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HomeMy WebLinkAbout29 - Compressed Natural Gas Fueling StationCITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT Agenda Item No. 29 June 24, 2008 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: General Services Department Mark Harmon, Director, (949) 644 -3055 mharmonacitv.newport- beach.ca. us SUBJECT: Approval of a Ten Year Agreement with Clean Energy, Inc. for Installation and Operation of a Compressed Natural Gas (CNG) Fueling Station ISSUE: Should the City Council approve the attached agreement with Clean Energy, Inc. (CE) for the installation and operation of a Compressed Natural Gas (CNG) fueling station? RECOMMENDATION: Approve the terms and award a ten -year agreement with CE through July 1, 2018, for the installation and operation of a Compressed Natural Gas (CNG) fueling facility. DISCUSSION: Background City Fleet- Alternative Fuel Requirements In June 2000, the Air Quality Management District (AQMD) adopted several rules that require public fleets to purchase alternative fuel /clean air vehicles when replacing existing equipment. The AQMD rules and equipment they impact are as follows: Rule 1186.1: Public and private street sweeperfleets Rule 1193: Public and private solid waste collection fleets Rule 1196: Public agency heavy duty trucks The City currently has approximately 60 vehicles that are impacted by the AQMD Rules, including 25 refuse collection trucks, 5 street sweepers, and 30 miscellaneous heavy equipment vehicles (street maintenance, utilities, beach maintenance, and park operations). Approval of Ten Year Agreement with Clean Energy Installation and Operation of a CNG Fueling Station June 24, 2008 Page 2 The only viable alternative fuel for large vehicles /trucks is liquefied natural gas (LNG), or compressed natural.gas (CNG). CNG is the recommended alternative fuel for many fleets due to cost, fuel supply, and fuel storage concerns. CNG may also be used as a clean air fuel for light equipment, such as pick -up trucks and sedans. Due to the adoption of the AQMD fleet rules, the City has deferred replacement of heavy equipment for several years. As a result, many of the heavy equipment vehicles in the City's fleet have surpassed their scheduled replacement based on City Council policy. As an example, of the City's 25 refuse collection trucks, 18 are overdue for replacement per Council Policy F -9. It is not feasible to replace existing equipment without a local supply of CNG to fuel our equipment. Presently, the closest location of CNG fuel for public fleet use is the City of Irvine Public Yard at Highway 5 and Sand Canyon. To meet the mandates of the AQMD, and to start the much needed replacement of heavy equipment, the City must site a local fueling facility for alternative fuel equipment. Public- Private Partnership As the owner and operator of the largest network of CNG stations in North America, Clean Energy dispenses more than 180,000 gallons (GGE) of CNG every day. CE currently ownsloperates 30 CNG fueling stations in Southern California, including stations at the Orange County Sanitation District, Airport Station in Santa Ana, City of Irvine Yard, Garden Grove/ARCO station, and the Seal Beach Station. CE is the provider of CNG fuel for the taxi /shuttle fleet at John Wayne Airport. Recognizing the need for a public fueling station in Newport Beach, CE approached the City with a proposal to site a station at the City's Corporate Yard. By entering into a long term agreement with CE, the City will realize the following benefits: • CE provides the necessary capital to build and operate a fueling facility (CNG fueling stations this size cost approximately $800,000 to $1 M to construct). • CE offers a preferential fuel rate to the City. • CE provides all preventative and emergency maintenance for the station. • CE will market the station to third -party customers. • CE will handle all accounting including billing and collections. • CE will provide grant writing services to the City for the purchase of alternative fuel equipment. Contract Terms During the past several weeks, staff and representatives from CE met and agreed to the terms and conditions included in the attached agreement. Some of the terms and conditions include: Approval of Ten Year Agreement with Clean Energy Installation and Operation of a CNG Fueling Station June 24, 2008 Page 3 • Proiect Fundina: CE shall design, permit, construct, operate, maintain and fully fund a public access CNG fueling facility at the City's Corporate Yard. The project will include a CNG dispenser, gas dryer, compressor, storage vessels, electrical room, and an automatic gate for Yard security. All utility fees associated with the CNG station (gas and electrical) will be metered separately and billed directly to CE. The City will waive all City fees and permit costs associated with the project. • Operations: CE shall manage all billing and point -of -sale transactions for fuel delivered to non -City vehicles. CE shall provide routine scheduled maintenance to the facility for the term of the Agreement, and will repair or replace any parts or equipment at CE's sole expense. CE shall respond to emergency repair requests within 4 hours of being contacted. • City Equipment/Fuel Requirement: The City is under no obligation to purchase CNG equipment or purchase any CNG fuel from the fueling facility during the term of the agreement. • Facility Expansion: If demand for fuel usage increases as the City's fleet of alternative fuel vehicles grows, CE will expand the station capacity at it's own expense. • Fees Paid to City: CE shall pay a royalty fee to the City in the amount of $0.05 per gasoline gallon equivalent (GGE) of CNG sold at the fueling facility to non - City vehicles. • Insurance Coverage Requirements: CE shall maintain the following; $1,000,000 Worker's Compensation Coverage, $5,000,000 General Liability Coverage, $1,000,000 Automobile Liability Coverage, and $2,000,000 Pollution Liability Coverage. • Reporting Requirements: CE shall submit the following monthly report(s): total number of transactions at facility, total GGE of CNG dispensed, total GGE of CNG dispensed to City vehicles, Southern California Gas Company's delivered cost of fuel, scheduled maintenance activities, and non - scheduled /emergency repairs for previous month. • Preferential Fuel Rate for Citv Equipment: The City shall receive a preferred price for CNG fuel delivered from the facility to City equipment. The monthly price shall be determined by combining the Southern California Gas Company's delivered cost of gas with CE's compression charge. The compression charge during the first year of the contract will be $0.95 per GGE. The City's preferential price shall never exceed CE's posted retail price less $0.10 per gallon. Approval of Ten Year Agreement with Clean Energy Installation and Operation of a CNG Fueling Station June 24, 2008 Page 4 • Annual Consumer Price Index Adjustment: The City shall grant CE an annual CPI increase (not to exceed 3% per 12 month period) beginning