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HomeMy WebLinkAboutResolution 33-11RECORD OF RESOLUTIONS Resolution No. 33 -11 Passed 20 A RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE AN AGREEMENT WITH COLUMBIA GAS OF OHIO TO EXTEND A HIGH PRESSURE NATURAL GAS LINE TO THE CITY'S NATURAL GAS FUELING FACILITY WHEREAS, the City of Dublin is making modifications to its existing fueling facility to dispense compressed natural gas as a vehicle fuel; and WHEREAS, in so doing, the City will realize savings in fuel costs for many years and the City's fleet will be cleaner burning with reduced emissions; and WHEREAS, the facility requires the installation of high pressure, natural gas supply infrastructure; and WHEREAS, Columbia Gas of Ohio is the utility that provides natural gas distribution in the City of Dublin; and WHEREAS, Columbia Gas of Ohio will install the required natural gas infrastructure at a cost of $165,179. NOM, THEREFORE, BE IT RESOLVED by the Council of the City of Dublin, of its elected members concurring, that: Section 1. The City Manager is hereby authorized to execute an agreement with Columbia Gas of Ohio to extend a high pressure natural gas line to the City's Compressed Natural Gas Fueling Facility at a cost of $165,179. Section 2 . This Resolution shall be effective upon passage in accordance with Section 4.04(a) of the Revised Charter. Passed this day of 2011. i Officer OMMICORKng ATTEST: Clerk of Council Office of the City Manager 5200 Emerald Parkway • Dublin, OH 43017 -1090 CITY OF DUBLIN_ Phone: 614 - 410 -4400 • Fax: 614 -410 -4490 To: Members of Dublin City Council From: Marsha I. Grigsby, City Manager�� Date: July 1, 2011 Initiated By: Ronald L. Burns, Director of Streets and Utilities Memo Re: Resolution 33 -11 - Authorizing the City Manager to Execute an Agreement with Columbia Gas of Ohio to Extend a High Pressure Natural Gas Line to the City's Compressed Natural Gas Fueling Facility Summary The Compressed Natural Gas (CNG) Fueling Facility has been designed to accommodate an increasing quantity of vehicles to be fueled with natural gas in future years. It is staff's intent to replace existing City vehicles with CNG - fueled vehicles, in accordance with the existing replacement schedules in the proposed CIP budget. In addition, Dublin Schools, Washington Township and private fleets may choose to utilize the facility for supply of CNG in future years. The Columbia Gas existing infrastructure cannot supply the quantities of gas and /or the gas pressures required for the CNG fueling facility. Therefore, staff has negotiated an agreement with Columbia Gas (attached) to extend a high pressure natural gas pipe from Eiterman Road east along the north side of Shier -Rings Road and into the CNG fueling facility located at the City's fleet maintenance complex. This upgrade in the natural gas supply ensures more than adequate quantity and pressure of natural gas to operate the CNG fueling facility at maximum capacity. Under the terms of the agreement, Dublin will pay Columbia Gas $165,179.00 to install the gas line. In addition, Dublin and/or any other customers who tap this line for natural gas supply must consume at least $3,146.00 of natural gas annually from this line for seven years. If Dublin and/or other future customers do not consume that quantity of natural gas annually, additional charges will apply. If Dublin and/or other future customers consume more than the required quantity of natural gas, Columbia Gas will refund money to Dublin. Additional charges or refunds will equal the balance between the amount consumed from the gas line and the $3,146.00 annually. Staff estimates Dublin will consume at least the minimum quantity of natural gas to meet this requirement during the entire term of this agreement. Columbia Gas currently owns easements along Shier -Rings Road, and thus we are hopeful that no additional easements are required for the installation of this infrastructure. Columbia Gas is still in the process of confirming that no additional easements will be required, with a final decision from Columbia Gas expected in the very near future. Although the work is currently not scheduled, it is expected to be done in August or September. Resolution 33 -11 - Agreement with Columbia Gas re. Natural Gas Line to CNG Fueling Facility July 1, 2011 Page 2 of 2 The installation of the natural gas line will be funded from the Capital Improvements Projects Tax Fund. In subsequent legislation, Council will be asked to appropriate funds for this work. Recommendation Staff recommends approval of Resolution 33 -11 at the July 6, 2011 Council meeting. COLUMBIA GAS OF OHIO, INC. Line Extension Agreement /Annual Revenue Guarantee LARGE RESIDENTIAL, COMMERCIAL OR