REPORT TO COUNCIL
SUBJECT
Title
Action to Authorize the City Manager to Negotiate, Execute, and Administer an Agreement with the City of Cupertino for the Cupertino-Santa Clara Joint On-Demand Shuttle Service Project and Approval of a Related Budget Amendment
Report
COUNCIL PILLAR
Deliver and Enhance High-Quality Efficient Services and Infrastructure
EXECUTIVE SUMMARY
In early 2022, Cupertino and Santa Clara jointly applied for State grant funding to continue Cupertino’s existing on-demand shuttle program and expand service into Santa Clara with a zero emissions fleet. The State approved the grant funding and Cupertino and Santa Clara have been coordinating on how to bring this on-demand transit service to Santa Clara. A funding agreement between Cupertino and Santa Clara and a budget amendment are necessary steps to bring this service to Santa Clara.
BACKGROUND
Since October 2019, the City of Cupertino (Cupertino) has operated their Via-Cupertino Community Shuttle Program with the goal of attracting motorists to a sustainable and affordable alternative transportation option. Cupertino’s shuttle program operates as an on-demand shuttle program with users calling a phone number or utilizing a smart phone application to book rides within Cupertino’s city boundaries as well as three locations outside of Cupertino (Sunnyvale Caltrain Station, Kaiser Permanente Santa Clara, and Rancho San Antonio Open Space Preserve in Los Altos). Currently, Cupertino’s shuttle program includes the use of nine vans and the majority of them are equipped with bicycle racks to accommodate two bicycles per van. Of the nine vans, two vans are wheelchair accessible. Shared rides are provided to users for a flat rate of $3.50 for a one-way fare with discounted fares (seniors, students, low-income, and disabled users) of $1.75 for a one-way fare. Weekly passes can be purchased for $25 with discounted weekly passes at $14. The hours of operation of the shuttle are Monday through Friday 7am to 7pm and Saturdays from 9am to 5pm. Cupertino has contracted with Nomad Transit LLC (also known as Via) to provide the shuttle service. Via was selected as Cupertino’s vendor for the shuttle program under a sole source finding by the Cupertino City Council under Cupertino Municipal Code Section 3.22.060. Via provides the vehicles, fuel, and drivers and operate the shuttles during the designated operating hours.
In early 2022, Cupertino requested that Santa Clara, Sunnyvale, and San Jose partner with Cupertino on a joint application to the California State Transportation Agency (CalSTA) for Transit & Intercity Rail Capital Program (TIRCP) grant funding to provide five years of funding to continue Cupertino’s On-Demand Shuttle program, expand operations into Santa Clara, Sunnyvale, and San Jose, and implement electrification of the shuttle fleet to support greenhouse gas emissions reductions.
City staff from Cupertino, Santa Clara, Sunnyvale, and San Jose met several times and ultimately Santa Clara City Council expressed interest in the City offering shuttle service to address first and last mile connection gaps. Staff proceeded to partner with Cupertino on the TIRCP grant application.
In July 2022, CalSTA announced that Santa Clara and Cupertino would be awarded approximately $8.5 million in TIRCP grant funds. The grant award of $8.5 million represents 50 percent of the cost of the proposed shuttle which amounts to an approximately $17 million on-demand shuttle service for both Cupertino and Santa Clara. On July 15, 2022, the City issued a press-release related to the TIRCP grant announcement (Attachment 1). Since July 2022, Department of Public Works staff have been coordinating with Cupertino on implementing the shuttle.
In September 2022, on behalf of the project, Cupertino accepted the $8,465,000 in TIRCP grant funding. Additionally, on March 7, 2023, Cupertino authorized their City Manager to execute the necessary Caltrans (on behalf of CalSTA) Master Agreement to receive funding for the project and approve an agreement with Via to operate the shuttle program in Cupertino with the ability to operate in Santa Clara subject to Santa Clara’s future budget and approvals.
DISCUSSION
The TIRCP grant application for the Cupertino-Santa Clara Joint On-Demand Shuttle Service project includes the following services over a five-year period: continuation of Cupertino’s On-Demand Shuttle Service, expansion into Santa Clara in two phases, and utilizing an electric shuttle fleet to achieve greenhouse gas emission reductions.
Below are key aspects of the project including: 1) Phased Expansion into Santa Clara, 2) Additional Transit Stops in Mountain View, 3) Electrification of the Shuttle Fleet and Overnight Charging Stations, 4) Modification of Project Length (four fiscal years instead of five fiscal years), 5) Fares and Service Hours, 6) Project Delivery Structure, 7) Student Art and Shuttle Naming Contest, 8) Service Launch Targets, and 9) Funding Agreement.
Phased Expansion into Santa Clara: As shown in Attachment 2, Santa Clara Phase I and II Expansion Map, Phase I of the proposed expansion of shuttle service into Santa Clara is adjacent to the existing Cupertino shuttle service zone. Phase 1 comprises the southern half of Santa Clara and terminates at the existing Caltrain tracks. Phase II comprises the northern half of Santa Clara and terminates at Highway 237. It is important to note that the service boundaries of the original Via-Cupertino Community Shuttle Program will remain the same and include stops at the Sunnyvale Caltrain Station, Kaiser Permanente Santa Clara, and Rancho San Antonio Open Space Preserve in Los Altos.
