HomeMy WebLinkAboutAgenda Statement 1980/02/12 Item 14COUNCIL AGENDA STATEMENT
Item 14
Meeting Date 2/12/80
ITEM TITLE: Resolution ~ 9G ~ Requesting MTDB to Unreserve $200,000 of
the City's FY1979 LTF Reserve Funds for Purchase of Used
Buses and Rereserve These Funds for Rehabilitation of CVT
Buses t
~ '
p gNl, (4/5ths Vote: Yes No X )
SUBMITTED BY: Develo ment Services Administrator \~l~
Council budgeted $350,000 in May, 1979 for purchase`of lA used buses in
FY1979-80. Staff prepared a bus needs study in January, 1980 (attached
as an exhibit) which analyzes the major alternatives of meeting present
and near future CVT bus needs. The Transit Coordinator indicated at the
January 10, 1980 Council Conference that we would soon be back to
Council with results of this study and a recommended course of action.
I am now bringing this matter back for Council review and action.
RECOMMENDATION: That Council:
1. Approve the rehabilitation of 14 CVT buses by Aztec Bus
Lines as the most feasible alternative for meeting CVT's
critical bus needs;
2. Request MTDB to unreserve $200,000 of the City's FY1979 LTF
reserve funds previously reserved for purchase of 8 used
buses;
3. Request MTDB to rereserve these funds for rehabilitation of
14 CVT buses.
BOARD/COMMISSION RECOMMENDATION: Not applicabl°.
DISCUSSION:
The Council approved on Marc ti 20, ].979, a resolution requesting MTDB to
hold $200,000 of the City's FY1979 LTF reserve funds for the purchase of
eight buses for use in CVT operations An additional 5 used buses were
planned to be purchased this year for about 5150,000 with the City's
FY1979-80 allocated LTF monies.
The MTD Board on June 25, 1.979, approved their staff's recommendation to
direct CPO and the County Auditor to encumber $2.00,000 of Chula Vista's
FY1979 LTF monies for the gurchase of eight buses with the following
conditions:
1. That Chula Vista Transit conduct a cost benefit study of the lease
and/or purchase and refurbishing of_ buses currently in storage in
the San Diego region in contrast to buying new or refurbished buses
from elsewhere,
2, That results of
~ Directors, and
Q~ 3. That funds be d
accordance with
Coordinator and
Form A-113 (Rev. 11/79)
said study be brought before the MTD Board of
isbursed from the encumbered amount only in
recommendations made by the Chula Vista Transit
concurred in by the MTD Board of Directors.
(Continued)
Page 2, Item No. 14
Meeting Date 2-12-80
The Transit Coordinator informed Council on June 2h, 1979, that he would
be conducting such a cost benefit study of the major alternate means of
leasing and/or purchasing and possible refurbishing of buses and come
back to Council upon the completion of the study with his findings and
recommendations.
Based on the findings and recommendations of the attached report and bus
needs study, I concur with the Transit Coordinator's recommendation to
contract with Aztec Bus Lines for the rehabilitation of 14 CVT buses
instead of purchasing or leasing used (or new) buses. I also agree with
his recommendation of requesting MTDB to unreserve $200,000 of the
City's FY1979 LTF reserve monies previously reserved last March for
purchase of used buses. At the same time a request would have to be
made to MTDB to rereserve these funds for rehabilitation of 14 CVT
buses.
FISCAL IMPACT:
The estimated $250,000 cost for renovating 14 CVT buses will be financed
by a combination of the City's FY1979 and FY1990 LTF reserves and FY1931
allocated SCOOT LTF monies.
JAB:nr/DS-005
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Dated `~_
January 2, 1980 C@~,egi~~~
File: DP--001 '• (,/~/1
A
To: Bill Robens, Development Services~Administrator
From: Jack Bloom, Transit Coordinator \/1~
Subject: Chula Vista Bus Needs Study I/
BACKGROUND
On March 8, 1978, at the Council Conference, staff discussed
the City's bus needs in tercns of the existing antiquated CVT
fleet and solutions to meeting this need. Staff discussed
several alternatives and recommended purchase in FY1980 of
14 used buses in good condition at S25,000 each or $":50,000
total. Another alternative discussed was the purchase of 14
older buses and renovating them at 550,000 each or S700,000
total cost spread over a two year period. Staff also
mentioned that these buses will be maintained by Aztec until
a suitable City/South Bay maintenance facility is built.
