1 STAFF REPORT
DATE: October 4, 2022
TO: Justin Hess, City Manager
FROM: Ken Berkman, Public Works Director
Via: Mihran Sarkisian, Assistant Public Works Director – Fleet and Building
SUBJECT: Adoption of a Resolution approving a Second Amendment to the Existing Operating Agreement with Clean Energy, a California corporation, related to the Compressed Natural Gas Station at 810 North Lake Street
RECOMMENDATION
Adopt A RESOLUTION OF THE COUNCIL OF THE CITY OF BURBANK APPROVING
A SECOND AMENDMENT TO THE EXISTING OPERATING AGREEMENT WITH CLEAN ENERGY RELATED TO THE COMPRESSED NATURAL GAS STATION AT 810 NORTH LAKE STREET (ATTACHMENT 1).
BACKGROUND
On July 23, 2002, the City Council entered into an Agreement (Agreement) with Clean Energy for the design, construction and 10 -year operation of a compressed natural gas (CNG) fueling station located at 810 N. Lake Street . On July 29, 2008, the City Council reviewed and approved a 10 -year extension to the Agreement from September 1, 2012 to September 1, 2022 (See Attachments 2-4). Clean Energy is seeking a second 10-year extension to the Agreement and is agreeing to construct approximately $30,000 worth of site improvements for such extension (Second Amendment).
DISCUSSION
The Second Amendment to the current ten-year Management and Operation Agreement between the City of Burbank and Clean Energy extends the term by ten years to September 1, 2032 which will continue to allow City employees, residents (upon proof of residency), and contract fleet vehicles, such as transit vehicles, an additional CNG fueling location, at preferential rates (Attachment 5). This preferential rate will remain in effect for Attachment 1 – SR - Clean Energy Agreement 810 N. Lake – Redline Version 2 the life of the agreement , which in addition to a reduced cost will provide an upgraded facility with no effort or cost to the City.
Clean Energy will provide approximately $30,000 in site improvements as a condition of this Second Amendment, including replacing the existing compressor with a new larger compressor and clean and rehab the station canopy and, consistent with the previous agreements, all maintenance, repair, and fuel station equipment replacement costs will continue to be paid by Clean Energy.
Extending this Lease and upgrading the CNG Station helps accomplish City Council’s goals of Sustainability, City Services, Infrastructure, and Quality of Life.
If the City Council decides to approve th e Second Amendment, a resolution has been prepared which provides the City Manager the authority to approve the Second Amendment and any subsequent substantially similar extensions of time, for example up to ten years, if the terms and rates are similar or lower to this Amendment.
ENVIRONMENTAL REVIEW
Under the California Environmental Quality Act (CEQA) and the CEQA Guidelines, operation of and minor alterations to ex isting structures, involving negligible or no expansion of existing use, are exempt from CEQA. (See 14 CCR § 15301.) Because this approval involves an extension of an operating agreement and minor site upgrades that do not result in any expansion of use , staff recommends that the City Council find that this ac tivity is exempt from CEQA and that no further environmental review is necessary.
FISCAL IMPACT
The upgrades included in this Second Amendment are funded by Clean Energy, so there is no fiscal impact to the City for the cost of upgrades.
In addition, the current rate the City is paying for CNG fuel is $0.944 per Gallon of Gasoline Equivalent (GGE) + Cost of Gas + Taxes. The fixed rate will be reduced to $0.79 per GGE , subject to annual adjustments tied to the Consumer Price Index (CPI). Annually, this e Public Works Yard station uses about 167,246129,105 GGEs.
The annual savings will be approxima tely $20,000 per year ($0.154 x 129,105167,246 GGEs).
3 CONCLUSION
Staff respectfully requests Council adopt a resolution to approve the Second Amendment to the existing agreement with Clean Energy for the management and operation of the CNG fueling station located at 810 N. Lake Street and provide the City Manager the authority to approve the Second Amendment and similar extensions in the future.
ATTACHMENT
Attachment 1 – Resolution
Attachment 2 – July 28, 2008 Staff Report
Attachment 3 – Operating Agreement
Attachment 4 – First Amendment
Attachment 5 – Second Amendment