Title
Disposal of Heavy Duty Buses (Ordinance S-52658) - Citywide
Description
Request to authorize the City Manager, or his designee, to enter into agreements for the disposition of buses through transfer or sale to various government agencies. Further request authorization for the City Treasurer to accept all funds related to this item.
Report
Summary
The Public Transit Department (PTD) disposes of buses past their useful life in compliance with Federal Transit Administration (FTA) requirements, usually through auction. The auction of full-size heavy-duty buses typically does not result in a large return, especially after fees and the costs of asset disposal. The Los Angeles County Metropolitan Transportation Authority (LA Metro) has requested the transfer of buses past their useful life to be used for transportation services during the 2028 Summer Olympics. In accordance with City Code, this request is for authorization to dispose of the surplus buses not needed by the department through a non-competitive sale and transfer to LA Metro. There will be no costs to the City, as LA Metro will handle the transport, painting, branding, and ongoing maintenance and operating costs for the buses.
PTD currently has seven buses ready to transport and estimates that it will transfer approximately 20 buses prior to the Olympic games. PTD has worked with the FTA to ensure the City will not be responsible for any return of federal funds which would normally be required for buses valued above certain thresholds.
In addition to the buses to be transferred to LA Metro, this item will allow for the sale of one hydrogen bus. This pilot bus was purchased as part of the department’s low emission fleet transition plan. The bus was ordered years ago when multiple hydrogen fueling companies had plans to provide hydrogen fuel in Arizona. Currently, there are no hydrogen fuel providers located in Arizona or in close proximity, and the costs to bring hydrogen to the valley from out-of-state is excessive and negates the environmental benefits of the low-emission bus. Additional infrastructure would also be needed for the storage and dispensing of hydrogen fuel. The City of Santa Clara, California is interested in purchasing the bus from PTD at cost. This item would allow PTD to sell the bus to the City of Santa Clara or to another interested government agency with no financial impact to the City.
Financial Impact
The average salvage value of the end-of-life buses, based on auction proceeds since 2022, is less than $5,000 per bus. The buses will be transferred to LA Metro at a nominal cost.
The hydrogen bus will be sold for $1,504,000, which is the amount the City paid for the bus.
Department
Responsible Department
This item is submitted by Deputy City Manager Amber Williamson and the Public Transit Department.