Submitted By: Tom Duncan
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Presentation By: Tom Duncan
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Department: Growth Management
STAFF RECOMMENDATION (Motion Ready):
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Adopt Resolution 2025-27 to accept Volkswagen Environmental Mitigation Trust Fund Grant Agreement VW305 between the Florida Department of Environmental Protection and the City of Ocala for funding to be used toward the purchase of an Electric Transit Bus in the amount of $300,000
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OCALA’S RELEVANT STRATEGIC GOALS:
Fiscally Sustainable, Operational Excellence
PROOF OF PUBLICATION:
N/A
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BACKGROUND: In 2015, the United States Environmental Protection Agency (EPA) issued a notice of violation to Volkswagen AG, alleging that the company had installed defeat devices in approximately 590,000 diesel vehicles sold in the U.S. These devices were designed to cheat emissions tests by reducing nitrogen oxide (NOx) emissions during testing, while allowing the vehicles to emit significantly higher levels during regular operation. This was a violation of the Clean Air Act.
As a result, Volkswagen entered into a series of civil settlements totaling more than $20 billion, one of which established the Volkswagen Environmental Mitigation Trust. The Trust aims to fund projects that mitigate the excess emissions caused by the affected vehicles. Each state received an allocation from the Trust, and the Florida Department of Environmental Protection (FDEP) serves as the lead agency for administering Florida’s share of the settlement funds.
Eligible projects under the Trust include replacing or repowering older diesel engines with new, cleaner technologies, including purchasing electric transit buses. The $300,000 grant awarded to the City of Ocala is part of Florida’s allocation from the VW Environmental Mitigation Trust. It is intended to support the City’s investment in clean transportation and infrastructure.
Project funding and budget details are to be completed by June 30, 2025, under the original agreement with FDEP. The city needs to first secure the Low/No Emissions Grant to purchase electric buses. The proposed Amendment #1 extends the agreement until June 30, 2027. Per the agreement, four tasks must be completed by the end date:
1. Certify the eligibility of transit buses to be replaced.
2. Purchase and receive delivery of electric transit buses.
3. Scrap and certify the destruction of the replaced diesel transit buses.
4. Submit reimbursement request and required documentation.
The Total Project Cost Share for this project is estimated based on information provided to the Department in the Grantee’s initial application for project funding from May 2023. The estimated price per Electric Transit Bus was $900,000. The DEP Grant Reimbursement per Electric Transit Bus is fixed at $300,000, resulting in a match of $600,000. The match will be funded with the existing Low/No Emissions Grant issued by the Federal Transit Administration (FTA).
FINDINGS AND CONCLUSIONS: The City of Ocala is taking strategic steps to modernize its public transit system by incorporating electric vehicles into its fleet. The city has secured federal support for purchasing electric buses and associated infrastructure through participation in the Federal Transit Administration’s Low/No Emissions Grant Program.
The $300,000 grant from the Florida Department of Environmental Protection, made available through the Volkswagen Environmental Mitigation Trust, will provide additional financial support toward acquiring an electric transit bus. This funding will complement existing federal grants and allow the city to leverage multiple funding sources to enhance its transit operations.
In addition to vehicle procurement, the grant will support infrastructure improvements necessary for the efficient operation and maintenance of the electric fleet. This includes installing charging equipment and related upgrades to ensure long-term functionality and integration with the City’s overall transit services.
FISCAL IMPACT: The $300,000 will be received in revenue account 494-334-000-000-09-33481 and spent out of expense account 494-050-448-544-66-64010.
PROCUREMENT REVIEW:
LEGAL REVIEW: This Agreement will be reviewed and approved for form and legality by City Attorney, William E. Sexton.
ALTERNATIVE:
• Approve with changes.
• Deny
• Table
RESOLUTION 2025-27
TO ACCEPT A VOLKSWAGEN ENVIRONMENTAL MITIGATION TRUST FUND GRANT AGREEMENT, #VW305, BETWEEN THE FLORIDA DEPARTMENT OF ENVIRONMENTAL PROTECTION (FDEP) AGENCY AND THE CITY OF OCALA FOR FUNDING TOWARD THE ACQUISITION OF AN ELECTRIC TRANSIT BUS IN THE AMOUNT OF $300,000
WHEREAS, in 2015 Volkswagen AG was found to be in violation of the Clean Air Act, which resulted in a Trust being formed to fund projects that mitigate the excess NOx emissions caused by older diesel engines and replace them with new, cleaner technologies, including the purchase of electric transit buses; and
WHEREAS, the City of Ocala applied for and was awarded a grant in the amount of $300,000 that will be used toward the acquisition of an electric transit bus; and
WHEREAS, the estimated cost for the electric transit bus is $900,000, of which the FDEP will reimburse $300,000, leaving a required match of $600,000; and
WHEREAS, through participation in the Federal Transit Administration’s Low/ No Emissions Grant Program, the city has secured federal support for the purchase of electric buses and associated infrastructure; and
WHEREAS, the city will utilize the Low/No Emissions Grant funding to match the $600,000 requirement for this grant; and
WHEREAS, the grant agreement with FDEP is to be effective July 1, 2025, and remain in effect until June 30, 2027.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF OCALA, FLORIDA, in regular session duly assembled that the City Council President is hereby authorized to execute and deliver to FDEP Grant Agreement VW305.
This resolution adopted this ______ day of ______________________, 2025.
ATTEST: CITY OF OCALA
By: By:
Angel B. Jacobs Kristen M. Dreyer
City Clerk President, Ocala City Council
Approved as to form and legality:
By: _________________________________
William E. Sexton
City Attorney