HomeMy WebLinkAbout08/01/2006, C12 - PROCUREMENT OF TRANSIT VEHICLES TO COMPLY WITH CALIFORNIA AIR RESOURCES BOARD EMISSION REQUIREMENTS council M.. n..�
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FROM: Jay Walter, Public Works Director ,ess;� r zona
Prepared by: Austin O'Dell, Transit Manager
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SUBJECT: PROCUREMENT OF TRANSIT VEHICLES TO COMPLY WITH
CALIFORNIA AIRRESOURCES BOARD EMISSION REQUIREMENTS
CAO RECOMMENDATION:
1. Approve SLO Transit's vehicle replacement plan to meet California Air Resources Board
(CARB) emission requirements.
2. Approve cooperative procurement to purchase up to four buses and one trolley.
3. Authorize the CAO to negotiate and execute a cooperate agreement for transit vehicle
replacements in a cumulative amount not to exceed $1,620,471 dollars.
DISCUSSION
Background
The California Air Resources Board (CARB) passed regulations in 2000 that require significant
reductions in emissions from public transit vehicles. CARB's requirements concentrate on
particulate matter(PM) and oxides of nitrates (NOx) emissions. Engine manufacturers were able
to produce a diesel engine to comply with the particulate matter emissions (PM) in 2003;
however, they were not able to produce an engine that complied with the NOx requirements. As
part of the regulations, CARB provided an opportunity for small transit operators (with less than
twenty buses) to file a financial burden waiver. This financial burden waiver allowed small
transit operators to delay their compliance with the PM emission requirements until January
2007. Based on staff recommendation, Council opted for the financial burden waiver. The
rationale for this approach was that the City would ultimately save scarce transit dollars by
making significant investment in CARB compliance once, instead of twice, and because it was
uncertain if engine manufacturers would be able to produce an engine that would meet the .20
gram NOx requirement.
Engine manufacturers have not met the CARB 2007 NOx standard for several reasons. One
reason was that engine manufacturers could.not develop the technology in time for the January 1,
2007 deadline. Another reason was economics. California represents a very small market as
compared to the rest of the nation and the CARB requirements were substantially different than
the federal requirements. Diesel engine manufacturers are focusing their efforts on the federal
deadline in 2010, which represents a much larger market in order to defray the development
costs on a national scale. During the fall of 2005, CARB considered the possibility of
i
Council Agenda Report—Procurement of Transit Vehicles Page 2
eliminating the clean diesel path, modifying the emission standards, or maintaining the status
quo. On October 27, 2005, CARB made a compromise by relaxing their standard NOx to the
federal standard of 1.2 grams and bringing the two standards much closer into alignment. In
2010, the federal standards will effectively catch-up to the CARB NOx standard of 0.20 grams
and the standards should run parallel. Attachment 1 shows the CARB and Federal new emission
standards.
The positive impact of this decision is that the City can now purchase new transit vehicles that
will meet both standards. Looking back, the City's strategy was correct; however, the City must
now move expeditiously to meet the January 2007 PM mandate.
Clean Diesel and Gasoline Hybrid—Why is it best for SLO Transit?
In 2001, CARB required transit operators to commit to a clean fuel path that would meet their
new emission standards. Based upon experience with various fuel types, the City adopted a
clean fuel path using clean diesel technology. This fuel path continues to be the recommended
fuel of choice for SLO Transit buses.
In the past year, there has been a lot of discussion between suppliers and the City regarding fuel
type. Many transit operators, including the City of San Luis Obispo, were approached by various
fuel vendors offering long-tern proposals if they would commit to their particular fuel type.
Staff continues to receive materials from fuel suppliers trying to convince the City that their fuel
is better and cheaper. However, the emission standards are the same regardless of the fuel and/or
technology, and as a small transit operator-, staff has significant concerns in committing to only
one fuel type. Putting all of our eggs into one basket is risky because it would reduce our ability
to choose vehicles based upon the best equipment available then on the market. Also, lower cost
alternatives may not be available as they are developed for other fuel options. Some agencies
have taken this approach and been successful, and some have not.
Based upon our particular needs and working with the CARE, staff is convinced that using the
clean diesel/gasoline hybrid path is still the best approach for SLO Transit at this time to meet
our bus replacement needs and to meet the CARB requirements. Attachment 2 contains a full
description of the issues analyzed in reaching this conclusion.
Justification of Piggyback Procurement
"Piggyback" purchasing is allowable under FTA guidelines and in essence allows procurements
by extending the contract rights to purchase goods and services from one transit agency to
another. The initial contract is awarded based on a competitive procurement process with
provisions that other agencies may also order transit vehicles from the same contract. Use of
cooperative purchasing is also allowed under the City's purchasing ordinance, and the City has
used this process in the past to purchase fleet vehicles and buses.
In order to meet the pending deadline for CARB purchase requirements, staff is recommending
Council approve the use of"piggyback procurement for the City's transit vehicle replacement
Council Agenda Report—Procurement of Transit Vehicles Page 3
plan. Staff has identified several contracts that are available for piggyback procurements at this
time. The City of Elk Grove has a contract with Complete Coach Works for gasoline hybrid
buses. The City of Colorado Springs has a contract with Gillig Corporation for 30-foot clean
diesel buses. Both contracts include CARB certified buses. Staff has not identified a piggyback
contract for the trolley at this time, and will continue esearching for an available contract. If a
piggyback contract for the trolley is not available, staff will solicit proposals to purchase the
trolley. The City has more time to comply with the emission requirements affecting the trolley,
and as such, delaying the delivery for the trolley will not have a negative impact on the City.
Use of cooperative purchasing in this case will expedite the delivery of the transit vehicles based
on times savings associated with preparing procurement documents and secure placement on the
manufacturing production schedule.
