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Home My WebLink AboutCS 13-03 11 REPORT TO COUNCIL Report Number: CS 13-03 Date: February 6, 2003 From: Gillis A. Paterson Director, Corporate Services & Treasurer Subject: APT A Bus Purchase - Pre 2003 Budget Approval Recommendation: 1. That Report CS 13-03 of the Director, Corporate Services & Treasurer be received and that: 2. Council provide pre budget approval for Ajax Pickering Transit Authority to purchase three (3) replacement buses from Orion bus Industries, which the City of Pickering will fund, to an upset limit of, $772,500; 3. funding in the City's 2003 Current Budget for the above acquisitions be as follows: Ontario Transit Renewal Reserve Fund $257,500 Transit Capital Reserve $515,000 4. the appropriate officials of the City of Pickering be authorized to give effect thereto. Executive Summary: Attached is a report to the APT A Board which outlines the situation and includes a recommendation which requires pre budget approval from the Councils of Ajax and Pickering. Ajax Council will be considering the above recommendations at its meeting of February 10, 2003. Financial Implications: The Ministry of Transportation has announced that APT A will receive 2003 funding, in the amount of $650,000 through the Ontario Transit Renewal Program, which may be applied to the purchase of these buses, on a one- third basis. It is expected that Pickering will receive, in 2003, from the Region, approximately $1,500,000 from the Regional Go Transit funds. 12 Report CS 13-03 Date: February 6, 2003 Subject: APT A Bus Purchase - Pre 2003 Budget Approval Page 2 Purchase price (upset limit) $1,545,000 $772,500 Pickering's Portion - 50% Ontario Transit Renewal Fund Transit Capital Reserve $257,500 $515,000 $772,500 By undertaking this purchase at this time and in this manner it is estimated that APT A, and therefore the municipalities, will save approximately $70,000 including applicable taxes. Background: The Ajax Pickering Transit Authority (APT A) identified, as part of the 2003 capital budget, the purchase of three (3) replacement buses. APTA currently has on order three (3) buses from Orion Bus Industries funded from the 2002 capital budget. There is an opportunity to "add on" the 2003 bus requirements to the existing 2002 purchase order. The timing and request for pre budget approval is predicated on delivery times and the ability to maintain the purchase price of 2002. Attachments: 1. Report APT A 09-03 from the General Manager, APT A Prepared I Approved I Endorsed By: ,~ ~ -- Gillis A. Paterson Director, Corporate Services & Treasurer GAP:vw Attachment Copy: Chief Administrative Officer Recommended for the consideration of Pickering City C u!)çil ç' - T ATTACHMENT#....L TO REPORT#.£;? I ~o 313 AJAX PICKERING ~ AUTHORITY REPORT TO THE BOARD FROM: Ted Galinis General Manager, Ajax Pickering Transit Authority Date: February 6, 2003 REPORT NUMBER: APTA 09-03 SUBJECT: APTA Purchase of Three (3) Additional Orion V Buses With Lifts (2003 Budget Item) RECOMMENDATION: 1. It is recommended that APT A Report 09-03 of the General Manager be received by the Board and that: . 2. the Board waive the APTA Purchasing Policy and approve increasing the existing Orion Bus Industries Production Order l221A fi.-om three (3) buses to six (6) buses: and that; 3. the Board authorize the General Manager to negotiate the purchase of three (3) Orion V buses from Orion Bus Industries at a cost not to exceed the approved upset limit of $515,000 each: and that; 4. this report and the Recommendation of the APT A Board be forwarded to the Councils of Ajax and Pickering for pre budget approval: and that; 5. the appropriate officials of the APT A be given, upon approval of the purchase by the respective Councils, the authority to give effect thereto. ORIGIN: APTA Report number APT A 09-02, dated May 27,2002. - Orion Bus Industries Bus Pròcurement AUTHORITY: N/A FINACIAL IMPLICATIONS: Approval of the above Recommendations will permit APT A staff to acquire three (3) additional buses (2003 budget) with concurrent manufacture and delivery with the 2002 order for a total of six (6) buses. ConcUlTent manufacturing and delivery of the three (3) additional buses in less than one year is unprecedented in the current manufacturing environment. 14 Page 2 Board Report 09-03 Subject: APT A Purchase of Three (3) Additional Orion V Buses With Lifts (2003 Budget Item) FINANCIAL IMPLICATIONS (Continued): The Ministry through the Ontario Transit Renewal Program (OTRP) has announced the APTA 2003 allocation of $650,000.00 for the purchase of replacement buses and major body overhauls. I have spoken with Mr. Peter Coghill, Team Leader of the Inter-Regional Transit Office and he has no issues with application of the OTRF funds for buses with accelerated delivery schedules. The Regional Transit Task Force has recommended that Regional GO Transit funds flow through to the Municipalities as they did in 2002. The purchase is included in the 2003 Capital Budget presentation. Adequate funds are available in the APTA Capital Budget under account 2930, sub account 6157. EXECUTIVE SUMMARY: It is APTA's intention to enter into a purchase agreement with Orion Bus Industries. Adding three (3) more buses to our existing Production Order 1221A will allow for significantly expedited delivery of the 2003 purchase and will provide much needed replacement vehicles for the aging fleet. Concurrent