HomeMy WebLinkAboutStaff Report 4.D 05/18/2015DATE: May 18, 2015
Agenda Item #4.D
TO: Honorable Mayor and Members of the City Council through City Manager
FROM: Dan St. John, RASCE — Director, Public Works & Utilities
Joe Rye — Transit Manager
SUBJECT: Resolution Approving Purchase of Three Replacement Fixed Route Buses for
Petaluma Transit in an Amount not to Exceed $2,274,000
RECOMMENDATION
It is recommended that the City Council adopt the attached Resolution Authorizing the Purchase
of Three Replacement Fixed Route Buses for Petaluma Transit from the Gillig Corporation in an
Amount not to Exceed $2,274,00.0 and Authorizing the City Manager to Execute all Documents
Necessary to Complete the Purchase.
BACKGROUND
A key to reliable transit service is maintaining a newer fleet. The proposed purchase of three new
diesel-electric hybrid buses to replace buses retired in recent years will improve reliability and
enhance the age of the Petaluma Transit fleet. This purchase continues the larger vehicle upgrade
strategy that utilizes Federal Transit Administration (FTA) transit capital funding allocated to the
Metropolitan Transportation Commission (MTC) and programmed to Petaluma as part of the
regional transit capital priorities program.
At the meeting of November 17, 2014, the City Council adopted a resolution authorizing the
filing of an application for Federal Transit Administration (FTA) Section 5307 and 5339 funding
for this vehicle purchase. The funding for this purchase is split between two grants programmed
by MTC and approved by the FTA. Due to the long lead time required for bus manufacturing, it
is necessary to place this order now to commit to the bus manufacturer (Gillig Corporation, of
Hayward) to secure the production slots for buses that are scheduled for delivery in June, 2016.
The grants that support project funding will be fully executed with the FTA prior to
manufacturing and delivery of the buses.
DISCUSSION
This purchase approval initiates construction of three diesel-electric hybrid buses ordered from a
local vendor and national bus manufacturing leader, the Gillig Corporation of Hayward,
California. These will replace three inferior vehicles that have already been retired in recent
years and will increase the Petaluma Transit (PT) fleet to 14 overall vehicles, which includes the
three 1999 -vintage New Flyer buses acquired a year ago from Santa Rosa.
After a long and thorough evaluation of the various fuel choices available commercially, the
Transit Advisory Committee (TAC) supported staff in recommending diesel-electric hybrid
technology for this order of buses due to the following features:
• increased fuel economy (decreased operating costs)
• reduced greenhouse gas emissions
• lack of access to a compressed natural gas (CNG) fueling station
• no additional infrastructure investment required for these hybrids
Due to lack of a CNG fueling station in Petaluma, the choices that made the most sense at this
time were staying with the Clean Diesel (status quo, all current Petaluma Transit fixed route
buses are clean diesel) or adopting the "bridge" technology of Diesel -Electric (DE) Hybrid
buses. There are several factors to consider when comparing Clean Diesel against Diesel -Electric
Hybrid buses to ascertain the best choice for Petaluma's next order of three buses. One factor is
that DE Hybrids are somewhat quieter in operations than their diesel counterparts. While not a
major decision criteria, there is an advantage to this, particularly when operating in residential
areas. Major decision factors are discussed individually below.
Local Match Funds for Purchase Price
Petaluma Transit receives robust assistance in its capital bus replacement purchases from the
(FTA through the MTC and its elaborate Transit Capital Priorities (TCP) Program. Through the
MTC TCP and its adopted bus/van pricelists, funds are programmed to transit agencies to replace
vehicles. For FY 15-16, the TCP is funding vehicle purchases at 82% federal, 18% local match
(up from 80/20 in past TCPs). With this heavy FTA subsidy in mind, TAC focused on reducing
operating costs, as operating funds are scarcer for Petaluma, and conserving them is a primary
goal of the TAC.
The 18% local "upfront" capital costs associated with each option vary by the fuel choice, with
clean diesel being the cheapest per bus cost ($93,780), and DE hybrids more expensive
($136,440). Multiplied by three, the local match requirement is ($281,340) for diesels, and
($409,320) for hybrids — a difference of $127,980.
Lifecvcle Fuel Costs Plus Local Share Purchase Price
The challenging variable in projecting the lifecycle costs of each fuel choice are ongoing fuel
costs. While predicting future costs of commodities is inherently difficult, history, global
petroleum production and geo-political forces argue against any scenario where diesel would
drop below $4 per gallon for an extended period of time. The case could easily be made that
even $5 per gallon is too low of a projection to cover the lifecycle of this next order of buses,
which will service Petaluma from 2016 through at least 2028.