Vehicle Replacement Plan
San Luis Obispo Transit operates some buses that are over 24 years in age, twice their useful life
as defined by the Federal Transit Administration (FTA). As a result, the City's current bus fleet
is expensive to maintain and to operate, and can be unreliable due to breakdowns. In addition,
the City has a limited spare bus fleet because four of the buses are either inoperable or unreliable.
As an example, three of the City buses have failing roofs, which rain water penetrates onto
passengers during bad weather. New buses will reduce operating and maintenance costs, provide
more reliable service, and allow the City to meet the reductions as required by CARB.
City staff has been working with CARB staff to determine the best approach to achieve
compliance in terms of investment and cost effectiveness. Today, CARB compliance is
achievable with a combination of clean diesel and gasoline hybrid buses. The vehicle
replacement plan shown in Attachment 3 maintains the current fleet mix in terms of vehicle
lengths and size. The vehicle replacement plan also replaces the City's oldest and least
compliant vehicles first. Neither CARB nor City staff anticipate delivery of these new vehicles
by the January 2007 deadline; however, CARB staff has indicated that they will support an
extension to the deadline as long as the City adopts a vehicle replacement plan and orders the
vehicles. The following is a brief description of the first five vehicles that are intended to be
replaced through cooperative purchasing in the vehicle replacement plan (Attachment 3) in
order to meet CARB's requirements:
1. Two Clean Diesel Buses (30 footers). These two new buses will replace two of the three 30
foot 1982 Orion buses. The Orion buses are the oldest and least compliant buses in the
City's bus fleet. Working with CARB staff, replacing these vehicles greatly moves the City
towards compliance. Staff is proposing to replace the Orion buses with 30-foot clean diesel
buses, in order to maintain our 30-foot buses fleet ratio because of their abilities to access
Downtown.
2. Two Rebuilt Gasoline Hybrid Buses (40 footers). One of the gasoline hybrid buses will
replace the remaining 1982 Orion bus. The other gasoline hybrid bus will replace the CNG
bus that is inoperable. Staff will propose a 30-foot bus in a future request to maintain current
fleet configuration.
Council Agenda Report—Procurement of Transit Vehicles Page 4
3. One Trolley. The current 1992 trolley(green color) is powered by a pre-1993 diesel engine
that will no longer be allowed to be used after December 31, 2007. Staff has received
numerous complaints about the diesel trolley mostly due to the diesel smoke and fumes
emissions. In reviewing the type of engine to be used for trolley replacement, staff analyzed
CNG, hybrid and gasoline technologies. While each of these types of engines have their own
strengths and weaknesses, using gasoline engine trolleys appears to be the best decision for
SLO Transit at this point in time. Gasoline engines are CARB compliant and have shown to
be more dependable over time than the other types of engines. Gasoline engines also carry
with them the benefit that fuel is readily available. For these reasons staff is recommending
the replacement of the existing diesel trolley with one gasoline trolley. Please refer to
Attachment 3.
It is staff's intention to replace the trolley with a vehicle that looks very familiar with the
current vehicles being used by SLO Transit. If similar vehicles are not available via
piggyback contracting or by direct bid, staff will return to Council with recommendations for
vehicle appearance types after coordinating a stakeholder review and comment process.
CONCURRENCES
California Air Resources Board is considering a time extension for the City to comply to their
standards based on the staff's request on March 3, 2006. CARB endorses the City's vehicle
replacement plan (July 14, 2006).
The Mass Transportation Committee is aware of the need to replace the City's fleet in order to
comply with the CARB's emission requirements. Staff has kept the Committee informed of this
issue as part of the Transit Manager's Report, and the Transit Manager's update on the 2006-07
Budget process. The Mass Transportation Committee has recommended the approval of these
Vehicle purchases as part of their review of the 2006 and 2007 Program of Projects.
FISCAL ANALYSIS
There will be no impact to the City's General Fund. Staff has secured funding from Federal and
State transit sources to purchase the vehicles. On.a separate agenda item at the August 1, 2006
meeting, it is recommended Council approve the FTA Program of Projects and necessary budget
amendments to support the purchase of these transit vehicles. Future vehicle replacements will
also be done using these funding sources along with State Transportation Improvement Plan
(STIP)monies.
Figure 1:Protect Budget
puree. Amount
FTA 5307 & 5336j $1,296,620
TDA LTF $323,851
Total $19620,471
Council Agenda Report—Procurement of Transit Vehicles Page 5
ALTERNATIVES
Council could disapprove the cooperative procurement of four buses and potentially one trolley
and instead require a direct competitive bid process. The consequence of this alternative would
be that the City will not meet the CARB deadlines and will face monetary penalties from CARB.
ATTACHMENTS
1. CARB Emission Requirements
2. Fact Sheet
3. Vehicle Replacement Plan
4. Resolution
G:\Staff-Reports-Agendas-Minutes\-CAR\2007\Transit\Transit Piggyback Vehicle Replacement-PRODUCTION.doc