INDUSTRIAL THIS LINE EXTENSION AGREEMENT (`Agreement "), entered into this — day of , 2011, by and between Columbia Gas of Ohio, Inc. (`Columbia "), with offices located at 200 Civic Center Dr., Columbus, Ohio 43215 and Cite of Dublin, OH (`Applicant'), located at 6555 Shier Rings Rd, Dublin, OH 43016 represents the full and complete understanding between Columbia and the Applicant under which Columbia will construct, install and/or improve certain facilities (`Facilities ") at, near, or necessary to provide natural gas service availability to Applicant's facility, also known as City of Dublin CNG Facility located in, Ohio, in accordance with the plans currently on file with Columbia (the "Project' or "Project Area "). WITNESSETH WHEREAS, Applicant is developing and constructing the Project and Applicant desires that natural gas service be made available to the Project Area, and WHEREAS, Columbia is a natural gas utility operating within the State of Ohio and is willing to extend natural gas service availability to the Project Area and construction, installation, and/or improvement of Facilities are necessary in order for Columbia to make natural gas service available to the Project Area, and WHEREAS, Applicant understands that payment shall be made by Applicant to Columbia (the "Deposit') for the costs of construction, installation and/or improvements of the Facilities if such Facilities are not deemed economically justified at the Company's expense, based on a cost - benefit study using certain consumption, facility and/or build -out information provided by Applicant. NOW, THEREFORE, the parties desire to enter into this Agreement subject to the terms and conditions as set forth herein, and intending to be legally bound, do hereby agree as follows. Columbia agrees to perform a cost - benefit study using load and/or meter set information provided by Applicant to determine if a Deposit will be required for the Facilities that are not deemed economically justified to be constructed at Columbia's expense. If a Deposit is required Columbia has no obligation to initiate scheduling of construction, installation and/or improvement of the Facilities unless and until such time as the aforementioned Deposit has been paid, in a form acceptable to Columbia and this Agreement has been executed and returned to Columbia. Based on the aforementioned cost - benefit study, the Deposit required is $165,179.00 . 2. If a Deposit is required pursuant to Section 1 above, refund of the Deposit will be made to Applicant in accordance with the terms and conditions of Columbia's Rules and Regulations Governing the Distribution and Sale of Gas. In no event shall any amount in excess of the total Deposit paid to Columbia be refunded to Applicant. 3. Each year, from the anniversary date of gas being made available and for the next 7 years, Columbia shall determine the total base rate revenue received from Applicant and/or other customers served directly off the main extension provided for pursuant to this Agreement. If the Applicant and/or other customers have together paid, in base rate revenue, an amount equal to or greater than S3, 146 (the "Threshold" amount), during each applicable annual review period, the annual revenue guarantee for the applicable annual period shall be deemed to be satisfied. If the annual base rate revenue received from Applicant and/or Other Customers served directly off the main extension is less than the "Threshold" amount for any such annual period, then Applicant agrees to pay an amount to the Company equal to the Threshold amount minus the actual base rate revenue received for the applicable annual review period. Company shall prepare and submit invoices annually for any such amounts due subsequent to its annual review period. If the amount of base revenue paid by Applicant and/or other customers is greater than the Threshold amount for any such annual review period, and the Applicant made a Deposit to Columbia, then Columbia shall determine the annual refund amount to be paid to the Applicant. The refund amount will equal the actual base rate revenue received from applicant and/or other customers for the annual review period minus the Threshold amount. 4. No provision of this Agreement shall be binding upon either party unless both parties have executed this Agreement by May 1, 2011. 5. The term of this Agreement shall be for a term of 7 years from the date gas is made available, unless terminated earlier as provided herein. 6. Columbia shall have the right to audit and perform on -site inspections, as necessary, to confirm Applicant's load and/or meter set information provided to Columbia. Any failure to meet these load requirements by Applicant, to be determined in Columbia's sole discretion, will entitle Columbia to recalculate the Deposit and collect an additional Deposit from Applicant as warranted by a cost - benefit study based on the revised load information. 