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 First Amendment to the Existing Lease with Clean Energy , a California corporation, related to the Time- Fill Compressed Natural Gas (CNG) Station at the Public Works Yard at 124 South Lake Street
RECOMMENDATION
Adopt A RESOLUTION OF THE COUNCIL OF THE CITY OF BURBANK APPROVING
A FIRST AMENDMENT TO AN EXISTING LEASE WITH CLEAN ENERGY RELATED
TO THE TIME -FILL COMPRESSED NATURAL GAS STATION AT THE PUBLIC WORKS YARD, AT 124 SOUTH LAKE STREET (ATTACHMENT 1).
BACKGROUND
On or about October 21, 2008, the City Council approved an agreement (Lease) with Clean Energy for the leasing, construction, and operation of a compressed natural gas (CNG) fueling station located at the Public Works Yard, 124 South Lake Street (Yard) to facilitate fueling of City-owned vehicles. The City found that the Lease furthered the public interest in alternative fuels, relieved congestion at existing public CNG stations , and provided adequate consideration for the City (Attachments 2-3).
The City uses the CNG fueling station at the Yard to primarily fuel refuse trucks, however, the CNG fueling station needs improvements and upgrades that will be beneficial to the City’s existing fueling operations. As such, Clean Energy and the City desire to extend the terms of the Lease to September 1, 2032, in accordance with the terms outlined in the First Amendment (Amendment) to the Lease, which would include approximately $870,000 of upgrades to the CNG fueling station (Attachment 4).
PUBLIC
WORKS
2 DISCUSSION
The Amendment to the current Lease between the City of Burbank and Clean Energy will facilitate more efficient and reliable fueling of City-owned vehicles, will continue to further the public interest in alternative fuels, relieve congestion at existing public CNG stations, and provides adequate fueling needs for the City. Upgrades include replacing compressors and motor controls, installing manual dryers, and repurposing existing storage bottle assembly. The upgrades will also include a new “fast fill” station, allowing sweepers to use the station at the Yard, rather than the public CNG station to fill up. This will help reduce congestion at the public station, as well as provide efficiencies in the sweeper operations. Consistent with the previous agreement, 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 amendment, a resolution has been prepared which provides the City Manager the authority to approve the 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, the leasing and operation of, and minor alterations to, existing 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 existing lease agreement and minor site upgrades to facilitate the existing 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 Amendment are funded by Clean Energy, so there is no fiscal impact to the City for the cost of upgrades.
The current rate th e 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 increase tied to the Consumer Price Index ( CPI). Annually, the Public Works Yard station uses about 167,246 GGEs. The annual savings will be approximately $26,000 per year ($0.154 x 167,246 GGEs).
3 CONCLUSION
Staff respectfully requests Council adopt a resolution to approve the Amendment to the existing lease agreement with Clean Energy at 124 S . Lake Street and provide the City Manager the authority to approve the First Amendment and similar extensions in the future.
ATTACHMENT
Attachment 1 – Resolution
Attachment 2 – October 21, 2008 Staff Report
Attachment 3 – October 21, 2008 Lease with Clean Energy Attachment 4 – First Amendment to Lease