Agenda Report
Fullerton City Council
MEETING DATE: APRIL 18, 2023
TO: CITY COUNCIL / SUCCESSOR AGENCY
SUBMITTED BY: STEPHEN BISE, CITY ENGINEER / ASSISTANT DIRECTOR OF PUBLIC WORKS PREPARED BY: JEROME JOAQUIN, PUBLIC WORKS ADMINISTRATIVE MANAGER TAYLOR SAMUELSON, SR. ADMINISTRATIVE ANALYST
SUBJECT: AIR QUALITY IMPROVEMENT FUND AVAILABLE BALANCE APPROPRIATION FOR FY 2022-23 VEHICLE REPLACEMENTS ______________________________________________________________________
SUMMARY
Request for City Council approval to appropriate $200,000 from available Air Quality Improvement Fund (Fund 22) fund balance in Fiscal Year 2022-23 to purchase four eligible Super Ultra Low Emission Vehicles (SULEV) under Assembly Bill 2766 (AB 2766) Motor Vehicle Subvention Program. This action would allow the City to utilize available restricted revenue funds and help implement the AB 2766 goal by reducing motor vehicle emissions.
RECOMMENDATION
Approve $200,000 budget transfer and appropriation from FY 2022-23 Budget from the Air Quality Improvement Fund (Fund 22) to the Vehicle Replacement Fund (Fund 64).
Authorize informal bidding process to expedite the purchase of four eligible Super Ultra Low Emission Vehicles (SULEV).
Authorize Administrative Services Director, or designee, to issue purchase orders not-to-exceed $200,000 to purchase four SULEV and to execute related documents.
CITY MANAGER REMARKS
This will continue the City’s efforts of lowering emissions in the City’s vehicles. This will add 4 ultra low emission vehicles to the fleet.
PRIORITY POLICY STATEMENT
This item matches the following Priority Policy Statement:
Fiscal and Organizational Stability.
FISCAL IMPACT
The City of Fullerton receives approximately $180,000 per year through the AB 2766 Motor Vehicle Subvention Program in recurring Air Quality Improvement Funds, special revenue provided by Air Quality Management District (AQMD) for the reduction of air pollution from motor vehicles.
Staff requests a $200,000 budget transfer and appropriation from the Air Quality Improvement Fund (Fund 22) to the Vehicle Replacement Fund (Fund 64), which houses the Citywide fleet program, to purchase four eligible Super Ultra Low Emission Vehicles. The City has available fund balance in the Air Quality Improvement Fund to purchase SULEV vehicles to cover four clean air vehicle replacements for FY 2022-23.
DISCUSSION
Air Quality Improvement Fund (Fund 22)
California adopted Assembly Bill 2766 in 1990 to provide revenue to reduce air pollution from motor vehicles, for related planning, monitoring and enforcement as well as technical studies. State law authorizes the Department of Motor Vehicles to collect a $6 per vehicle surcharge to fund the AB 2766 Subvention Fund Program. The state returns forty percent of the AB 2766 fund, which represents approximately $20 million annually in the South Coast Air Basin, to cities and counties to develop clean transportation programs and reduce vehicle emissions.
Funds are distributed on a quarterly basis to all 160 participating cities and counties in the basin, based on the prorated share of their population. Projects funded with AB 2766 funds must meet the criteria and guidelines in the California Air Resources Board’s (CARB) Criteria and Guidelines document as summarized in the South Coast Air Quality Management District (SCAQMD)’s AB 2766 Resource Guide (Attachment 1).
Vehicle Replacement Program
The City of Fullerton’s fleet and equipment inventory consists of approximately 357 units with a replacement value of approximately $20 million. The City’s Vehicle Replacement Program replaces obsolete equipment, projecting replacement costs, setting replacement fees, accumulating replacement funds, receiving new units, installing auxiliary equipment and selling old equipment. Internal Service Fund 64 is designated for Vehicle Replacement Fund.
AQMD Rule 1191 and 1196 requires the City, as a public fleet operator of 15 or more vehicles, to procure low-emitting gasoline or alternative-fuel vehicles from the list certified by CARB when adding or replacing vehicles to its fleet. Exemptions apply to emergency or rescue vehicles (i.e., police and fire), heavy-duty on-road vehicles or vehicles with no ULEV or cleaner engine and chassis configuration available commercially. The City has mindfully procured alternative-fuel vehicles and transitioning the fleet inventory into more alternative-fuel vehicles, hybrids / plug-in hybrid electronic (PEVs) and electronic vehicles.
Utilizing special revenue funds such as AB 2766 Air Quality Improvement funds also reduces the City’s dependence on the General Fund for the Vehicle Replacement Program which has several outstanding needs.
How the City will use the funds:
Staff recommends using the one-time $200,000 budget appropriation from Air Quality Improvement Fund (Fund 22) to Vehicle Replacement Fund (Fund 64) to replace the following vehicles on the City’s Vehicle Replacement Program in the same class / classifications for multiple departments to energy efficient AB 2766-eligible vehicles. All vehicles exceeded their useful life and the City deferred for replacement for at least five to seven additional years due to various factors. Class CodeVehicle NumberYear/Make/ModelUseful Life YearsVehicle Replacement Schedule YearCommunity Development (Code Enforcement) 2202
103B
2008 Ford Ranger
10 FY 2022-23
2202
162A
2008 Ford Ranger
10 FY 2023-24
Library
2205
530B
2008 Ford Escape
10 FY 2022-23
Carpool
1300
115B
2009 For Fusion
9 FY 2023-24
Staff recommends replacing these aging, gasoline-powered vehicles with eligible ULEV or stricter level Low Emission Vehicles (LEV). Staff recommends Toyota RAV4 Hybrid or equivalent due to trusted durability and resale value of Toyota’s vehicles. Toyota Rav4 Hybrid Model Year 2023 is also categorized as a Super Ultra Low Emission Vehicle (SULEV) which has lower emissions compared to ULEV. Staff surveyed the current price range of this vehicle by obtaining quotes from reputable dealerships (see Attachment 2). The lowest quoted “out the door” cost totals $43,997 for each vehicle from DCH Toyota of Torrance, plus additional outfitting cost which equals approximately $45,000 for each vehicle. This brings the total to $200,000 including a 10% contingency. Staff would transfer any surplus from this budget appropriation back to the Air Quality Improvement Fund balance.
Additionally, staff recommends City Council waive formal bidding and authorize staff to purchase these vehicles via informal bidding process by obtaining competitive written quotes in the open market. The overall market for new fleet vehicles continues to encounter supply chain related challenges and the acquisition of low emission hybrid electric vehicles is even more challenging via formal bid process due to inventory moving quickly. Staff will obtain and evaluate quotes from qualified dealerships within the region thereby evaluating competitive pricing outside of the formal bid process. Staff will ensure the replacement cost per vehicle does not exceed $50,000. These vehicles replace 15-year-old gasoline vehicles which need immediate replacement and operate five years over their useful life.
Attachments:
Attachment 1 – SCAQMD AB 2766 Subvention Fund Program Resource Guide Attachment 2 – Supplemental Purchasing Information including Written Quotes cc: City Manager Eric J. Levitt
Air Quality Improvement Fund Balance for Vehicle Replacements Appropriation April 18, 2023 - Page PAGE \* MERGEFORMAT 2