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ACCEPT PACIFIC GAS & ELECTRIC REBATE FUNDS, APPROVE PURCHASE OF LED STREET LIGHT LUMINAIRES WITH JAM SERVICES, INC. FOR THE PHASE 2 STREET LIGHT CONVERSION, AND APPROVE CONTRACT CHANGE ORDER NO. 2 WITH NET ELECTRIC, INC. FOR THE CITYWIDE ARTERIAL ROADWAY - LED STREET LIGHTS (PW1430)
recommended action
RECOMMENDATION
It is recommended that the City Council adopt a resolution to:
1. Authorize the City Manager to accept rebate funds totaling approximately $389,000 from the Pacific Gas & Electric (PG&E) LED Street Light Rebate Program.
2. Adopt an amendment to the Fiscal Year 2014-15 Capital Improvement Program (CIP) Budget to appropriate existing and future PG&E LED Street Light Rebate Program funds to the Citywide Arterial Roadway - LED Street Lights (PW1430) in the amount of $389,000.
It is also recommended that the City Council adopt a resolution and findings authorizing the following:
1. The purchase of 2,108 light emitting diode street light luminaires in the amount of $420,482.76, through a sole source contract with JAM Services, Inc., of Livermore, CA.
2. Execute a Contract Change Order in the amount of $123,300 with Net Electric, Inc., of San Leandro, CA, for additional contract work for the 2014 LED Arterial Street Light Conversion (PW1430).
The total project cost for material purchase and contracted work is $543,782.76.
It is further recommended that the resolution authorize the City Manager to take appropriate actions to carry out the purpose and intent of this resolution.
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Summary
The Fiscal Year (FY) 2014-15 CIP Budget approved a project to convert a portion of the City’s high pressure sodium (HPS) roadway street light inventory to light emitting diode (LED) luminaires. Council authorized the purchase of 3,000 LED fixtures for the first phase of this conversion on July 29, 2014, by Motion No. 2014-07-29-1212. On September 9, 2014, by Motion No. 2014-09-09-1205, Council authorized award of a Construction Contract to Net Electric, Inc., of San Leandro, CA, for the conversion. Phase 1 was completed by December 2014. In total, due to additional lights that were encountered along street segments that had been specified for conversion, Phase 1 converted 3,117 lights on arterial roads. The locations are shown in Attachment A - Vicinity Map. Following conversion of the 3,117 street lights, Public Works applied for and will receive PG&E LED Street Light Rebate Program funds totaling approximately $389,000. Annual energy savings from the Phase 1 conversion is estimated at approximately $300,000.
Utilizing project fund balance and rebate funds, Phase 2 will include the conversion of an additional 2,108 luminaires on the remaining arterial and collector roads. The locations proposed for this second phase are identified in Attachment B - Vicinity Map.
Annual energy savings from the Phase 2 conversion is estimated at approximately $190,000.
The recommended resolution allocates the PG&E Rebate Program funds, approves findings, and authorizes the purchase of 2,108 LED street lights through a sole source contract with JAM Services, Inc., and authorizes Contract Change Order No. 2 with Net Electric, Inc., the original contractor for Phase 1, to complete the Phase 2 conversion.
It is anticipated that the Phase 2 conversion will be completed by September 30, 2015.
DISCUSSION
Background
The City has an inventory of approximately 19,000 street lights. The majority of these lights utilize HPS as a light source, which until recently was the most efficient light source available. However, recent improvements to LED technology have increased efficiency and reduced initial product cost, and LED street lights are the new preferred light source. LED street lights use less energy and have a longer luminaire lifetime than HPS, which reduces ongoing costs for electricity and general maintenance. Staff recognized the potential savings to be achieved by converting the City’s street light inventory, and developed a plan for incremental conversion starting with the higher wattage HPS street lights located on arterial roads. Conversion of these lights generates the largest reduction in electrical consumption with an average of 60 percent, which yields the greatest financial and carbon footprint impact.
