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HomeMy WebLinkAbout31-Public Services RiGINfL CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION From: Ken Fischer, Director Subject: Resolution authorizing the execution of an Amendment and Dept: Public Services increase to Contract Purchase Order #08-070, with three single year renewal Date: April 9, 2008 options to Applied LNG Technologies pursuant to Section 3.04.010 B-3 of the Municipal Code for the purchase of LNG fuel. Meeting Date: April 21, 2008 Synopsis of Previous Council Action Reso 2008-48 February 4, 2008 Approved $75,000 increase to annual PO April 7, 2008 Approved $50,000 increase to annual PO. Item continued to April 21, 2008 Council meeting, referred to Ways and Means Committee for review. Recommended Motion: e Adopt Resolution. S' re Contact person Don Johnson, Fleet Manager Phone: 5220 Supporting data attached: Staff Report, Quote, Resolution, Agreement, and Amendment. Ward: All FUNDING REQUIREMENTS: Amount: $100,100 Source: 635-341-5113 Motor Fuel & Lubricants Finance: Council Notes: cSo X008 - /3 aI o8 Agenda Item No. b I CITY OF SAN BERNARDINO — REQUEST FOR COUNCIL ACTION Staff Report Subject: Resolution authorizing the execution of an Amendment and increase to Contract Purchase Order #08-070, with three single year renewal options, to Applied LNG Technologies pursuant to Section 3.04.010 B-3 of the Municipal Code for the purchase of LNG fuel. Background: Applied LNG Technologies is the company that supplied the first load of fuel to our new LNG station (Station). Since Applied LNG Technologies is most familiar with our Station, staff issued an interim contract purchase order in the amount of $24,900 to purchase LNG fuel until staff could seek bids for a long-term contract. Unfortunately, it took longer than anticipated to resolve the minor technical issues associated with the construction and commissioning of the Station, and on February 4, 2008 resolution #2008-48 was approved by the Mayor and Common Council increasing the purchase order by $75,000. On April 7, 2008 a $50,000 increase was approved, the item was referred to the Ways and Means Committee for review and continued to the April 21, 2008 meeting of the Mayor and Common Council. There are only two available vendors able to supply LNG fuel. Fleet staff has been in contact with both vendors and requested quotes for a long term contract for LNG fuel supply and station maintenance, the results are as follows: Applied LNG Technologies is proposing an initial charge of $1.43 per gallon including freight, subject to monthly adjustment pursuant to a regional petroleum pricing index. The proposed preventive maintenance contract is $750.00 per month, which is $9,000 per year. This covers monthly inspections and all preventive maintenance required by the station manufacturer. Field service labor for repairs is $100 per hour plus parts costs, so the City would only pay for each repair throughout the year (see attached contract/maintenance agreement attachment 2). The estimated annual station maintenance cost per the manufacturer is $40,000. Clean Energy is proposing to charge $1.34 per gallon including a diesel surcharge of $0.001 per gallon for delivery, subject to monthly adjustment pursuant to a regional petroleum pricing index. Their preventive maintenance proposal appears to be an all- inclusive price based on a $0.15 per gallon of LNG fuel pumped but excludes three of the major components of the station. The City's fleet currently uses approximately 1200 gallons per day (1200 x 0.15) = $180 per day. Fuel usage is expected to double to Staff Report — Continued 2400 gallons per day when sixteen (16) new LNG vehicles arrive by the end of the fiscal year. This will raise the daily maintenance cost to $360 per day. IWM operations run six (6) days a week, so we can expect to pay around $9,000 per month. This cost would rise as more fuel is pumped from the station, as it is now open to other fleets as well as the public. Attached for your review is a spreadsheet comparing both proposals with a conservative estimate of future fuel usage. Fuel costs proposed by Applied LNG and Clean Energy are similar. However, the disparity between their proposed maintenance costs leads staff to recommend a multi- year contract award to Applied LNG Technologies for LNG fuel supply beginning in FY 07/08 and station maintenance beginning in December of FY 08/09 when the station construction warranty period is completed. In order to allow the City vehicles and the public to fuel without interruption at our Station, staff is seeking approval of an amendment that includes three (3) single year renewal options and an increase to the purchase order amount by an additional $100,100 for a total of $250,000 for the remainder of FY 07/08. On April 9, 2008 at the regularly scheduled Ways & Means Committee meeting this item was reviewed. Staff presented its recommendations and methodology showing how the bids were solicited and reviewed to determine who was the lowest responsive bidder. Both vendors were present and gave a brief presentation to the Ways and Means Committee. Committee members questioned both vendors and staff prior to any recommendations. The Committee members voted to recommend award of the contract to Applied LNG Technologies and referred the item back to the full Council for approval at the April 21, 2008 meeting of the Mayor and Common Council. Financial Impact: Funds for this purchase are available in the FY 07-08 Account No. 635-341-5113, Motor Fuel & Lubricants. Recommendation: Adopt Resolution. CLEAN ENERGY ®rm-'$/LNG Fuel Maintenance Fu " Main en ,c�;. Priced Per Gallon Yearly Flat Rate Based on 2,400 Based on$750.00 gallons per day @ per month 0.15 per gallon Preventative Annual Cost is Maintenance April 2008 Natural Gas $120,960.00 Annual cost Commodity Price $0.726 0.726 $9,000 CE's station On site repair labor maintenance rate$100.00 per pricing excludes hour. Materials are costs associated cost plus 15% as with 3 major needed per each components, card repair. reader system,CNG dispenser video panel and LNG pump rebuilds Liquefaction loss factor $0.00 $0.14 Delivery Price Per Gallon $0.62 $0.45 Freight $0.00 $0.12 Diesel Surcharge ($11.54/9,000 gallons $0.001 $0.000 Total $1.347 $1.438 Annual Maintenance Cost $120,960.00 9,000 Estimated Annual "Station Repair Cost manufacturer estimates$40,000 $0.00 annual repair cost Annual Fuel Usage $1,086,220.80 1,161,216.00 Total Fuel & Maintenance Cost $1,207,180.80 $1,170,216.00 Clean Energy ALT Daily Fuel Use 2,400 X$1.347=$3,232.80 Daily Fuel Use 2,400 X$1.44=$3,456.00 Monthly Fuel Use$3,232.80 X 28 days=$90,518.40 Monthly Fuel Use$3,456.00 X 28 days=$98,768.00 Annual Fuel Use$90,581.40 X 12 months= 1,086,220.80 Annual Fuel Use 98,768.00 X 12 Months= 1,161,216.00 Projected Fuel usage increase 600 gallons daily Clean Energy 151,200.00 Annual Maintenance Daily Fuel Use 3,000 X$1.347=$4,041,00 1,357,776.00 Annual Fuel Use Monthly Fuel Use 4,041.00 X 28 days=$113,148.00 $1,508,976.00 Total Maint.&Fuel Annual Fuel Use$113.148.00 X 12= 1,357,776.00 ALT Daily Fuel Use 3,000 x 1.443=$4,329/00 9,000.00 Annual Maintenance" Monthly Fuel Use$4329.00 x 28 days=$121,212.00 1,454,544.00 Annual Fuel Use Annual Fuel Use$121,212,.00 X 12$1,454,544.00 $1,463,544.00 Total Maint.&Fuel Cost differential $45,432.00 COPY 1 RESOLUTION NO. 2 RESOLUTION OF THE MAYOR: AND COMMON COUNCIL OF THE CITY OF 3 SAN BERNARDINO AUTHORIZING THE EXECUTION OF AN AMENDMENT AND INCREASE TO CONTRACT PURCHASE ORDER #08-070, WITH THREE SINGLE 4 YEAR RENEWAL OPTIONS, TO APPLIED LNG TECHNOLOGIES PURSUANT TO SECTION 3.04.010 B-3 OF THE MUNICIPAL CODE FOR THE PURCHASE OF LNG 5 FUEL. 6 BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY 7 OF SAN BERNARDINO AS FOLLOWS: 8 WHEREAS, the current Contract Purchase Order of $149,900 needs to be 9 increased to $250,000 in order to fuel the LNG station; 10 SECTION 1. The City Manager of the City of San Bernardino is hereby 11 12 authorized to execute on behalf of said City an Amendment No. 1 to an Agreement 13 between the City of San Bernardino and Applied LNG Technologies, a copy of which is 14 attached hereto, marked Exhibit "A" and incorporated herein by reference as fully as 15 though set forth at length. 16 SECTION 2. The Mayor and Common Council hereby authorize the Director of 17 Finance or his/her designee to increase Contract Purchase Order No. 08-070 by an 18 additional $100,100 for a total of $250,000 beginning in FY 07/08. 19 20 SECTION 3. This purchase is exempt from the formal contract procedures of 21 Section 3.04.010 of the Municipal Code, pursuant to Section 3.04.010. B.3 of said 22 Code "Purchases approved by the Mayor and Common Council". 23 SECTION 4. The Purchase Order shall reference this Resolution No. 2008- 24 and shall read, "Applied LNG Technologies for the purchase of LNG fuel" and shall 25 incorporate the terms and conditions of the Agreement. 26 27 28 April 9, 208 I RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF 2 SAN BERNARDINO AUTHORIZING THE EXECUTION OF AN AMENDMENT AND INCREASE TO CONTRACT PURCHASE ORDER #08-070, WITH THREE SINGLE 3 YEAR RENEWAL OPTIONS, TO APPLIED LNG TECHNOLOGIES PURSUANT TO SECTION 3.04.010 B-3, OF THE MUNICIPAL CODE FOR THE PURCHASE OF LNG 4 FUEL. 5 SECTION 5. The authorization to execute the above referenced Purchase 6 Order and agreement is rescinded if not issued within sixty (60) days of the passage of 7 this resolution. 8 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Ill 28 April 9, 2008 1 RESOLUTION OF THE MAYOR. AND COMMON COUNCIL OF THE CITY OF 2 SAN BERNARDINO AUTHORIZING THE EXECUTION OF AN AMENDMENT AND INCREASE TO CONTRACT PURCHASE ORDER #08-070, WITH THREE SINGLE 3 YEAR RENEWAL OPTIONS, TO APPLIED LNG TECHNOLOGIES PURSUANT TO SECTION 3.04.010 B-3, OF THE MUNICIPAL CODE FOR THE PURCHASE OF LNG 4 FUEL. 5 1 HEREBY CERTIFY that the foregoing Resolution was duly adopted by the 6 Mayor and Common Council of the City of San Bernardino at a 7 meeting thereof, held on the day of 2008, by the 8 9 following vote, to wit: 10 Council Members: AYES NAYS ABSTAIN ABSENT 11 ESTRADA 12 BAXTER 13 BRINKER 14 DERRY 15 KELLEY 16 17 JOHNSON 18 MCCAMMACK 19 20 Rachel G. Clark, City Clerk 21 The foregoing resolution is hereby approved this day of , 2008. 22 23 Patrick J. Morris, Mayor 24 City of San Bernardino 25 Approo ed as to form: 26 r James F. Oenman 27 City Attorney 28 April 9, 2008 j AMENDMENT NO. 1 TO VENDOR SERVICES AGREEMENT APPLIED LNG TECHNOLOGIES 2 3 This Agreement is entered into this 21 st day of April 2008, by and between Applied LNG Technologies ("VENDOR") and the City of San Bernardino 4 ("CITY" or"San Bernardino"). 5 RECITALS 6 A. On February 4, 2008, Applied LNG Technologies and the City of San Bernardino 7 entered into a Vendor Services Agreement ("Agreement") for the purchase of 8 LNG fuel for a not-to-exceed amount of $99,900, a copy of which is attached 9 hereto as "Attachment 1" and incorporated by this reference. 10 B. On April 7`", 2008, Applied LNG Technologies and the City of San Bernardino amended the Agreement to increase the amount of the Agreement by$50,000. 11 C. The CITY and VENDOR now desire to amend the Agreement to increase the 12 amount of the Agreement by $100,100 for a total not-to-exceed purchase price of 13 $250,000 for LNG fuel. 14 D. The CITY and VENDOR now desire to amend the Agreement terms to add three 15 (3) single year renewal options. 16 AGREEMENT In consideration of the mutual promises contained in the Vendor Services 17 Agreement, the parties agree as follows: 18 1. Paragraph 1 and 2 of the Agreement dated February 4, 2008, attached here to 19 as Attachment 1, is amended to incorporate the terms and conditions of 20 Attachment 2, attached hereto and incorporated herein by this reference. 21 2. The total Agreement price shall be increased by $100,100, for a not-to-exceed 22 amount of$250,000. 23 3. The term of this Agreement shall be for an initial term from April 21, 2008 through June 30, 2008. With three (3) one-year extensions at the City's option. 