COUNCIL AGENDA REPORT
TO: Mayor and City Council
FROM: Brett Fulgoni, Director of Public Works
DATE: February 17, 2026
SUBJECT: Adoption of a Resolution Approving the D isposition of Older Transit Vehicles and Equipment
Description:
The City Council will consider authorizing the disposal of older transit vehicles and equipment.
Environmental Notice: The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required.
RECOMMENDATION:
1. Adopt a Resolution authorizing the disposition of older transit vehicles and equipment; and
2. Authorize the City Manager, or designee , to sign sales agreements with a reputable auction company for the surplus of the transit vehicles.
BACKGROUND:
The City of Santa Maria Regional Transit (SMRT) utilizes a variety of vehicles and equipment purchased primarily through Federal Transit Administration (FTA) funding. As a recipient of federal funds, the City must manage the disposal of these assets in accordance with the Code of Federal Regulations (2CFR §200) and FTA Circular 5010.1E. Once an asset reaches the end of its "useful life," it is surplused through methods that ensure the highest financial return, typically via public auction.
DISCUSSION:
The Transit Division has identified several assets for retirement based on age, mileage, and condition. None of these vehicles have undergon e major drivetrain overhauls that would extend their mandated useful life.
Assets Identified for Disposition:
Vehicle Type Quantity FTA Useful Life Threshold Current Status Heavy-Duty (40’
Gillig) 6 12 Years / 500,000 Miles Met/Exceeded
2 Vehicle Type Quantity FTA Useful Life Threshold Current Status Medium-Duty
(Trolleys) 2 7 Years / 150,000 Miles Met/Exceeded
Equipment 2 Donaldson DPF Thermal
Cleaners
Obsolete/Poor
Condition
Condition and Replacement
According to the City’s Transit Asset Management (TAM) Plan, these assets have received a condition rating of less than 2.0 (Very Poor). Due to high maintenance costs and declining reliability, it is no longer fiscally responsible to keep them in service.
Replacements for these vehicles have already been budgeted and received for the FY 2024-26 cycle.
Federal Interest and Fair Market Value
The FTA retains a financial interest in equipment with a unit value exceeding $5,000.
Transit staff calculated the remaining value using straight-line depreciation; based on age and wear, the remaining federal interest is calculated at $0. Furthermore, market analysis of similar recent auctions confirms the anticipated individual sale price for each unit will likely fall below the $5,000 threshold.
Sale Process
If a vehicle sells for more than $5,000, the City will reimburse the FTA its proportionate share (e.g., 80% of net proceeds) or apply those funds toward an FTA -approved capital award. The Transit Division will collaborate with Fleet Services to utilize online auction platforms, which historically yield higher returns and m ore competitive bidding than in - person events.
Auction Company
The sale of items is advertised and displayed online with photographs, videos, and detailed descriptions. In recent years, the City’s Fleet and Transit Divisions have utilized the online auction company GovDeal.com to market and sell equipment to the broad est possible audience. In general, auction proceeds through this site have been better than with the City attempting to sell them on its own or than other government equipment auction sites, and it is recommended that the City continue using this method.
Alternative(s)
The City Council may choose not to approve the recommended action, which would result in the continued retention of vehicles and equipment that have exceeded their useful life, leading to increased maintenance costs and reduced reliability. Alternatively, the City Council could direct staff to delay disposal; however, this would continue to incur storage and maintenance costs without providing operational benefit.
3 Fiscal Considerations
There is no impact on the General Fund. The Transit Program operates as an Enterprise Fund. All proceeds from the auction will be recorded in the Transit budget as restricted funds, to be applied toward future FTA-approved capital projects.
Impact on the Community
This is an administrative action with no negative impact on transit service. The retirement of older, high-maintenance vehicles ensures a more reliable and efficient fleet for SMRT riders. Auction proceeds will be reinvested into future community transportation improvements.
ATTACHMENT(S)
A. Resolution
B. 2026 Transit Equipment Surplus List