ATTACHMENT l
CALIFORNIA EMISSION STANDARDS FOR URBAN BUS
FLEET
Emission 2000 2001 2002 2003 2007 2010
Particulate 1.0 1.0 0.01 0.01 0.01 0.01
Matter Q h -hr h -hr h -hr h -hr h -hr h -hr
NOx 5.1 5.1 4.80 0.5 0.2 0.2
g/bhp-hr h -hr h -hr h -hr h -hr h -hr
Revised 1.2 0.2
-NOx2 hp-hr, g/bhp7hr
Source: CARB, adopted 2/24/06, as approved by OAL 1/31/06
Footnotes
1 Based on transit operators average NOx emission on urban bus fleet
2 Modified to federal 2007 NOx standard due to manufacturer inability to meet initial standard. .
G:\Staff-Reports-Agendas-MinutestCAR\2007\Tmnsit\Transit CAR Piggyback Procurement Vehicles Replacement Attachment I-
PRODUCTION.doc
ATTACHMENT
CTCy O
Sd11 lU1S OBISPO
• R K S • E P A R T M E N T 955 MORRO ST. 93401 -3208
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Mo%*
To: Ken Hampian
From: Jay Walter
Prepared by: Austin O'Dell
Date: March 6, 2006
Re: Fact Sheet Responding to the Clean Energy Letter
Overview
The Mayor and some City Council members received a letter dated November 14, 2005 from
Clean Energy, a company that is in the business of selling compressed natural gas (CNG) for
transit and other fleet operators, offering to make a deal with the City to provide a CNG
fueling facility in return for a commitment to purchase CNG over the next five years. The
purpose of this memorandum is to provide the Council with information in response to the
letter from Clean Energy, explaining why staff is not receptive to their proposal. In the letter,
Clean Energy representatives recap a meeting held with City Transit Manager Austin O'Dell
to encourage the City to move towards CNG powered buses in future procurements. Because
there is a heightened interest in the use of alternative fuels for transit and fleet operations as an
option to higher prices for diesel and gasoline, we thought Council would be interested in
some perspective on these issues as it applies to our Transit program. The City Transit
Manager worked with our Transit operator, First Transit, to provide this information. If you
have further questions about this information, please contact the Transit Manager Austin
O'Dell or Deputy Director Tim Bochum.
1. Is CNG cleaner than diesel?
No. The California Air Resource Board Table I
(CARB) designed the emission standards so
Emission Hybrid CNG' Comment
that both CNG and diesel paths are subject to Particulate
the same criteria. CARB is fuel and Matter Not .03
technology neutral in this matter, that is, they hh ) measurable
have set standards to meet but have made NOx .2 1.5
them independent of the fuel choice. CNG is }i1i
not the cleanest fuel; that distinction belongs Noise Less 72dba d a
to the latest gasoline hybrid engines. Engine 2007 Gas Hybrid
CARB Yes No is
Compliant CLEANEST
Source:Calffomia Air Resource Board
A TTACHMENT
Fact Sheet for Clean Energy Letter March 6,2006
manufacturers must develop their equipment to meet the CARB standards.
2. What about soot and particulate matter?
Referring to Table 1, CNG does emit ultra fine particulate matter (PM). Ultra fine PMs
are more hazardous because the human body cannot filter this emission as it can filter
larger emissions. CARB is evaluating the need to develop a standard for this emission.
Diesel engines can be outfitted with soot traps on the exhaust system to gain compliance
by filtering out the larger particulates.
3. Which technology is quieter?
Referring to Table 1, gasoline hybrid engines are quieter. The CNG engine is essentially a
modified diesel engine. Ignition in a diesel engine requires the fuel to be under pressure
(or compression). When a diesel engine is modified to a CNG engine, ignition is caused
by compression and spark using pressurized fuel. Under these conditions in a CNG
engine, combustion is louder. In addition, both diesel and CNG engine require turbo-
chargers,which increase the noise levels.
In contrast,ignition for a gasoline hybrid engine requires only a spark for combustion,and
no compression. The gasoline hybrid engine is quieter because the fuel is not under
pressure and does not require turbo-chargers.
4. What is the experience with operating CNG vs.gasoline hybrid buses?
Staff attempted to validate statements made in the letter by Clean Energy, claiming that
transit operators are dissatisfied with gasoline hybrid technology. From staff's
conversations with the City of Elk Grove,Long Beach Transit,and Orange County Transit
Authority,we learned the following:
♦ City of Elk Grove
✓ Based on Elk Grove Transit, fuel economy for a gasoline-hybrid bus engine is 5
miles per gallon'.
✓ Elk Grove is considering diversifying their fleet,which may include CNG.
✓ Elk Grove Transit is ordering more gasoline hybrid buses.
♦ Long Beach Transit
✓ Based on Long Beach Transit,fuel economy for a gasoline-hybrid fuel bus engine
is 3.5 miles per gallon or equal to diesel'.
✓ Long Beach Transit is more satisfied with their 47 gasoline hybrid buses.
✓ Long Beach Transit is ordering 20 more gasoline-hybrid buses.
✓ Long Beach Transit is retiring their CNG fleet.
♦ Orange County Transit Authority
✓ Based on Orange County Transit Authority, CNG fuel economy is 1.6 miles per
gallon.
✓ According to Orange County Transit Authority, maintenance cost increased by
20%due to their CNG fleet.
Page 2 of 5
7ACHMENT
Fact Sheet for Clean Energy Letter March 6,2006
The difference in fuel economy is the application and configuration of the buses for each property.
Gas hybrid buses need to be customized for each transit operator to realize maximum efficiencies.
5. What is the makeup of the City's Transit Fleet?
The City transit fleet currently has 16 diesel engine buses, some over 20 years old and
some only 3 years old.We also have 2 CNG buses that do not run.
6. What are other transit operators purchasing for their bus fleet?
About ten years ago, South Coast Area Transit (Oxnard) converted their diesel fleet to
CNG. Oxnard's experience with CNG is not positive. Oxnard experienced an increase in
maintenance costs of 20% and constant flow interruption of CNG to their fueling station.
It's important to understand that Oxnard made the full commitment to CNG by installing
an on-site fast fill CNG fueling station with a dedicated fuel line. After ten years of CNG,
Oxnard's Board of Directors has decided to convert its entire CNG fleet to gasoline
hybrid. The reasons for their decision was because of the constant interruption of CNG
supply, which caused Oxnard's buses to sit in the yard and miss service. Oxnard also
attributes their decision due to the increase in maintenance costs, -and poor vehicle
reliability.
Montebello Bus.Line is ordering 257 gasoline hybrid buses, along with six other transit
operators in the Los Angeles area. Their decision is predicated on the experience from
other transit operators,the infrastructure and maintenance costs,safety,and that gasoline is
more readily available than CNG.
