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Home My WebLink AboutCS 45/01 -- REPORT TO COUNCIL FROM: Gillis A. Paterson Director, Corporate Services & Treasurer DATE: November 26,2001 REPORT NUMBER: CS 45-01 SUBJECT: Acquisition of Buses RECOMMENDATION: 1. That Report CS 45-01 from the Director, Corporate Services & Treasurer be received; 2. a) Council approve the acquisition of one refurbished GMC bus from Eastway Ontario Inc. at a cost of approximately $42,250 (plus applicable taxes) to replace the Orion VI bus that is undergoing extended repairs; b) That this bus be leased to the Ajax/Pickering Transit Authority (APTA) until approximately October, 2002 and then a buyout provision be included in that lease; c) That all terms and conditions of the purchase, lease and disposition of bus to be leased to APTA be subject to the approved of the Chief Administrative Officer and the Director, Corporate Services & Treasurer of the City of Pickering; - 3. A second 1983 GMC bus be purchased from Eastway Ontario Inc. with the cost to be split 50150 with the Town of Ajax; and, 4. The appropriate officials of the City of Pickering be authorized to take the necessary actions to give effect thereto. ORIGIN: Ajax/Pickering Transit Authority AUTHORITY: The Municipal Act Transit Merger Agreement dated August 8, 2001 FINANCIAL IMPLICATIONS: The purchase, lease and eventual sale to APTA of the first bus is intended to be structured in such a way it has no long term fmancial implications on the City of Pickering. The City would in effect finance the purchases, for one year, to be repaid by APTA. The purchase of the second bus is essentially a pre-budget approval and will cost the City of Pickering approximately $21,000 plus applicable taxes. - EXECUTIVE SUMMARY: Not applicable --/ -' Report to Council CS 45-01 Date: November 26,2001 Subject: Acquisition of Buses Page 2 -- BACKGROUND: Attached is a memo from the Deputy Manager, Ajax/Pickering Transit Authority, on the replacement of the two Orion buses that were involved in separate engine compartment fires in May and September of this year. One of the buses is expected to be back in service by approximately year end. However, as it will be approximately one year before the second bus is returned to service, APTA has requested that the City of Pickering provide alternate arrangements so that it continue with its present level of service. Their recommendation is that the City of Pickering purchase a bus, lease it to APTA who would recover the leasing costs from our insurers. It is intended that should this be approved, it will cost the City virtually nothing financially and APT A will be able to maintain its level of service. The purchase of the second bus is for backup purposes and essentially a pre-budget approval for the 2002 budget. Further details can be found in the attachment. I have been advised that the two Co-Chairs of the APT A Board are aware of the contents of the attached memo and support the recommendations. If approved by Pickering Council, then it is intended that this matter will be put before the APT A Board for their consideration. It is coming to Pickering first simply due to timing at year end of the meeting dates of Council and the Board. ATTACHMENTS: 1. Memorandum from Deputy Manager, Ajax/Pickering Transit Authority dated November 19,2001. - Prepared! ApprovedlEndorsed By: _~~e~ Gillis A. Paterson Director, Corporate Services & Treasurer GAP:vw Attachment Copy: Chief Administrative Officer General Manager, Ajax/Pickering Transit Authority Recommended for the consideration of Pickering City Council - ......./ ----- --' . .' . (;{; 1~ '0 I ATTACHj\lIEI\iTrf-1- fa REPORT#_ - AJAX PiCKERiNG ~ AUTHORITY To: Gillis Paterson, Director, Corporate Services, APTA Treasurer Date: November 19,2001. Subject: Replacement of Orion VI Buses # 2004 and #2005 Executive Summary: .