Los Angeles County

Metropolitan

Transportation

Authority

One Gateway Plaza

Los Angeles, CA

90012

2i3.922.6ooo

10FINANCE AND BUDGET COMMITTEEOctober 6, 1998

SUBJECT: ACCELERATED BUS PROCUREMENT FUNDING PLAN

ACTION: APPROVE ACCELERATED BUS PROCUREMENT FUNDINGPLAN

RECOMMENDATION

Approve funding plan for the following actions taken at the September 28, 1998 boardmeeting. Those actions included:

A. Adopting an Accelerated Bus Procurement Plan;

Authorizing the negotiation and exercise of a Change Order with NeoplanUSA to purchase up to 100 additional Neoplan High Floor CNG buses(subject to resolution of remaining warranty issues) in an amount not exceed $38 million, which is inclusive of funding required for taxes, delivery,spares and optional equipment; and,

Co Authorizing the negotiation and exercise of a Change Order with New Flyerof North America on the base 222 bus buy to change to a low floorconfiguration, at a cost not to exceed $900,000.

IO

DISCUSSION

The purpose of this report is to identify the proposed funding sources for theaccelerated bus procurement plan (the "Plan") to satisfy the condition to the Board’sapproval of the Plan on September 28, 1998. At that meeting, the Plan was approvedsubject to:

"... availability o f funding to be presented at the October Finance and Budgetand Operations committees’"

To identify the additional funds required to implement the MTA Board action, stafffirst reviewed the projected costs of the accelerated procurement plan. Staff thenreviewed the availability of revenues in the committed baseline portion of the draftreport for Milestone 1 of the Regional Transit Alternatives Analysis. As a final step,and only as a last resort, staff determined the amount of funds that must, bynecessity, come from the uncommitted funds of the Regional Transit AlternativesAnalysis. The remainder of this report describes the cost and revenue side results of

Accelerated Bus Procurement Funding PlanOctober 6, 1998Page 2

this staff work and then describes the net amount to be added to the committed baseline of theRegional Transit Altematives Analysis.

Accelerated Bus Procurement Plan Costs

To determine the total cost of the Plan, staff combined the costs of the acquisition of 1,313 busesassumed in the Restructuring Plan with the net additional 782 buses. Then, to determine theadditional cost of the Accelerated Bus Procurement Plan, as compared to the Restructuring Plan,stafftook the following steps:

Adjusted the Restructuring Plan to make it consistent with the MTA’s FY 1998-99 Budgetaction, which occurred after the adoption of the Restructuring Plan. This action raised thebase by 8 buses (from 1,313 to 1,321);

¯ Added the cost of optional equipment necessary to make the buses more technologicallyadvanced; and,

¯ Assumed that the entire MTA fleet will become CNG powered and included the added costof the fueling facilities that would be necessary to support an all CNG fleet.

Based on these premises the total cost of the Plan is projected to be $817.3 million which is$310.6 more than the adjusted Restructuring Plan cost, as shown in Table 1. This added cost of$310.6 million must first be compared to the revenues available, as will be discussed below,before the net impact on the Regional Transit Alternatives Analysis can be determined.

Accelerated Bus Procurement Plan Revenues

Once the added cost of the accelerated plan was identified, staff reviewed the revenues shown ascommitted in the draft Milestone 1 Report for the Regional Transit Alternatives Analysis anddetermined that the following additional adjustments to the revenues available were necessary:

Removed t~om the committed baseline the increment needed to upgrade standard fareboxesto advanced technology (Metro Card) fareboxes and re-assigned the savings to theAccelerated Bus Procurement. The Metro Card fareboxes are to be evaluated as an option inthe system-wide improvements portion of the Regional Transit Alternatives Analysis insteadof being funded in the baseline;

Adjusted the committed baseline funds in the Regional Transit Alternatives Analysis to re-assign Section 5307 transit capital funds from the MTA Capital Improvement Program to theAccelerated Bus Procurement Plan; and,

Accelerated Bus Procurement Funding PlanOctober 6, 1998Page 3

Reviewed funds available from a new discretionary Clean Fuels bus program in TEA-21 andfrom on-going AB 2766 funds administered by the South Coast Air Quality ManagementDistrict.

These additional revenues were combined with the revenues previously assumed to be availablein the Restructuring Plan resulting in total projected revenues of $85.4 million. The remainingshortfall of $225.1 million will be added to the baseline of the Regional Transit AlternativesAnalysis.

Funding Risks

This funding plan projects that certain revenues will be available. There is some risk that someof these funds will not be available due to unforeseen actions by legislators, the FTA, or theSCAQMD. The Congressional risks are low because TEA-21 was just enacted and thatlegislation included minimum guarantees for the formula programs assumed in this report. TheFTA must act to approve discretionary grants from the Clean Fuels bus program in TEA-21.Since this is a new program, the risk that these funds do not come through is somewhat greater.This greater risk has been mitigated by TEA-21 in that the formulas used favor areas with highair pollution. The SCAQMD AB 2766 funds are programmed in a competitive process, and sothese funds are probably the most subject to change.