Every reasonable pricing scenario (scenarios were analyzed using $4, $5, and $6/gallon diesel
costs) concludes that DE Hybrid buses will save Petaluma money over the lifecycle of the buses
2
($90,000 to $150,000 each). Under a "rising diesel price" scenario, such as $6/gallon diesel, the
difference is more dramatic, with three DE Hybrids collectively saving $372,180 in precious
operating funds over their lifecycles.
Emissions
There have been numerous studies in recent years evaluating the levels of polluting emissions
from DE Hybrid buses versus their Clean Diesel counterparts. While the studies vary, the
majority of studies show that DE Hybrids produce lower emissions than Clean Diesel.
Maintenance
There have also been numerous studies in recent years evaluating the maintenance costs of DE
Hybrid buses versus their Clean Diesel counterparts. While the studies vary, the majority of
studies show that DE Hybrids produce equal or slightly lower per -mile maintenance costs in
routine operations (versus) Clean Diesel.
In California, the Air Resources Board (CARB) closely regulates the public transit fleets and
must certify all bus engines prior to allowing them to be sold and operated. CARB has taken a
tough stance with regards to DE Hybrids over the last decade, failing to certify the larger engines
normally used in urban transit buses in a hybrid package (Cummins ISL engines, for example).
CARB has only certified a DE Hybrid package with a smaller engine (Cummins ISB) that is not
projected to adequately fulfill its FTA -established 12 year useful life. The net effect of this is that
in order to comply with CARB Urban Bus Regulations, transit agencies must commit to repower
any new DE Hybrid buses at or near mid-life with a second GARB -certified engine, such as
another Cummins ISB. This amounts to approximately $50,000 in added lifecycle expense at
some point (mileage -driven) in the midst of the buses' lifecycles.
There are also concerns in the transit industry about potential need to replace the DE Hybrid's
battery pack once during the usual lifetime (12-16 years) of the bus. Due to DE Hybrids only
hitting the market around 2000, data on this situation is incomplete, but so far the battery packs
have held up well and are not being replaced by most of the early adopters of DE Hybrid fleets.
There is very little study data available for a high level of confidence on this issue. The cost of a
mid-life battery replacement (not mandated - may or may not become necessary) is
approximately $50,000 per bus according to recent estimates.
Summary
An intangible to consider in this decision is public opinion, and the desire for our community to
become more green with a lower carbon footprint. Although the technical emissions and
greenhouse gas impact differences are not significant between the two choices, the selection of
DE Hybrids may be received by the community as a greening of the PT fleet, and can support
expanded marketing efforts on the sustainability of using PT, and how PT is helping to not only
reduce congestion and provide mobility to all, but also is helping to clean our air and protect our
environment.
Either choice requires no new infrastructure and will be easily implemented in the next 18
months. The purchase of three DE Hybrid buses in 2016 does not prevent an eventual switch to
CNG or other emerging fuel technologies in upcoming vehicle replacement cycles, but rather can
serve as a transition technology.
Procurement Method
These replacement buses are being procured in compliance with Petaluma Municipal Code (PM)
Section 4.04.100, utilizing a cooperative purchase that is also an FTA -approved method of
procurement. Cooperative purchasing involves utilizing another agency's publicly bid process
and results, and thereby allows an exemption from the City's formal bidding procedures. The
City benefits, through economies of scale, to attain a lower pricing in a larger consortium
bidding process. The use of joint procurements and procurement consortiums to obtain better
pricing and lessen transit agency staff burden is strongly encouraged by the MTC. FTA allows
these types of piggyback procurements based upon FTA Circular 4220. IF, Chapter V, Section 7,
subsection a (2) a.
This same cooperative purchasing method was used for the bus and bus shelter purchases
approved by City Council in 2009, 2010, 2011, 2012, and 2014. These buses are being purchased
using FTA -approved procurement options with the same pricing solicited by the Port Authority
of Allegheny County, in Pittsburgh PA. The Port Authority competitively bid the contract and
ended up with more buses than they needed, allowing them to assign their extra purchase options
(from the Gillig Contract) to other, generally small agencies. In addition to obtaining competitive
pricing from a contract of over 50 buses, versus a small order of 3, the City saved numerous
hours of additional staff time necessary to conduct a complex stand-alone procurement.