24 Option year one, if exercised, shall be effective July 1, 2008 through June 30, 25 2009. Option year two, if exercised, shall be effective July 1, 2009 through 26 June 30, 2010. Option year three, if exercised, shall be effective July 1, 2010 27 through June 30, 2011. 28 4. The other provisions of the written contract are reaffirmed as originally stated. Exhibit"A" . 1 AMENDMENT NO. 1 TO VENDOR SERVICES AGREEMENT 2 APPLIED LNG TECHNOLOGIES 3 4 5 IN WITNESS THEREOF, the parties hereto have executed the Agreement on the day and date first above written. 6 7 Dated: 52008 APPLIED LNG TECHNOLOGIES 8 9 By: 10 11 12 Dated: 12008 CITY OF SAN BERNARDINO 13 14 15 By: Fred Wilson, City Manager 16 17 ATTEST: 18 19 Rachel Clark, City Clerk 20 21 22 Approved as to form: 23 James F. Penman 24 City Attorney 25 By: 26 27 28 Exhibit"A" 1 AMENDMENT NO. 1 TO VENDOR SERVICES AGREEMENT 2 APPLIED LNG TECHNOLOGIES 3 This Agreement is entered into this 21st day of April 2008, by and between 4 Applied LNG Technologies ("VENDOR") and the City of San Bernardino ("CITY" or"San Bernardino"). 5 RECITALS 6 A. On February 4, 2008, Applied LNG Technologies and the City of San Bernardino 7 entered into a Vendor Services Agreement ("Agreement") for the purchase of 8 LNG fuel for a not-to-exceed amount of $99,900, a copy of which is attached 9 hereto as "Attachment 1" and incorporated by this reference. 10 B. On April 7`", 2008, Applied LNG Technologies and the City of San Bernardino amended the Agreement to increase the amount of the Agreement by$50,000. 11 C. The CITY and VENDOR now desire to amend the Agreement to increase the 12 amount of the Agreement by $100,100 for a total not-to-exceed purchase price of 13 5250,000 for LNG fuel. 14 D. The CITY and VENDOR now desire to amend the Agreement terms to add three 15 (3) single year renewal options. 16 AGREEMENT 17 In consideration of the mutual promises contained in the Vendor Services Agreement, the parties agree as follows: 18 1. Paragraph 1 and 2 of the Agreement dated February 4, 2008, attached here to 19 as Attachment 1, is amended to incorporate the terms and conditions of 20 Attachment 2, attached hereto and incorporated herein by this reference. 21 2. The total Agreement price shall be increased by$100,100, for a not-to-exceed 22 amount of$250,000. 23 3. The term of this Agreement shall be for an initial term from April 21, 2008 through June 30, 2008. With three (3) one-year extensions at the City's option. 24 Option year one, if exercised, shall be effective July 1, 2008 through June 30, 2009. Option year two, if exercised, shall be effective July 1, 2009 through 26 June 30, 2010. Option year three, if exercised, shall be effective July 1, 2010 27 through June 30, 2011. 28 4. The other provisions of the written contract are reaffirmed as originally stated. 1 AMENDMENT NO. 1 TO VENDOR SERVICES AGREEMENT 2 APPLIED LNG TECHNOLOGIES 3 4 5 IN WITNESS THEREOF, the parties hereto have executed the Agreement on the day 6 and date first above written. 7 Dated: , 2008 APPLIED LNG TECHNOLOGIES 8 9 By: 10 11 12 13 Dated: ' 2008 CITY OF SAN BERNARDINO 14 15 By: Fred Wilson, City Manager 16 17 ATTEST: 18 19 Rachel Clark, City Clerk 20 21 22 Approved as to form: 23 James F. Penman 24 City Attorney 25 26 27 28 2008-48 Attachment 1 1 VENDOR SERVICE AGREEMENT This Vendor Service Agreement is 2 g entered Into this 4th day of February 3 2008, by and between Applied LNG Technologies ("VENDOR") and the City of San 4 Bernardino ("CITY" or"San Bernardino"). 5 WITNESSETH: 6 7 WHEREAS, the Mayor and Common Council has determined that it is advantageous 8 and in the best interest of the CITY to purchase LNG fuel in order to continue to fuel its new 9 LNG station; and 10 WHEREAS, the City of San Bernardino did not solicit and accept quotes from vendors 11 for the purchase of LNG fuel since minor technical issues still need to be resolved before bid 12 specifications can be established. 13 NOW, THEREFORE, the parties hereto agree as follows: 14 1. SCOPE OF SERVICES. 15 16 For the remuneration stipulated, San Bernardino hereby engages the services of 17 VENDOR to provide LNG fuel. 18 2. COMPENSATION AND EXPENSES. 19 a. For the services delineated above, the CITY, upon presentation of an invoice, shall pay the 20 VENDOR up to the amount of$99,900 for the purchase of LNG fuel. 21 b. No other expenditures made by VENDOR shall be reimbursed by CITY. 22 23 3. TERM. 24 The term of this Agreement shall be for a period of one year. 25 This Agreement may be terminated at any time by thirty (30) days' written notice by 26 either party. The terms of this Agreement shall remain in force unless mutually amended. The 27 duration of this Agreement may be extended with the written consent of both parties. 28 01/31/08 2008-48 1 4. INDEMNITY. 2 CITY agrees to indemnify and hold harmless VENDOR, its officers, agents and 3 volunteers from any and all claims, actions, or losses, damages and/or liability resulting from 4 CITY's negligent acts or omissions arising from the CITY's performance of its obligations 5 under the Agreement. 6 VENDOR agrees to indemnify and hold harmless the CITY, its officers, agents, and 7 8 volunteers from any and all claim, actions, or losses, damages and/or liability resulting from 9 VENDOR's negligent acts or omissions arising from the VENDOR's performance of its 10 obligations under the agreement. 11 In the event the CITY and/or the VENDOR is found to be comparatively at fault for any 12 claim, action, loss, or damage which results from their respective obligations under the 13 Agreement, the CITY and/or VENDOR shall indemnify the other to the extent of this 14 15 comparative fault. 16 5. INSURANCE. 17 While not restricting or limiting the forgoing, during the term of this Agreement, 18 VENDOR shall maintain in effect policies of comprehensive public, general and automobile 19 liability insurance, in the amount of $1,000,000.00 combined single limit, and statutory 20 worker's compensation coverage, and shall file copies of said policies with the CITY's Risk 21 Manager prior to undertaking any work under this Agreement. CITY shall be set forth as an 22 23 additional named insured in each policy of insurance provided hereunder. The Certificate of 24 Insurance furnished to the CITY shall require the insurer to notify CITY of any change or it termination in the policy. 26 27 28 01/31/08 2008-48 1 6. NON-DISCRIMINATION. 2 In the performance of this Agreement and in the hiring and recruitment of employees, 3 VENDOR shall not engage in, nor permit its officers, employees or agents to engage in, 4 discrimination in employment of persons because of their race, religion, color, national origin, 5 ancestry, age, mental or physical disability, medical conditions, marital status, sexual gender or 6 sexual orientation, or any other status protected by law, except as permitted pursuant to Section 7 12940 of the California Government Code. 8 9 7. INDEPENDENT CONTRACTOR. 10 VENDOR shall perform work tasks provided by this Agreement, but for all intents and 11 purposes VENDOR shall be an independent contractor and not an agent or employee of the 12 CITY. VENDOR shall secure, at its expense, and be responsible for any and all payment of 13 Income Tax, Social Security, State Disability Insurance Compensation, Unemployment 14 15 Compensation, and other payroll deductions for VENDOR and its officers, agents, and 16 employees, and all business licenses, if any are required, in connection with the services to be 17 performed hereunder. 18 8. BUSINESS REGISTRATION CERTIFICATE AND OTHER REQUIREMENTS. 19 VENDOR warrants that it possesses or shall obtain, and maintain a business registration 20 certificate pursuant to Chapter, 5 of the Municipal Code and any other licenses, 21 22 qualifications, insurance and approval of whatever nature that are legally required of VENDOR 23 to practice its business or profession. 24 25 26 27 28 01/31/08 I 2008-48 1 9. NOTICES. 2 Any notices to be given pursuant to this Agreement shall be deposited with the United 3 States Postal Service, postage prepaid and addressed as follows: 4 TO THE CITY: City of San Bernardino 5 Ken Fischer, Director 300 North "D" Street 6 San Bernardino, CA 92418 Telephone: (909) 384-5140 7 TO THE VENDOR: Applied LNG Technologies 8 3001 Knox St. 9 Dallas, TX 75205 Telephone: (214) 697-0391 10 Attn: Kevin W. Markey 11 10. ATTORNEYS' FEES. 12 In the event that litigation is brought by any party in connection with this Agreement, 13 the prevailing party shall be entitled to recover from the opposing party all costs and expenses, 14 including reasonable attorneys' fees, incurred by the prevailing party in the exercise of any of 15 16 its rights or remedies hereunder or the enforcement of any of the terms, conditions or 17 provisions hereof. The costs, salary and expenses of the City Attorney and members of his 18 office in enforcing this Agreement on behalf of the CITY shall be considered as "attorneys' 19 fees" for the purposes of this paragraph. 20 11. ASSIGNMENT. 21 22 VENDOR shall not voluntarily or by operation of law assign, transfer, sublet or 23 encumber all or any part of the VENDOR's interest in this Agreement without CITY's prior 24 written consent. Any attempted assignment, transfer, subletting or encumbrance shall be void 25 and shall constitute a breach of this Agreement and cause for the termination of this 26 Agreement. Regardless of CITY's consent, no subletting or assignment shall release VENDOR 27 28 01/31/08 2008-48 1 of VENDOR's obligation to perform all other obligations to be performed by VENDOR 2 hereunder for the term of this Agreement. 3 12. VENUE. 4 The parties hereto agree that all actions or proceedings arising in connection with this 5 Agreement shall be tried and litigated either in the State courts located in the County of San 6 Bernardino, State of California or the U.S. District Court for the Central District of California, 7 8 Riverside Division. The aforementioned choice of venue is intended by the parties to be 9 mandatory and not permissive in nature. 10 13. GOVERNING LAW. 11 This Agreement shall be governed by the laws of the State of California. 12 14. SUCCESSORS AND ASSIGNS. 13 This Agreement shall be binding on and inure to the benefit of the parties to this 14 15 Agreement and their respective heirs, representatives, successors, and assigns. 16 15. HEADINGS. 17 The subject headings of the sections of this Agreement are included for the purposes of 18 convenience only and shall not affect the construction or the interpretation of any of its 19 provisions. 20 16. ENTIRE AGREEMENT; MODIFICATION. 21 22 This Agreement constitutes the entire agreement and the understanding between the 23 parties, and supercedes any prior agreements and understandings relating to the subject manner 24 of this Agreement. This Agreement may be modified or amended only by a written instrument 25 executed by all parties to this Agreement. 26 27 28 01/31/08 2008-48 1 VENDOR SERVICE AGREEMENT APPLIED LNG TECHNOLOGIES 2 3 IN WITNESS THEREOF, the parties hereto have executed this Agreement on the day 4 and date set forth below. 5 Dated: 3 ' (� , 2008 VENDO 6 By: 7 Its: Q �01•(S 8 Dated / �i c.6 Cv , 2008 CITY OF ARDINO 9 By: 10 Fred i , City Manager 11 12 Approved as to Form: 13 14 By: - 41` a 15 es F. Penman, City Attorney 16 17 18 19 20 21 22 23 24 25 26 27 28 01/31/08 Attachment 2 AMT'; January 29, 2008 Don W. Johnson Fleet Manager City of San Bernardino Public Services Department 182 South Sierra Way San Bernardino, CA 92408 Mr. Johnson, Applied LNG Technologies is pleased to offer you this proposal. We look forward to offering you a complete LNG service. One of the ways we intend to do this is to work with the City to open your fueling station to the general public. This new LNG station would provide an environmentally friendly fuel to the surrounding business community while creating a new source of revenue to the City. In order to implement this plan Applied LNG Technologies will provide the following: 1. Provide fuel grade LNG for the term of the agreement. 2. Assist in the completion of federal tax application (IRS form 637) to process tax credits. And to assist on a monthly basis of providing data to file for your tax credits. 