Memorandum

City of Lawrence

Public Transit

TO:	Dave Corliss, City Manager
FROM:	Cliff Galante, Public Transit Administrator
CC:	Debbie Van Saun, Assistant City Manager
Date:	February 12, 2007
RE:	FY2008 Transit Earmark Request

I. Project/Item Description:

Seeking City Manager consideration to include Fiscal Year 2008 Transit Earmark request to the Kansas Congressional Delegation in the amount of $1,920,000 for the replacement of six (6) fixed-route transit vehicles and an additional $400,000 to complete a feasibility study for Bus Maintenance Facility as part of the consent agenda at the February 20^th City Commission Meeting. The total Federal funding request of $2,320,000 to the Congressional Delegation would be formally made as “City of Lawrence, KS Transit System - Bus and Bus Facilities” to maximize flexibility of use of funds. The priority for the use of funds would be to first address fixed-route vehicle replacement of the City’s transit fleet.

II. Project Description:

The Transit Department is seeking to obtain necessary Federal and matching local funds to replace six (6) fixed-route transit vehicles that will reach their use service lives at the end of 2008 (calendar year). The City acquired a fleet of 12 transit vehicle to operate fixed-route service in 2001. The vehicles that were acquired are considered medium-to-heavy duty with a useful service life of 10 years or 350,000 miles. Annually, each bus travels 50,000 to 55,000 miles operating 14 hours a day and approximately 307 days per year. By the end of this year, the entire fixed-route fleet will have an average of 300,000 miles. To date, many of these vehicles have undergone costly repairs in order to keep them service. Excessive vehicle downtime and reliability will continue to be a concern as the vehicles age and more miles are put on them.

The City currently has sufficient Federal earmark and local matching funds to acquire six (6) heavy- duty (12 year or 500,000 mile), 35ft., fixed-route vehicles at a unit cost of $320,000 each. The FY2008 Federal Transit earmark request is to obtain sufficient funding to replace the six (6) remaining vehicles.

It is important to keep in mind that Federal transit earmarks can cover up to 80% of vehicle acquisition or other capital costs. The City should address its capital replacement needs by continuing to seek Federal funds to help cover the cost.

In addition, it is important to note that it is in the City’s best interest to replace as many fixed-route vehicles as possible prior to the end of 2008 when the service contract with MV Transportation, Inc. also expires. Any contractor bidding on the future service contract will factor the age and maintenance requirements of the fleet to be operated into their pricing. New buses covered under a manufacturer’s warranty should help keep maintenance costs down in the early years of a contract.

Currently it takes approximately 18 months from the time of vehicle order to delivery. The Transit Department as part of it’s Capital Replacement Plan will be seeking City Commission approval in the coming months to order six (6) vehicles utilizing existing Federal and local funding. The Transit Department will replace other vehicles as future funding becomes available, possibly requiring some vehicles to operate longer than the manufacturer stated useful service life.

In addition to addressing vehicle replacement needs, the Transit Department is seeking $400,000 to include in the earmark request under “Bus and Facilities” to obtain necessary Federal and local matching funding to complete a feasibility study for a new joint City/University of Kansas Bus Maintenance/Administration facility. In an effort towards coordinating City and University transit services, the Transit Department and the University of Kansas representatives mutually understand one of the greatest benefits of coordination would be sharing in the cost of designing, constructing, and operating a shared maintenance/administration facility. The University has formally requested that the City include the financing of this study in the FY08 earmark request.

III. Project/Item Funding:

In terms of local match, the Transit Department recommends sending a formal request to the Kansas Department of Transportation about utilizing available Kansas Turnpike Authority toll credits to be used as the 20% local match. Toll credits have been used routinely in the past by other transit systems in the State to help cover local matching requirements. KDOT uses toll credits only for transportation capital projects and makes them available on a case by case basis through a formal request to the Bureau Chief of Program Management. It is my understanding the City of Lawrence has never pursued utilizing toll credits in the past. For accounting purposes, toll credits are considered an in-kind match that represent a pre-determined dollar value, but are not considered real money.

Federal funds acquired through the earmarks would be used to cover 100% of the real acquisition cost of the vehicles.

If sufficient toll credits can be obtained, it would lower the City’s responsibility to commit local dollars to cover the 20% match.

Using toll credits:

Federal share (80%): $1,920,000 (6 vehicles x $320,000 each)

Local share (20%): $480,000 toll credits for accounting purposes (City contribution: $0)

Total (100%): $2,320,000

Without toll credits:

Federal share(80%): $1,920,000

Local share (20%): $480,000 city contribution

Total (100%): $2,400,000

If toll credits are not available or cannot be obtained from KDOT, then the City will have to match the Federal dollars it plans to spend. If Federal earmark funding is available after the vehicles are acquired, the balance can be used to fund other capital bus and bus facility needs the City identifies, such as the feasibility study of a new Bus Maintenance/Administration Facility. The local match for the feasibility study for a new Bus Maintenance/Administration Facility would be equally shared between the City and University of Kansas.

Feasibility Study:

Federal share (80%): $400,000

Local share (20%): $50,000 City/$50,000 University of Kansas

Total (100%): $500,000

The total City obligation if entire earmark request was funded and toll credits could not be obtained: $530,000

$50,000 University of Kansas

IV. Action Request

Seeking City Commission approval to authorize staff to submit a FY2008 Federal Transit earmark to the Kansas Congressional Delegation in the amount of $2,320,000 (federal funds) under “Bus and Bus Facilities” to be used primarily for fixed-route vehicle replacement of the City’s transit fleet. Any remaining available Federal funds would then be used towards completing a feasibility study for a shared Bus Maintenance/Administration facility.