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HomeMy WebLinkAboutItem 6g - SLO Transit 2026 Transit Asset Management Plan and Contingency Fleet Plan Item 6g Department: Public Works Cost Center: 5201 For Agenda of: 9/1/2026 Placement: Consent Estimated Time: N/A FROM: Aaron Floyd, Public Works & Utilities Director Prepared By: Alex Fuchs, Mobility Services Business Manager SUBJECT: APPROVAL OF SLO TRANSIT’S 2026 TRANSIT ASSET MANAGEMENT PLAN AND CONTINGENCY FLEET PLAN RECOMMENDATION 1. Adopt a draft Resolution entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, approving San Luis Obispo (SLO) Transit’s 2026 Transit Asset Management Plan and Contingency Fleet Plan, and authorizing the City Manager to approve future administrative updates to the plans” (Attachment A); 2. Authorize SLO Transit’s Accountable Executive, the City Manager, to sign the final version of the 2026 Transit Asset Management Plan (Attachment B); and 3. Authorize SLO Transit’s Accountable Executive, the City Manager, to sign the final version of the Contingency Fleet Plan (Attachment C); and 4. Authorize the City Manager to approve amendments and future administrative updates to the Plans as necessary to maintain compliance with applicable Federal Transit Administration requirements and to address changing operational conditions. REPORT-IN-BRIEF The City Council is being asked to consider the 2026 Tr ansit Asset Management (TAM) Plan and Contingency Fleet Plan for SLO Transit. The TAM Plan is required by the Federal Transit Administration (FTA) for recipients of federal transit funding and establishes a framework for managing transit vehicles, faciliti es, equipment, and other capital assets to maintain a State of Good Repair.1 The Contingency Fleet Plan is not required by the FTA but was developed to provide SLO Transit with additional operational flexibility as the agency transitions to a predominantly zero-emission fleet. SLO Transit has experienced varying levels of reliability and parts availability among its battery-electric buses, including extended downtime associated with a Proterra bus and operating limitations affecting a New Flyer bus. At the same time, the six new Gillig battery-electric buses placed into service in March 2026 have demonstrated relatively consistent performance. 1 State of Good Repair is defined as, “Condition in which a capital asset can operate at a full level of performance” Page 195 of 249 Item 6g The proposed Contingency Fleet Plan would allow eligible vehicles that have reached the end of their minimum useful life2 to be retained as inactive reserve vehicles and placed into service only when needed for emergencies, prolonged vehicle outages, or other operational contingencies. The Plan is intended to provide an additional safeguard for service reliability while the City's transition to zero-emission technology continues. POLICY CONTEXT Section 405 – Fleet Management of the City’s Financial Management Manual establishes responsibilities, policies, and procedures for managing the City’s fleet. The section recognizes that the City has established a separate transit fleet and acknowledges that transit equipment, including vehicles, has a specialized roll and unique requirements that necessitate separate certification and record keeping. Management of the transit fleet is subject to applicable federal regulations and FTA oversight. The Moving Ahead for Progress in the 21st Century Act (MAP-21), enacted in July 2012, amended federal transit law and required the FTA to establish a national TAM system. In July 2016, the FTA published a final rule establishing TAM requirements for recipients of federal financial assistance. As a recipient of the FTA financial assistance, the City is required to maintain a TAM Plan, establish performance measures, and to report asset-related information annually through the FTA’s National Transit Database. Compliance with these requirements is necessary for the City to remain eligible for federal funding. TAM requirements differ based on the number of vehicles an agency operates during peak regular service. SLO Transit is classified as a Tier II provider because it operates 100 or fewer vehicles during peak regular service. The required elements of a TAM Plan for Tier II providers are described below. 1. Capital Asset Inventory - An inventory of the number and type of capital assets3. This includes all capital assets owned by the provider, except non-vehicle equipment with an acquisition value under $50,000. 2. Condition Assessment - Condition assessments of inventoried assets for which the provider has direct capital responsibility. The assessments must provide enough information to monitor and predict asset performance and to inform investment prioritization. 3. Decision-Support Tool - A description of the decision-support tools the agency uses to estimate capital investment needs over time and develop its investment priorities. 4. Prioritized List of Investments - A prioritized list of capital assets to be improved or replaced to maintain or improve a State of Good Repair. 2 The FTA minimum useful life for heavy-duty buses is 12 years or 500,000 miles 3 The FTA defines Capital asset as, “a unit of rolling stock, a facility, a unit of equipment, or an element of infrastructure used for providing public transportation” Page 196 of 249 Item 6g The 2026 TAM Plan, included as Attachment B, aligns with the City’s Climate Action Plan and the State’s Innovative Clean Transit (ICT) regulation, both of which support reducing greenhouse gas emissions. Consistent with these goals, the TAM Plan continues to prioritize SLO Transit’s transition to zero-emission technologies by focusing on procurement of zero-emission vehicles and charging infrastructure. The FTA does not require transit agencies to develop or maintain a Contingency Fleet 4 Plan. However, FTA policy permits transit agencies to retain vehicles beyond their useful life and use those vehicles for non-routine or contingency purposes. Specifically, FTA Circular 5010.1F, Award Management Requirements, Subsection 3.n.4, “Contingency Fleet” on document page 154, permits agencies that have introduced or are transitioning to a zero-emission fleet to include eligible vehicles in a contingency fleet. DISCUSSION The 2026 TAM Plan and Contingency Fleet Plan serve complementary purposes. The TAM Plan provides the federally required framework for managing SLO Transit's capital assets and identifying future investment needs, while the Contingency Fleet Plan provides an operational safeguard to help maintain service reliability during the transition to a predominantly zero-emission fleet. Contingency Fleet Plan SLO Transit does not currently have a Contingency Fleet Plan. Staff is p roposing the Plan at this time because the transition to zero-emission technology has introduced additional fleet management considerations, including