Official Information Request - Street lights

Sent: Tuesday, 6 July 2021 3:39 pm
Subject: Official Information request - street lighting contract

I refer to your information request of 30 June 2021 regarding the street lighting contract, and provide the following responses:

As a ratepayer I recall RLC 2020 renewed the street lighting contract with their preferred contractor at an EXTRA annual cost of $24,000 over and above a local contractor tender price meaning a further cost to ratepayers of $240,000 over 10 years term .
Now the Infrastructure & Environment Deputy Chief Executive states this LED roll out will save ratepayers $360,000 pa with RLC having a $2.6 million plan to convert the City lights from sodium to LED s that have an expected life of 20 yrs.
The current Street Lighting contract has 9yrs to run with obviously less maintenance required on an annual basis & over the remaining period of the contracted period [9yrs to run]

Firstly I can clarify that the street lighting maintenance/management contract was not simply renewed in 2020. A tender was called for the installation of new LED lights (to replace some 4500 old type luminaires) ie: a capital part and the 10 year maintenance of the new lights. This was a new contract openly tendered in accordance with NZTA rules. NZTA provides ongoing funding assistance for the operations and maintenance of the lights in the order of 56% of costs and in this case they have also provided 85% of the capital installation costs. Tenders had to be conducted and evaluated according to NZTA procurement policies or else the funding assistance subsidies would not be available.

The difference between the successful tender (McKay) and the unsuccessful tender (Sefton) was:

• Maintenance (10 years) - $5,534.17 higher for McKay, which equates to $553.42 per year
• Capital upgrade to LED - $239,224.74 higher for McKay, which equated to a $36,000 one-off cost to Council (85% NZTA $203,000; 15% RLC $36,000)

It is important to note that when assessing tenders a range of price and non-price attributes must be scored including risk of parts proposed, skills, experience, track record and timeliness. So while there might be some small price variance in the submitted tenders the evaluation panel weighs up other types of risks. Especially in this LED upgrade contract where NZTA’s 85% capital funding contribution was conditional on strict completion dates by June 2021. The risk was that failure to deliver the full programme by that date would place Council at risk of losing $2.2million of NZTA subsidies

1. Please advise me what if any terms and conditions of the street lighting existing contract have changed, when and to what extent in terms.

The awarding of the operations and maintenance contract requires the monitoring, maintenance and replacement of faulty lights and in broad terms there are no significant variations to traditional operations and maintenance contracts. The service provider is required to provide the resources and systems to monitor the operations of the lights and intervene to affect repairs as required within the tendered price of the Maintenance contract.

2. What financial savings are there to the ratepayer over the remaining period of the existing contract as significantly less maintenance and replacement will be required thereby significantly reducing the contractual service requirements involving the current contractor. Obviously a saving in related expenditure can be expected over and above the $360,000 per year in energy etc.

The operational benefits (to the ratepayer) from the installation of the LED lights compared to the old halogen type of lights and as result of the new maintenance contract are:

Estimated annual cost savings from the conversion

These savings will apply from 2021/22 when the LED conversion is in place. Please note:

• Actual savings to ratepayers will be less than the 56% NZTA subsidy ie: net ratepayer savings $161,000.
• Power costs fluctuate depending on energy supply agreements and the national grid system.
• The Council’s street lights budget includes amenity lights in parks and reserves that were not covered by the NZTA subsidy.

20 year life – energy consumption and energy cost – based on current energy rates for next 20 years

3.Can you please provide itemised evidence of how the $360,000 saving was calculated

See Question 2 above.

You have the right to seek an investigation and review by the Ombudsman of this decision. Information about how to make a complaint is available at www.ombudsman.parliament.nz or freephone 0800 802 602.

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Regards