HomeMy WebLinkAboutDSD-18-075 - LED Streetlight Conversion - Software as a Service AgreementREPORT TO: Community and Infrastructure Services Committee
DATE OF MEETING:August 13, 2018
SUBMITTED BY: Barry Cronkite, Interim Manager, Transportation Planning,519-741-
2200 ext. 7738
PREPARED BY:Aaron McCrimmon-Jones, Transportation Planning Project Manager,
519-741-2200 ext. 7038
WARD (S) INVOLVED:All
DATE OF REPORT:June 29, 2018
REPORT NO.: DSD-18-075
SUBJECT: LED StreetlightConversion - Softwareas a Service Agreement
_______________________________________________________________________
RECOMMENDATION:
That the Mayor and Clerk be authorized to execute a Software as a Service Agreement
with Fairway Electrical Services Incorporated.,for cloud data hosting and Streetlight
Vision Software for an initial ten year term with an option to renew for five years, subject
to the satisfaction of the City Solicitor,
That the 10-year estimated ongoing operating costs of $750,000for LED street lights
(which will be adjusted fromtime to time as street light sensor nodes are added/removed)
related to the data storage, technical support, and Streetlight Vision software accessbe
budgeted in the operating budget and funded by hydro savings related to the LED street
lighting conversion, and further;
That the Mayor and Clerk be authorized to executean agreement with the Regional
Municipality of Waterloo to allow it access to Streetlight Visionthrough the City’s
Software as a Service agreement, subject to the satisfaction of the City Solicitor.
EXECUTIVE SUMMARY:
In 2017 City of Kitchener converted approximately 15,000 streetlights to LED fixtures that
included adaptive controls (smart sensors) that makeup a city wide narrowband network. The
adaptive control system allowsthe City to control and monitor streetlights remotely. This work
was completed under the regional contract Waterloo Region LED Conversion Supply and
Installation of LED Luminaires, Smart City Controls and the Disposal of Existing Cobra Head
HID Luminaires(Regional LED Conversion Contract).In the original contract streetlightdata was
to be hosted on premises at Kitchener City Hall innew data servers, and the City would purchase
asoftware license for the Streetlight Visionsoftware. Due to changing market conditions and
cost efficiencies, staff are seeking approval to enter into an agreement to host streetlight data
on a cloud network and subscribe to Streetlight Vision softwarethrough a Software as a Service
(SaaS) agreement.
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Based on updated projections the pay back periodfor the LED Streetlight Conversion has been
reduced from approximately eight (8) years to five and a half (5.5) years. This reduction is due
to savings in the overall project cost as well an unbudgeted hydro rebate related to the street
light conversion.
BACKGROUND:
TheRegionalLED Conversion Contract is a joint initiativebetween theRegion of Waterloo, City
of Kitchener, City of Waterloo, City of Cambridge, Township ofWoolwich, Township of Wilmot,
Township of Wellesley, and Township of NorthDumfries. The work under this contract includes
the supply, delivery, and installation of approximately 42,030 LED streetlights and the disposal
of existing HID Cobra Head luminaires within the Region of Waterloo.This contract was awarded
to Fairway Electrical Services Inc.in 2016.
Adaptive/Smart City Controls are a mechanism to remotelyturn lights on and off,remotely
monitor and troubleshoot issues, adjust brightness and keep track of power usage. Smart City
controls are infrastructure forfuture capabilities such as water meter reading and traffic volume
counting.
The adaptive controlstreetlight network requires data hosting to retain streetlight data,a
software interface to review and analyze data, and remotely control each of the smart sensors
installed on each streetlight. In the original supply and installation contract this data was to be
stored in data servers located at Kitchener City Hall and the City would be required to purchase
a software license, and ongoing software license maintenance for Streetlight Vision. This model,
included in the original contract,is referred to as an ‘On Premise/Licensed model’.
In the summer of 2017 Silver Spring Networks (now Itron Inc.)and Fairway Electricalproposed
a change to the Regional LED ConversionContract. The change included moving from an on
premisedata hostingmodel to cloud data hosting, and moving from a software licenceto a
software as a service (SaaS) model.Thisproposedmodel is referred to as a ‘Cloud/SaaS model’
REPORT:
Cloud/SaaS Model versusOn Premise/Licensed Model
Through the summer and fall of 2017,and working with Silver SpringNetworks(now ItronInc.)
and Fairway Electrical,staff investigated the option of moving to a cloud data hosting and
software as a service model. In this instance theCloud/SaaSmodel providescritical advantages
versus the On Premises/Licencedmodel. Thenetworkvendor(Itron Inc.)will no longer be
developing and upgradingthe on premise version of the software model. The on premiseversion
of the Streetlight Vision softwareapplication is a single tier (monolithic) application. The cloud
version of Streetlight Visionis a modern three-tier software application where the user interface,
business logic and database layers are separated from each other. This provides the ability to
change one tier without affecting other tiers. It also makes the system more flexible and much
easier to manage when a problem occurs, and overall is more resilient to hardware failures.In
addition, since the database layer is separate from other layers the system is more scalable
allowing the Cityto add more endpoints to the system without the need to upgrade the entire
application.
