City Says Sustainable Lighting Initiative Not Financially Sustainable; Going Forward Only Failed Lights To Be Replaced

Monday, May 12, 2014

After months of analysis, recommendations regarding the city of Chattanooga’s Sustainable Lighting Initiative were provided to Mayor Berke on Saturday by the city’s COO Jeff Cannon and CFO Daisy Madison.  Mayor Berke said he is accepting the proposed recommendations, which advise against proceeding with the lighting program except in replacement of failed lights on an ongoing basis.  

In their recommendations, Mr. Cannon and Ms. Madison state that “we (the city) discovered a multitude of issues that should have been examined prior to the deployment of the lights, including a 10-percent installation cost not accounted for in the initial budgeting for this initiative and an unsustainable deployment process. We believe that because these issues were not thoughtfully planned for prior to the deployment, they substantially increase the cost to taxpayers and negate the environmental benefits the community expected to achieve.”

The contract is with the Chattanooga-based Global Green Lighting firm headed by Don Lepard. In March 2013, Governor Bill Haslam, Economic and Community Development Commissioner Bill Hagerty and Mr. Lepard held a press conference  to announce that the company planned to hire as many as 250 people at a newly established lighting assembly facility in Chattanooga. The move is creating jobs for Tennesseans by bringing subcontracted production back from China, officials said.

GGL had recently acquired a 180,000-square-foot manufacturing facility in Chattanooga and had set up production lines to assemble its flagship product, a light emitting diode (LED) street lamp combined with the latest AMI (automated metering infrastructure) smart grid metering technology, it was stated.

Then-Mayor Ron Littlefield said at the time, "We're on the way to making all of our streets brighter, safer and more energy efficient thanks to Global Green Lighting’s unique wireless radio controlled street lamps,”

A recent report from City Internal Auditor Stan Sewell said the Littlefield administration approved the purchase of up to 27,000 lights from Global Green Lighting. However, the initial purchase was limited to $6 million, and $136,165 of that amount remains unspent.

Mr. Cannon and Ms. Madison said the deployment strategy defined by the previous administration and council is costly and unsustainable, resulting in the large scale replacement of functioning lights. “The take-down and replacement of over 4,000 existing lights has greatly increased the cost to the taxpayer over what it should have been and increased the city’s carbon footprint. When a light that still has years of life left is taken down and warehoused to put up an LED light, the taxpayer is still charged for the light that was taken down because it was amortized over the predicted life of the light,” the memo stated.

It states, “This has been described as the ‘stranded investment charge.’ In addition, this method of deployment greatly hurts the city’s environmental return on investment because of the energy costs and resources associated with the old lights. This large-scale replacement strategy is unsustainable and has a negative impact on the environmental aspect of this initiative not previously considered.”

The memo goes on to provide capital investment recommendations for the outdoor lighting replacement initiative, most notably a one-to-one replacement strategy moving forward.

“With our responsibility to taxpayers in mind, we respectfully recommend a restructure of the current deployment process of Chattanooga’s Sustainable Lighting Initiative to a one-for-one replacement. Upon the failure of an existing conventional street light fixture, that light should be replaced with an LED light fixture,” the memo stated.

In FY2014/2015, the city of Chattanooga will likely require approximately 700 light replacement fixtures, at a cost of approximately $600 to $800 per replacement.

Click here to read the entire memo.

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