Title
Consider and take action on a resolution authorizing an agreement between Texas-New Mexico Power Company (TNMP) and the City of League City for the acquisition of streetlights and related facilities in an amount not to exceed $2,976,821 and related matters (Assistant Director of Public Works-Operations and Executive Director of Development Services)
Background:
Approval of this item will authorize an agreement between Texas-New Mexico Power Company (TNMP) and the City of League City for the acquisition of streetlights and related facilities in an amount not to exceed $2,976,821, and authorizing the City Manager to execute the agreement and related closing documents of the Asset Purchase Agreement (APA).
Under the APA, the City will purchase TNMP-owned streetlights and related facilities within the City and assume responsibility for their operations and maintenance following the agreement’s 21-day transition period. City ownership will allow the City to manage maintenance, repairs, and future lighting improvements directly. This project is included in the FY2026-2030 Reinvestment Capital Improvement Program.
The City’s consultant performed an audit of Streetlight inventory which identified 5,875 fixtures owned and maintained by TNMP, 791 by CenterPoint, and 54 by the City. This acquisition applies to TNMP facilities identified in the final inventory audit, agreed to by both parties. CenterPoint-owned Streetlights are not included in this agreement.
Facilities to be acquired: The APA provides for the transfer of streetlight fixtures mounted on distribution poles, standalone streetlight poles with fixtures, and wiring located on public property or in the public ROW within the City’s municipal boundaries. TNMP will retain the distribution poles and electric distribution system. The City will acquire the lighting equipment that is mounted on TNMP’s distribution poles.
Purchase price and closing: The APA identifies an estimated purchase price of $2,826,821, consisting of the facilities’ estimated Net Book Value (NBV) plus estimated transaction and transition costs. This amount excludes unfinalized negotiations of both Samara and Marina Bay TNMP-owned streetlights, which is estimated at $150,000. The agreed purchase price of $2,826,821 along with this $150,000 is a total not to exceed amount of $2,976,821 allowing for future purchase authority of Samara and Marina Bay’s TNMP owned streetlights once final negotiations are reached. The agreement requires TNMP to provide written notice of the final price at least 30 days before closing, with payment due at closing.
Electric service and ongoing costs: TNMP will continue providing electric service delivery after the transfer. The APA calls for rates applicable to City-owned streetlights that exclude charges attributable to TNMP ownership, investment, depreciation, maintenance, and replacement of the acquired facilities. The City will pay TNMP’s applicable customer-owned streetlight rates and delivery charges and will assume the cost of maintaining and replacing its facilities.
Transition to City maintenance: Ownership will transfer at closing. TNMP will continue ordinary operation, maintenance, outage response, and repairs for 21 days after closing at no additional charge. The City may extend this period once for up to 30 additional days by providing written notice at least 15 days before the initial period expires. The City will use this period to establish maintenance resources, contracts, and procedures before assuming these duties.
Condition and separation work: The City will acquire the streetlight facilities “as is”, the City will be responsible for the required separation work which includes reconfiguration work and LED conversions within 5 years of closing. TNMP will be responsible for required separation work to remove smart meter equipment from the streetlight system, including applicable fuses, disconnect equipment, and ownership identifications within 180 days after closing.
New development: The APA provides for City ownership of new streetlights and standalone poles installed after closing in residential, commercial, and other developments, including developments already approved or under construction, subject to City acceptance. Developers will request electric service through TNMP’s standard service request process, and pull boxes located in City ROW will be the standard point of connection. TNMP and developers will coordinate with the City on installation, connection, ownership, and billing.
Attachments:
1. Proposed Resolution
2. CIP Project Sheet
FUNDING
{X} Funding in the amount of $2,976,821 is available from Reinvestment Cash, fund 5017, with expenses charged to project expense string RE2601-CONSTRUCT - CONSTRUCT - RE CASH.
STRATEGIC PLANNING
{X} Addresses Strategic Planning Critical Success Factor #1 - Develop and Maintain our Infrastructure, #2 - Financially Sustainable, and #8 - Quality Built Environment.