- APT A experienced an engine compartment fire involving Orion VI bus #2005 on May 1, 2001 and a second engine compartment fire involving Orion VI bus #2004 on September 10, 2001. Fire damage to both buses was extensive. These buses are the property of the City of Pickering and therefore, Pickering is be responsible for financing and administering replacement buses. Amounts paid by Pickering to replace the fire damaged buses are recoverable and will form a part of our insurance claim. We have been advised that repairs to Orion VI bus #2005 are expected to be completed within two (2) months (January 2002 target). Repairs to Orion VI bus #2004 are not expected to be completed until the October 2002. Upon entering the winter season, passenger loads will increase and APTA will no longer be able to accommodate student passenger loads without the benefit of a minimum of one (1) 40' bus to replace Orion VI bus #2004. APTA staffhave contacted local transit properties in the GTA to enquire about the possibility of leasing buses. Although several local properties have leased buses to Pickering in the past, no buses are currently available for lease locally. . / Eastway, a Burlington bus refurbishing company, has provided APTA with the option to lease or buy up to two (2) 1982/1983 refurbished GMC buses. Maintenance staff have completed an inspection of these vehicles and deemed them to be in good condition. The Eastway bus is available to lease at a fixed rate of $3,500 per month. The lease provides a full powertrain warranty and requires a minimum leasing term of one year at a total cost of $42,000.00 (plus GST). Eastway has quoted a purchase price of $42,250.00 (plus applicable taxes). Thus, the cost to lease an Eastway bus (based on a minimum one year term) is comparable to the purchase price. - .2/... Recommendation: 1. That the City of Pickering purchase one (1) used 1982 GMC New Look bus for a sum of $42,250.00 (plus applicable taxes) from Eastway Ontario Inc.; and that -../ 2. APTA lease-to-buy the used GMC bus from the City of Pickering for a sum of $3,500 each per month (plus GST) until such time as fire repairs are completed on buses #2004 in October 2002; and that 3. The City of Pickering notify Cowan Insurance Company by letter, of APTA's intent to claim approximately $42,000.00 in leasing costs for the replacement bus; and that 4. Upon the return of bus #2004, the City of Pickering sell the used GMC bus to APTA for the sum of $250.00 (plus GST), representing the difference between the purchase cost and the quoted cost of one (1) year of leasing. 5. That the City of Pickering Finance Committee consider the purchase a second used 1983 GMC New Look bus for a sum of $42,000.00 (plus applicable taxes) from Eastway Ontario Inc., the cost to be split 50/50 with the Town of Ajax. Financial Implications: Cost: Purchase one (1) used 1982/1983 GMC reconditioned 40' bus: $42,250.00 (plus taxes) Recovery: Estimate Insurance Claim Recovery (12 mth. lease to APTA) :$42,000.00 (plus GST) Net Cost to Pickering: $250.00 ~ Background: Between June and October 2001, APTA staffhave contacted the following transit authorities and refurbishing companies concerning bus leasing. Mississauga Transit (4 buses were leased to Pickering in 1998/99) Toronto Transit Commission Brampton Transit Whitby Transit Oshawa Transit (1 bus was leased by Pickering in 1998) Cobourg Transit (2 buses were leased by Pickering in 1998) Peterborough Transit Mississauga Truck and Bus Transit International Leasing, California, US Mecano, Quebec Eastway Ontario Inc. The transit authorities contacted have not been able to expand their fleets to meet growth demand or more frequent mechanical repair requirements on aging fleets. Consequently, these properties no longer have the flexibility to lease buses. - .3/... _r- For Discussion - The need for a second used 40' Bus: Page 3 APT A has been advised that repairs to Orion VI bus #2005 are expected to be completed within two (2) months. Thus far, APTA has been able to replace our damaged buses with existing Ajax/Pickering spare inventory. Upon entering the winter season, passenger loads will