HomeMy WebLinkAboutItem 5h Appropriate grant funds to Transit Program Capital Projects Item 5h
Department: Public Works
Cost Center: 9501
For Agenda of: 6/17/2025
Placement: Consent
Estimated Time: N/A
FROM: Scott Collins, Assistant City Manager
Prepared By: Alex Fuchs, Mobility Services Business Manager
SUBJECT: APPROPRIATE GRANT FUNDS TO TRANSIT PROGRAM CAPITAL
PROJECTS
RECOMMENDATION
Adopt a Draft Resolution entitled, “A Resolution by the City Council of the City of San Luis
Obispo, California, approving the appropriation of federal and state grant funds to Transit
program capital projects.”
REPORT-IN-BRIEF
The Transit Fund is one of four enterprise funds within the City and relies heavily on grant
opportunities and rebate programs to fund capital projects. The City has an obligation to
make the best use of awarded grant funds to the extent a llowed by the administrating
agencies. The recommended action of this report accomplishes three grant related
activities to make the best use of federal and state funds available to the City for transit
program capital projects.
First, staff recommends that remaining federal and state grant dollars from a recently
completed project be reappropriated to eligible Transit program projects to meet the
requirements of their respective guidance documents. Second, staff recently executed a
grant with the Federal Transit Administration (FTA) to fund several capital projects. These
grant dollars now need to be appropriated to their associated project budgets. Third, state
grant program funds awarded to the City in prior fiscal years need to be appropriated so
that those funds can be expended in a timely manner as required by the administrating
agencies.
Staff is recommending adopting a Draft Resolution (Attachment A) appropriating federal
and state grant funds to Transit program capital projects as described in this report to
accomplish these activities.
POLICY CONTEXT
Appropriation of grant funds to associated capital projects as detailed in this report are
consistent with the City’s proposed 2025-27 Financial Plan Major City Goal for
Infrastructure and Sustainable Transportation. Funding these capital projects is also
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necessary to implement recommendations of the SLO Transit Innovations Study and SLO
Transit’s Zero Emission Bus Rollout Plan.
Because each of the recommended actions of this report relate to appropriation of
previously-received grant funds and/or reappropriation of leftover funds from completed
projects, they do not affect projects presented in the 2025-27 Financial Plan or the draft
Capital Improvement Plan (CIP); however, the action is consistent with the Major City
Goal of Infrastructure and Sustainable Transportation which supports policies and
programs aimed at expanding mass transportation and public transit.
Financial Management Manual Policy 740 requires that the City Council approve grant
applications greater than or equal to $5,000. However, due to the often limited time given
to apply for grants and the Transit program’s heavy reliance on grants to fund operations
and capital projects, in 2022 City Council adopted Resolution No. 11330 authorizing the
Public Works Director to apply for future transit related funding opportunities and to
execute related documents on behalf of the City.
DISCUSSION
Reappropriation of Completed Project Funds
Staff recently closed Project No. 2000058 (Bus Replacements) for the purchase of two
battery electric buses. This project was partially funded by the state’s H ybrid and Zero-
Emission Truck and Bus Voucher Incentive Project (HVIP) program , which applies point-
of-sale discounts to HVIP-eligible vehicle purchases. Both buses were eligible to
participate in the program, and the City received a discount that was applied directly to
the invoices from the respective bus manufacturers. These vouchers resulted in a savings
of federal and state grant dollars for the project as shown in Table 1.
Table 1: Project No. 2000058 (Bus Replacements) Remaining Funds
Funding Source Amount
FTA Section 5307 $ 135,909
SB 1 (SGR) $ 150,325
Low Carbon
Transit Operations
Program (LCTOP)
$ 69,156
Total $ 355,390
If the funds are not reappropriated, then the City will lose access to the remaining federal
funds and will have to reimburse the state for unexpended funds already disbursed. The
grant program guidelines for these funds have criteria identifying when the funds can be
reassigned to other eligible projects. Staff is recommending these remaining funds be
reassigned to eligible Transit program projects. Otherwise, the federal grant funds will be
de-obligated and unavailable to the City for future projects and the state grants funds will
need to be returned to the administrating agency for reprogramming.
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Appropriation of Federal Grant Dollars
In November 2024, under the authorization vested by Reso lution No. 11330, staff
submitted an application to the Federal Transit Administration (FTA) using Section 5307
formula grant funds for three capital improvement plan projects and for preventive
maintenance of revenue vehicles1 as shown in Table 2. The TDA funds and SB 125 grant
funds shown in Table 2 provide the matching local funds as required by the FTA. The
application was approved at the end of March 2025, grant CA-2025-050 was created and
is available for the City to begin incurring eligible expenses.
