Sustainability has become a byword for many commercial fleets today — often as an extension of their companies’ green initiatives designed to cut the overall carbon footprint.
The good news is that there are numerous solutions available to fit to the fleet and its customers’ needs to make a fleet more sustainable. The downside is alt-fuel vehicle purchases can be budget busters.
However, there is money available from local, regional, state, federal and even private sources that can go a long way to funding the purchase of alt-fuel vehicles to transform a traditional gasoline- or diesel-powered fleet into a sustainable fleet.
The biggest mistake fleet managers make when looking for grants to fund their alt-fuel vehicle purchases is chasing dollars without a solid plan, according to Bill Van Amburg, senior vice president of CALSTART, a national, nonprofit advanced transportation technologies organization founded in 1992 to promote a clean transportation industry.
“CALSTART tries to stress with fleets that there are dollars out there, but the first place to start isn’t looking for dollars. The first place to start is the fleet plan, and really lay out what you want to do,” Van Amburg says.
Chasing the dollars without a plan will typically end in a scenario with a fleet manager finding funding for one particular alternative fuel and deciding, based on the available funds, to pursue the funding without regard to the needs of the fleet and its customers.
Instead, fleets should develop a fleet and transition plan for the technology, determine what platforms make sense for the technologies that interest the fleet, determine how many of the vehicles are desired, and decide on the time frame to acquire them.
“It’s much more powerful to go to a funding agency and know exactly what you want to do and write in a proposal that you have a five-year plan, have laid out an implementation strategy, and explain why these funds are needed, because this is exactly what the fleet needs to do this year. And, this will let the fleet do it faster, instead of saying ‘I heard you had some money and maybe I’ll buy two of these things.’ There’s a big difference in those proposals,” Van Amburg says.
Planning doesn’t involve just knowing what the fleet needs or wants. Timing also plays an important part in the process.
While there are different types of grant funding methods, the traditional one involves submitting an application and receiving funds directly from the granting organization.
Complexity arises after the grant is approved and before the money is disbursed to the fleet.
“This has happened several times with fleets we’ve worked with,” Van Amburg says. “They go through the proposal process and get picked for that calendar year. However, they can’t buy the vehicles and hope to get reimbursed until they’re under contract with the agency, and the contract doesn’t come into effect until the next year. Then, sometimes the dollars run out. You really have to know the time horizon of the grant funding or whatever the funding source is.”
It isn’t enough to have a fleet plan. Running in parallel with developing the plan is developing relationships with funders, service providers, and even other fleet managers to make the fleet stand out during the application process.
“As the funders get to know you and get a sense of what you need and what you know about the subject, they might keep an eye out for you. So, when your proposal comes in, they can put a name to it, and can say, ‘I know that fleet, they’re real, they’re committed,’” Van Amburg says.
At the very least, potential funders should be called and, ideally, met in person.
It’s important to keep in mind that relationships with funders will likely be for the long haul. “You need to build long-term relationships for a few reasons. It’s how you’re going to be successful when you apply. The funder will know how serious you are. And, you’ll probably need more than one source of funding,” Van Amburg explains.
This is what John Clements did when pursuing funding for electric and hybrid school buses for his district. (Clements recently retired as director of transportation for Kings Canyon Unified School District in Reedley, Calif.)
According to Van Amburg, Clements developed a solid plan and built strong relationships with everyone he would need to involve in the process.
In total, Kings Canyon secured funding from four or five different sources, including using vouchers, local sources and regional sources of funding. Clements credited his personal relationships for his funding success.
“I have been very blessed to work for a supportive public school district for nearly 39 years that has allowed me to participate in state, local and federal clean air workgroup meetings,” he said prior to his retirement. “My attendance, along with funding opportunity workshops, has enabled me to build working relationships with various agencies and their staffs. The knowledge I have gained has aided me to use multiple funding sources to provide near full funding for my district and neighboring schools to obtain these clean emissions alternative-fuel school buses and white fleet vehicles.”
Joining local chapters of Clean Cities, for example, can give fleet managers access to information about grants available in the area and access to potential funders.
One-on-one relationships with fleet peers who have received grants can also be useful in determining what worked and what didn’t and traps to avoid when asking for funds.Finding the money
Finding funding sources and building relationships is a hand-in-glove process. Today’s reality is there’s less money available, but it’s there. It may just take some additional detective work to find it.