January 1, 2009, and each January 1 thereafter, on the compression fee charged to the City. The Consumer Price Index to be used in such calculation is the Consumer Price Index for Energy, All Urban Consumers, for the Los Angeles, Anaheim, Riverside Metropolitan Area, published by the United States Department of Labor, Bureau of Labor Statistics (1982- 84 = 100)0 • Term: At the end of the ten -year term, there is an option to extend the agreement in five -year increments. Committee Review On March 12, 2008, the Finance Committee received a presentation from CE and City staff on the CNG fueling station project. The Committee was supportive of the project and directed staff to return to the full City Council with an agreement for consideration. Further, Councilmember Henn and Councilmember Curry have reviewed the attached Agreement with CE. Financial Review CE will completely fund the installation and ongoing maintenance costs associated with the CNG fueling facility. Awarding this agreement will not result in additional costs to the City. CE will pay royalty fees to the City in the amount of $0.05 per GGE dispensed at the facility to non -City customers. This revenue stream to the City will vary depending on the use of the facility by outside fleets. Environmental Review: This project does not require environmental review. The CNG fueling facility will be installed at the City's existing gasoline fueling facility located at the City Yard. Public Notice: This agenda item may be noticed according to the Ralph M. Brown Act (72 hours in advance of the public meeting at which the City Council considers the item). Legal Review The City Attorney's Office has reviewed the attached Agreement Approval of Ten Year Agreement with Clean Energy Installation and Operation of a CNG Fueling Station June 24, 2008 Page 5 Subm Mark Harmon General Services Director Reviewed by: Aaron Harp Assistant City Attorney Attachments 1) Draft Agreement with Clean Energy, Inc. AGREEMENT WITH CLEAN ENERGY AND CLEAN ENERGY CONSTRUCTION FOR INSTALLATION AND OPERATION OF A COMPRESSED NATURAL GAS FUELING STATION THIS AGREEMENT is made and entered into as of this 24th day of June, 2008, by and between the CITY OF NEWPORT BEACH, a charter City and municipal corporation ( "City") on the one hand, and Clean Energy, a California corporation, and Clean Energy's affiliate, Clean Energy Construction, a California corporation, on the other hand, located at 3020 Old Ranch Parkway, Suite 200, Seal Beach, California 90740 (Clean Energy and Clean Energy Construction are collectively referred to herein as "CE "), and is made with reference to the following: RECITALS A. City is a municipal corporation duly organized and validly existing under the laws of the State of California with the power to carry on its business as it is now being conducted under the statutes of the State of California and the Charter of City. B. City is planning to hire CE to design and construct, with assistance from Clean Energy Construction as appropriate, a fully operational Compressed Natural Gas ( "CNG ") fueling station at the City Yard, and operate and manage said station for the term of the contract ( "Project "), at no cost to the City. C. The principal member of CE for purposes of Project shall be James Harger, Senior Vice President. D. City has solicited and received a proposal from CE, and desires to retain CE, to install and operate a CNG fueling station under the terms and conditions set forth in this Agreement. NOW, THEREFORE, it is mutually agreed by and between the undersigned parties as follows: 1. TERM The term of this Agreement shall commence on the Effective Date (as defined below), and shall terminate on the 30th of June 2018, unless terminated earlier as set forth herein. The term of this Agreement shall automatically be extended for consecutive five (5) year terms (automatic extensions) with the extensions to automatically commence upon the expiration of the initial term or any extended term, unless the City notifies CE or CE notifies City in writing at least one hundred and eighty (180) days before the end of the initial term or any extended term, of its intent to terminate this Agreement at the conclusion of the initial term or any extension. For purpose of this Agreement the term ( "Effective Date ") shall refer to July 1St, 2008, which is the date that the Project is to begin under this Agreement. 2. SERVICES TO BE PROVIDED BY CE CE shall diligently perform all the services described herein and in the Equipment/Yard Modifications attached hereto as Exhibit A and incorporated herein by reference ( "Contract Services "): 2.1 Except as specified in Section 5, or as may be separately agreed to by City and CE, CE shall not charge the City for any costs or expenses incurred in providing the Contract Services described in Section 2. 2.2 CE, with assistance from Clean Energy Construction as appropriate, shall design, construct, operate and maintain a CNG fueling facility ( "Facility ") at the City's Corporate Yard located at 592 Superior Avenue in the City of Newport Beach in substantial conformance with the diagram attached hereto as Exhibit B. Improvements to be designed, constructed, operated and maintained by CE include, but are not limited to, an automatic gate, CNG dispenser, gas dryer, block walls, curb cuts, an electrical room, compressor enclosure and CNG storage vessels as set forth in more detail in Exhibit A and generally depicted on Exhibit B. CE shall obtain City approval of the design of the Facility, location of CE equipment and any modification to existing City facilities. The design of the Facility shall ensure that City equipment/vehicles including, but not limited to, trash trucks that use CNG fuel, can easily access the Facility and adjacent City property. Except as expressly provided in Section 3.5, CE shall be responsible for obtaining, at CE's sole cost, all permits relating to the design, construction, operation, and maintenance of said Facility. The Facility will include adequate storage containers and a dispenser designed for public access. In addition, the City will be provided with all access codes and automatic controllers requested by the City necessary to open and close the automatic gate which will be designed and constructed in a way to provide easy access to City vehicles including, but not limited to, trash trucks to the adjacent City property. It is the responsibility of the City to provide on -going maintenance of the automatic gate. During the construction of the Facility, the City's petroleum gas dispensers shall remain operational and available for City use at all times, unless otherwise agreed by the City in writing. 2.3 CE shall provide the Facility with CNG to fuel City vehicles and will bill the City a preferential rate as outlined in Section 5. 2.4 CE shall provide the Facility with CNG to fuel non -City vehicles ( "Fleet Customers ") and will bill the Fleet Customers at rates set in CE's sole and absolute discretion. City will not be responsible for any private /third -party billings. CE will allow Fleet Customers 24 -hour access to the Facility. 