Additional Transit Stops in Mountain View: Included within the TIRCP grant application are proposed shuttle stops at two key locations in Mountain View (Caltrain Station and El Camino Hospital).
Electrification of the Shuttle Fleet and Overnight Charging Stations: As the TIRCP grant requires the use of Zero Emissions Vehicles, the current fleet of vans will be replaced with Kia Niro EV’s, and with three Lighting 3ZEV wheelchair accessible vehicles (WAV). Via is responsible for acquiring the necessary electric vehicle fleet. During the initial launch into Santa Clara, shuttles will be charged in Cupertino; however, there are ongoing discussions about vehicle charging in Santa Clara as well.
Modification of Project Length (four fiscal years instead of five fiscal years): The original TIRCP grant application proposed a five-year program; however, Cupertino ridership has grown faster than anticipated since the grant application was submitted. In March 2022, the month the TIRCP application was submitted, Via-Cupertino completed 999 trips. In comparison, in January 2023, Via-Cupertino’s monthly ridership reached 3,112 trips. In order to meet the increased demand and avoid long wait times, the project team proposes compressing the funding award to a four-year project schedule, which will enable scheduling more driver hours to accommodate anticipated ridership while serving the same number of trips envisioned in the original application.
As the budget is a not-to-exceed amount, if ridership declines or does not meet expectations, funds can be conserved to be used in future years to accommodate ridership fluctuations caused by external factors, such as economic or social conditions. The overall budget and estimated greenhouse gas reductions would remain unchanged. Caltrans has verbally accepted this change in project duration and Cupertino is working to formalize the change in writing with Caltrans.
Fares and Service Hours: Based on extensive discussion with Cupertino and Via, all parties concluded that shuttle fares and service days/hours should be consistent for both Cupertino and Santa Clara. As proposed, fare rates will remain modest and the same for both cities at $3.50 for a one-way fare with discounted fares (seniors, students, low-income, and disabled users) of $1.75 for a one-way fare. Weekly passes would cost $25 and discounted weekly passes would cost $14. The hours of operation of the shuttle would remain as follows: Monday through Friday 7am to 7pm and Saturdays from 9am to 5pm. Fare revenues will be collected by Via and credited against Via costs for each City.
Project Delivery Structure: Staff has coordinated with Cupertino on the proposed delivery structure as follows:
• Cupertino is the lead local agency regarding grant administration with Caltrans including agreements and reimbursements with Caltrans.
• Cupertino will enter into a service agreement with Via to operate the proposed on-demand shuttle program within the City of Cupertino and the City of Santa Clara.
• Cupertino and Santa Clara will enter into a funding agreement in which Santa Clara will reimburse Cupertino for shuttle service operations in Santa Clara.
Staff will also work with Cupertino to develop performance metrics and success indicators that will be used to evaluate the program and provide the Council with annual updates.
Student Art and Shuttle Naming Contest: In February and March 2023, the project launched a student contest to: 1) solicit art ideas for the graphic wrap for the shuttle vehicles, and 2) solicit possible names for the shuttle service. Staff from Cupertino and Santa Clara reviewed the submittals and selected a student’s artwork as inspiration for the shuttle vehicle wraps. Additionally, staff from both Cities came up with a new shuttle name, Silicon Valley Hopper. Via has created mockup graphics for the shuttles as well as branding for the smartphone application as shown in Attachment 3.
Service Launch Targets: Cupertino is planning a launch date for their portion of the on-demand shuttle program on July 1, 2023 as a continuation of their existing shuttle program. The planned expansion into Santa Clara would occur after completion of the funding agreement between Cupertino and Santa Clara. It is estimated that the Phase I service in Santa Clara could begin in July/August 2023.
Funding Agreement: The key provisions of a funding agreement with Cupertino would likely include:
• Cupertino to lead the TIRCP grant administration and coordination with Caltrans.
• Cupertino to directly contract with Via to provide on-demand shuttle services.
• Funding allocations are based on service zone square mileage per city per year.
• Santa Clara to reimburse Cupertino for Via shuttle services in Santa Clara boundaries.
• Cupertino and Santa Clara to develop and define in writing, a decision-making framework for conducting the project including roles and responsibilities.
• Cupertino will ensure and Santa Clara to verify that Via has appropriate insurance coverages to operate in Santa Clara.
• Cupertino to ensure and Santa Clara to verity that Via will provide adequate hold harmless and indemnification coverage to the benefit of Santa Clara.
ENVIRONMENTAL REVIEW
This project is exempt from CEQA under CEQA Guidelines section 15061(b)(3) (“common sense” exemption).
FISCAL IMPACT
To fully fund the City’s share of the on-demand shuttle expansion into Santa Clara, $4,007,230 is needed during the next four fiscal years (FY 2023/24 through FY 2026/27) as shown in Table 1, below.
