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Agreement with Tanko Lighting, Inc., for Street Light Purchase Feasibility Study August 4, 2015 Page 2 energy rate will change from LS -1 to a lower LS -2 rate, which translates to a savings of approximately $8 per month in utility charges for each street light. The utility charge savings would be leveraged to cover the capital cost of system conversion and modernizations through a separate contract. Projects under consideration include state -of- the -art solar technology that would facilitate further reductions in energy consumption, a robust citywide Wi -Fi system utilizing the street light infrastructure, and added emergency response features for Fire and Police operations. In addition, the City would be able to maintain prudent and sufficient reserves for ongoing street light replacement, and establish performance standards to improve and expand continuous nighttime street lighting for the community. To purchase the street light system, the parties involved must follow procedures established by SCE and the California Public Utilities Commission (CPUC). Essentially, a detailed appraisal of the existing SCE -owned street light system is necessary to establish an equitable value using the Replacement- Cost - New - Less - Depreciation ( RCNLD) method. Should the City decide to move forward with the street light acquisition, the ownership transfer must be processed and approved by the CPUC. On May 19, 2015, the Public Works Agency issued a Request for Proposals (RFP) seeking qualified firms with expertise in municipal street lighting to evaluate the feasibility of acquiring the citywide street lighting system from SCE. The scope of services sought included the following: Phase 1: Initial Valuation and Street Light Assessment oAssist the City during SCE initial evaluation and assessment of street lights. o Develop an independent RCNLD evaluation. Phase 2: Final Valuation and Street Light Acquisition o Perform a detailed audit of the entire street light system. o Perform a GPS /GIS survey of the entire street light system. o Perform data analyses to reconcile survey /audit with SCE invoicing to identify billing discrepancies. oAssess street lighting enhancements to attain an improved distribution of nighttime illumination levels. Phase 3: Street Light Financial Analysis o Evaluate and recommend purchase alternatives, including financing options for the acquisition, construction, and maintenance of the street light system. oDetermine current and future costs of street lights, including tariffs, energy, distribution, etc. o Assist the City with the purchase negotiations and SCE formal appraisal. c Develop comparison analysis identifying positive cash flow savings and system efficiency. 25N -2