Table 2: FTA Section 5307 Grant Fund Breakdown by Project
FTA 5307 Grant TDA Funds SB 125 Grant Total
Project No. 1000102
(Bus Yard Parking Lot
Maintenance)
$ 60,000 $ 15,000 $ 0 $ 75,000
Project No. 2000404
(Auto Vehicle Locator
System Replacement)
$ 300,000 $ 0 $ 130,000 $ 430,000
Project No. 2000506
(Bus Stop Improvements) $ 280,000 $ 70,000 $ 0 $ 350,000
Preventive Maintenance $ 211,296 $ 52,824 $ 0 $ 264,120
Staff is recommending that Council appropriate the awarded funds to the related capital
projects as shown in the Fiscal Impact section of this report.
Appropriation of State Grant Funds from Prior Fiscal Years
State funds are available to transit agencies through the Low Carbon Transit Operations
Program (LCTOP) and State of Good Repair (SGR) program. SGR is a key component
of Senate Bill (SB) 1, enacted in 2017, to address the state’s aging infrastructure. In this
report, the term “SB 1 (SGR)” is used to refer to funds received from the program.
Both LCTOP and SB 1 (SGR) funds allocated to our region are managed by the San Luis
Obispo Council of Governments (SLOCOG) and are separated into two categories –
operator apportionment and regional competitive funds. Operator apportionment funds
are formula-based and are apportioned to each transit agency within the given region.
Regional competitive funds must be applied for and are awarded by SLOCOG based on
adopted evaluation criteria.
Each year, the City receives approximately $14,500 in LCTOP operator apportionment
funds and $9,000 in SB 1 (SGR) operator apportionment funds. The amounts vary slightly
from year-to-year depending upon the collection of fees by the state that fund the
1 The Federal Transit Administration defines Preventive Maintenance as, “All maintenance costs related to
vehicles and non-vehicles. Specifically, preventive maintenance includes all the activities, supplies,
materials, labor, services, and associated costs required to preserve or extend the functionality and
serviceability of the asset in a cost-effective manner, up to and including the current state of the art for
maintaining such an asset.
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programs. Both operator apportionment funds and regional competitive funds must either
be assigned to new or existing eligible projects on file with the State of California.
During the closeout of Project No. 2000058, staff found that LCTOP and SB 1 (SGR)
operator apportionment funds from prior fiscal yea rs were never appropriated. These
funds need to be appropriated to their associated projects so funds can be expended in
a manner as required by the administrating agencies (FY 2024-25 LCTOP Guidelines - Page
10 and 2024 State of Good Repair Guidelines - Page 11). Otherwise, these funds would need
to be returned to the administrating agency for reprogramming. Staff is recommending
appropriating $14,868 in LCTOP funds and $27,355 in SB 1 (SGR) funds to eligible
projects, as described in the Fiscal Impact section of the report.
Previous Council Actions
1. April 15, 2025 – Council reviewed the Strategic Budget Direction Report and the
2025-27 Major City Goals and Work Plans which includes Infrastructure and
Sustainable Transportation as a Major City Goal. Council also provided feedback
and guidance proposed budget allocations before the scheduled adoption of the
25-27 Financial Plan.
2. January 14, 2025 – Council approved appropriation of Senate Bill 125 grant funds
to several capital projects and the execution of an agreement with SLOCOG for
reimbursement of project expenditures.
3. June 4, 2024 – Council adopted the FY 2024-25 Supplemental Budget including
updates to the Capital Improvement Plan (CIP).
4. March 5, 2024 – Council adopted SLO Transit’s Zero-Emission Rollout Plan as
required by California’s Air Resources Board.
5. January 23, 2024 – Council received and filed Transit Innovation Study and
directed staff to finalize the report and begin implementation.
6. July 11, 2023 – Council adopted Resolution No. 11434 (2023 Series) a uthorizing
the appropriation of undesignated Transit Fund balance for the purchase of six
battery electric buses.
7. June 6, 2023 – Council adopted the 2023-25 Financial Plan and FY 2023-24
Budget which includes the Climate Action, Open Space, and Sustainable
Transportation Major City Goal.
Public Engagement
This is an administrative item, so no outside public engagement was completed. Public
comment can be provided to the City Council through written correspondence prior to the
meeting and through public testimony at the meeting.