3. Provide a Cooperative Purchase Agreement, which provides the LNG supply to the City of San Bernardino. • LNG pricing quote ((SoCal/ 12.104) x 1.2) + 0.45 plus freight. 4. We will also provide maintenance for your station when your warranty expires in 12 months. We will negotiate as this date gets closer. See attached maintenance agreement. We look forward to working with you and the City on this project. Again, thank you for the opportunity. Kevin W. Markey VP of Operation 3001 Knox Street—Suite 403 Dallas, TX 75205 Phone: 214.697.0391 Fax: 214.520.0507 ALT APPLIED LNG TECHNOLOGIES MAINTENANCE AGREEMENT EXHIBIT A LNG Station Components Periodic Inspection and Preventative Maintenance Schedule Based on Information Supplied by Manufacturer Monthly Quarterly Annually -2-year Vent Lines — Check for leaks and dama e X Flame Detectors — calibrate and test X Grounding Circuit—verify continuity X Air Desiccant— replace if indicated X Air System — Snoop test for leaks X Air System — Check regulator set point X Valves & Piping: Check for leaks and malfunctions X Fill Hoses: Check for leaks, damage and wear X Dispensers: Check for leaks and malfunctions X Fueling Nozzle Seals X Drain air tank &/or water se arator X Fire Extinguishers: inspect X Air Regulator— Check set point ressure X Air Conditioners —clean filters and assure proper X o eration Air Compressor— Check and maintain oil level X Y Strainers —clean and inspect X Process Lines — Snoop test valve stems, flanges, um can flanges, and threaded fittings for leaks X Methane Detectors — calibrate and test X Relief Valves: Verify Proper Set Points X VJ Piping Insulation: Integrity X ESD System: test X Storage Tank Vacuum: measure & record X Control Hardware — Check operation and for leaks on pressure gauges, liquid level gauges, transmitters X — calibrate as necessa Pressure Relief Valves —.recertify X Burst Disc: Replace X LNG Pump: Labor to remove and inspect for abnormal conditions at 4000 hours. Labor to remove and return to manufacturer or repair facility for See intervals rebuilding at 8000 hours ALT APPLIED LNG TECHNGLGGIES MAINTENANCE AGREEMENT Vi. FEE STRUCTURE 6.1. Unless otherwise agreed in writing by the parties, the fee structure for the preventative maintenance required by this Agreement shall be as follows: Maintenance Fee Structure Preventative Maintenance Labor $ 750.00 per month Unscheduled Call Out Labor (see 6.2 Fee Structure) (fees subject to increase on an annual basis but limited to 3% per year) Consumables, Parts, & Materials Invoices $1000 and over Cost plus 15% Invoices under $1000 Cost plus $150 administrative fee 6.2. Unless otherwise agreed in writing by the parties, the fee structure for the breakdown repairs required by this Agreement shall be as follows: Repair Fee Structure LNG/LCNG/CNG Technician Field Service Rates Continental United States & Mexico Effective January 1 , 2006 • Field service "on site" labor rate is $100.00 per hour ($150.00 holiday) for all hours worked (two hour minimum) • Service labor rate for travel to and from site, phone support, or pre / post field service is $50.00 per hour ($75.00 holiday) (one hour minimum) • Driving: mileage charge is $0.485 per mile • Air travel / rental car: costs plus 15% (as above) • Per-diem: $200.00 per day • Material: ALT/FleetStar cost plus 15% (as above) • Sub-let labor: ALT/FleetStar cost plus 15% (as above) • Equipment rental: ALT/FleetStar cost plus 15% (as above) • Freight: ALT/FleetStar cost plus 15% (as above) 38. Resolutions authorizing increases to contract Purchase Order No. 08-062 in the amount of $176,000 to Matich Corporation and contract Purchase Order No. 08-063 in the amount of$22,000 to Pavement Recycling Systems, Inc. for street repairs. (See Attached) (Cost to City - $198,000 from Infrastructure Loan Fund.) Wards 2&5 A. Resolution of the Mayor and Common Council of the City of San Bernardino authorizing an increase to contract Purchase Order Number 08-062 in the amount of $176,000 to Matich Corporation pursuant to Section 3.04.010 B-3 of the Municipal Code for additional street paving services. Adopted 2008-110 B. Resolution of the Mayor and Common Council of the City of San Bernardino authorizing an increase to contract Purchase Order Number 08-063 in the amount of $22,000 to Pavement Recycling Systems, Inc. pursuant to Section 3.04.010 B-3 of the Municipal Code for additional cold planing services, labor and equipment rental for City street repairs. Adopted 2008-111 Approved MOTION: That said resolutions A&B, be adopted. XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX 39. Resolution of the Mayor and Common Council of the City of San Bernardino authorizing the execution of an amendment and increase to contract Purchase Order #08-070, with three single year renewal options, to Applied LNG Technologies pursuant to Section 3.04.010 B-3 of the Municipal Code for the purchase of LNG fuel. (See Attached) (Cost to City - $150,100 from the Fleet Services Fund.) All Wards No Action Taken MOTION: That said resolution be adopted. Approved MOTION: That the matter be placed on the Ways and Means Committee agenda as a matter that arose subsequent to the posting of the agenda; that the City Manager be authorized to purchase LNG fuel for the refuse fleet for an amount not to exceed $50,000; and that the matter be continued to April 21, 2008. XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX END OF CONSENT CALENDAR 14 04/07/2008 CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION From: Ken Fischer, Director :Subject: Resolution authorizing the execution of an Amendment and Dept: Public Services increase to Contract Purchase Order x#08-070, with three single year renewal Date: March 25, 2008 options to Applied LNG Technologies pursuant to Section 3.04.010 B-3 of the (Municipal Code for the purchase of LNG fuel. (Meeting Date: April 7, 2008 Synopsis of Previous Council Action Reso 2008-48 February 4, 2008 Approved $75,000 increase to annual PO Recommended Motion: Adopt Resolution. n ture Contact person Don Johnson, Fleet Manager Phone: 5220 Supporting data attached: Staff Report, Quote, Resolution, Agreement, and Amendment. Ward: All FUNDING REQUIREMENTS: Amount: $150,100 Source: 635-341-5113 Motor Fuel & Lubricants Finance: Council Notes: wilDe Agenda Item No. CITY OF SAN BERNARDINO — REQUEST FOR COUNCIL ACTION Staff Report Subject: Resolution authorizing the execution of an ,Amendment and increase to Contract Purchase Order #08-070, with three single year renewal options, to Applied LNG Technologies pursuant to Section 3.04.010 B-3 of the Municipal Code for the purchase of LNG fuel. Background: Applied LNG Technologies is the company that supplied the first load of fuel to our new LNG station (Station). Since Applied LNG Technologies is most familiar with our Station, staff issued an interim contract purchase order in the amount of $24,900 to purchase LNG fuel until staff could seek bids for a long-term contract. Unfortunately, it took longer than anticipated to resolve the minor technical issues associated with the construction and commissioning of the Station, and on February 4, 2008 resolution #2008-48 was approved by the Mayor and Common Council increasing the purchase order by $75,000. The most critical issue to resolve was the activation of the Station credit card reader. A long-term fuel supply contract was not possible until this system is fully operational. Staff has worked closely with the City's bank ("fells Fargo) and has resolved this issue. There are only two available vendors able to supply LNG fuel, Fleet staff has been in contact with both vendors and requested quotes for a long term contract for LNG fuel supply and station maintenance, the results are as follows: Applied LNG Technologies is proposing to charge $1.29 per gallon plus freight. The proposed preventive maintenance contract is $750.00 per month, which is $9,000 per year. This covers monthly inspections and all preventive maintenance required by the station manufacturer. Field service labor for repairs is $100 per hour plus parts costs, so the City would only pay for each repair throughout the year. (see attached contract/ maintenance agreement attachment 2). The estimated annual station maintenance cost is $40,000. Clean Energy is proposing to charge $1.32 per gallon plus a diesel surcharge for delivery. Their preventive maintenance proposal is an all-inclusive price based on a $0.15 per gallon of LNG fuel pumped. The City's fleet currently uses approximately 1200 gallons per day (1200 x 0.15) = $180 per day. Fuel usage is expected to double to 2400 gallons per day when sixteen (16) new LNG vehicles arrive by the end of the fiscal year. This will raise the daily maintenance cost to $360 per day. IWM operations run six (6) days a week, so we can expect to pay around $9,000 per month. This cost would rise as more fuel is pumped from the station. Fuel costs proposed by Applied LNG and Clean Energy are similar. However, the great disparity between their proposed maintenance costs leads staff to recommend a multi- year contract award to Applied LNG Technologies for LNG fuel supply beginning in FY 07/08 and station maintenance beginning in October of FY 08/09 when the warranty period is completed. In order to allow the City, vehicles and the public to fuel without interruption at our Station, staff is seeking approval of an amendment that includes three (3) single year renewal options and an increase to the purchase order amount by an additional $150,100 for a total of$250,000 for the remainder of FY 07/08. Financial Impact: Funds for this purchase are available in the FY 07-08 Account No. 635-341-5113, Motor Fuel & Lubricants. Recommendation: Adopt Resolution. 1 RESOLUTION NO. 2 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AUTHORIZING THE EXECUTION OF AN AMENDMENT AND 3 INCREASE TO CONTRACT PURCHASE ORDER #08-070, WITH THREE SINGLE 4 YEAR RENEWAL OPTIONS, TO APPLIED LNG TECHNOLOGIES PURSUANT TO SECTION 3.04.010 B-3 OF THE MUNICIPAL CODE FOR THE PURCHASE OF LNG 5 FUEL. 6 BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS: 7 8 WHEREAS, the current Contract Purchase Order of $99,900 needs to be 9 increased to $250,000 in order to fuel the LNG station; 10 SECTION 1. The City Manager of the City of San Bernardino is hereby 11 authorized to execute on behalf of said City an Amendment No. 1. to an Agreement 12 between the City of San Bernardino and Applied LNG Technologies, a copy of which is 13 attached hereto, marked Exhibit "A" and incorporated herein by reference as fully as 14 15 though set forth at length. 16 SECTION 2. The Mayor and Common Council hereby authorize the Director of 17 Finance or his/her designee to increase Contract Purchase Order No. 08-070 by an 18 additional $150,100 for a total of$250,000 beginning in FY 07/08. 19 SECTION 3. This purchase is exempt from the formal contract procedures of 20 Section 3.04.010 of the Municipal Code, pursuant to Section 3.04.010. B.3 of said 21 22 Code "Purchases approved by the Mayor and Common Council". 23 SECTION 4. The Purchase Order shall reference this Resolution No. 2008- 24 and shall read, "Applied LNG Technologies for the purchase of LNG fuel" and shall 25 incorporate the terms and conditions of the Agreement. 26 27 28 March 25, 2008 I RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AUTHORIZING THE EXECUTION OF AN AMENDMENT AND 2 INCREASE TO CONTRACT PURCHASE ORDER #08-070, WITH THREE SINGLE YEAR RENEWAL OPTIONS, TO APPLIED LNG TECHNOLOGIES PURSUANT TO 3 SECTION 3.04.010 B-3, OF THE MUNICIPAL CODE FOR THE PURCHASE OF LNG FUEL. 4 5 SECTION 5. The authorization to execute the above referenced Purchase 6 Order and agreement is rescinded if not issued within sixty (60) days of the passage of 7 this resolution. 