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Contract Award to Install LED Lights and Light Controls Agreement for On -Bill Financing Loan December 6, 2016 Page 2 At this juncture, staff requests the City Council to approve the implementation of the Newhope Library project as the second of three library retrofit projects. The first retrofit project is for the Main Library which was approved by the City Council on October 4, 2016. The third retrofit project is for the McFadden Learning Center which will be presented to the City Council for approval in the near future. The Newhope Library project consists of lighting fixtures (replace fluorescent lights with energy- efficient light -emitting diode [LED] lights) and lighting controls (install occupancy sensors and connect to lighting system and Building Management System). Project benefits include an annual reduction of 39,403 kWh in energy usage, annual utility bill savings of $11,186 and annual greenhouse gas reduction equivalent to taking 59 cars off the road as tabulated below. PROJECT Estimated Estimated Estimated Annual Estimated Estimated COMPONENTS Annual kWh Annual Utility Bill CARS off' SCE Cash OBF SAVINGS SAVINGS the Road Incentives Light Fixtures 34,079 $9,786 51 $5,949 $62,086 Light Controls 5,324 $1,400 8 $441 $9,699 Total 39,403 $11,186 59 $6,390 $71,785 Total project cost is $78,175 including a $6,348 contingency. Payback period is 10 years. As tabulated above, project cost will be fully funded by SCE using cash incentives of $6,390 and a zero interest On -Bill Financing (OBF) loan of $71,785 for a total of $78,175. An innovative feature of the recommended actions is the City will have no upfront costs or interest charges as Pacific Lighting Management Inc. will finance the entire cost of the project. SCE will then pay Pacific Lighting Management Inc. directly with the cash incentives and OBF loan proceeds that SCE has approved for the project. As a result of the OBF loan, the Newhope Library's new electricity bill will be different as it will have a lower Amount Due based on the energy reduction from the project, and a new separate line -item to show the OBF loan repayment amount. This latter amount will reflect kWh saved from the project multiplied by the relevant billing rate. Once the OBF loan is paid in full, SCE will discontinue the OBF loan repayment line -item, and the reduced energy usage due to the project should result in smaller bills. (Cash incentives are grants and not repaid.) Staff requests Council approval of the foregoing project and funding process. SCE Notices of Approval for incentives and OBF loan amount (Exhibits 1 and 2) and the loan agreement form (Exhibit 3) are attached. The Notice soliciting bids was advertised on September 9, 2016 on the City's online bid management and publication system. A summary of the bids received is as follows: 36 Vendors were notified 2 Santa Ana vendors notified 27 Vendors downloaded the solicitation 9 Bids received 1 Bid received from a Santa Ana vendor 22Ci-2