SR-10-13-2015-3D
City Council
Report
City Council Regular Meeting: October 13, 2015
Agenda Item: 3.D
1 of 6
To: Mayor and City Council
From: Edward King, Director, Big Blue Bus, Transit Maintenance
Subject: Conversion of Two Gasoline/Electric Hybrid Buses to Compressed Natural
Gas
Recommended Action
Staff recommends that the City Council:
1. Authorize the City Manager to negotiate and execute a sole source contractual
services agreement with El Dorado National, a California -based company, to convert
two 2009 El Dorado National 30-foot buses from gasoline/electric power to compressed
natural gas (CNG). This is a two-year contract in an amount not to exceed $552,000
(including a 5% contingency) with future year funding contingent on Council budget
approval;
2. Authorize the City Manager to issue a Notice to Proceed to El Dorado National for the
conversion of two 2009 El Dorado National 30-foot buses from gasoline/electric hybrid
buses to compressed natural gas (CNG);
3. Authorize the Director of Transit Services to issue any necessary changes to
complete additional work within contract authority.
Executive Summary
Big Blue Bus (BBB) is in need of converting two 2009 El Dorado National 30 -foot
gasoline/electric buses to CNG. Staff recommends a sole source award to El Dorado
National, a Riverside, California-based company, for the conversion of gasoline/electric
hybrid vehicles to a CNG-powered propulsion system in an amount not to exceed
$552,000.
Background
On July 23, 2008, Council approved award of bid #2948 to Creative Bus Sales for the
purchase and delivery of five 30-foot gasoline/electric hybrid transit buses to replace
five Mini Blue Buses that had reached their useful life.
2 of 6
On December 22, 2008, BBB entered into an Agreement for Purchase of Buses #8963
for the purchase and delivery of five 30-foot gasoline/electric hybrid buses with an
option to purchase up to 25 additional vehicles.
On March 24, 2009, Council approved a modification to contract #8963 to exercise the
option to procure an additional ten 30-foot gasoline/electric hybrid buses.
On or about March of 2010, BBB took delivery of the first five gasoline/electric hybrid
buses and placed them into revenue service.
Immediately after placing the buses in service, the hybrid propulsion system
experienced a high rate of failure, resulting in vehicle breakdowns in revenue service,
no-starts in the yard when Motor Coach Operators were preparing or leaving BBB in the
morning to go into revenue service, and other related mechanical issues. At any given
time, at least two of the coaches are out of service pending repairs to the ISE Gasoline -
Electric hybrid system. The cost per mile to maintain the hybrid buses is over 250%
higher compared to the same type of buses with the CNG system.
Shortly after BBB took delivery of the first five gasoline/electric hybrid buses and placed
them into revenue service, the hybrid propulsion system manufacturer, ISE Corporation,
declared Chapter 11 bankruptcy and went out of busine ss. The company was
purchased by an offshore corporation that did not purchase the debt and, therefore, did
not honor the original warranty.
The manufacturer of the bus, El Dorado National, was responsive to the warranty claims
and facilitated warranty repairs. However, the complexity of the hybrid propulsion
system caused delays in repairing the buses. As a result, El Dorado National propose d
converting three of the five hybrid buses to Compressed Natural Gas (CNG) at no cost
to the City.
3 of 6
In September 2012, a First Amendment to Agreement for Purchase of Buses was
executed, allowing El Dorado National to convert three hybrid buses to Compressed
Natural Gas (CNG) at no cost to the City. In doing so, the City relinquished El Dorado
National of the remaining warranty on the last two hybrid buses.
Staff recommends converting the two remaining gasoline/electric hybrid buses to CNG.
The conversion would be performed by El Dorado National, the original manufacture r of
the buses.
Discussion
BBB, currently operates fifteen 30-foot El Dorado buses. Thirteen are CNG-powered
and two are gasoline/electric hybrids. The hybrid buses consistently break down and
are routinely out of service due to the no start condition, complete shutdown of system,
and slow or no acceleration. These breakdowns result in poor service quality to BBB
customers. Replacement buses must be placed in service, resulting in a maintenance
mechanic being taken off of the floor from other jobs. Towing services costs are
incurred due to the breakdowns.
Per FTA regulations, these buses have a useful life range of 1 0 years or 350,000 miles.
The City has an option to retire these vehicles early. However, since they were
purchased using Federal Transit Authority (FTA) funds, a prorated amount would have
to be paid back to the FTA. The prorated amount is calculated by dividing the original
purchase price by 10 years of useful life ($65,813) times the number of years the bus
was retired early (five years). The amount that would have to be paid back to the FTA
would be $329,067 per bus or $658,133 for both buses. In addition, to maintain current
transit services and fleet size, two new buses would have to be purchased at
approximately $575,780 per bus or $1,151,560 for two buses to replace those vehicles.
Total Cost of Bus If Retired 5 yrs. Early Dispose of 1
bus
Dispose of 2
buses
Original cost of 30' Hybrid Electric Bus $ 658,133 $ 1,316,266
4 of 6
Sales Tax $ 61,236 $ 122,472
Payment to FTA If Retired 5 Years Early $ 329,066 $ 658,133
Purchase of bus $ 575,780 $ 1,151,560
Grand Total $ 1,624,215 $ 3,248,431
Amount already paid $ (719,369) $ (1,438,738)
NET COST NOW $ 904,846 $ 1,809,693
Total net cost of the buses, tax, payment to FTA for early retirement and purchase of
new buses would be $1,809,693.
