Submitted By: Tom Duncan
presenter
Presentation By: Tom Duncan
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Department: Growth Management
STAFF RECOMMENDATION (Motion Ready):
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Adopt Budget Resolution 2025-157 amending the Fiscal Year 2024-25 budget to appropriate Volkswagen Environmental Mitigation Trust funds from the Florida Department of Environmental Protection 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 were to be completed by June 30, 2025, under the original agreement with FDEP. Still, the city needed first to 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, and the DEP Grant Reimbursement per Electric Transit Bus is fixed at $300,000.00, resulting in a match of $600,000. The purchase of an electric transit bus will be funded with the existing Low/No Emissions Grant issued by the Federal Transit Administration (FTA).
FINDINGS AND CONCLUSIONS: 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.
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:
• Adopt with changes.
• Table
• Deny
BUDGET RESOLUTION 2025-157
A RESOLUTION AMENDING THE FISCAL YEAR 2024-25 BUDGET TO ACCEPT AND APPROPRIATE VOLKSWAGEN ENVIRONMENTAL MITIGATTION TRUST FUNDING FROM THE FLORIDA DEPARTMENT OF ENVIRONMENTAL PROTECTION (FDEP) TO BE USED 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 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 Volkswagen Environmental Mitigation Trust Fund 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 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 required of this grant.
NOW THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL OF THE CITY OF OCALA, FLORIDA, duly assembled in regular session, that the Fiscal Year 2024-25 budget be amended as outlined below to appropriate funding as follows:
SOURCE:
494-334-000-000-09-33481 FDEP Grant Agreement VW305 $300.000
USE:
494-050-448-544-66-64010 FDEP Grant VW305 - Equipment $5,000+ $300,000
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
Reviewed for accounting accuracy & completeness:
By: _________________________________
Peter A. Lee
City Manager