Staff also discussed that the purchase of these used buses
is in line with the 1975 Five Year Transit Development Plan
service expansion improvements but does deviate from its
recommendation of City purchase of new buses. This
deviation was based on the following two major factors.
1. The City should not apply for and accept Federal
Transit Operating and Capital grants due to the lack of
sufficient operating and capital grant funds which
would meet CVT's needs.
2. The fact that new 45-52 passenger buses cost about
$130,000 and are estimated to last only 10 years (thus
a $13,000/year amortized cost) while used buses in good
condition cost about $25,000 and should be operable for
about 5 years (at about a 55,000/year amortized cost).
Staff discussed that in order to purchase these used buses
we would need approximately 5200,000 in addition to the
existing LTF and fare revenues. We also stated that about
$42,000 per year would be saved from not having to pay Eor
lease costs of the buses from Aztec. Savings would also be
accrued because of a minor reduction in expenses for
maintenance of the present CVT fleet due to the relative
high costs involved in maintaining 20 year old buses. The
Council then approved a resolution requesting MTDB to hold
~R ~Y~
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Bill Robens -2- January 2, 1980
$200,000 of the City's FY1979 LTF reserves for purchase of 8
used buses at the March 20, 1979 Council meeting: MTDB
essentially approved of this request at its June 25, 1979
Board meeting.
CPO also approved of the holding of the City's FY79 LTF
reserve monies to fund the $?00,000 expenditure for 8 used
buses in FY19R0 at its Board meeting during the same month.
Both MTDB and CPO approved the following resolution:
CPO and ttre County auditor are directed to encumber
$200,000 of Chula Vista's 1979 FY TDA monies for the
purchase of 8 buses, faith the following conditions.
a. Chula Vista Transit must conduct a cost/benefit of
the lease or purchase and refurbishing of buses
currently in storage in the San Diego region in
contrast to buying new or refurbished buses from
elsewhere.
b. The result of said study be brought before the MTD
Board of Directors.
c. Funds be dispersed from the encumbered amount only
in accordance with recommendations made by the
Chula Vista Transit Coordinator concurred in by
the MTD Board of Directors.
$200,000 was to purchase 8 buses at a cost of S25,000 each
with the City's FY1979 LTF reserve funds. An additional 0
used buses were to be purchased (in FY1980) at a cost of
$25,000 each or a total of 5150,000 with the City's FY1980
LTF allocation.
I. Findings
A. With the above background I would now 'like to go
into the detailed cost/benefit study of bus
acquisition/rehabilitation that I have been
requested to do by both MTDB and CPO.
1. Review of lease or purchase of buses in the
San Diego region.
As of January 1, ].980, both San Diego Transit
Corp. and North County Transit District
report that they do not have any 45-53
passenger buses available for sale. There
were no other buses for sale as well from
other transit operators or bus companies
located in the San Diego region.
a~~
Bill Robens -3- January 2, 1980
2. Review of lease or purchase of buses on a
nationwide basis.
Due to the recent energy crisis and suppliers
of new buses pulling out of the market, there
seems to be very few good used buses for
sale. Those that are seem to be quite
overpriced. Most of the buses that are for
sale throughout the country seem to be sold
extremely inexpensive by transit properties
which have fairly well run them down over the
past 15-20 years of the useful life of the
bus, as stated by many transit maintenance
superintendents. Thus those buses are often
fully depreciated. Bus brokers who buy these
type of vehicles then put in about 55,000 to
renovate them and end up selling the buses
for around $10-20,000 each. Thus it is
highly doubtful that both the bus being sold
is in good condition as well as the high
price oftentimes quoted for these type of
coaches is reasonable.
It seems that very few if any of these
brokers have 14 buses of the same make and
style. Very few small transit properties of
the size of Chula Vista Transit mix and match
transit co ac has. This is due both to
appearance (i.e. having more than one type or
model of bus on the street) as well as
maintenance of different buses (in terms of
stocking many more parts and requiring to
have on hand different sets of tools.)
The majority of buses for sale are GMC 5301
which are 40 feet long and 102 inches wide.