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 March 25, 2008 i j RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF 1 SAN BERNARDINO AUTHORIZING THE EXECUTION OF AN AMENDMENT AND 2 INCREASE TO CONTRACT PURCHASE ORDER #08-070, WITH THREE SINGLE YEAR RENEWAL OPTIONS, TO APPLIED LNG TECHNOLOGIES PURSUANT TO 3 SECTION 3.04.010 B-3, OF THE MUNICIPAL CODE FOR THE PURCHASE OF LNG FUEL. 4 5 1 HEREBY CERTIFY that the foregoing Resolution was duly adopted by the 6 Mayor and Common Council of the City of San Bernardino at a 7 meeting thereof,. held on the day of _ 2008, by the 8 following vote, to wit: 9 Council Members: AYES NAYS ABSTAIN ABSENT 10 ESTRADA 11 12 BAXTER 13 BRINKER 14 DERRY 15 KELLEY 16 JOHNSON 17 MCCAMMACK 18 19 Rachel G. Clark, City Clerk 20 The foregoing resolution is hereby approved this day of 21 , 2008. 22 _ 23 Patrick J. Morris, Mayor City of San Bernardino 24 A roved as to f rm: 25 26 Ja es F. Penman 27 City Attorney 28 March 25, 2008 1 AMENDMENT NO. 1 TO VENDOR SERVICES AGREEMENT 2 APPLIED LNG TECHNOLOGIES 3 This Agreement is entered into this 7th day of April 2008, by and between 4 Applied LNG Technologies ("VENDOR") and the City of San Bernardino 5 ("CITY" or"San Bernardino"). 6 RECITALS 7 A. On February 4, 2008, Applied LNG Technologies and the City of San Bernardino entered into a Vendor Services Agreement ("Agreement") for the purchase of 8 LNG fuel for a not-to-exceed amount of $99,900, a copy of which is attached 9 hereto as "Attachment 1" and incorporated by this reference. 10 B. The CITY and VENDOR now desire to amend the Agreement to increase the 11 amount of the Agreement by $150,100 for a total not-to-exceed purchase price of 12 $250,000 for LNG fuel. 13 C. The CITY and VENDOR now desire to amend the Agreement terms to add three 14 (3) single year renewal options. AGREEMENT 15 In consideration of the mutual promises contained in the Vendor Services 16 Agreement, the parties agree as follows: 17 1. Paragraph 1 and 2 of the Agreement dated February 4, 2008, attached here to 18 as Attachment 1, is amended to incorporate the terms and conditions of 19 Attachment 2, attached hereto and incorporated herein by this reference. 20 2. The total Agreement price shall be increased by $150,100, for a not-to-exceed amount of$250,000. 21 3. The term of this Agreement shall be for an initial term from April 7, 2008 22 through June 30, 2008. With three (3) one-year extensions at the City's option. 23 Option year one, if exercised, shall be effective July 1, 2008 through June 30, 24 2009. Option year two, if exercised, shall be effective July 1, 2009 through 25 June 30, 2010. Option year three, if exercised, shall be effective July 1, 2010 26 through June 30, 2011. 27 4. The other provi re reaffirmed as originally stated. 28 �X�, -A 1 AMENDMENT NO. 1 TO VENDOR SERVICES AGREEMENT 2 APPLIED LNG TECHNOLOGIES 3 4 5 IN WITNESS THEREOF, the parties hereto have executed the Agreement on the day and date first above written. 6 7 Dated: , 2008 APPLIED LNG TECHNOLOGIES 8 9 By: 10 11 12 Dated: , 2008 CITY OF SAN BERNARDINO 13 14 15 By: Fred Wilson, City Manager 16 17 ATTEST: 18 19 Rachel Clark, City Clerk 20 21 22 Approved as to form: 23 James F. Penman 24 City Attorney 25 B I i y• 26 27 28 2008-48 Attachment 1 1 VENDOR SERVICE AGREEMENT 2 This Vendor Service Agreement is entered into this 4th day of February 3 2008, by and between Applied LNG Technologies ("VENDOR") and the City of San 4 Bernardino ("CITY" or"San Bernardino"). 5 WITNESSETH: 6 WHEREAS, the Mayor and Common Council has determined that it is advantageous 7 and in the best interest of the CITY to purchase LNG fuel in order to continue to fuel its new 8 9 LNG station; and 10 WHEREAS, the City of San Bernardino did not solicit and accept quotes from vendors 11 for the purchase of LNG fuel since minor technical issues still need to be resolved before bid 12 specifications can be established. 13 NOW, THEREFORE, the parties hereto agree as follows: 14 1. SCOPE OF SERVICES. 15 16 For the remuneration stipulated, San Bernardino hereby engages the services of 17 VENDOR to provide LNG fuel. 18 2. COMPENSATION AND EXPENSES. 19 a. For the services delineated above, the CITY, upon presentation of an invoice, shall pay the 20 VENDOR up to the amount of$99,900 for the purchase of LNG fuel. 21 b. No other expenditures made by VENDOR shall be reimbursed by CITY. 22 3. TERM. 23 24 The term of this Agreement shall be for a period of one year. 25 This Agreement may be terminated at any time by thirty (30) days' written notice by 26 either party. The terms of this Agreement shall remain in force unless mutually amended. The 27 duration of this Agreement may be extended with the written consent of both parties. 28 01/31/08 2008-48 1 4. INDEMNITY. 2 CITY agrees to indemnify and hold harmless VENDOR, its officers, agents and 3 volunteers from any and all claims, actions, or losses, damages and/or liability resulting from 4 CITY's negligent acts or omissions arising from the CITY's performance of its obligations 5 under the Agreement. 6 VENDOR agrees to indemnify and hold harmless the CITY, its officers, agents, and 7 8 volunteers from any and all claim, actions, or losses, damages and/or liability resulting from 9 VENDOR's negligent acts or omissions arising from the VENDOR's performance of its 10 obligations under the agreement. 11 In the event the CITY and/or the VENDOR is found to be comparatively at fault for any 12 claim, action, loss, or damage which results from their respective obligations under the 13 Agreement, the CITY and/or VENDOR shall indemnify the other to the extent of this 14 comparative fault. 15 16 5. INSURANCE. 17 While not restricting or limiting the forgoing, during the term of this Agreement, 18 VENDOR shall maintain in effect policies of comprehensive public, general and automobile 19 liability insurance, in the amount of $1,000,000.00 combined single limit, and statutory 20 worker's compensation coverage, and shall file copies of said policies with the CITY's Risk 21 Manager prior to undertaking any work under this Agreement. CITY shall be set forth as an 22 23 additional named insured in each policy of insurance provided hereunder. The Certificate of 24 Insurance furnished to the CITY shall require the insurer to notify CITY of any change or 25 termination in the policy. 26 27 28 01/31/08 (I 2008-48 1 6. NON-DISCRIMINATION. 2 In the performance of this Agreement and in the hiring and recruitment of employees, 3 VENDOR shall not engage in, nor permit its officers, employees or agents to engage in, 4 discrimination in employment of persons because of their race, religion, color, national origin, 5 ancestry, age, mental or physical disability, medical conditions marital status sexual gender or 6 sexual orientation, or any other status protected by law, except as permitted pursuant to Section 7 12940 of the California Government Code. 8 9 7. INDEPENDENT CONTRACTOR. 10 VENDOR shall perform work tasks provided by this Agreement, but for all intents and 11 purposes VENDOR shall be an independent contractor and not an agent or employee of the 12 CITY. VENDOR shall secure, at its expense, and be responsible for any and all payment of 13 Income Tax, Social Security, State Disability Insurance Compensation, Unemployment 14 15 Compensation, and other payroll deductions for VENDOR and its officers, agents, and 16 employees, and all business licenses, if any are required, in connection with the services to be 17 performed hereunder. 18 8. BUSINESS REGISTRATION CERTIFICATE AND OTHER REQUIREMENTS. 19 VENDOR warrants that it possesses or shall obtain, and maintain a business registration 20 certificate pursuant to Chapter 5 of the Municipal Code, and any other licenses, permits, 21 qualifications, insurance and approval of whatever nature that are legally required of VENDOR 22 23 to practice its business or profession. 24 25 26 27 28 01/31/08 II 2008-48 1 9. NOTICES. 2 Any notices to be given pursuant to this Agreement shall be deposited with the United 3 States Postal Service, postage prepaid and addressed as follows: 4 TO THE CITY: City of San Bernardino 5 Ken Fischer, Director 300 North"D" Street 6 San Bernardino, CA 92418 Telephone: (909) 384-5140 7 TO THE VENDOR: Applied LNG Technologies 8 3001 Knox St. 9 Dallas, TX 75205 Telephone: (214) 697-0391 10 Attn: Kevin W. Markey 11 10. ATTORNEYS' FEES. 12 In the event that litigation is brought by any party in connection with this Agreement, 13 the prevailing P art shall be entitled to recover from the opposing party all costs and expenses, 14 including reasonable attorneys' fees, incurred by the prevailing party in the exercise of any of 15 16 its rights or remedies hereunder or the enforcement of any of the terms, conditions or 17 provisions hereof. The costs, salary and expenses of the City Attorney and members of his 18 office in enforcing this Agreement on behalf of the CITY shall be considered as "attorneys' 19 fees" for the purposes of this paragraph. 20 11. ASSIGNMENT. 21 VENDOR shall not voluntarily or by operation of law assign, transfer, sublet or 22 23 encumber all or any part of the VENDOR's interest in this Agreement without CITY's prior 24 written consent. Any attempted assignment, transfer, subletting or encumbrance shall be void 25 and shall constitute a breach of this Agreement and cause for the termination of this 26 Agreement. Regardless of CITY's consent, no subletting or assignment shall release VENDOR 27 28 01/31/08 I 2008-48 1 of VENDOR's obligation to perform all other obligations to be performed by VENDOR 2 hereunder for the term of this Agreement. 3 12. VENUE. 4 The parties hereto agree that all actions or proceedings arising in connection with this 5 Agreement shall be tried and litigated either in the State courts located in the County of San 6 Bernardino, State of California or the U.S. District Court for the Central District of California, 7 8 Riverside Division. The aforementioned choice of venue is intended by the parties to be 9 mandatory and not permissive in nature. 10 13. GOVERNING LAW. 11 This Agreement shall be governed by the laws of the State of California. 12 14. SUCCESSORS AND ASSIGNS. 13 This Agreement shall be binding on and inure to the benefit of the parties to this 14 15 Agreement and their respective heirs, representatives, successors, and assigns. 16 15. HEADINGS. 17 The subject headings of the sections of this Agreement are included for the purposes of 18 convenience only and shall not affect the construction or the interpretation of any of its 19 provisions. 20 16. ENTIRE AGREEMENT; MODIFICATION. 21 This Agreement constitutes the entire agreement and the understanding between the 22 23 parties, and supercedes any prior agreements and understandings relating to the subject manner 24 of this Agreement. This Agreement may be modified or amended only by a written instrument 25 executed by all parties to this Agreement. 26 27 28 01/31/08 II 2008-48 1 VENDOR SERVICE AGREEMENT APPLIED LNG TECHNOLOGIES 2 3 IN WITNESS THEREOF, the parties hereto have executed this Agreement on the day and date set forth below. 4 5 Dated: , 2008 VENDO 6 By: 7 Its: /OyCs' 8 Dated (,—, 2008 CITY OF ARDINO 9 By: 10 Fred i , City Manager 11 12 Approved as to Form: 13 14 By: dam_ a 15 es F. Penman, City Attorney 16 17 18 19 20 21 22 23 24 25 26 27 28 01/31/08 Attachment 2 ORE E" January 29, 2008 Don W. Johnson Fleet Manager City of San Bernardino Public Services Department 182 South Sierra Way San Bernardino, CA 92408 Mr. Johnson, Applied LNG Technologies is pleased to offer you this proposal. We look forward to offering you a complete LNG service. One of the ways we intend to do this is to work with the City to open your fueling station to the general public. This new LNG station would provide an environmentally friendly fuel to the surrounding business community while creating a new source of revenue to the City. In order to implement this plan Applied LNG Technologies will provide the following: 1. Provide fuel grade LNG for the term of the agreement 2. Assist in the completion of federal tax application(IRS form 637) to process tax credits. And to assist on a monthly basis of providing data to file for your tax credits. 3. Provide a Cooperative Purchase Agreement which bundles the LNG supply to the City of San Bernardino (see attached LNG contract) • LNG pricing quote ((SoCal/ 12.104) x 1.2) + 0.45 plus freight. 