TO: AC Transit Board of Directors
FROM: Michael A. Hursh, General Manager/Chief Executive Officer
SUBJECT: Application for Volkswagen (VW) Environmental Mitigation Trust Funds
ACTION ITEM
AGENDA PLANNING REQUEST: ☐
RECOMMENDED ACTION(S):
Title
Consider adoption of Resolution No. 23-045 authorizing the General Manager, or his designee, to file and execute applications and funding/contract agreements with the Volkswagen Environmental Mitigation Trust Fund for the purchases of zero-emission transit buses.
Staff Contact:
Chris Andrichak, Chief Financial Officer
Body
STRATEGIC IMPORTANCE:
Goal - Financial Stability and Resiliency
Initiative - Financial Efficiency and Revenue Maximization
Applying for the funds supports the District’s Transit Asset Management (TAM) policy and plan, Zero-Emission Bus fleet transition plan and maintains operations. The application for these trust funds for the purchase of zero-emission buses will help the District in replacing buses that have reached the end of their useful lives.
BUDGETARY/FISCAL IMPACT:
The District has several bus purchases in the coming years with an approximate total cost of $154 million. The District has so far been able to secure $105 million. The secured funds are a mix of federal, state and local dollars. The details are provided in Table 1.
The District needs approximately an additional $49 million in funding to complete these bus purchase projects.
BACKGROUND/RATIONALE:
The Volkswagen (VW) Environmental Mitigation Trust (Trust) provides about $423 million for California to mitigate the excess nitrogen oxide (NOx) emissions caused by VW’s use of illegal emissions testing defect devices in certain VW vehicles. The Trust is a component of partial settlements with VW and is enumerated in the first Partial Consent Decree.
The Consent Decree provides funding opportunities for specified eligible actions that are focused mostly on “scrap and replace” projects for heavy-duty sector, including on-road freight trucks, transit and shuttle buses, school buses, forklifts and port cargo handling equipment, commercial marine vessels and freight switcher locomotives.
Staff proposes to apply for funding from the Trust for approximately $36 million for the zero-emission bus purchase projects.
|
Bus Purchases |
Approximate Total Cost |
Secured Funding |
|
32 x 60ft Artic Fuel Cell Buses |
$67,161,040 |
$38,027,261 |
|
25 x 40ft Fuel Cell Buses |
$36,903,773 |
$32,731,000 |
|
47 x 40ft Diesel Buses |
$32,468,884 |
$20,541,440 |
|
17 x 40ft Battery Electric Buses |
$17,394,133 |
$14,139,750 |
|
Total |
$153,927,830 |
$105,439,451 |
Table 1: Summary of Bus Purchases
ADVANTAGES/DISADVANTAGES:
The advantage of applying for these trust funds is the ability to fund the purchases of replacement buses and the ability to keep the District’s fleet in a state of good repair. These trust funds will allow the District to receive additional funds to maintain its capital assets.
ALTERNATIVES ANALYSIS:
None
PRIOR RELEVANT BOARD ACTION/POLICIES:
None
ATTACHMENTS:
1. Resolution 23-045
Prepared by:
Seema Prasad, Senior Capital Planning Specialist
Approved/Reviewed by:
Richard Oslund, Director of Management & Budget
Chris Andrichak, Chief Financial Officer
Jill A. Sprague, General Counsel/Chief Legal Officer