approve an increase in building permit fees for larger buildings only, to fund the pilot project ranging from $0.45 to $0.75 per $1,000 of construction value and averaging 10% overall. C. THAT Council instruct the Director of Legal Services to bring forward appropriate amendments to the Building By-Law. GENERAL MANAGER'S COMMENTS The General Manager of Community Services RECOMMENDS approval of A, B, and C. COUNCIL POLICY Council has always promoted principles of safe building design by adoption of modern Building By-Laws and requiring compliance with such by-laws. BACKGROUND This report is further to my report recommending amendments to the Building By-law, dated March 10, 1995 and approved by Council on March 28, 1995. One of the subjects of the by-laws recommended for adoption related to independent Structural Design Review. It was withdrawn from the package of by-law amendments that Council finally approved on June 20th, 1995. It appeared at that time that the Association of Professional Engineers & Geoscientists (APEGBC) would seek an amendment to its Act so that we could withdraw our proposed Charter amendment which would have authorized the setting up of a Structural Design Review Program. However, it was subsequently learned that it would take at least two years to realize a change to either the Engineers' and Geoscientists' Act or the City Charter to accomplish the permanent Structural Design Review Program. The recent findings of the APEGBC Practice Review Committee confirm the need for independent review in the area of structural and seismic design of buildings. - 2 - Because of a decision back in 1965, by the Council of that time, City staff rely solely upon the structural engineers' seals and letters of assurance and do not review structural designs for compliance with current code standards. Prior to 1965, City staff carried out reviews on all structural designs because the by-law was then relatively simple and did not include complex seismic design requirements. Vancouver, in 1965, therefore became the only major city in Canada to rely solely on engineer's seals as evidence of compliance with structural and seismic design standards and to eliminate structural design review from their Building Permit Process. DISCUSSION Since 1965, conditions prevailing in the practice of consulting engineering and the construction industry in general have changed markedly. These include: Increased fee competition among engineers together with uncontrolled bidding for professional services. This has had a significant effect on reducing the scope and quality of professional services rendered on a project, particularly in the field of commercial and developer-driven projects. Fast-tracking of projects leading to shorter time frames for preparation of engineering designs and increased potential for miscommunication within the construction team. Fragmentation of the construction industry with a blurring of traditional lines of control and responsibility within the construction industry. The above trends have been a concern to the City for many years. The 1988 structural failure of the Save-On Foods store in Burnaby's Station Square development highlighted these concerns and revealed the extent to which structural and seismic safety had been jeopardized by an inadequate level of engineering services and a subsequent lack of effective communication amongst the design and construction team on this fast-tracked project. The subsequent investigation into the causes of the Save-On Foods collapse by Commissioner Dan J Closkey made 10 wide ranging recommendations to improve the situation, many of which have been implemented. However, the first key recommendation has not been implemented at this time. This recommendation #1 advocated that reviews be made of a random sample of structural designs together with reviews of complex or unusual designs as selected by the municipality. The reviews were to be commissioned from independent engineers and paid for by funding derived from a levy on permit fees and administered by the APEGBC. The full text of this recommendation is contained in Appendix A. - 3 - Around this time the City also experienced significant problems with structural designs. The letter of January 1990 from the then City Building Inspector, Mr R. V. Hebert P.Eng., to the editor of the "Professional Engineer" magazine describes the situation quite forcibly.(see Appendix B) An attempt to carry out the requirements of the Closkey Commission was made but without better evidence, not enough concern was expressed to justify such a major move at that time. Subsequently, in 1992, the APEGBC mandated in-house checking of all structural designs together with an independent concept review. The APEGBC also instituted a program of professional and technical peer practice reviews with the emphasis on structural engineers working in the area of commercial building design. These reviews have indicated significant structural deficiencies in the design of several buildings, particularly with respect to seismic design. Such reviews have resulted in newly constructed buildings being retrofitted seismically due to conceptual errors in their seismic design. The cost of such retrofits, carried out after completion of construction, may fall on current owners and tenants who had no involvement in the original design and construction of the building. Clearly, this practice review program has highlighted an awareness that such reviews should be carried out before construction commences, when changes to the design may be relatively easily effected. The program has also highlighted the need for corrective action at this time and indicated that it would be inadvisable to wait a further 2-3 years for the required Act changes to permit the