4. We will also provide maintenance for your station when your warranty expires in 12 months. We will negotiate as this date gets closer. See attached maintenance contract. We look forward to working with you and the City on this project. Again, thank you for the opportunity. Kevin W. Markey VP of Operation 3001 Knox Street—Suite 403 Dallas, TX 75205 Phone: 214.697.0391 Fax: 214.520.0507 P Attachment 2 A LT APPLIED LNG TaCHMOLOGIES MAINTENANCE AGREEMENT LNG Station Components Periodic Inspection and Preventative Maintenance Schedule Based on Information Supplied by Manufacturer Monthly Quarterly Annual) 2-year Vent Lines — Check for leaks and damage X Flame Detectors — calibrate and test X Grounding Circuit—verity continuity X Air Desiccant— replace if indicated X Air System — Snoop test for leaks X Air System — Check regulator set point X Valves & Piping: Check for leaks and malfunctions X Fill Hoses: Check for leaks, damage and wear X Dispensers: Check for leaks and malfunctions X Fueling Nozzle Seals X Drain air tank &/or water separator X Fire Extinguishers: inspect X Air Regulator— Check set point pressure X Air Conditioners —clean filters and assure proper X operation Air Compressor— Check and maintain oil level X Y Strainers — clean and inspect X Process Lines — Snoop test valve stems, flanges, X pump can flanges, and threaded fittings for leaks Methane Detectors— calibrate and test X Relief Valves: Verify Proper Set Points X VJ Piping Insulation: Integrity X ESD System: test x Storage Tank Vacuum: measure & record X Control Hardware — Check operation and for leaks on pressure gauges, liquid level gauges, transmitters X — calibrate as necessary Pressure Relief Valves — recertify X Burst Disc: Replace X LNG Pump: Labor to remove and inspect for abnormal conditions at 4000 hours. Labor to remove See intervals and return to manufacturer or repair facility for rebuilding at 8000 hours 7of7 1 AMENDMENT NO. 1 TO VENDOR SERVICES AGREEMENT 2 APPLIED LNG TECHNOLOGIES 3 This Agreement is entered into this 7th day of April 2008, by and between 4 Applied LNG Technologies ("VENDOR") and the City of San Bernardino 5 ("CITY" or"San Bernardino"). 6 RECITALS 7 A. On February 4, 2008, Applied LNG Technologies and the City of San Bernardino entered into a Vendor Services Agreement ("Agreement") for the purchase of 8 LNG fuel for a not-to-exceed amount of $99,900, a copy of which is attached 9 hereto as "Attachment I" and incorporated by this reference. 10 B. The CITY and VENDOR now desire to amend the Agreement to increase the 11 amount of the Agreement by $150,100 for a total not-to-exceed purchase price of 12 $250,000 for LNG fuel. 13 C. The CITY and VENDOR now desire to amend the Agreement terms to add three 14 (3) single year renewal options. AGREEMENT 15 In consideration of the mutual promises contained in the Vendor Services 16 Agreement, the parties agree as follows: 17 1. Paragraph 1 and 2 of the Agreement dated February 4, 2008, attached here to 18 as Attachment 1, is amended to incorporate the terms and conditions of 19 Attachment 2, attached hereto and incorporated herein by this reference. 20 2. The total Agreement price shall be increased by $150,100, for a not-to-exceed amount of$250,000. 21 3. The term of this Agreement shall be for an initial term from April 7, 2008 22 through June 30, 2008. With three (3) one-year extensions at the City's option. 23 Option year one, if exercised, shall be effective July 1, 2008 through June 30, 24 2009. Option year two, if exercised, shall be effective July 1, 2009 through 25 June 30, 2010. Option year three, if exercised, shall be effective July 1, 2010 26 through June 30, 2011. 27 4. The other provisions of the written contract are reaffirmed as originally stated. 28 Exhibit"A" OEM 1 AMENDMENT NO. 1 TO VENDOR SERVICES AGREEMENT 2 APPLIED LNG TECHNOLOGIES 3 4 5 IN WITNESS THEREOF, the parties hereto have executed the Agreement on the day and date first above written. 6 7 Dated: 12008 APPLIED LNG TECHNOLOGIES 8 9 By: 10 11 12 Dated: , 2008 CITY OF SAN BERNARDINO 13 14 15 By: Fred Wilson, City Manager 16 17 ATTEST: 18 19 Rachel Clark, City Clerk 20 21 22 Approved as to form: 23 James F. Penman 24 City Attorney 25 By: 26 27 28 Exhibit"A" 2008-48 Attachment 1 1 VENDOR SERVICE AGREEMENT 2 This Vendor Service Agreement is entered into this 4th day of February 3 2008, by and between Applied LNG Technologies ("VENDOR") and the City of San 4 Bernardino ("CITY" or"San Bernardino"). 5 WITNESSETH: 6 7 WHEREAS, the Mayor and Common Council has determined that it is advantageous and in the best interest of the CITY to purchase LNG fuel in order to continue to fuel its new 8 9 LNG station; and 10 WHEREAS, the City of San Bernardino did not solicit and accept quotes from vendors 11 for the purchase of LNG fuel since minor technical issues still need to be resolved before bid 12 specifications can be established. 13 NOW, THEREFORE, the parties hereto agree as follows: 14 1. SCOPE OF SERVICES. 15 16 For the remuneration stipulated, San Bernardino hereby engages the services of 17 VENDOR to provide LNG fuel. 18 2. COMPENSATION AND EXPENSES. 19 a. For the services delineated above, the CITY, upon presentation of an invoice, shall pay the 20 VENDOR up to the amount of$99,900 for the purchase of LNG fuel. 21 22 b. No other expenditures made by VENDOR shall be reimbursed by CITY. 3. TERM. 23 24 The term of this Agreement shall be for a period of one year. 255 This Agreement may be terminated at any time by thirty (30) days' written notice by 26 either party. The terms of this Agreement shall remain in force unless mutually amended. The 27 duration of this Agreement may be extended with the written consent of both parties. 28 01/31/08 I I 2008-48 1 4. INDEMNITY. 2 CITY agrees to indemnify and hold harmless VENDOR, its officers, agents and 3 volunteers from any and all claims, actions, or losses, damages and/or liability resulting from 4 CITY's negligent acts or omissions arising from the CITY's performance of its obligations 5 under the Agreement. 6 VENDOR agrees to indemnify and hold harmless the CITY, its officers, agents, and 7 8 volunteers from any and all claim, actions, or losses, damages and/or liability resulting from 9 VENDOR's negligent acts or omissions arising from the VENDOR's performance of its 10 obligations under the agreement. 11 In the event the CITY and/or the VENDOR is found to be comparatively at fault for any 12 claim, action, loss, or damage which results from their respective obligations under the 13 Agreement, the CITY and/or VENDOR shall indemnify the other to the extent of this 14 comparative fault. 15 16 5. INSURANCE. 17 While not restricting or limiting the forgoing, during the term of this Agreement, 18 VENDOR shall maintain in effect policies of comprehensive public, general and automobile 19 liability insurance, in the amount of $1,000,000.00 combined single limit, and statutory 20 worker's compensation coverage, and shall file copies of said policies with the CITY's Risk 21 Manager prior to undertaking any work under this Agreement. CITY shall be set forth as an 22 23 additional named insured in each policy of insurance provided hereunder. The Certificate of 24 Insurance furnished to the CITY shall require the insurer to notify CITY of any change or 25 termination in the policy. 26 27 28 01/31/08 II I 2008-48 1 6. NON-DISCRIMINATION. 2 In the performance of this Agreement and in the hiring and recruitment of employees, 3 VENDOR shall not engage in, nor permit its officers, employees or agents to engage in, 4 discrimination in employment of persons because of their race, religion, color, national origin, 5 ancestry, age, mental or physical disability, medical conditions, marital status, sexual gender or 6 sexual orientation, or any other status protected by law, except as permitted pursuant to Section 7 12940 of the California Government Code. 8 9 7. INDEPENDENT CONTRACTOR. 10 VENDOR shall perform work tasks provided by this Agreement, but for all intents and 11 purposes VENDOR shall be an independent contractor and not an agent or employee of the 12 CITY. VENDOR shall secure, at its expense, and be responsible for any and all payment of 13 Income Tax, Social Security, State Disability Insurance Compensation, Unemployment 14 15 Compensation, and other payroll deductions for VENDOR and its officers, agents, and 16 employees, and all business licenses, if any are required, in connection with the services to be 17 performed hereunder. 18 8. BUSINESS REGISTRATION CERTIFICATE AND OTHER REQUIREMENTS. 19 VENDOR warrants that it possesses or shall obtain, and maintain a business registration 20 certificate pursuant to Chapter 5 of the Municipal Code and any other licenses, 21 qualifications, insurance and approval of whatever nature that are legally required of VENDOR 22 23 to practice its business or profession. 24 25 26 27 28 01/31/08 II I 2008-48 1 9. NOTICES. 2 Any notices to be given pursuant to this Agreement shall be deposited with the United 3 States Postal Service, postage prepaid and addressed as follows: 4 TO THE CITY: City of San Bernardino 5 Ken Fischer, Director 300 North"D" Street 6 San Bernardino, CA 92418 Telephone: (909) 384-5140 7 TO THE VENDOR: Applied LNG Technologies 8 3001 Knox St. 9 Dallas, TX 75205 Telephone: (214) 697-0391 10 Attn: Kevin W. Markey 11 10. ATTORNEYS' FEES. 12 In the event that litigation is brought by any party in connection with this Agreement, 13 the prevailing party shall be entitled to recover from the opposing party all costs and expenses, 14 15 including reasonable attorneys' fees, incurred by the prevailing party in the exercise of any of 16 its rights or remedies hereunder or the enforcement of any of the terms, conditions or 17 provisions hereof. The costs, salary and expenses of the City Attorney and members of his 18 office in enforcing this Agreement on behalf of the CITY shall be considered as "attorneys' 19 fees" for the purposes of this paragraph. 20 11. ASSIGNMENT. 21 VENDOR shall not voluntarily or by operation of law assign, transfer, sublet or 22 23 encumber all or any part of the VENDOR's interest in this Agreement without CITY's prior 24 written consent. Any attempted assignment, transfer, subletting or encumbrance shall be void 25 and shall constitute a breach of this Agreement and cause for the termination of this 26 Agreement. Regardless of CITY's consent, no subletting or assignment shall release VENDOR 27 28 01/31/08 II I 2008-48 1 of VENDOR's obligation to perform all other obligations to be performed by VENDOR 2 hereunder for the term of this Agreement. 3 12. VENUE. 4 The parties hereto agree that all actions or proceedings arising in connection with this 5 Agreement shall be tried and litigated either in the State courts located in the County of San 6 Bernardino, State of California or the U.S. District Court for the Central District of California, 7 8 Riverside Division. The aforementioned choice of venue is intended by the parties to be 9 mandatory and not permissive in nature. 10 13. GOVERNING LAW. 11 This Agreement shall be governed by the laws of the State of California. 12 14. SUCCESSORS AND ASSIGNS. 13 This Agreement shall be binding on and inure to the benefit of the parties to this 14 15 Agreement and their respective heirs, representatives, successors, and assigns. 16 15. HEADINGS. 17 The subject headings of the sections of this Agreement are included for the purposes of 18 convenience only and shall not affect the construction or the interpretation of any of its 19 provisions. 20 16. ENTIRE AGREEMENT; MODIFICATION. 21 This Agreement constitutes the entire agreement and the understanding between the 22 23 pies, and supercedes any prior agreements and understandings relating to the subject manner 24 of this Agreement. This Agreement may be modified or amended only by a written instrument 25 executed by all parties to this Agreement. 26 27 28 01/31/08 ( I I 2008-48 1 VENDOR SERVICE AGREEMENT APPLIED LNG TECHNOLOGIES 2 3 IN WITNESS THEREOF, the parties hereto have executed this Agreement on the day 4 and date set forth below. 