2.5 CE shall maintain the Facility in accordance with the following requirements: a) CE shall provide scheduled, routine maintenance service for the term of this Agreement, and shall repair or replace any defective parts or equipment at CE's sole expense. CE shall also perform all other necessary maintenance or repairs, including emergency services, at CE's expense, in order to keep the 2 Facility operating. Any damage to Facility incurred due to abuse or neglect by City's personnel shall be billed to City at CE's then existing reasonable rates. b) CE and City shall mutually agree on times for maintenance services that will require the Facility to be out of operation for more than four (4) hours. c) CE will install at the Facility an electronic annunciation system including an auto - dialer to contact CE regarding any system failures or faults. The auto - dialer will communicate directly to CE's existing control system immediately notifying service technicians of existing problems with the Facility. Whether notified through the annunciation system or by City, CE will respond to a notification within 4 -hours maximum unless a longer period of time for response is otherwise agreed to by the City's Contract Administrator. A 24 -hour CE response telephone number shall be clearly posted at the Facility. d) CE shall not install any trash containers at the Facility without the City's written permission. e) Any graffiti on the Facility shall be removed by CE at its cost within twenty -four (24) hours of CE receiving notice of the graffiti from the City. 2.6 CE shall provide reasonable training programs to educate City personnel as to the procedures for the safe and efficient use of the Facility, including, without limitation, procedures relating to safe vehicle fueling, troubleshooting, and appropriate emergency procedures. A video training program outlining the procedure to safely fuel vehicles, as well as written instructions, shall be installed /posted at the fuel pump. 2.7 In performing the obligations under this Agreement, CE shall comply in all material respects with all applicable Federal, State, and local laws, regulations, ordinances and rulings, including (but not limited to) those pertaining to health, safety, employment and environmental matters. 2.8 During the Term, CE will use commercially reasonable efforts to market the Facility to sell CNG fuel to Fleet Customers at a price determined by CE. 2.9 CE shall pay the City the amount of $0.05 per gasoline gallon equivalent ( "GGE ") of CNG sold at the Facility's public dispenser(s) to non -City vehicles. Royalty payments relating to this Section shall be made by CE on a quarterly basis within thirty (30) days following the end of each calendar quarter. 3. SERVICES TO BE PROVIDED BY CITY 3.1 City shall maintain the premises in the vicinity of the Facility in a clean, safe, and orderly condition suitable for CNG vehicle refueling use, including the ingress to, and egress from, the Station. 3.2 City employees shall refuel City owned equipment. City will provide appropriate training and supervision for employees, including, but not limited to, scheduling attendance at all appropriate training sessions provided by CE. .K7 3.3 City shall pay fuel invoices for CNG fuel delivered from Facility to City owned equipment within 30 days following receipt of invoice by the City. For purposes of this section, receipt shall be defined as three (3) days after the invoice is mailed by CE. City is under no obligation to aurchase CNG vehicles or CNG fuel as part of this Agreement. 3.4 In performing its obligations under this Agreement, the City shall comply in all material respects with all applicable Federal, State and local laws, regulations, ordinances and rulings, including, but not limited to, those pertaining to health, safety, employment and environmental matters. 3.5 City will waive all City fees and permit costs associated with Project. 4. TIME OF PERFORMANCE Time is of the essence in the performance of services under this Agreement. As such, CE shall complete the Facility installation and start delivery of fuel to City vehicles, if applicable, and Fleet Customers within one (1) year from the Effective Date. The failure by CE to strictly adhere to the schedule may result in termination of this Agreement by City; provided that in the event that any delay in completion is due to circumstances beyond CE's reasonable control, including but not limited to delays in issuance of required permits, then the City and CE shall negotiate a reasonable extension of the schedule to accommodate such circumstance. 5. COMPENSATION TO CE FOR FUEL PURCHASES 5.1 From the Effective Date, City shall pay CE for any CNG fuel used in City equipment that is properly metered and measured through Facility, in accordance with Preferred Billing Rate attached hereto as Exhibit C and incorporated herein by reference. The City is under no obligation per this Agreement to purchase CNG powered equipment/vehicles or purchase quantities of CNG fuel through CE's Facility. 5.2 CE shall submit invoices on a monthly basis for CNG fuel used by City owned /operated vehicles only. All invoices submitted to the City shall be accompanied by a monthly report indicating, in detail, GGE of CNG dispensed through Facility for City equipment and date CNG fuel was dispensed. City shall pay invoices within thirty (30) days after receipt by the City. Payment shall be deemed made when deposited in the United States mail, first class postage pre- paid, and addressed to "Accounts Receivable" at CE's address as specified in Section entitled "Notices." 6. DISPUTES PERTAINING TO PAYMENT FOR CNG FUEL Should any dispute arise respecting whether any delay is excusable, or its duration, or respecting any payment to CE during the performance of the Agreement, such dispute (a "Payment Dispute ") shall be decided by the principal member from CE and the Project Administrator, with any appeal by CE made to 9 the City Manager. In the event that the principal member from CE and the City Manager are unable to resolve the Payment Dispute within twenty (20) business days following their first meeting, the Payment Dispute will be submitted to non- binding mediation in Los Angeles, California before a mediator made available to the parties though JAMS. In the event that the mediation process fails to result in resolution of the dispute within forty-five (45) days following submission to the mediator, the parties may take any action they may deem necessary to protect their interests subject to the requirements of Section 34. 7. REIMBURSEMENT FOR EXPENSES Except as provided in this Agreement, CE shall not be reimbursed for any fees or other costs and expenses unless prior written authorization is obtained from the Project Administrator. 