7. The Company reserves the right to make additional extensions or laterals from the original main extension installed hereunder at any time, and shall not be required to make any payments or refunds to Applicant on account of any customers served from such additional extensions or laterals. 8. Termination: If Applicant terminates this Agreement for any reason prior to completion of the Facilities, Columbia may deduct any and all costs related to this Agreement and the cost of Facilities that it has incurred, up to the effective date of termination, from the Deposit. Columbia does not waive any other rights in law or equity it may have as a result of Applicant's termination of this Agreement. Any payment obligation of either party arising pursuant to this Agreement shall survive the termination of this Agreement. 9. Applicant agrees that, unless otherwise required by law or order of any governmental body having jurisdiction over Columbia, Columbia shall not be required to pay interest, carrying charges, or any other amounts arising out of or related to the payment made pursuant to Section 2. 10. Right to Setoff. Columbia may setoff against any amount due and payable under this Agreement any and all present and future indebtedness of Applicant to Columbia whether or not related to the services performed pursuant to this Agreement. 11. Applicant agrees to enter into a Right of Way Agreement with Company in which Applicant shall grant to Company all necessary easements or rights of way on property owned by Applicant at no cost to Company. Applicant agrees to save the Company harmless from adverse claims of ownership to the easements or rights of way addressed in such Right of Way Agreement. Applicant shall also use its best efforts to assist Company in acquiring any necessary easements or rights of way on property owned by third parties that are not in a public street or alley. Applicant understands and agrees that the Company shall not be obligated to construct the Facilities and this Agreement may be terminated at the discretion of the Company if: (1) Applicant fails to enter into such Right of Way Agreement referenced above, or (2) if third party easements are required, and Company is not able to obtain such third party easements or rights of way upon terms and conditions (including costs) mutually agreeable to the Company and such third party property owner(s). In the event of such termination, Applicant shall be responsible for all costs expended or obligated by Company related to the Facilities at the time of termination. Columbia further agrees to extend its natural gas distribution main approximately 3 feet to the geographic area in accordance with the plans on file in Columbia's office. Unless otherwise provided, the Facilities become and remain the property of Columbia. This provision shall survive termination of this Agreement 12. This Agreement contains the full and complete understanding of Columbia and Applicant as to payment for the Facilities and supersedes any prior understandings, commitments, agreements and authorizations, whether oral or written, regarding the Facilities or payment therefor, no other representations or promises regarding the new Facilities, written or oral, shall survive the execution hereof. Any modifications hereto shall be in writing and duly executed by both parties. This Agreement shall not modify any obligation of Applicant or Columbia under the applicable and presently effective provisions of Columbia's Tariff or any Service Agreement entered into between the parties for natural gas service to the Project. If any conflict arises between the language of this Agreement and the language of the Company's approved tariffs, the language of the tariffs shall prevail. Applicant may not assign this Agreement without express written consent from Columbia. 13. The parties further agree that the terms and conditions of this Agreement are competitively sensitive, proprietary in nature and confidential. As such the parties agree to keep confidential and not to disseminate generally or specifically to anyone in any manner whatsoever the terms and conditions of this Agreement, except when the information is made publicly available as a result of filings with governmental agencies, or where law otherwise requires disclosure. IN WITNESS WHEREOF, Columbia and Applicant have caused this Agreement to be duly executed by the appropriate representatives identified below, on the date first written above. COLUMBIA GAS OF OHIO, INC. APPLICANT Signature Signature Name (Print) Name (Print) Title Title Date Date