5 Dated: 3 _l 2008 VENDO 6 By: 7 Its: 19 8 Dated6 , 2008 CITY OF ARDINO 9 By: 10 Fred i , City Manager 11 12 Approved as to Form: 13 14 By: a 15 es F. Penman, City Attorney 16 17 18 19 20 21 22 23 24 25 26 27 28 01/31/08 II Attachment 2 E t Ucmain raps January 29, 2008 Don W. Johnson Fleet Manager City of San Bernardino Public Services Department 182 South Sierra Way San Bernardino, CA 92408 Mr. Johnson, Applied LNG Technologies is pleased to offer you this proposal. We look forward to offering you a complete LNG service. One of the ways we intend to do this is to work with the City to open your fueling station to the general public. This new LNG station would provide an environmentally friendly fuel to the surrounding business community while creating a new source of revenue to the City. In order to implement this plan Applied LNG Technologies will provide the following: 1. Provide fuel grade LNG for the term of the agreement 2. Assist in the completion of federal tax application(IRS form 637) to process tax credits. And to assist on a monthly basis of providing data to file for your tax credits. 3. Provide a Cooperative Purchase Agreement which bundles the LNG supply to the City of San Bernardino (see attached LNG contract) • LNG pricing quote((SoCal/ 12.104) x 1.2) + 0.45 plus freight. 4. We will also provide maintenance for your station when your warranty expires in 12 months. We will negotiate as this date gets closer. See attached maintenance contract. We look forward to working with you and the City on this project. Again, thank you for the opportunity. Kevin W. Markey VP of Operation 3001 Knox Street—Suite 403 Dallas, TX 75205 Phone: 214.697.0391 Fax: 214.520.0507 Attachment 2 APPLIiED LNG TficHNQLOQIES MAINTENANCE AGREEMENT LNG Station Components Periodic Inspection and Preventative Maintenance Schedule Based on Information Supplied by Manufacturer Month) Quarter) Annual) 2-year Vent Lines — Check for leaks and damage X Flame Detectors — calibrate and test X Grounding Circuit—verify continuity X Air Desiccant— replace if indicated X Air System — Snoop test for leaks X Air System — Check regulator set point X Valves & Piping: Check for leaks and malfunctions X Fill Hoses: Check for leaks, damage and wear X Dispensers: Check for leaks and malfunctions X Fueling Nozzle Seals X Drain air tank &/or water separator X Fire Extinguishers: inspect X Air Regulator— Check set point pressure X Air Conditioners — clean filters and assure proper X operation Air Compressor— Check and maintain oil level X Y Strainers — clean and inspect X Process Lines — Snoop test valve stems, flanges, X pump can flanges, and threaded fittings for leaks Methane Detectors —calibrate and test X Relief Valves: Verify Proper Set Points X VJ Piping Insulation: Integrity X ESD System: test X Storage Tank Vacuum: measure & record X Control Hardware — Check operation and for leaks on pressure gauges, liquid level gauges, transmitters X — calibrate as necessary Pressure Relief Valves — recertify X Burst Disc: Replace X LNG Pump: Labor to remove and inspect for abnormal conditions at 4000 hours. Labor to remove See intervals and return to manufacturer or repair facility for rebuilding at 8000 hours 7of7 Cs 3020 Old Ranch Parkway,Suite 200 Chad M.Lindholm Seal Beach,California 90740 USA �nt�rrf into RP.CO�(I 8t /� Regional Manager Phone 562.546-0322 '"7 /O(� Fax 562.493-4532 "levcMS Mtg: G www.cleanenercivfueis.com Clean Energy'" April 7, 2008 Mr. Fred Wilson City Clerk/CDC Secy City Manager City of Sall 13 .rrfardinn City of San Bernardino 300 North D Street Via email &facsimile San Bernardino, CA 92418 Re: Agenda Item 39,Purchase of LNG Fuel Dear Mr. Wilson: Clean Energy has reviewed Agenda Item 39, the proposed resolution regarding Purchase Order#08-070 for the supply of LNG fuel to the City of San Bernardino. We have concerns over the solicitation process, evaluation and the recommendation before council. Solicitation Process At no time was there an official release of a documented"Request for Proposals" where detailed guidelines could be followed by all proposers. Therefore, critical components of the City's fleet operation including current and future LNG volume needs as well as station maintenance requirements were unknown. Further, the staff report makes no mention of evaluation criteria such as LNG fuel supplier company background, experience, capabilities or references. These are important points which should be considered in an evaluation involving well over$1 million of annual costs to the City to ensure reliable LNG deliveries to fuel vehicles providing essential City services. Critical Criteria Not Evaluated Company Background—Clean Energy is North America's largest natural gas vehicle fuel provider both in number of stations and gallons sold per year. Today CE owns and operates over 170 natural gas fueling stations with a broad customer base in the transit, refuse, shuttle, taxi, intrastate and interstate trucking, airport and municipal fleet markets. Clean Energy was formed in 2001 and currently employs over 125 people. CE has offices in Arizona, California, Colorado, District of Columbia, Georgia, Texas, Washington, Massachusetts, as well as Vancouver and Toronto, Canada. Experience—Clean Energy is the largest provider of vehicular natural gas (CNG and LNG) in North America currently delivering over 140,000 gallons of LNG per day to 40+ customers. Customers include the cities of Bakersfield, Barstow, Fresno, Phoenix, Sacramento, Santa Monica, Tempe and Tulare as well as Omnitrans and the Los Angeles World Airports. North America's leader in clean transportation Capabilities—Clean Energy is the only fuel provider with several LNG supply sources and a proven track record to ensure the City of reliable and consistent LNG fuel deliveries. In addition Clean Energy is currently constructing an LNG production plant in Boron, California; only 75 miles from the City's yard. The Boron plant will produce 160,000 gallons per day and have a 1.5 million gallon storage tank. This 1.5 million gallon storage tank is the only LNG storage facility in the entire Southwest region of the United States that is sizeable enough to maintain customer deliveries during production disruptions. Clean Energy will also have exclusive LNG supply from a new plant in Arizona opening this summer. Further, our LNG tanker fleet of 60 units is the largest in the country dedicated to LNG fuel deliveries. Evaluation We believe that a significant error has been made in evaluating the total cost of delivered LNG and the total cost of station maintenance. LNG Fuel Cost The staff report states that Clean Energy's and ALT's "fuel costs are similar" however, this is incorrect. The report concludes that ALT's fuel price is $1.29 per gallon plus freight and Clean Energy's fuel price is $1.32 plus a diesel surcharge. There is no backup data to support these figures and no pricing provided for freight or the diesel surcharge. Below is an actual price comparison if fuel were to be delivered by either company today: $/LNG Gallon Clean Energy ALT April 2008 Natural Gas $0.726 $0.726 Commodity Price 20% Premium added to $0.000 $0.145 Commodity Price Delivery Charge $0.620 $0.450 Freight $0.00 ??? Not provided in proposal $0.144* Diesel Surcharge $0.001 $0.000 ($11.54/9,000 gallons) Total $1.347 $1.465 Clean Energy Savings per $0.118 Gallon Clean Energy Annual $88,358 Savings to City *Diesel surcharge when fuel is above$3.50 per gallon. Assume DOE monthly diesel is$4.00: ($4.00/gal-$3.50/gal)x(round trip miles from Boron to San Bernardino of 150 miles/6.5 mpg)_$11.54 **Estimate of Freight Calculation per gallon is$0.144 (assumes$1300 per delivery and 9,000 gallons delivered) Station Maintenance Cost It remains unclear as to what basis was used in price comparison for future maintenance services. The recommendation states that there is a"great disparity"between Clean Energy's and ALT's maintenance costs". While CE's maintenance costs are clearly stated in our proposal ($0.15 per gallon), ALT's proposal does not quote a price, but instead states that after the station warranty period expires a rate will be negotiated. However, the recommendation before council includes a breakdown of costs from ALT. We are not sure how this information was derived. Since there was no guidance on how to bid maintenance services, proposals from both companies are completely different. Clean Energy has more service technicians that any other LNG fuel supplier—50 employees across the country of which 13 are based in Southern California. Our maintenance cost included all major and minor service (labor, parts, planed maintenance and emergency call-outs). The price quoted was based on the City's current usage of 1,200 gallons per day which would cost the City$4,500 per month or$54,000 annually. We explained to City staff that with increased volume, we'd certainly present a new maintenance price. We also explained that our maintenance bid was an option to the City and not inclusive of fuel supply services. The assumption that Clean Energy's maintenance cost to the City is $9,000 per month is incorrect. Listed maintenance numbers for ALT are $750 per month for once a month maintenance. This number does not include labor at$100 per hour or parts. Based on this data, an estimated annual cost of$40,000 has been assumed. It is not clear where any of these numbers originated from. Clean Energy's Recommendation Having provided LNG and CNG fueling services to thousands of fleet customers on a daily basis, Clean Energy understands the City's proactive alternative fuel policy and welcomes the opportunity to develop a long-term partnership. We appreciate your consideration of our concerns and ask that you and the city council take an active role in evaluating the proposals and reviewing the process. Clean Energy remains available to meet in person and discuss our capabilities and the contents of our proposal in greater detail. I can be reached at(562)493-2804. Sincerely, Chad Lindholm Regional Manager Southern California&Arizona cc: Mayor and City Council James Penman, City Attorney Ken Fischer, Public Services Director Don Johnson, Fleet Manager �aa �rr�r biro � 6� r r z aN✓S` � s a �✓��� � r to a u✓r,:F q y,/ S a Ne Clean fne ................ �'`� ✓ /siM'� �?,dr'F �fnl'W eg / 6��/M%✓ /�i z,/ p r .��i✓ r„ az ��'�� .1����] kx a a"q✓ ymn�r ,y flr�`,r„` <ra ✓ / ✓' ny+� � ��✓vr ✓b/rli „,T���,`g✓�, �r� x� ,q r�✓ � :fir Comprehensive Liquefied Natural Gas ✓ y f a/ tF Supply and Station Maintenance Services F �������'°/✓wx' � City of San Bernardino N 3020 Old Ranch Parkway Seal Beach, CA 90740 (562) 493-2804 www.cleanenergyfuels.com February 5, 2008 Clean Energy Table of Contents Description Tab Introduction 1 Capabilities 2 LNG Production and Supply 2.1 LNG Delivery Management 2.2 Qualifications and Experience 3 Company Profile 3.1 Client References 3.2 Organization and Staffing 4 Organizational Chart 4.1 Key Personnel 4.2 Proposal 5 LNG Supply Pricing 5.1 Station Maintenance 5.2 Station Maintenance Pricing 5.3 Station Billing and Retailing (Option) 5.4 Appendix 6 City of San Bernardino Comprehensive Liquefied Natural Gas Station Proposal Clean Energy Introduction Clean Energy (CE) is pleased to provide the City of San Bernardino (City) with the following proposal to supply and deliver Liquefied Natural Gas (LNG) fuel for its fleet of natural gas powered vehicles. With a growing high-volume customer base, CE understands the importance of providing the City with a secure and cost effective LNG fueling source. CE has continued to increase its LNG customer base since 2001 and we currently deliver over 140,000 gallons of LNG on a daily basis to customers in Arizona, California, Idaho, New Mexico, Texas and Canada. CE's qualifications and experience make us the industry leader in the supply of LNG as a vehicle fuel. r � a4r c��1 fueled V ��Ctes LNG Trailer Making Delivery to Phoenix Transit City of San Bernardino Comprehensive Liquefied Natural Gas Station Proposal Clean Energy Resources 2.1 LNG Production and Supply As the largest and most experienced LNG fuel supplier in California, CE has the proven ability to exceed the City's expectations. The City must meet daily roll-out of its fleet of LNG powered refuse trucks. CE has maintained an excellent track record and its partners have never missed roll-out due to fuel supply issues. In order to further improve our service to the City, CE has begun building a new, state-of-the-art LNG production facility in Boron, California. The new plant is scheduled to come on-line during the 3rd Quarter 2008. ' Y`i's.