vehicle reliability, parts availability, specialized maintenance requirements, and potentially longer rep air periods. These challenges are not unique to SLO Transit and have been experienced by transit agencies transitioning to battery-electric technology nationwide. SLO Transit has experienced varying levels of reliability among its battery-electric buses, depending on manufacturer, vehicle age, and component availability. These experiences demonstrate the value of maintaining a limited inactive reserve fleet that can be used if significant vehicle outages affect the City's ability to maintain scheduled service. To help mitigate these risks, many California transit agencies, including San Luis Obispo Regional Transit Authority, Monterey-Salinas Transit, and Santa Barbara Metropolitan Transit District, have established contingency fleets to provide operational flexibility during the transition to zero-emission technologies. The 2025 Short-Range Transit Plan (SRTP) update recognizes the need to continue operating diesel-powered buses during the transition to a zero -emission fleet and recommends refurbishing several mid-life diesel-powered buses to extend their useful life and maintain sufficient active fleet capacity to support future service delivery. However, the SRTP does not address the establishment or use of a separate contingency fleet , as this was not considered at the time the plan was updated. 4 Contingency fleet means inactive rolling stock reserved or retained for emergencies or other unforeseen and justified activities. Page 197 of 249 Item 6g The proposed Contingency Fleet Plan would not change SLO Transit's long -term transition to zero-emission technology and would not be used to support routine daily operations. Instead, eligible vehicles that have reached their minimum useful life would be retained as inactive reserve vehicles and could be placed into service only when needed for emergencies, prolonged vehicle outages, or other operational contingencies. Maintaining a small fleet of reserve vehicles may result in slightly higher costs being paid to the City’s transit services contractor for periodic preventative maintenance activities. Staff will track and monitor any related costs as part of the management and oversight of the contingency fleet. The final draft of the Contingency Fleet Plan, included as Attachment C, establishes the procedures for maintaining and activating these vehicles and includes all required FTA elements. Battery Electric Bus Performance The City's experience with its current battery-electric fleet provides context for the proposed contingency fleet approach. SLO Transit operates buses from multiple manufacturers, each with varying levels of reliability and aftermarket support. Table 1 summarizes the issues by bus manufacturer and the number of each bus brand in the fleet. In September 2023, Proterra filed for Chapter 11 bankruptcy, Phoenix Motorcars subsequently assumed responsibility for providing third-party support for Proterra buses. Since then, parts for Proterra buses have remained in limited supply and often have a long lead time, resulting in extended periods of downtime. SLO Transit’s Proterra bus has been out of service since March 2026 due to a failed air compressor. The City’s transit operation and maintenance services provider, MV Transportation, is currently working to source parts and third-party assistance to complete the repair. New Flyer, one of the other bus manufacturers, remains in business but is currently addressing a nationwide recall affecting battery systems on certain model year buses. SLO Transit’s New Flyer bus is subject to the recall and is tentatively scheduled for battery system replacement at the end of this calendar year. Although the bus remains available for service, it cannot be charged beyond 75 percent of its battery capacity, which limits the bus’s ability to operate certain service assignments. The bus has also experienced a separate issue involving an imbalance among its individual battery packs. This condition can cause the battery management system to shut down the bus. New Flyer is working to resolve this issue so the bus can remain in service until the battery system is replaced. By comparison, the six new Gillig electric buses put int o service in March 2026 have demonstrated relatively consistent performance. The buses have experienced minor issues, including intermittent air conditioning failures and ADA ramp deployment issues, but Gillig has responded promptly to address these issues and minimize vehicle downtime. Despite the reliability challenges experienced with some vehicles, battery- electric buses accounted for nearly half of all service miles driven between April and June 2026. This percentage is expected to continue increasing as the MV Transportation team becomes more familiar with SLO Transit’s service requirements and optimizes fleet Page 198 of 249 Item 6g assignments and charging operations. Table 1 - Summary of Issues by Electric Bus Manufacturer Bus Manufacturer No. of Buses Issues Proterra 1  Lack of manufacturer support  Limited parts supply availability  Failed air compressor New Flyer 1  Open recall on battery system  Imbalance among battery packs causing bus to shut down Gillig 85  Intermittent air conditioning issues  ADA ramp deployment failure (2 buses) Overall, the experience to date demonstrates that reliability varies among manufacturers, while the newest Gillig buses have generally demonstrated consistent performance. The City therefore continues to move forward with its zero-emission fleet transition while maintaining an operational safeguard to address potential extended vehicle outages. Charging Infrastructure As of the date of this report, SLO Transit is nearing completion of Phase Two of its charging infrastructure buildout, which will provide sufficient capacity for all 10 battery - electric buses to charge simultaneously. Two additional battery-electric buses are ready to enter service and, once those buses are placed into service, SLO Transit will have a total of 10 battery-electric buses in its active fleet. T he expanded charging capacity is expected to allow a majority of SLO Transit’s service to be provided by battery-electric buses going forward. A Contingency Fleet Plan will ensure that any future significant issues affecting the electric buses do not interfere with service delivery. Previous Council or Advisory Body Action City Council approved SLO Transit's initial TAM Plan on January 16, 2018. The TAM Plan was subsequently updated in 2022 but was not presented to Council , in part due to turnover in transit staff between 2021 and 2023. The FTA reviewed the 2022 update as part of the City's subsequent Triennial Review and determined that it complied with applicable federal requirements; no findings were issued related to the TAM Plan. The 2026 TAM Plan and Contingency Fleet Plan were not presented to the Mass Transportation Committee for consideration because they address administrative and compliance requirements rather than matters within the Committee’s purview, which includes changes to routes, schedules, capital projects, fares, marketing, and additional services. 