PURPOSE

The purpose of this report is to request the City Council to amend the Fiscal Year 2005-2006 budget to appropriate $326,325 from Fund 532 for the purchase of seven (7) Burbank Transportation Service (BTS) buses.  These vehicles provide transportation throughout Burbank to senior and disabled persons and are in need of replacement.

BACKGROUND

During the Fiscal Year 2003-2004 budget preparation process, it was determined that a longer life was possible for seven (7) BTS buses based on vehicle usage at that time.  Thus, the useful lives of these buses were increased to reduce department operating costs, and they were scheduled for replacement in Fiscal Year 2006-2007.  However, during Fiscal Year 2004-2005 and continuing into Fiscal Year 2005-2006, these vehicles have served as back up buses for the seven (7) CNG media district shuttle buses which have experienced excessive downtime resulting from many warranty repair issues.  Ultimately, the additional use of the BTS buses has placed an unexpected burden on the vehicles which are now experiencing significant mechanical problems.  Furthermore, given that these vehicles are utilized as back-ups for other services, the additional fixed route program will escalate their usage.

The average mileage for each BTS bus is currently 120,000 miles, and it is very unlikely that they will last another year without expensive engine and transmission repairs.  Incurring such expense for repairs at this time is not prudent, as they are scheduled be replaced next fiscal year.  Because the useful lives of these buses were extended beyond their original replacement date of June 2005, the necessary capital to replace them has already been collected, and no additional funds are needed. 

At their meeting in August 2005, the Transportation Task Force discussed the replacement of these buses.  The Task Force supported the idea of replacing the buses with either gasoline or CNG buses during this fiscal year.  They also strongly recommended that the entire fleet have a uniform look which will require all of the transportation vehicles, including BTS, to be repainted.  The estimated cost of painting each vehicle is $4,000 to $5,000.  The cost of painting the current fleet of seven BTS vehicles is approximately $28,000.  It would not be practical to paint the existing seven buses now and then replace them in less than a year.  It would be more cost effective to replace the vehicles at this time.

ANALYSIS

On October 6, 2005, the City issued Request for Quotation (RFQ) No. 2006032 for the manufacturing of seven (7) Para-transit buses. The RFQ called for quotations for both Gasoline powered buses and Compressed Natural Gas (CNG) powered buses.  The RFQ closed on November 1, 2005, and three responsive bids were received from the following vendors:  Bus West Corporation, Creative Bus Sales, and A-Z Bus Sales.

The bids received for gasoline buses ranged in price from $55,189 to $62,237.36 per bus ($386,323.04 to $435,661.54 for all seven (7) buses) and $77,272 to $81,956.82 per CNG bus ($540,904.04 to $573,697.75 for all seven (7) buses).  The incremental cost for CNG ranges from  $19,720 to $22,083 per bus ($138,036 to $154,581 for all seven (7) buses).

TABLE 1

Seating capacity is of paramount importance due to the utilization of the buses throughout all of the City�s programs.  The lowest bidder, Bus West, will provide the largest seating capacity at 21 seats in a gasoline bus, with the other two bidders closely behind at 19 and 20 seats.  However, two of the three bidders were only able to propose a CNG bus with a seating capacity of 12 passengers due to weight restrictions.  The third and highest bidder proposed a 15 passenger CNG bus. 

The current BTS fleet has two buses which have a seating capacity of 21 passengers, and five buses which have a seating capacity of 17 passengers.  To continue to offer an efficient service, it is extremely important to keep or increase the current seating capacity.  If the seating capacity dropped, we would be required to purchase additional buses and hire more drivers in order to keep our current service level.  As previously noted, these buses are sometimes called upon to serve as back-up vehicles to the commuter services.  In addition, over the past few years, BTS vehicles have also been called into service to stage for evacuations due to fires and due to a natural gas line rupture in a residential area.

A timely replacement of the buses is also of great importance.  All bidders have complied with the delivery requirement.  However, it should be noted that the delivery time for CNG buses is 30 days longer than its gasoline counterpart.  The gasoline bus will be delivered within 120 days, whereas the CNG bus will take 150 days.

BTS vehicles are first responders in the event of disasters.  In the event of a natural disaster, the CNG fueling station may go offline which would prevent these vehicles from operating.  Gasoline would be a much easier fuel to acquire, such as through possibly siphoning gasoline from one vehicle into another in order to remain operational.

On August 8, 2005 President George W. Bush signed The Energy Policy Act of 2005.  This energy bill provides a tax credit to the buyer for the purchase of a new, dedicated alternative fuel vehicle.  For non-tax paying entities, however, the energy bill allows the seller of the vehicle to take the credit.  These credits range from $2,500 to $32,000 depending on the size of the vehicle, a percentage of the incremental cost, and if the vehicle meets certain tighter emission standards.  The credit is effective on purchases made after December 31, 2005 and expires December 31, 2010.  The approximate tax credit for the BTS buses is $20,000.  Although the City pays sales tax, it does not file income tax.  Therefore, the City is considered a non-tax-paying entity and unable to take advantage of the tax credit.

FISCAL IMPACT

All seven (7) buses have recovered their full replacement cost of $55,000 each for a total of $385,000.  If the contract is awarded to the lowest bidder in the gasoline version, the total cost to replace all seven (7) buses is $386,323.04.  During the FY 2005-2006 Budget process, $60,000 was budgeted to replace the oldest of the seven buses; therefore, only $326,325 is needed.  These funds are available in the unappropriated fund balance of the Vehicle Replacement Fund.   

The proposed resolution will amend the FY 2005-2006 Budget to appropriate $326,325 from account number 532.ND000.30004.0000.000000 to account number 532.PR44A.15111.0000.000000.  The budget amendment reflects adjusted costs of the buses as one of the seven buses is already budgeted in this Fiscal Year (FY2005-2006).

RECOMMENDATION

Staff recommends that Council adopt the proposed resolution amending the Fiscal Year 2005-2006 budget to appropriate $326,325 for the purchase of seven (7) gasoline fueled Burbank Transportation Service buses.

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