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SR 08-08-2017 3A City Council Report City Council Meeting: August 8, 2017 Agenda Item: 3.A 1 of 6 To: Mayor and City Council From: Susan Cline, Director, Public Works, Street & Fleet Services Subject: Award Contract Energy Efficiency Package Bid (Parks, Lots, Structures) Recommended Action Staff recommends that the City Council: 1. Authorize the City Manager to enter into an On-Bill Financing agreement with Southern California Edison (SCE) and to execute all necessary documents to accept the On-Bill Financing loan and rebates; 2. Award Bid #4265 to Siemens Industry, Inc., a Texas-based company, to implement energy efficiency measures at various City parks, parking lots, and parking structures; 3. Authorize the City Manager to negotiate and execute a contract with Siemens Industry, Inc. in an amount not to exceed $1,208,639 (including a $157,649 contingency); and 4. Authorize the Director of Public Works to issue any necessary change orders to complete additional work within contract authority. Executive Summary In support of Council’s commitment to public safety, environmental sustainability, and fiscal responsibility, the City has undertaken replacing streetlights with more efficient Light Emitting Diode (LED) lights. The cost of replacing these lights is subsidized by on- bill financing through Southern California Edison (SCE). Staff now seeks approval to implement additional energy efficiency measures in four parks, six parking structures, and seven parking lots in an amount not to exceed $1,208,639. The majority of the project would involve retrofitting inefficient lights to LED and would be paid through savings on electricity bills. Staff estimates that the City would see a return on investment in under nine years. Background Energy efficiency in municipal operations is a key component of the City’s efforts to reduce greenhouse gases and save on utility costs. Since 2006, the City has 2 of 6 successfully saved over 4.3 million kWh annually through energy efficiency. An additional 750,000 kWh in savings are anticipated through the recent conversion of streetlights to LED. These conversions are a direct measure in the 15x15 Climate Action Plan adopted by City Council in February 2013 (Attachment A) and are supportive of Council’s ongoing priorities of enhancing public safety, protecting the environment, and maintaining fiscal responsibility. Replacement of existing high-pressure sodium lighting fixtures with LED lighting would provide an energy-efficient system that would reduce the energy consumption in the converted areas and also reduce maintenance costs. Discussion The energy efficiency project package was approved as a part of the FY 2017-18 Capital Improvement Budget and would focus on the replacement of existing lighting within City parks, parking structures, and parking lots with LED lighting with supplemental funding from SCE through rebates and on-bill financing. This package would also include non-reimbursable measures to replace light poles at Beach Lot 1 at 1550 PCH, new fixtures at Reed Park, and install a new carbon monoxide (CO) detection system and variable speed drives to control five garage exhaust fans in Parking Structure 9. The system would monitor CO levels and operate the fans at the minimum speed required to maintain acceptable CO concentrations. While not all measures are covered by SCE’s rebate and on-bill financing programs, replacing or upgrading the systems is still recommended by staff. By bundling various measures, staff can accelerate energy savings, increase project implementation efficiency and reduce administration costs. Collectively, the projects would save over 1.1 million kWh. A map of all project locations is included in Attachment B. In May 2017, the City submitted 12 applications to fund this conversion project under the SCE’s On-bill Financing (OBF) and Energy Rebate Program. This program offers reimbursements for eligible expenses incurred to complete the lighting upgrades. Rebates are issued directly and the OBF, which is a 0% interest loan, is repaid over 3 of 6 time through a charge on the City’s monthly utility bill. Approval on all 12 submitted applications is expected to be received in summer 2017. Staff recommends entering into an OBF agreement with SCE in an estimated amount of $785,802 in FY 2017-18 to fund the eligible energy efficiency measures. When the proposed conversion project is completed, SCE would conduct a final inspection and issue a rebate check and OBF loan proceeds check which, together, would reimburse the City for the cost of construction with the exception of $71,200. 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 the City to continue paying the same amount to SCE with no budget changes needed. Once the loan is repaid, the energy cost savings would revert to the General Fund. The monthly loan payments would be made on the electric bill of the facility receiving the efficiency upgrade over an average of 8 to 9 years for all of the projects. 