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June 25, 2002
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SUBJECT: |
Resolution for Grant Funding Application to Convert Five New Diesel Refuse Trucks to Compressed Natural Gas Engines |
REPORT IN BRIEF
The City is submitting to the Bay Area Air Quality Management District (BAAQMD) an application for grant funding from the Transportation Fund for Clean Air (TFCA). Any grant funds received will defray the extra cost of powering 5 new collection trucks with compressed natural gas (CNG) engines. Bay Counties Waste Services, the City’s franchised refuse hauler, is scheduled to place these new trucks into service during calendar year 2004.
BACKGROUND
The Transportation Fund for Clean Air (TFCA) provides grants to local governments for projects that will reduce air pollution. The Bay Area Air Quality Management District (BAAQMD), of which Council member Miller is a member, administers the grant program in the San Francisco Bay Area. Grants are available for various types of projects, including the replacement of diesel trucks with trucks powered by clean air fuels such as natural gas. Grants are typically made available only to governmental agencies that purchase vehicles for their own use. However, an exception to this rule allows governmental agencies to obtain grant funding for vehicles that are purchased privately but are used "for public purposes," a category that includes solid waste and recycling collection contracted through a city. Bay Counties Waste Services (BCWS) collects garbage, yard trimmings, and recyclable materials under a long-term contract with the City. Under the contract, BCWS’s compensation each year is calculated by a process that takes into account its actual allowable costs during a prior year and adjusts them for inflation. Thus, any allowable cost that the company incurs becomes part of the City’s cost in a future year. BCWS operates a total of approximately 40 trucks in a given day, collecting various types of materials. The contract includes a vehicle replacement schedule that spells out which trucks are to be replaced during which years of the contract term. Generally, trucks are replaced (or moved into a backup role) after they have been in use for 7 years. The number of trucks to be replaced in a given year varies. For example, two trucks are being replaced 03/04, and three are scheduled to be replaced 04/05.
EXISTING POLICY
Air quality Sub-Element – Goal A: Improve Sunnyvale’s Air Quality and reduce the exposure of its citizens to air pollutants. Air Quality Sub-Element – Policy C.4: Reduce Emissions from City of Sunnyvale fleet vehicles.
DISCUSSION
Beginning in January 2000, BCWS and City staff have been working to implement a program of converting the recycling and refuse truck fleet to alternative fuels, specifically natural gas. In 2000 City Council approved 2 grant applications to the BAAQMD for a combined $1,200,000 in funding to off-set the cost of converting the first 24 trucks. Those trucks have arrived and are being placed into service. In addition, $200,000 in BAAQMD funds were made available to partially fund the new CNG fueling station at BCWS. This station will be available to the public as well as fueling the refuse and recycling fleet. Conversion of the recycling and refuse trucks is consistent with the City’s shift to alternative fuels in its own fleet in recent years. In the case of diesel engines, the recent designation of diesel exhaust particulates as a carcinogen opens up new opportunities for litigation and makes long term reliance on diesel fuels problematic. Tighter air emission standards for diesel engines are also planned, meaning that the costs and difficulty of operating diesel fleets will be increasing in the future. The incremental cost of specifying alternative fuel engines for the 5 trucks in question is estimated to be $65,000 per vehicle, a total of $325,000. The TFCA grant program will reimburse a maximum of $50,000 per truck. The remaining cost is estimated to be $75,000. Amortized over the 7-year life of the trucks, this amount will have no significant effect on refuse collection rates. Should the City fail to receive the grant funds, the alternative fuel decision could be revisited with the full financial effect on refuse ratepayers in mind. However, the regulatory and legal liability issues noted above would likely lead the City and BCWS to take advantage of this opportunity to continue to move to alternative fuels even in the absence of grant reimbursement. The application for the TFCA Grant requires a City council resolution authorizing submittal of the application, and authorizing the City Manager to execute a funding agreement if the application is approved for funding. Staff is recommending that the Council approve such a resolution, shown as
Attachment A.
FISCAL IMPACT
Estimated cost for converting the five trucks is $325,000. Of that amount, $250,000 is proposed to be covered by grant funding, and the remaining $75,000 would consist of matching funds from the City of Sunnyvale. There is no fiscal impact to the City by authorizing submittal of this application.
PUBLIC CONTACT
Notice has been provided through the publication and posting of the City Council Agenda. In addition, all Reports to Council are available in the Library and on the City’s internet home page.
RECOMMENDATION
It is recommended that the City Council adopt the resolution shown as
Attachment A.
Prepared by:
Mark Bowers
Solid Waste Program Manager
Reviewed by:
Marvin Rose
Director, Department of Public Works
Approved by:
Robert S. LaSala
City Manager
Attachments
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