Unofficially, Riverside Transit is considering replacing its CNG buses with hybrid
technology.
City of Visalia is purchasing six CNG buses. The City of Visalia is in the minority for
purchasing CNG vehicles instead of other alternative technologies. Their decision is
based on their experience with 2002 emission reduction technology that simply did not
work for them. The momentum was already in motion to purchase CNG vehicles in the
City of Visalia prior to the blossoming of current hybrid technology.
7. In terms of fuel prices, Clean Energy's offer
seems to make financial sense,but does it? Table_2 Clean
Not according to our calculations. Referring to Variable Diesel CNG' Result
Table 2, the City would spend more transit MPG 3:34 1.6
dollars on CNG per bus than a bus using Fuel Costs 2.50 2.00
gasoline hybrid or traditional technology. The r Gallon
reason is that CNG vehicles only get l.6 mpg Annual
compared to 3.5 mpg for buses using hybrid or Miles per 32,273 32,273
traditional technology, simply because CNG has Bus
Page 3 of 5
FuCost ual $24,156 $40,341 �is el
Bus cheaper
-TACHMENT
Fact Sheet for Clean Energy Letter March 6,2006
less energy per gallon than gasoline or diesel. The City is achieving 3.34 mpg with our
clean diesel vehicles. Even though Clean Energy is willing to guarantee/lock their fuel
prices for five years, the City would spend 74 % more on CNG than diesel or gasoline.
This appears not to be a good deal for the City.
8. What about other unforeseen costs due to CNG?
In terms of CNG, individual fuel tanks must be replaced every 12 years at a cost of
$100,000 per bus. Based on the experiences from other transit operators using CNG,
CNG is more labor intensive. The City uses a fueling service to prepare the buses for the
next day. As a result;the City incurs no additional labor costs associated to fueling. CNG
would require specially trained technicians to stage and fuel the buses, which would
require an additional 8 person hours per day. Fueling CNG will significantly increase
maintenance costs due person hours and energy costs. This added cost of maintenance
would take away from service levels provided to our riders unless we raised fares or
received a higher subsidy.
In terms of engine maintenance, the cost to overhaul a gasoline engine is $2,500 (twenty-
five hundred dollars,this is not a typo),compared to the cost of overhauling a CNG engine
at$50,000. This is made possible by the manufacturer's engine exchange program. The
manufacturer will discount a manufacturer rebuilt engine in exchange for the old engine.
Similar programs are not currently available for CNG engines.
9. Are there any safety considerations?
Yes, there are safety considerations, The physical characteristics of CNG are different
than traditional fuels (i.e. lighter than oxygen, collects in ceiling spaces, high pressure,
bums on contact, etc.). CNG requires special training and protective clothing during
handling and refueling.
10. Can transit operators use bio-diesel?
Due to a recent change in state law, bio-diesel can be used in urban transit fleets.
However, CARB cautions that bio-diesel is not verified to reduce emissions. Staff is
researching this change to learn how this change applies to urban transit bus fleets.
11. How proven.is hybrid technology?
In terms of domestic vehicles, automobile manufacturers are phasing out CNG vehicles
and phasing in gasoline hybrids. Automobile manufacturers have tried CNG technology
and it has not been completely successful. As the City has experienced with hybrid
pickup trucks in the Utilities and Public Works Departments, the CNG part of the engine
technology has proven to be unreliable and is no longer used.
Hybrid technology has proven to be a reliable technology, which has been around since
the early 1990's. Transit agencies that are using hybrid technology are:
• Montebello Transit is purchasing 257 hybrid buses;.
• Long Beach Transit is purchasing 47 hybrid buses;
Page 4 of 5
�A,2 �o
TTACHMENT
Fact Sheet for Clean Energy Letter March 6,2006
• City of Elk Grove is purchasing 21 hybrid buses;
• Seattle Metro has been operating 235 diesel hybrid buses since 2004;
• General Motors has delivered 364 hybrid buses throughout the United States since
2003;
• New York operates 140 diesel hybrid buses. New York conducted an analysis in 2000
between traditional diesel, diesel hybrid, and CNG. The reports recommends diesel
hybrid buses for future purchases.
12. How should the City proceed?
In 2002, transit operators were required by the California Air Resources Board to select a
fuel path: clean diesel or alternative fuel. On July 16, 2002, City Council approved a
resolution selecting the clean diesel path because it was the most cost-effective avenue to
meet the emission requirements. In addition, it was also pointed out that other
technologies would be emerging in the near future,such as other hybrids and hydrogen. It
is staff s opinion that CNG is not the fuel choice for the City bus service. It is important to
realize that choosing the next bus is not a simple decision anymore. Considerations to its
application, terrain,.size, and passenger loads are essential to decide whether to purchase a
diesel or a hybrid bus. Staff will assess and recommend the appropriate buses during
upcoming cycle of vehicle procurements.
Council will be asked to agree to terms of a new agreement with Cal Poly that provides an
operating subsidy. We should be very careful before changing directions on a fuel path
that may have cost consequences on our service levels.
The City should graciously decline Clean Energy's offer and continue on the path to clean
diesel or gasoline hybrid bus purchases. Council will have the opportunity within the next
few months to revisit the selection of the clean diesel path with the purchase of the next
new buses for the fleet.
