Council Agenda - City of Burbank

Tuesday, June 26, 2007

Agenda Item - 6

 

 

 
 

 

DATE: June 26, 2007
TO: Mary J. Alvord, City Manager
FROM:

Susan M. Georgino, Community Development Director

Eric Hansen, Park, Recreation and Community Services Director        

By: Johnathan Frank, Administrative Analyst I
SUBJECT:

AUTHORIZATION TO ENTER INTO AN AGREEMENT WITH THE CALIFORNIA AIR RESOURCES BOARD, ACCEPT GRANT FUNDS FOR A HYDROGEN HYBRID FUEL CELL TRANSIT BUS UNDER THE ALTERNATIVE FUEL INCENTIVE PROGRAM AND TO AMEND THE FISCAL YEAR 2006-07 BUDGET

 

PURPOSE

 

Staff is requesting that the City Council authorize the execution of an agreement with the California Air Resources Board (CARB) to accept grant funds in the amount of $1,370,000 under the Alternative Fuel Incentive Program for the purchase and demonstration of a Hydrogen Hybrid Fuel Cell Transit Bus, and to amend the fiscal year 2006-07 budget. 

 

BACKGROUND

 

The CARB is the �clean air agency� of the State of California. The mission of CARB is to �promote and protect public heath, welfare and ecological resources through the effective and efficient reduction of air pollutants.� Assembly Bill 1811 authorizes CARB and the California Energy Commission (CEC) to jointly develop a plan to expend $25 million dollars in State funds, through the Alternative Fuel Incentive Program to further the goal of reducing air pollution and greenhouse gas emissions. These funds are to be expensed for the following purposes:

  • Market-based incentives such as by-downs, rebates, credits or other incentives for purchasers of high efficiency, high mileage clean alternative vehicles;

  • Production incentives such as loans, loan guarantees, and credits for clean alternative fuel production in California;

  • Market-based incentives such as loans and loan guarantees for the construction of publicly accessible, clean alternative refueling stations; and

  • Grants for research and development of clean and zero emission fuels and vehicle technology to assist in making those technologies affordable in the marketplace.

Each fiscal year CARB solicits grant proposals through several categories that are consistent with Assembly Bill 1811 provisions. The focus of this grant application is for the demonstration and development of zero emission and zero emission enabling technologies for buses operating in California. The total available funding this year through the Alternative Fuel Incentive Program for zero emission buses and zero emission enabling bus technology is $2 million; however, CARB requires that all funds must be encumbered by June 30, 2007.

 

ANALYSIS

 

As the City of Burbank continues its commitment to furthering clean air technologies and to be a leader in implementing alternative fueled vehicles and technologies, staff was approached by the private company Mobile Energy Solutions (MES) and its two subcontractors, Hydrogenics Corporation and Martin Marietta Composites, requesting that the City submit a grant application under the Alternatives Fuel Incentive Program for a zero emission transit bus. All three private companies are qualified and well respected leading edge companies engaged in the commercialization of hydrogen and fuel cell technology. In order to be eligible for Alternative Fuel Incentive Program, funding the private sector companies need to partner with a public agency to implement the development of a transit bus project. As such, on March 19, 2007, the City developed a public-private partnership with MES, Hydrogenics Corporation, and Martin Marietta Composites.

 

In April of 2007, the City of Burbank along with MES, Hydrogenics Corporation, and Martin Marietta Composites submitted an application to CARB as a public-private partnership to fund the development and demonstration of a zero emission transit bus. Staff worked with MES, Hydrogenics Corporation, and Martin Marietta Composites to develop a proposed project budget of $1,985,982 for a zero emission transit bus that will be owned and operated by the City of Burbank. On May 24, 2007, staff received notification from CARB that the City was awarded a grant in the amount of $1,370,000 with a local match of $615,982 to construct and operate a hydrogen hybrid bus. The $615,982 costs would be shared in this public-private partnership. Martin Marietta Composites will be providing $250,000 and MES will be providing $226,982 to construct and test the hydrogen bus. The City will be responsible for covering the remaining 23 percent of the shared costs or $139,000 as a local match to fund a portion of the one year operation costs. Staff has estimated that the hydrogen bus will be in service by summer 2008, fiscal year 2007-2008.

 

The hydrogen bus is designed to be 35 feet in length and will be able to carry the same number of passengers as a conventional 40 foot bus. The bus is designed to perform as well as or better than a commercial diesel bus. With the typical commercial buses averaging between three to four miles per gallon, MES estimates that its vehicle will cover in excess of ten miles per kilogram of hydrogen (gas gallon equivalent); tripling the mileage per gallon currently available by today�s commercial buses. It should be noted that the comparison is slightly skewed in that the hydrogen bus is additionally powered by energy stored in its batteries which are regenerated. It is estimated that commercial diesel vehicles cost $0.69 per mile and the proposed bus will cost $0.42 per mile to operate.

