SR-1000-002 (2)
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Tit: JFH :RLA: JW
Counc~l Meet~ng: 10/22/85
Santa Monica, Callfornla
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TO: Mayor and City Councll
FROM: Clty Staff
SUBJECT: AUTHORIZE THE CITY MANAGER TO DISPOSE OF 46 GRUMMAN
FLXIBLE BUSES
Introduction
In late October, the Santa Mon~ca Munlclpal Bus Llnes w~ll begln
recelvlng buses from General Motors of Canada. These buses wlll
be used to replace ltS Grumman Flx~ble buses bUllt ln 1979 and
1980. ThlS report recommends that the Clty Counc~l authorlze the
C~ty Manager to dlspose of the 46 Grumman Flxlble buses belng
replaced.
Background
On December 4, 1984, the Santa Monlca Clty Counc~l awarded a
contract to Dlesel Dlvlslon, General Motors of Canada for the
purchase of new d~esel trans~t buses to replace Grumman Flxlble
buses manufactured ln 1979 and 1980. An opt~on to that contract,
exerclsed by the City Counell on September 10, 1985, perm:Ltted
the purchase of addltlona1 buses to replace the rema~nder of the
Grumman buses manufactured ln 1980.
The In:Ltlal order of buses lS scheduled to arrlve ln late October
1985, whlle the flnal portion of the order has been tentatively
set for dellvery durlng March 1986. Unless the Grumman buses to
be replaced are dlsposed of ln a tlmely fashlon, the Mun~c~pal
Bus Llnes wlll be faced wlth problems storlng the replaced
vehlcles.
(P-fI
OCT 2 2 1995
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T;l:JFH:RLA: JW
Councll Meeting: 10/22/85
Santa Monlca, Callfornla
Because the Grumman buses were purchased with the asslstance of a
Federal capltal grant, they must be dlsposed of accordlng to the
regulatlons
of
the
Federal
Urban
Mass
Transportatlon
Admlnlstratlon
( UMTA) .
There are two alternatlve methods.
Flrst, they may be transferred to another UMTA grantee.
Under
thlS a1 ternatlve, title to the buses lS transferred to another
grantee ln return for 20 percent of the appralsed falr market
value of the bus.
ThlS represents the percentage of matchlng
Transportatlon Development Act {TDA} matching funds that were
used when the Grumman buses were orlglnally purchased and thus
the non-Federal share of the equlty.
Staff would very much prefer transferrlng the buses to another
grantee.
We have been ln contact wlth UMTA for the last several
months pursuing thlS alternatlve. However, to date a prospectlve
grantee lnterested in such a transfer has not been found.
If efforts to flnd a grantee lnterested ln the Grumman buses
prove frultless, the second alternative lS to sell the buses at a
publlC auctlon.
Recently, the Orange County TranSl t Dlstrlct
(OCTD) conducted an auctlon to sell 1 ts 63 Grumman buses. We
have lnformed UMTA that thlS may be our only alternatlve. Elghty
percent of the proceeds of auctlon would be returned to UMTA,
representlng the proportlonal Federal share of the buses.
Budgetary/Flnanclal Impact
If the buses are transferred to another grantee, the grantee must
pay the Clty 20 percent of the appralsed falr market value of the
buses, representlng the TDA portlon of the origlnal cost of the
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'J'D.~ JFH: RLA: JW
Councll Meet~ng: 10/22/85
Santa Monlca, Callfornla
veh~cle.
If the buses are d~sposed of by auct~on, 80 percent of
the proceeds must be forwarded to UMTA, whlle 20 percent would be
returned to the Mun~clpal Bus L~nes' Reserve for Revenue
Equ~pment.
Recommendat~on
ci ty staff recommends that the City CounCll authorize the C~ ty
Manager to dlspose of the Santa Monlca Munlc~pal Bus Lines I 46
Grumman Flx1ble buses bUl1t In 1979 and 1980 by elther of the
followlng methods:
l. Transferrlng t~tle to the buses to another UMTA grantee In
return for 20 percent of the appralsed falr market value, or
2. Selllng the buses at publ~c auctlon to the highest b~dder
and returning 80 percent of the net proceeds to UMTA.
Prepared by: J. F. Hutchison, D~rector of Transportatlon
R. L. Ayer, Asslstant D~rector of Transportation
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