Funding Neoplan Buses and the New Flyer Low Floor Change Order

As shown in Table 1, the total FY 1999 bus acquisition costs are projected to be $91.2 million.The MTA’s FY 1999 Adopted Budget identified $65.1 million in funding, leaving a $26.1million shortfall Staff is proposing to fund the $26.1 million shortfall as follows:

Fund Source $ Millions

Clean Fuels Bus Funding (TEA-21) $ 2.7SCAQMD AB 2766 Funds $ 3.7Section 5307 (Section 9) $ 0.6Congestion Mitigation and Air Quality Improvement $19.1Total $26.1

Accelerated Bus Procurement Funding PlanOctober 6, 1998Page 4

Expeditious approval of the Plan will ensure that the MTA can hold its place in line for FY 1999delivery of the Neoplan buses.

Prepared by: David Yale, Director, Capital Planning

Office of the Chief Executive Officer

x:\dyale~RTAA Accelerated Bus Procurement Plan

Table 1Bus Procurement Schedules and CostsAccelerated Bus Procurement Funding Plan ($ millions)

Bus CostsFY 1998 DeliveriesNeoplan BaseNeoplan OptionNew Flyer1

New Flyer BaseN,F, Base Low FloorNew Flyer OptionBus Procurement PendingNew Bus Orders2CNG Buy-up:

BusesFacilities

Subtotal CNG Buy-up n/aTotal Costs 237

FY 1998 FY 1999 FY 2000 FY 2001 FY 2002 I FY 2003 FY 2004 TotalsBuses I Cost Buses I costBuses I cost Buses I costBuses I CostI Buses I costBuses I Cost Buses I cost

237 $84.2 237 $84.2100 $39.3100 $38.020 $6.3

1 $7.6 22~ $74.8$0.9

215 $77.2

$0.5$0.0 n/a $0.0 n/a $0.5

$84.2 221 $91.2 437 $153.4

279 $96.8

121 $47.9

$2.1$1o.o

n/a $12.1

400 $156.8

100 $39.3100 $38.O20 $6.3223 $82.4

$o.9279 $96.8215 $77.2

400 $148.3 200 $76.4 200 $76.4 921 $349.0

$7.0 $3.5 $3.5 n/a $16.1$6.0 $5.5 $5.0 n/a $27.0

n/a $13.0 n/a $9.0 n/a $8.5 n/a $43.1400 $161.3 200 $85.4 200 $84.9 2,095 $817.3

BUS Revenues I Buses I $ I Buses I $ I Buses I $ I BusesRestructuring Plan3

Section 5307 (Section 9) $70.0 $46.1 $51.4RSTP $10,0Prop. C 40% Bonds $1.1 $27.5TDA Article 4 $9.3 $9.0SCAQMD AB2766 $3.8

Subtotal Restr Plan 227 $84.2 161 $65.1 223 $78.9New Funding:

Clean Fuel $2,7 $2.7SCAQMD $3.7 $2.0Sect. 5307 (Section 9) $0.6 $0.8

$0.0 n/a $7.0 n/a $5.5 n/aSubtotal New Fundingl n/aAdditional From RTAA

CMAQRTAA

Subtotal RTAASubtotal New + RTAATotal Revenues

Notes:

$ I Buses I $ I Buses I $ I Busesl $ II Buses

$52.7 $54.1 $58.1

$3.9 $4.7 $0.6$9.1 $9.8 $10.0

$1.3214 $65.7 164 $68.6 165 $70.0

$2.7 $2.7 $2.7$2.0 $2.0 $2.0

$17.7 $8.7 $21.7$22.4 n/a $13.4 n/a $26.4 n/a

$19.1$69.0 $68.7 $79.3

n/a $0.0 n/a $19.1 n/a $69.0 n/a $68.7 n/a $79.310 $0.0 60 $26.1 214 $74.5 186 $91.1 236 $92.7

237 $84.2 221 $91.2 437 $153.4 400 $156.8 400 $161.3

(1)Low floor diesel buses from Las Vegas purchased using local funds.(2)These costs are based upon a 50% CNG and 50% clean diesel bus fleet. The added (marginal) cost to purchase an all CNG

fleet, including facilities, is shown as the "CNG Buy-up." The bus and facilities cost of the "CNG Buy-up" are reflected separately.(3)The first two years of this schedule have been modified to reflect changes to the Restructuring Plan made by the FY 1998-99 MTA Budget adoption.

$61.6 $394.0$10.0

$6.O $43.8$6.6 $53.8

$5.1167 $74.2i 1,321 $506.7

$3.0 $16.5$2.0 $13.7$5.7 $55.2

$10.7 n/a $85.4

($11.0n/a ($11.0

35 $15.4200 $85.4

$19.1$206.0

n/a $0.0 n/a $225.133 $10.7 774 $310.6

200 $84.9 2,095 $817.3

Prepared by: Capital Development and Programming 10/6/98 4:48 PM X:\David Yale~Accel Bus Procure

MTA BOARD MEETINGOCTOBER 22, 1998ITEM #10

MOTION BY DIRECTORS

FASANA, OROPEZA, KNABE AND YAROSLAVSK’Y

WE MOVE THAT THE FUNDING PLAN FOR THE ACCE~,~I~..~D BUSPROCUREMENT INCLUDE CAPITAL FORMULA FUNDS ~;(~RMUNICIPAL TRANSIT OPERATORS FOR FYs 1998-04, AND THAT THESEFUNDS BE FLEXIBLE IN USE IN SO FAR AS THEY SUPPORT CAPITALIMPROVEMENTS THAT PROMOTE A YOUNG AND WELL-,MAINTAINEDFLEET IN SERVICE.

