ACTION REQUESTED:
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Communication from the City Manager and Chief Innovation Officer with a Request for the Following:
A. APPROVE and AUTHORIZE the City Manager to Enter into an AGREEMENT with THE EFFICIENCY NETWORK (TEN), in the Amount of $2,066,963.00, for a STREETLIGHT UPGRADE PROJECT of the City-Owned Streetlight System to Reduce Annual Energy and Maintenance Costs Related to the System;
B. APPROVE and AUTHORIZE the City Manager to Enter into a FINANCING AGREEMENT with Either INB, N.A. or MUNICIPAL LEASING CONSULTANTS (MLC), in an Amount not to Exceed $2,067,000.00, with a rate not to exceed 4.00% and a term not to exceed Fifteen (15) Years;
C. ADOPT an ORDINANCE Amending the City of Peoria 2020 - 2021 BIENNIAL BUDGET Relating to the Capital Fund to Recognize the Cost to Implement the Streetlight Upgrade Project, in the Amount of $2,067,000.00, and the Corresponding Financing of the Project.
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BACKGROUND: Additional documents to be distributed under separate cover. As outlined in the City’s 2020 budget, a request for proposals (RFP) was issued for a budget-neutral approach to upgrade streetlighting within the City to light emitting diodes (LEDs). Upgrading high pressure sodium (HPS) streetlight lamps with more efficient and longer lasting LED lamps will reduce City maintenance costs and lower energy costs paid to utility companies. A physical inventory and an investment-grade audit (IGA) have now been completed and have provided a detailed analysis of the energy and maintenance costs related to the City-owned streetlight system.
This request is for approval to enter into an Agreement based upon the technical and economic analysis provided by TEN. The Agreement outlines a budget-neutral approach to perform LED upgrades to City-owned streetlights that reduce energy and increase operational efficiency. This approach allows the City to pay for today’s upgrades with tomorrow's energy savings - without tapping into capital budgets.
An outline of the benefits of the proposed Streetlight Upgrade Project include:
- Upgrade of over 6,000 City-owned streetlights to long-lasting and energy-efficient LED technology
- Lower electrical utility costs by $176,000 per year
- Improve light quality and enhance safety for residents and visitors in a budget-neutral manner by leveraging currently wasted energy costs to pay for low-cost debt service
- Optimize significant, available utility rebates (over $430,000) that could increase ROI and shorten the payback period
- Use of local firms and labor resources to maximize local beneficial impact
- Reduction of energy usage by over 3,000,000 kilowatt hours (kWh) annually
- CO2 emission reductions of 2,184 metric tons annually
- Reduce maintenance hard costs by a minimum of $10,000 per year in addition to significant reductions in maintenance soft costs
- Inclusion of 500 streetlight control nodes for a foundational and future-ready control system network (e.g. compatible with smart city technologies)
- Provide up to 100 replacement globes to address deteriorated decorative luminaires
As part of the 2020-2021 budget restructuring the City had identified two (2) electrician positions to be part of the position reductions. In discussions with TEN, the City will be able to retain the electrician positions to be part of the labor force to complete the Streetlight Upgrade Project. The costs of these two employees as well as costs for use of City equipment would be allocated to the project. The remainder of the Streetlight Upgrade Project construction will be performed by minority contractors.
Upon completion of the investment-grade audit (IGA) and determination of the scope for a Streetlight Upgrade Project, TEN issued a request for proposals (RFP) to potential municipal lenders on behalf of the City of Peoria. Eight financial institutions, both local and national, were sent the RFP. Two complete responses were received. Of the remaining six, four of them chose not to respond due to a combination of several factors including the term, size, and long-term credit concerns regarding the State of Illinois. Two respondents did not submit a proposal or respond at all. The two complete responses were received from Illinois National Bank (INB) and Municipal Leasing Corporation (MLC). Upon authorization, the City Manager will negotiate the most beneficial terms based on the parameters outlined above and enter into an Agreement with either Illinois National Bank or Municipal Leasing Corporation.
FINANCIAL IMPACT: Future funding of debt service for this capital project will be obtained through savings provided by reducing the energy usage and cost of the City-owned streetlighting system.
NEIGHBORHOOD CONCERNS: N/A
IMPACT IF APPROVED: The City of Peoria will upgrade the entire City-owned street lighting system to high efficiency LED fixtures.
IMPACT IF DENIED: The City will continue to operate the current streetlighting system and upgrade lights to high efficiency LED fixtures incrementally as budget allows.
ALTERNATIVES: N/A
EEO CERTIFICATION NUMBER: The Efficiency Network 03581-210331
WHICH OF THE GOALS IDENTIFIED IN THE COUNCIL’S 2017 - 2032 STRATEGIC PLAN DOES THIS RECOMMENDATION ADVANCE?
1. Financially Sound City
2. Safe Peoria
WHICH CRITICAL SUCCESS FACTOR(S) FROM THE COMPREHENSIVE PLAN DOES THIS RECOMMENDATION IMPLEMENT?
1. Have an efficient government.
2. Reinvest in neighborhoods.
3. Reduce crime.
4. Support sustainability
DEPARTMENT: City Manager's Office