City Council Agenda Report
Meeting Date: June 3, 2025
From: Todd Dusenberry, General Manager of Public Utilities Department: Public Utilities
Submitted by: Adriana Ramos, Senior Management Analyst
Subject
Amendment No. 2 to the Services Agreement with EN Engineering, LLC Recommendation
Approve and authorize the City Administrator to execute Amendment No. 2 to the Services Agreement with EN Engineering, LLC, in substantially the same form as submitted, to extend the term of the Agreement for the final one-year period effective July 1, 2025, for a total amount notto-exceed $110,900.
Background
The Vernon Public Utilities (VPU) Gas Fund was established in 2006 to serve the City’s industrial sector with a large distribution system. The City currently provides natural gas to approximately 125 commercial and industrial customers and has the infrastructure to serve about 900 customers within the City's service area. VPU is one of the largest municipal gas providers by volume in the United States. VPU maximizes the operational efficiency of its gas system by using full-time employees for daily operations and maintenance to ensure reliability, while seeking outside expertise for specialized requirements.
The pipeline industry is currently facing increased scrutiny from regulators, the media, and the public. In 2018, the Pipeline Hazardous Materials Safety Administration (PHMSA) delegated the California Pipeline Safety Audits to the California Public Utilities Commission (CPUC). More recently, VPU was informed to expect annual audits. This marks a significant change, as PHMSA audits were previously conducted every two to three years. Furthermore, the CPUC audits are conducted by a team of technical experts, whereas PHMSA audits are performed by a single inspector.
In October 2023, VPU underwent a rigorous and comprehensive inspection conducted by the CPUC to comply with Title 49, Code of Federal Regulations, Parts 191, 192, and 199. In late January 2025, PHMSA advised that the 2023 inspections for the City of Vernon were closed. The Western Region Director reviewed the preliminary findings and did not recommend further action. This is the first known audit that successfully concluded with no findings. Although the findings of the audit were positive, it is the opinion of VPU staff that continued compliance support services are necessary due to increased audit scrutiny, the need to implement feedback from CPUC inspectors and audit findings, compliance with new regulations, the demand for expertise in the integrity management of natural gas pipeline systems, and the need to maintain staffing levels and operational efficiency within the division.
Following a Request for Proposal process, on June 20, 2023, the City Council approved a Services Agreement with EN Engineering, LLC (EN Engineering) for natural gas operational and compliance support services in the amount of $185,000 for a term of one year, with an option to extend the Services Agreement up to a three-year term.
On June 18, 2024, Amendment No. 1 to the Agreement with EN Engineering was approved to extend the term of the Agreement for an additional one-year period through June 30, 2025, and to increase the total not-to-exceed amount by an additional $150,000.
Based on the satisfactory services provided by EN Engineering during the contract term and to avoid a lapse in this essential service, VPU staff recommends that the City Council approve the proposed Amendment No. 2 to extend the term of the Services Agreement for the final one-year period effective July 1, 2025, with a total amount not-to-exceed $110,900, bringing the total contract amount to $445,900. Pursuant to Vernon Municipal Code Section 3.32.030(A), City Council approval is required for the proposed amendment, as the total value of the contract exceeds $100,000.
Amendment No. 2 has been reviewed and approved as to form by the City Attorney's Office.
Fiscal Impact
The fiscal impact is not-to-exceed $110,900. Sufficient funds are available in the Electric Fund, Administration, Professional Services – Technical, Account No. 055-050-580-529225 for Fiscal Year 2025-26.
Attachments
1. Amendment No. 2 - EN Engineering LLC