Attachments: 1 Letter from Clean Energy
2 ISE Brochure
1:LCAR ReWrts\WMTra=ATm=t CAR Sole Source Vehicles RepLrcen=Amchmettt 5-DRAFr.doc
Page 5 of 5
ArrACHMENT -2: --_
3020 Old Ranch Parkway,Suite 200
Seal Beach,California 90740 USA
562.493.2804 tax 562.493.4532
Chad M.Lindholm
www.cleanenercivluels.com - Senior Account Manager
NOV 2 2 206141(7-IIMENT
Man ERe qjr November 14,2005
Mr. Austin O'Dell
Transit General Manager
City of San Luis Obispo
955 Morro St.
San Luis Obispo, CA 93401
Dear Mr. O'Dell,
I appreciate you taking the time to meet with Jim Harger and me to discuss the City of
San Luis Obispo's transit operation and specifically review current and future bus
procurements. As we explained, we are just beginning to see the effects of tighter world
oil supply as diesel and gasoline prices have risen over 30% during the last twelve
months. Transit agencies across the country are experiencing a significant impact on
operating budgets as a result of these skyrocketing costs.
San Luis Obispo (SLO)Transit has a great opportunity to make a transition to the"clean
air path" while reducing fuel costs and displacing 100%foreign oil. Moving your fleet
to natural gas will not only provide these benefits, but will also position SLO Transit to
meet the strict emission standards set by CARB for 2007 and 2010. In fact,both
CumminsWestport and John Deere have stated that their natural gas transit engines will
meet the 2010 standards in 2007.
The Truth about Hybrid Technology
Recent Gasoline-Hybrid bids from transit agencies have comeback with a price tag of
$550,000 per bus. That is$200,000 more than a compressed natural gas (CNG)bus!
You mentioned in our meeting that SLO Transit is considering the purchase of gasoline
hybrid buses similar to those purchased by the City of Elk Grove. I had an opportunity
at the recent California Transit Association(CTA)Conference to speak with people
from the City of Elk Grove and learned that their hybrid buses were performing way
below expectations. In fact, they have decided that their next procurement will be for 12
CNG buses and a new CNG fueling facility.
Unfortunately, the projected fuel economy savings have not transpired. At the CTA
Conference,Long Beach Transit confirmed these findings by stating their gasoline-
hybrid buses were achieving worse mileage(2.9—3 mpg)than their existing diesel fleet
(3—3.5 mpg). It is evident that the fuel economy projections are not being met to
payout the$200,000 incremental cost of the bus. In addition,hybrid engine technology
is new and unproven. The long-term results are unknown and the financial risks are
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ATTACHMENT
considerable. The required battery replacement cost in year 6 of$30,000 per bus is often
not considered. It is clear that hybrid engine technology comes with a significant price
tag and does little to solve our foreign oil dependency problem.
Company Background
Clean Energy is North America's largest-natural gas fuel provider with a network of over
160 fueling stations across North America. More than 20 of our stations fuel transit bus
operations, both large and small. Today we fuel over 2;500 natural gas transit buses
including large operators like Dallas Area Rapid Transit(DART),EI Paso Sun Metro,
Foothill Transit,Massachusetts Bay Transit Authority(MBTA),Mesa Transit,Phoenix
RPTA, San Diego Transit,and Santa Clarita Transit.
As a complete natural gas fuel provider, Clean Energy designs,builds,operates and
maintains natural gas fueling stations. We also have the ability to offer commodity price
protection from buying"gas future contracts"on the New York Mercantile Exchange
(NYN EX)for the past several years. This business approach allows Clean Energy to
hedge the cost of physical natural gas deliveries from the local distribution company
(LDC)and pass the savings directly to our customers in the form of lower and stable fuel
Rices. This valuable service saves substantial dollars and guarantees that our customers
never pay more than a predetermined amount for their fuel.
CNG Proposal
As we discussed,at no upfront cost to the City of San Luis Obispo,Clean Energy is
prepared to build,operate and maintain a turnkey CNG station on city property. The
CNG station will be designed to fuel 15 transit buses per hour, continuously,at an
average fuel requirement of 40 gallons per bus. If necessary,the station could also be
designed to fuel at a faster rate. So, as your natural gas fleet grows, we can add
infrastructure to meet the demand. If feasible, Clean Energy would be more than willing
to open a public access apron on the perimeter of the property to allow city residents and
other fleet operators access to CNG.
Because of our past performance in meeting roll out for both transit and refuse operators
in several states and Canada, the SLO Transit can be assured it is working with a
qualified partner. Because of your operation's requirement, our company will base a
qualified technician in the Santa Barbara Region. In the event of an emergency,we will
guarantee a two-hour response time,24-hours per day. We will also have a supply of
necessary parts on site, and a complete inventory at our Santa Fe Springs warehouse.
A > ACHMENT
ATTACHMENT r
Fuel Pricing: I know the rising cost of diesel fuel impacts the operating'Sudg—Fat SLO
Transit. If SLO Transit and the City can commit to a small fleet replacement that will
consume at least 20,000 gallons per month, Clean Energy is prepared to provide a long-
term natural gas fuel price at a substantial savings compared to liquid fuels. As we
discussed, we can provide a 5-year fixed price for the natural gas commodity not to
exceed$1 per gallon. A separate margin,to recover our principle,interest,taxes,
insurance,O&M,G&A and profit will be set at$1 per gallon and be subject to an annual
increase not to exceed the Consumer Price Index for the San Luis Obispo Region. To
encourage the City to purchase additional buses, street sweepers,refuse trucks,etc. we
are prepared to discount the margin for each additional 10,000 gallons of consumption
on a monthly basis. The schedule of volumes and.prices are provided in the following
table:
Monthly Volume Delivered Cost of Clean Energy's Total Price
Gallons NG ' Margin' ($/Gallon)
139,000 BTU's) ($/Gallon) ($/Gallon)
>20,000 $1.00 $2.00
30,000 SoCalGas G-NGU $0.95 $1.95
40,000 tariff in Gallons, $0.90 $1.90
50,000 not to exceed$1 $0.85 $1.85
60,000 per Gallon $0.80 $1.80
>70,000 $0.75 $1.75
Notes:
1. SoCalGas' delivered cost includes both transportation to the fueling facility and
natural gas commodity. The delivered cost is billed in therms,where 1.39 therms
is equivalent to 1 diesel gallon. If the natural gas prices were to decline such that
the bundled price is less than$1 per gallon,the City will pay the lower cost.
