FOR THE COUNCIL MEETING OF SEPTEMBER 20, 2022
COUNCIL AGENDA REPORT
TO: City Council
FROM: City Manager
Prepared by: Interim Director of Public Works
SUBJECT: APPROVAL OF DISPOSITION OF OLDER TRANSIT VEHICLE RECOMMENDATION:
That the City Council adopt a Resolution declaring certain transit vehicles as surplus and authorizing the disposition of said transit vehicles that have exceeded their useful life.
BACKGROUND:
The Transit Enterprise Program purchases and uses a variety of motor vehicles and equipment to provide transportation services to riders of Santa Maria Regional Transit (SMRT). At the conclusion of the federally defined useful life period, these vehicle assets are surplused and disposed of, typically at auction. As a federally funded Enterprise Program, the disposal of federally funded assets is governed in accordance with the Code of Federal Regulations (CFR) Part 200.
DISCUSSION
Within the Transit Fleet Roster there are two 40' 2007 and two 40' 2009 Low -Floor (Gillig) heavy-duty buses that were purchased with Federal assistance and have now met the end of their Federal Transit Administration (FTA) approved useful life of 12 years and/or 500,000 miles.
Heavy -Duty Vehicles:
Vehicle/L
Yea'
VIN Number '
License Plat'
Lengt1:
Make_
Model'
Fue2Type"
Engine_
Seating_Aoressd'
Datetn.krvke'
Date0utSerk.
AK
emaining YEARS Current Odometer
Remaining MILES
4007-166
• 20[7
15GGD271381078624
1237538
40'
011.116
LOW FLOOR
Diesel
Cummins
38 Yes
6/15/2007
TBD
15 " '
~
,, 520,904.0
I :
4(q7 -11S
20[1
15000211581078625
1237539
40'
051.16
LOWROOR
Diesel
Cummins
38 Yes
6/15/7001
TBD
15 r
443111.0
15,539
4009-189
2009
15660271091078629
1237578
40'
RUG
LOW FLOOR
Diesel
Cummins
38 Yes
2/15/2009
TBD
13 1
484,461.0
56,483
4009-188
2019
15GGD271991078620
1237576
40'
GILLIG
10W FLOOR
Diesel
Cummins
38 Yes
2/15/2009
TBD
13 •1
422,673.0
77,327
Additionally, the Transit Division has one 25' 2008 and one 25' 2010 Ford chassis cut- away medium -duty buses that were purchased with federal assistance and have met the end of their FTA-approved useful life of 7 years or 200,000 miles.
Medium -Duty Vehicles:
Vehicle
Year
VINNumber
License Plate
Length
Make
Model
FuelType
Seating
Assedble
Age
Remaining YEARS
CurrentOdometer
Rena mmgMILES
2580-196'
2008
11045455580054902
1329031
25'
FORD
E450
Gasciine
22 Yes
14 :�
389,526.0
2510-169'
2010
110154F5600452640
1352900
25'
FORD
E450
Gasdine
22 Yes
12 1
127,124.0
22,876
None of the vehicles have had repowering (major overhaul) work performed to the drivetrain that would extend their FTA-defined useful life period. All six of the vehicles have been approved to be replaced in the FY 2022-2024 budget cycle.
Given the age, wear/tear, mechanical issues, and high cost of maintenance of the vehicles, the Transit Division sees it best to retire and surplus the six vehicles instead of continuing to heavily invest in maintaining their roadworthiness. Disposition of the vehicle assets is in accordance with the City's adopted TAM Plan as the vehicles have received a condition rating of less than 2.0 (very poor condition) on the grading scale.
FTA Interest
Per FTA C 5010.1E, Chapter IV, Part 4(o), the FTA retains a financial interest in equipment with a unit value exceeding $5,000 and supplies with an aggregate value exceeding $5,000, even if useful life has been met. The Transit Division has determined the fair market value of the vehicles by using a straight-line depreciation, whereby the value decreases each year by one -twelfth or one -seventh, correspondingly, of its original purchase price. Using this method and given the age of the vehicles, the Transit Division calculates that the remaining Federal interest in the vehicles is $0.
With FTA concurrence that there is no federal interest in the previously funded assets, SMRT will surplus these vehicles. SMRT will employ proper sales procedures that ensure the highest possible return is achieved in the disposition of the federally assisted asset by sending them to sell at auction. Records of this action will be retained for FTA inspection.
Sale of Vehicles
An analysis of similar vehicles sold at auction indicates that the fair market value of each of the vehicles is anticipated to be less than $5,000. In such a case, the FTA is aware that there is no obligation to proportionally share the proceeds with them.