APEGBC to implement their Structural Review Program. It has also highlighted the fact that the City cannot rely upon the level of compliance of new buildings with current structural design standards and there is no means of determining the extent to which corrective action is required. This is particularly significant for seismic design deficiencies which may only become apparent after a major earthquake. Earthquakes have a propensity for exposing deficiencies in the lateral load resisting system of buildings, and the consequences of such deficiencies for the physical safety of building occupants and the economic life of the City after a major earthquake are incalculable. As the City is responsible for earthquake emergency response and would bear the brunt of any economic disruption following a major earthquake, it would appear prudent to take additional measures to ensure that the new construction in the City is seismically adequate. Commencing in 1994, the City reopened discussion on this issue for a second time and formed a joint committee between the APEGBC, the Structural Engineering Consultants of BC and the Consulting Engineers of BC with representation from the City and the municipality of Burnaby. This committee once again recommended formation of an Independent Structural Review Board which would be administered by representatives selected from the participating organizations and which would commission independent reviews of structural designs. - 4 - After extensive discussion between lawyers for the APEGBC and our Law department, it was concluded that the Structural review Board should operate under the control of the APEGBC and be legally constituted by a change in the " Engineers' and Geoscientists' Act". As an interim measure, and to effect some immediate improvements to our current system, the City has agreed to review the feasibility of proceeding with a Pilot project for structural reviews. In addition to improving the level of compliance with structural and seismic design standards, this pilot project would have the following objectives: To provide better information on the level of compliance with current structural and seismic design standards of building projects submitted for permit and to assess more accurately the extent to which corrective action is warranted. To provide useful feedback on the operation and effectiveness of a structural review system. This will assist with the implementation of a province-wide review system should this proceed as currently proposed within a two to three year time frame. To provide a forum for discussion and interpretation of structural design codes and to achieve a reasonable level of consistency in their application and enforcement. To provide the City with an effective means of verifying the structural and seismic adequacy of questionable designs and appropriate assurance that the City may rely upon such design reviews. Each year when we review our fee schedule with the Director of Finance, we are reminded that most Canadian cities charge at least five (5) times as much for major building permit fees as we do. This is mostly to pay for the significant amount of time needed by their municipal staff to carry out a thorough structural design review, sufficient to find major errors, and thorough enough to properly challenge the structural engineer of record. It also provides funding to cover an appeal process where interpretations and innovative design solutions can be addressed. The City currently has no source of funding to either carry out structural design reviews internally or to send structural drawings out for an independent design review. However, this pilot project is designed primarily to assess through a small sampling of designs the level of compliance with structural or seismic design standards achieved under the current system. A further report with more extensive recommendations will be presented to Council once the full extent of the problem is understood. At this point we recommend that the structural design review be out-sourced and carried out by prequalified independent practicing designers which is a more economical solution than adding more municipal staff. - 5 - PROPOSED CHANGE TO FEES We propose no increase for smaller projects but to increase fees for projects with an estimated cost in excess of $50,000 by an average of 45õ-75õ per $1000 of construction cost. This increase would represent a 10% overall increase in total building permit fees, but with the major portion (15% to 25% increase) directed at large complex buildings. This funding would generate sufficient funds to enable us to out-source approximately 100 projects for independent structural review over a 12 month period. This level of review would constitute an effective pilot program and enable us to test the program and to develop an advisory panel and appeal board to obtain input and feedback from the design and construction community. CONCLUSION This report recommends a reasonable increase in fees of the more major buildings to fund a pilot project of independent structural design review. By raising the building permit fees by a modest amount, we would develop a source of funding for staff to send out selected buildings for an independent design review on a spot check basis. After carrying out this program for a limited period of approximately one year, staff propose to return to Council with a more detailed proposal for ensuring adequate compliance with prevailing structural and seismic safety standards, but only after a detailed assessment of the extent of any problem related to such compliance. This assessment will be reviewed extensively with the design professionals and construction industry before proceeding to draft further recommendations. * * * * *