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Please call 519-741-2345 or TTY 1-866-969-9994 for assistance.
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The cloud version of the software ismore fault tolerant,andis sized based upon engineering
sizing guidelines that are dependent upon the performance required, such as the length of data
retention, the number of applications being run, the number of users, etc.The vendor (Itron Inc.)
will continueto updateand upgradethe cloud version of the software model providing the City
with ongoing access to additional features and future opportunities for Internet of Things
applications. In addition, City staffresourceswill no longerbe requiredto maintain and upgrade
the on premise software and associated hardware as this would bethe responsibility of the
network vendor(Itron Inc.).
Industry wide, the cloud based model has progressed substantially in recent years and will likely
continueto expand and develop. Ultimately the Cloud/SaaS model offers secure data hosting,
ongoing access to updatedand upgradedsoftware, 24/7 monitoring and technical support, and
does not require City owned data hosting servers orCity of Kitchener staff to operate and
managethe storage system. It is worth noting thatstreet lights do not containpersonal
information, and as such personal informationwillnotbe collected or stored on the cloud.
Software as a Service Agreement(SaaS)
Based on the benefits of the Cloud/SaaS model, City of Kitchener requested Fairway Electrical
/Silver Spring (now Itron Inc.)toproposea Software as a Service frameworkand a summary of
the cost impacts of moving from anOn-Premises/Licenced model.In December 2017,Fairway
Electrical provided a draft SaaS agreement for City of Kitchener’s review. Over the course of
winter 2018 City staff including worked to negotiate and rework the proposed SaaS agreement
to ensure this agreementprotected City of Kitchener interests. In May 2018,City of Kitchener
and Fairway Electrical agreedin principle tothe terms of the proposed SaaS agreement, subject
to Council approval.
SaaSAgreement Terms
Staff arenow seekingauthorityto enter into in a Software as a Serviceagreement with Fairway
Electrical Services Inc. During the termof the agreement, Fairway will provide City of Kitchener
with the following services:
Network access for the Streetlight Vision software to communicate withdevices
Access to Streetlight Vision and ensuring functionality ofStreetlight Visionapplication
Ensuringaccess to all streetlight dataand take all necessary steps to prevent data breach
Manage, maintain and assist with troubleshooting of the network equipment for the
duration of theagreement term
Supportoffuture initiatives requiring further network design, installations and expansion
of the network
24x7x365secure access to a web based software and 24x7x365 customer supportand
troubleshooting
The initial term of the servicecontinues for a period of Ten (10) years. The term of the Services
will automatically renew for one additional period of five (5) years unless either party notifies the
other of its intent not to renew.The City of Kitchener retains all rights to the network equipment
and data at the end of the Term.
*** This informationis available in accessible formats upon request. ***
Please call 519-741-2345 or TTY 1-866-969-9994 for assistance.
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Project Change
Moving from anOn-Premises/Licenced model to a Cloud/SaaS modelis a change to the original
Regional LED ConversionContract.It was initially contemplated the proposed SaaSagreement
could be signed by the Region of Waterloo and the change administered under the terms of the
original contract by means of a project change order. However,it was later determined that City
of Kitchenerstaff are better positioned to administer the SaaS agreement, protect the City’s
interests, and ensure the terms of the agreement are being upheld if the City of Kitchener enters
this agreement directly. City of Kitchener ProcurementDivision and Legal Services Division have
been consulted regarding the purchasing bylawandframework for procuring goods and
services.
Agreement with Region of Waterloo
The Region of Waterloo own and operate3,273streetlightswithin the City of Kitchener
boundary. As per the Regional LED ConversionContract,this regionowned lights were
integrated with the City of Kitchener’s adaptive control network.