As referred to below, these type of buses do
not meet the needs of Chula Vista Transit.
Buses that do, GMC 4517's which are 35 feet
long and 95 inches wide, seem to be extremely
scarce, are in great demand, and cost more
than the GMC 5301's. There was not one
supplier of buses, either a transit operator
or a bus broker, that had more than two or
three of these GMC 4517 coaches available for
sale as of November 15, 1979, Please refer
to the attached addendum for an updated
report on the availability of these buses.
I did find that theta were new GMC 4517's
available in about a year and a half from GMC
of Canada for about $80,000 apiece. These
coaches, manufactured in Montreal, do not as
"N
Bill Robens
3
-4-
yet meet the existing
standards. Thus they
for use in Chula Vista
January 2, 1980
California emissions
could not be purchased
Transit's operation.
Review/inspection of MTDB buses.
About one year ago, MTDB purchased from a
Texas bus broker 15 1952-53 Flxible buses.
These buses are 40 feet long, 102 inches wide
and have a V-5 engine. They are 51 seat
capacity vehicles. National City Transit
leases 9 of these buses and currently 5 are
available for 'lease to area operators from
MTDB.
~~
On August 15, 1979, these 5 MTDB buses were
inspected by the follocaing people at the
Caltrans yard located in Chula Vista. John
Alden and myself, representing the City;
Larry Watt of Caltrans; Leonard Zlotoff and
Jack Geary, from Aztec Bus Lines; and ,7im
Lundquist from MTDB. It is my understanding
that these buses are available for lease by
MTDB at $100/month each, which is the current
price paid by National City Transit. I also
understand that approximately $2,000 per bus
was expended by National City Transit for
painting, bodywork, etc„ on these coache s
The investigation team's findings followe
a. Just about all the exteriors definitely
needed a complete paint job (excluding
CVT paint sr_heme).
b. All of the buses did not have any gauges
(i.e., air pressure and speedometer
gauges) .
c. A good many of these 5 buses definitely
needed some body work as well as sorie
had cracked windows.
d. None of the buses were equipped with
radios. Thus the City would have to
purchase radios at an approximate cosy
of 57,000 each Eor the 5 buses. I au~
quite sure that Aztec caould not lease us
their radios unless they were used iii
their own buses fo'r CVT service.
e. Most of the buses
test run seemed to
running condition.
that we took out for a
be in adequate
Jack Geary, Aztec;
Bill Robens -5- January 2, 1980
maintenance shop foreman, stated that
all 5 vehicles seemed to be in
structurally sound shape but that all of
the engines needed to be overhauled.
National City reported transmission
problems with their buses so it is quite
possible that some or all of the
transmissions need to be overhauled as
caell. If all of the vehicles required
overhaul of both the engine and
transmission, the cost to the City could
well total around $30,000.
f. All of the interiors seem to be in
fairly good condition as well. Brakes,
transmission and tires on the 5 vehicles
were not inspected.
g. Only 6 vehicles are available for lease
and CVT bus needs consist of 14 transit
coaches. As stated previously, I would
not like to mix and match vehicles that
would be used in CVT service. The MTDB
buses are 1962.-1963, 51 passenger
Flxible buses. These buses would be
fairly hard to come by in terms of
purchasing an additional 8 vehicles of
the same type and model elsewhere
throughout the countryo Both John
Alden, the City's Maintenance
Superintendent, as well as Jack Geary,
Aztec Maintenance Superintendent, agreed
with me that mixing and matching
vehicles for operation of such a small
fleet would be a detriment in terms of:
1. Appearance
2. Maintenance (in regards to Aztec
maintaining both current CVT GMC
4517 buses and MTDB Flxible 5301
vehicles)
The current CVT coach lacks approximately 8
seats froi.i that of the f4TDB coach, however I
do not see that as a great problem in that
rarely do our buses achieve ridership that ~s
greater than its seating capacity. I do not
anticipate such a problem over the next
several years, given the proposed service
levels of the CV'P system.
`^ Finally, these buses are, not suited to CVT
1~"y~
Bill Robens -6- January 2, 1980
service due to the fact that they are 40 feet
long and 107 inches wide due to the
following:
1. The 40 foot vehicle with a V-6 engine
would lack the power that the existing
CVT 35 foot GMC buses have to go up some
of Chula Vista's hills, especially
around Southwestern College.
