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CITY OF PALM DESERT
PUBLIC WORKS DEPARTMENT
STAFF REPORT
REQUEST: APPROVE THE PURCHASE OF COMPRESSED NATURAL GAS
FUEL FOR FISCAL YEAR 2010-11 IN AN AMOUNT NOT TO
EXCEED $40,000 FROM CLEAN ENERGY, AS THE PRIMARY
SOURCE, AND SUNLINE SERVICES GROUP, AS AN
ALTERNATIVE SOURCE
SUBMITTED BY: Mark Greenwood, P.E., Director of Public Works
VENDOR:
Clean Energy
3020 Old Ranch Parkway
Seal Beach, Ca 90740
SunLine Services Group
32-505 Harry Oliver Trail
Thousand Palms, CA 92276
DATE: May 13, 2010
Recommendation
By Minute Motion, approve the purchase of Compressed Natural Gas (CNG) fuel
for fiscal year 2010-11 in an amount not to exceed $40,000 from Clean Energy,
as the primary source, and SunLine Services Group, as an alternative source.
Funds for the purchase of CNG fuel are budgeted in General Fund Account No. 110-
4331-413-2170.
Background
Clean Energy operates four CNG fuel stations in the Coachella Valley. One of the four
CNG stations is located at the Burrtec Waste Management facility, in Palm Desert.
This facility has been the primary source for fuel for the City's CNG vehicles due to its
proximity and accessibility. In previous years, the City's franchise agreement with
Burrtec allowed the City to acquire a special rate for the purchase of CNG fuel at the
Burrtec CNG facility. Negotiations to acquire a special rate from Burrtec failed in
February 2009. The City is now paying the current market rate of $2.23 per gallon for
Staff Report
Approve Purchase of CNG from Specific Vendors for FY 2010-11
May 13, 2010
Page 2of2
the purchase of CNG fuel at the Burrtec fueling station. This rate is subject to change
based on market conditions.
The Burrtec CNG fueling station is rarely out of service. However, in the infrequent
times when it is non -operational, City staff must have an alternative source for acquiring
CNG fuel. SunLine Services Group in Thousand Palms is another provider for CNG
fuel. City staff has used the SunLine fueling facility only in emergency circumstances
when the Burrtec fueling station has been out of service. Their current rate for CNG
fuel is $2.09 a gallon. This rate is subject to change based on market conditions.
The City has vehicle fueling cards from Clean Energy and SunLine Services Group and
is invoiced monthly with a complete purchase detail by Clean Energy and SunLine when
used.
While SunLine is currently offering a lower price for the fuel, the costs associated with
traveling to Thousand Palms do not offset the reliable convenience of the Burrtec
fueling station, and both suppliers' prices are based on market conditions. Therefore,
staff recommends approval of the use of the Clean Energy fueling station located at the
Burrtec facility as the primary source of CNG fuel, with SunLine as a secondary source.
Fiscal Analysis
This is a necessary, on -going expense with no fiscal impact beyond the cost of fueling
City vehicles.
Crlos Hergiandez
Maintenary/ a Services Manager
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Paul S. Gibson
Director of Finance
M. Wohlmuth
y Manager
CH/bl
Departyfie�ft,; ead:
Mark Greeinwood, P.E.,
Director of Public Works
CITY COUNCIL ACTION
APPROVED DENIED
RECEIVED OTHER
MEETING DATE -5 -/3 C/C
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ABSENT: Atone
ABSTAIN: NnV1'
VERIFIED BY. 1i'n ira
Original on File with City Cleric's Office