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  It was withdrawn from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.

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