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HomeMy WebLinkAboutAgenda Report - February 20, 2008 E-13AGENDA ITEM &15 CITY OF LODI COUNCIL COMMUNICATION AGENDA TITLE: Adopt Resolution Authorizing City Manager to Execute Agreement with City cf Elk Grove Regarding Their Purchase of Compressed Natural Gas (CNG) from City of Lodi at Municipal Service Center (MSC) Fueling Station MEETING DATE: February 20,2008 PREPARED BY: Public Works Director RECOMMENDED ACTION: Adopt a resolution authorizing the City Manager to execute a temporary agreementwith the City of Elk Grove regarding their purchase of compressed natural gas (CNG) at the City of Lodi's Municipal Service Center (MSC) fueling station and extend the agreement, if necessary. BACKGROUND INFORMATION: In late 2007, the City of Elk Grove contacted the City of Lodi's Fleet and Facilities Manager to request to fill some of their CNG -powered buses on a short-term basis when one of their regular CNG fueling stations became unavailable. City staff agreed to let them do so, and Elk Grove has been reimbursing the City for the cost of fuel. Staff recognized, however, that Elk Grove's short-term need would continue months longerwhen we were informed that they would be building a new CNG fueling station to offset the existing CNG station loss. Elk Grove is now advertising for bids for construction of their new CNG fueling station, but construction will not be completed until this summer. Should construction take longer than anticipated, an extension may be needed. Staff recommends that the extension not exceed one year. City staff recommends that an agreement to use the City's CNG fueling station at the MSC be formalized and that the City Manager be authorized to execute the attached agreement and an extension. should one become necessary. The City of Lodi will charge the City of Elk Grove the current cost per therm charged by PG&E to Lodi, plus maintenanceand operation costs, administrative fees and taxes, and a CNG Station depreciation/replacement charge. The current charge is $1.85 but fluctuates with the direct charge from PG&E. FISCAL IMPACT: Reimbursementfrom the sale of CNG fuel will be received and credited to the Transit fund. FUNDING AVAILABLE: Not applicable. Richard C. Prima. J . Public Works Directo Prepared by Dennis J. Callahan. Fleet and Facilities Manage! RCPIDJCIpmf Attachment cc: Tiffani Fink, Transportation Manager Randy Laney, Fleet Services Supervisor Janice Magdich, Deputy City Attorney Carlos Tobar, Elk Grove Transit Systems Manager APPROVED: BIa' City Manager K 1WPICOUNCIUMEIkGrave CNG Purchase doc 211 412 00 8 AGREEMENT TO USE CNG FUELING STATION This Agreement is made and entered into February , 2008 ("Effective Date"), by and between the City of Lodi, a municipal corporation ("Lodi"), and the City of Elk Grove, a municipal corporation ("Elk Grove"). WHEREAS, Lodi is the owner of a CNG Fueling Station located at its Municipal Service Center, 1331 South Ham Lane, Lodi, San Joaquin County, California ("CNG Facility/'); and WHEREAS, Elk Grove desires to temporarily use the CNG Facility for the purpose of fueling certain buses in its municipal fleet; and WHEREAS, Lodi has consented to the use of the CNG Facility on the terms and conditions detailed below. NOW, THEREFORE, the parties agree as follows: 1. Lodi will permit Elk Grove to use the CNG Facilities, for the sole purpose of fueling buses in its municipal fleet. Elk Grove will be charged per gallon of compressed natural gas and billed monthly for charges incurred, as follows: the current cost per therm (at the rate charged by PG&E to Lodi) X 1.278 (conversion factor) plus $0.42 per gallon for maintenance and operation costs, administration fees and taxes', and plus $0.27 per gallon for CNG Station depreciation/replacement chargee. Payment by Elk Grove is due and payable upon receipt of Lodi's invoice and delinquent if not paid in full within 15 -days of receipt. 2. The term cf this Agreement shall be from September 1, 2007, through December 31, 2008 ("Term"). 3. Employees of Elk Grove using the CNG Facilities are required to receive training by Lodi in the proper use of the CNG Facilities prior to use. 4. In the event that the CNG Facility is damaged by employees or agents of Elk Grove during the Term of this Agreement, Elk Grove agrees to reimbursethe City for all costs incurred by the City that are necessary to return the CNG Facilityto its condition prior to the damage. 