To match the sizes of the three new buses to the current and future needs of Petaluma Transit,
after lengthy discussions, staff and TAC recommend ordering one 40 -foot bus and two 35 -foot
buses. While overall ridership would lead to a decision to purchase all 40 -foot buses, feedback
from drivers indicates difficulties in making turns in the tight Downtown area, and that 35 -foot
buses are the most versatile size overall. As Petaluma Transit replaces its fixed route fleet, under
the MTC Transit Capital Priorities process, Petaluma will be ordering in batches of 3-4 buses
every 4 years. It is TAC and staff strategy to continue ordering one 40 -foot in each batch, to have
an ultimate fleet roster consisting of three 40 -foot buses to go with four to five 35 -foot buses, and
three to four smaller (30 -foot) buses.
Under the pricing provided by Gillig, based off the Port Authority Contract, modified to meet
Petaluma Transit's requirements, each bus will cost $758,000, which includes a small
contingency for spare parts and special tools, extended warranties on the powertrains, and sales
taxes. The total cost for procurement of three buses is $2,274,000.
The TAC considered this item at multiple meetings, ultimately making a recommendation for
Council approval at their March 5, 2015 meeting. TAC recommends that the City Council adopt
the resolution approving purchase of three (3) replacement diesel-electric hybrid buses from
Gillig Corporation.
11
The proposed action meets Council Goal: "Plan for and implement priority capital projects as
funding permits".
FINANCIAL IMPACTS
The total cost to purchase the buses is $2,274,000. The purchase will be funded by a combination
of Federal Transit Administration (FTA) Section 5307 and 5339 funds ($1,864,680), with local
match coming from the Public Transportation Modernization Improvement and Service
Enhancement Act (Prop 113 - $171,423) and Transportation Development Association (TDA)
Article 4.0 funds ($237,897).
All funds are recommended in the FY 2016 Operating Budget for Petaluma Transit.
ATTACHMENTS
1. Resolution
2. Gillig Price Quotation
3. Assignment of Options Letter — Port Authority of Allegheny County, PA
Attachment 1
RESOLUTION AUTHORIZING THE PURCHASE OF THREE REPLACEMENT
FIXED -ROUTE BUSES FOR PETALUMA TRANSIT FROM THE GILLIG
CORPORATION IN AN AMOUNT NOT TO EXCEED $2,274,000 AND AUTHORIZING
THE CITY MANAGER TO EXECUTE ALL DOCUMENTS NECESSARY TO
COMPLETE THE PURCHASE
WHEREAS, pursuant to Moving Ahead for Progress in the 21St Century (MAP -21),
eligible project sponsors wishing to receive Federal Transit Administration (FTA) Section 5307
and Section 5339 grants for a project shall submit an application with the metropolitan
transportation planning organization (MPO) for review and inclusion in the MPO's
Transportation Improvement Program (TIP); and
WHEREAS, the City of Petaluma submitted an application for FTA Section 5307 and
5339 funding for transit vehicle procurements. in the amount of $2,274,000 ("the project") to the
Metropolitan Transportation Commission (MTC) and the FTA in November 2014, and funding
has been subsequently programmed; and
WHEREAS, additional funding for the replacement buses is available from local match
sources: Proposition 113 Transit Capital funds, and Transportation Act Article 4.0 funds, and
purchase orders are required to initiate production; and
WHEREAS, options were obtained to purchase low -floor diesel-electric hybrid buses
through a FTA -approved procurement by The Port Authority of Allegheny County,
Pennsylvania, where the Gillig Corporation of Hayward, CA was the successful bidder; and
WHEREAS, Petaluma Municipal Code section 4.04. 100 provides that purchases made
through a cooperative purchasing program with the state, county or other public agencies are
exempt from provisions of Chapter 4.04 of the Petaluma Municipal Code, provided there is
documentation as to the advantage of the cooperative purchase; and
WHEREAS, the bus purchases under the Port Authority of Allegheny County's
competitively bid procurement processes meet the requirements of Petaluma Municipal Code
Section 4.04. 100 for an exemption from City of Petaluma competitive bidding requirements; and
WHEREAS, there is an advantage in purchasing the vehicles using a cooperative
purchasing program because of better pricing, better delivery timelines, and the avoidance of the
expense and time associated with conducting a formal bid process; and
G
WHEREAS, after reviewing the quote from Gillig Corporation, staff and the Transit
Advisory Committee recommend that the Council authorize the purchase of three diesel-electric
hybrid fixed route transit buses from Gillig Corporation.
NOW, THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL HEREBY
(1) Authorizes the purchase of one 40 -foot and two 35 -foot diesel-electric hybrid low -
floor buses from Gillig Corporation in an amount not to exceed $2,274,000; and
(2) Authorizes the City Manager, or his designee, to execute all documents necessary to
complete the purchase.
