SR 08-09-2016 3D
Ci ty Council
Report
City Council Meeting : August 9, 2016
Agenda Item: 3.D
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To: Mayor and City Council
From: Susan Cline, Director , Public Works, Civil Engineering
Subject: On -Bill Financed Light Emitting Diode (LED) Street Light Conversion Project
Recommended Action
Staff recommends that the City Council:
1. Authorize the City M anager to enter into an On -Bill Financing agreement with
S outhern California Edison (SCE) and to execute all necessary documents to
accept t he On -Bill Financing loan and rebate s ;
2 . Award Bid #SP2372 to Siemens Industry, Inc., a Delaware -based company, for
the replacement of existing High Pressure Sodium (HPS) street light luminaires
with Light Emitting Diod e (LED) street light luminaires ;
3 . Authorize the City Manager to negotiate and execute a contract with Siemens
Industry, Inc. in an amount not to exce ed $589,206 (inc luding a 15%
contingency); and
4 . Authorize the Director of Public Works to issue any necessary change orders to
complete additional work within contract authority.
Executive Summary
The On -Bill Financed LED Street L ight Conversion Projec t would replace 1 ,271 existing
traditional h igh p ressure s odium (HPS) street light luminaires ranging in energy use
from 50W to 400W with equivalent Light Emitting Diode (LED) street light luminaires in
various streets throughout the City. Conversion of t he City’s street light luminaires to
LEDs is supportive of the City Council’s ongoing priorities of enhancing public safety,
protecting the environment, and maintaining the fiscal responsibility and is a direct
measure in the 15x15 Climate Action Plan adop ted by City Council in February 2013
(Attachment A). Replacement of existing HPS lighting fixtures with LED lighting would
provide an energy efficient system that would reduce the energy consumption in the
converted streetlights by 40% and also require les s maintenance costs.
In June 2016, the City solicited bids for the replacement of existing HPS street light
luminaires with LED street light luminaires. After reviewing the seven bids received,
staff recommends Siemens Industries, Inc. as the lowest and best bidder for a not to
exceed amount of $589,206. The project would be funded by On -Bill Financing via a
Southern California Edison Company no cost , 0% interest loan program for energy
efficiency projects. The monthly loan payment amount would equal t he monthly savings
on the Southern California Edison portion of the electric bill. With energy savings
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generated from the project, the City would recover the cost for the lighting conversion
over approximately nine years .
Background
The City owns and mai ntain s approximately 5,860 street lights throughout the City. In
2011, the City converted 576 of its 5,860 streetlights to modern LED fixtures using the
Energy Efficiency and Conservation Block Grant (EECBG) funds from the Department
of Energy as part of t he American Recovery and Reinvestment Act of 2009. A portion
of the EECBG funds allocated to the City were designated to replace existing High
Intensity Discharge (HID) lighting fixtures with energy efficient LED lighting.
O n May 24, 2016 (Attachment B ), City Council awarded a contract for the replacement
of 43 HPS street lights luminaires with LED luminaires and installation of 5 2 new
pedestrian street light poles with LED luminaires using Community Development Block
Grant (CDBG) funds as part of the Mi chigan Avenue Neighborhood Greenway
(MANGo) plan.
Discussion
LED fixtures are an energy ‐efficient, environmentally friendly alternative to traditional
street lighting. LEDs used in streetlight applications can emit a broad ‐spectrum, white
light that prod uces good visual clarity, and depth of field . LEDs can provide excellent
color rendering, precise optical control, long lamp life, and have minimal recycling
requirements when compared to traditional sources. These benefits combine to yield
energy and cost savings opportunities for the City of Santa Monica. Furthermore, unlike
HPS lamps and b allasts, LED luminaires do not contain any hea vy metals like lead and
mercury. This mak es storage, disposal and recycling easier and reduces greenhouse
gas emissions.
In October 2015, staff pursued project funding from Southern California Edison’s On -bill
Financing and Energy Rebate program and submitted 12 applications to Southern
California Edison for rebates and on -bill financing in order to manage the numerous
acco unts, meters and streetlights . Southern California Edison’s On -bill financing (OBF)
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is a 0% interest loan that allows the City to make energy efficiency improvements and
repay the cost over time through a charge on the City’s monthly utility bill. I n Nove mber
2015, the City received approval from SCE for all 12 a pplications for rebates and on -bill
financing.