5 6 buses were delivered in 2025 and are currently in service. 2 buses were delivered in 2026 and being readied for service. Page 199 of 249 Item 6g Public Engagement The TAM Plan and Contingency Fleet Plan address asset management, capital procurement, and operational continuity and do not propose changes to transit fares, routes, service levels, or access to service. Accordingly, no separate public engagement process was conducted for these plans. Public comment remains available through written correspondence to City Council prior to the meeting or public testimony at the Council meeting. CONCURRENCE The City’s transit operations and maintenance services contractor, MV Transportation, reviewed both the draft 2026 Transit Asset Management Plan and the draft Contingency Fleet Plan and concur with the recommended actions in this report. Additionally, FTA Region 9 Office reviewed the draft Contingency Fleet Plan and confirmed that they did not have any comments or suggested modifications. ENVIRONMENTAL REVIEW The California Environmental Quality Act (CEQA) does not apply to the recommended actions in this report, because the actions do not constitute a “project” under CEQA Guidelines Sec. 15378. FISCAL IMPACT Budgeted: Yes Budget Year: 2026-27 Funding Identified: Yes Fiscal Analysis: Funding Sources Total Budget Available Current Funding Request Remaining Balance Annual Ongoing Cost General Fund $ 0 $ 0 $ 0 $ 0 Transit Fund $ 0 $ 0 $ 0 $ 0 Federal $ 0 $ 0 $ 0 $ 0 Fees $ 0 $ 0 $ 0 $ 0 Total $ 0 $ 0 $ 0 $ 0 The recommended actions in this report do not have a direct fiscal impact. However, failure to update and approve SLO Transit’s Transit Asset Management (TAM) Plan by the October 1, 2026, deadline would place the City out of compliance with FTA requirements. This could result in a finding during a future FTA Triennial Review and require corrective actions to restore compliance. Continued findings of noncompliance could affect the City's eligibility to receive future federal financial assistance. ALTERNATIVES Page 200 of 249 Item 6g 1. Council could decide not to approve the 2026 Transit Asset Management Plan. Should Council pursue this option, SLO Transit would not be in compliance with applicable FTA requirements. This could result in a finding during a future FTA Triennial Review and require the City to implement corrective actions to restore compliance. Continued noncompliance could affect the City's eligibility to receive future federal financial assistance. 2. Council could decide not to approve the Contingency Fleet Plan. Should Council pursue this option, staff would dispose of vehicles that have reached or exceeded their minimum useful life in accordance with FTA requirements once replacement vehicles have entered revenue service. SLO Transit would continue to rely on the replacement fleet and work with its contracted operations and maintenance provider to meet service requirements. However, the City would have fewer reserve vehicles available to respond to unforeseen maintenance issues, service disruptions, or other operational contingencies during the transition to a zero-emission fleet. 3. Council could decide to direct staff to make changes to either or both plans prior to approval. Should Council pursue this option, staff will incorporate the changes into the final versions of the plans and route them for the City Manager’s approval. If Council directs staff to make significant changes to the 2026 Transit Asset Management Plan, then there is limited time for staff to revise the plan and return to Council for consideration before the October 1, 2026, deadline. ATTACHMENTS A - Draft Resolution approving the 2026 Transit Asset Management Plan and Contingency Fleet Plan B - 2026 Transit Asset Management Plan, Final Draft C - Contingency Fleet Plan, Final Draft Page 201 of 249 Page 202 of 249 R ______ RESOLUTION NO. _____ (2026 SERIES) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, APPROVING SAN LUIS OBISPO (SLO) TRANSIT’S 2026 TRANSIT ASSET MANAGEMENT PLAN AND CONTINGENCY FLEET PLAN, AND AUTHORIZING THE CITY MANAGER TO APPROVE FUTURE ADMINISTRATIVE UPDATES TO THE PLANS WHEREAS, the City of San Luis Obispo receives federal financial assistance from the Federal Transit Administration (FTA) under the Urbanized Area Formula Grants program for the operation of San Luis Obispo (SLO) Transit, a public transportation system; and WHEREAS, the FTA requires transit operators to develop, implement, and update their Transit Asset Management (TAM) Plan at least every four years in accordance with 49 Code of Federal Regulations (CFR) Part 625; and WHEREAS, SLO Transit is a Tier II transit provider under 49 CFR Part 625 and is therefore required to develop and carry out a TAM Plan addressing the applicable Tier II requirements, including an inventory of capital assets, condition assessments of inventoried assets, a description of the decision -support process used to make capital investment decisions, and a prioritized list of investments to maintain or improve the capital assets; and WHEREAS, the City has prepared an update to the TAM Plan in accordance with 49 CFR Part 625, which also supports the City’s Climate Action Plan and compliance with the State of California’s Innovative Clean Transit regulations; and WHEREAS, FTA Circular 5010.1F, Award Management Requirements, permits the use of a contingency fleet consisting of inactive rolling stock retained for emergencies or other unforeseen and justified activities, including the transition to zero -emission vehicles, provided such vehicles have met applicable minimum useful life r equirements and are properly stored, maintained, and documented in a contingency plan; and WHEREAS, SLO Transit is transitioning to a zero-emission bus fleet and has developed a Contingency Fleet Plan to establish the criteria and procedures for retaining eligible vehicles in a contingency fleet, including documentation of vehicle useful life, justification for contingency fleet status, activation periods, storage and protection, and required maintenance activities; and WHEREAS, approval of the 2026 Transit Asset Management Plan and Contingency Fleet Plan will support the City's continued compliance with applicable FTA requirements and provide a basis for managing SLO Transit's capital assets and contingency fleet in response to changing operational conditions; and Page 203 of 249 Resolution No. _____ (2026 Series) Page 2 R ______ WHEREAS, the City Council desires to authorize the City Manager, as SLO Transit’s Accountable Executive, to approve future