“There are still a few opportunities at the federal level if you know the timing and where to look for them,” Van Amburg says, specifically in the Diesel Emissions Reduction Act program run by the EPA and Clean Cities.
Fleet managers will most likely have better luck at the regional, state and local levels, according to Van Amburg.
“Many states — for air quality or energy security reasons — have grant programs fleets can apply for,” he says. “Sometimes, they’re run out of the state energy or environment offices, or sometimes regional air quality offices. The national fleets are looking at California, New York, Ohio and Texas — there are a lot of programs. Each state has individual opportunities.”
Funds don’t have to come just from public sources. There are a growing number of private funders coming on the scene as well.
Some of these are already well-known by fleets that have invested in compressed natural gas (CNG)-fueled vehicles. This funding involves setting up the fueling infrastructure.
In this model, a fueling provider agrees to build the fueling station for the fleet or for several fleets in exchange for guarantees in throughput and a small surcharge on the CNG pumped into the vehicles.
“You’re essentially paying for the station; you’re just paying for it with a little surcharge on the fuel. That’s been working on the natural gas side. I’ve even seen it on the propane autogas side,” Van Amburg says.
Writing the grant
Once the planning is done, relationships forged, and grants identified, it’s time to write the grant.
The first thing that fleet managers need to know is that the process to write the application will likely take longer than they expect.
“You’ve got to set aside at least two weeks for two people to fill out some of these proposals,” Van Amburg says. “Although that could be duration, and not total time.”
Van Amburg advises fleets to lay out a duration time line with the starting point as the submission date and work back to identify benchmark dates, including building in times for approvals from senior management and the operation’s legal department, for instance.
Another issue that may have to be determined is who will be writing the grant. In some large and public organizations, there are expert grant writers on staff. If there aren’t internal resources available, it may make sense to hire a freelance grant writer. And, in some cases, it may fall to the fleet manager or one of his or her subordinates to write the application.
No matter how the grant writing process is handled, there are some points to keep in mind when completing the application, according to Van Amburg, including:
• Having a clear vision of what the fleet wants.
• Understanding what the funder wants, as well, and what it is allowed to pay for.
• Writing to the grant criteria — show how the goals will be met.
• Being concise and to the point and sticking to the facts and not engaging in self-aggrandizement.
• Avoiding being greedy; show how the fleet can be competitive within the projected plan.
Also, during the grant writing process, it should be determined who will be handling the reporting side of the award. This could be handled by a consultant, but since it has to do with the internal processes of the fleet, it could be difficult for an outsider to track.
Many grants come with reporting strings and other requirements attached, and Van Amburg notes that it is important to be fully aware of what those rules are, because failing to follow directions could doom the application to rejection.
“Some reporting criteria, for instance, are pretty streamlined,” Van Amburg explains. “You just have to provide the receipts that you’ve purchased the vehicles, how much fuel you’ve used, and how many miles they are running.”Vouchers becoming popular
The process is simple and is handled directly by the dealer. If the fleet qualifies, it’ll get a vehicle for half or more of the incremental amount. The dealer is reimbursed by the state, in this case California, for the difference.
While the voucher system eliminates much of the time-consuming grant writing process, it has another advantage for fleets. It eliminates the timing issue that can derail a fleet’s grant.
“The vouchers can get secured at your time of order, and they’re going to be held until the time you’ve paid for the vehicle. It doesn’t really matter what your fiscal timing is,” Van Amburg explains.
Funding and consequences
Typically, a grant requires a certain amount of reporting or other requirements, which, as mentioned previously, are often fairly straightforward and crucial. If there is a lack of compliance, this could jeopardize the fleet receiving the balance of the grant money.
“The funder can even go after the money they’ve given you, because you didn’t do what was required for the grant,” Van Amburg warns.
Long term, this could mean that the fleet may not get funding in the future.
“If you have a bad reputation among funders, you won’t qualify. This is usually as a result of a bad audit or non-compliance,” Van Amburg says.
However, this scenario is very rare. “Most people are pretty careful,” he adds.
Chris Wolski is associate editor for Green Fleet magazine, a sister magazine of SCHOOL BUS FLEET, published by Bobit Business Media. This article originally appeared in the May/June 2013 issue of Green Fleet.
Getting a grant starts with a plan
Step 1: Baseline fleet.
Step 2: Learn your fuel and tech options.
Step 3: Compare options to fleet mix – geography, operation, etc.
Step 4: Outline alt-fuel implementation plan over several years.
Step 5: Understand cost and then seek funding.