2. The 35 foot bus has better response.
3. The 35 foot bus also has a better
turning radius and is thus easier for
turning on some of the narrow streets
throughout the City.
4. The 35 foot coach has better fuel
economy due to its weighing less than
the MTDB 5301 coach. My understanding
is that the 5301 coach loses about 1
mile per gallon compared to the existing
CVT fleet.
4. Review of purchase of current CVT buses.
Upon initial discussions with the former
president of Aztec Bus Lines, t.eonard
Zlotoff, I was informed that the buses were
not for sale due to a disadvantageous tax
situation for Mr. Zlotoff if these buses
were sold. This decision has been recently
confirmed by the new Aztec management.
5. Review of possibilities of renovation of the
Aztec buses.
Aztec has informed me that they could
renovate 14 transit coaches (12 existing CVT
buses and ? additional coaches of the same
make and model) for a total of about $17,500
per coach. This is comprised of the
following: Overhaul of transmission, heater,
differential, radiator, and suspension.
Three engines out of the 1~ need to be
overhauled as 11 engines have been currently
overhauled in the past year and a half.
Engine overhauls are included in the 516,3L'6
cost/bus. This cost is broken down as
follows: Parts would total $13,242 per bus
and labor would total $1,582 per bus. This
would result in a 514,37.4 renovation cost per
bus. An additional $1,562 per bus would have
~~
Bill Robens -7- January 2, 1980
to be added on for needed body repair and
painting.
Z would alsu want to replace the existing
worn seats in the 14 buses, adding an
additional cost of approximately S1,200/bus.
Thus the total estimated cost for interior
and exterior renovation of 14 CVT buses would
be $17,500 per bus or a total of about
5245,000. It would take Aztec approximately
5-9 months in order to complete renovation of
these 14 buses excluding delivery of new
seats. Most of this work would be done at
their shop located on Twain Avenue in San
Diego. City equipment maintenance staff-will
make periodic inspection trips to the Aztec
yard in order to ensure quality of
rehabilitation work performed.
Mr. Zlotoff informed me that if the
City/SCOOT decided to pay for renovation of
these buses and at the end of one year
decided to purchase or lease vehicles from
another supplier/contractor, Aztec would
refund 2/3 of this renovation cost and 1/3 at
the end of two years. This would only be
applicable on a two year contract basiso He
also informed me that if the City decided to
sign a three year contract effective FY1981,
Aztec would absorb the labor costs of 51,682
per bus or a total of a little over 512,000.
The City would still be responsible for
paying the parts costs, which would total
approximately $233,000.
The new Aztec President, Gus Zemba, confirmed
Mr. Zlotoff's proposal and even stated that
Aztec may absorb some of the labor costs of
bus renovation given a two year contract,
Aztec management stated that the City could
choose one of the following two methods of
payment for renovation of 14 vehicles.
1. A lump sum method whereby the City would
pay on a monthly basis as the buses were
renovaL-ed or on a quarterly basis over
the 5-9 month period.
2. Tl~e contract cost per mile could be
increased by the appropriate costs over
a 24 month contract period.
He stated that at the end of r_he two year
~~~
Bill Robens -8- January 2, 1980
contract, the City could have the first
option to perhaps buy these renovated
vehicles with some discount off for the
renovation work. This cost would then be
subtracted off the fair market value of the
buses at the time of possible sale.
B. City's prior request to hold FY1979 LTF reserve
monies.
1. The 1979 Administrative Code of the State
Transportation Development Act states that
unallocated LTF funds may be reserved for
such capital purchases as acquisition of
vehicles, park and ride lots, shelters, but
not be limited to these types of purchases.
These funds can only be eligible, of course,
for capital intensive transit purposes. The
CPO counsel, Debra Greenfield, is in
agreement with me that renovation of buses is
an eligible capital intensive purpose under
the appropriate section of the Act and thus
LTF funds could be reserved for such
purposes. I believe that it is highly
unlikely that either MTDB, CPO, or the State
would differ with this interpretation,
particularly in light of the following facts:
a. Chula Vista Transit is not receiving
Federal Capital Grant funds. lT, S.