8. REPORTS CE shall submit a monthly report to City containing the following information: • Total number of transactions at Facility for previous month • Total GGE of CNG dispensed through Facility • Total GGE of CNG dispensed to Fleet Customers • Total GGE of CNG dispensed to City vehicles • Southern California Gas Company's Delivered Cost of Gas per GGE for previous month • Scheduled maintenance activity for previous month • Non - Scheduled /Emergency Repairs for Previous Month Annually, CE shall submit the depreciated book value of the Facility at City's request. Report(s) shall be faxed, e- mailed, or mailed to: General Services Director City of Newport Beach P.O. Box 1768 Newport Beach, CA 92658 -8915 Fax: (949) 650 -0747 mharmon@ city. newport-beach.ca. us 9. LICENSE TO USE PREMISES 9.1 Permitted Use: To enable CE to fulfill its obligations set forth herein, the City hereby licenses and permits CE to use the portion of the City property located at 592 Superior Avenue for the Facility, as generally depicted on Exhibit B ( "Premises ") for the purposes contemplated herein and in accordance with the terms and conditions of this Agreement. CE agrees that the parking spaces shown on Exhibit B and the City petroleum gas dispenser's and other items located on the Premises which are not installed by CE shall not be considered 5 7 the City Manager. In the event that the principal member from CE and the City Manager are unable to resolve the Payment Dispute within twenty (20) business days following their first meeting, the Payment Dispute will be submitted to non- binding mediation in Los Angeles, California before a mediator made available to the parties though JAMS. In the event that the mediation process fails to result in resolution of the dispute within forty -five (45) days following submission to the mediator, the parties may take any action they may deem necessary to protect their interests subject to the requirements of Section 34. REIMBURSEMENT FOR EXPENSES Except as provided in this Agreement, CE shall not be reimbursed for any fees or other costs and expenses unless prior written authorization is obtained from the Project Administrator. REPORTS CE shall submit a monthly report to City containing the following information: • Total number of transactions at Facility for previous month • Total GGE of CNG dispensed through Facility • Total GGE of CNG dispensed to Fleet Customers • Total GGE of CNG dispensed to City vehicles • Southern California Gas Company's Delivered Cost of Gas (G -NGU) per GGE for previous month • Scheduled maintenance activity for previous month • Non - Scheduled /Emergency Repairs for Previous Month Annually, CE shall submit the depreciated book value of the Facility at City's request. Report(s) shall be faxed, e- mailed, or mailed to: General Services Director City of Newport Beach P.O. Box 1768 Newport Beach, CA 92658 -8915 Fax: (949) 650 -0747 mharmonacity. newport- beach. ca. us 9. LICENSE TO USE PREMISES 9.1 Permitted Use: To enable CE to fulfill its obligations set forth herein, the City hereby licenses and permits CE to use the portion of the City property located at 592 Superior Avenue for the Facility, as generally depicted on Exhibit B ( "Premises') for the purposes contemplated herein and in accordance with the terms and conditions of this Agreement. CE agrees that the parking spaces shown on Exhibit B and the City petroleum gas dispenser's and other items located on the Premises which are not installed by CE shall not be considered part of the Premises. CE agrees that its use of the Premises is non - exclusive and that City shall continue to have the right to use the Premises for any use that does not directly conflict with CE's use of the Premises. The City shall not, and shall not permit others to, levy any rent, charge, lien or encumbrance not expressly provided for in this Agreement against CE for the use of the Premises or Facility. 9.2 Clear Title: The City is, and shall remain during the term of this Agreement, the owner or lessee of the Premises, and shall not allow any lien or encumbrance affecting the Facility or CE's performance hereunder. CE shall be the owner of the Facility, and its parts and equipment. CE shall have the right to grant a lien or encumbrance against its right, title and interest in the Facility or its equipment to a third party for financing purposes; provided, however, that CE shall not permit any liens or encumbrances of any kind to be placed on the Premises, and shall promptly discharge, at its expense, any and all mechanic, labor or material liens, encumbrances or charges against the Premises or the Facility related to its performance under this Agreement. 9.3 Sale, Abandonment or Removal: Unless otherwise agreed to by parties in writing, upon termination or expiration of this Agreement, CE may elect one of the following options: (i) sell the Facility to the City on mutually agreeable terms; (ii) remove the Facility, at CE's sole expense (including any and all merchandise, equipment, furnishings, fixtures, machinery, and tools relating to the Facility), from the Premises, which will be restored in all material respects to their condition as of the Effective Date of this Agreement, excluding the removal of any underground piping which may be left in place by CE; or (iii) if the City agrees in writing, abandon the same in place by quitclaiming all of its right, title and interest therein to the City. Thereafter, CE shall have no further rights or obligations under this Agreement with respect to the Premises. Notwithstanding the above, in the event of termination by reason of a material breach by CE or termination without a cause by CE, the City may, in its sole and absolute discretion, elect to purchase the Facility for the depreciated book value of the Facility (calculated based on a ten -year useful life of the Facility) less any grant monies received by CE with respect to the Facility. 9.4 To ensure that the Premises shall be clear of any pre- existing underground hazards or soil contaminants, CE shall conduct soil tests of the construction site prior to the start of Facility installation, and prior to any financial commitment on the part of either party. The City and CE shall agree on a contractor and the costs involved with the process prior to testing. If it is determined that no underground hazards or soil contaminants that would deem the site unsuitable for the station's construction exist, CE shall be fully responsible for payment of the soil testing procedure. If it is determined that pre- existing underground hazards and /or soil contaminants exist that either (a) require removal, replacement, and disposal of soils or materials, (b) require remediation, or (c) deem the site unsuitable for the station's construction, the City shall be fully responsible for payment of the soils testing procedure, and shall be financially responsible for any mitigation costs which may include remediation, removal, replacement, and disposal. If City does not commence, within thirty (30) days after discovery of any such pre- existing underground hazard or soil A contaminant, and therefore to diligently prosecute to completion the correction of such condition, CE may, without further obligation or penalty, terminate this Agreement for cause by written notice to City. 10. ADMINISTRATION This Agreement will be administered by the General Services Department. The General Services Director, or his designee, shall be the Project Administrator and shall have the authority to act for City under this Agreement. The Project Administrator or his /her authorized representative shall represent City in all matters pertaining to the services to be rendered pursuant to this Agreement. 