PURPOSE:

To obtain Council approval of a Memorandum of Understanding with the South Coast Air Quality Management District and authorization for the City Manager or designee to execute the MOU for the construction and maintenance of hydrogen vehicle fuel station and the conversion of five City vehicles to hydrogen fuel.

BACKGROUND:

In June 2003, the City of Burbank was asked by the South Coast Air Quality Management District (AQMD) to participate in a five year hydrogen fuel infrastructure and fleet vehicle demonstration project.  The purpose of the project is to assist with the development of ultra-clean hydrogen-fueled vehicles and a hydrogen fueling network in the AQMD basin. This demonstration project includes the participation of Burbank, Ontario, Riverside, Santa Ana and Santa Monica.  The AQMD will also host a fueling station.  As part of the project, each participating city has purchased five Toyota Prius gasoline/electric hybrid cars which will be converted to hydrogen/electric hybrids using the standard internal combustion engine.  The AQMD will pay for all conversion costs. 

One of the goals of this project is to develop a network of hydrogen fueling stations that will allow for public fueling capabilities 24 hours per day, seven days per week.   The AQMD will pay for the installation of the hydrogen station components.  The City is responsible for the installation of underground utilities necessary to support the station components.  The hydrogen station will be located at the City�s CNG fuel station at 810 N. Lake Street.

ANALYSIS:

In order for the project to proceed, the City must enter into a formal Memorandum of Understanding (MOU) with the AQMD.  The City�s obligation under the MOU is to provide the land, utility service, fuel & utility costs and miscellaneous infrastructure improvements for the station and very minor maintenance procedures.

The AQMD will fund the contracts with Air Products, Inc. for the installation, maintenance and five-year operation of the station and Quantum, Inc. for the conversion of the Toyota Prius�s.

The City has taken delivery of two of the five Prius�s and estimates the final three vehicles to be delivered by the end of June or July.  It is estimated that the station and conversion of the cars will be complete by October or November of this year.  The hydrogen vehicles will be assigned to operations which tend to accumulate higher than average mileage so as to provide the best testing ground possible.

FISCAL IMPACT:

The five Toyota Prius�s were purchased as part of the City�s normal vehicle replacement process so no additional costs were incurred.   Routine maintenance of the vehicles will be the responsibility of the City however; any repairs related to the hydrogen system will be covered by the AQMD project.  During the 2004/05 budget process, the Council appropriated $125,000 for providing utilities and ancillary costs for the installation of the hydrogen station components.  These funds are available in project 14915.  Additional costs to the City include the cost of hydrogen fuel estimated to be 250 gallons per year per vehicle at approximately $5.50 per gallon which will be charged back to the vehicle as is the procedure for all City vehicles and paid out of fund 532.   The cost of utilities to operate the station is estimated at $10,000 per year and will also be paid out of fund 532.

As a participant in AQMD�s demonstration project, the City will receive hydrogen fuel station equipment valued at $850,000.   Additionally, the AQMD will pay for the cost of converting the five Toyota Prius�s which is valued at $460,000.  Air Products, under contract to the AQMD will be responsible for the maintenance and repair of the station equipment of which value has not been determined at this point but an estimate appears below. 

City Costs                                                                AQMD Costs

Purchase of five vehicles                 $140,000       Conversion of five vehicles     $460,000

Provide utility services                      $125,000       Cost of station equipment       $850,000

Five-year cost of hydrogen fuel       $  34,375        Cost of 5-year maintenance  $100,000

Five-year est. cost of utilities           $  50,000

SUB TOTALS                                  $349,375                                                       $1,410,000

Project Total:           $1,759,375

RECOMMENDATION:

Staff recommends that the Council adopt the resolution approving a Memorandum of Understanding between the South Coast Air quality Management District and the City of Burbank and authorizing the City Manager or designee to execute the MOU for construction, maintenance and five-year operation of a hydrogen fuel station and conversion of five Toyota Prius�s to hydrogen hybrid.

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