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Contract Award to Install LED Lights and Light Controls Agreement for On -Bill Financing Loan April 4, 2017 Page 2 At this juncture, staff requests the City Council to approve the implementation of the McFadden Learning Center /PAAL Center project as the third of three library retrofit projects. The first retrofit project was for the Main Library as approved by the City Council on October 4, 2016. The second retrofit project was for Newhope Library as approved by the City Council on December 6, 2016. The McFadden Learning Center /PAAL Center project consists of light fixtures (replace fluorescent lights with energy- efficient light- emitting diode [LED] lights) and light controls (install occupancy sensors and connect to lighting system and Building Management System). Project benefits include an annual reduction of 41,682 kWh in electric usage, annual electric bill savings of $10,379 and annual greenhouse gas reduction equivalent to taking 73 cars off the road as shown below. Total project cost is $49,068.36 including a $10,000 contingency. As tabulated above, project cost will be fully funded by SCE using cash incentives of $7,246.66 and a zero interest On -Bill Financing (OBF) loan of $41,821.70 for a total of $49,068.36. An innovative feature of the recommended actions is the City will have no upfront costs as the awarded contractor will finance the cost of the project. SCE will then pay contractor directly with the cash incentives and OBF loan proceeds that SCE has approved for the project. As a result of the OBF loan, McFadden Learning Center's /PAAL Center 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. This will result in smaller electricity bills at this location. (Cash incentives are grants and not repaid.) Staff requests the City Council to approve 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 December 27, 2016 on the City's online bid management and publication system. A summary of the bids received is as follows: 45 Vendors were notified 1 Santa Ana vendor notified 23 Vendors downloaded the solicitation 10 Bids received 251 -2 Estimated Estimated Estimated Estimated PROJECT Estimated Annual kWh Annual Electric Annual CARS SCE Cash COMPONENTS OBF SAVINGS Bill SAVINGS off the Road ' :incentives Light Fixtures 41,656 $10,372 73 $7,246.66 $40,760.70 Light Controls 26 $7 0 $0 $ 1,061.00 Total project cost is $49,068.36 including a $10,000 contingency. As tabulated above, project cost will be fully funded by SCE using cash incentives of $7,246.66 and a zero interest On -Bill Financing (OBF) loan of $41,821.70 for a total of $49,068.36. An innovative feature of the recommended actions is the City will have no upfront costs as the awarded contractor will finance the cost of the project. SCE will then pay contractor directly with the cash incentives and OBF loan proceeds that SCE has approved for the project. As a result of the OBF loan, McFadden Learning Center's /PAAL Center 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. This will result in smaller electricity bills at this location. (Cash incentives are grants and not repaid.) Staff requests the City Council to approve 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 December 27, 2016 on the City's online bid management and publication system. A summary of the bids received is as follows: 45 Vendors were notified 1 Santa Ana vendor notified 23 Vendors downloaded the solicitation 10 Bids received 251 -2