55A - RESO - STREET LIGHT SYSTEM

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Resolution Authorizing City to pursue CPUC Approval to Purchase Streetlight System from SCE February 21, 2017 Page 2 Ownership of the 7,817 SCE streetlights by the City will result in many benefits: • Convert to energy efficient Light -Emitting Diode (LED) fixtures • Improve the environment • Provide faster street lighting service calls • Improve lighting levels and safety • Reduce energy cost to the City • Provide higher street lighting system reliability • Reduce maintenance costs from significantly improved LED performance • Leverage the energy savings to purchase the street lights On August 4, 2015, the City Council awarded an agreement with Tanko Lighting to conduct a feasibility study and provide acquisition support should the city decide to purchase the Citywide streetlight system from SCE. A new LED street light with pole would cost nearly $5,000 each to install. In contrast, the Tanko report, following CPUC guidelines, established the purchase price of each street light to be just under $500 each. The Tanko study concluded that the purchase price to acquire all 7,817 streetlights is $3.7 million. However, upgrading the streetlight system will be necessary so that the City achieves the previously mentioned benefits. The system will need to be outfitted with LED lamps, new controllers, repair/replace deficient streetlight poles, and design over/under lit areas at a cost of $8.6 million. Therefore, the total one- time cost to purchase and upgrade the streetlight system is approximately $12.3 million (Exhibit 2) and will be financed with the use of maintenance / energy cost savings. Established CPUC procedures must be followed in order to present the option to acquire the SCE -owned streetlights. Pursuant to those requirements, a detailed appraisal of the existing SCE -owned streetlight system was conducted (Exhibit 3). The value of the street lighting system was set by using the Replacement -Cost -New -Less -Depreciation method acceptable by the CPUC. The City and SCE have drafted a Purchase and Sale Agreement (Exhibit 4) which will be sent to the CPUC for review and approval. A separate License Agreement (Exhibit 5) has also been drafted that addresses existing and future wireless communications devices attached to streetlight poles. These devices are used by SCE to collect and relay data, and to communicate with SCE electrical power distribution systems. The License Agreement identifies the terms and conditions for the maintenance, removal, repair, or replacement of the attached devices. STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's efforts to meet Goal #6 Community Facilities & Infrastructure, Objective #1 (establish and maintain a Community Investment Plan for all City assets), Strategy C (invest resources and technology to extend the service life of existing infrastructure to protect the City's investment and support a high quality of life standard). ENVIRONMENTAL IMPACT There is no environmental impact associated with this action. 55A-2