CONCURRENCE
SLOCOG is the sponsor agency for both LCTOP and SB 1 (SGR) programs and
SLOCOG staff concur with the transfer of funds to the eligible projects as described in
this report.
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Item 5h
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. Capital projects must comply with state and local laws including
environmental review or finding of exemption.
FISCAL IMPACT
Budgeted: Yes Budget Year: 2024-25
Funding Identified: Yes
Fiscal Analysis:
Reappropriation of unexpended federal and state dollars to applicable projects makes the
best use of funds that would otherwise be de-obligated by or returned to the administrating
agency. Similarly, appropriating FTA Section 5307 program dollars aligns with the
program’s intent and supports delivery of critical transit projects. Appropriating state grant
funds awarded to the City allow those funds to be expended in accordance with their
respective program guidelines.
Project No. 2000102 – Bus Yard Parking Lot Maintenance
This project initially identified $25,000 in unsecured SB 1 (SGR) grant funds for design;
however, an application for SB 1 (SGR) competitive funds for design was not submitted
and, therefore, not obtained. In March 2025, the project was awarded $60,000 in FTA
Section 5307 formula funds for design. This grant requires a minimum 20% local match.
Staff recommends using Transportation Development Act (TDA) funds to meet this
requirement by appropriating $15,000 in TDA funds to the project. A total of $75,000 is
sufficient to complete the design phase based on the current scope of work. Any unspent
FTA funds may be amended and reallocated to support the construction phase.
The recommended action appropriates $60,000 in FTA Section 5307 funds and $15,000
in TDA funds to Project No. 2000102 and deprograms the previously identified $25,000
in SB 1 (SGR) funds.
Project No. 2000102 (Bus Yard Parking Lot Maintenance)
SB 1 (SGR)
Grant
FTA 5307
Grant
TDA
Funds
Total
Project
Budget
Current Fund
Amount $ 25,000 $ 0 $ 0 $ 25,000
Proposed Funding
Added $ 0 $ 60,000 $ 15,000
Proposed Funding
Removed $ (25,000) $ 0 $ 0
Post Transfer
Amount $ 0 $ 60,000 $ 15,000 $ 75,000
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Item 5h
Project No. 2000403 – Battery Electric Bus Charging Infrastructure
In April 2024, the SLOCOG Board approved a total allocation of $319,168 in LCTOP
funds to the City to support procurement and installation of electric vehicle charging
infrastructure. This funding includes $304,400 in regional competitive funds and $14,868
in operator apportionment funds; both administered through the LCTOP program. The
regional competitive funds have been appropriated, and staff is recommending the
appropriation of $14,868 in operator funds to assist with project implementation.
In addition to LCTOP funds, this project includes $395,000 in Senate Bill (SB) 125 funds
appropriated by Council in January 2025 , bringing the total project budget to $699,400.
Based on initial input from electrical engineers, additional site improvements are needed
before electric vehicle charging stations can be installed.
To help meet this need, staff recommends reallocating $69,156 in unexpended LCTOP
funds from Project No. 2000058, which was previously funded for the purchase of two
battery electric buses. Under LCTOP guidelines (page 13), remaining funds may be
reassigned to another project with an approved allocation request. Project No. 2000403
meets this requirement and is eligible to receive the unspent funds.
The recommended action in this report appropriates $14,868 in LCTOP operator
apportionment funds and $69,156 in reassigned LCTOP competitive funds for a total of
$84,024 to Project No. 2000403 to complete necessary site improvements for the
purchase and installation of charging infrastructure at the Bus Yard.
Project No. 2000403 (Battery Electric Bus Charging Infrastructure)
LCTOP
Grant SB 125 Grant Total Project
Budget
Current Fund
Amount $ 304,400 $ 395,000 $ 699,400
Proposed
Transfers $ 84,024 $ 0
Post Transfer
Amount $ 388,424 $ 395,000 $ 783,423
Project No. 2000404 – Auto Vehicle Locator System Replacement
Automatic Vehicle Locator (AVL) systems track the real-time location of buses, trains, and
other public transit vehicles. This data is used for various purposes, including optimizing
routes, improving schedule adherence, providing real-time information to passengers,
and enhancing overall transit operations. Replacement of SLO Transit’s failing AVL
system is the 4th highest priority recommendation of SLO Transit’s Transit Innovation
Study.
In January 2025, Council authorized execution of a cooperative agreement with SLOCOG
for SB 125 grant funds. The cooperative agreement included $130,000 in funds fo r Project
No. 2000404 – Auto Vehicle Locator System Replacement. Initial cost quotes indicated
that it is not enough to fully fund the replacement of all the system components. Staff
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applied for and was awarded $300,000 in FTA Section 5307 formula funds to fully fund
the project.
