City Council Staff Report Page 1 of 4 December 16, 2025 Staff Report
Agenda Item No. 4.8
DATE: December 16, 2025
TO: Honorable Mayor and Members of the City Council
FROM: Joan Malloy, City Manager
SUBJECT: Adopt a Resolution Awarding a Contract to Gillig, LLC, for the Purchase of Seven (7) Compressed Natural Gas (CNG) Thirty-Five Foot (35’) Heavy-Duty Fixed-Route Transit Vehicles (Buses) through the Washington State Department of Enterprise Services (WADES) Master Contract No. 06719, in the amount of $6,406,547, Authorizing the City Manager to execute the Contract in a Form Approved by the City Attorney, and Authorizing an Amendment to the Capital Improvement Plan
EXECUTIVE SUMMARY
Staff recommends that the City Council adopt a resolution awarding a contract to Gillig, LLC, for the purchase of seven (7) compressed natural gas (CNG) thirty-five foot (35’) heavy-duty fixed-route transit vehicles (buses) through the Washington State Department of Enterprise Services (WADES) Master Contract No. 06719, in the amount of $6,406,547, and authorizing the City Manager to execute the contract in a form approved by the City Attorney.
STRATEGIC PLAN ALIGNMENT
This agenda item is aligned with the following:
Goal D, Environmental Sustainability and Infrastructure - Create a healthy, sustainable community and maintain and improve the City’s infrastructure.
BACKGROUND
Union City Transit plans to replace the existing heavy-duty fixed-route transit fleet, which has reached, or is near, the end of its useful life, with zero-emission vehicles.
On December 14, 2018, the California Air Resources Board (CARB) implemented the Innovative Clean Transit (ICT) regulation, requiring all transit agencies to transition their bus fleets to zero-emission technologies gradually. In accordance with this regulation, Union City Transit is required to have twenty-five percent (25%) of its fixed-route bus procurements to be zero-emission by 2026.
Agenda Item No. 4.8
City Council Staff Report Page 2 of 4 December 16, 2025 On February 25, 2020, the City Council adopted Resolution No. 5568-20 to support efforts to secure additional funding opportunities by committing to convert the Union City Transit fixed-route fleet to zero-emission vehicles.
Following this commitment, the City of Union City and Union City Transit have been coordinating with the Metropolitan Transportation Commission (MTC), the California Air Resources Board (CARB), the Alameda County Transportation Commission (Alameda CTC), and the Federal Transit Administration (FTA) on the funding opportunities to convert the City’s Compressed Natural Gas (CNG) fixed-route buses to battery electric buses (BEB). Union City Transit staff were able to secure both an FTA Section 5307 formula funding grant and an FTA Section 5339(c) Low or No Emission Vehicle (Low-No) discretionary grant for fixed-route BEB.
On April 1, 2021, the Washington State Department of Enterprise Services (WADES) entered into Master Contract No. 06719-01, adding Gillig, LLC, of Livermore, CA, to its State Cooperative Purchasing Schedule for authorized participating public agencies (see Exhibit A). On November 1, 2022, Union City Transit, as an authorized participating public agency, entered into a Cooperative Purchasing Agreement for the original fourteen (14) BEBs that would be procured with the federal discretionary funding as outlined in the FTA Section 5339(c) Low or No Emission Vehicle (Low-No) discretionary grant for fixed-route BEB.
On January 10, 2023, the City Council adopted Resolution No. 6067-23 awarding a contract with Gillig, LLC (Livermore, CA), for the purchase of fourteen (14) Battery Electric Thirty-Five Foot (35’) Heavy-Duty Fixed-Route Transit Vehicles (Buses) through the Washington State Department of Enterprise Services (WADES) Master Contract No. 06719, in the amount of $16,516,360; authorizing the City Manager to Execute a Contract in a Form Approved by the City Attorney; and appropriating $9,316,360 to City Project No. 21-08.
On August 22, 2025, staff was informed by FTA that the Section 5339(c) discretionary grant application would not be approved for purchase of zero-emissions buses unless Union City Transit agreed to change propulsion engine types to satisfy the new federal administration’s definition of clean air vehicles and the only viable option was to maintain the status quo and procure CNG buses as opposed to the six (6) BEBs planned to be purchased with the Section 5339(c) funds. With the federal fiscal year deadline of September 30, 2025, rapidly approaching, Union City Transit staff moved quickly to avoid the risk of losing funds for the bus purchases, successfully rewriting the grant funding obligation application to comply with the new requirements.