11. STANDARD OF CARE, WORKMANSHIP, SUPERVISION 11.1 CE shall provide a work force sufficient to perform the Contract Services and all members of the work force shall be hired in compliance with State and Federal law. 11.2 All Contract Services shall be performed by competent and trained employees. CE represents that it possesses the professional and technical personnel required to perform the services required by this Agreement, and that it will perform all services in a manner commensurate with community professional standards. CE hereby certifies that all work performed under this Agreement will conform to the requirements of this Agreement and all applicable Federal, State and local laws and the professional standard of care. 11.3 CE represents and warrants to City that it has, shall obtain, and shall keep in full force and in effect during the term hereof, at its sole cost and expense, all licenses, permits, qualifications, insurance and approvals of whatsoever nature that is legally required of CE to practice its profession. CE shall maintain a City of Newport Beach business license during the term of this Agreement. 12. INDEPENDENT CONTRACTOR It is understood that City retains CE on an independent contractor basis and CE is not an agent or employee of City. The manner and means of conducting the work are under the control of CE, except to the extent they are limited by statute, rule or regulation and the express terms of this Agreement. Nothing in this Agreement shall be deemed to constitute approval for CE or any of CE's employees or agents, to be the agents or employees of City. CE shall have the responsibility for and control over the means of performing the work, provided that CE is in compliance with the terms of this Agreement. 13. COOPERATION CE agrees to work closely and cooperate fully with City's designated Project Administrator and any other agencies that may have jurisdiction or interest in the work to be performed. City agrees to cooperate with CE on the Project. 7 14. CITY POLICY CE shall discuss and review all matters relating to policy and Project direction with City's Project Administrator in advance of all critical decision points in order to ensure the Project proceeds in a manner consistent with City goals and policies. 15. INSURANCE REQUIREMENTS Without limiting CE's indemnification of City, CE shall obtain, provide and maintain at its own expense during the term of this Agreement, a policy or policies of liability insurance of the type and amounts described below and in a form satisfactory to City. 15.1 Certificates of Insurance. CE shall provide certificates of insurance with original endorsements to City as evidence of the insurance coverage required herein. Insurance certificates must be approved by City's Risk Manager prior to commencement of the Agreement. Current certification of insurance shall be kept on file with City at all times during the term of this Agreement. 15.2 Signature. A person authorized by the insurer to bind coverage on its behalf shall sign certification of all required policies. 15.3 Acceptable Insurers. All insurance policies shall be issued by an insurance company currently authorized by the Insurance Commissioner to transact business of insurance in the State of California, with an assigned policyholders' Rating of A (or higher) and Financial Size Category Class VII (or larger) in accordance with the latest edition of Best's Key Rating Guide, unless otherwise approved by the City's Risk Manager. 15.4 Coverage Requirements. a) Workers' Compensation Coverage. CE shall maintain Workers' Compensation Insurance and one million dollars ($1,000,000) Employer's Liability Insurance for his or her employees in accordance with the laws of the State of California. Any notice of cancellation or non - renewal of all Workers' Compensation policies must be received by City at least thirty (30) calendar days (10 calendar days written notice of non - payment of premium) prior to such change. The insurer shall agree to waive all rights of subrogation against City, its officers, agents, employees and volunteers for losses arising from work performed by CE that relates in any way to this Agreement. b) General Liability Coverage. CE shall maintain commercial general liability insurance in an amount not less than five million dollars ($5,000,000) per occurrence for bodily injury, personal injury, and property damage, including without limitation, contractual liability. If commercial general liability insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to the work to be performed under this Agreement, or the general aggregate limit shall be at least twice the required occurrence limit. 0 c) Automobile Liability Coverage. CE shall maintain automobile insurance covering bodily injury and property damage for all activities of the CE arising out of or in connection with work to be performed under this Agreement, including coverage for any owned, hired, non -owned or rented vehicles, in an amount not less than one million dollars ($1,000,000) combined single limit for each occurrence. d) Pollution Liability Coverage. CE shall maintain environmental liability insurance with limits in an amount of not less than two million dollars ($2,000,000) per occurrence and annual aggregate covering claims for on -site, under -site, or off -site bodily injury and property damage and regulatory fines as a result of pollution conditions arising out of its operations under this Agreement. 15.5 Endorsements. Each general liability, automobile liability and pollution liability insurance policy shall be endorsed with the following specific language: a) The City, its elected or appointed officers, officials, employees, agents and volunteers are to be covered as additional insureds with respect to liability arising out of work performed by or on behalf of CE. b) This policy shall be considered primary insurance as respects to City, its elected or appointed officers, officials, employees, agents and volunteers as respects to all claims, losses, or liability arising directly or indirectly from CE's operations or services provided to City. Any insurance maintained by City, including any self- insured retention City may have, shall be considered excess insurance only and not contributory with the insurance provided hereunder. c) This insurance shall act for each insured and additional insured as though a separate policy had been written for each, except with respect to the limits of liability of the insuring company. d) The insurer waives all rights of subrogation against City, its elected or appointed officers, officials, employees, agents and volunteers. e) Any failure to comply with reporting provisions of the policies shall not affect coverage provided to City, its elected or appointed officers, officials, employees, agents or volunteers. f) The insurance provided by this policy shall not be suspended, voided, canceled, or reduced in coverage or in limits, by either party except after thirty (30) calendar days (10 calendar days written notice of non - payment of premium) written notice has been received by City. 15.6 Timely Notice of Claims. CE shall give City prompt and timely notice of claim(s) made or suit instituted arising out of or resulting from CE's performance under this Agreement. 