administrative updates to the 2026 Transit Asset Management Plan and Contingency Fleet Plan when such updates are necessary to maintain compliance with applicable FTA requirements or address changing operational conditions. NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo as follows: 1. Approve San Luis Obispo (SLO) Transit’s 2026 Transit Asset Management Plan and Contingency Fleet Plan and authorize the City Manager, as SLO Transit’s Accountable Executive, to sign the final versions of these Plans ; and 2. Authorize the City Manager, or their designee as authorized by the City Manager, to approve administrative updates, amendments, and revisions to the 2026 Transit Asset Management Plan and Contingency Fleet Plan that are necessary to maintain compliance with applicable federal laws and regulations or to reflect changes in SLO Transit's capital assets, asset condition, inventory, maintenance practices, or operational conditions. SECTION 1. Environmental Review. The California Environmental Quality Act (CEQA) does not apply to the recommended action because the action does not constitute a “Project” under CEQA Guidelines Sec. 15378. 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 1st day of September 2026. ___________________________ Mayor Erica A. Stewart ATTEST: ______________________ Teresa Purrington City Clerk Page 204 of 249 Resolution No. _____ (2026 Series) Page 3 R ______ 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 Page 205 of 249 Page 206 of 249 City of San Luis Obispo, Title, Subtitle Page 1 of 12 City of San Luis Obispo San Luis Obispo (SLO) Transit 990 Palm Street San Luis Obispo, CA 93401 Transit Asset Management (TAM) Plan Approved September 1, 2026 Accountable Executive Whitney McDonald, City Manager Date Page 207 of 249 Page 2 of 12 Table of Contents Introduction .................................................................................................................................... 3 Target Setting Methodology ........................................................................................................... 4 Asset Inventory ............................................................................................................................... 5 Revenue Vehicles ........................................................................................................................ 5 Equipment – Non-Revenue Service Vehicles .............................................................................. 5 Facilities....................................................................................................................................... 6 Asset Condition Assessment ........................................................................................................... 7 Revenue and Non-Revenue Vehicles Condition ......................................................................... 7 Facilities Condition ...................................................................................................................... 7 Decision Support Tools ................................................................................................................... 8 Investment Prioritization ................................................................................................................ 8 Transition to Fully Electric Fleet .................................................................................................. 9 Charging Infrastructure ............................................................................................................... 9 Cutaway Replacement ................................................................................................................ 9 ADA Van Replacement .............................................................................................................. 10 Appendices .................................................................................................................................... 10 Page 208 of 249 Page 3 of 12 Introduction The City of San Luis Obispo (City) is centrally located along California's Central Coast, halfway between San Francisco and Los Angeles. The City is the County Seat for San Luis Obispo County and as such, it is also the governmental, economic, medical and educational hub for the other cities in the county. San Luis Obispo has a population of roughly 47,063 (US Census, 2021) with an estimated additional population of 22,279 students when California Poly Technic State University is in session. SLO Transit is the local fixed-route transit operation for the City, operating under the City’s Public Works and Utilities Department. As of September 2025, SLO Transit operates 11 vehicles at peak along eight fixed-routes, one tripper route, and one express route; within the 23 square miles of the city limits of San Luis Obispo and the adjacent California Poly Technic State University campus. SLO Transit operates Monday through Friday, approximately from 6:00 a.m. to 11:00 p.m. and Saturday and Sunday from 8:00 a.m. to 8:00 p.m. Similar to other agencies across the nation that were affected by the pandemic, SLO Transit has steadily increased service and ridership over the last four years and is on track to return to pre- pandemic levels of service by fall 2026. SLO Transit’s ridership demographics reflect a broad cross section of riders, including but not limited to seniors, persons with disabilities, socially or economically transit dependent, K-12 Students, collegial students, working professionals, and choice riders. The operation of all fixed-route services is contracted out to a third-party vendor; currently awarded to MV Transportation, Inc. For door-to-door demand response paratransit services, SLO Transit provides part of its funding allocation, off-the-top, to the county's consolidated para-transit service provider known as Run- About. Run-About is operated by the San Luis Obispo Regional Transit Authority (RTA), who also provides regional fixed-route services as well as local fixed-route services in the North County, South County, and Morro Bay areas. SLO Transit aligns with the City’s Climate Action Plan, which centers on reducing greenhouse gas emissions along with following the California Air Resources Board (CARB) adopted Innovative Clean Transit (ICT) fleet regulations by converting its existing diesel-powered fleet to a 100 percent zero-emission bus (ZEB) fleet by 2040. In response to the City’s Climate Action Plan, and the State’s ICT regulation, SLO Transit developed its Zero-Emission Bus Rollout Plan which documents the agency’s plan for replacing its diesel-powered fleet with electric powered buses. SLO Transit currently has eight electric buses in service with two more scheduled to be in service by fall 2026. The State’s and City’s climate action goals is a determining factor in supporting the investment