Dept. of Transportation Secretary Neil
Goldschmidt at his Senate Commerce
Committee confirmation hearings held in
early September, 1979, indicated that he
caill support payments for increased bus
maintenance. He admonished some transit
agencies that have been buying new
equipment rather than rehabilitating the
old.
b. The City does not have sufficient funds
available in its LTF account to purchase
new buses.
c. The used bus market is currently quite
slim.
7. Action on use of F.`1979 LTF reserve nwnies.
The CPO Counsel recommended the following
course of action for the City of Chula Vista
as regards the matter of its use of FY1979
LTF reserve monies.
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Bill Robens -9- January 2, 1980
a. We should request MTDB to unreserve
these previously reserved fiscal 1979
LTF monies and as of February 1, 1980,
re-reserve the $200,000 for renovation
of the existing CVT fleet plus 2
additional vehicles. She stated that we
would have to include in the agreement
with Aztec that the Bus Company would
refund us the appropriate share of the
renovation cost should the City decide
to purchase or lease other vehicles at
any time within the proposed two year
contract time frame. She believes that
MTDB would not have any problem in
complying with the City's new request
(if they go along with City/SCOOT
justifications for renovation of the
buses) .
II. CONCLUSIONS
Since there are not a sufficient number of suitable
vehicles for CVT operation available for sale or lease
in the San Diego region as well as throughout the
country, I believe there is only one feasible course of
action that is available to the City if its severe bus
needs are to be met. That would be to renovate the
existing CVT fleet owned by Aztec plus an additional
two vehicles of the same type and make as 'is current.l.y
in CVT service.
As stated previously, after detailed review and
analysis I believe that the only buses for sale or
lease in the region (i.e. 5 MTDB Flxible coaches) are
definitely not suited for CVT operational needso Tt
would cost Chula Vista $100/month for rental and
approximately $30,000 total renovation costs far the
five MTDB buses versus $300/month rental and about
$245,000 total renovation costs for 14 Aztec. CVT buses.
Should there have been an adequate number of suitablF
used vehicles available for sale or lease then this
cost/benefit study would have entailed the cost of
purchasing or leasing these vehicles. These costs
would then be compared to the benefit of acquiring the
buses in terms of their condition, estimated years lest
of operation, and other factors that would benefit the
City in terms of acquiring or leasing such vehicles
Since that is not the case (excepting the bases listed
in the attached addendum), I am convinced that the only
feasible solution at present is Eor the City to
renovate CVT buses.
1~~
Bill Robens -11- January 2, 1980
to be done in light of another review as to 'what other
buses are available on the market that would meet the
City's bus needs at that time.
I would like to use the money that had previously been
requested to be held in the City's LTF reserve account
for purchase of used buses to be expended on renovation
of CVT buses.
I recommend expending all of the $200,000 LTF reserve
monies plus an additional $45,000 from the total of
$350,000 of FY1980 LTF monies originally budgeted for
uus purchase for the renovation of 14 CVT buses. If
the City/SCOOT decides to purchase two Mini-Buses,-then
we would only need to spend an estimated $10,000 from
the current transit budget for renovation of 12 CVT
buses in addition to $80,000 - $90,000 two new Mini-
Buses.
I would then request that the remainder of the capital
equipment funds budgeted in my current account and in
the FY1979-80 LTF claim for purchase of buses (about
$300,000) be carried forward to next year in case
suitable buses do become available for sale or lease.
Of course the refund provision written in the
renovation contract would apply if the City did in fact
purchase or lease other than Aztec buses within the
next 1-3 years.
1. Timetable for Actions
1) Staff agreement on the most suitable method
of solving CVT bus needs problem.
2) Present approved report to City Council in January
1980. SCOOT Board meeting in February will
include discussion of this report and staff
recommendations to the City Council. A resolution
requesting unreserving 5200,000 of Chula Vista's
FY79 LTF reserve funds and re-reserving these
funds as of. February 1, 1980, to finance
renovation of CVT buses will be forwarded to MTDB
and CPO.
3) MTDB (primarily) and CPO would, of course, have to
agree with the conclusions and recommendations of
this report as well as the unreserving of the
FY1979 LTF monies Eor bus purchase and re-
reserving these funds for renovation of CVT buses.