7
Attachment 2
H(fpA,)vJ, CA R4040-3008
16101 7fts-tsoo
April 24, 2015 FAX! 1.51 W(Bb-60 I U
Mr. InL10i Rya:
Transit Division Nlanaj,ki
City fir Peralmnit
PUNiC. Warks Depiultnen(
555 N. NfiaDwkvull Blvd.
Nialump, CA 94954
Deaf Mr, Rvo:
Jjj:jnk yuu f0r yilur intcwst lo, purchase one (I) 40' & (2) 35' H.vbnd Low Fluor buses by
"pipt;yhictinr" off the Pittsburgh, PA ecinlrucC
Attached yoo -will find the pnec varian" sheets that would I)cnain to vuur order. The 10CU
varimwv sheo also includes 1110 escalation and frielmdo as M the, Contract Gillig is PlcaLcd to
quote the fi)llowing:
ON IL (1) 40' IWDRID LOW FLOOR BUS $698,077.0ti each
TWO (2) 35' HYBRID LOW FLOOR RUS S603,5230) each
Thig lifico is vidid for 30 days, 4md j, fOB lletalums, C.A. Prices exclude any laws crud license
fccr, Tho pruduclino -Sari date of the buses will by within 20 nionths horn receipt of purebasc
(wdcr.
We thgnkN.tiau tow this appnrtunity and appreciate your intpiest in Cifflig and out livoiluoss.
Shuold you have any qtje.lions plewse do not be3ilaic to Contact ace at 5 10867-5108,
Sinctrely,
Lee Pclorm;vi
Regiunal Snh:�.N-lanagcr
CC: B, Gnmill
—10 P "Le
rorfCifliig i'r* bi life
Attachment 3
John DeAngelis, Manager of
Contract Administration Bus & Rail
Purchasing & Maletials Managerneni Dept,
Part Authority of Allegheny County
Direct Dial: (412)566-5481
Fax: (412)566-5359
E-mail: JDoAnaelis@-Por1Aufho6fv.orca
Date: February 26, 2015
Sulajed: Availability of Option Coaches Crony "Port Authority of Allegheny Count),
Dear Transit Agenc-y,
This letter is to colifirin (per your inquiry) that the Port Authority of Allq!lieny Comity hats ngrcod to
tssin l 40 -foot low -floor �aleo(lie Authority's contract �itCilirLni.tiilgtarnwr
i Pelulurna, CA — 3 coacFvs
W isconsin DOT — 4 coijol es
Middletown, CT 3 coaclies
Spokane, WA r coack es
Advancs: Transit, Wilk-, Vl' — 3 coaches
is Rf)eky ;47ount, NC — 7 c.,:snc.hcs
Y C'olumbiu, SC — 9 conclx:s
Poughkeepsie, NY — 2 Loaclies
At the iinic of (lie ,Authority's original solicitation in 2W9120I U`the utl)Ority wu, looking, ter
repincc coachcs within its fleet that would be rcaching the cad of their useful service life during the contract
period. Since then, the Autlurrity's operdiemti have idenlif ed a aced to replace n greater portion of its Fleet
with 60 -fool lots' flour articulated coaches; also csnitructed durinZ? tic 2009/2010 period) rather than Inc. 40-
tbot torr flair cuachus in suppotl of liew l3wq Rapid'I`runsit plan lic:re in the: Pittsburgh r(,Tion, In addition,.
the Authority's operating titiances were reduced, causing the. Authority to cut its service by 15'/,, and reduce
its fleet size accordingly, This liar dratiiatically reduced the number or coaches (lie Authority will replace.
during; the rdirurfluri pro -cess. For thew- rea,rwris, thorc are. optional coaches available on the Port Authority's
contract with Gillig to perutit Lhe assipt-,wnt of lhcwe ctxtc ic:s to other agencies.
9
If yt>u itsae aitly clue4li(IIIS regimlinlst this aralter, lax l frco lis contact mne nl the nb(lva,
sil.uerely,
John DcAngelis
lWanager of Contract Administration
Bus & Rail
a : OV. h9illcr— {:'hici'fiperaliens {lfiiccr, Pori r'sudwrily ot'AI1q: wily Cumnly
A. Trona — Directur of Nurm:.hasmnb & Materials Management, Port Aamthority of Mlle-glien;r Count -;
?. Shech:,am — F2cgioraml 3al�s Fviarrmger Gillig LLC:
C'onlract File
10