Agenda Item Wording:
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Authorize the City Manager or designee to enter into a contract with Trillium for the Management and Maintenance of the Compressed Natural Gas (CNG) Facility, management of the Low Carbon Fuel Standard (LCFS) credits, Electric credits, and ensure the supply of Renewable Compressed Natural Gas (RCNG) to the facility for an initial term of three (3) years with the option to renew for two (2) consecutive one-year periods up to five (5) years.
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Deadline for Action: None
Submitting Department: Administration - Transit Division
Contact Name and Phone Number:
Angelina DeRossett, Transit Manager Angelina.DeRossett@Visalia.City (559) 713-4591
Nick Mascia, Assistant City Manager, Nick.Mascia@Visalia.City, (559) 713-4323
Department Recommendation:
Staff requests that City Council authorize the City Manager to enter into a contract with Trillium for the Management and Maintenance of the CNG Facility, management of the (LCFS) credits, Electric credits, and ensure the supply of RCNG to the facility for an initial term of three (3) years with the option to renew for two (2) consecutive one-year periods up to five (5) years. Funding for these contracts are preexisting within the current operational budget.
Background Discussion:
The CNG station located at the Transit Operations and Maintenance Facility at 525 North Cain Street in Visalia is owned and maintained by the Transit division. The City’s Transit Division directly operates a fleet of 45 CNG buses from this facility. The Station includes a public access CNG Fueling station which is accessible 24 hours per day, seven days per week. Additionally, the fueling station supplies an adjacent slow-fill system for fueling the City’s Solid Waste fleet of approximately 60 vehicles.
There are multiple contracts associated with the CNG station; The Maintenance and Management of the station, the management and retention of the LCFS and electric credits, and the management and supply of the RCNG to the station. Historically, these pieces were split between multiple vendors. With the growth and evolution of the station and the growth in capacity, it became apparent that Transit should seek out one (1) qualified vendor to manage all aspects of the CNG station as a whole. In the spring of 2023 the attached Request for Proposals (RFP) with a sample contract was released with the following tasks:
• Task 1: Provide consulting services to recommend improvements to the CNG station. Trillium’s fee for this is $24,300. however it is waived as part of their award for task 4, which is the station operations and maintenance piece.
• Task 2: Supply 100 percent of COV Transit’s natural gas requirements in the form of a guaranteed supply of renewable natural gas to COV Transit’s CNG Fueling facility on a non-interruptible basis or supplier procurement for the RCNG. Trillium bid this piece at $806,400 annually however their recommendation is that the City receive the fuel directly from Southern California Edison at a lower direct cost of $658,000 annually. This is a savings of $148,400 annually. Staff will return to Council to request to enter into a contract with Southern California Edison.
• Task 3: Manage COV Transit’s Low Carbon Fuel Standard (LCFS) program as outlined in California Assembly Bill AB32; manage additional LCFS and RIN (federal) credits generated through the use of green gas and provide quarterly reporting. Manage the LCFS credits for the Battery Electric Bus fleet and Transit owned solar. Trillium proposed paying the City 12% of the LCFS share (the current contract pays the City 5%). This would project the City to receive $330,666 in annual LCFS revenue. The City has not yet begun collecting on the electric credits, however based on Trillium’s proposal, the City would receive $56,429 of annual electric LCFS credits for the fleet of 11 electric buses.
• Task 4: Provide fuel station maintenance management for a station maintenance contract. Trillium will charge the City .10 per therm. Based on the previous year’s station therms, that would amount to an annual expense of $143,523.
• Task 5 (Optional): Project management services and preparation of RFP and Bid documents to hire a design services consultant and construction company for the construction work to upgrade the existing CNG station equipment. Trillium did not bid this optional task.
Proposals:
From this RFP process staff received two qualified proposals; one from Trillium, who is the current station Manager, and one from GHI Energy, who is the current station LCFS Manager.
The proposal evaluation piece was completed individually by four (4) separate staff members, three within the Transit division, and one outside the Transit division. All four evaluations reflected similar scores with Trillium being the unanimous leader. As shown in the Tasks listed above, Task 5 for the project management piece of the future construction upgrade to the station was optional. Trillium opted not to bid that task, therefore Task 5 will be brought back to Council at a later date as an independent project to complete.
Protest:
Purchasing received a protest from GHI on the procurement process and the selection of Trillium as the lead proposer. At that time Purchasing staff went through the RFP scoring process and evaluated both the GHI and Trillium proposals for any inconsistencies or what GHI was claiming. It was determined that Trillium was selected appropriately by the scoring committee as the lead proposer based on the scoring parameters outlined in the bid proposal. A response was sent to GHI on Purchasing’s decision to uphold the selection of Trillium. At that point GHI followed the protest procedure and escalated the protest to the City Manager. The City Manager performed her own review and again confirmed the selection of Trillium as the lead proposer. Per the protest procedures, the next step in the process for GHI would have been to appeal to City Council by 5:00 p.m. on Tuesday October 3rd. The City received no such response, and at this time Staff is asking Council to approve the selection of Trillium.
History:
The original Transit CNG facility was built by Trillium in 2006. Trillium was also awarded a 10-year maintenance contract as part of that procurement. In 2016 staff went through the process of having the station upgraded. and Trillium was the project manager for the station upgrade. When the original maintenance contract ran out, another procurement was performed, and Trillium was awarded a new maintenance contract in 2017. This new agreement, if approved by Council, will replace all existing agreements for station maintenance, fuel, and LCFS credit associated with the CNG station.
Fiscal Impact:
The contracts associated with this report are ongoing and budgeted yearly in the 4551 Transit operations. All associated credits and expenditures are outlined within the report.
Prior Council Action:
10/03/2005 Award of design/build contract to Pinnacle CNG (Trillium before name change) for 10-year maintenance contract.
01/05/2015 Award to GHI Energy for fuel procurement and participation in the LCFS credits program.
11/20/2017 Contract Award to Trillium for Station Maintenance and Operation.
Other:
None
Alternatives:
None
Recommended Motion (and Alternative Motions if expected):
recommendation
I move to authorize the City Manager or designee to award an agreement to Trillium for the Management and Maintenance of the Compressed Natural Gas (CNG) Facility, management of the Low Carbon Fuel Standard (LCFS) credits, Electric credits, and ensure the supply of Renewable Compressed Natural Gas (RCNG) to the facility for an initial term of three (3) years with the option to renew for two (2) consecutive one-year periods up to five (5) years not to exceed $150,000.00 annually.
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Environmental Assessment Status:
None
CEQA Review:
None
Attachments:
1. Request for Proposal (with sample contract)
2. Ownership Disclosure Form