REPORT TO COUNCIL
SUBJECT
Title
Action on Amendment No. 2 to the Agreement with American Power Solutions, Inc. for Citywide LED Lighting Retrofit, Replacement, and As-Needed Services and to Approve the Related Budget Amendment
Report
BACKGROUND
On July 16, 2024, following a Request for Proposals (RFP) process, the City Council authorized the City Manager to execute agreements with Advanced Lighting Services, Inc. (ALS) and American Power Solutions, Inc. (APS) to retrofit or replace fluorescent lighting fixtures with light-emitting diode (LED) fixtures. The project supports compliance with California Assembly Bill 2208 (AB 2208), signed into law in September 2022, which phases out the sale of fluorescent bulbs in California.
As noted in the July 2024 staff report, the project has been implemented based on available budget funding, with initial work prioritized at the City’s largest facilities, including City Hall, the Police Department, libraries, the Senior Center, and the Community Recreation Center. To date, lighting upgrades have been completed in approximately 40 buildings.
Many of these buildings were approved for financing through the Silicon Valley Power (SVP) loan program, which ended on December 31, 2024, as well as rebates from SVP. SVP issues loans for the lighting upgrades and anticipates payback through energy savings generated by the new LED lighting. Leveraging the SVP loan program allowed the City to complete more facilities than originally planned.
On April 29, 2025, the City approved Amendment No. 1 to the agreements with ALS and APS to increase the maximum compensation amount by $441,046, from $500,000 to a revised not-to-exceed aggregate compensation amount of $941,046. Of the total aggregate amount, $537,984 was funded from the General Fund Capital Projects Reserve, with the remaining $403,062 funded in the Electric Operating Grant Trust Fund.
DISCUSSION
The City has made substantial progress in converting its facilities from fluorescent to LED lighting. The remaining work includes lighting retrofits and replacements at the Franklin Square Parking Maintenance District facilities and various City pump stations. Completing these locations will further the City’s efforts to replace fluorescent lighting with more energy-efficient LED technology and address the phaseout of fluorescent lamps under State law.
As described above, the City previously awarded agreements to APS and ALS to provide citywide LED retrofit and replacement services. As part of the amendment process, APS agreed to maintain pricing established under the agreement. ALS proposed rate increases that the City determined were not economically advantageous. Accordingly, the City elected not to exercise the option to extend the term of the agreement with ALS and recommends extending the agreement with APS.
To complete this remaining work, additional contract capacity is required. Staff recommends approval of Amendment No. 2 to the agreement with APS to increase the aggregate maximum compensation by $200,000, from $941,046 to a revised aggregate not-to-exceed compensation amount of $1,141,046, and to exercise the option to extend the agreement through July 31, 2027.
Under the amended agreement, APS will continue to provide citywide LED retrofit and replacement services on a per-building request basis. For each building, APS will conduct an assessment that includes an inventory of the fixtures to be retrofitted or replaced and will submit a proposal for the required work. Proposals will be based on the hourly rates and unit pricing established in the agreements.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(a) as it has no potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment.
FISCAL IMPACT
Amendment No. 2 increases the aggregate maximum compensation not-to-exceed amount by $200,000 for a revised aggregate maximum compensation not-to-exceed amount of $1,141,046. As part of the FY 2024/25 and FY 2025/26 Adopted Capital Improvement Program (CIP) Budget, $500,000 was budgeted in the City Buildings - Upgrade Lighting to LED Project in FY 2024/25. In April 2025, as part of the Council approval of Amendment No. 1 increasing the not-to-exceed amount by $441,046, an additional $37,984 was appropriated to this project from the General Fund CPR. The remaining $403,062 was funded through SVP loans and rebates. The loans and rebates portions were funded directly from the Electric Operating Grant Trust Fund - Public Benefits Program. The energy savings earned in future years will pay back the SVP loans.
In order to complete the lighting retrofits and replacements discussed in this memorandum, additional funding of $113,000 from the Capital Projects Reserve is requested in FY 2026/27. The remaining $87,000 was appropriated in the Downtown Parking Maintenance District Fund for the work at Franklin Mall, as approved as part of the FY 2026/27 and FY 2027/28 Adopted CIP Budget. Costs beyond FY 2026/27 will be requested through the annual budget process and are subject to appropriation of funds by the City Council.
The budget amendment below allocates funding from the General Fund Capital Projects Reserve to the Public Buildings Capital Fund for the Upgrade Lighting to LED Project as recommended in this memorandum. The amendment below allocates the additional $113,000 needed for the increase as well as the $37,984 from the April 2025 action that had not been carried over.
Budget Amendment
FY 2026/27
|
|
Current |
Increase/ (Decrease) |
Revised |
|
General Fund |
|
|
|
|
Transfer To |
|
|
|
|
Public Buildings Capital Fund |
$1,203,200 |
$150,984 |
$1,354,184 |
|
|
|
|
|
|
Fund Balance |
|
|
|
|
Capital Projects Reserve |
$12,031,732 |
($150,984) |
$11,880,748 |
|
|
|
|
|
|
Public Buildings Capital Fund |
|
|
|
Transfer From |
|
|
|
|
General Fund |
$1,203,200 |
$150,984 |
$1,354,184 |
|
|
|
|
|
|
Expenditures |
|
|
|
|
Upgrade Lighting to LED Project |
$28,517 |
$150,984 |
$179,501 |
COORDINATION
This report has been coordinated with the Finance Department, Silicon Valley Power, and the City Attorney’s Office.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
1. Authorize the City Manager or designee to negotiate and execute Amendment No. 2 to the agreement with American Power Solutions, Inc. for citywide LED lighting retrofit and replacement services to increase the aggregate maximum compensation by $200,000, from $941,046 to a revised not-to-exceed amount of $1,141,046, and to extend the term of the agreement through July 31, 2027, subject to the appropriation of funds and review and approval by the City Attorney; and
2. Approve the following Fiscal Year 2026/27 budget amendments:
a. In the General Fund, increase the transfer to the Public Buildings Capital Fund in the amount of $150,984 and decrease the Capital Projects Reserve in the amount of $150,984 (five affirmative Council votes required for the use of unused balances); and
b. In the Public Buildings Capital Fund, increase the transfer from the General Fund Capital Projects Reserve in the amount of $150,984 and increase the Upgrade Lighting to LED Project in the amount of $150,984 (five affirmative Council votes required to appropriate additional revenue).
Staff
Reviewed by: Craig Mobeck, Director of Public Works
Approved by: Jovan Grogan, City Manager
ATTACHMENTS
1. Agreement with Advanced Lighting Services, Inc.
2. Amendment No. 1 to the Agreement with Advanced Lighting Services, Inc.
3. Agreement with American Power Solutions, Inc.
4. Amendment No. 1 to the Agreement with American Power Solutions, Inc.
5. Proposed Amendment No. 2 to the Agreement with American Power Solutions, Inc.