Board of Directors Regular Meeting Agenda


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Meeting Date: 02/26/2014  

SUBJECT MATTER:
Receive, consider and act upon a recommendation from the Ad Hoc Transportation Committee to authorize an application to H-GAC for acquiring new park and ride buses through the H-GAC Transit Bus Fleet Expansion;
FISCAL IMPACT:

See analysis below

BACKGROUND:
The Board of Directors and Ad Hoc Transportation Committee have previously discussed purchasing buses for the Park and Ride program as an alternative to continuing to contractually lease them. Financial analysis has been presented showing costs for a full turnkey program (contract for buses and operations) and a partial turnkey program (purchase buses and contract for operations). After reviewing analysis based on a H-GAC Transit Bus Fleet Expansion grant funding 50% of bus purchases and the Township funding the remaining 50%, the Board decided to defer action and pursue efforts to secure additional grant funding.

Recent information indicates a grant may be authorized by H-GAC within the next few weeks that would fund 80% of the acquisition cost of a bus. Analysis was prepared based on this new assumption and presented to the Ad Hoc Transportation Committee on February 13, 2014. After review, the committee directed staff to bring the information forward to the Board of Directors with a recommendation to authorize the President/General Manager to make application to H-GAC for grant monies to fund 80% of the cost of acquiring up to 32 new park and ride buses, and to further recommend that the Township’s 20% share of the bus costs be funded from the Capital Replacement Fund at a maximum Township cost n ot to exceed $3,520,000 with full repayment (plus interest) to the Capital Replacement Fund from the Township’s Transportation Fund over a period not to exceed five years.

Attached is a cost analysis regarding the purchase of buses for the Park and Ride program utilizing the Township’s existing Capital Replacement Fund as an initial funding source. The Capital Replacement Fund could potentially be reimbursed over a 3.7 year period with cost savings generated by implementing a partial turnkey Park and Ride program.

The following assumptions were used to prepare the attached cost analysis:
 


$550,000 Cost to purchase new bus
 
x 20% Local match (80% funded by HGAC grant)
 
$110,000 Township’s cost per bus

 
   
32 Total buses in fleet
 
32,000 Total annual contract operating hours
 
$ 208 Operating cost per hour – full turnkey
 
$ 162 Operating cost per hour – partial turnkey
 
 
Summary – Partial Turnkey
$110,000/ Purchase price of each bus
 
$ 29,230 Annual surplus per purchased bus - used to reimburse Capital Replacement Fund
 
3.7 Years to reimburse Capital Replacement Fund

 
   
$20,830 Annual surplus per purchased bus - carried over to following year

 
   
Summary – Full Turnkey
$4,060 Annual surplus per bus - carried over to following year
 
 
The analysis shows that the projected reduction in the hourly rate charged by the bus operator as a result of implementing a partial turnkey program could generate an annual surplus per bus purchased of $50,060. Of this amount, $29,230 could be used to reimburse the Capital Replacement Fund, which translates into full reimbursement in 3.7 years. The remaining annual surplus of $20,830 per bus purchased would be carried over to the following year to pay for eligible expenses. The annual surplus per bus in a full turnkey program is projected at $4,060.
RECOMMENDATION:
Authorize the President/General Manager to make application to H-GAC for grant monies to fund 80% of the cost of acquiring up to 32 new park and ride buses, and further recommend that the Township’s 20% share of the bus acquisition costs be funded from the Township’s Capital Replacement Fund (up to a maximum of $3,520,000) with full repayment (plus interest) to the Capital Replacement Fund from the Township’s Transportation Fund over a period not to exceed five years.
Attachments
Analysis


    

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