15.7 Additional Insurance. CE shall also procure and maintain, at its own cost and expense, any additional kinds of insurance, which in its own judgment may be necessary for its proper protection and execution of the work. 0 16. RESPONSIBILITY FOR DAMAGES AND INJURY /INDEMNIFICATION 16.1 CE Responsibility. CE shall be responsible for any damages caused as a result of CE's acts or omissions including, but not limited to injuries to or death of any person or damage to public and /or private property and damages to public improvements as a result of CE's performance of this Agreement. 16.2 General Indemnification. CE shall indemnify, hold harmless, and defend City, and each of its past, present and future elected officials, officers, employees, agents, consultants, volunteers, affiliates, assignees, representatives, attorneys, subsidiaries, and affiliated entities and their respective successors, heirs and assigns (collectively, "Indemnified Parties ") for, from and against any costs, expenses, damages, and losses, including actual attorneys fees ( "Losses ") of any kind or character to any person or property arising directly or indirectly from or caused by any of the following: (i) any act or omission of CE or its respective officers, directors, shareholder members, partners, employees, agents, contractors, subcontractors, suppliers, representatives and affiliates ( "CE's Representatives "); (ii) any accident or casualty within or arising out of the services /work performed by CE under the Agreement; (iii) any material violation of any law, ordinance or statute now or hereafter enacted by CE arising out of services /work performed by CE pursuant to the Agreement; and (iv) any material breach of the Agreement. CE shall not be required to indemnify, hold harmless and defend the Indemnified Parties from the sole negligence, contributory negligence, active negligence or willful misconduct of the Indemnified Parties. Nothing in this indemnity shall be construed as authorizing any award of attorney's fees in any action on or to enforce the terms of this Agreement. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as a limitation upon the amount of indemnification to be provided by CE. 16.3 Except as expressly provided herein, neither party shall have any liability to the other party for special, consequential or incidental damages. 16.4 Hazardous Substances Indemnification. Subject to Section 9.4 above, CE shall indemnify the Indemnified Parties from and against all claims, actual damages including, but not limited to, special and consequential damages, natural resource damage, punitive damages, injuries, costs, response, remediation, and removal costs, losses, demands, debts, liens, liabilities, causes of action, suits, legal or administrative proceedings, interest, fines, charges, penalties and expenses attorneys' and expert witness fees and costs incurred in connection with defending against any of the foregoing or in enforcing this indemnity of any kind whatsoever paid, incurred or suffered by, or asserted against, the Indemnified Parties or CE arising directly from or caused by any of the following: (i) the violation of any Environmental Laws or the failure to clean up and mitigate the consequences of a spill or release of any Hazardous Substance by CE; and (ii) any act or omission of CE's under this Agreement that causes a spill or release of hazardous substances at any place where CE stores or disposes of 10 hazardous substances pursuant to this Agreement. The foregoing indemnity is intended to operate as an agreement pursuant to the Comprehensive Environmental Response, Compensation and Liability Act 42. U.S.C. Section 9607(e) and any amendments thereto; California Health and Safety Code Section 25364, to insure, protect, hold harmless, and indemnify City from liability associated with CE's violation of Environmental Laws or a release or spill of hazardous substance caused by CE. For the purpose of clarity, any discovery of hazardous substances or release of a hazardous substance associated with pre- existing contamination of the premises (i.e. contamination in existence at the Premises prior to the Effective Date hereunder) shall be governed by Section 9.4 above and CE shall not be obligated to indemnify the Indemnified Parties with respect to such pre- existing contamination. As used herein, the term "Environmental Laws" shall mean "any and all present and future federal, state or local laws (whether common law, statute, rule, regulation or otherwise), permits, orders and any other requirements of Governmental Authorities relating to the environment or any "Hazardous Substance" or "Hazardous Substance Activity" (as defined herein) (including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. §§ 9601 at seq.) as amended from time to time and the applicable provisions of the California Health and Safety Code and California Water Code). As used herein, the term "Hazardous Substance" shall mean "any (a) chemical, compound, material, mixture or substance that is now or hereinafter defined or listed in, or otherwise classified pursuant to any Environmental Law as a "hazardous substance ", "hazardous material," "hazardous waste," "extremely hazardous waste," "infectious waste," "toxic waste," "toxic pollutant," or any other formulation intended to define, list or classify substances by reason of deleterious properties or affect and (b) petroleum, petroleum by- products, natural gas, natural gas liquids, liquefied natural gas, synthetic gas usable for fuel (or mixtures of natural gas in such synthetic gas), ash, municipal solid waste, steam, drilling fluids, produced waters and other wastes associated with the exploration, development and production of crude oil, natural gas or geothermal resources." 16.5 Notice. City agrees to give notice to CE when the City receives a claim for damages or other liability for which CE has provided indemnification under this Section. 