HomeMy WebLinkAboutStaff Report 4.A 11/20/2017Agenda Item #4.A
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DATE: November 20, 2017
TO: Honorable Mayor and Members of the City Council through City Manager
FROM: Dan St, John, RASCE — Director, Public Works & Utilities
Larry Zimmer, P.E. — Deputy Director, Public Works & Utilities
SUBJECT: Resolution Authorizing Award of Contract for the LED Streetlight Retrofit Phase
2 Project to D.C. Electric Group, Inc.
RECOMMENDATION
It is recommended that the City Council adopt the attached Resolution Authorizing Award of
Contract for the Light Emitting Diode (LED) Streetlight Retrofit Phase 2 Project to D.C. Electric
Group, Inc.
BACKGROUND
The City owns and maintains 5,458 streetlights. The majority of the lights use the high - pressure
sodium bulb and ballast system (HPS), which have higher energy and maintenance costs
compared to LED lighting. The City completed its first LED retrofit project in 2012 using
American Recovery and Reinvestment Act (ARRA) of 2009 funding, which replaced 138
streetlights. The ARRA funding was a grant and the City's monthly electricity bill was reduced
slightly because of the energy reduction. A second retrofit project in March 2016, using Pacific
Gas & Electric (PG &E) On -Bill Financing (OBF), converted 724 existing City -owned
streetlights. The PG &E OBF Program is a 0% interest loan that is paid back through the energy
savings realized on monthly utility bills. The March 2016 retrofit project was calculated to be
paid back in five years. As a result of these two successful projects, the City Council approved
on March 6, 2017, an interfund loan from the Wastewater Fund in the amount of $1,490,000 and
approved the LED Streetlight Retrofit Project budget of the same amount. The subject capital
improvement project (CIP) intends to replace most of the remaining HPS lights in the system.
DISCUSSION
This project will retrofit all remaining HPS lights Citywide except the historic style lights
installed mainly in the downtown area and specialty parking lot lights. Replacing high wattage
HPS bulbs with LED fixtures reduces power by 60 -65 %. In addition to saving power, LED lights
last longer and save money to replace bulbs and ballasts in the fitture. Most of the HPS lights on
arterial streets have been replaced in the two previous projects, allowing this project to focus on
collector and local streets mostly in the residential areas of town. Most of these streets are
narrower with lower speed than the arterial streets and the existing HPS lights are a lower
wattage. Therefore the energy savings per bulb will not be as great as in previous projects.
PG &E's LED streetlight rates are much lower for the salve lighting level using HPS streetlights
because they use a much higher wattage bulb. The reduction in monthly charges will be used to
pay off the interfund loan for the project over an estimated eleven -year time period.
As part of the retrofit work, the contractor will also repair fuses, ballasts, photocells, or loose
wiring, which may be causing a current outage. However, some non - working streetlights are due
to broken conduit or corroded wires, which require more extensive construction repairs and are
not part of the proposed scope of work, therefore not all light outages will be repaired by this
project. At this time, known light outages due to power supply problems amount to less than two
percent of the total inventory of streetlights.
The Notice Inviting Bids for the work was issued on October 12, 2017. On November 13, 2017,
four (4) bids were received as follows:
Name of Bidder
Business Location
Total Base Bid
D.C. Electric Group, Inc.
Cotati
$704,522.00
Bear Electrical Solutions
Alviso
$882,375.00
St. Francis Electric, LLC
San Leandro
$994,872.00
WBE
Novato
$1,116,473.00
Engineer's Estimate
N/A
$1,300,000.00
Bids were ranked in accordance with the specifications by the base bid amount. The base bid
includes the retrofit of approximately three thousand nine - hundred fifty -six (3,956) cobrahead
streetlights to LED fixtures, house -side shields as needed to prevent light infiltration, fuse
replacement to restore electrical power and additional LED fixture stock for use after contract
acceptance. The lowest responsible bidder, D.C. Electric Group, Inc., has performed work for the
City of Petaluma, and has performed similar public works projects. The contractor, D.C. Electric
Group, Inc., possesses the necessary California Contractor's License, Class C -10 number
949934, which expires on 10/31/2019 to perform the work.
Construction is tentatively scheduled to begin at the end of January 2019, or as soon as the
lighting fixtures are delivered, assuming the weather is dry enough to work. Otherwise, the
project will be postponed for dry weather. Once the notice to proceed is given, the work should
be completed within seventy -five (75) working days per the contract documents. The project is
categorically exempt from California Environmental Quality Act because it is fundamentally an
operations and maintenance project. It is recommended that the City Council authorize the City
Manager to execute a contract for the LED Streetlight Retrofit Phase 2 Project with the apparent
low bidder, D.C. Electric Group, Inc., for the base bid to retrofit an estimated 3,956 streetlight
fixtures.