4 of 6 Project # Incentive Application kWh Savings kW Savings Estimated Cost Non- Reimb Cost Estimated Rebate Estimated OBF Loan 1 Airport Park 82,768 0.24 $109,755 $14,061 $95,694 2 Memorial Park 206,745 0 $282,545 $34,255 $248,290 3 Reed Park 68,305 0.00 $106,375 $11,550 $11,038 $83,787 4 Palisades Park 121,401 0.00 $70,275 $20,638 $49,637 5 Parking Structure P1 29,485 3.17 $12,372 $5,788 $6,584 6 Parking Structure P2 89,839 9.39 $43,132 $17,139 $25,993 7 Parking Structure P4 86,196 9.02 $33,624 $16,464 $17,160 8 Parking Structure P5 96,562 10.01 $39,656 $18,375 $21,281 9 Parking Structure P9 81,179 9.3 $129,086 $13,250 $15,194 $100,642 10 Parking Structure P10 16,626 1.91 $25,520 $3,113 $22,407 11 Beach Lot #1 205,041 0 $152,300 $46,400 $28,674 $77,226 12 Beach Lot Lighting 33,875 0 $46,350 $9,249 $37,101 Total 1,118,022 43.04 $1,050,990 $71,200 $193,988 $785,802 Contingency $157,649 Total with contingency $1,208,639 The cities of Los Angeles, San Diego, San Jose and many others throughout the country have already taken significant strides towards system-wide conversion to LED lights. LEDs reduce maintenance costs and yield significant energy cost savings. Public Outreach and Project Timeline The Street and Fleet Services Division of the Public Works Department would manage the construction and collaborate with the Office of Sustainability & the Environment to implement communications and outreach. Construction is anticipated to start in October 5 of 6 2017 with an expected duration of six months. Community notices would be issued via the website, flyers at facilities and social media. Vendor Selection On March 8, 2017, the City published Notices Inviting Bids to convert 4,152 outdoor LED lights across 12 facilities in accordance with City specifications. The bid was posted on the City’s on-line bidding site, and notices were advertised in the Santa Monica Daily Press, in accordance with City Charter and Municipal Code provisions. 722 vendors were notified, 92 vendors downloaded the bid. Five bids were received and publicly opened on March 24, 2017. Bidder Bid Amount tL Custom Lighting $342,629 Green Energy Innovations $711,924 Siemens Industry, Inc. $1,050,990 Aegis ITS $2,325,994 Comet Electric, Inc. $2,648,909 The bids were evaluated based on the criteria in SMMC 2.24.072, including price, previous experience, capacity and skill, ability to deliver, quality of product, and compliance with City specifications and scope of work. Siemens Industry Inc. is not the lowest bidder, but offered in most cases, installation of new fixtures with manufacturer warranties, in addition to a one-year warranty on installation; responded to City supplemental bid questions regarding DarkLights Consortium (DLC) lighting compliance and their ability to provide documentation needed for on-bill financing submittals; and provided references which indicated that the company has satisfactorily completed projects of similar size and scope. Based on these criteria, Siemens Industry Inc., is recommended as the best bidder. Financial Impacts & Budget Actions 6 of 6 The contract to be awarded to Siemens Industry Inc., is for an amount not to exceed $1,208,639. Funds are available in the FY 2017-18 Capital Improvement Program budget. The contract will be charged to the following accounts: C019144.589000 $ 390,383 C119144.589000 $ 186,617 C019155.589000 $ 631,639 TOTAL $ 1,208,639 Entering into an On-Bill Financing agreement with Southern California Edison to fund the Park, Parking Structure and Parking Lot Light Conversion Project is estimated to result in a one-time revenue of $979,790 ($785,802 loan proceeds and $193,988 energy incentive rebates) in FY 2017-18 in account 01426.410050. Revenue budget adjustments have already been included in the approved FY 2017-18 Budget. The loan amount of $785,802 will be repaid over an average of 8 to 9 years for all projects with monthly on-bill charges determined upon final application acceptance. Prepared By: Kori Jones, Administrative Analyst Approved Forwarded to Council Attachments: A. 15x15 Climate Action Plan (Weblink) B. Project Locations C. Oaks Disclosure 2017 D. 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Airport Park O. Memorial Park P. Palisades park Q. Reed Park 3201 Airport Ave. 1401 Olympic Blvd. Ocean Ave, North of SM Pier 1133 7th St. A. Structure 1 B. Structure 2 C. Structure 4 D. Structure 5 E. Structure 9 F. Structure 10 1234 4th St. 1235 2nd St. 132 2nd St. 1440 4th St. 1136 4th St. 1125 Third St. G. Lot Annenberg H. Lot 1550 PCH I. Lot 3N J. Lot 2S K. Lot 3S L. Lot 4S M. Lot 5S 415 Palisades Beach Rd. 1550 PCH 1150 PCH 1670 Appian Way 1750 Appian Way 2030 Ocean Ave. 2600 Bernard Way A B C DE F G HI J K L M N O P Q Exhibit B CITY OF SANTA MONICA OAKS INITIATIVE NOTICE NOTICE TO APPLICANTS, BIDDERS, PROPOSERS AND OTHERS SEEKING DISCRETIONARY PERMITS, CONTRACTS, OR OTHER BENEFITS FROM THE CITY OF SANTA MONICA Santa Monica’s voters adopted a City Charter amendment commonly known as the Oaks Initiative. The Oaks Initiative requires the City to provide this notice and information about the Initiative’s requirements. You may obtain a full copy of the Initiative’s text from the City Clerk. This information is required by City Charter Article XXII—Taxpayer Protection. It prohibits a public official from receiving, and a person or entity from conferring, specified personal benefits or campaign advantages from a person or entity after the official votes, or otherwise takes official action, to