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November 26, 2002
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SUBJECT: |
Grant Funding Agreement to Convert Five New Diesel Refuse Trucks to Compressed Natural Gas Trucks |
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REPORT IN BRIEF |
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The City has been awarded $250,000 by the Bay Area Air Quality Management District (BAAQMD) in grant funding from the Transportation Fund for Clean Air (TFCA) to 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. Acceptance of the grant requires a funding agreement between the City of Sunnyvale and BAAQMD. Staff is recommending that the Council authorize the City Manager to execute the agreement. |
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BACKGROUND |
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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 Vice Mayor 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 when appropriate, adjusts them for inflation. 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 during fiscal year 2003/04, and three are scheduled to be replaced during fiscal year 2004/05. |
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EXISTING POLICY |
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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. |
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DISCUSSION |
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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, the 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 have been placed into service. In addition, $200,000 in BAAQMD funds were made available to partially fund the new CNG fueling station at BCWS. In addition to fueling the refuse and recycling fleet, this station is available to the public. 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 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, a total of $250,000. The remaining cost for this project 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. Staff is recommending that the City Council authorize the execution of the attached funding agreement with the BAAQMD by the City Manager. |
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FISCAL IMPACT |
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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 Solid Waste Fund, payable over 7 years. There is no significant fiscal impact to the City in executing this funding agreement. |
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PUBLIC CONTACT |
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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. |
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RECOMMENDATION |
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It is recommended that the City Council authorize the City Manager to execute the attached funding agreement with the BAAQMD. |
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Prepared by: |
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Reviewed by: Marvin A. Rose Director, Public Works |
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Approved by: Robert S. LaSala City Manager |
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Attachments |
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Next Council Item | Corresponding Agenda |
| List of Council Meetings | List of Reports to Council | Sunnyvale Home Page |