The proposed action meets Council Goal: "Sustainability Practices: Design and deliver cost -
effective energy and other resource savings projects for city facilities and infrastructure."
2
FINANCIAL IMPACTS
The project is included in the FY 17/18 CIP Budget as C16501412 with an approved total project
budget of $1,490,000. The following table shows the existing budget and revised cost estimate
for the subject project.
The revised project estimate includes additional funding for design and construction
management. Staff contracted an energy services consultant to analyze the existing streetlight
data, document a technical specification for the bid documents and to verify the product order.
The contingency is 18.5 %, which is higher than typical, and intended to address streetlight power
problems that are being discovered in conjuction with this project. The City has previously
contracted with D.C. Electric Group, Inc. to repair underground streetlight conduit, has been
satisfied with their work and confident to continue in this capacity. Construction management
has been increased to account for the additional work to oversee the power problems.
The Waste Water Fund was selected as the loan funding source because it has the resources to
finance the project. The total project expenditures, not to exceed $1,490,000, will be presented at
the time of contract acceptance and the term of the loan will be calculated. The annual payments
will be based on the energy savings and are estimated to be $144,225. After the loan is paid off,
the Streets and General Funds will realize the full energy savings from the project. The
wastewater fund currently has an adequate balance to loan for this project. The interest rate of
1.25% earned on the loan by the Wastewater Utility will be higher than the rate of interest earned
in the pool of City investments. The interest rate paid by the Streets and General Fund will be
less than what would be paid through a more traditional financing.
ATTACHMENTS
1. Resolution
2. Resolution 2017 -036 Authorizing a Loan Not to Exceed $1,490,000 From the
Wastewater Fund to the LED Streetlight Retrofit Project and Approving the Project
Budget
3
FY 17/18 CIP
C16501412
Revised
Project
Estimate
Design
$10,000
$50,000
Environmental
$0
$
Construction Contract
$1,300,000
$704,522
Construction Management
$20,000
$40,000
Contingency
$130,000
$130,000
CIP Overhead
$30,000
$30,000
Remaining Budget
$0
$535,478
Total
$1,490,000
$1,490,000
The revised project estimate includes additional funding for design and construction
management. Staff contracted an energy services consultant to analyze the existing streetlight
data, document a technical specification for the bid documents and to verify the product order.
The contingency is 18.5 %, which is higher than typical, and intended to address streetlight power
problems that are being discovered in conjuction with this project. The City has previously
contracted with D.C. Electric Group, Inc. to repair underground streetlight conduit, has been
satisfied with their work and confident to continue in this capacity. Construction management
has been increased to account for the additional work to oversee the power problems.
The Waste Water Fund was selected as the loan funding source because it has the resources to
finance the project. The total project expenditures, not to exceed $1,490,000, will be presented at
the time of contract acceptance and the term of the loan will be calculated. The annual payments
will be based on the energy savings and are estimated to be $144,225. After the loan is paid off,
the Streets and General Funds will realize the full energy savings from the project. The
wastewater fund currently has an adequate balance to loan for this project. The interest rate of
1.25% earned on the loan by the Wastewater Utility will be higher than the rate of interest earned
in the pool of City investments. The interest rate paid by the Streets and General Fund will be
less than what would be paid through a more traditional financing.
ATTACHMENTS
1. Resolution
2. Resolution 2017 -036 Authorizing a Loan Not to Exceed $1,490,000 From the
Wastewater Fund to the LED Streetlight Retrofit Project and Approving the Project
Budget
3
Attachment 1
RESOLUTION AUTHORIZING AWARD OF CONTRACT FOR
THE LED STREETLIGHT RETROFIT PHASE 2 PROJECT TO D.C. ELECTRIC
GROUP, INC.