5. Elk Grove acknowledges that no more than two (2) buses are permitted at any one time at the CNG Facility and that buses waiting for fueling will be staged at an area designated by Lodi's Fleet & Facilities Manager or his designee. Elk Grove also Cost per therm X 1.278 + $0.20 maintenance & operation + $0.10 administration + $0.12 taxes = price per gallon of CNG fuel. 2 CNG Station Depreciation/Replacement Charge = + $0.27 per gallon of CNG fuel. Page 1 of 3 J:\CA\CITY\Contracts\PUBLICWO\CNG Facility UseAgreement.doc acknowledges and agrees that Lodi buses and fleet vehicles have priority to fuel at the CNG Facility, and may move ahead of Elk Grove buses then fueling, if necessary, to meet Lodi's fueling requirements. Should Elk Grove's fueling at the CNG Facility deplete the storage and/or availability of fuel for Lodi buses and fleet vehicles, the number of Elk Grove buses permitted to fuel may be limited. Lodi's Fleet & Facilities Manager or his designee retain the sole discretion to limit the number of Elk Grove buses permitted to fuel at the CNG Facility during the Term of this Agreement. 6. This Agreement may be terminated by either party at any time upon 10 - days written notice to the other. Notice shall be given as provided in paragraph 11 below. 7. Elk Grove agrees to indemnify, defend and hold Lodi harmless from and against any and all claims, losses, damages, expenses, judgments and costs, including attorneys' fees and court costs, resulting from Elk Grove's use of the CNG Facility during the Term of this Agreement. 8. Upon execution of this Agreement, Elk Grove shall provide Lodi with documentation confirming that contract employees of Elk Grove are to be considered soley as employees of the City of Elk Grove while said contract employees are using the CNG Facility or are on the grounds of Lodi's Municipal Service Center, and further that such contract employees are not covered under any existing contract that the City of Lodi may have with Elk Grove's current transportation contractor or any future transportation contractorthat may be under contract with Elk Grove. 9. Elk Grove shall, at its own expense, maintain in full force and effect during the term of this Agreement a policy of at least $5,000,000 comprehensive public liability and auto liability insurance against any liability resulting from Elk Grove's use of the CNV Facility under this Agreement. Lodi shall be named as an additional insured and all policies shall be written on a primary basis. Elk Grove shall be able to furnish a certificate of such insurance or evidence of coverage provided under any self-insurance program maintained by Elk Grove immediately following execution of this Agreement. 10. Elk Grove may not assign its rights under this Agreement to any other party. 11. Any notice required to be given by the terms of this Agreement shall be in writing signed by an authorized representative of the sender and shall be deemed to have been given when the same is personally served or upon receipt by express or overnight delivery, postage prepaid, or in three (3) days from the time of mailing if sent by first class or certified mail, postage prepaid, addressed to the respective parties as follows: To Lodi: City of Lodi Richard Prima, Public Works Director 221 West Pine Street P.O. Box 3006 Lodi. CA 95241-1910 Page 2 of 3 J:\CA\CITY\Contracts\PUBLICWO\CNG Facility Use Agreement.doc To Elk Grove: City of Elk Grove Carlos Tobar, Transit System Manager 102501ron Rock Way Elk Grove, CA 95624 12. This Agreement contains the entire agreement between the parties relating to the rights granted and obligations assumed under it. Any amendments or modifications to this Agreement will not be effective unless contained in a writing signed by both parties. 13. This Agreement shall be interpreted and construed under the laws of the State of California. The forum for any dispute arising out of this Agreement shall be the San Joaquin County Superior Court. IN WITNESS WHEREOF, this Agreement has been entered into as of the effective date as written above. CITY OF LODI a municipal corporation By: BLAIR KING City Manager ATTEST: By RANDIJOHL City Clerk APPROVED AS TO FORM: By: JANICE D. MAGDICH Deputy City Attorney CITY OF ELK GROVE a municipal corporation By: JIM ESTEP Interim City Manager ATTEST: PEGGYJACKSON City Clerk APPROVED AS TO FORM: By: SUSAN BURNS COCHRAN City Attorney Page 3 cf 3 J:\CA\CITY\Contracts\PUBLICWO\CNG Facility Use Agreement.doc RESOLUTION NO. 2008-27 A RESOLUTION OF THE LODI CITY COUNCIL AUTHORIZING THE CITY MANAGER TO EXECUTE AGREEMENT BETWEEN CITY OF LODI AND CITY OF ELK GROVE FOR PURCHASE OF COMPRESSED NATURAL GAS AT CITY OF LODI'S MUNICIPAL SERVICE CENTER AND EXTENSION WHEREAS, the city of Elk Grove contacted the City of Lodi's Fleet and Facilities Manager with a request to fill some of its compressed natural gas (CNG) -powered buses on a short-term, emergency basis when one of its regular CNG fueling stations became unavailable; and WHEREAS, the city of Elk Grove's short-term needs will continue months longer than expected as it will be building a new CNG fueling station to offset the existing CNG station loss. The city of Elk Grove is now advertising for bids for construction of its new CNG fueling station, but construction will not be completed until June 2008. Should construction