This week, the City Council moved forward with a project to replace nearly 9,500 of its high-pressure sodium streetlights with light-emitting diodes, which use less energy, last longer and will save Modesto several hundred thousand dollars annually on its electric bill.
Modesto estimates the project will cost $3.8 million. To foot the bill, it will take money from its surface transportation fund, which pays for streets and sidewalks, streetlights and traffic signals, and similar infrastructure. Work could start this year and take less than a year.
Replacing the streetlights seems like a smart decision, but the city reached it after some less-than-illuminating moments.
In June, the council was poised to approve spending $8.4 million to have global giant Siemens Industry replace the streetlights and perform other energy upgrades. The streetlights made up the bulk of the project and energy savings, and the city estimated Siemens was charging $5.4 million to replace them. But the project would have cost Modesto nearly $10.8 million because Siemens was lending Modesto the money for the work at 2.75 percent interest over 15 years. Modesto would have paid Siemens back with savings on its utility bills.
Council members gave their initial approval for the project at their June 10 meeting, but rejected it at their June 24 meeting after city officials raised concerns about the project’s cost and financing and said they could not recommend it.
Here is what’s interesting:
A Siemens competitor told council members June 10 that what Siemens was charging the city to replace the streetlights was about $2 million too high and urged them to put that part of the project out to bid. This came after the city and Siemens had been working on the project for about 17 months.
Jason Tanko with San Francisco-based Tanko Lighting did not get a warm response for his warning. Some council members and Mayor Garrad Marsh told him they did not appreciate that he came before them at the last minute, though Tanko said the pricing information had just recently become available. Some council members also said they trusted Siemens and city officials.
Councilman Bill Zoslocki cast the only vote against moving the project forward because he had concerns about the cost of replacing the streetlights.
Marsh also said Modesto did not have the money to pay for the project and needed Siemens to lend it the money. But this week, the council approved spending as much as $4 million in city money to replace the streetlights.
Marsh said he meant that the city did not have the $8.2 million for the entire Siemens project, but it can afford to take as much as $4 million from its surface transportation fund for the streetlights.
He added that the city relied upon Siemens to develop the project, and no one raised concerns about the cost until Tanko did, though Marsh acknowledged a city staffer was questioning what Siemens was charging the city.
“We are not energy experts,” he said. “That’s why we hired Siemens (to determine) what was feasible and not feasible.”
Still, the outcome of the Siemens proposal was odd. Typically when city officials bring major proposals to the City Council, the proposals have been vetted and the expectation is that council members will approve them. It’s rare for major proposals to unravel in public.
As part of replacing the streetlights, Modesto is testing different types of lights with light-emitting diodes on Snyder Avenue near Dieterich Elementary School and near J and I streets, between 11th and 12th streets, downtown. City officials are seeking feedback on the lights being tested. To learn more and fill out a survey on the lights, go to www.modestogov.com.