decisions for bus replacement prioritization. SLO Transit operates fewer than 100 vehicles in revenue service during peak regular service across all non-rail fixed route modes and is therefore considered a Tier II provider as defined by 49 Code of Federal Regulations (CFR) Part 625. Whitney McDonald, City Manager, is the designated Accountable Executive and has the authority to set transit asset management policies, approve the Transit Asset Management (TAM) Plan, Page 209 of 249 City of San Luis Obispo, Title, Subtitle Page 4 of 12 and direct the allocation of resources necessary to achieve and maintain a State of Good Repair in accordance with 49 CFR Part 625. Target Setting Methodology As part of an ongoing scheduling and planning process, SLO Transit reviews the percentage of vehicles within the asset classes that have met or exceeded their Federal Transit Administration (FTA)-defined Useful Life Benchmark (ULB). SLO Transit’s plan states that no more than 50 percent of the revenue vehicle, fixed route fleet is to exceed the ULB. Table 1 below outlines SLO Transit’s 2026 through 2030 performance targets and measures. These targets align with the FTA’s TAMplate application, the FTA’s Transit Economic Requirements Model (TERM) scale for the maintenance and bus yard facility rating, and with SLO Transit’s annual National Transit Database (NTD) reporting. Table 1 - Asset Performance Targets and Measures Asset Category Performance Measure Asset Class 2026 Target 2027 Target 2028 Target 2029 Target 2030 Target Age - % of vehicles that have met or exceeded their ULB BU - Bus 21% 7% 7% 29% 29% CU - Cutaway N/A 0% 0% 0% 0% DB – Double Decker 100% 100% 100% 100% 0% RT – Rubber Tire Vintage Trolley 100% 100% 0% 0% 0% Age - % of vehicles that have met or exceeded their Useful Life Benchmark (ULB) Non-Revenue / Service Automobiles, Trucks and Equipment. 100% 0% 50% 50% 50% Condition - % of facilities with a condition rating below 3.0 on the TERM Scale Maintenance Facility 0% 0% 0% 0% 0% Page 210 of 249 City of San Luis Obispo, Title, Subtitle Page 5 of 12 Asset Inventory This section provides an inventory of City-owned transit assets. Table 2 is a summary of the transit asset inventory including quantity, average age, average mileage (vehicles only), and average and total replacement cost estimates. The following assets fall into three FTA-defined categories: 1. Revenue Vehicles 2. Equipment 3. Facilities Revenue Vehicles SLO Transit currently operates a total of 16 revenue vehicles made up of 14 Low-floor heavy-duty buses, 1 Double Decker bus, 1 medium-duty cutaway bus, and 1 Rubber-tired Vintage Trolley. The existing cutaway bus’s engine failed in December 2024 and was disposed of in September 2025. SLO Transit plans to purchase a new battery electric cutaway bus in 2026 which is expected to enter service by 2027. SLO Transit’s Short-Range Transit Plan includes a target that no more than 50 percent of its revenue vehicles should exceed their useful life benchmarks (ULBs)1 in terms of vehicle age. SLO Transit’s priority is to replace existing diesel-powered buses that have surpassed their ULBs with battery-electric (BEB) buses. SLO Transit currently has 8 BEBs in service and 2 additional BEBs have been delivered but have not yet entered revenue service. SLO Transit anticipates that the 2 additional BEBs will enter service in fall 2026. These 10 BEBs were purchased to replace older diesel-powered buses that have exceeded their ULBs. The City’s adopted 2025-27 Financial Plan includes the purchase of 1 battery electric cutaway bus in Fiscal Year (FY) 2025-26 to replace the recently disposed of gasoline-powered model (page 293) as well as the purchase of 3 BEBs in FY 2026-27 to replace existing diesel-powered buses (page 267). Equipment – Non-Revenue Service Vehicles SLO Transit currently owns 1 Ford F-350, utility truck and 1 ADA Van both of which are used by the operations and maintenance contractor. SLO Transit’s TAM Plan includes a target that no more than 50 percent of its support vehicles (non-revenue) to exceed their ULBs. The ADA Van is scheduled to be replaced with a battery-electric equivalent in 2026. Even though the Zero- emission Rollout Plan does not require procurement of non-revenue zero-emission vehicles, the 1 FTA tracks the performance of revenue vehicles (Rolling Stock) and non-revenue service vehicles (Equipment), by asset class, by calculating the percentage of vehicles that have met or exceeded the useful life benchmark (ULB). FTA has set a default ULB as the expected service years for each vehicle class in the table below. ULB is the average number of years at which a vehicle would reach a 2.5 rating on the FTA Transit Economic Requirements Model (TERM) scale, assuming a standard maintenance schedule. Page 211 of 249 City of San Luis Obispo, Title, Subtitle Page 6 of 12 City’s Fleet Purchasing Policy requires all new City-owned fleet vehicles to be zero-emission if zero-emission equivalents are available. Facilities SLO Transit maintains and operates its fleet from an operations and maintenance facility located at 29 Prado Road, San Luis Obispo, CA. The facility is composed of 24 bus bays, two maintenance bays with lift-jacks, a bus wash facility, administrative offices, and electric vehicle charging infrastructure. With the age of the facility being 38 years, SLO Transit conducts monthly inspections to assess the condition and function of different facility elements. Any deficiencies are documented and repaired. Installation of four dual-port charging stations, two power blocks, and transformer upgrades was recently completed. Th is equipment is in addition to the existing two single-port charging stations installed in 2024. This equipment is sufficient to support the operation of 10 BEBs; however, additional equipment will need to be purchased and installed to support the full transition to a zero-emission fleet. The City is also working on a multi-site solar panel project which includes installation of panels at the transit operations and maintenance yard to offset daytime electrical needs of the facility. Table 2 - Asset Inventory Summary Asset Category / Class Total No. Average Age (in Years) Average Annual Mileage Average Replacement Cost/Value Total Replacement Cost/Value Revenue Vehicles 16 7.3 25,225 $ 1,403,400 $ 25,260,600 BU – Bus 14 5.8 29,994 $ 1,410,000 $ 22,560,000 CU – Cutaway2 -- -- -- $ 300,600 $ 300,600 DD – Double Decker Bus 1 17 7,925 $ 1,750,000 $ 1,750,000 RT – Rubber-tired Vintage Trolley 1 18 4,373 $ 650,000 $ 650,000 Equipment (Non-Revenue Vehicles) 2 12 4,780 $ 105,000 $ 210,000 Ford F-350 1 10 2,175 $ 60,000 $ 60,000 ADA Van 1 14 7,385 $ 150,000 $ 150,000 Facilities 1 38 -- $ 10,000,000 $ 10,000,000 Bus Maintenance Facility 1 38 -- $ 10,000,000 $ 10,000,000 2 Historically, SLO Transit has operated a cutaway bus as part of its revenue fleet. However, the existing