The cost to convert two gasoline/electric hybrid buses to CNG-powered buses is
$525,622. With a 5% contingency for unforeseen circumstances, the total net cost is
$551, 903.
Total Cost of Bus If Converted Convert 1 bus Convert 2 buses
Original cost of 30' Hybrid Electric Bus $ 658,133 $ 1,316,266
Sales Tax $ 61,236 $ 122,472
Estimated Cost to Convert from Hybrid to CNG $ 262,811 $ 525,622
Grand Total $ 982,180 $ 1,964,360
Amount already paid $ (719,369) $ (1,438,738)
NET COST NOW $ 262,811 $ 525,622
5% Contingency (unforeseen circumstances) $ 13,140 $ 26,281
TOTAL NET COST with Contingency $ 275,951 $ 551,903
The cost of retiring the two buses early and buying two new buses is more than triple
the cost of converting them.
Vendor/Consultant Selection
Staff recommends El Dorado National, the original manufacturer of the buses, on a sole
source basis. Section 2.24.080(a) of the Municipal Code allows exception to the
competitive bidding when competition does not exist, such as membership in
professional organizations, meetings, conventions, travel, legal advertising, public
utilities, and proprietary items of original equipment manufacturers and/or their
authorized exclusive distributors.
5 of 6
Staff recommends El Dorado National to convert two existing El Dorado National 30-
foot gasoline/electric-powered buses to Compressed Natural Gas-powered buses on a
sole source basis. The sole source conversion request would ensure that these buses
are compatible to the existing fleet of 13 CNG-powered El Dorado National buses and
the City recommends the proposed contract settlement of our claims against the
manufacturer for selling us a defective product.
Staff recommends a sole source award to El Dorado National for the conversion of two
existing gasoline/electric hybrid-powered buses to Compressed Natural Gas-powered
buses and related components for an amount not to exceed $552,000 including a 5%
contingency.
6 of 6
Financial Impacts and Budget Actions
The agreement to be awarded to El Dorado National is for an amount not to exceed
$552,000 (including a 5% contingency). Funds are available in the FY 2015 -16 Capital
Improvement Program budget in account C410106.589000. Future year funding is
contingent on Council budget approval.
Prepared By: Getty Modica, Transit Maintenance Officer
Approved
Forwarded to Council
Attachments:
A. El Dorado Hybrid Repower quote 7-17-15
B. Copy of El Dorado Hybrid Conversion to CNG Cost Analysis
C. July 23, 2008- Council award of bid #2948
D. March 24, 2009- Council approved modification for contract 8963
E. El Dorado Hybrid Conversion to CNG Cost Analysis 9-30-15 EDITED
Cummins ISL G Engine Conversion Parts 193,800.00$
Allison Transmission Labor 50,600.00$
Air Conditioning System Subtotal 244,400.00$ Total
EMP Electric Cooling System
CNG Fuel System
Harness Assemblies
Hydraulic Steering System
Engineering
Disassembly
Installation
Body repair
Misc. Unforeseen Labor & Parts Sales Tax 18,411.00$
262,811.00$
Convert 1 bus Convert 2 buses Dispose 1 bus Dispose 2 buses
658,133.00$ 1,316,266.00$
658,133.00$ 1,316,266.00$ Sales Tax 61,236.14$ 122,472.28$
61,236.14$ 122,472.28$ 287,747.64$ 575,495.28$
262,811.00$ 525,622.00$ Purchase of bus 575,780.00$ 1,151,560.00$
982,180.14$ 1,964,360.28$ 1,582,896.78$ 3,165,793.56$
(719,369.14)$ (1,438,738.28)$ (719,369.14)$ (1,438,738.28)$
262,811.00$ 525,622.00$ 863,527.64$ 1,727,055.28$
5% Contingency 13,140.55$ 26,281.10$
275,951.55$ 551,903.10$
Funding Available: - Programmed 425,000.00$ Funding Available: - Programmed 425,000.00$
Funding Available: - UnProgrammed 127,000.00$ Funding Available: - UnProgrammed 127,000.00$
Total Funds Available: 552,000.00$ Total Balance: (1,175,055.28)$
Cons:
-6-12 months out of service for conversion Cons:
Pros: -Pay FTA for early disposition
-extend life of bus beyond 2020 -6-12 months of bus production
-new 5 year warranty on transmission and engine -No funds available for replacement bus
Sole Source Justification:
-engineering
-reliability
-consistency/unformity with existing El Dorado 30' CNG buses
71,936.91$
4
287,747.64$
719,369.14$
Total Cost to Convert to CNG - Per Bus
Estimated Cost to Convert from Hybrid to CNG
Payment to FTA If Retired 4 Years Early
Grand Total
Total Cost of Bus if Converted to CNG Total Cost of Bus If Retired 4 yrs. Early
Total Cost of (1) One 2009 Hybrid Electric 30' Bus
Cost to Convert From Hybrid Electric to CNG Cost To Retire and Replace in 2015 With New
Gillig CNG 29' Bus
Prorated cost of bus (per year)
Number of Years Owed to FTA
Grand Total
Conversion quote
provided by El Dorado
on 7/17/15
Original cost of 30' Hybrid Electric Bus
Original cost of 30' Hybrid Electric Bus
Cost of (1) one 2009 Hybrid Electric Bus
Sales Tax
Original Cost of (1) One 2009 El Dorado Hybrid Electric 30' Bus
658,133.00$
61,236.14$
Sales Tax
TOTAL NET COST NOW
Amount already paid Amount already paid
NET COST NOW NET COST NOW
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Reference:
CONTRACT NO. 10195
(CCS)