!~~
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Bill Robens -12-
I would estimate that
before MTDB and CPO a
if their approval is
would expect Aztec to
CVT buses in April of
by January, 1981.
JAB:nr
January 2, 1980
the approved report would go
t their March meetings. Thus
received at that time, I
initiate renovation of 14
1980 and complete this work
January 2, 1980
File: DP001
T0: Bill Robens, Development Services Administrator
FROM: Jack Bloom, Transit Coordinator
SUBJECT: Addendum to Bus Needs Study
I was contacted by Mr. Patrick Linnington, President of San
Luis Obispo Transportation Co ., the week of November 19,
1979. He informed me that he had just purchased six 1950-
51, 45 passenger GMC diesel buses from Monterey Peninsula
Transit. These buses are the exact same type, make, and
model as the ones that are presently in operation in Chula
Vista. He informed me that kie would lease these buses to
City/SCOOT for $1,000 per bus/mo. He also stated that these
buses were in excellent condition and did not need any
rehabilitation in the near future. As discussed in the bus
needs study, I pointed out that the City is currently paying
Aztec a $300 lease cost per month per bus.
Thus it is quite obvious that these buses would have to be
in far superior condition to the current Chula Vista Transit
fleet in order to justify increasing the City's/SCOOT's
lease cost by more than 300&. I then contacted Thomas
Albert, General Manager of Monterey Peninsula Transit who
sold these buses to Mr. Linnington. He informed me that the
sale price was $12,500 and that these buses were only in
"fair" condition. He thought that the $1,000 lease cost per
month per bus was quite exorbitant. He stated that these
buses had not recently been rehabilitated but they were in
"fairly good" operating condition.
Mr. Linnington contacted me a couple of days later and I
informed him that I thought the lease cost was too excessive
compared to our current lease cost with Aztec Bus Lines for
CVT buses to justify leasing six buses from him. He then
offered to sell City/SCOOT the six GMC buses at a price of
$17,500/bus which would include tires (that weren't in "the
best of shape" as he stated) and with the CVT paint scheme
(which I would doubt the quality of such work).
!,1 R~1
Bill Robens
Thus for a little
the owners of six
in CVT operation.
pursue this action
-2-
January 2, 1°80
over $100,000, the City/SCOOT could become
similar type of buses that are currently
However, I do not recommend that we
due to the following:
1. Due to the fact that the buses are the same make, model
and year that are currently in CVT operation as well as
were in operation under relatively similar conditions
(Monterey vs. Chula Vista), I presume that Mr.
Linnington's buses and CVT buses are in practically
the same operating condition. Thus most likely within
a few months after they would be in service, these
buses would have to be renovated somewhere along the
lines as stated in the bus needs study as regards
renovation of CVT buses. Mr. Linnington said that he
would give us a one year guarantee on the buses.
However, there would be a difference in about 300--400
miles vs. 15 miles between lessor and lessee (i.e., San
Luis Obispo Transportation Co. vs. Aztec Bus Lines in
San Diego to Chula Vista) as regards any needed
"warranty" maintenance work.
G~~~
6
2. It seems that we still would need to purchase good
tires on Linnington's buses or lease them from a ti.xe
leasing company whereas this cost is covered under the
5300/month lease cost/bus under the current Aztec
contract.
3. Upon purchase of these buses, we caould essentially have
two separate bus arrangements, that of City/SCOOT
owning six and leasing 5--8 buses from Aztec. Although
a similar maintenance servicing arrangement for
Ginnington's buses could be handled by Aztec Bus Lines,
it is a much simpler process to have all CVT vehicles
under one ownership: operation, or lease arrangement.
~1. As stated in the bus needs study, the City will still
have the protection that upon r-enovation of the CVT
buses, costing around $17,500 each, it would receive at
worst a 7_/3 refund of the renovation cost by Aztec if
the City/SCOOT decides to use other buses at the end of
the first year of renovation. It would receive a 1/3
refund after the second year the buses are renovated if
it decides to operate other than these renovated buses.
The second option of a refund by iiztec over a three
year period is subject to future negotiations. Mr.
Linnington did not agree to any Similar refund clause
in his offer.