On September 23, 2025, the FTA approved the obligation of FTA Grant No. CA-2025- 277-00 for Union City Transit Section 5339(c) Low or No Emission Grant Program Capital Projects, in the amount of $9,342,346, with a local match of $1,546,536, totaling $10,888,882, for the purchase of seven (7) thirty-five foot (35’) CNG vehicles and for improvements to the Corp Yard where the buses are parked (see Exhibit B).
Immediately after accepting the FTA grant, Union City Transit notified Gillig, LLC (Gillig) that the loss of FTA discretionary funding left the City with only enough budget to purchase eight (8) BEBs, as opposed to the fourteen (14) for which it had entered into Agenda Item No. 4.8
City Council Staff Report Page 3 of 4 December 16, 2025 contract. On October 20, 2025, Gillig presented the City Manager, Deputy City Manager, Public Works Director, and Transit Manager with an opportunity to cancel the additional six (6) BEB buses without penalty and to reduce the contract amount to $8,501,822.
On November 4, 2025, the City Council adopted Resolution No. 2025-148, authorizing the City Manager to execute the Second Amendment to the Agreement with Gillig, LLC, reducing the number of battery-electric thirty-five-foot (35’) heavy-duty fixed-route transit vehicles (buses) (BEBs) to be purchased from fourteen (14) to eight (8), in a form approved by the City Attorney.
Three (3) of the BEBs have already been delivered to the Corporation Yard and the remaining five (5) BEBs are scheduled to be delivered by the end of December 2025.
DISCUSSION
Union City Transit is required to comply with federal procurement guidelines for using federal funding and can confirm that Gillig has submitted all the necessary documents for WADES, has provided a pre-award Buy America checklist to Union City Transit, and does not appear to be suspended or debarred from doing business with the federal government based on a search of the federal System for Award Management (SAM) website.
On December 9, 2025, Union City Transit received a quote from Gillig, LLC, for seven (7) thirty-five-foot (35’) CNG Low Floor Buses at a cost of $915,221 for each bus, see Exhibit C. The total cost to purchase seven (7) CNG buses is $6,406,547, and it will take about 24 months for Gillig, LLC, to manufacture these vehicles at their Livermore location.
Union City Transit seeks to expedite procurement of the CNG buses before the California Innovative Clean Transit (ICT) regulation requiring twenty-five percent (25%) of all bus procurements to be zero-emission technology takes effect on January 1, 2026. There are currently no identified funding options for BEBs to meet the requirement after this date.
Competitive state or regional funding sources will likely be oversubscribed, as the current federal administration no longer issues discretionary awards for zero-emission technology.
The change in the FTA Section 5339(c) Low or No Emission Grant Program Capital Projects revoking authorization for battery electric vehicles, necessitates an update to the approved Five-Year Capital Improvement Plan (CIP) for Fiscal Years 2025-2026 through Fiscal Year 2029-2030, changing the name of Project 50 from “Transit Heavy-Duty Battery Electric Vehicle Procurement” to the more appropriate “Transit Heavy-Duty Vehicle Procurement.
FISCAL IMPACT
There is $6,406,547 available in FTA 5339(c) Discretionary Grant No. CA-2025-277-00 totaling $10,888,882, which includes $9,342,346 of federal funds and $1,546,536 of Transportation Development Act (TDA) funds in the Capital Projects Grants Fund (Account Number 410-92108-57140).
Agenda Item No. 4.8
City Council Staff Report Page 4 of 4 December 16, 2025
RECOMMENDATION
Staff recommends that the City Council adopt a resolution:
1. Authorizing the City Manager to execute a contract with Gillig, LLC, in the amount of $6,406,547, for the purchase of seven (7) compressed natural gas (CNG) thirtyfive foot (35’) heavy-duty fixed-route transit vehicles (buses) through the Washington State Department of Enterprise Services Master Contract No. 06719, in a form approved by the City Attorney; and
2. Amending the approved Five-Year Capital Improvement Plan (CIP) for Fiscal Years 2025-2026 through Fiscal Year 2029-2030 by changing the name of Project 50 from “Transit Heavy-Duty Battery Electric Vehicle Procurement” to “Transit Heavy-Duty Vehicle Procurement”.
Prepared by: Steve Adams, Transit Manager
Submitted by: Marilou Ayupan, Public Works Director
Attachments
1. Draft Resolution
2. Exhibit A – WADES-Gillig Purchasing Master Agreement
3. Exhibit B – FTA Grant No. CA-2025-777-000
4. Exhibit C – CNG Quote from Gillig, LLC