cutaway bus’s engine failed in December 2024 and was disposed of in September 2025. SLO Transit plans to purchase a new zero-emission cutaway bus in 2026 which is expected to enter service by 2027. Page 212 of 249 City of San Luis Obispo, Title, Subtitle Page 7 of 12 Asset Condition Assessment Revenue and Non-Revenue Vehicles Condition SLO Transit has assessed its rolling stock condition using an age-based methodology in alignment with the FTA’s default Useful Life Benchmark (ULB), supplemented by maintenance performance data and contractor-reported reliability metrics. SLO Transit utilizes the FTA’s ULBs of 12 years for heavy-duty buses (which includes the Double Decker bus), 12 years for the Rubber-tired Vintage Trolley, and 10 years for the cutaway bus. An overall condition assessment is used for the bus maintenance facility. With the majority of diesel-powered buses being replaced by BEBs in 2026, SLO Transit is working closely with its operations and maintenance services contractor to review ongoing preventative maintenance requirements and performance metrics to ensure the BEBs remain in a state of good repair. In the upcoming years, SLO Transit expects to implement a planned service expansion which will increase the use and mileage of these BEBs. At the time of this plan update, 31 percent of SLO Transit’s revenue vehicle fleet has either met or exceeded its ULB. The percentage of vehicle at or beyond its useful life decreased significantly when 6 new BEBs entered service in March 2026. SLO Transit anticipates that this percentage will decrease further with 2 additional BEBs expected to enter service in fall 2026. The older diesel buses replaced by these new BEBs will be removed from active service and retired. Facilities Condition Facilities condition is assessed using FTA’s TERM scale. The TERM scale rates the condition of an asset on a scale of one to five:  1 = Poor (asset is in need of immediate repair or replacement or may have critically damaged components)  2 = Marginal (asset is reaching or is just past the end of its useful life; there are an increasing number of defective or deteriorated components and increasing maintenance needs)  3 = Adequate (asset has reached its mid-life; some moderately defective or deteriorated components)  4 = Good (asset shows minimal signs of wear, some slightly defective or deteriorated components)  5 = Excellent (asset is new with no visible defects) SLO Transit has set a standard of not falling below a 3 on the FTA-defined TERM scale and has currently rated it at a 3.5. While the facility currently meets a state of good repair, its age and current status present long-term issues related to electrical capacity and fleet electrification needs, which are being addressed through a phased capital project for infrastructure electrification. Page 213 of 249 City of San Luis Obispo, Title, Subtitle Page 8 of 12 Table 3 - Asset Condition Assessment Asset Category / Class Total No. Average Age (in Years) Average Annual Mileage Average TERM Condition Average Value % At or Past ULB Revenue Vehicles 16 7.3 25,225 -- $ 1,200,000 31% BU – Bus 14 5.8 29,994 -- $ 1,410,000 21% DD – Double Decker Bus 1 17 7,925 -- $ 1,750,000 100% RT – Rubber Tire Vintage Trolley 1 18 4,373 -- $ 650,000 100% Equipment (Non-Revenue Vehicles) 2 12 4,780 -- $ 105,000 50% Ford F350 1 10 2,175 -- $ 60,000 0% ADA Van 1 14 7,385 -- $ 150,000 100% Facilities 1 38 -- 3.5 $ 10,000,000 0% Bus Maintenance Facility 1 38 -- 3.5 $ 10,000,000 0% Decision Support Tools The following tools and planning documents are used in making investment decisions: Transit Fleet Roster - SLO Transit uses Microsoft Excel to track and maintain its fleet data including mileage, age, costs, and the percentage of fleet that has met or exceeded its ULB. Short-Range Transit Plan - The Short-Range Transit Plan identifies projects and fleet requirements to maintain compliance with state mandates as well as implement planned service expansion needs. ICT Zero-Emission Roll-Out Plan - The Innovative Clean Transit (ICT) fleet regulation requires transit agencies to shift to an all-electric fleet by 2040. SLO Transit developed its Zero-Emission Roll-Out Plan to align with the state regulations along with the City of San Luis Obispo’s Climate Action Plan to achieve community-wide carbon neutrality by 2035. FTA TAMPlate - FTA’s TAMPlate model was used to derive targets and tables for revenue vehicles, non-revenue support vehicles, facilities, conditional assessments and costs. Investment Prioritization Investment priorities are determined based on the following criteria: Page 214 of 249 City of San Luis Obispo, Title, Subtitle Page 9 of 12  Asset condition relative to Useful Life Benchmarks  Impact on safety and service reliability  Compliance with state and federal regulatory requirements  Support of zero-emission fleet transition  Ability to maintain or improve the State of Good Repair SLO Transit has operated a majority of its diesel-powered fleet beyond their Useful Life Benchmarks (ULBs) due to the pandemic, staff turnover, and changes in federal and state funding availability; all of which delayed procurement of replacement buses. The City has prioritized carbon-neutrality goals outlined in its Climate Action Plan which adopted specific sector goals aimed at reducing greenhouse gas emissions. Along with the City’s Climate Action Plan, SLO transit is following the State’s Innovative Clean Transit (ICT) regulation which impacts transit vehicle procurement for small agencies beginning in 2026. SLO Transit is in the process of transitioning its diesel-powered fleet to a battery electric, zero- emission fleet. The transition to an all-electric fleet remains a top priority for SLO Transit and, as such, all further purchases of revenue and non-revenue vehicles will be BEBs assuming market availability at time of purchase. SLO Transit has identified associated capital investment priorities that will support the electrification of its fleet. These priority investments are discussed below and are summarized in Table 4 below. Transition to Fully Electric Fleet A top priority is to transition the existing diesel-powered fleet to an all-electric fleet. Along with the State’s ICT requirements, SLO Transit’s dedication to fleet reliability and safety remains a top priority in allocating funds to these assets. With a significant percentage of existing buses past their ULBs and a steady uptick in maintenance requirements over the past five years, SLO Transit has made funding the transition a top priority. Charging Infrastructure In order to transition to an all-electric fleet, the City’s transit operations and maintenance facility requires improvements to install the necessary electric vehicle charging infrastructure. In 2024, the City completed the groundwork, electrical upgrades, and installation of 2 single-port charging stations to