2. Clean Energy's Margin.is subject to an annual adjustment not to exceed the
change in the Consumer Price Index for the San.Luis Obispo Region.
3. This is the maximum total price. Prices could be lower if the delivered cost of
NG is less than$1 per gallon. The total price does not include road taxes(not
applicable today for transit operators),utility fees and charges or utility user tax
(if applicable). All of these fees will be passed through to the City in the
monthly bill
Based on today's diesel costs, the City will save at least$0.50 per gallon,and as oil
prices continue to rise,our price protection feature will maintain a stable fuel cost and
the difference between a gallon of diesel and-natural gaswill increase over the term of
the agreement,resulting in additional savings. This offer could begin as early as July 1,
2006 and conclude on June 30, 2011. However, in order to hold the natural gas contracts
for the City, we will need an executed Letter of Intent on or before January 31,2006.
C/.2 -�/
A AACHMENT 1T
ATTACHMENT
I would be happy to discuss this further with you and your city council as you see
appropriate. We will also be available to host you and your team to tour our transit
properties in the Los Angeles Region.
Again, thank you for your time and consideration.
Sincerely,
`1
Chad Lindholm
Senior Account Manager
cc: Mayor Dave Romero
Councilmember Christine Mulholland
ISE CORPORATION Versatile Hybrid Electric Alternative
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Rated Torque ..,.......:.::..a.......:...........440 Nm / 324 lb-ft Emissions..............25%less than CARB engine certification
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_- _ <0.01 g/bhp-hr PM
Low Noise.......:....................Very quiet inside E&outside,
< 72 db(A)exterior noise during acceleration
ENGINE/GENERATOR POWER SOURCE .idle-off at stop with battery
-- energy storage option
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the vehicle communications
bus and the drive controller 230 VAC ....:..........e.......:..:....... Independent of engine,
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17
ISE CORPORATION TRANSPORTATION FOR A CLEAN PLANET
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ATTACHMENT 4
RESOLUTION NO. (2006 Series)
RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO
APPROVING THE PIGGYBACK PROCUEMENT FOR VEHICLE REPLACEMENTS
TO COMPLY WITH EMISSION REQUIREMENTS FOR CALIFORNIA AIR
RESOURCES BOARD
WHEREAS, the City of San Luis Obispo (referred hereinafter as the City) operates SLO
Transit; and
WHEREAS, California Air Resources Board required transit operators to choose either
the clean diesel or alternative fuel path by January 1, 2003; and
WHEREAS, City Council chose the clean diesel path on October 15, 2002; and
WHEREAS, the City has identified four buses that need to be replaced:to comply with
the emission requirement of the California Air Resources Board by January 1, 2007; and
WHEREAS, the City has identified one trolley that needs to be replaced to comply with
the emission requirement of the California Air Resources Board by December 31, 2007; and
WHEREAS, the City has secured funding from the Federal Transit Administration and
Transportation Development Act to assist in the City's compliance of the emission requirements.
NOW THEREFORE,BE IT RESOLVED that the City Council of San Luis Obispo:
SECTION 1. Approves piggyback procurement to purchase transit vehicles to comply
with the California Air Resources Board(CARB) emission standards.
SECTION 2. Approves the vehicle replacement plan in Exhibit A.
SECTION 3. Authorizes the City Administrative Officer to negotiate and execute
cooperative purchase agreements to replace four city buses, and one trolley with the
spending authority not to exceed$1,620,471 dollars.
- AFACHMEW4
Resolution No. (2006 Series)
Page 2
On motion of seconded by and on the
following roll call vote:
AYES:
NOES:
ABSENT:
The foregoing resolution was passed and adopted this day of 2006.
Dave Romero, Mayor
ATTEST:
Audr � Hooper, Cit 'Pr
'
r ona an P. Lowell, City Attorney
G:\Staff-Reports-Agendas-Minutes\_CAR\2007\Transit\Transit CAR Piggyback Procurement Vehicles Replacement Attachment 4(Resolution)-
PRODUCTION.doc
council $ 1 6
j agenda RepoRt C�3
CITY OF SAN LUIS OBI SPO
FROM: Jonathan P.Lowell
Prepared By: J. Christine Dietrick
SUBJECT: A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO
TO PROTECT CALIFORNIA STATE PARK LANDS
CAO RECOMMENDATION
Consistent with the Council's Legislative Priorities for 2006, adopt a resolution relating to
protection of state park resources.
DISCUSSION
This issue was raised as a communications item by Council Member Christine Mulholland at the
July 18, 2006 City Council meeting. The subject matter appears within the following item on the
Council's list of legislative priorities: "32. Supporting State and Federal funding for
acquisition, protection, preservation and restoration of natural resources, open space, coastal
resources, signature land forms, wetlands and park development, including continued funding for
the Land and Water Conservation Grant Program." The Natural Resources Defense Council, the
group seeking to protect state parklands, has asked that a resolution of support be provided.
Hence, this matter has been placed on the agenda of August 1, 2006 for consideration of a
resolution urging protection of California state parks.
