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l. The current Dynegy agreement obligates it or its successar to move or relocate any poles <br /> or other elements of the street lighting system in the event of the construction, repair or <br /> maintenance of a street or a City-owned utility. This would represent a significant <br /> savings to the City if it were reasonably certain any of these situations are going to <br /> happen. If the City takes ownership, such relocation costs would have to be included in , <br /> the project cost or paid by the party wanting a lighting unit to be moved or relocated. �� <br /> 2. Dynegy in the current agreement indemnifies and holds harmless the City from all claims ', <br /> for bodily injury, death or property damage resulting from or arising out of the street �, <br /> lighting system. A value was not included in the City's costs to assume ownership. � <br /> There is a cost, but estimating a cost in relation to the City's overall insurance costs is <br /> difficult. <br /> 3. All costs for the City to assume ownership are based on today's costs and inflation factors <br /> were not incorporated to the various City costs over the remaining life of the agreement. <br /> 4. Energy costs are paid by the City no matter what option may be chosen. An increase or <br />, decrease in energy cost is not a factor. <br /> 5. City annual operations and maintenance costs are estimated on routine and periodic <br /> inspections and general maintenance. General maintenance would include replacing <br /> lamps, globes, cleaning, minor electrical repairs and cleaning. <br /> 6. It is expected that on occasions because of conflicting workloads, staffing levels and/or <br /> special needs that work would have to be contracted out. The frequency and cost of this <br /> work is estimated based on the limited experience, to date, on this system. The estimate <br /> is considered to represent a moderate to high end cost to the City. <br /> 7. The obvious case in which the City encumbers significant loss by assuming ownership is <br /> in the event of a major circumstance (i.e., tornado, severe storm, extensive vandalism, out <br /> of control vehicle, etc.) which causes damage to several or all of the lights or the <br /> accumulated loss of street lights from lesser, but similar events over the life of the <br /> agreement. The City would have to pay for the replacement in this case. If contracted out <br /> under the current agreement, Dynegy or its successors would have to pay for the repairs <br /> and/or replacement of the lights. This becomes a risk that the City undertakes in <br /> assuming ownership. Whether any costs the City might incur are recoverable (i.e., self <br /> insurance, disaster assistance, restitution from the damaging party, etc.) is anyone's best <br /> guess. <br /> The estimated cost savings on an annual basis to the City for assuming ownership is not that <br /> substantial over the 37 year remaining 7ife of the agreement. The savings is $1,200 per year if <br /> Options 1 and 2 are averaged ($533,700) when compared to the cost of contracting the <br /> ownership. This amount may be argued to not be worth the additional "headache" of ownership. <br /> Option 1 which is considered a reasonable estimate by staff results in a savings of$3,600 per <br /> year. This may also represent marginal justification for the City to takeover the Oakwood <br /> Lighting. <br /> The estimated annual savings did give cause for staff to question why the City would want to <br /> take over ownership. In considering this matter, the intangible value of ownership became a <br /> deciding factor. The City's ownership of the Oakwood Lighting provides direct control of how <br /> well the lights are inspected and maintained. It is felt that repairs and maintenance can be <br /> managed in a more dependable, timely and satisfactory manner over the remaining life of the <br /> agreement and beyond. If contracted, the opportunities for disputes, delays or other contractual <br />