The recommended action in this report appropriates $300,000 in FTA Section 5307 funds
to Project No. 2000404 to fully fund the replacement of SLO Transit’s failing auto vehicle
locator system.
Project No. 2000404 (Auto Vehicle Locator System Replacement)
FTA 5307
Grant
SB 125
Grant
Total Project
Budget
Current Fund
Amount $ 0 $ 130,000 $ 130,000
Proposed
Transfers $ 300,000 $ 0 $ 300,000
Post Transfer
Amount $ 300,000 $ 130,000 $ 430,000
Project No. 2000505 – Fleet Replacement: 6 Gillig Buses
In July 2023, Council approved appropriation of additional Transit Fund dollars to Project
No. 2000505 for the purchase of six battery electric buses. In January 2025, Council
authorized execution of a cooperative agreement with SLOCOG for SB 125 grant funds
including supplanting $278,521 in Transit Fund dollars with $280,000 of SB 125 funds.
Project No. 2000058 for the purchase of two battery electric buses was supported by FTA
Section 5307 and TDA funds through grant CA-2021-172 that was executed in August
2021 and by SB 1 (SGR) and LCTOP state grants dollars. Following project completion,
$135,909 of FTA Section 5307 funds and $23,984 TDA remain in this project due to the
project being eligible for vouchers through the state’s HVIP program . To ensure these
funds are not lost, staff recommends reallocating them to support the ongoing purchase
of six battery electric buses.
The recommended action appropriates $135,909 in FTA Section 5307 funds and $23,984
in TDA funds to Project No. 2000505 to supplant Transit Fund dollars appropriated to the
project as contingency. Doing so preserves Transit Fund working capital and prioritizes
use of grant funds for capital projects.
Project No. 2000505 (Fleet Replacement: 6 Gillig Buses)
FTA
5339(b)
Grant
FTA 5307
Grant TDA Funds Transit
Fund
SB 125
Grant
Total
Project
Budget
Current Fund
Amount $ 4,799,978 $ 506,296 $ 1,326,569 $ 414,682 $ 280,000 $ 7,327,524
Proposed
Transfers $ 135,909 $ 23,984 $ (159,893)
Post Transfer
Amount $ 4,799,978 $ 642,205 $ 1,350,553 $ 254,789 $ 280,000 $ 7,327,524
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Item 5h
Project No. 2000506 – Bus Stop Improvements
This project will replace outdated bus shelters that are well beyond their useful life and
make associated site improvements to meet Americans with Disabilities Act (ADA)
standards. The estimated total cost is approximately $496,500, which may also cover
additional bus stop amenities such as trash receptacles, solar lighting, and schedule
holders if funds allow.
The project was originally planned to be funded entirely with Transportation Development
Act (TDA) funds. However, staff recently secured $280,000 in FTA Section 5307 funds
for this project, significantly expanding the project budget. While TDA funds are still
required to meet the 20% local match requirement, only $70,000 is needed. As a result,
staff recommends deprogramming $20,000 in TDA funds to preserve this flexible funding
source for future transit needs.
To fully fund the project, staff also recommends reprogramming $150,325 in remaining
SB 1 (SGR) funds from Project No. 2000058. According to SB 1 (SGR) guidelines (page
11) savings from completed or canceled projects may be applied to other eligible projects.
Shelter replacement qualifies under these guidelines, and SLOCOG , the regional
sponsor, supports this reallocation. In addition, $27,355 in SB 1 (SGR) operator
apportionment funds from prior fiscal years were previously designated for this project but
were never formally appropriated.
The recommended action appropriates $280,000 in FTA Section 5307 funds, $150,325
in SB 1 (SGR) reprogrammed funds, and $27,355 in SB 1 (SGR) operator apportionment
funds, while deprogramming $20,000 in TDA funds.
Project No. 2000506 (Bus Stop Improvements)
FTA 5307
Grant TDA Funds SB 1 (SGR)
Grant
Total
Project
Budget
Current Fund
Amount $ 0 $ 90,000 $ 0 $ 90,000
Proposed Funding
Added $ 280,000 $ 0 $ 177,680
Proposed Funding
Removed $ 0 $ (20,000) $ 0
Post Transfer
Amount $ 280,000 $ 70,000 $ 177,680 $ 527,680
ALTERNATIVE
Council could decide not to adopt the Draft Resolution appropriating grant funds
to Transit program capital projects. This would delay progress on projects that support
the State of California’s zero-emission mandates for transit agencies and implementation
of key recommendations of the Transit Innovation Study.