WHEREAS, the project intends to replace most of the remaining high - pressure sodium
cobrahead streetlight fixtures with LED fixtures;
WHEREAS, LED light fixtures use 60 -65% less energy than high - pressure sodium light
fixtures;
WHEREAS; the City of Petaluma initiated this project with the intent to reduce its
energy bills and will also benefit from reduced maintenance requirement on the streetlight
system;
WHEREAS, City staff has prepared construction bid documents and advertised for
construction of this Project; and
WHEREAS, in accordance with the City of Petaluma Charter and Municipal Code,
California Public Contract Code Section 20162 and other applicable law, City staff solicited bids
for the Project; and
WHEREAS, the project was bid on October 12, 2017, and four (4) bids were received
and opened on November 13, 2017 in accordance with applicable law; and
WHEREAS, the lowest responsive bid for the Project was submitted by D.C. Electric
Group, Inc., from Cotati, CA for $704,522.00; and
WHEREAS, staff has determined that the Contractor's bid satisfies the bidding
requirements for the Project; and
WHEREAS, staff has verified that Contractor possesses a valid California Contractor's
License, Class C -10, number 949934 that is appropriate for the work to be performed for the
Project; and
WHEREAS, the Project is categorically exempt pursuant to California Environmental
Quality Act ( "CEQA ") and Title 14, the California Code of Regulations ( "CEQA Guidelines "),
Section 15301, because the project consists of the operation, repair, maintenance or minor
alteration of existing public structures involving negligible or no expansion of use beyond that
previously existing; and
WHEREAS, the FY 17/18 budget for the LED Streetlight Retrofit Phase 2 project
C16501412 has sufficient funds for this project.
4
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Petaluma
hereby:
Awards the contract for the LED Streetlight Retrofit Phase 2 Project No. C16501412 to
D.C. Electric Group, Inc in the amount of $704,522.00, the amount of the lowest
responsive bid, conditioned on D.C. Electric Group, Inc.'s timely executing the project
contract and submitting all required documents, including but not limited to, executed
bonds, certificates of insurance, and endorsements, in accordance with the project bid
documents.
2. Directs staff to issue a Notice of Award to D.C. Electric Group, Inc.
Authorizes and directs the City Manager to execute the project contract on behalf of the
City of Petaluma upon timely submission by D.C. Electric Group, Inc., of the signed
project contract and all other required documents, including but not limited to, executed
bonds, certificates of insurance, and endorsements, in accordance with the project bid
documents.
4. Authorizes a construction contract contingency of $130,000.
The amount of the loan and repayment shall not exceed $1,490,000 (one million four
hundred and ninety thousand dollars) and the maximum term of the loan of 11.25 years
(eleven and one - quarter years).
Attachment 2
Resolution No. 2017 -036 N.C.S.
of the City of Petaluma, California
RESOLUTION AUTHORIZING A LOAN NOT TO EXCEED $1,490,000, FROM
THE WASTER WATER FUND TO THE LED STREETLIGHT RETROFIT
I'ROJ C`I' AND APPROVING THE PROJECT BUDGET
WHEREAS, the City owns and maintains 5,458 streetlights, the majority of which are
high pressure sodium (HPS); and
WHEREAS, HPS streetlights are not energy efficient, have high operation and
maintenance costs; and
WHEREAS, Light Emitting Diode (LED) lighting consumes less energy than HPS
lighting, which reduces energy costs and maintenance requirements as compared to HPS bulbs;
and
WHEREAS, the City is using a new LED street light standard for new streetlights; and
WHEREAS, City staff worked with PG &E to analyze energy usage of the streetlight
system and identify the savings generated from energy efficient LED streetlights; and
WHEREAS, staff is proposing to convert approximately 3,936 existing City -owned
streetlights from HPS to LED through a construction contract; and
WHEREAS, the City has an Interfund Loan Policy that allows the internal transfer of
funding and agreement that the City will repay the loan through the realized savings from the
monthly utility bills; and
WHEREAS, the City will implement a competitive process to select a contractor.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City hereby:
1. Finds based upon the City staff report and presentation that the LED Streetlight
Retrofit Project is in the best interest of the City, and that funds for the repayment of
the loan are projected to be available from revenues available from funding that
would otherwise have been used for purchase of electrical energy.
2. The amount of the loan and repayment to be covered by the Agreement shall be set
pursuant to provisions in the interfimd loan Policy, but shall not exceed $ 1,400,000.
Rcsolution No. 2017 -036 N.C.S. 6
(one million four hundred and ninety thousand dollars) and the maximum term of the
loan of 11.25 years (eleven and one- quarter years).
3. Authorize the City Manager to take all actions to effectuate this loan.
4. Approves the LED Streetlight Retrofit Project budget in the amount of $1,490,000.
Under the power and authority conferred upon this Council by the Charter of said City.
REFERENCE: I hereby certify the foregoing Resolution was introduced and adopted by the Approve as to
Council of the City of Petaluma at a Regular meeting on the 6t° day of March, 2017,
by the following vote:
City Attorney
AYES: Albertson, Vice Mayor Barrett, Mayor Glass, Healy, Kearney, King, Miller
NOES: None
ABSENT: None
ABSTAIN: None
ATTEST:
City Clerk — - - -- Mayor =
Re.- OlUtion No. 2017 -036 N.C.S. 7