 

MES is estimating that it will take approximately one year to complete the construction and testing of the hydrogen hybrid bus. At this point of the project, the City�s local match contribution of $139,000 will fund the operations costs associated with the demonstration of the hydrogen bus. The $139,000 will provide funding for one year as follows: $74,000 for a driver, $30,000 for administration oversight, $24,000 for fuel costs, $6,000 for maintenance costs, and $5,000 for marketing costs.

 

Staff plans to utilize the bus on each of the BurbankBus�s current five fixed routes: Media District; North Hollywood Media District Shuttle; North Hollywood Empire Shuttle; Downtown Burbank Shuttle; and Empire Downtown Shuttle to maximize the demonstration or publicity of this unique technology. Essentially, the hydrogen bus will be used in a rotation for a regular Compressed Natural Gas (CNG) bus, and will not be used to provide additional services at this time.

 

Funding for the current operations of BurbankBus is provided by Proposition A Funds (Fund 104) and Proposition C Funds (Fund 105). Staff has estimated that some of the operating costs associated with the hydrogen bus would be absorbed by the transit program�s proposed fiscal year 2007-2008 budget. Currently, BurbankBus has contractor agreements with Southland Transit to provide drivers and Moore and Associates to provide marketing for BurbankBus. Additionally, the salaries or administration oversight costs to administer this grant will be absorbed by the current budget. Staff has estimated that a total of $109,000 of the $139,000 local match will be absorbed within BurbankBus�s current budget. Therefore, the total operation cost is estimated to be $30,000 which would fund the maintenance and fuel costs associated with the hydrogen bus.

 

Pros

  • The Council can authorize staff to enter into an agreement with CARB to accept grant funds in the amount of $1,370,000 under the Alternative Fuel Incentive Program for the purchase and demonstration of a Hydrogen Fuel Cell Transit Bus.

  • The Council can also authorize staff to enter into a public-private partnership with MES to develop a zero emissions transit bus. Although, there are other qualified companies in the industry, the City is under time constraints set forth by CARB and does not want to jeopardize the grant funds.  Therefore, it is in the City�s best interest to not go out to bid for the construction of the hydrogen hybrid bus. However, staff will return to the Council for authorization to enter into an agreement with MES in the very near future.

Cons

  • The Council can determine not to enter into an agreement with CARB and consequently the City will not be eligible to utilize CARB�s Alterative Fuel Incentive Program Funding at this time. 

FISCAL IMPACT

 

The total estimated project costs of the Hydrogen Fuel Cell Transit Bus, including fabricating, assembly, routine maintenance, operation, and administration is $1,985,982. Of this amount, $1,370,000 is funded through the Alternative Fuel Incentive Program. The proposed resolution accepts the vehicle grant funding of $1,370,000 and amends the fiscal year 2006-07 budget to appropriate the $1,370,000 in Transportation Impact Fee (Fund 127) revenues, which will be reimbursed through the Alternative Fuel Incentive Program grant. These funds would be moved from the unappropriated fund 127.ND000.30004.0000.00000 to the project account 127.CD32A.70010.0000.17787. 

 

The balance of $615,982 or 31 percent of the total project costs will be shared by a public-private partnership. Funding from the private sector covers 77 percent of the shared costs. Martin Marietta Composites will be providing $226,982 and MES will be providing $250,000. The City will be responsible for covering the remaining 23 percent of the shared costs or $139,000 as a local match. Staff has estimated that a total of $109,000 of the $139,000 local match will be absorbed within BurbankBus�s current budget. Staff is requesting that Council appropriate the balance of $30,000 funding from the set-aside funds that Council has designated for future bus expansions.  Currently, there is a total $450,000 available in two holding accounts reserved for BurbankBus expansion projects. If approved, staff is recommending that the Council fund the City�s local match contribution or shared cost portion by appropriating $30,000 from the Transportation-Bus Expansion Holding Account 001.ND000.70020.1002 to the project account 127.CD32A.70010.0000.17787. 

 

RECOMMENDATION

 

Staff recommends that Council adopt the proposed resolution authorizing staff to enter into an agreement with California Air Resource Board (CARB) to accept grant funds in the amount of $1,370,000 under the Alternative Fuel Incentive Program for the purchase and demonstration of a Hydrogen Hybrid Fuel Cell Transit bus; and to amend the fiscal year 2006-2007 budget.