take longer than anticipated, an extension may be needed; and WHEREAS, City staff recommends that an agreement to use the City's CNG fueling station at the MSC be formalized and that the City Manager be authorized to execute the attached agreement; and WHEREAS, the City of Lodi will charge the city of Elk Grove the current cost per therm charged by PG&E to Lodi, plus maintenance and operation costs, administrative fees and taxes, and a CNG station depreciation/replacement charge. NOW, THEREFORE, BE IT RESOLVEDthat the Lodi City Council hereby authorizes the City Manager to execute an agreement with the city of Elk Grove to purchase CNG at the City cf Lodi's MSCfueling station; and BE IT FURTHER RESOLVED that the Lodi City Council hereby authorizes the City Manager to execute an extension to the agreement not to exceed one year; and BE IT FURTHER RESOLVED that the charge for the CNG will be the current cost per therm charged by PG&E to Lodi, plus maintenance and operation costs, administrative fees and taxes, and a CNG station depreciation/replacement charge. Dated: February20, 2008 I hereby certify that Resolution No. 2008-27 was passed and adopted by the City Council of the City of Lodi in a regular meeting held February20, 2008, by the following vote: AYES: COUNCIL MEMBERS — Hansen, Hitchcock, Johnson, Katzakian, and Mayor Mounce NOES: COUNCIL MEMBERS — None ABSENT: COUNCIL MEMBERS — None ABSTAIN: COUNCIL MEMBERS— None IJOHL City Clerk P011GI] AGREEMENT TO USE CNG FUELING STATION This Agreement is made and entered into February , 2008 ("Effective Date"), by and between the City of Lodi, a municipal corporation ("Lodi"), and the City of Elk Grove, a municipal corporation ("Elk Grove"). WHEREAS, Lodi is the owner of a CNG Fueling Station located at fts Municipal Service Center, 1331 South Ham Lane, Lodi, San Joaquin County, California ("CNG Facility");and WHEREAS, Elk Grove desires to temporarily use the CNG Facility for the purpose of fueling certain buses in its municipal fleet; and WHEREAS, Lodi has consented to the use of the CNG Facility on the terms and conditions detailed below. NOW, THEREFORE, the parties agree as follows: 1. Lodi will permit Elk Grove to use the CNG Facilities, for the sole purpose of fueling buses in its municipal fleet. Elk Grove will be charged per gallon of compressed natural gas and billed monthly for charges incurred, as follows: the current cost per therm (at the rate charged by PG&E to Lodi) X 1.278 (conversion factor) plus $0.42 per gallon for maintenance and operation costs, administration fees and taxes', and plus $0.27 per gallon for CNG Station depreciation heplacement chargee' Payment by Elk Grove is due and payable upon receipt of Lodi's invoice and delinquent if not paid in full within 15 -days of receipt. 2. The term of this Agreement shall be from September. 1, 2007, through December 31,2008 ("Term"). 3. Employees of Elk Grove using the CNG Facilities are required to receive training by Lodi in the proper use of the CNG Facilities prior to use. 4. In the event that the CNG Facility is damaged by employees or agents of Eik Grove during the Term of this Agreement, Elk Grove agrees to reimburse the City for all costs incurred by the City that are necessary to return the CNG Facility to its condition prior to the damage. 5. Elk Grove acknowledges that no more than two (2) buses are permitted at any one time at the CNG Facility and that buses waiting for fueling will be staged at an area designated by Lodi's Fleet & Facilities Manager or his designee. Elk Grove also ' Cost per therm X 1.278+ $0.20 maintenance& operation +$0.10 administration + $0.12taxes = price per gallon of CNG fuel. CNG Station Depreciation/Replacement Charge = + $0.27 per gallon of CNG fuel. Page 1 of 3 J:}CA1CrrYlContractslPUBLICWOtiCNG Facility Use Agreemenl,doc 124 acknowledges and agrees that Lodi buses and fleet vehicles have priority to fuel at the CNG Facility, and may move ahead of Elk Grove buses then fueling, if necessary, to meet Lodi's fueling requirements. Should Elk Grove's fueling at the CNG Facility deplete the storage and/or availability of fuel for Lodi buses and fleet vehicles, the number of Elk Grove buses permitted to fuel may be limited. Lodi's Fleet & Facilities Manager or his designee retain the sole discretion to limit the number of Elk Grove buses permitted to fuel at the CNG Facility during the Term of this Agreement. 6 This Agreement may be terminated by either party at any time upon 10 - days written notice to the other. Notice shall be given as provided in paragraph 11 below. 7. Elk Grove agrees to indemnify, defend and hold Lodi harmless from and against any and all claims, losses, damages, expenses, judgments and costs, including attorneys' fees and court costs, resulting from Elk Grove's use of the CNG Facility during the Term of this Agreement. 