The proposed SaaS agreementbetween City of Kitchener and Fairway Electricalpermits the
City to provide access to otherparties including the Regional Municipalityof Waterloo, Kitchener-
Wilmot HydroInc., and neighbouring municipalities to use and access Streetlight Vision and/or
to connect their nodes to Streetlight Vision and to the City of Kitchener’s network. The City of
Kitcheneris permitted to charge third party users an access fee andadministrative fee to allow
the third party to use the adaptive network services. The proposed agreement between the
Region of Waterloo and City of Kitchener would stipulate the Region’s access toStreetlight
Visionand require the Region to comply with terms to ensure the Region uses the software in
accordance with the terms imposed on the City. The Agreement would also set out the
associated fee, and reasonable administrative fee,for thestreetlights that the Regionwill monitor
and control through the City’s adaptive network.
ALIGNMENT WITH CITY OF KITCHENER STRATEGIC PLAN:
The recommendation of this report supports the achievement of the city’s strategic vision
through the delivery of core service by:
Strategic Priority #5 - Improving the design and delivery of city services so that they provide
what citizens wantin the most reliable, convenient and cost-efficient way
Business Plan ID#CS63 - Narrowband Smart City/Internet of Things Network Development
FINANCIAL IMPLICATIONS:
One-time capital costs for the installation of hardware, software, and network infrastructure
required to operate the City’s LED light networkwas approved through staff report #INS-16-024
LED Streetlight Replacement Program.The contract amount to complete this work (as outlined
in Table 1.0, below) is$670,450.By moving to the Cloud/SaaS model,the contract amount of
$670,450 for installation of hardware, software, and network infrastructure would bereducedby
$319,591to $350,859through a project change order.
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The ongoing operating costs of the SaaS agreement will be budgeted in the operating budget
and will be funded by hydro savings related to the LED street lighting upgrade.
Table 1.0 summarizes the 10-yearfinancial impact moving from an On-Premises/Licenced
model to a Cloud/SaaS model.
Table 1.0
On-Premise/Licenced ModelCloud/SaaS Model
Budget item
(original model)(proposedmodel)
Install: Network/Hardware/Software
$670,450$350,859
1
(originalcontract)
10 YearSoftware Maintenance
$785,031$0
2
requirement
3
$0$750,230
10 YearSaaS Agreement
TOTAL$1,455,481$1,101,089
1.Moving from the On-Premises/Licenced modelto Cloud/SaaS modelwould result in a credit
to the original contract of $319,591forthesupply of data servers. Because the data servers
are not required under the Cloud/SaaS model, $319,591 will be subtracted from the original
contract.
2.$785,031 is the projected cost to operate and maintain data serversover 10 yearsif owned
by City of Kitchener and the cost to maintain an updated licence for the Streetlight Vision
software.This is acostrequirement under the original On-Premises/Licenced model.
3.$750,230 is based on a per node cost of $0.34 per month for a 10 year period. This equates
to $6,251.92 per month for 18,388 nodes (one node per streetlight). This fee includes all data
storagerequirements, technical support and Streetlight Vision software access. It is
anticipated that additional nodes will be added over the course of the contract and as this
happens, the maintenance fee will be increased at the rate of $0.34/node permonth. This
per node fee will remain in effect for the duration of the 10-yearterm of the SaaS agreement.
As mentioned above, the proposed new agreement between the Region of Waterloo and City of
Kitchener would stipulate the Region’s access to Streetlight Vision,data storageand the
associated fee for the streetlights thatthe Region will monitor and control through the City’s
adaptive network. An administrative fee amount has not yet been establishedand is therefore
not reflected in the table below, but will be included in the agreement.The anticipated cost
recovery from the Region of Waterloo is summarized in Table 2.0.
Table 2.0
Region of Waterloo Cost Recovery
Cost recovered per node per month$0.34 cents
Total nodes as of July 20183,273
Cost recovered per month$1,113
10 Yeartotal cost recovery$133,560
*** This informationis available in accessible formats upon request. ***
Please call 519-741-2345 or TTY 1-866-969-9994 for assistance.
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COMMUNITY ENGAGEMENT:
INFORM – This report has been posted to the City’s website with the agenda in advance of the
council / committee meeting.
PREVIOUS CONSIDERATION OF THIS MATTER:
INS-16-024
LED Streetlight Replacement Program
FCS-16-190
Waterloo Region LED Conversion – Supply and Installation of LED Luminaires, Smart City
Controls and the Disposal of Existing Cobra Head HID Luminaires
ACKNOWLEDGED BY: Justin Readman, General Manager, Development Services
Department
*** This informationis available in accessible formats upon request. ***
Please call 519-741-2345 or TTY 1-866-969-9994 for assistance.
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