MTA BOARD MEETINGOCTOBER 22, 1998ITEM #10

MOTION BY DIRECTORS

FASANA, OROPEZA, K2NABE AND YAROSLAVSKY

WE MOVE THAT THE FUNDING PLAN FOR THE ACCELERATED BUSPROCUREMENT INCLUDE CAPITAL FORMULA FLrNDS FOR THEMUNICIPAL TRANSIT OPERATORS FOR FYs 1998-04, AND THAT THESEFUNDS BE FLEXIBLE IN USE IN SO FAR AS THEY SUPPORT CAPITALIMPROVEMENTS THAT PROMOTE A YOUNG AND WELL-,MAINTAINEDFLEET IN SERVICE.

Accelerated Bus Procurement

Funding Plan

Los Angeles County

Metropolitan Transportation Authority

October 14, 1998

Accelerated Plan Introduction¯ There are sufficient funds available for the Accelerated

Bus Procurement Plan ("the Plan") adopted by the MTABoard in September 1998.

¯ Staff reviewed costs and determined that an additional$310.6 million would be required for the accelerated planversus the Restructuring Plan.

¯ There are $85.4 million in MTA revenues available tooff-set the cost of the Plan.

¯ The remaining $225.1 million needed for the Plan will beadded to the baseline of the Regional Transit AlternativesAnalysis, along with an additional $40 million to addressthe needs of the included Municipal Operators.

Accelerated Plan Costs

¯ Additional costs of $310.6 million are as compared to theRestructuring Plan, except that the FY 1999 Budgetchanged the base from 1,313 buses to 1,321 buses.

¯ The Plan assumes an all CNG fleet. The "CNG Buy~Up"of $43. lmillion is the additional capital cost of changingthe 921 buses on the "New Bus Orders" line from halfCNG/half Clean Diesel to all CNG. Additional operatingcosts of an all CNG fleet, if any, are not assumed.

¯ The Plan includes $30.9 million for optional advancedtechnology, such as voice enunciators, a globalpositioning system, and security cameras.

Table 1Bus Procurement Schedules and CostsAccelerated Bus Procurement Funding Plan ($ millions)

Tota IsBus CostsFY 1998 DeliveriesNeoplan BaseNeoplan OptioniNew Flyer1New Flyer BaseN.F. Base Low FloorNew Flyer OptionBus Procurement PendingNew Bus Orders2CNG Buy-up:.,

BusesFacilities

Subtotal CNG Buy-up

Total Buses and Cost

Buses23710010020

223

279215921

n/an/a

Cost$84.2$39.3$38.0

$6.3$82.4$0.9

$96.8$77.2

$349.0

$16.1$27.0

(1) Low floor diesel buses from Las Vegas purchased using local funds.

(2) These costs are based upon a 50% CNG and 50% clean diesel bus fleet. The added (marginal) cost to purchase

an all CNG fleet, including facilities, is shown as the "CNG Buy-up." The bus and facilities cost of the "CNG

Buy-up" are reflected separately.

n/a $43.1

2,095 $817.3

Accelerated Plan Revenues¯ The revenue baseline was the Restructuring Plan, except for

adjustments required by the FY 1999 budget and thepassage of TEA-21.

¯ Revenues were freed-up from the revenue baseline byremoving Metro Card fareboxes al~d assigning the savingsto the Plan.

¯ Metro Card fareboxes will be evaluated in the RegionalTransit Alternatives Analysis for funding as a countywide

bus service improvement.¯ The plan re-assigned Section 5307 (formerly Section 9)

funds from TEA-21 to bus procurements.

¯ Clean fuel revenues from TEA-21 and SCAQMD A]~ 2766discretionary funds are assumed to be available for the Plan.

Table 1Bus Procurement Schedules and CostsAccelerated Bus Procurement Funding Plan ($Bus Revenues

Restructuring Plan1

Section 5307 (Section 9)RSTPProp. C 40% BondsTDA Article 4SCAQMD AB2766

Subtotal Restr PlanNew Punding:

Clean FuelSCAQMD

Buses

1,321

millions)$

$394.0$10.0$43.8$53.8$5.1

$5O6.7

$16.5$13.7$55.2

(1) The first two years of this schedule have been modified to reflect changes to the Restructuring Plan

made by the FY 1998-99 MTA Budget adoption.

Sect. 5307 (Section 9)

Subtotal New Funding n/a $85,4Additional From RTAA

CMAQ $19.1RTAA $206.0

Subtotal RTAA n/a $225.1

Subtotal New + RTAA 774 $310.6

Total Revenues 2,095 $817.3