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City Council Staff Report
May 10, 2016
Agenda Item No. 15
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: David A. Webb, Public Works Director - 949-644-3311,
dawebb@newportbeachca.gov
PREPARED BY: Iris Lee, Senior Civil Engineer, ilee@newportbeachca.gov
PHONE: 949-644-3323
TITLE: Streetlight LED Retrofit — Award of Contract No. 6427 (16V11)
ABSTRACT:
Staff recently completed an application, and has received verbal acknowledgement that
the City will be awarded an estimated $620,000 in Southern California Edison (SCE)
energy efficiency incentive funds, as well as $549,000 in zero -percent on -bill financing
to fund a large scale city owned Streetlight LED retrofit project. To realize this funding,
and future savings in electrical and maintenance costs of over $155,000 annually, staff
solicited cost proposals for this LED retrofit project through the National Joint Powers
Alliance (NJPA) cooperative contract purchasing program. Authorization is now being
requested to award the contract to Express Energy Services, Inc. of Los Alamitos,
California.
RECOMMENDATIONS:
Upon Southern California Edison's confirmation that the above mentioned funding has
been secured and awarded to the City:
a) Award Contract No. 6427 to Express Energy Services, Inc. (Express Energy) for the
amount of $1,061,780.32, and authorize the Mayor and City Clerk to execute the
contract;
b) Include in the project construction contract encumbrance an additional contract
contingency allocation of $106,219.68 (approximately 10 percent of the total bid) to
cover unforeseen conditions, extra work and/or material quantities; and
c) Approve Budget Amendment No. 16BA-039 to appropriate $1,169,000.00 from the
unappropriated General Fund balance to Account No. 01001928-980000-16V11
(Streetlight LED Retrofit project) as an advance for rebates and savings from
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Streetlight LED Retrofit — Award of Contract No. 6427 (16V11)
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Southern California Edison (SCE) through its Energy Leader Partnership Program
and receive revenue of approximately $620,000 in 01003-511050 (General Fund -
Private Refunds & Rebates) an $549,000 in 01003-612005 (General Fund -Proceeds
from Long Term Debt).
FUNDING REQUIREMENTS:
The total contract cost plus contingency of $1,169,000 will initially require a General
Fund advance. Southern California Edison (SCE) will provide an estimated $620,000 in
energy efficiency incentives at the completion of the project as reimbursement back to
the City's general fund through the Energy Leader Partnership Program. The incentive
amount represents 53 percent of the total cost.
The remaining 47 percent of project costs, estimated to be $549,000, will be refunded to
the City through Southern California Edison's On -Bill Financing (OBF) program. This
program allows public agencies to finance qualifying energy-efficient projects with zero -
interest and loan repayment as part of their utility bills.
Per Council's January 12, 2016 approval, staff submitted an SCE incentive and OBF
application. The application was accepted and the approved funding will be released to
the City once the installation is deemed complete and functional. As such, a budget
amendment in the amount of $1,169,000.00 is requested to cover the contract cost and
record estimated Revenue.
Account Description Account Number
Streetlight LED Retrofit 16V11 -Construct -010 -Unassigned
Total:
Proposed fund uses are as follows:
Vendor Purpose
Express Energy Services, Inc. Construction Contract
Express Energy Services, Inc. Construction Contingency
Various Printing and Incidentals
Total
DISCUSSION:
Amount
$1,169,000.00
$1,169,000.00
Amount
$1,061,780.32
$ 106,219.68
$ 1,000.00
$1,169,000.00
The City of Newport Beach adopted an Energy Action Plan (EAP) in 2013 to
demonstrate the City's commitment towards energy efficiency and sustainability. This
document identified measures to reach AB -32 (California Global Warming Solutions
Act) target of decreasing emission statewide to Year 1990 levels by 2020. Measure 14
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Streetlight LED Retrofit — Award of Contract No. 6427 (16V11)
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of the EAP recommends the replacement of the City's older streetlights with new LED -
type fixtures.