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Item 5h
ATTACHMENTS
A - Draft Resolution approving appropriation of grant funds to Transit program projects
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R ______
RESOLUTION NO. _____ (2025 SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, APPROVING THE APPROPRIATION OF
FEDERAL AND STATE FUNDS TO TRANSIT PROGRAM CAPITAL
PROJECTS
WHEREAS, the Transit Fund is one of four enterprise funds within the City and
relies heavily on federal and state grant opportunities to fund capital projects ; and
WHEREAS, the City has an obligation to make the best use of awarded grant
funds to the extent allowed by the administrating agencies; and
WHEREAS, unexpended Federal Transit Administration (FTA) Section 5307
formula funds, Low Carbon Transit Operations Program (LCTOP) funds, and Senate Bill
(SB) 1 State of Good Repair (SGR) funds from a completed capital project are available
for reappropriation to eligible capital projects; and
WHEREAS, San Luis Obispo Council of Governments (SLOCOG) is the
sponsoring agency for both LCTOP and SB 1 (SGR) programs and concurs with the
reappropriation of unexpended funds to eligible projects; and
WHEREAS, in June 2022, Council adopted Resolution No. 11330 (2022 Series)
authorizing the Public Works Director to apply for funding opportunities that benefit the
City’s Transit program; and
WHEREAS, in November 2024 staff applied for use of FTA Section 5307 formula
funds for three capital improvement plan projects and for preventive maintenance of
revenue vehicles and in March 2025, the application was approved allowing the City to
be reimbursed for eligible expenses; and
WHEREAS, operator apportionment funds from LCTOP and SB 1 (SGR) are
disbursed to the City each year and must be appropriated to either new or existing,
approved projects on file with the State of California; and
WHEREAS, during an internal review of Transit program grants, staff discovered
that $14,868 in LCTOP operator apportionment funds and $27,355 in SB 1 (SGR)
operator apportionment funds from prior fiscal years were never appropriated to eligible
projects; and
WHEREAS, these grant funds need to be appropriated to their associated projects
so funds can be expended in a timely manner, as required the administrating agencies,
and before the City can incur expenses towards the respective projects
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Resolution No. _____ (2025 Series) Page 2
R ______
NOW, THEREFORE, BE IT RESOLVED that the Council of the City of San Luis
Obispo does hereby approve appropriation of funds to Transit program capital projects
as follows:
SECTION 1. Environmental Review. The California Environmental Quality Act
(CEQA) does not apply to the recommended actions in this report, because the action
does not constitute a “Project” under CEQA Guidelines Section 15378. Capital projects
must comply with state and local laws including environmental review or finding of
exemption.
SECTION 2. Approval. The City Council of the City of San Luis Obispo does
hereby:
1. Appropriate $60,000 in FTA Section 5307 funds and $15,000 in
Transportation Development Act (TDA) funds to Project No. 2000102; and
2. Deprogram $25,000 in SB 1 (SGR) funds from Project No. 2000102; and
3. Appropriate $14,868 in LCTOP operator apportionment funds and $69,156
in reassigned LCTOP competitive funds for a total of $84,024 in LCTOP
grant funds to Project No. 2000403; and
4. Appropriate $300,000 in FTA Section 5307 funds to Project No. 2000404;
and
5. Appropriate $135,909 in FTA Section 5307 funds and $23,984 in TDA funds
to Project No. 2000505; and
6. Return $159,893 in Transit Fund dollars from Project No. 2000505 to Transit
Fund Working Capital; and
7. Appropriate $280,000 in FTA Section 5307 funds, $150,325 in SB 1 (SGR)
reprogrammed funds, and $27,355 in SB 1 (SGR) operator apportionment
funds (for a total of $177,680 in SB 1 (SGR) funds) to Project No. 2000506;
and
8. Deprogram $20,000 in TDA funds from Project No. 2000506 .
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Resolution No. _____ (2025 Series) Page 3
R ______
Upon motion of Council Member ___________, seconded by Council Member
___________, and on the following roll call vote:
AYES:
NOES:
ABSENT:
The foregoing resolution was adopted this 17th day of June 2025.
___________________________
Mayor Erica A. Stewart
ATTEST:
______________________
Teresa Purrington
City Clerk
APPROVED AS TO FORM:
______________________
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the
City of San Luis Obispo, California, on ______________________.
___________________________
Teresa Purrington
City Clerk
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