Letter of Intent
Whereas, the City of Rialto, a California municipal corporation, ("City"), is contemplating a streetlight conversion program to decrease the total energy expenditure and maintenance costs of City's current streetlight infrastructure (the "Streetlight Project"); and
Whereas, the Streetlight Project will be comprised of the transfer of streetlight assets from Southern California Edison ("SCE") to City, and the procurement and installation of LED streetlight fixtures that will result in a minimum of $73,000' of first-year, "initial" annual cost savings (the "Project Goal")?; and
Whereas, Siemens Industry, Inc., through its Road and City Mobility Unit and Logistics Division, ("Consultant"), has proposed to assist City in developing the Streetlight Project with the option of implementing the Streetlight Project; and Whereas, Consultant is well qualified, experienced and suited to develop and implement the Streetlight Project for City; and
Whereas, City intends to enter into an Energy Savings Performance Contract to implement the Streetlight Project, (the "ESPC"), subject to Consultant developing the Streetlight Project, pursuant to the following terms and conditions:
The Streetlight Project development will be divided into two phases for which Consultant will be compensated on a time and materials basis (in accordance with hourly rates identified on Table 1, and actual material costs incurred), not to exceed the Guaranteed Maximum Price.
1 The initial annual savings will be calculated as the total annual reduction in the billed cost of street light service from SCE less any debt service associated with the acquisition of the municipal street lights from SCE (reduced tariff costs), and the HPSV- to-LED retrofit (reduced energy costs). Savings shall exclude any street light maintenance costs, changes in the cost of capital and any SCE rebates. 2 To the extent that all 4,738 of the SCE-owned municipal street lights in the City of Rialto are not eligible for the Streetlight Project, the Project Goal shall be equitably reduced by the proportion of the number street lights excluded from the Streetlight Project. In the event any grants, rebates or incentives are obtained, the initial annual savings to the City shall increase commensurate with the avoided debt service costs in using the grants, rebates, or incentives obtained. The Project Goal is contingent upon the City maintaining its current credit rating, and SCE tariffs and electric rates not changing by more than 5% from the July 1, 2013 rates.
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Phase One Guaranteed Maximum Price: ($15,000)
Consultant shall perform the following:
• Develop a representative sample of 100 street lights to be used by SCE for the initial Replacement Costs New Less Depreciation (RCNLD") study. The representative sample shall fairly and accurately capture the age and condition of the City's street light system.
• Accompany SCE during their survey and study of the street light system to ensure that the agreed upon representative sample is used and that all parties agree on the facts associated with the initial SCE valuation.
• Develop and document an independent initial assessment of RCNLD valuation based on the City's audit data, information provided by SCE, PUC and public records.
• Validate and optimize cut-over costs from the SCE system. • Identify over-lit areas of the City and recommend street light removals meeting minimum safe night-time lighting standards.
• Coordinate as necessary to ensure a successful acquisition of the street lighting system.
If Consultant, solely through its own fault, is unable to develop the Streetlight Project meeting the Project Goal, then it shall receive no payment for its efforts to develop the Streetlight Project and waives any exclusive right to the Streetlight Project. However, if Consultant is able to develop the Streetlight Project meeting the Project Goal, and City and SCE agree to proceed with Phase Two, then the costs associated with Phase One shall be incorporated into the price of the ESPC. If Consultant is able to develop the Streetlight Project meeting the Project Goal, and develops an ESPC that is acceptable to the City, and City elects not to proceed with the Streetlight Project, then City shall pay Consultant up to $15,000 (Fifteen Thousand Dollars) within thirty (30) days of invoice for the Phase One services described above. City agrees that if the Streetlight Project does not proceed on the basis of a third party failure to perform, that Consultant shall have an exclusive right to develop and implement any future Streetlight Project for a period of three (3) years following the execution of this Letter of Intent.
Phase Two Guaranteed Maximum Price: ($69,800)
Consultant shall perform the following:
• Perform an independent in-depth audit of the entire street light system used by SCE in its final valuation.
• Confirm the age, pole type and technology, fixture type and wattage, technology and condition of each street light.
• Develop a Geographic Information System (GIS) database of the entire street light system.
• Audit SCE street light billings for the prior three (3) years, identify inaccuracies and associated billing credits otherwise due to the City.
• Prepare an audit report, inventory and demand for credit for submittal to SCE for reimbursement of SCE street light charges, in accordance with SCE and PUC regulations.
• Validate and optimize cut-over costs from the SCE system.
Develop a representative sample of types of poles with SCE to form the basis of the final RCNLD study that minimizes redundant effort.
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• Accompany SCE during their final survey and study of the street light system to ensure that the agreed upon representative sample is used and that all parties agree on the facts associated with the final SCE valuation.
• Define service levels and type of service contract for a long-term street light maintenance agreement.
• Develop an initial financing overview.
• Identify alternative sources of funding, grants and rebates available to the City. • Develop a draft ESPC establishing the terms and conditions of the turn-key capital improvement project to retrofit existing HPSV light fixtures to LED light fixtures.
If Consultant, solely through its own fault, is unable to develop the Streetlight Project meeting the Project Goal, then it shall receive no payment for its efforts to develop the Streetlight Project and waives any and all exclusive rights to the Streetlight Project.
However, if Consultant is able to develop the Streetlight Project meeting the Project Goal, and the City and SCE agree to proceed with the Streetlight Project, then the costs associated with Phase Two will be incorporated into the price of the ESPC. If Consultant is able to develop the Streetlight Project meeting the Project Goal, and develops an ESPC that is acceptable to the City, and City elects not to proceed with the Streetlight Project, then City shall pay Consultant up to $69,800 (Sixty Nine Thousand Eight Hundred Dollars) within thirty (30) days of invoice for the Phase Two Services described above. City agrees that if the Streetlight Project does not proceed on the basis of a third party failure to perform, that Consultant shall have an exclusive right to develop and implement any future Streetlight Project for a period of three (3) years following the execution of this Letter of Intent.
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IN WITNESS WHEREOF, the City and Consultant have caused this Letter of Intent to be executed this 28th day of January, 2014.
CITY OF RIALTO, CALIFORNIA Siemens Industry, Inc., through its Road and City Mobility Unit and
Logistics Division
Hebret Stehn
Deborah Robertson
Mayor By .
Signature
ATTEST:
Chris Reyes /Area Manner
Printed Name/Title
Barbara A. McGee
City Clerk
APPROVED AS TO FORM:
Fred Galante Signature
City Attorney
STENEN TRAL/ OPERATIONS MANAGER
RECOMMENDED: Printed Name/Title
By mum. Euen
Marcus L. Fuller
Public Works Director/City Engineer
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Table 1 - Hourly Rates by Job Category
Job Category Hourly Rate
Energy Engineer $180.00
roject Manager $130.00
ield Superviso $110.00
General Foreman $98.00
Service Vehicle $20.00
Bucket Truck $30.00
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