Agenda #: 5.3
Meeting Date: April 18, 2023
TO: Honorable Mayor and Members of the City Council
FROM: Daniel Fox, City Manager
TITLE: TRANSFER OF 37 STREETLIGHTS FROM A COUNTY OF LOS
ANGELES PUBLIC WORKS SERVICE ACCOUNT TO A CITY
SERVICE ACCOUNT WITH SOUTHERN CALIFORNIA EDISON AND
RECOMMENDING LOS ANGELES COUNTY TO EXECUTE AN
OPTION E AGREEMENT FOR THE CITYWIDE CONVERSION TO LED
STREET LIGHTS.
STRATEGIC
GOAL: Responsible Stewardship of Public Resources
RECOMMENDATION:
A. Adopt Resolution No. 2023-10 authorizing the City Manager to accept the transfer of 37 streetlights from a County of Los Angeles Public Works Department service account to a city service account and facilitate annexation of 26 streetlights into the County Lighting Maintenance District; and
B. Appropriate $82,500 from the General Fund (Fund 100) Fund Balance to the Electric Utility Expenditure Account of Road Maintenance (Fund 655) in Fiscal Year 2022/23 Operating Budget.
FINANCIAL IMPACT:
The estimated financial impact includes an $80,000 one-time cost, $15,000 over the next 18 months, and $3,000 per fiscal year after the first 18 months. An appropriation of $82,500 is required for the one-time cost ($80,000) and the ongoing utility cost for the remaining 3 months in the current fiscal year ($2,500). Sufficient funds will be requested in the Operating Budget of future fiscal years.
The following are the costs estimated for the transfer process:
a. A one-time three-year back billing by SCE for the 37 streetlights for the period of August 2015 to August 2018 (day of discovery) estimated at $30,000.
b. A one-time reimbursement to the County of Los Angeles for 37 streetlights from August 2018 (day of discovery) to the final City’s acceptance (April 2023) estimated at $50,000.
c. An ongoing estimated utility cost for 37 streetlights from the date of City acceptance (April 2023) to the annexation completion date (estimated 12 to 18 months) at $10,000 per year. The total estimated cost is $15,000. d. An ongoing estimated utility cost for 11 streetlights from the annexation completion date at $3,000 per fiscal year.
The citywide conversion of the streetlights to LED will be done by SCE at no upfront cost to the City.
BACKGROUND:
Prior to the City’s incorporation, Los Angeles County Public Works Department (County) created Lighting Maintenance and Assessment Districts to collect funds through property tax to offset the energy and maintenance costs of the streetlights. The County Lighting Maintenance District (CLMD) 10006 is specific to Diamond Bar. County Lighting District (CLD) Landscaping and Lighting Act-1 (LLA-1) was formed to provide supplemental funding for the CLMDs and includes a Diamond Bar Zone. Both CLMD 1006 (Diamond Bar) and LLA-1 are still in place and are collectively called the District in this report.
To conserve energy, City has been in discussions with SCE to pursue the conversion of the existing SCE-owned streetlights to LED. The Option E Program provides for LED lamp replacement for the streetlights City-wide with no upfront costs, as the replacement costs are incorporated in a special twenty-year LED streetlight tariff.
According to SCE, the energy cost savings from LED conversion are greater than the recovery mechanism built into the special tariff.
To initiate the conversion process of these streetlights, several steps were taken:
a. Inventory of existing streetlights in Diamond Bar.
An audit was conducted to ascertain the ownership and annexation status of all of the approximately 5,000 streetlights on public streets within the City. As a result of that effort, a number of lights were identified that had not formally been annexed by County into the District.
b. Identification of streetlights outside the District.
Over the course of the audit process, 88 streetlights were identified that were managed and paid for by the District but were not annexed to the District by the County. A map of the locations of the 88 streetlights is provided in Attachment 2. Fifty (50) of the 88 streetlights were found to be annexable without circulation of a petition since the annexation is for roadways only, and the streetlights benefit all property owners within the District. Twenty-six (26) of the 88 streetlights were found to be annexable and will require the circulation of a petition. These lights are on roadways adjacent to properties benefiting from the lights (Special Benefit) and can be annexed by the District. Eleven (11) of the 88 streetlights are not annexable. These 11 lights are on streets without an identifiable Special Benefit, meaning those streetlights are providing only General Benefits. Examples of those streetlights include the ones that are on freeway overpasses/bridges or adjacent to open spaces. Therefore these 11 streetlights will need to be serviced by the City, with costs to be borne by the City as well.
ANALYSIS:
In order for the County to formally annex the 26 annexable streetlights into the District, three years of back electric charges on the 37 streetlights before the day of discovery, and the electric charges from the day of discovery to the day of transfer (City’s acceptance of the streetlights) are requested to be addressed.
The County is requesting the City to:
a. Accept the transfer of billing for 37 streetlights located within the City’s jurisdictional boundaries from a County service account to a City service account with Southern California Edison (SCE). Of these 37 streetlights, 26 (in multiple subsets) will go through the annexation process and, if the process succeeds, will then be taken off the City account. The annexation process could take 12 to 18 months to complete. The 11 remaining streetlights that cannot be annexed to the Districts will be in the City’s account.
b. Accept and pay for a 3-year back billing from SCE on 37 streetlights for the period from August 2015 to August 2018, the date of discovery, estimated at $30,000. Since the streetlights were not in the District, Rule 17 of the streetlighting tariff for SCE limits the back pay period to three-year. c. Reimburse the County for the electricity cost of the streetlights for the period between the day of discovery and the day of transfer (August 2018 to April 2023), estimated at $50,000.
At the conclusion of the above-proposed transactions, including the transfer of the accounts and the one-time payments, the City and County will begin the process of formally annexing the 26 streetlights into the District. Additionally, the LED conversion will begin at the same time, which will start with the execution of an Option E Agreement between the County and SCE. The current estimated time for the commencement of the LED light replacement process is six (6) months from the conclusion of the above transaction (tentatively October 2023).
LEGAL REVIEW:
The City Attorney has reviewed and approved the Resolution as to form.
PREPARED BY:
REVIEWED BY:
Attachments:
1. 5.3.a Resolution No. 2023-10
2. 5.3.b Map - 88 Streetlights Locations