17. FORCE MAJEURE In the event that CE is prevented from performing its duties and obligations pursuant to this Agreement by circumstances beyond its control, including, without limitation, fires, floods, labor disputes, equipment failure, the interruption of utility services that prevents CE from operating the station, war, acts of terrorism, or Acts of God (hereinafter referred to as "Force Majeure"), then Clean Energy shall be excused from performance hereunder during the period of such disability ( "Force Majeure Period "). If Clean Energy claims Force Majeure, Clean Energy shall notify City within 24 hours after it learns of the existence of a Fong Majeure condition, and will also provide City with an estimate, if one can be reasonably made, of the 11 anticipated Force Majeure Period. Clean Energy will also notify City within 24 hours after the Force Majeure condition has terminated. Clean Energy shall agree to use commercially reasonable efforts to correct whatever event or circumstance caused the Force Majeure event. 18. PROHIBITION AGAINST ASSIGNMENTS AND TRANSFERS Except as specifically authorized under this Agreement, the services to be provided under this Agreement shall not be assigned, transferred contracted or subcontracted out to any entity other than a wholly owned subsidiary or affiliate of CE without the prior written approval of City, provided that, such consent shall not be necessary in the context of an acquisition of CE or CE's parent company by asset sale, merger, change in control or operation of law. Permitted assigns and successors in interest shall have the benefit of, and shall be bound by, all terms and conditions of this Agreement. Notwithstanding anything contained herein to the contrary, CE may assign this Agreement to such CE's parent corporation, an entity under common control with CE, or a wholly -owned subsidiary of CE without the consent of the City 19. ASSIGNMENT The parties recognize that a substantial inducement to City for entering into this Agreement is the professional reputation, experience and competence of CE. Assignments of any or all rights, duties or obligations of CE under this Agreement to any entity other than a wholly -owned subsidiary or affiliate of CE will be permitted only with the express written consent of City. CE shall not subcontract any portion of the work to be performed under this Agreement to any entity other than a wholly -owned subsidiary or affiliate of CE without the prior written authorization of City. Authorization by City shall not be unreasonably withheld. 20. CONFIDENTIALITY All documents, including drafts, preliminary drawings or plans, notes and communications that result from the services in this Agreement, shall be kept confidential by CE unless City authorizes in writing the release of information. City shall have the right to disclose any information and documents related to this Agreement at any time. 21. INTELLECTUAL PROPERTY INDEMNITY CE shall defend and indemnify City, its agents, officers, representatives and employees against any and all liability, including costs, for infringement of any United States' letters patent, trademark, or copyright infringement associated with the work/services performed by CE hereunder. 22. AUDIT/RECORDS 22.1 Audits may be performed by the City to verify that CE is in compliance with the terms and conditions of this Agreement including, but not limited to, the auditing of facility fueling records, fuel costs from So Cal Gas or other provider, rate 12 increases, and safety records. If the results of the audit determine that CE is in compliance with the terms and conditions of this Agreement, the City shall be responsible for all costs related to the audit. If non - compliance is determined, CE shall be fully responsible for all costs related to the audit. City shall have the right to audit any of CE's records or documents at a mutually agreeable location in the City of Newport Beach or Seal Beach that relate in any way to this Agreement upon three (3) working days notice. CE shall keep all documents and information related in any way to this Agreement for a four (4) year period. 22.2 No report, information or other data given to or prepared or assembled by CE pursuant to this Agreement may be made available to any individual or organization without prior approval by City unless such disclosure is required by law or court proceedings. 23. WITHHOLDINGS City may withhold payment to CE of any disputed sums until dispute is proceeds through the process pursuant to Section 6 above provided the City notes CE in writing as soon as possible specifying the reason for such withholding. Such withholding shall not be deemed to constitute a failure to pay according to the terms of this Agreement pursuant to Section 6 above. CE shall not discontinue work as a result of such withholding, unless and until the mediation process pursuant to Section 6 is concluded without resolution. CE shall have an immediate right to appeal to the City Manager or his /her designee with respect to such disputed sums. CE shall be entitled to receive interest on any withheld sums at the rate of return that City earned on its investments during the time period, from the date of withholding of any amounts found to have been improperly withheld. 24. CONFLICTS OF INTEREST CE or its employees may be subject to the provisions of the California Political Reform Act of 1974 (the "Act "), which (1) requires such persons to disclose any financial interest that may foreseeably be materially affected by the work performed under this Agreement, and (2) prohibits such persons from making, or participating in making, decisions that will foreseeably financially affect such interest. If subject to the Act, CE shall conform to all requirements of the Act. Failure to do so constitutes a material breach and is grounds for immediate termination of this Agreement by City. CE shall indemnify and hold harmless City for any and all claims for damages resulting from CE's violation of this Section. 25. NOTICES All notices, demands, requests or approvals to be given under the terms of this Agreement shall be given in writing, and conclusively shall be deemed served when delivered personally, or on the third business day after the deposit thereof in the United States mail, postage prepaid, first -class mail, addressed as 13 hereinafter provided. All notices, demands, requests or approvals from CE to City shall be addressed to City at: Attention: Mark Harmon, Director General Services Department City of Newport Beach 3300 Newport Boulevard Newport Beach, CA, 92663 Phone: 949 - 644 -3055 Fax: 949 - 650 -0747 All notices, demands, requests or approvals from CITY to CE shall be addressed to CE at: Attention: James Harger, Senior Vice President Clean Energy Incorporated 3020 Old Ranch Parkway Suite 200 Seal Beach California 90740 Phone: (562) 493 -2804 Fax: (562) 493 -4532 26. DEFAULT /TERMINATION In the event that either party fails or refuses to perform any of the provisions of this Agreement at the time and in the manner required, that party shall be deemed in default in the performance of this Agreement. If such default is not cured within a period of ten (10) calendar days, or if more than ten (10) calendar days are reasonably required to cure the default and the defaulting party fails to give adequate assurance of due performance within ten (10) calendar days after receipt of written notice of default, specifying the nature of such default and the steps necessary to cure such default, and thereafter diligently take steps to cure the default, the non - defaulting party may terminate the Agreement forthwith by giving to the defaulting party written notice thereof. Notwithstanding the above provisions, City shall have the right, at its sole discretion and without cause, of terminating this Agreement at any time by giving one hundred eighty (180) calendar days prior written notice to CE. In the event of termination under this Section, City shall pay CE for services satisfactorily performed and costs incurred up to the effective date of termination for which CE has not been previously paid and CE may elect to sell, remove or abandon the Facility, as described in Section 9.3 above. On the effective date of termination, CE shall deliver to City all reports, documents and other information developed or accumulated in the performance of this Agreement. 