The City owns and maintains over 5,000 streetlights and intersection lights. As part of
an energy audit conducted by The Energy Network, 3,113 lights were identified for a
non -decorative LED streetlight retrofit project. This conversion has the potential to save
the City over $100,000 annually in energy costs. Additionally, the City will realize
reduced maintenance cost over the 15 -year lifespan of these LED fixtures, which is
estimated at $55,000 yearly. The estimated payback period is less than four years.
This Streetlight LED Retrofit project is currently proposed in the 2016-2017 Fiscal Year
Capital Improvement Project budget. To realize and secure the incentives, financing,
electrical and maintenance cost savings as soon as possible, staff is requesting to
advance this project for award in the current fiscal year. The proposed 16/17 Street
light project will then be removed from next fiscal year's budget.
Instead of the traditional design -bid -build project delivery approach, staff determined
that it would be most economical and efficient to select a contractor through NJPA to
complete the streetlight retrofit. NJPA Contract CA-SL10C-082013-EES is an Indefinite
Quantity Construction Agreement for street lighting energy efficiency services. All
contracts under this agreement have been competitively solicited nationally and
reviewed by knowledgeable trade experts, where the City will benefit from the reduced
pricing made possible by these large volume national contracts.
While contractor selection through NJPA does not require multiple bid solicitation, staff,
nevertheless, requested multiple cost proposals. At 10:00 a.m. on April 11, 2016, staff
received cost proposals from two NJPA vendors:
VENDOR TOTAL BASE COST PROPOSAL
Low Express Energy Services, Inc. $1,055,280.32
2 Facility Solutions Group $1,137,143.44
The low cost proposer, Express Energy, possesses a California state contractor's
license classification of "C-10", and has satisfactorily completed similar LED streetlight
conversion projects for other public agencies.
Staff recommends including an optional task to verify lighting photometric upon
installation to ensure intersection lighting requirements are met. This task would
increase the base cost by $6,500.00, for a total contract cost of $1,061,780.32. Given
that NJPA members have the ability to tailor their specific contract terms, staff has
amended the base NJPA contract language to stipulate Express Energy shall complete
all work in place within 60 consecutive working days upon material delivery. Completion
is expected in the Fall of 2016.
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ENVIRONMENTAL REVIEW:
Staff recommends the City Council find this project exempt from the California
Environmental Quality Act (CEQA) pursuant to Class 2 Section 15302(c)
(Reconstruction of existing facility involving negligible or no expansion of capacity) of
the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it
has no potential to have a significant effect on the environment.
NOTICING:
The agenda item has been noticed according to the Brown Act (72 hours in advance of
the meeting at which the City Council considers the item).
ATTACHMENTS:
Attachment A — Budget Amendment
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ATTACHMENT A
City of Newport Beach
BUDGET AMENDMENT
2015-16
EFFECT ON BUDGETARY FUND BALANCE:
X Increase Revenue Estimates
X Increase Expenditure Appropriations
Transfer Budget Appropriations
SOURCE:
from existing budget appropriations
X from additional estimated revenues
from unappropriated fund balance
EXPLANATION:
NO. BA- 16BA-039
AMOUNT: 1 $1,169,000.00
AND Increase in Budgetary Fund Balance
Decrease in Budgetary Fund Balance
X No effect on Budgetary Fund Balance
This budget amendment is requested to provide for the following:
To increase revenue estimates and expenditure appropriations to record Southern California Edison Rebate revenues
and expenditures for a contract to fund a large-scale, city -owned Streetlight LED retrofit project.
ACCOUNTING ENTRY:
BUDGETARY FUND BALANCE
Fund Object Description
REVENUE ESTIMATES
Orq
Object
Description
01003
511050
General Fund -Private Refunds & Rebates
01003
612005
General Fund -Proceeds from LT Debt
EXPENDITURE APPROPRIATIONS
Description
Org
Number
01001928
General Fund CIP-Misc & Studies
Object
Number
980000
Capital Improvement Project
Project
Number
16V11
Streetlight LED Retrofit Project
Project
String
E-16VII
CONSTRUCT -010 -UNASSIGNED
Signed:
Fina
Signed:
Adm
Signed:
Approval: City M
City Council Approval: City Clerk
Amount
Debit Credit
$620,000.00
$549,000.00
$1,169,000.00
Automatic System Entry.
Date
:51 Jb
Date
Date
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