Staff recommends entering into a n On -Bill Financing agreement with Southern
California Edison in a n estimated amount of $589,206 ($432,027 loan pro ceeds and
$157,179 energy incentive rebates) in FY 2016 -17 to fund the LED Street Light
Conversion Project. When the proposed conversion project is completed, SCE would
conduct a final inspection and issue a rebate check and a loan proceeds check which,
to gether, would reimburse the City for the cost of construction. SCE would then add a
monthly loan repayment charge to the utility accounts impacted. The monthly payment
is calculated to be equal to the energy cost savings generated by the project allowing
t he City to continue paying the same amount to SCE with no budget changes needed.
Once the loan is repaid, the energy cost savings revert to the General Fund. The loan
would be for a term of approximately nine years, and monthly loan payments would be
made on the electric bill of the facility receiving the efficiency upgrade. This project is
estimated to save over 924,000 kWh annually which would translate to approximately
$47,616 savings per year.
The cities of Los Angeles, San Diego, San Jose and many oth er s throughout the
country have already taken significant strides towards system ‐wide conversion to LED
streetlights. LEDs reduce maintenance costs and yield significant energy cost savings.
The conversion of the City’s street lights to LED consists of co nverting 1,271 street
lights from HPS to LEDs.
Public Outreach and Project Timeline
Construction management and public outreach for this project would be provided by
City staff. Construction management would include inspecting the contractor’s work
duri ng construction, verifying and documenting field changes and unforeseen
conditions, monitoring and mitigating impacts as a result of the construction activities,
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attending contractor’s safety meetings, attending periodic progress meetings, and
maintaining all necessary inspection documentation relevant to the work conducted
during construction. Public outreach would include notifications distributed to adjacent
properties and the surrounding community on the scope of the project, potential impacts
and sche dule with additional periodic updates. Construction is anticipated to start in
early October 2016 and be completed in mid -January 2017.
Contractor Selection
O n June 14 , 2016 , the City published Notices Inviting Bids to replace 1 ,271 existing
traditional h igh p ressure s odium (HPS) street lights luminaires with equivalent Light
Emitting Diode (LED) street light luminaires in vari ous streets throughout the City in
accordance with City specifications. The bid was posted on the City's on -line bidding
site, an d notices were advertised in the Santa Monica Daily Press in accordance with
City Charter and Municipal Code provisions. 44 vendors downloaded the bid. 7 bids
were received and publicly opened on June 30, 2016 . Bid results are as follows:
Bidder Base Bid
Siemens Industry, Inc. $512,353.00
Select Electric, Inc. $540,617.00
International Line Builders, Inc. $698,555.00
Comet Electric $726,210.00
Belco Elecnor Group $757,106.00
Dynalectric $790,860.00
Servitek Solutions, Inc. $817,305.21
Bids were evaluated based on the criteria in SMMC 2.24.072, including price, capacity
to perform the work, experience on similar projects, availability of material, equipment
and qualified staff, understanding of the project requiremen ts, ability to meet the desired
time frames, and performance of similar projects. Based on these criteria, Siemens
Industry, Inc., the lowest bidder, is recommended as the best bidder. Staff contacted
references provided by Siemens Industry, Inc. for simil ar projects in the cities of
Sacramento , Davis , and San Mateo , which were completed in 2015 -16 , and additional
projects for the cities of Huntington Beach, Livingston , and Manteca , which were
completed in 2014. All reference agencies reported that the work was completed in a
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timely and cost -effective manner while maintaining consistent quality. Staff also verified
with Contractor's State Licenses Board that Siemens Industry, Inc. licenses is current,
active, and in good standing.
Financial Impacts and Bud get Actions
The contract to be awarded to Siemens Industry, Inc. is for an amount not to exceed
$589,206 . Funds are available in the FY 201 6 -17 Capital i mprovement Program budget
in account C019118.589000 On -Bill LED Streetlight Project .
Entering into an On -Bill Financing agreement with Southern California Edison to fund
the LED Street Light Conversion Project is estimated to result in one -time revenues
totaling $589,206 ($432,027 loan revenue and $157,179 energy incentive rebate) in FY
2016 -17. Revenue bu dget adjustments will be included in the FY 2016 -17 Midyear
Budget for Council approval.
The loan amount of $432,02 7 will be repaid over approximately nine years in monthly
installments of $3,968. Funds are available in the Public Works Department. Future
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year funding is contingent upon Council budget approval .
Prepared By: Tom Shahbazi, Civil Engineer
Approved
Forwarded to Council
Attachments:
A. Febru ary 26, 2013 Staff Report
B. May 24, 2016 Staff Report
C. September 27, 2011 Staff Report
Reference:
Contract No. 10348
(CCS)
&
Contract No. 10349
(CCS)