TO:Andrew P. Powers, City Manager
FROM:Clifford G. Finley, Public Works Director
DATE:January 30, 2024
SUBJECT: Thousand Oaks Transit Replacement Light-Duty Compressed Natural Gas Cutaway Buses
RECOMMENDATION:
1. Approve amendment to previously issued purchase order with A-Z Bus Sales, Inc. (A-Z) (Colton, CA), for the purchase of two replacement light-duty compressed natural gas (CNG) cutaway buses due to cost increases for vehicles in the amount of $10,313.44, for a new total cost of $372,236.31.
2. Approve expense in the amount of $10,313.44 from A/C #651-5540-685-8400 (Materials and Supplies/Equipment $5,000 or More).
3. Find that this action is not a project as defined under the California Environmental Quality Act.
FINANCIAL IMPACT:
No Additional Funding Requested. The $10,313.44 additional expense included in the Adopted FY 2023-24 Transportation Fund Budget. The increased cost to purchase vehicles will not adversely impact funding for transit operations or street and road maintenance.
BACKGROUND:
Thousand Oaks Transit (TOT) has been serving the residents of Thousand Oaks and adjacent cities since 1981. TOT manages five local bus routes and one Summer Beach Bus Program that frequents Zuma Beach (Malibu, CA). TOT offers a variety of services which include fixed-route, Senior Dial-A-Ride (DAR), Americans with Disabilities Act (ADA) paratransit services, and a free Kanan Road shuttle service. Additionally, TOT provides services under contract to the Cities of Moorpark, Westlake Village, Agoura Hills, and the County of Ventura (including Oak Park and select unincorporated areas). TOT operates the CONNECT InterCity DAR Program through the East County Transit Alliance (ECTA).
TOT Replacement Light-Duty CNG Cutaway Buses
January 30, 2024
9 0
1 On October 10, 2023, City Council authorized staff to purchase two light-duty van or light-duty (cutaway) CNG buses for $361,922.87 through a cooperative purchasing agreement administered by the California Association for Coordinated Transportation (CALACT) and Morongo Basin Transit Authority (MBTA). The City received a 90-day pricing quote from A-Z (Attachment #1). A valid purchase order was processed and delivered within the quotation period.
During the time of the quotation there was a scheduled price adjustment in the master contract administered through CALACT/MBTA that was not included.
Moreover, the CNG upfitter declared higher prices for CNG conversions, and between the time of the quotation and the submission of the purchase order, Ford stopped receiving orders for 2024 vehicle chassis. Therefore, the vendor had to wait for the release of model year 2025 chassis to build the ordered vehicles, which resulted in additional costs. The total cost increase as a result of these changes to this vehicle order is $14,643.56.
On October 18, 2023, A-Z notified City staff that due to changes in conditions, they could not provide the ordered vehicles as specified without an increase in the previously approved purchase price. As a good faith effort to keep the increase as low as possible, A-Z proposed to absorb a portion of the price increase, which lowered the additional expense to the City from $14,643.56 to $10,313.44.
DISCUSSION/ANALYSIS:
CALACT/MBTA have confirmed that a planned price increase is included in the terms of the master agreement which binds the City despite the previous quotation.
CALACT/MBTA concluded that any pricing increases for CNG conversion or for vehicle chassis are not a Force Majeure situation as described in the contract.
Force majeure is a clause that is included in contracts to remove liability for unforeseeable and unavoidable catastrophes that interrupt the expected course of events and prevent participants from fulfilling obligations, which would place the City under no obligation to pay the increased costs.
Vehicle dealers are increasingly unwilling to “hold” vehicles for purchase for an extended period. A-Z acknowledged that the quotation received should have been good for only 30 days rather than the 90 days listed on the original quote. The original quote should have expired before the scheduled cost increase with CALACT/MBTA.
After consultation with the City Attorney's Office regarding the request for additional payment from A-Z, staff determined that the best course of action would be to continue with the purchase at the new price. The final revised cost to the City includes an additional $10,313.44, or $5,156.72 per vehicle, which amounts TOT Replacement Light-Duty CNG Cutaway Buses
January 30, 2024
9 0
1 to an approximate 2.9 percent increase to the original purchase price (Attachment #2). If the City were to not accept the price increase and quoted new vehicles, TOT would incur the full price increase of $14,643.56. TOT staff believes that the increase is reasonable given the proposed cost-sharing and the change in conditions justify purchasing the vehicles without any further delay.
As delivery times for vehicles are increasing, staff recommends accepting the revised quote for the purchase of two light-duty CNG cutaway buses. Although not an ideal situation with the City being charged more for the vehicles than originally quoted, staff accepts that there were extraordinary circumstances involved. From a practical standpoint, an alternative approach will only result in an additional delay to the bus purchase and could lead the City towards acquiring less desirable vehicles.
The order for two light-duty CNG buses is intended to replace two existing vehicles that reached their federally required minimum in-service life in 2019. Replacing these vehicles is necessary to maintain compliance with the Transit Asset Management Plan. Upon approval, the delivery of the vehicles will take up to two months due to the delays involved with the release of the next model year chassis.
Therefore, staff recommends approval of the amended purchase order to expedite delivery of the vehicles ordered.
COUNCIL GOAL COMPLIANCE:
Meets the following City Council goal:
C. Operate City government in a fiscally and managerially responsible and prudent manner to ensure that the City of Thousand Oaks remains one of California's most desirable places to live, work, visit, recreate, and raise a family.
PREPARED BY: Paul Weinstein, Associate Analyst
Attachments:
Attachment #1 – Original AZ Bus Sales Quote from August 3, 2023 Attachment #2 – Revised AZ Bus Sales Quote from December 15, 2023 DPW: 940-10\pw\ev\Council\2024\01302024\PO Amendment for Purchase of Light Duty Buses staff report.docx