Table 1
Cupertino-Santa Clara Joint On-Demand
Shuttle Service Project Funding Needs
|
Funding |
FY 2023-24 |
FY 2024-25 |
FY 2025-26 |
FY 2026-27 |
Total |
|
TIRCP |
$1,622,464 |
$1,903,189 |
$2,035,136 |
$2,904,211 |
$8,465,000 |
|
Cupertino |
$932,916 |
$1,094,328 |
$1,170,204 |
$1,260,312 |
$4,457,760 |
|
Santa Clara |
$689,547 |
$808,855 |
$864,936 |
$1,643,892 |
$4,007,230 |
|
Total |
$3,244,927 |
$3,806,372 |
$4,070,276 |
$5,808,415 |
$16,929,990 |
Currently, the City has approximately $2 million in Silicon Valley Power (SVP) Electric Vehicle Program funding in the Electric Operating Grant Trust Fund to support this project. SVP will use restricted funds from the Low Carbon Fuel Standard program that must be used to facilitate the adoption of electric vehicles and/or provide e-mobility solutions for Disadvantaged Communities. This will provide full funding for FY 2023-24 and FY 2024-25 and partial funding in FY 2025-26 as shown in Table 2, below.
Table 2
Cupertino-Santa Clara Joint On-Demand Shuttle Service Project
Funding Needs vs. Secured Funding
|
Funding Status |
FY 2023-24 |
FY 2024-25 |
FY 2025-26 |
FY 2026-27 |
Total |
|
Santa Clara Funding |
$689,547 |
$808,855 |
$864,936 |
$1,643,892 |
$4,007,230 |
|
Secured Funding |
$689,547 |
$808,855 |
$501,598 |
|
$2,000,000 |
|
Remaining Funding Needs |
|
|
($363,338) |
($1,643,892) |
($2,007,230) |
Additional funding will be required for the remainder of FY 2025/26 and all of FY 2026/27. Staff is exploring various options to secure the remaining unfunded amounts including potential grant opportunities, Federal and/or State funding, and developer funding. If funding is not able to be secured for the remaining need of $2.0 million, the City would need to set aside its own funds for the remainder of the grant and agreement period or end the program.
The budget amendment below is recommended to allocate funding from the Electric Operating Grant Trust Fund to the Streets and Highways Capital Fund in the amount of $689,547 and establish the new Cupertino-Santa Clara On-Demand Shuttle project. Funding for the project is anticipated to be carried forward to FY 2023/24 for the first year of funding. Future budget actions for year two and partial funding for year three will be brought forward as part of the FY 2024/25 Capital Improvements Project biennial budget process. The remaining funding need for the agreement is subject to the appropriation of funds and will be considered and brought to council at a later date after other funding options are explored.
Budget Amendment
FY 2022/23
|
|
Current |
Increase/ (Decrease) |
Revised |
|
Electric Operating Grant Trust Fund |
|
|
|
|
Expenditures |
|
|
|
|
Electric Department |
$19,701,274 |
$(689,547) |
$19,011,727 |
|
Transfers To |
|
|
|
|
Streets and Highways Capital Fund |
$400,000 |
$689,547 |
$1,089,547 |
|
Streets and Highways Capital Fund |
|
|
|
|
Transfers From |
|
|
|
|
Electric Operating Grant Trust Fund |
$400,000 |
$689,547 |
$1,089,547 |
|
Expenditures |
|
|
|
|
Cupertino-Santa Clara On-Demand Shuttle Project (NEW) |
$0 |
$689,547 |
$689,547 |
COORDINATION
This report has been coordinated with Silicon Valley Power, the Finance Department and the City Attorney’s Office.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov <mailto:clerk@santaclaraca.gov> or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
1. Authorize the City Manager to Negotiate, Execute, and Administer an Agreement with the City of Cupertino for the Cupertino-Santa Clara Joint On-Demand Shuttle Service Project up to a total not-to-exceed amount of $4,007,230, subject to the appropriation of funds and in a final form approved by the City Attorney;
2. Authorize the City Manager to execute any and all documents necessary for or associated with the agreement, including payments to the City of Cupertino, in a final form approved by the City Attorney; and
3. Approve the following FY 2022/23 budget amendments:
A. In the Electric Operating Grant Trust Fund, decrease the Electric Department budget by $689,547 and establish a transfer to the Streets and Highways Capital Fund in the same amount (majority affirmative Council votes required);
B. In the Streets and Highways Capital Fund, recognize a transfer in from the Electric Operating Grant Trust Fund of $689,547 and establish the Cupertino-Santa Clara On-Demand Shuttle Project in the amount of $689,547 (five affirmative Council votes required to appropriate additional revenue).
Staff
Reviewed by: Craig Mobeck, Director of Public Works
Approved by: Jōvan D. Grogan, City Manager
ATTACHMENTS
1. July 15, 2022 City News Release
2. Santa Clara Phase I and II Expansion Map
3. On-Demand Shuttle Service Shuttle Artwork and Smartphone App Branding