The FY 2014-15 CIP Budget allocated $1.2 million of mission critical funding for conversion of roadway street lights from HPS to LED fixtures. The first phase included conversion of 3,100 luminaires on arterial roadways throughout the City, including major portions of Airport Way, Hammer Lane, Martin Luther King Jr. Boulevard, and El Dorado Street (Attachment A - Vicinity Map). To implement this first phase, Council approved the purchase of 3,000 Leotek LED luminaires on July 29, 2014, by Motion No. 2014-07-29-1212. The purchase was contracted with Leotek through an intergovernmental cooperative purchase agreement with the City of Portland. The individual cost per light fixture was $224.58 each, which included the cooperative purchase administrative fee, freight, and tax. At the time, this was the most cost effective means of purchasing the Leotek product. The Leotek product is commonly used by many other public agencies such as City of Los Angeles, City of San Jose, City of Modesto, and the California Department of Transportation due to their high performance, quality, and low cost.
On September 9, 2014, by Motion No. 2014-09-09-1205, Council authorized award of a Construction Contract to Net Electric, Inc., of San Leandro, CA, for installation of 2,500 of the luminaires. Public Works’ staff installed the remaining 500 purchased luminaires. The award to Net Electric, Inc. was done through a competitive public bid process. Six bids were received with the following results:
Net Electric, Inc. (San Leandro) $124,000
St. Francis Electrical, Inc. (San Leandro) $165,000
Pacific Excavation (Elk Grove) $212,500
Advance Lighting Services, Inc. (Dublin) $222,500
Aegis ITS (Anaheim) $238,636
Bear Electrical Solutions, Inc. (Alviso) $275,000
The Engineer’s Estimate was $275,000. Net Electric, Inc. in the amount of $124,000 was the lowest responsive bidder.
Since no local firms bid the job, the contract was not subject to the Local Business Preference Ordinance (Stockton Municipal Code, Section 3.68.090); however, the contract is subject to the requirements of the Local Employment Ordinance (Stockton Municipal Code, Section 3.68.095).
Present Situation
Phase 1 was completed by December 2014. In total, due to additional lights that were encountered along street segments that had been specified for conversion, Phase 1 converted 3,117 lights on arterial roads. There was sufficient contingency funding for this project that was available to cover the costs for including these additional lights that were encountered. The anticipated annual energy savings from these conversions is approximately $300,000. In addition to energy savings, Public Works was also able to take maximum advantage of PG&E rebates of $125 per luminaire conversion. The City can expect $389,000 in Phase 1 rebate returns by Spring 2015. One check has been received in the amount of $129,275, with two additional claims totaling $260,000 being processed, for a grand total of approximately $389,000. These rebates are being allocated to Citywide Arterial Roadway - LED Street Lights project (PW1430), per the proposed resolution to amend the budget.
The Phase 1 project cost, including change orders and staff time, totaled approximately $864,000 from the original $1.2 million funding. By combining the remaining project funding, and the anticipated rebate returns totaling approximately $389,000, there is adequate budget for the second phase of conversions. Phase 2 proposes to convert 2,108 street light luminaires on arterial and collector roads. The locations for this second phase are identified in Attachment B - Vicinity Map. Annual energy savings from the Phase 2 conversion is estimated at $190,000.
While the rebate program continues to be offered, effective January 1, 2015, the rate has been reduced to $60 per luminaire conversion until funds are depleted. PG&E staff advise that there is high demand for this rebate program, and recommend submission of applications as soon as possible. Once Phase 2 is completed and rebates are received, staff anticipates returning to Council with a Phase 3 portion of the Citywide Arterial Roadway - LED Street Lights project (PW1430) to allocate the funds and amend the contracts.
Purchase of Fixtures
In order to expedite obtaining additional Leotek luminaire fixtures for Phase 2, staff requested quotes from three distributors of Leotek fixtures for supply of 2,108 units. Quotes were as follows:
|
COMPANY NAME |
BID AMOUNT |
ADJUSTED BID AMOUNT (local preference applied) |
|
JAM Services, Inc. (Livermore) |
$420,482.76 |
|
|
AZCO Supply (San Joaquin County) |
$435,854.51 |
$427,137.42 |
|
REDCO (Sanger) |
$466,816.60 |
|
The price submitted by JAM Services, Inc. is the lowest of the three quotes. The JAM Services, Inc.’s price is also $52,931.88 lower than the cost of using the cooperative agreement with Leotek and the City of Portland that was used in Phase 1. Staff recommends that a resolution be approved to award a sole source purchase contract to JAM Services, Inc. (Attachment C), including approval of findings supporting the purchase.