°°%•: r ;, ,. 1'.0 ¢;4#i�`"�-" '� rF'r`�4ti Fitt . ..__. :.w.4Y. 4-3.ui� ..W.'..'. � £a•,Mw:, n.11rrWR2+ xiar I I k t a xf Clean Energy's new Boron, California LNG Production Facility to open 3`d Quarter 2008 The Boron plant will initially produce 160,000 gallons of LNG per day and have 1.5 million gallons of LNG on-site in a storage tank. This 1.5 million gallon storage tank is the only LNG storage facility in the entire Southwest region of the United States that is sizeable enough to maintain customer deliveries during production disruptions. CE is the only LNG fuel provider that is making capital investments in the LNG vehicle business to insure our customers of uninterrupted service. In addition to the new Boron facility, CE signed an exclusive 10-year supply agreement with Spectrum Energy Services (SES) to provide additional supply of LNG. The agreement calls for SES to provide 100% of their production to CE which initially starts at 45,000 gallons of LNG on a daily basis. The plant will be located in Ehrenberg, Arizona and is scheduled to be completed during the summer of 2008 City of San Bernardino Comprehensive Liquefied Natural Gas Station Proposal Clean Enemy Plant Capacity and Fuel Specification Detail by Plant CE has a number of LNG supply sources to pull from on a daily basis which includes the following: Williams Gas Processing Company Plant — Production capacity of 50,000 gallons of LNG per day and 80,000 gallons of LNG storage capacity. ExxonMobil — Production capacity of 50,000 gallons of LNG per day and 80,000 gallons of LNG storage capacity. BP Painter Plant— Production capacity of 40,000 gallons of LNG per week and 50,000 gallons of LNG storage capacity. Pioneer Satanta Plant— Production capacity of 40,000 gallons of LNG per week and 30,000 gallons of LNG storage capacity. Pickens Plant— Production capacity of 100,000 gallons per day and 1,000,000 gallons of LNG storage capacity. Clean Energy Boron Plant —When completed in 2008, production capacity will be 160,000 gallons of LNG per day and 1,500,000 gallons of LNG storage capacity. Spectrum Energy Services Plant — When completed in 2008, production capacity will be 45,000 gallons of LNG per day and 100,000 gallons of LNG storage capacity. + Y ^^5J Exxon • BP Painter William � + Pioneers 'CE ._..t loom e + 1 ......._ .. ,. SES CE Pickens ...�rl City of San Bernardino Comprehensive Liquefied Natural Gas Station Proposal Clean Energy 2.2 LNG Delivery Management As the largest LNG fuel provider, CE is confident in our ability to provide reliable and consistent fuel deliveries to the City. CE has multiple LNG fuel sources to pull from when making deliveries to high fuel use customers who must meet a critical rollout window on a daily basis. These Clean Energy's Seal Beach Operations Center sources include ExxonMobil, Williams Company and BP, all of which produce LNG and offload to CE's fleet of tanker trailers. CE has access to other plants operated by various local utilities, which are available on an as needed basis, and our own LNG Plant in Willis, Texas, which can produce over 100,000 gallons of LNG per day with over 1 million gallons of onsite storage. In fact, because of our ability to procure LNG fuel from a number of sources and our large tanker fleet, CE on several occasions over the years has served as a reliable backup supplier and made emergency deliveries to fleets under contract with other LNG fuel providers. This took place most recently at a Waste Management LNG station which had been run out of fuel by its supplier. Within a six-hour window, CE was able to make an emergency delivery to ensure vehicles met roll-out. GPS Tracking and Fuel Inventory Monitoring CE utilizes a GPS tracking system that allows us to monitor the progress of our deliveries throughout the country. CE also maintains excess trailers and driving teams in order to ensure our delivery schedule and prevent any missed schedules. We have had a very successful track record in meeting customers' schedules for deliveries. CE can maintain a remote inventory monitoring system which is linked to the City's LNG station and allows CE personnel to ensure timely deliveries to each station. City of San Bernardino Comprehensive Liquefied Natural Gas Station Proposal f Clean Energy LNG Tanker Fleet CE currently owns and operates a fleet of 58 LNG tankers: CE also leases two additional LNG tankers giving us a fleet total of 60 tankers. These are all capable of carrying 10,000 gallons at maximum gross weight. CE took delivery of 15 new trailers in 2007. Ili/-=� �•��� L/CNG Station at City of Tempe Transit Facility City of San Bernardino Comprehensive Liquefied Natural Gas Station Proposal Clean Energy Qualifications and Experience 3.1 Company Profile During the past few years, CE has grown significantly by making strategic acquisitions and building new infrastructure throughout North America. CE is North America's largest natural gas vehicle fuel provider both in number of stations and gallons sold per year. Today CE owns and operates over 180 natural gas fueling stations with a broad customer base in the transit, refuse, shuttle, taxi, intrastate and interstate trucking, airport and municipal fleet markets. CE was formed in 2001, originally under the name ENRG, and currently employs over 125 people. CE has offices in Arizona, California, Colorado, District of Columbia, Georgia, Texas, Washington, Massachusetts, as well as Vancouver and Toronto, Canada. CE is proud to be the natural gas fuel provider for other large volume LNG fleets including CR&R, City of Bakersfield, City of Fresno, City of Phoenix, City of Sacramento, City of Tempe, City of Tulare, County of Sacramento, Dallas Area Rapid Transit, Harris Ranch Feeding Company, Los Angeles World Airports, Omnitrans, Santa Monica's Big Blue Bus, and Sun Metro. CE also fuels a number of large volume Compressed Natural Gas (CNG) fleets including Foothill Transit, North County Transit District, RPTA/Mesa, San Diego Transit, Santa Clarita Transit and Boston's MBTA. Having provided LNG and CNG fueling services to thousands of fleet customers on a daily basis, CE understands the City's proactive alternative fuel policy and welcomes the opportunity to develop a long-term partnership. City of San Bernardino Comprehensive Liquefied Natural Gas Station Proposal eu Clean Enemy 3.2 Client References City of Santa Monica, Big Blue Bus The City currently operates over 100 LNG powered transit buses and a number of light and medium-duty natural gas vehicles. The LCNG fueling facility includes two 30,000 gallon LNG tanks. CE and the transit department executed an exclusive LNG supply contract on February 14, 2006 which includes a term of up to four years. Ralph Merced Transit Maintenance Manager 612 Colorado Ave. Santa Monica, CA 90401 (310) 458-1975 ext. 5865 . merced(o-)smqov.net o LNG Transit Buses at Big Blue Bus Yard in Santa Monica City of El Paso, Sun Metro The City of El Paso, Texas currently operates over 150 LNG powered transit buses. In 2007, Clean Energy delivered over 4,600,000 Gallons of LNG to Sun Metro's fueling facilities. CE and the transit department executed an exclusive LNG supply contract on December 13, 2003 which includes a term of five years. Kevin Bunce Assistant Director -Transit Operations and Maintenance 700-A San Francisco El Paso, TX 79901 (915) 534-5830 bunceke(a)-ci.el-paso.tx.us City of San Bernardino Comprehensive Liquefied Natural Gas Station Proposal Clean Energy Los Angeles World Airports CE entered into an exclusive three-year LNG supply agreement with the Los Angeles World Airports to deliver all of its LNG fuel needs at the Los Angeles International Airport (LAX) LCNG station. The facility fuels over 80 buses (standard size and articulated) as well as hundreds of other light, medium and heavy-duty natural gas vehicles. The contract was awarded on September 6, 2006 and runs through September 5, 2009. David Waldner Assistant Chief of Airports Construction and Maintenance 7411 World Way West Los Angeles, CA 90045 (310) 646-3263 City of Tulare On July 1, 2005 the City awarded a two-year LNG supply agreement to CE for exclusive fuel deliveries to its 15,000 gallon LCNG station. The contract included two successive one-year renewal options with the first renewal being exercised on July 1, 2007. There are approximately 20 CNG powered transit buses, 15 CNG and LNG powered refuse trucks and several other light-duty CNG vehicles utilizing the facility in addition to third parties traveling through the San Joaquin Valley. Lew Nelson Public Works Director 3981 South "K" Street Tulare, CA 93274 (559) 684-4318 Inelson(cDci.tulare.ca.us City of Fresno The City awarded CE an exclusive two-year supply contract which began on November 4, 2005. Currently, CE is delivering LNG fuel under a six-month extension to a fleet of over 80 LNG powered refuse trucks. The LNG facility consists of one 15,000 tank and two 6,000 gallon tanks for a total capacity of 27,000 gallons. Joseph Oldham Acquisition Supervisor 2101 "G" St., Bldg. "F" Fresno, CA 93706 (559) 621-1106 Joseph.old ham(c-)fresno.gov City of San Bernardino Comprehensive Liquefied Natural Gas Station Proposal aean En&W Organization and Staffing 4.1 Organizational Chart Andrew J. Littlefair President and CEO Brian Powers James N.Harger Assistant Vice President, Senior VP,Marketing& Operations Sales Tom Bressler Chad Lindholm Operations Manager Regional Manager, SoCal and Arizona Christa Pc Les Stinson Logistics Manager, Inland Empire LNG L Account Manager LNG Operations Team City of San Bernardino Comprehensive Liquefied Natural Gas Station Proposal Man fnevgy- 4.2 Key Personnel Andrew Littlefair, President and CEO 3020 Old Ranch Parkway, Suite 200 Seal Beach, CA 90740 (562) 493-2804 phone (562) 493-4532 fax alittlefair(a�cleanenergyfuels.com Brian Powers, Assistant Vice President of Operations 3020 Old Ranch Parkway, Suite 200 Seal Beach, CA 90740 (562) 493-2804 phone (562) 493-4532 fax bpowers cleanenergyfuels.com James Harper, Senior Vice President of Marketing I 3020 Old Ranch Parkway, Suite 200 Seal Beach, CA 90740 (562) 493-2804 phone (562) 493-4532 fax iharger(a�cleanenergyfuels.com Chad Lindholm, Regional Manager— Southern California &Arizona 3020 Old Ranch Parkway, Suite 200 Seal Beach, CA 90740 (562) 493-2804 phone (562) 493-4532 fax clindholm(a-),cleanenergyfuels.com Les Stinson, Account Manager— Inland Empire 3020 Old Ranch Parkway, Suite 200 Seal Beach, CA 90740 (562) 493-2804 phone (562) 493-4532 fax Istinson(a)cleanenergyfuels.com City of San Bernardino Comprehensive Liquefied Natural Gas Station Proposal Clean Energy Tom Bressler, Operations Manager 23020 Old Ranch Parkway, Suite 200 Seal Beach, CA 90740 (562) 546-0337 phone (562) 546-0137 fax tbressler(a�cleanenergVfuels.com Christa Peila, Logistics Manager, LNG 3020 Old Ranch Parkway, Suite 200 Seal Beach, CA 90740 (562) 493-2804 phone (562) 493-4532 fax cpeila(@cleanenergyfuels.com ,F ;2 L/CNG Station at Sanitation Districts of Los Angeles County Puente Hills Landfill i, E Private LCNG Station at LAX City of San Bernardino Comprehensive Liquefied Natural Gas Station Proposal Clean Enenjr Proposal 5.1 LNG Supply Pricing CE is prepared to offer the City the following LNG supply pricing proposal: Price Proposal Delivered Price $0.62 SoCal Border Index SoCal Border Applicable Taxes Taxes Notes: 1. Index Price per MMBTU (million British Thermal Units)/12.1 = Price per LNG Gal. 2. For example, the SoCal Border for the month of February is $7.60 per MMBTU, which is the equivalent of$0.63 per LNG Gal. ($7.60/12.1). Thus, the City's total fuel price for the month of June would be $1.25 per LNG Gal. ($0.62 + $0.63). 