Bil'._ Robens -3- January 2, 1980
Therefore, I recommend not leasing or purchasing these
particular GMC buses from t;._ San Luis Obispo Transportation
Company. Instead, I still go along with my original
recommendation of renovating 14 CVT buses at Aztec Bus
Lines.
JAB: fpw
~~~
,;
_s~~~~
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February 4, 1980
File No. DS-00
pro; w. J. Robens, Development Services Administrator
From: Jack A. Bloom, Transit Coordinato r ~--6~
Subject: Report on City's Bus Needs and (/~'~
Associated Financing
I would like to make the following recommendations to both
you and the Council (with your concurrence) at the February
12, 1980, meeting regarding the City's critical bus needs
and associated financing.
That the City:
1. approve of the recommended rehabilitation of 14 CVT
buses by Aztec Bus Lines at an estimated cost of
$250,000.
2. request MTDB to unreserve $200,000 of the City's .FY1979
LTF reserve funds previously reserved for purchase of 8
used buses.
3. request MTDB to rereserve these funds for
rehabilitation of CVT buses.
These recommendations are based on the following findings of
the attached bus needs study that I discussed with the
Council at the January 10 Council Conference:
1. There are neither sufficient local, state, or federal
funds available at present nor anticipated to be
available in the near future for purchase of new buses
(at a cost of about $130,000 apiece) suitable for CVT
service.
a) Even if there are sufficient federal funds
available to purchase new buses there are two
significant deterrants associated with receipt of
federal transit funds that would pose major
problems for the City.
1) City and Aztec approval of the employee
protection .l3(c) agreement;
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W. J. Robens -2- February 4, 1980
2) Complying with the federally mandated 504
regulations involving wheelchair
accessibility on all buses financed with
federal funds.
2. I have determined that there are not a sufficient
number of used vehicles suitable for CVT operation
available for sale or lease in the San Diego region as
well as nationwide. This determination was based on
thorough examinations of used buses that were for sale
or lease in Southern California (e.g. 5 MTDB used
buses) as well as contacts made with representative
transit operators and bus dealers/suppliers throughout
the country.
3. I am recommending the renovation of 14 CVT buses at
a total estimated cost of $250,000 as the most feasible
alternative available to meeting the City's critical
bus needs. I have determined that Aztec Bus Lirres
would be the best firm available (in terms of
capability, cost-effectiveness and time) to perform
this work.
4. I recommend that the Council grant approval to me to
initiate negotiations with Aztec Bus Lines foe
provision of CVT operations over the two .year period of
FY1981-1982. Included in these negotiations would be
contracting with Aztec for rehabilitation of 14 CVT
buses over a 5-9 month period effective July 1, 1980.
Aztec would be paid a lump sum amount for this
additional work (pending appropriate evaluatior_ of this
work by staff) spread over the first three regular
quarterly payments for FY1981 contract services.
5. I would ensure that the City's agreement with Aztec for
rehabilitation of buses include an equitable refund
arrangement. This would entail Aztec reimbursing the
City a prorated portion of the rehabilitation costs
over a 2-3 year period effective January 1, 1981, if
the City decided to use other than Aztec buses for CVT
service. It is estimated that renovation of the
existing CVT buses would add an additional 5 years to
the useful life of the bus. At the end of this 5 year
time period another extensive review will be made of
the City's bus needs and a recommendation. regarding the
most suitable means of providing adequate buses for CVT
service will be discussed then.
5. Since the Council originally requested h1TDB to hold
$200,000 of its FY1979 LTF reserves for the purchase of
used buses it will be necessary to request the MTD
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W. J. Robens -3- February 4, 1980
Board that the City now d?sires to expend these funds
on rehabilitation of CVT buses. About 550,000 of total
rehabilitation costs will be funded with FY1981 LTF
monies earmarked for capital purposes,
If MTDB rejects our request to rereserve $200,000 of
the City's FY1979 LTF monies for rehabilitation of CVT
buses, there are three additional options available for
financing bus rehabilitation costs:
a) Use of the City's FY1981 LTF allocation, if
sufficient funds are available;
b) Reserve available FY1980 LTF monies earmarked for
capital purposes to be expended for bus renovation
in FY1981;
c) Request the County as a member of SCOOT to fund
that portion of bus renovation costs for which the
City does not have available funds.
JAB:nr
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