Subject: CLEAN-FUEL VEHICLE INCENTIVE PROGRAM

 

COUNCIL DISTRICT:  Citywide

 

RECOMMENDATION

 

1.      Adoption of an amendment to the Master Parking Rate Resolution extending the clean-air vehicle free parking pilot program at City parking facilities and on-street parking meters for two years to April 30, 2005, and expansion of the program to include free parking for all clean-fuel vehicles, including hybrid vehicles, purchased through a licensed auto dealership in the City of San José, and authorizing the Director of Transportation to extend the program annually thereafter and extend to vehicles using other emerging alternative fuel technology.

 

2.      Adoption of an ordinance that authorizes the Director of Transportation to designate and enforce reserved parking spaces for Zero Emission Vehicles in both privately owned and City owned and/or operated parking facilities.

 

 

BACKGROUND

 

In April 2001, the City Council established a two-year pilot program providing free parking incentives to clean-air vehicles in San José.  Clean-air vehicles are generally alternative fuel vehicles, including Zero Emission Vehicles (ZEV’s – electric vehicles), Ultra-Low and Super-Ultra-Low Emission Vehicles (ULEV’s, SULEV’s – e.g. compressed natural gas) that meet the EPA’s Inherently Low Emission Vehicle standards.  Vehicles must display the “Clean Air Vehicle” sticker issued by the DMV, which parking staff uses to distinguish the vehicles from standard automobiles.  Marketing efforts undertaken to promote the program, include: 

 

q       Press releases at the onset of the pilot program and an articles in Downtown newsletters

q       Signage at off-street parking facilities

q       Communications with clean air groups, including the RAV4 EV car club and the Electric Automobile Association of Silicon Valley

q       Information posted on www.sjdowntownparking.com

 

On February 4, 2003, the City Council approved the Mayor’s budget strategy that contained a focus on economic stimulus and emphasized the critical need to work closely with the community to achieve economic solutions.  To continue the encouragement of clean-air vehicles, reduce auto emissions, and increase activity in the Downtown, staff recommends an extension of the program for an additional two years.  Staff also recommends an expansion of the program to include all clean-fuel vehicles, which includes new hybrid vehicles, purchased within the City to encourage the acquisition of these fuel-efficient vehicles.

 

ANALYSIS

 

Extension of the Pilot Program

 

To date, the utilization of the free parking incentive program has been limited, due to the small number of clean-air vehicles when compared to the overall number of standard automobiles.  Some of the City's parking lots, however, do accommodate regular clean-air vehicle customers who take advantage of free parking.  The San Fernando/2nd and 3rd Street lots receive up to 10 ZEV’s and CNG-fueled vehicles per month.  The Market Street Garage almost daily accommodates two frequent users.  Additionally, staff has observed a handful of ZEVs (fewer than 10 different vehicles) utilizing meter parking at a typical rate of five occurrences per week, primarily in the following areas:

 

q        San Jose State University @ S. 10th Street and San Antonio Streets

q        Meters around St. James Park and San Pedro Square

q        Meters in Japantown

 

Since utilization has been limited, the resulting revenue impact has been negligible.  Extending this program provides a very low-cost method for the City to demonstrate its environmental leadership by encouraging the use of environmentally friendly transportation alternatives.

 

Expansion of Program to Clean-Fuel Vehicles (including Hybrids)

 

Manufacturing trends have negatively impacted the attractiveness of Zero Emission Vehicles, both in terms of cost and functionality, which has in turn resulted in low utilization of the free parking program.  Currently, there are no such models available to the consumer for new car purchases.  Even with modifications to the original California ZEV program requirements established in 1990, automobile manufacturers were never able to successfully market and sell these vehicles at the rate needed to reach the targets set by the State. 

 

In March 2003, the State of California announced amendments to the state ZEV Program regulations, which essentially eliminated the requirement for car manufacturers to reach a level of 10% of new car sales as zero-emitting by 2003.  The focus has now shifted towards the use of Partial ZEVs (PZEVs), also known as hybrid vehicles, which operate using a combination of fuel and electric power.  These hybrid vehicles fall under the larger umbrella of clean-fuel vehicles, which are eligible for federal tax credits on individual income tax returns.  Several of these models are gaining in popularity, including the Toyota Prius, Honda Insight, and a version of the Honda Civic.  Several models by other manufacturers are scheduled for release in future years.

Based on these manufacturing trends, and to encourage the sale of clean-fuel vehicles at San José dealerships, the pilot program should be expanded to include all clean-fuel vehicles purchased in San José.  San José dealerships will distribute a simple application to new car owners who apply to the Department of Transportation for a no-cost permit sticker that will identify the vehicle and enable the driver to obtain free parking Downtown.  The project will be retroactive to January 1, 2003.  Under the proposed resolution, the Director of Transportation may extend the program to other emerging alternative fuel technologies as they are developed.

 

Reserved Parking for ZEV’s (Electric Vehicles)

 

The new Fourth Street Garage and Convention Center Garage contain reserved parking spaces for ZEV’s.  These vehicles require frequent re-fueling at special charging stations.  Staff recommends that the Council adopt an ordinance authorizing reserved off-street parking spaces for ZEV’s and the subsequent enforcement of these reserved parking spaces.

 

 

PUBLIC OUTREACH

 

Ongoing education about the incentive program will be undertaken through cost-effective utilization of the City’s website, www.sjdowntownparking.com, and modifications to the signage at off-street parking facilities, as well as promotional activities with San José car dealerships through the Office of Economic Development.  The Mayor’s Office intends to conduct a press conference detailing the incentive program for hybrid vehicles at a local San José car dealership.

 

 

COORDINATION

 

This memorandum has been coordinated with the City Attorney’s Office, Office of Economic Development, and the Environmental Services Department.

 

 

COST IMPLICATIONS

 

At this time, there is a negligible cost/revenue impact.  As the utilization of hybrid vehicles increases, future cost and revenue impacts beyond the pilot period will be analyzed by the Director of Transportation annually to determine the duration of the program. 

CEQA

 

Not a project.

 

 

JAMES R. HELMER, Director

Department of Transportation