I. RECOMMENDATION:
City Council Authorization to the City Manager to Enter Into a Professional Services Agreement with Tanko Lighting to Prepare a Feasibility Analysis of Street Light System Acquisition and Maintenance Options for the City of Coalinga.
II. BACKGROUND:
There is a growing nationwide industry trend in which municipalities are acquiring their streetlight infrastructure from their local private utility companies. This poses tremendous advantages to the municipality, in that not only does it allow the municipality to control the management of the system within its geographic borders, but it also involves tremendous cost savings – particularly related to maintenance and energy (as many utilities charge exorbitant fees for energy and maintenance rates for the systems).
The City Council has expressed interest in looking into the feasibility of acquiring all the existing streetlights from PG&E and Tanko lighting has the expertise and experience with these particular acquisitions. The City currently pays approximately $100,000 per year for street lights. It has been shown that owning and maintaining your own streetlights could save up to 70% on overall costs.
III. DISCUSSION:
If the City chooses to proceed with the possibility of acquiring the existing streetlight infrastructure from PG&E, the first step is to perform a feasibility analysis in order to determine if this is a project that makes sense for the City. The feasibility analysis will analyze the City's streetlight inventory, existing rates, aqusionsion history in the area, anticipated maintenance, and financing opportunities. At the completion of the feasibility analysis, a report will be prepared and delivered to the City outlining the City’s streetlight system options, cost/benefits, assumptions, budgetary pricing, savings, cash flows, recommended strategies, and overall assessment of the feasibility of streetlight acquisition and maintenance.
Once the feasibility is complete and it makes sense to move forward, Phase 2 would need to be approved by the City Council which would include an in-depth financial valuation of the existing streetlight systems assets, financial analysis of the feasibility of acquisition including cash flow analysis. Tanko Lighting would also serve as lead on acquisition negotiations as well as perform the inventory audit of the existing system. These costs are far more substantial than the initial cost for the feasibility study but the City Council will be able to make that determination based on the results of the initial feasibility study.
IV. ALTERNATIVES:
The Council may choose not to proceed with the feasibility study and direct staff accordingly.
V. FISCAL IMPACT:
The cost for the initial feasibility study is $2,500 and will paid from the Gas Tax Fund. | | |