SR 09-27-2011 3IF
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City Council Meeting: September 27, 2011
Agenda Item: -:3--1
To: Mayor and City Council
From: Andy Agle, Director of Housing and Economic Development
Subject: Main Street Festival Lighting System Improvements
Recommended Action
Staff recommends that the City Council authorize the City Manager to negotiate and
execute the First Modification to the Revocable License and Funding Agreement
Contract No. 8389 (CCS) with Main Street Business Improvement Association ( MSBIA)
for the continued operation of the festival lighting on Main Street in accordance with the
terms stated in this report.
Executive Summary
In 2005, festival lights were installed along both sides of Main Street using $220,000 in
grant funds from the City. On October 12, 2004, the City entered into a Revocable
License and Funding Agreement with MSBIA to design, install, operate and maintain the
festival lights. This Agreement expires on October 12, 2011. In order for MSBIA to
continue operating the festival lights, the term for the License Agreement needs to be
extended. Staff recommends that the term be extended for 10 years to October 12,
2021, and that the other terms in the existing License and Funding Agreement be
updated and modified.
Background
The MSBIA has administered the operation and maintenance of the festival lights since
they were installed in 2005. The festival lights are hung from light poles along both
sides of Main Street, between Pico Boulevard to the north and the southern City
boundary.
On September 28, 2004, the City Council authorized staff to negotiate a Revocable
License and Funding Agreement (Contract No. 8389 (CCS) (Original Agreement) that
was executed on October 12, 2004. This Agreement granted MSBIA $220,000 to
design, install, operate and maintain the festival lighting. Most of the funds from this
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grant were used to design and install the lights; the on -going operating and
maintenance costs were reimbursed to MSBIA from the remaining grant funds until the
grant was fully exhausted in 2008.
In early 2007, MSBIA recognized that it needed additional funds to continue paying for
the festival lights. For FY 2007 -08, the City Council approved a one -time appropriation
to MSBIA in the amount of $25,000 to be used for the continued operation and
maintenance of the festival lighting on Main Street, $50,000 for a Main Street
Assessment Study and $9,600 for additional sidewalk cleaning.
On May 27, 2008, the City Council adopted Resolution No. 10294 (CCS), declaring its
intention to set the public hearing date on July 22, 2008, to consider the formation of the
Main Street Business Area Festoon Lighting and Sidewalk Cleaning Assessment
District (the "District "). On July 22, 2008, the City Council conducted a public hearing
on the proposed formation of the District, tabulated the ballots and confirmed the
formation of the District. The property -based assessment, which generates
approximately $88,000 annually, pays for the on -going operation and maintenance
associated with the festival lights, as well as supplemental sidewalk cleaning. The City
invoices the MSBIA for the utility costs associated with these lights.
Discussion
The Original Agreement has a seven -year term that expires on October 12, 2011. This
First Modification to the Agreement would:
1. Extend the term of the Agreement until October 12, 2021
2. Change the title of the Agreement to "Revocable License Agreement"
3. Restate a requirement that MSBIA will use a licensed electrical contractor, rather
than naming the contractor
4. Add a requirement that MSBIA install electrical sub - meters to provide a more
accurate accounting of the festival lights' electric usage.
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The Main Street commercial district benefits from the festival lighting because it
enhances the evening atmosphere and the business vitality in this unique retail and
restaurant district. MSBIA has used the District assessment funds to replace all of the
lights as well as to pay for the on -going electricity and maintenance costs. While
continuing to evaluate LED technology as an alternative, MSBIA has determined that, at
this time, LED lights do not illuminate as well as the existing incandescent lights and
that the lower monthly electricity costs that may be achieved with LED lights do not
offset the large investment to acquire LED lights. MSBIA also plans to hire a contractor
to install electrical sub - meters so that the electricity costs for the festival lights can be
more accurately measured rather than requiring the City to calculate and invoice MSBIA
for its share of the electrical costs.
On September 1, 2011, the MSBIA Board voted to continue to assume responsibility for
maintenance of the festival lighting, subject to Council approval of the First Modification.
Financial Impacts & Budget Actions
There is no financial impact associated with the First Modification to Contract 8389.
Prepared by: Erika Cavicante, Senior Development Analyst
Approved:
Andy Agle, Director
Housing and Econo
Forwarded to Council:
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Rod Gould
City Manager
Reference Amended
Lease No. 8389 (CCS).