M E M O   /   N O T E   D E   S E R V I C E

 

 


 

To / Destinataire

Chair and Members of Transit Committee/Président et membres du Comité des services de transport en commun

File/N° de fichier: 

 

ACS2009-ICS-TRA-0020

From / Expéditeur

Alain Mercier

General Manager/Directeur général

Transit Services/Services du transport en commun

 

Contact / Personne-ressource :

Alain Mercier, General Manager/Directeur général,

Transit Services/Services du transport en commun

613-842-3636, 52271

Alain.Mercier@ottawa.ca

Subject / Objet

Four Additional Articulated Buses for 2009 with No Additional Funding/

Quatre autobus articulés pour 2009 ayant aucun financement additionnel

Date:    

10 November 2009

Le 10 novembre 2009

 


 

BACKGROUND

 

Transit Services is committed to increasing bus availability by 2014, as expressed in report ACS2009-ICS-TRA-0001 (Review of Bus Fleet Maintenance Standards and Processes).  New Flyer Industries (NFI), manufacturer of 600 of the OC Transpo buses, has proposed a two-year fleet reliability enhancement program (at their cost) that will allow Transit Services to achieve our bus availability objective.

 

The NFI program, which will be completed locally, requires the injection of four additional buses so that the current bus availability is not hampered by this effort and quality of service is sustained.

 

DISCUSSION

 

Transit Services is supporting this vendor-initiated reliability enhancement program by having New Flyer Industries (NFI) supply the four articulated buses under existing contract at no incremental cost or budget, and to be delivered this year, or early 2010.  In addition, NFI is reducing the unit cost by about 17 per cent to reflect the depreciated value associated with the two-year program.

 

The 2009 capital and operating budget submission for Transit Services included recommendations for the addition of 42 articulated buses. During Council’s deliberations of both budgets, the decision was made to reduce the growth bus budget by 25 units, which resulted in a net of $16.9M that was reassigned to the operating budget.

 

In following Council’s direction to find efficiencies, while not compromising service delivery, I am pleased to announce that the net reduction to the 2009 capital budget has been achieved, which has resulted in a balanced operating budget. 

 

FINANCE AND SUPPLY

 

The purchase of the four additional buses will not require additional funding. The 2008 and 2009 capital growth programs for hybrid buses, funded from development charges, both gas tax programs and transit debt, are expected to have a positive balance to pay for the buses for the following reasons:

 

q  US dollar devaluation by 15 per cent against the Canadian dollar between program budget in 2006 and contract award in 2007.

q  Hybrid bus bid competition resulted in lower than anticipated unit cost by almost $50,000.

 

The unit pricing for the four additional buses is in accordance with the current contract for articulated buses with NFI, RFP #2006-55615-P02.  The linear depreciation applied to the unit price is considered fair and reasonable.

 

As part of the NFI reliability enhancement program, the City is moving forward to resolve long-standing disagreements with NFI in relation to disputed warranty claims, payment holdback against contract RFP #2003-55615-P01 and a brake fire incident that will result in greater fleet reliability.

 

LEGAL

 

The City Clerk and Solicitor Department has been consulted on this matter and, in conjunction with OC Transpo and Supply Management, a contract has been prepared to evidence the resolution of the matters in issue with NFI and to provide for satisfactory performance security in favour of the City.

 

FINANCIAL IMPLICATIONS

 

As indicated in the report, there are sufficient savings within the hybrid bus capital growth program to fund the purchase of the four additional articulated buses.  No additional funding is required.

 

CONCLUSION

 

The growth requirement, reduced to 17 units at Council, has been re-established by four units within existing authority, albeit articulated diesel buses in lieu of hybrid standard models.  Currently, the City of Ottawa has a contract with New Flyer for articulated buses, but not hybrids. 

 

The four articulated buses, to be delivered this winter, is allowing for the approved fleet maintenance efficiency to be captured by 2012, as per commitment expressed in report ACS2009-ICS-TRA-0001.

 

Original signed by

 

Alain Mercier