3. An LNG Gal. is defined as 3.49 pounds of LNG. 4. The Product Price does not include any applicable federal, state or local taxes and fees (if applicable), which will be added to the price to determine a final deliverable cost of Product. 5. A diesel surcharge will apply when the average monthly diesel cost published by the U.S. Department of Energy (DOE) is higher then $3.50 per Gal 6. The SoCal Border is published monthly in Platt's Inside FERC publication. To get the monthly index price per Gal., take the applicable index price per MMBTU (million British Thermal Units) divided by 12.1. Volumetric Excise Tax Credits CE spear-headed and was successful in getting natural gas tax provisions included under the 2005 Energy Bill, which provide a $0.50 per gallon tax credit on LNG fuel. The tax credit will equate into a significant cost reduction to the City's overall operating budget. CE's proposed pricing structure excludes any discount as a result of the tax credits and we will assume the City is to apply for and receive these tax credits separately. We will provide our assistance and guidance to ensure the available tax credits are received by the City. City of San Bernardino Comprehensive Liquefied Natural Gas Station Proposal Clean Energy 5.2 Station Maintenance Description of Maintenance Services CE is very familiar with CNG and LNG station operations and maintenance. As an operator of the largest network of natural gas stations in North America, we dispense more than 200,000 gallons daily. CE has built a reputation in the natural gas fueling industry for having the most qualified staff to operate and maintain our network of fueling stations, handle customer service, prepare accurate bills, and market our products and services. CE will continue this tradition with the City by providing a reliable fueling station to serve current and future clean burning fleets. Preventative Maintenance • CE will follow all of the manufacturer's recommendations for preventative maintenance including all equipment inspections. • CE will track station operations through a maintenance management system that will monitor all major components of the station. • CE will hold weekly maintenance meetings to discuss station performance and resolve operational issues. Unscheduled/Emergency Maintenance • Station callout — in the unlikely event a station goes down for an ESD or other predetermined issue, the maintenance technician on-duty will be dispatched. • A CE maintenance technician will be on call 24 hours a day, 7 days a week, 365 days a year. • The City will all have access to other CE fueling stations in the network, which provides a reliable backup fueling source. Service Technician Team CE currently employs 13 full time maintenance technicians and one cleaning technician that are based in the Los Angeles/Orange/Riverside/San Bernardino Region. Our technician team assures a quick response time in the event of unscheduled maintenance and first class station appearance. Our maintenance technicians are assisted by two Operations Coordinators, an Operations Manager and our Assistant Vice President of Operations. City of San Bernardino Comprehensive Liquefied Natural Gas Station Proposal Clean Enemy Station Maintenance Program CE's Computerized Maintenance Management System (CMMS) will be used at the City L/CNG station to ensure equipment reliability and performance. The program's monthly maintenance reports show maintenance tasks, major/minor repairs and hours logged in addition to the following: • Manages inventory and orders parts • Tracks hours and specific maintenance work orders • Provides complete history profile of equipment • Provides detailed reports on a monthly basis Spare Parts Inventory CE stocks over $1.8 million in spare parts at our maintenance facility in Santa Fe Springs as well as in the Mobile Devicee Handhelld d Devices s trucks of our service technicians. This will ensure that important equipment parts are readily available to keep the station up and running. 5.3 Station Maintenance Pricing CE is prepared to offer a price per LNG gallon inclusive of all labor, supervision, spare and replacement parts, maintenance equipment, consumables, supplies, transportation and all overheads including insurance and profit. Basing maintenance pricing on a "per gallon" fee ensures accurate pricing reflective of actual station usage. It also protects the City on unforeseen volume increases or decreases over the next several years. Station Maintenance Cost per LNG Gallon 24/7 Service $0.15 CE wishes to further discuss and clarify the following with the City: Station maintenance excludes any repairs that are covered under the manufacturers' warranty. CE understands that the manufacturers' warranty is for a one-year period commencing on the date the station is officially accepted by the City. CE's station maintenance pricing excludes costs associated with the M ultiforce/Fuel Force card reader system, Greenfield CNG dispenser video panel and LNG pump rebuilds (note —typical LNG pump life is three years). Damage to LNG and CNG hoses and nozzles due to drive-aways will be paid for by the City. City of San Bernardino Comprehensive Liquefied Natural Gas Station Proposal Clean Energy 5.4 Station Billing and Retailing (OPTION) As an option to the City, CE has the ability to operate the LCNG station and provide all billing, retailing, customer service and interface with the Multiforce/FuelForce card reader system. Card reader system and CNG dispenser video panel potential maintenance and labor costs will be covered by CE under this option. The City will not be charged for this service. ** Furthermore, CE will provide the City with a $0.05 per gallon royalty in addition to crediting back the cost for fuel on each gallon of natural gas sold to all non-city vehicles. This arrangement will provide the City with a guaranteed revenue stream while putting the risk for station operations, billing, retailing and customer service on CE. CE's customer service r representatives are available from 7 AM — 8PM everyday and happy to aid each customer with fuelingQ ` needs. Our accounting staff is ; will provide records of all CNG and LNG transactions, bill customers, collect payments, and reimburse ' the City for all fuel dispensed to non-city vehicles. The existing accounts-receivable and t " accounts-payable systems provide these services on a daily basis for over 30,000 transactions. i. Mug m t a t% k yN. da City of San Bernardino Comprehensive Liquefied Natural Gas Station Proposal eu Clean Energy Appendix Clean Energy Begins Construction on LNG Plant in California First Commercial LNG Plant in California to Serve Growing Demand from Heavy-Duty Natural Gas Vehicle Fleets, including Los Angeles Ports Seal Beach, CA (Sept. 13, 2007) — Clean Energy Fuels Corp. (Nasdaq: CLNE) has begun construction on California's first, large-scale LNG (liquefied natural gas) production plant in the Mojave Desert, approximately 75 miles northeast of Los Angeles. The plant is scheduled to begin commercial shipments in the second half of 2008. "This plant is a major step in our preparing to fuel potentially thousands of additional buses and trucks with natural gas as a result of increasing commercial demand and of new measures instituted by the California Air Resources Board and the Ports of Los Angeles and Long Beach for cleaner vehicles," said Andrew J. Littlefair, president and CEO. Natural gas is one of the cleanest burning fuels available, Littlefair noted. Natural gas vehicles emit significantly less greenhouse gas and pollution than vehicles fueled by diesel or gasoline. At the new plant, Clean Energy will liquefy pipeline gas for shipment to customers by tanker trailers. Initial production capacity is anticipated to be 160,000 LNG gallons per day, which will be delivered for use by vehicle fleets throughout California and the Southwest. The facility can be expanded to a production capacity of 240,000 gallons per day. The plant will also have LNG storage capacity of 1.5 million gallons. About Clean Energy Clean Energy, based in Seal Beach, CA, is the leading provider of natural gas (CNG and LNG) for transportation in North America. It has a broad customer base in the refuse, transit, shuttle, taxi, intrastate and interstate trucking, airport and municipal fleet markets, fueling more than 14,000 vehicles daily at strategic locations across the United States and Canada. Information at: www.cleanenerpyfuets.com Safe Harbor Statement This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21 E of the Securities Exchange Act of 1934 that involve risks, uncertainties and assumptions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements, including the financial impact of unanticipated project delays, higher than anticipated construction costs and delays in the demand for LNG as a vehicle fuel. The forward-looking statements made herein speak only as of the date of this press release and the company undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances. Contacts News Media Bruce Russell, 310/559-4955, ext. 101 brussell@cleanenerQyfuels.com City of San Bernardino Comprehensive Liquefied Natural Gas Station Proposal ) ObanFneW- Clean Energy Signs Deal to Increase LNG Resources in Southwest 10-Year Agreement to Help Supply Growing Transportation Fuel Demand in AZ and CA - Seal Beach, Calif. (October 25, 2007) - Clean Energy Fuels Corp. (Nasdaq: CLNE) has entered into an LNG sales agreement with Spectrum Energy Services, LLC (SES), an Alaska limited liability company, to purchase, on a take-or-pay basis over a term of 10 years, 45,000 gallons per day of liquefied natural gas (LNG) from a plant to be constructed by SES in Ehrenberg Arizona, which is near the California border. The plant is anticipated to be in full production in the summer of 2009. The LNG from the plant will be used to help support Clean Energy's supply agreements with customers in Arizona and California. "Demand for natural gas for transportation is growing steadily, particularly in the Southwest, for the transit, refuse and emerging ports markets," said Andrew J. Littlefair, Clean Energy president and CEO. "This new supply agreement will supplement our resources needed to fuel the growth." "The Ports of Los Angeles and Long Beach alone have developed a plan that envisions the addition of 5,300 heavy-duty LNG trucks for goods movement at the ports within five years," noted Littlefair. "Clean Energy has committed to be a major supplier to that initiative and already has LNG fueling stations under construction and design." Clean Energy is building its own LNG production plant in the California desert that is planned to begin delivering up to 160,000 gallons of LNG per day in late 2008. The plant is designed to be able to increase production up to 240,000 gallons of LNG per day as demand grows further. About Clean Energy Clean Energy is based in Seal Beach, Calif., and is the leading provider of natural gas for transportation in North America. It has a broad customer base in the refuse, transit, shuttle, taxi, intrastate and interstate trucking, airport and municipal fleet markets, fueling more than 14,000 vehicles daily at strategic locations across the United States and Canada. Information at: www.cleanenerpvfuels.com Forward-Looking Statement This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21 E of the Securities Exchange Act of 1934 that involve risks, uncertainties and assumptions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements, including the ultimate timing and production capacity of the new plant and the demand for LNG in the Southwestern United States, and other factors more fully described in the company's recent Form 10-Q and Initial Public Offering Prospectus filings with the Securities and Exchange Commission. The forward-looking statements made herein speak only as of the date of this press release and the company undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances. Contacts - News Media Bruce Russell, 310/559-4955, ext. 101 brussetl@cteanenerp,yfuets.com City of San Bernardino Comprehensive Liquefied Natural Gas Station Proposal