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Item 09 - Authorization to purchase two Electric Transit Vehicles Department Name: Public Works Cost Center: 5201 For Agenda of: July 7, 2020 Placement: Business Estimated Time: N/A FROM: Matt Horn, Public Works Director Prepared By: Gamaliel Anguiano, Transit Manager SUBJECT: AUTHORIZATION TO PURCHASE TWO ELECTRIC TRANSIT VEHICLES RECOMMENDATION Approve the purchase of two electric buses for $1,744,259 using the California Department of Goods and Services Statewide Cooperative Purchasing Contract. DISCUSSION Background Much of the City’s Transit fleet is aged (average bus age is nine plus years). Two transit vehicles are already past their Federal Transit Administration (FTA) defined “useful -life,” of twelve years of consecutive service, and need to be retired and replaced as soon as possible. There are six more transit vehicles reaching the end of their useful life in 2021 and will also need to be replaced in the nearer term. On December 17, 2018, the California Air Resources Board (CARB) adopted the Innovative Clean Transit (ICT) fleet regulations. The ICT rules require that all public transit agencies convert to a 100 percent zero-emission bus (ZEB) fleet by 2040 with incremental milestones in between to meet this goal. This regulation is aimed at tackling the issues associated with greenhouse gas (GHG) emissions and their contribution to climate change. Per the ICT regulations, on or before January 1, 2026, no less than 25% of the City of San Luis Obispo Transit (SLO Transit) fleet procurements will need to be ZEB technology. Given the time to procure, deliver, and address infrastructure needs, transit agencies will need to begin the transition process well in advance of this deadline. In line with the adopted 2019-21 Financial Plan and ICT regulations, staff proposes the replacement of the two oldest transit vehicles by purchasing two electric transit vehicles. Purchase of Two Vehicles Under the California Department of Goods and Services Contract The State of California’s Department of Goods and Services has just completed an extensive Request for Proposals for ZEB vehicles. This resulted in a statewide contract that allows public agencies such as the City of San Luis Obispo to purchase under it. This streamlines the acquisition process, helps to procure a tested product, and secures competitive pricing. Item 9 Packet Page 81 This statewide contract is a State Cooperative Purchasing Contract under Section 3019 of the Fixing America’s Surface Transportation Act (FAST Act) and is compliant with Federal Transit Administration Guidelines. The State of California has contracted with New Flyer of America, Inc. and Proterra, to provide ZEB vehicles, options, spare parts, and support. The contract incorporates FTA required clauses and certifications. The cost for the New Flyer Excelsior 40’ ZEB vehicle is $750,000 while the Proterra ZEB vehicle is $800,000. These prices do not include the cost of ancillary transit equipment (i.e. fareboxes, automatic vehicle locations systems, passenger counters, etc.) which are expected to cost an additional $100,000 for each vehicle. Staff proposes buying one bus from each of the two vendors, New Flyer Excelsior and Proterra. This will allow the City to compare similar but slightly different products at minimal risk and to evaluate which manufacturer has the better technology for future purchases. The total expenditure to acquire these vehicles including ancillary transit equipment is $1,744,259. Electric Charging Infrastructure The City is addressing the infrastructure needs related to ZEB vehicles. Earlier this year the City Council approved a grant application for $150,000 with the Air Pollution Control District for the design work at the bus yard to prepare the facility to support and charge ZEB vehicles. COVID-19 Considerations Due to the current economic impacts of COVID-19, and consistent with the City’s activated Fiscal Health Contingency Plan, all CIP projects are scrutinized with the goal of reducing capital expenditures, and aligning CIP projects with a focus on economic recovery and fiscal responsibility including addressing long-term maintenance needs. With these criteria in mind, this project is recommended to continue since it is addressing a critical capital replacement need, helps ensure the continued reliability of transit services and, reduces maintenance costs for the Transit Program. Additionally, this project strongly aligns with Council’s objectives of addresses climate and through sustainable transportation. Policy Context This purchase is identified in the 2020-21 Supplemental Budget and the adopted 2017-22 Short Range Transit Plan (SRTP) which support sustainable transportation goals. 1. Previous Council or Advisory Body Action. On June 6, 2020 Council approved the use of Transit Fund Undesignated Working Capital for this CIP during the 2020-21 Budget Supplement along with the use Federal 5307 grant funds both of which have been augmented by approved Council Grant Awards from the. Low Carbon Transportation Operations Program (LCTOP) and SB1 State of Good Repair (SGR) Grant. 2. Other Agencies. Outside the City, these efforts are also supported by various emission reduction strategies such as those outlined in the San Luis Obispo Council of Governments (SLOCOG) Regional Transportation Plan and the SLO County Air Pollution Control District’s (APCD) Clean Air Plan. The City’s plan for a ZEB transition supplements and aligns with these other plans. Item 9 Packet Page 82 3. Purchasing Guidelines. Section 3.24.060(E) of the City’s purchasing ordinance allows for direct purchasing when the purchase will be made cooperatively with one, or more, other units of government, making the DGS contract a prime way of procuring the vehicles and achieving competitive pricing on a vetted product. Public Engagement No public engagement was necessary as this is considered to be an administrative item. CONCURRENCE The project has been approved in the FY 2020-21 Budget Supplement and receives broad general support from the adopted plans and stated goals of organizations such as Sustainability Division, SLOCOG, Air Pollution Control District and of course the CARB. ENVIRONMENTAL REVIEW The California Environmental Quality Act (CEQA) does not apply to the recommended action in this report, because the action does not constitute a “Project” under CEQA Guidelines Sec. 15378. FISCAL IMPACT Budgeted: Yes Budget Year: FY 2020-21 Funding Identified: Yes Fiscal Analysis: Funding Sources Current FY Cost Annualized On-going Cost Total Project Cost Transit Fund $530,428 State – LCTOP* $256,731 State – SGR** $285,459 Federal - 5307 $671,641 Other: Total $1,744,259 $0 $0 *Low Carbon Transit Operations Program (LCTOP) is one of several programs that are part of the Transit, Affordable Housing, an d Sustainable Communities Program established by the California Legislature in 2014 by Senate Bill 862 ** The Road Repair and Accountability Act of 2017, Senate Bill (SB) 1 (Chapter 5, Statues of 2017), signed by the Governor on Ap ril 28, 2017, includes a program that will provide additional revenues for transit infrastructure repair and service improvements. On June 6, 2020 Council approved the use of Transit Fund Undesignated Working Capital in the amount of $530,428 for this CIP during the 2020-21 Budget Supplement along with the use of $671,641 in Federal 5307 grant funds. These funds are being supplemented by a number of discretionary grants awarded for this procurement. These include a February 4, 2020 Low Carbon Transportation Operations Program (LCTOP) application, where $256,731 was awarded for ZEB purchase. A February 18, 2020 Senate Bill 1(SB1) State of Good Repair (SGR) application where $285,459 was awarded for ZEB purchase. The combined total of these funds is sufficient to buy the two electric transit vehicles as priced in the CA DGS contract. Item 9 Packet Page 83 ALTERNATIVES 1. Direct staff to defer purchasing to see if more favorable pricing is available. This however is not recommended as the two existing 2007 transit vehicles that need to be replaced are now past FTA’s defined useful life of 12 years of continual service and are experiencing reliability issues in the field. Replacing these vehicles will be important for service continuity and reliability. 2. Direct staff to purchase diesel model vehicles instead. This is not recommended because the discretionary grants awarded to the City (i.e. LCTOP and SB1) were for the purpose of procuring zero emission technology and would likely need to be returned if not used for these purposes. Item 9 Packet Page 84