ATTACHMENTS
Attachment 1 -Resolution
G:\Agenda-Ordinances-Resol\Protecting CA State Parks-Agenda Rpt.DOC
Attachment 1
RESOLUTION NO. (2006 Series)
A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO TO
PROTECT CALIFORNIA STATE PARK LANDS
WHEREAS, California's first state park was established in 1864 with land granted by
President Abraham Lincoln, and the California state parks system was created in 1927 "to
preserve outstanding natural, scenic, and cultural values, indigenous aquatic and terrestrial fauna
and flora, and the most significant examples of ecological regions of California;"
WHEREAS, from ancient redwoods to desert buttes, from Southern California's iconic
beaches to the opulence of Hearst Castle, the California state parks system contains a diverse
collection of historical,environmental and recreational resources second to none in the nation;
WHEREAS, California state parks are the crown jewels of the state, designated for the
benefit of all of California residents in order to improve our lives by providing healthy outdoor
and educational experiences;
WHEREAS, California state parks provide a significant economic benefit to the people
of California, generating, according to estimates from the Department of Parks and Recreation,
about 80 million visitors from around the world who spend approximately $2.6 billion directly
with an additional $4 billion in indirect contributions;
WHEREAS, California state park lands are designated for their protection and
preservation on behalf of future generations and should not be warehoused for later development
in a manner inconsistent with state park purposes;
WHEREAS, protection of state park lands is a matter of paramount statewide concern
which requires that these lands not become the least costly alternative for major infrastructure
projects deemed to be necessary for uses inconsistent with state park purposes;
WHEREAS, on November 18, 2005, the California State Park and Recreation
Commission (Commission), in a resolution entitled "Opposing a Proposed Tollroad Alignment
and Request for Action to Protect San Onofre State Beach," reaffirmed the principle that state
parks are "designated for their protection and preservation on behalf of this and future
generations and should not be used in a manner inconsistent with state park purposes;"
WHEREAS, in said resolution, the Commission (i) urged abandonment of the proposed
toll road, called the Foothill-South Toll Road, that would run "over four miles in length through
the heart of the nearly 1,200 acre [inland portion] of San Onofre State Beach" and (ii) requested
that the "Governor, in concert with the Attorney General's office, oppose any major
transportation arterial through San Onofre State Beach using all appropriate methods, including
litigation if necessary, to defend this valuable and irreplaceable public resource;"
C13
Resolution No. (2006 Seriesj Attachment 1
Page 2
WHEREAS, the state park at SanOnofre State Beach was set aside for the people of
California in 1971 by Governor Ronald Reagan who proclaimed that "one of the greatest
legacies we can leave to future generations is the heritage of our land, but unless we can preserve
and protect the unspoiled areas which God has given us, we will have nothing to leave them" and
has since become one of the top five most visited state parks in California;
WHEREAS, the taking of such park land by a toll road would destroy this unique
Southern Californian coastal unit.of the state parks system, and set a dangerous state-wide
precedent that might in the future be cited in justifying the destruction and degradation of other
state parks;
W HREAS, in said resolution, the Commission recognized that "viable alternative
routes and traffic improvements exist which do not depend upon San Onofre State Beach.
BE IT RESOLVED,by the City Council of the City of San Luis Obispo as follows:
SECTION 1. The City endorses the Commission's November 18, 2005 resolution and
requests that the Foothill/Eastern Transportation Corridor Agency immediately and permanently
withdraw its plans to construct a toll road with an alignment through the state park at San
Onofre.
SECTION 2: The City Council directs its staff, in concert with the Financial Director, to
refrain from acquiring any bonds for, or making other financial investments in, the Foothill-
South Toll Road on the ground that the proposed road is not a sound environmental investment
and is inconsistent with California's compelling interest in protecting its state parks.
SECTION 3: The City Council directs its staff to send a copy of this resolution and
communicate its contents to the Commission, Foothill/Eastern Transportation Corridor Agency,
and the California Governor, Resources Agency, Department of Parks and Recreation, Attorney
General's Office, Treasurer's Office, and Department of Transportation.
Upon motion of , seconded by
and on the following roll call vote:
AYES:
NOES: .
ABSENT
�i3 -3
Resolution No. (2006 Series) Attachment 1
Page 3
The foregoing resolution was adopted this day of , 2006.
David F. Romero, Mayor
ATTEST:
Audrey Hooper
City Clerk
APPROVED AS TO FORM:
Jonathan P. Lowell
City Attorney
G:Wgenda-Ordinances-Resol\Protecting CA State Parks-Reso.DOC
Page 1 of 1
I'
SLO Citycouncil-trestles toll roan.esolution
From: Lisa Jouet<jouetstudio@sbcglobal.net>
To: <slocitycouncil@slocity.org>
Date: 7/29/2006 1:55 PM
Subject: trestles toll road resolution
We support the possible resolution by the city council to oppose the toll-road that is threatining San Onofre State Park.
Thank you for your time and consideration of this issue.
Tim&Lisa Jouet
t ,41 L
RECEIVED RED FILE -9 COUNCIL M CDD DIR
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JUL 1 �ufl� MEETING AGENDA ER
AO ORNEv %S Pw DICRHIEF
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file://C:\Documents%20and%20Settings\slouser\Local%20Settings\Temp\GW}00002.HTM 7/31/2006
`,oSsa"Lo�soe�A RECEIVED
s56 r AUG 01 2006
N�seG� �a�r SLO CITY CLERK
MEMORANDUM
From the Office of the City Attorney
August 1, 2006
To: Mayor and City Council
Via: Ken Hampian, City Administrative Officer 4r
From: Jonathan P. Lowell, City Attorney 6L
Subject: Consent Item C13, A Resolution to Protect California State Park Lands
Attached please find a communication from the Chief Executive Officer of the Transportation
Corridor Agencies, an agency consisting of two joint powers authorities formed by the California
Legislature in 1986 to plan, maintain and operate Orange County's toll roads. The letter
provides explanation of why proponents are seeking expansion of a toll road through a portion of
San Onofre State Beach Park. In addition, the letter raises public policy issues for consideration
by the City Council.