support the 2 BEBs in service. A second project is nearing completion to install four additional dual-port charging stations and support equipment, transformer upgrades, and minor groundwork needed to support the 8 BEBs delivered in 2025 and 2026. Future construction is needed to complete the charging infrastructure build-out. Given the critical role charging infrastructure plays in SLO Transit’s continued transition to zero-emission operation, investment in future infrastructure projects is ranked as a ‘High’ priority. Cutaway Replacement The City’s gasoline-powered cutaway bus experienced an engine failure in December 2024 and was disposed of in September 2025. The City’s adopted financial plan includes budget for Page 215 of 249 City of San Luis Obispo, Title, Subtitle Page 10 of 12 purchase of a replacement cutaway bus with a battery-electric equivalent in 2026. With the cutaway’s main purpose of serving a tripper route, this project investment priority is ranked lower compared to other fleet replacements. ADA Van Replacement Also, due to the age of this support vehicle along with maintenance issues, the ADA Van is scheduled to be replaced in 2026 with a battery-electric equivalent. This support vehicle is used by contracted personnel to provide service for riders left behind due to overcrowding. The contractor also provides support vehicles used in the performance of the contract, so replacement of the City’s ADA Van is considered a ‘Medium’ priority. Table 4 - Investment Priorities List Project Name Project Year Asset Category Asset Class Unit Cost Priority Replace (1) ADA Van No. 1202 2026 Equipment Other Rubber Tire Vehicles $ 150,000 Medium Replace (1) Cutaway No. 1167 2026 Revenue Vehicles CU – Cutaway $ 300,600 Medium Replace (1) 40’ Diesel Bus No. 1366 2027 Revenue Vehicles BU – Bus $ 1,410,000 High Charging Infrastructure 2027 Facilities Facility $ 700,000 High Replace (1) Trolley No. 0856 2028 Revenue Vehicles RT – Rubber Tire Vintage Trolley $ 650,000 Low Replace (3) 40’ Diesel Buses Nos. 1768, 1769, 1770 2029 Revenue Vehicles BU – Bus $ 4,230,000 Medium Appendices Appendix A - Fleet Replacement Module Table Appendix B – Asset Register Table Page 216 of 249 Page 11 of 12 Appendix A - Fleet Replacement Module 2026 2027 2028 2029 2030 Fleet Type No. of Units Cost (in 2026 Dollars) No. of Units Cost (in 2026 Dollars) No. of Units Cost (in 2026 Dollars) No. of Units Cost (in 2026 Dollars) No. of Units Cost (in 2026 Dollars) 2011 Cutaway Bus 1 $ 300,600 2012 ADA Van 1 $ 150,000 2013 Heavy-duty bus 1 $ 1,410,000 2009 Double Decker bus 1 $ 1,750,000 2008 Replica Trolley 1 $ 650,000 2017 Heavy-duty bus 3 $ 4,230,000 Total Cost in Current Year Dollars $ 450,600 $ 1,410,000 $ 2,400,000 $ 4,230,000 $ 0 Inflation Rate 0 10% 20% 30% 40% Compounded Inflation 1 1.10 1.20 1.30 1.40 Total Cost in Replacement Year Dollars $ 450,6000 $ 1,551,000 $ 2,880,000 $ 5,499,000 $ 0 Page 217 of 249 Page 12 of 12 Appendix B - Asset Register Revenue Vehicle Assets Current Year 2026 2026 Revenue Vehicles Asset Agency Fleet Asset Age Acquisition Vehicle Repolacement Useful Life Useful Life Category ID Class (Yrs.)Year Mileage Cost/Value Benchmark Remaining Revenue Vehicle 1264 BU 14 2012 428,131 $1,410,000 12 -2 Revenue Vehicle 1365 BU 13 2013 487,840 $1,410,000 12 -1 Revenue Vehicle 1366 BU 13 2013 452,197 $1,410,000 12 -1 Revenue Vehicle 1768 BU 9 2017 360,773 $1,410,000 12 3 Revenue Vehicle 1769 BU 9 2017 375,037 $1,410,000 12 3 Revenue Vehicle 1770 BU 9 2017 327,691 $1,410,000 12 3 Revenue Vehicle 2271 BU 4 2022 28,953 $1,410,000 12 8 Revenue Vehicle 2272 BU 4 2022 46,637 $1,410,000 12 8 Revenue Vehicle 2573 BU 1 2025 3,794 $1,410,000 12 11 Revenue Vehicle 2574 BU 1 2025 5,017 $1,410,000 12 11 Revenue Vehicle 2575 BU 1 2025 2,408 $1,410,000 12 11 Revenue Vehicle 2576 BU 1 2025 1,952 $1,410,000 12 11 Revenue Vehicle 2577 BU 1 2025 4,374 $1,410,000 12 11 Revenue Vehicle 2578 BU 1 2025 4,440 $1,410,000 12 11 Revenue Vehicle 963 DB - Double Decker 17 2009 134,728 $1,750,000 12 -5 Revenue Vehicle 856 RT - Rubber-tire Vintage 18 2008 78,720 $650,000 12 -6 Equipment (Non-Revenue Vehicles) Asset Agency Fleet Asset Age Vehicle Repolacement Useful Life Useful Life Category ID Class (Yrs.)Mileage Cost/Value Benchmark Remaining Equipment 1636 Service Truck 10 2016 21,750 $60,000 14 4 Equipment 1202 MV - Mini Van 14 2012 103,389 $150,000 8 -6 Page 218 of 249 San Luis Obispo (SLO) Transit Contingency Fleet Plan Prepared by: City of San Luis Obispo Public Works and Utilities Department 990 Palm Street San Luis Obispo, CA 93401 www.slocity.org Page 219 of 249 Page 2 of 5 Revision History Revision No. Date Description 1.0 September 1, 2026 Approval of initial plan Document Approval Approved By Position Date Signature Whitney McDonald City Manager MMM, DD, YYYY This Contingency Fleet Plan is approved by the City Manager, who serves as the Accountable Executive for San Luis Obispo (SLO) Transit, as authorized by the City Council of the City of San Luis Obispo on September 1, 2026. The City Manager is also authorized to approve future administrative updates to the Plan as necessary to maintain compliance with applicable Federal Transit Administration requirements and to address changing operational conditions. Purpose The Contingency Fleet Plan (Plan) is to ensure the continued provision of safe, reliable, and efficient public transit service during the City of San Luis Obispo’s (City) transition from conventional diesel-powered buses to battery-electric buses (BEBs). The City operates a fixed-route fleet of 18 revenue vehicles. Due to the relatively small fleet size, the temporary unavailability of even a few vehicles may significantly impact service delivery. As such, maintaining a contingency fleet is necessary to ensure continuity of operations during the phased transition to zero-emission technologies. This Plan establishes the policy and procedures for maintaining and deploying a limited contingency fleet of legacy vehicles. This Plan also outlines the periodic need and justification for the City’s contingency fleet as required by the Federal Transit Administration (FTA) prior to establishing a contingency fleet. Staff reviews this plan annually and updates it as necessary to support the contingency fleet and related processes and procedures. The City’s active rolling stock is not part of the contingency fleet and the City does not calculate or include contingency fleet vehicles into its spare ratio. Regulatory Framework This Plan is developed in accordance with applicable federal requirements governing transit asset management and federally funded property. While the Code of Federal Regulations does not specifically define or regulate contingency fleets, this Plan is consistent with 49 CFR Part 625 (Transit Asset Management), which requires recipients to implement lifecycle management practices for capital assets. Page 220 of 249 