Agenda Report
Fullerton City Council
MEETING DATE: August 15, 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 SUBJECT: FISCAL YEAR 2023-24 VEHICLE REPLACEMENTS – TWO ULTRA LOW EMISSION VEHICLES ______________________________________________________________________
SUMMARY
Request to appropriate funding from the Air Quality Improvement Fund (Fund 22) in Fiscal Year (FY) 2023-24 to purchase two eligible Ultra Low Emission Vehicles (ULEV) under Assembly Bill 2766 (AB 2766) Motor Vehicle Subvention Program to utilize restricted revenue funds and help reduce motor vehicle emissions.
RECOMMENDATION
Authorize Administrative Services Director, or designee, to issue Purchase Order(s) through an informal bidding process to purchase two eligible ULEV.
Approve $112,200 budget transfer and appropriation to the FY 2023-24 Budget from the Air Quality Improvement Fund (Fund 22) fund balance to the Vehicle Replacement Fund (Fund 64).
CITY MANAGER REMARKS
This will continue the City’s efforts of lowering emissions in the City’s vehicles. This will add two 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 approval to purchase two ULEV to replace Fire vehicles past their useful life and scheduled for replacement. Each vehicle costs an estimated $56,100 which includes fitting and a 10% contingency. Staff requests a $112,200 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, as the City may use AQMD funds to purchase ULEV vehicles. The Air Quality Improvement Fund has available fund balance to purchase these two Ultra Low Emission Vehicles for the Fire Department.
DISCUSSION
Air Quality Improvement Fund (Fund 22)
California adopted Assembly Bill 2766 in 1990 to provide revenue to reduce air pollution from motor vehicles and 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.
AQMD distributes funds quarterly 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 (CARB) Criteria and Guidelines document as summarized in the South Coast Air Quality Management District (SCAQMD) AB 2766 Resource Guide (Attachment 1).
Vehicle Replacement Program
The City of Fullerton fleet and equipment inventory consists of approximately 357 units with a replacement value of approximately $20 million. The 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. Staff has designated Internal Service Fund 64 for the 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 fleet vehicles. 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 procured alternative-fuel vehicles and is 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 reduces the City’s dependence on the General Fund for the Vehicle Replacement Program which has several outstanding needs.
How the City Would Use the Fund:
Staff recommends a $112,200 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 the Fire Department to low emission 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 Code
Vehicle Number
Year/Make/Model
Useful Life Years
Vehicle Replacement Schedule Year
Fire Department
2071
145C
2008 Ford Escape
15 FY2021-22
2071
139C
2009 Ford Escape
14 FY2020-21
Staff recommends replacing these aging, gasoline-powered vehicles with eligible ULEV or stricter level Low Emission Vehicles (LEV) Chevrolet Traverse or equivalent. Chevrolet Traverse Model Year 2023 is an Ultra Low Emission Vehicle (ULEV) which has lower emissions compared to the two vehicles to replace. Staff surveyed the vehicle price range by obtaining quotes from reputable dealerships (see Attachment 2). The lowest estimated “out the door” cost totals $46,000 for each vehicle, plus potential $5,000 outfitting cost and a 10% contingency which brings the total to $56,100 and the total for two vehicles estimated at $112,200. Staff would transfer any surplus from this budget appropriation back to the Air Quality Improvement Fund balance.
Additionally, staff requests purchasing these vehicles with informal bidding by obtaining competitive written quotes in the open market to expedite the vehicle purchase and obtain the most cost-effective pricing. These two vehicles replace 14- to 15-year-old gasoline vehicles which need immediate replacement and operating at an average of five years over their useful life. Expediting the bidding process would replace these obsolete vehicles and avoid further maintenance cost to the City. The overall market for new vehicles continues to encounter supply chain and inflation cost-related challenges. Not undertaking a formal bidding process would greatly reduce the time to acquire eligible and most cost-effective quotes from qualified dealerships within the region that meet City needs in an expeditious manner. Staff anticipates the replacement cost per vehicle would not exceed $56,100.
Attachments:
Attachment 1 – SCAQMD AB 2766 Subvention Fund Program Resource Guide Attachment 2 – Vehicle Price Check and CARB Report
cc: City Manager, Eric J. Levitt
Vehicle Replacements – Two Ultra Low Emission Vehicles
August 15, 2023 - Page 2