Attachments
� o C6
COUNCIL CDD DI,R
®CAO FIN DIR
RED FILE ACAO
MEETING AGENDA 0 ATTORNEY � FIRE CHIEF
UT CLERK/ORIG PO DIR
DA7L9ITEM #� ® D�EADS ® RECICE D RCHF
Eff UTIL DIR
—6 — HSR DiR
Son Joaquin Hills Foothill/Eastern
Corridor Agency ` Corridor Agency
Chairwoman: Chairman:
Carmen Vali-Cove Jim Thor
Aliso Viejo TRANSPORTATION CORRIDOR AGENCIES RSM
July.31, 2006
Mayor Dave Romero and City Council
City of San Luis Obispo
990 Palm Street
San Luis Obispo, CA 93401
Re: August 1, 2006 City Council Meeting, Agenda Item No. C13
A Resolution of the Council of the City of San Luis Obispo to Protect California
State Park Lands
Dear Mayor Romero and City Councilmembers:
I respect the City of San Luis Obispo's legislative priorities and am sensitive to the value of
California's State Park System but I am writing to you today to reconsider the proposed
resolution described under Item No. C13 of your August 1, 2006, meeting agenda.
The proposed resolution does not take into account the unique aspects of San Onofre State Beach
Park which allows us to move forward with our toll road proposal and the extreme need to
address the existing and future traffic constraints on Interstate 5 in southern Orange County.
Interstate 5 is a primary route for goods movement, tourism, and the Southern California
commuter. Traffic is projected to increase at the San Diego/Orange County border by 60% by
2025. The plans to extend the 241 toll road to I-5 completes a long-studied transportation
program that will relieve I-5 traffic, provides an alternative route, avoids the most sensitive
environmental areas, does not remove any homes or businesses, and avoids areas of the San
Onofre State Beach leasehold that is most utilized by the public..
The proposed resolution attempts to stop the construction of a state highway that will be
constructed without state funds and is vital to improving mobility for millions of Californians.
As such, I hope you will consider this additional information before taking action.
1. The San Onofre State Beach is located on federal land leased to the State for
operation of the park. The state entered into a lease with the federal government that
explicitly reserved the right.to grant easements for roadways within the park lease.
Congress has explicitly authorized the Secretary of the Navy to grant to the TCA an
easement for State Route 241 within this portion of Camp Pendleton. The alignment
William Woollett,Jr., Chief Executive Officer
123 PACIFICA,SUITE 100,IRVINE, CA 92618-3304 ❑P.O.BOX 53770,IRVINE, CA 92619-3770 ❑949/754-3400 FAX 949/754-3467
www.thetollroods.com
Members:Aliso Viejo D Anaheim D Costa Mesa DCounty of Orange O Dana Point O Wine D Laguna Hills D Laguna Niguel D Laguna Woods D Lake.Forest
Mission Viejo D Newport.Beach 0 Orange D Rancho Santa Margarita D Santa Ana 0 San Clemente D San Juan Capistrano 11 Tustin D Yorba Linda
,
Letter to City of San Luis Obispo Mayor& Council
July 31, 2006
Page 2 of 3
reflects the specific recommendations of the Marine Corps that any alignment on the base
be restricted to the area of the state park lease, in order to preserve the ability to train
Marines to defend our nation.
2. Federal and state resource agencies have preliminarily determined that the
preferred alignment is the"least environmentally damaging,practicable
alternative."These conclusions were made by the Federal Highway Administration,
Environmental Protection Agency, Army Corps of Engineers, the U.S. Fish& Wildlife
Service, and Caltrans after a comprehensive, $17 million Environmental Impact
Statement/Subsequent Environmental Impact Report was completed over these past six
years. Numerous toll road and non-toll road alternatives were thoroughly analyzed to
determine which alternative could best handle projected traffic growth in south Orange
County. Abandoning plans now would be irresponsible, as the project has been studied
and reviewed in accordance with state and federal environmental laws, and would be
unacceptable to the vast majority of Orange County residents who support the project.
Copies of the environmental impact report are available upon request, and can be found
online www.foothill-south.com under the link"Final SEIR."
3. Ninety-five percent of the 2.5 million visitors to San Onofre State Beach in 2005
went to the coastal subunits according to State Park Department Data. The toll road
extension passes through the inland portion of the park, located north of Interstate 5,
passing by the San Mateo Campground which according to the State Parks Department,
was visited by 107,000 people in 2005. Ninety-five percent of the annual visitors go to
the coastal units that are south of, and adjacent to Interstate 5. The coastal sub-units will
not be impacted by the toll road plans.
This project has the support of a broad coalition of labor unions, business organizations,
hospitals and emergency services providers, in addition to the support of a majority of Orange
County residents who will be severely impacted by gridlock and a lack of transportation
alternatives. A list of supporters is attached for your review.
In addition to the facts presented above, I hope that you will also respect the value of local
control. The Foothill/Eastem Transportation Corridor Agency is a governmental agency that has
and will continue to work with the necessary local, state, and federal authorities—in full
compliance with the California Environmental Quality Act and the National Environmental
Policy Act—to produce a project that balances the need to relieve traffic while being sensitive to
environmental concerns. This project is part of regional transportation plans approved by the
two
associations of governments in Southern California. I believe that neither Orange County, nor its
cities, would presume to know what's best for the residents of San Luis Obispo anymore than
San Luis Obispo would know what's best for addressing Orange County's pressing
transportation needs and its commitment to building roads that are sensitive to the environment.
i
Letter to City of San Luis Obispo Mayor& Council
July 31, 2006
Page 3 of 3
For all of these reasons,.I hope you will reconsider the proposed resolution and take no action. I
would be happy to provide additional information, and can be reached through Lisa Telles, Chief
Communications Officer, at(949) 754-3411.
Respectfully,
William Woollett, Jr.
Chief Executive Officer
c: Jonathan Lowell, City Attorney, City of San Luis Obispo
Audrey Hooper, City Clerk, City of San Luis Obispo
Attachments
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