award a “public benefit” to that person or entity. The prohibition applies within and outside of the geographical boundaries of Santa Monica. All persons or entities applying or receiving public benefits from the City of Santa Monica shall provide the names of trustees, directors, partners, and officers, and names of persons with more than a 10% equity, participation or revenue interest. An exception exists for persons serving in those capacities as volunteers, without compensation, for organizations exempt from income taxes under Section 501(c)(3), (4), or (6), of the Internal Revenue Code. However, this exception does not apply if the organization is a political committee or controls political committees. Examples of a “public benefit” include public contracts to provide goods or services worth more than $25,000 or a land use approval worth more than $25,000 over a 12-month period. In order to facilitate compliance with the requirements of the Oaks Initiative, the City compiles and maintains certain information. That information includes the name of any person or persons who is seeking a “public benefit.” If the “public benefit” is sought by an entity, rather than an individual person, the information includes the name of every person who is: (a) trustee, (b) director, (c) partner, (d) officer, or has (e) more than a ten percent interest in the entity. Therefore, if you are seeking a “public benefit” covered by the Oaks Initiative, you must supply that information on the Oaks Initiative Disclosure Form. This information must be updated and supplied every 12 months. CITY OF SANTA MONICA OAKS INITIATIVE DISCLOSURE FORM In order to facilitate compliance with the requirements of the Oaks Initiative, the City compiles and maintains certain information. That information includes the name of any person or persons who is seeking a “public benefit.” If the “public benefit” is sought by an entity, rather than an individual person, the information includes the name of every person who is: (a) trustee, (b) director, (c) partner, (d) officer, or has (e) more than a ten percent interest in the entity. Public benefits include: 1. Personal services contracts in excess of $25,000 over any 12-month period; 2. Sale of material, equipment or supplies to the City in excess of $25,000 over a 12- month period; 3. Purchase, sale or lease of real property to or from the City in excess of $25,000 over a 12- month period; 4. Non-competitive franchise awards with gross revenue of $50,000 or more in any 12-month period; 5. Land use variance, special use permit, or other exception to an established land use plan, where the decision has a value in excess of $25,000; 6. Tax “abatement, exception, or benefit” of a value in excess of $5,000 in any 12- month period; or 7. Payment of “cash or specie” of a net value to the recipient of $10,000 in any 12- month period. Name(s) of persons or entities receiving public benefit: Name(s) of trustees, directors, partners, and officers: Name(s) of persons with more than a 10% equity, participation, or revenue interest: Prepared by: ____________________________Title: __________________________ Signature: ______________________________________ Date: ________________ Email: ____________________________________ Phone: ____________________ FOR CITY USE ONLY: Bid/PO/Contract # ____________________________ Permit # ___________________________ CITY OF SANTA MONICA OAKS INITIATIVE DISCLOSURE FORM In order to facilitate compliance with the requirements of the Oaks Initiative, the City compiles and maintains certain information. That information includes the name of any person or persons who is seeking a “public benefit.” If the “public benefit” is sought by an entity, rather than an individual person, the information includes the name of every person who is: (a) trustee, (b) director, (c) partner, (d) officer, or has (e) more than a ten percent interest in the entity. Public benefits include: 1.Personal services contracts in excess of $25,000 over any 12-month period; 2.Sale of material, equipment or supplies to the City in excess of $25,000 over a 12- month period; 3.Purchase, sale or lease of real property to or from the City in excess of $25,000 over a 12- month period; 4.Non-competitive franchise awards with gross revenue of $50,000 or more in any 12-month period; 5.Land use variance, special use permit, or other exception to an established land use plan, where the decision has a value in excess of $25,000; 6.Tax “abatement, exception, or benefit” of a value in excess of $5,000 in any 12- month period; or 7.Payment of “cash or specie” of a net value to the recipient of $10,000 in any 12- month period. Name(s) of persons or entities receiving public benefit: Name(s) of trustees, directors, partners, and officers: Name(s) of persons with more than a 10% equity, participation, or revenue interest: Prepared by: ____________________________Title: __________________________ Signature: ______________________________________ Date: ________________ Email: ____________________________________ Phone: ____________________ FOR CITY USE ONLY: Bid/PO/Contract # ____________________________ Permit # ___________________________ Item 3-A 08/08/17 Item 3-A 08/08/17 REFERENCE:    CONTRACT NOS. 10513 &  10514  (CCS)