Page 3 of 5 In addition, this Plan aligns with guidance set forth by FTA Circular 5010.1F (Award Management Requirement) which permits recipients to retain vehicles beyond their minimum useful life and to use these vehicles for non-routine or contingency purposes, provided that such use is appropriately documented and the vehicles are excluded from spare ratio calculations. The City will maintain compliance with FTA spare ratio requirements1 by excluding contingency fleet vehicles from spare ratio calculations and maintaining clear fleet documentation that distinguishes between active fleet vehicles and inactive2 vehicles. The City will also ensure consistency between this Plan and National Transit Database (NTD) reporting, including proper classification of contingency vehicles. Collectively, these authorities provide the regulatory basis for the limited retention and controlled use of contingency vehicles to support service continuity during the City’s transition to 100 percent zero-emission fleet operations. Additionally, this Plan supports compliance with California’s Innovative Clean Transit Regulation, which requires full transition to zero-emission bus fleets by 2040. Policy Statement The City actively maintains a contingency transit fleet in compliance with FTA requirements and, as such, is in addition to the normal spare ratio as allowed by federal regulations. The contingency fleet will be used only for emergency responses, employee training, or to maintain service delivery levels throughout the City’s transition to a zero- emission fleet. The contingency fleet will be maintained per original equipment manufacturer (OEM) requirements to ensure mechanical reliability and readiness. Contingency Fleet Composition The contingency fleet will consist of diesel buses that have met or exceeded the Useful Life Benchmark (ULB) requirements. In the case of large, heavy-duty transit buses, the ULB is at least 12 years of service or an accumulation of at least 500,000 miles. Table 1 is the list of contingency fleet vehicles which is a reasonable and proportional contingency capacity for an 18-vehicle fleet. Consistent with FTA expectations, the size of the contingency fleet reflects the operational needs of a small system and the risks associated with phased BEB deployment. 1 The FTA does not set a specific spare ratio for agencies with fewer than 50 vehicles operated in maximum fixed-route service (i.e. City of San Luis Obispo); however, the FTA expects the number of spare buses to be reasonable, considering the number of vehicles and variety of vehicle types and sizes. 2 Contingency vehicles are considered inactive and are not assigned to daily service. Page 221 of 249 Page 4 of 5 Table 1 - List of Contingency Fleet Vehicles Fleet ID Model Year Make Description Year Removed from Service Mileage (at time of Removal)* Useful Life 0861 2008 Gillig Heavy-duty, 35-foot 2026 484,210 12 years or 500,000 miles 1264 2012 Gillig Heavy-duty, 40-foot 2026 437,276 12 years or 500,000 miles 1365 2013 Gillig Heavy-duty, 40-foot 2026 493,253 12 years or 500,000 miles *Mileage shown is as of June 30, 2026. Mileage will be updated prior to plan approval Permitted Uses Contingency vehicles may be deployed only under the following circumstances: Zero-Emission Vehicle Constraints  Range limitations and/or operational constraints of BEBs  Reduced vehicle availability due to performance issues Charging Infrastructure Limitations  Charging equipment failures or reduced capacity  Utility outages, including Public Safety Power Shutoffs Maintenance Backfill  Extended maintenance or repair of BEBs  Delays in parts or warranty service Emergency Operations  Natural disasters, including but not limited to wildfires or evacuations  Regional emergency response or mutual aid Temporary Service Needs  Short-term increases in service demand Activation and Documentation Requests to activate contingency fleet vehicles will be made in writing and can be made either by the City or by the City’s contracted service provider. Final approval for activation shall be made by the Mobility Services Business Manager or their designee. Written request is not required in the event of an emergency that requires immediate activation or for maintenance training purposes. Each activation of a contingency vehicle will be documented including date and duration of use, reason for activation, fleet identification number, and service or route assignment. Maintenance and Storage Buses in the contingency fleet are subject to a 6,000-mile preventive maintenance (PM) schedule. Periodic vehicle “start-ups” will occur between normal preventive maintenance Page 222 of 249 Page 5 of 5 inspections (PMI) so the fleet remains ready for service activation at all times. Prior to activating contingency vehicles back into revenue service, the City will perform a safety inspection. If the vehicle has been inactive for more than sixty (60) days, the City will perform a full PMI. The City may revise its vehicle inspection and/or PMI intervals if the City determines the above intervals are inadequate. The City will maintain and make available (upon request) all records associated with the contingency fleet. The contingency fleet will be stored at the City’s Transit Operation and Maintenance Facility located at 29 Prado Road, San Luis Obispo, CA. This facility has security fencing surrounding the property, security cameras at strategic locations, and perimeter lighting. Monitoring and Plan Updates Annually, staff will review the Contingency Fleet Plan and the activation of contingency fleet vehicles to determine if this Plan needs to be updated . The following criteria will be used during the annual review:  Frequency and duration of contingency fleet usage  Causes of deployment  Battery-electric bus reliability and availability  Changes in Federal and State laws  Funding availability for future battery electric bus and associated infrastructure procurements Through the annual review and update process, the City may begin a phased reduction of the contingency fleet as the transition to zero-emission technologies progresses. Vehicles will be considered for disposition when BEB fleet availability and infrastructure reliability demonstrate sustained operational stability. If the City determines that the number of vehicles retained in the contingency fleet can be reduced, then disposition of contingency vehicles will occur in accordance with FTA asset disposition requirements once no longer needed Conclusion This Fleet Contingency Plan provides a limited, controlled, and compliant framework for retaining legacy diesel vehicles during the City’s transition to a zero-emission fleet. The Plan ensures alignment with FTA requirements while maintaining the operational flexibility necessary to deliver reliable transit service to the San Luis Obispo community. Page 223 of 249 Page 224 of 249