Stockton Municipal Code Section 3.68.090 gives a five percent bid preference to businesses located within the City of Stockton, and a two percent bid preference to businesses located within San Joaquin County. AZCO Supply is located in San Joaquin County, and a two percent bidder preference has been applied to their original bid amount. After application of the bid preference, JAM Services, Inc. is the low bidder.
Findings
Stockton Municipal Code, Section 3.68.070 (B) provides for an exception to the competitive bidding requirement in cases where Council has approved findings which support and justify the exception. Proposed findings to support this exception to the competitive bidding are as follows:
1. The cost submitted by Jam Services, Inc. is lower than the Phase 1 cost using the cooperative purchase agreement with Leotek and the City of Portland; a savings of $52,931.88. During Phase 1, staff had researched LED street light conversions undertaken by other agencies, and the City of Portland had contracted the most favorable price for the procurement of the Leotek LED luminaire fixtures via a competitive bidding process.
2. The price from JAM Services, Inc. is reasonable. Price quotes were received from two other material suppliers, and Jam Services, Inc. submitted the lowest quote.
3. The time to process this purchase through the City’s competitive bid process will delay delivery of materials for several months, which will delay submission of rebate applications to PG&E and delay commencement of energy savings, estimated at $15,800 per month.
4. JAM Services, Inc. has developed a good working relationship with the City and has provided excellent service to date, including timely delivery of materials.
Installation Contract Change Order
All work on the existing contract for the 2014 LED Arterial Street Light Conversion (PW1430), has been completed. Contract Change Order No. 2 in the amount of $123,300 is for the conversion of an additional 2,108 luminaire fixtures to LED outlined as the Phase 2 conversion. The change order includes additional remobilization, traffic control, and an additional 50 contract working days. The unit cost of converting individual fixtures remains the same as the original at $49 each; however, traffic control and mobilization was negotiated with an increase to compensate for the circuitous roadways and shorter segments associated with collector streets versus the long linear arterial roadways that were included with Phase 1. The revised total price is still less than the price which would be paid using the unit prices from the second low bid from the original bid.
The proposed Contract Change Order No. 2, in the amount of $123,300, combined with Contract Change Order No. 1, totals $129,915, which requires Council approval when combined with the previous change orders. The total revised final contract amount will be $253,915.
The recommended resolution will approve Contract Change Order No. 2 with Net Electric, Inc. in the amount of $123,300 for the 2014 LED Arterial Street Light Conversion (PW1430), which will include Phase 2 conversions (Attachment D).
FINANCIAL SUMMARY
The PG&E rebates totaling approximately $389,000 are allocated to the Citywide Arterial Roadway - LED Street Lights project (PW1430). One check has been received in the amount of $129,275, with two additional claims totaling $260,000 being processed, for a grand total of approximately $389,000.
The proposed amendment to the FY 2014-15 CIP Annual Budget appropriates the following amounts to PW1430, LED Street Light Conversion, to cover the purchase of additional luminaire fixtures from JAM Services, Inc. and the Contract Change Order No. 2 of Net Electric, Inc. installation contract per the recommended resolution.
Revenue 301-0000-492 $389,000
Construction/Materials 301-3062-640 $389,000
With the additional funding from the rebate allocation, the project will have sufficient funds to complete Phase 2 of the Citywide Arterial Roadway - LED Street Lights project (PW1430).
Attachment A - Vicinity Map of Phase 1 LED Street Light Conversion
Attachment B - Vicinity Map of Phase 2 LED Street Light Conversion
Attachment C - Agreement for the Purchase of Goods and Services with JAM Services, Inc.
Attachment D - Contract Change Order No. 2 with Net Electric, Inc.