SR-08-23-1977-6I4
Santa Monica, California August 3, 1977
TO: Mayor and City Council
AUG 2b1977
FROM: City Staff
SUBJECT: Recommendation to enter contract agreement for leasing
bus line tires and tubes. Bid No. 1295.
Introduction
This report,concerns the recommendation to authorize the City
Manager to execute a contract with Goodyear Tire and Rubber
Company for lease of tires and tubes for Santa Monica Municipal
Buslines. This contract is for the period September 1, 1977
through August 31, 1980. Two (2) one -year options are available.
Initial year costs are estimated to be $75,000.00. Funds are
available in account 35 -600- 654 - 000 -160 (Tires &.Tubes for Revenue
Equipment.
Background
In response to published Notice Inviting Bids to furnish bus tires
and tubes on a lease basis, the bid of Goodyear Tire and Rubber
Company was received and publicly opened and read in the office
of the City Manager August 2, 1977. Proposal forms were mailed
to eleven (11) prospective lessors and notices were advertised
in accordance with dity charter and municipal code provisions.
The sole bidder, Goodyear Tire and Rubber Company, is the current
tire supplier. This contract establishes a base rate of $.015591
per bus mile plus $.004893 per bus -mile for direct service. These
basic costs are subject to price variations in the nylon and rubber
markets and in direct service labor costs.
T0: Mayor
and City Council
-2-
August
3, 1977
Leasing is
considered to be
in the
best interests of
the
City since, on the basis of average tire life of seventy-
five thousand (75,000) miles, the cost per tire leased
would be $194.80 in contrast with $300.00 if the City
were to purchase these tires outright. In addition, pur-
chase of the necessary tires, tubes and spares would en-
tail an initial expenditure in excess of two hundred
thousand dollars ($2,000.000.00). It is estimated that
ninety -seven per cent (97 %) of the major bus lines in the
United States participate in tire leasing programs.
Recommendation
It is recommended that the City Manager be authorized to
execute this bus tire and tube lease contract with Goodyear
Tire and Rubber Company, the sole bidder, in the estimated
initial yearly amount of $75,000.00.
Prepared by: R.N. Aronoff
Purchasing Agent
Reference:
Contract No. 2363
(CCS)