8. Upon execution of this Agreement, Elk Grove shall provide Lodi with documentation confirming that contract employees of Elk Grove are to be considered soiey as employees of the City of Elk Grove while said contract employees are using the CNG Facility or are on the grounds of Lodi's Municipal Service Center, and further that such contract employees are not covered under any existing contract that the City of Lodi may have with Elk Grove's current transportation contractor or any future transportation contractorthat may be under contractwith Elk Grove. 9. Elk Grove shall, at its own expense, maintain in full force and effect during the term of this Agreement a policy of at least $5,000,000 comprehensive public liability and auto liability insurance against any liability resulting from Elk Grove's use of the CNV Facility under this Agreement. Lodi shall be named as an additional insured and all policies shall be written on a primary basis. Elk Grove shall be able to furnish a certificate of such insurance or evidence of coverage provided under any self-insurance program maintained by Elk Grove immediatelyfollowing execution of this Agreement. 10. Elk Grove may not assign its rights under this Agreement to any other party- 11- Any notice required to be given by the terms of this Agreement shall be in writing signed by an authorized representative of the sender and shall be deemed to have been given when the same is personally served or upon receipt by express or overnight delivery, postage prepaid, or in three (3) days from the time of mailing if sent by first class or certified mail, postage prepaid, addressed to the respective parties as follows: To Lodi: City of Lodi Richard Prima, Public Works Director 221 West Pine Street P.O. Box 3006 Lodi, CA 95241-1910 Page 2 of 3 J:ICA1C] Y\Contracts%PUBLICwO1CNG Facility Use Agreement.doc 125 To Elk Grove: City of Elk Grove Carlos Tobar, Transit System Manager 10250 Iron Rock Way Elk Grove, CA 95624 12. This Agreement contains the entire agreement between the parties relating to the rights granted and obligations assumed under it. Any amendments or modifications to this Agreement will not be effective unless contained in a writing signed by both parties. 13. This Agreement shall be interpreted and construed under the laws of the State of California. The forum for any dispute arising out of this Agreement shall be the San Joaquin County Superior Court. IN WITNESS WHEREOF, this Agreement has been entered into as of the effective date as wriften above. CITY OF LODI a municipal corporation By: GLAIR KING City Manager ATTEST: BY RAND]JOHL City Clerk APPROVED AS TO FORM: By: JANICE D. MAGDICH Deputy City Attorney CITY OF ELK GROVE a municipal corporation By: JIM ESTEP Interim City Manager ATTEST: PEGGY JACKSON City Clerk APPROVED AS TO FORM: By: SUSAN BURNS COCHRAN City Attorney Page 3 of 3 J:ICAICITYIContractslPUBLICWOICNG Facility Use Agreernent.doc 126 CITY COUNCIL JOANNE L. MOUNCE, Mayor LARRY D. HANSEN, Mayor Pro Tempore SUSAN HITCHCOCK BOBJOHNSON PH I L KATZAKIAN CITY OF LODI PUBLIC WORKS DEPARTMENT CITY HALL, 221 WEST PINE STREET P.O. BOX 3006 LODI. CALIFORNIA 95241-1910 (209) 333-6706 FAX (209) 333-6710 EMAIL wdept@lodi.gov http:\ www.lodi.gov February 15,2007 Carlos Tobar, Transportation Services Manager City of Elk Grove 8380 Laguna Palms Way Elk Grove, CA 95758 BLAIR KING City Manager RANDIJOHL City Clerk 0. STEVEN SCHWABAUER City Attorney RICHARD C. PRIMA. JR Public Works Director SUBJECT: Adopt Resolution Authorizing City Manager to Execute Agreement with City of Elk Grove Regarding Their Purchase of Compressed Natural Gas (CNG) from City of Lodi at Municipal Service Center (MSC) Fueling Station Enclosed is a copy of background information on an item on the City Council agenda of Wednesday, February 20, 2008. The meeting will be held at 7 p.m. in the City Council Chamber, Carnegie Forum, 305 West Pine Street. This item is on the consent calendar and is usually not discussed unless a Council Member requests discussion. The public is given an opportunityto address items on the consent calendar at the appropriate time. If you wish to write to the City Council, please address your letter to City Council, City of Lodi, P. O. Box 3006, Lodi, California, 95241-1910. Be sure to allow time for the mail. Or, you may hand-deliverthe letter to City Hall, 221 West Pine Street. If you wish to address the Council at the Council Meeting, be sure to fill out a speaker's card (available at the Carnegie Forum immediately prior to the start of the meeting) and give it to the City Clerk. If you have any questions about communicating with the Council, please contact Randi Johl. City Clerk, at (209) 333-6702. If you have any questions about the item itself, please call Dennis Callahan, Fleet and Facilities Manager, at (209) 333-6800, extension 2690. Richard C. Prima, Jr. 4r Public Works Director RCPIpm# Enclosure cc: City Clerk NELKGROVE CNG PURCHASE.DOC