Should the sales of one of these vehicle assets exceed the $5,000 threshold, the Transit Division will reimburse FTA a proportionate amount by multiplying the total aggregate fair market value at the time of disposition, or the net sale proceeds by the percentage of FTA's participation in the original award (e.g., if FTA provided 80 percent of the vehicle purchase price, then FTA would receive 80 percent of the proceeds).
The Transit Division will record the receipt of the proceeds in the Transit budget accounting system, showing that the funds are restricted for use in a future capital award, and to reduce the liability as the proceeds are applied to one or more future FTA-approved capital awards.
Auction Company
The Transit Division, in conjunction with the City Fleet Services Division, has typically used various auction companies to sell its used vehicles and equipment, with the Fleet Services Supervisor or the Lead Mechanic authorized to sign the sales agreements and 2 set auction reserve prices. These companies have been secured based on several factors, including ease of use, qualifications, market reach, and ultimately as the result of informal or competitive bidding or through a cooperative purchasing program. Due to the nature of these contracts, where the Transit Division pays for the service via a portion of the sales (fee paid net of revenue proceeds), it is unclear how entering into a contract is regulated by the purchasing guidelines.
Most recently, the Transit Division used an online auction company, GovPlanet, and in general, auction prices have been better than traditional "in -person" auctions. However, if Transit Division staff observes other auction companies yielding greater net sales proceeds (sales price less sales commission) for similar equipment, one of those other auction companies would be used. There are several auction companies available to use, many of which would still be available through a cooperative purchase program, and the Transit Division would like to utilize the various options available to it to obtain the best economic results.
Fiscal Considerations
In general, online auctions reach larger groups of buyers than in -person auctions, which in turn yields more competitive bidding. The sale items are advertised and displayed online with photographs, videos, and descriptions.
Impact to the Community
There is no impact to the community by this action as it is largely considered an administrative item. Net proceeds of the sale will be used in accordance with FTA regulations to help pay for other transit capital projects.
GAMALIEL ANGUIANO
Transit Manage
BRETT FULGONI
Interim Public Works Director
3 RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF SANTA MARIA, DECLARING CERTAIN TRANSIT VEHICLES
AS SURPLUS AND AUTHORIZING THE DISPOSITION OF SAID
TRANSIT VEHICLES THAT HAVE EXCEED THEIR USEFUL LIFE
WHEREAS, the Transit Enterprise Program purchases and uses a variety of motor vehicles and equipment to provide transportation services to riders of Santa Maria Regional Transit (SMRT); and
WHEREAS, at the conclusion of the Federal Transit Administration (FTA) defined useful life, these vehicles assets are surplused and disposed of at auction; and WHEREAS, as a federally -funded Enterprise Program, the disposal of federally - funded assets is governed in accordance with the Code of Federal Regulations (CFR) Part 200; and
WHEREAS, the Transit Fleet Roster identified two 40' 2007 and two 40' 2009 Low - Floor Gillig heavy-duty buses purchased with Federal assistance that have now met the end of their FTA-approved useful life of 12 years and/or 500,000 miles; and WHEREAS, the Transit Fleet Roster also identified one 25', 2008 and one 25', 2010 Ford chassis cut -away medium -duty bus purchased with Federal assistance and have also met the end of their FTA-approved useful life of 7 years or 200,000 miles; and WHEREAS, none of the vehicles have had repowering (major overhaul) work performed to the drivetrain that would extend their FTA-defined useful life; and WHEREAS, all six of the vehicles have been approved to be replaced in the FY 2022-2024 budget cycle; and,
WHEREAS, the Transit Division, in conjunction with the City Fleet Services Division, will list the vehicles with the reputable auction company GovDeals.com for the sale of transit vehicles that have met the end of their FTA-approved useful life of 12 years and/or 500,000 miles; and,
WHEREAS, the Transit Manager, Fleet Manager and/or Fleet Lead Mechanic will list the vehicles on GovDeals.com for the sale of these Transit vehicles.
NOW, THEREFORE, IT IS HEREBY RESOLVED by the City Council of the City of Santa Maria, California, as follows:
1. Authorizes the City Manager, or designee, to execute agreements with a reputable auction company for the sale of surplus transit vehicles that have met the end of their FTA-approved useful life (12 years and/or
500,000 miles and 7 years or 200,000 miles), and to execute all forms or documents necessary to coordinate the disposition of the vehicles ; and
2. The Chief Deputy City Clerk is hereby authorized to make minor changes herein to address clerical errors, so long as substantial conformance of the intent of this document is maintained. In doing so, the Chief Deputy City Clerk shall consult with the City Manager and City Attorney concerning any changes deemed necessary.
PASSED AND ADOPTED at a regular meeting of the City Council of the City of Santa Maria, California, held this 20th day of September 2022.
ATTEST:
Chief Deputy City Clerk
Mayor
APPROVED AS %I' ORM:
AP
Interim Departmept Director
City Manager
2