manufacturing of the six (6) buses will improve quality control issues at Orion, reduce maintenance costs for an aging fleet, reduce training requirements and will help standardize our spare parts inventory. In order to proceed with this purchase, we request the APTA Board to waive the tendering requirement of the APT A Purchasing Policy in this instance. We are in receipt of an e-mail tram Orion Bus Industries quoting the per vehicle cost at $425,684.00 excluding taxes. The is the same price as the 2002 purchase. If the normal procurement process was followed in this instance, the buses would be ordered in mid 2003 and delivery would occur in late 2004 or early 2005. The estimated per vehicle cost increase would be at least three to five percent. At five percent, the additional cost per bus would increase by approximately $21,000.00 for a total of $63,000.00 for three buses before applicable taxes. Unfortunately this opportunity has a very limited window for a decision because of the manufacturing process. A decision was required ten working days from receipt of their letter. The original deadline of February 14, 2003 has been extended to February 19, 2003. This timing will allow for pre budget approval by both Municipal Councils on February 10 and 17 in Ajax and Pickering respectively. BACKGROUND: Orion vehicles represent seventy five to eighty percent of our existing fleet. The Orion V's buses have a proven performance record and our operators are familiar with them. Adequate funding is available from repatriated GO Transit Regional Funds and the Ontario Transit Renewal Program. This purchase would be a continuation of the tag on approach taken by York region and APT A last year. A price validation, by APTA's General Manager, will be made to compare our costs to the York Region Transit contract. 3/... Board Report 09-03 Page 3 15 Subject: APT A Purchase of Three (3) Additional Orion V Buses With Lifts (2003 Budget Item) ATTACHMENTS: 1. 2. Orion Bus Industries Letter - Henry Bekker to Ted Galinis dated January 31, 2003. Orion Bus Industries ß-.mail- Yvonne Tavenor to Ted Galinis dated February 4, 2003. Prepared / Approved / Endorsed By: Prepared / Approved / Endorsed By: , .?" M~~ - Gil Paterson, Treasurer . Ajax Pickering Transit Authority 3/... 16 1111 Œ ~ŒJI' Œ 1m lI11 F£B - 3 loo:dllJ .....111 orlonll/@ Friday, January 31,2003 Mr. Ted Galinis General Manager Ajax Pickering Transit Authority 65 Harwood Avenue South Ajax, Ontario L 1S 2H9 Re: Quote for 3 Additional High Floor Buses Dear Mr. Galinis: Orion Bus Industries is pleased to submit its quotation to Ajax Pickering Transit Authority. Orion has a long history of providing its customers with the highest quality transit buses, and is committed to continuing this level of service into the future, The price of the additional 3 Orion V's based on your current Production Order 1221A will be $416,457.00 per bus. The price is based on a white bus with two stripes and includes delivery to Ajax and excludes all applicable taxes. Orion advises that no additional training is being offered. Please provide a change notice to the original Production Order within the next 10 days and Orion will commit to delivering all 6 buse5--OOflcurrently. Thank you for allowing Orion the opportunity to quote on this procurement. Please do not hesitate to contact me if you have any questions regarding our submission. Yours very truly, ORION BUS INDUSTRIES ){ß~ Henry Bekker Manager Technical Sales Orion Bus Industries 350 Hazelhurst Road Mississauga, Ontario L5J 4T8 Tel: (905) 403-1111 Fax: (905) 403-88qO A DaimlerChrysler Company Orion Bus Industries Inc. 165 Base Road, PO Box 748 Oriskany, NY 13424-0748 Tel: (315)223-5100 Fax: (315) 768-6520 Orion Parts - Canada 350 Hazelhurst Road Mississauga, Ontario L5J 4T8 Tel: (905) 403-7800 Tel: (800) 668-2871 Fax: (800) 297.5249 Orion Parts - US 165 Base Road, PO Box 748 Oriskany, NY 13424-0748 Tel: (315) 223-4419 Tel: (BOO) 786-8099 Fax: (800) 211-3760 An ISO 9001 Registered Company '" T, -è, ','d,'G,',",',',", 'E',""~, :,in,'¡s, "',~,'",', A,~, ad, ',i,tIo,", 'n,"â,"",'rBusé,",~"s",",-~'""""""-", "', "',",", "'@"',"""',""'=,"', ","""',"""""',', ',"',', ""«"",c','~,,',, k, '" ",',", ',','A',',"""~=:" =':, '::',,:::,:'::, ::::::,:::':",::':, ":::::::'::::::, M::I;ã:9j, iJ] L-~""""'~'%"_'_'_ffl_"'~"'-"'w_,,~~'-"""~""«w_-""'-".""-""=-"'~""""~='m""'~""""""M',..",,-"',.""._.m' .." "', 'w "" ,....,:,.", , "M.. ", '" '.' . 1 ~¡ From: To: Date: Subject: "Tavenor, Yvonne" <YTavenor@OrionBus.com> "'Ted Galinis'" <ted.galinis@townofajax.com> 2/4/03 12:05PM Additional Buses Ted Orion advises that the price quoted in our letter dated January 31,2003 did not include extended warranties on the engine and transmission. Should Ajax wish to have these extended warranties on the additional 3 buses then the price per bus would be $425,684.00. Orion also advises that in order to ship the 6 buses concurrently the new delivery date wi/I be July 25, 2003. As per our phone conversation this morning, please provide a change notice to the original Production Order by February 19, 2003. Thanks. Yvonne Tavenor Supervisor, Bid Administration Phone: (905) 403-7871 Fax: (905) 403-8600 Email: ytavenor@orionbus.com CC: "Pretty, Michael" <MPretty@OrionBus.com>, "Bekker, Henry" <HBekker@OrionBus.com>, "Balgobin, Gene" <GBalgobin@OrionBus.com>, "Attwell, Bob" <BAttwell@OrionBus.com> IDJ ~ (Ç~J[' ~ rm 1D1 FEB - 4 1003 11JJ