27. COMPLIANCE WITH ALL LAWS CE shall at its own cost and expense comply with all statutes, ordinances, regulations and requirements of all governmental entities, including federal, state, county or municipal, whether now in force or hereinafter enacted. CE shall conform to all applicable provisions of State and Federal law including, applicable provisions of the California Labor Code and the Federal Fair Labor Standards Act. In addition, all work performed by CE shall conform to applicable City, local, 14 county, state and federal laws, rules, regulations and permit requirements and be subject to approval of the Project Administrator and City. 28. WAIVER A waiver by either party of any breach, of any term, covenant or condition contained herein shall not be deemed to be a waiver of any subsequent breach of the same or any other term, covenant or condition contained herein, whether of the same or a different character. 29. INTEGRATED CONTRACT This Agreement represents the full and complete understanding of every kind or nature whatsoever between the parties hereto, and all preliminary negotiations and agreements of whatsoever kind or nature are merged herein. No verbal agreement or implied covenant shall be held to vary the provisions herein. 30. CONFLICTS OR INCONSISTENCIES In the event there are any conflicts or inconsistencies between this Agreement and the Scope of Services or any other attachments attached hereto, the terms of this Agreement shall govern. 31. INTERPRETATION The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of the Agreement or any other rule of construction which might otherwise apply. 32. AMENDMENTS This Agreement may be modified or amended only by a written document executed by both CE and City and approved as to form by the City Attorney. 33. SEVERABILITY If any term or portion of this Agreement is held to be invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions of this Agreement shall continue in full force and effect. 34. CONTROLLING LAW AND VENUE The laws of the State of California shall govern this Agreement and all matters relating to it and any action brought relating to this Agreement shall be adjudicated in a court of competent jurisdiction in the County of Orange. 15 35. EQUAL OPPORTUNITY EMPLOYMENT CE represents that it is an equal opportunity employer and it shall not discriminate against any subcontractor, employee or applicant for employment because of race, religion, color, national origin, handicap, ancestry, sex or age. 16 IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on the day and year first written above. APPROVED AS TO FORM: By: /O V" C. p_ Aaron C. Harp, Assistant City Attorney for the City of Newport Beach ATTEST: am LaVonne Harkless, City Clerk CITY OF NEWPORT BEACH, A Municipal Corporation Mayor Ed Selich for the City of Newport Beach CLEAN ENERGY (Corporate Officer) Print Name: (Financial Officer) Title: Print Name: CLEAN ENERGY CONSTRUCTION (Corporate Officer) Title: Print Name: By: (Financial Officer) Print Name: Attachments: Exhibit A - Equipment/YardModifications Exhibit B - Proposed Site Plan Exhibit C - Preferred Billing Rate for City Vehicles 17 Exhibit A Equipment/Modification Schedule 1) Station Equipment: CE shall provide the following equipment as part of the CNG Fueling Facility: • (1) ANGI or Greenfield Compressor • (3) ASME Storage Vessels • (1) Xebec Dryer • (1) Greenfield Dispenser with Video Screen • (1) Priority Panel • (1) Switchgear • (2) Sherex Nozzles CE, at its sole discretion, may substitute different equipment manufacturers for the above equipment. Specifications for substituted equipment must be equal to or of better quality than equipment listed above. 2) CE shall, at its cost, have installed a natural gas meter (Southern California Gas Company), and an electric usage meter (Edison) to measure natural gas and electricity usage at the Facility. CE is fully responsible for the cost of all utilities associated with the CNG Fueling Facility. 3) Modifications to the City Corporate Yard: Without exception, CE shall be responsible for all costs associated with modifications to the City Yard for the purposes of installing/constructing a fast -fill natural gas fueling station to be located at the fueling island nearest the intersection of Superior Avenue and Industrial Way. This includes, but is not limited to, the following: • Utility service lines /connections • Block wall structure at fuel storage /equipment area • Asphalt/Concrete/Landscape modifications and repairs • Secure Automated Gate separating fueling facility from City Yard facilities Any modifications to City Yard must be approved by City prior to any work being performed. 4) CNG Fueling — CE shall, at its cost, add additional station components as necessary to insure adequate fuel for City vehicles at all times. Adequate fuel is defined as a reasonable filling time per vehicle. 0 ~----�--- Exhibft B PROPOSED SffE PLAN SUMIM FM ME NEWPORT BEACH CITY YARD Exhibit C Preferred Billing Rate for City Vehicles The City shall receive a preferred price for CNG fuel delivered from Facility to City equipment. The monthly CNG price per Gasoline Gallon Equivalent (GGE) shall be determined by the following formula: The monthly Southern California Gas Company's Delivered Cost of Gas (G-NGU) per GGE + the Compression Charge per GGE + any applicable excise, sales, and/or use taxes per GGE = CNG Price per GGE charged to the City. The Compression Charge per GGE for the first year of the contract will be $0.95. There are 125,000 British Thermal Units (Btu) per GGE. The following conditions apply: 1) CE will pay all Southern California Gas Company charges for service to the Facility. 2) Beginning January 1, 2009 and each January 1 thereafter, the Compression Charge per GGE of CNG charged by CE will be adjusted by the increase in the United States Bureau of Labor Statistics Consumer Price Index for Energy for All Urban Consumers, Los Angeles - Anaheim - Riverside, California (1982 -84 =100) for the year (or portion thereof) prior to the year being adjusted. The CPI increase shall not exceed 3% per 12 month period. 3) The City's preferential fuel price shall never exceed CE's posted retail price less $0.10 per GGE.