increase and the need for larger vehicles will become more ;critical. Even with the return of our bus # 2005 and the addition of the used Eastway bus to replace bus # 2004, APTA would like the City of Pickering and the Town of Ajax to consider purchasing a second used bus. In earlier discussions with Eastway, APTA staff were preparing for the need to replace both of our damaged Orion VI buses for an extended period of time. During these discussions,. APT A was offered two (2) used GMC buses. The need for one (1) replacement bus is critical, however Pickering and Ajax may want to consider purchasing a second used bus for the following reasons: ~ There will be a significant delivery delay on new bus orders. Used buses are cost-effective "insurance" against future major mechanical breakdowns. Used 40' buses provide needed scheduling flexibility for planned fleet rilairi.tenance. APTA will be removing a minimum of six (6) buses from service for short periods of time in the next several months to complete needed engine rebuilds. As an alternative to the cost of additional winter "overflow" buses, used 40' used buses are a cost-effective means to ease winter crush-load conditions on our heavier school service routes. Temporary increase to fleet capaCity to supplement service harmonization and expansion logistics. .~ ~ ~ ~ - ~ eo Recommendations Approved: " Attachments: 1. 1993 GMC New Look photograph 2. Eastway purchase quote - 1983 GMC New Look VN#2GHYT82W5D3500142 . 3. Eastway purchase quote - 1982 GMC New Look VN#2GHYT82W5D3500101 . 4. Eastway leasing quote (vehicles identified above). - Copy: Regional Councillor Maurice Brenner, Co-Chair, APTA Regional Councillor Jim McMaster, Co-Chair, APTA Stan Karwowski, Manager Financial Services, City of Pickering Gary Moskalyk, Operations Manager, APT A IATTACHMENT'..i._ TOREPO~ -./ -tl:,.~-'- '1Ih ..----~:...-,-~~~,:-~~" -"., ' ."~;;~,u/:;~:~,~_ --/ l J. -- - Oct 24, 2001 Customer: Pickerinl!:/Aiax Transit Model: GMC New Look 5307 VN#: 2GHYT82W5D3500142 Specifications , ATTACHMENT' ~ 89173 1 (Ontario) Inc. · Engine - 6V71 · Transmission - V 730 · Air Ride Driver's seat · Power Steering · Tilt-telescopic steering column · 47 seats · Structure repairs & replace as necessary · Panel replaced as necessary · Painted to spec · Safety Certificate · Clean Air Certificate - Price - 965 lvlackay Street Pembroke. ON K8B 1A2 Bus: (613) 735-4593 Fax: (613) 735-0747 259 I Edinburgh Place Ottawa, ON Kl B 5Ml Bus: (613) 745-6123 Fax: (613) 747-9133 TO REPORT # = Unit: 25082 1 815 Ironstone Drive Burlington. ON. L7L 588 Bus: (905) 33] -5877 FlL'C (905) 331-9.124 TO REPORT# 89 J 731 (Ontario) Inc. --' Oct 24, 2001 Customer: Pickerin2/Aiax Transit Model: GMC New Look 5307 Unit: 25055 VN#: 2GHYT82W2D3500101 Specifications · Engine - 6V71 · Transmission - V 730 · Air Ride Driver's seat · Power Steering · Tilt-telescopic steering column · 47 seats · Structure repairs & replace as necessary · Panel replaced as necessary · Painted to spec · Safety Certificate · Clean Air Certificate ---' 965 Mackay Stn:et Pembroke. ON K8B IA2 Bus; (613) 735-4593 Fax: (613) 735-0747 2591 Edinburgh Place Ottawa.. ON KIB 5Ml Bus: (613) 745-6123 Fax: (613) 747-9133 ] 815 Ironstone Drive Burlington. ON L7L 5B8 Bus: (905) 33 I -5877 Fax (905) 331-9124 -- ,. Aug 22, 200 I Gary Moskalyk Supervisor Transportation Division City ofPickering Dear Mr, Moskalyk: ATTACHMENT # 4- TO REPORT # 891731 (Ontario) Inc. As per your inquiry for rental of a 40 foot transit bus. ,..... The price per month is $3,500 per month for a I year fixed lease and $4,000 per month for an open rental with no time limit requirement. Terms and conditions are listed in the enclosed document. Sincerely Jerry Kucheran VP Sales and Marketing - 96:" Macl;ay Street Pembroke. ON f.:8B IA2 Bus: (613) 735-4593 Fax: (6 i3) 73~-0747 2591 Edinburgh Place Ottawa. ON KIB ~Ml 13m;: (613) 745-6123 Fax: (613) 747-9133 1815 ironstone Drive Burlington. ON L7L 5B8 Bus:. (905) 331-~877 Fax: (905) 331-9124 --," ~. -