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Home My WebLink AboutCOUNCIL - AGENDA ITEM - 10/20/2015 - FIRST READING OF ORDINANCE NO. 130, 2015, APPROPRIAgenda Item 9 Item # 9 Page 1 AGENDA ITEM SUMMARY October 20, 2015 City Council STAFF Karl Gannon, Financial Analyst SUBJECT First Reading of Ordinance No. 130, 2015, Appropriating Prior Year Reserves in the Transit Services Fund and Prior Year Reserves in the Transportation Fund and Authorizing the Transfer of Appropriations into the Capital Projects Fund and Appropriating Therein for the Mason Corridor Project for the Purchase of Two Rapid Transit Buses. EXECUTIVE SUMMARY The purpose of this item is to request appropriations and transfers in the amount of $1,473,887 to help pay for two recently-delivered Bus Rapid Transit (BRT) 60-foot Compressed Natural Gas (CNG) buses for MAX. The total cost for the two buses is $1,734,598 and the balance will be paid from an existing Capital Projects Fund appropriation of $260,711. The requested funding sources and amounts are as follows: Transportation Fund Reserves in the amount of $741,288; and Transit Fund Reserves in the amount of $732,599. The appropriated amounts would then be transferred to the Capital Projects Fund. STAFF RECOMMENDATION Staff recommends adoption of the Ordinance on First Reading. BACKGROUND / DISCUSSION Two additional MAX buses were purchased in September 2014 to meet immediate and future service demand. Available federal and local funds within the existing MAX Capital Project appropriation were utilized to issue the Purchase Order. Following the purchase of the two buses the Federal Transit Administration retracted its approval to utilize federal funds for this purchase. Transfort is now needs to appropriate MAX Local Project Funds, Transit and Transportation Reserve funds to pay the bus manufacturer for the two BRT buses delivered in August 2015. The original MAX operating plan and fleet management plan identified a need for five buses in peak service to provide a 10 minute frequency and one bus as a spare (total of six) for training, scheduled and unscheduled maintenance. After the MAX Guideway was constructed it became clear that the originally-projected travel time of 20 minutes could not be met utilizing five buses in peak service as originally planned. In practice, bus operators were taking as long as 30 minutes to travel the Guideway. There were various reasons for the longer travel times, but the primary issue was slower travel times through major intersections than had been anticipated. Consequently, two additional buses were added to the operations (the one dedicated MAX spare bus and one non-Bus Rapid Transit Bus) in order to meet the frequency of service required by the Project Construction Grant Agreement (PCGA). The PCGA is the official contract between the City and the FTA for the MAX project. The PCGA set forth the scope of the undertaking of the project as well as the budgeted funding amounts across a number of expense classification codes. When all six specially designed BRT buses were put into service, plus one additional non-BRT bus, there were no spare vehicles designed for BRT operations. Transfort staff informed Federal Transit Administration (FTA) of this issue and made an eligibility request to purchase two additional BRT buses with remaining federal MAX project funds to provide an adequate spare ratio. On September 5, 2014, the FTA sent a letter of concurrence Agenda Item 9 Item # 9 Page 2 to the City, allowing for the purchase of up to three more buses. After receiving the letter of concurrence from FTA the City entered into an agreement with NABI (bus manufacturer) to purchase two additional BRT buses within two weeks of receipt of the FTA letter. Shortly after the purchase of the two additional BRT buses, FTA contacted Transfort to express concern that the City may not be eligible for additional bus funding. This questioning was unexpected as staff thought this funding arrangement was very clear in the Financial Management Plan, as well as the justification used by FTA themselves to allow the purchase of the two additional buses. FTA informed staff that its concern stemmed from the fact that the PCGA’s budget referenced the six bus requirement as being funded at an 80% level with federal funds and not at the 50% level as stated in the Financial Management Plan. At the time, it was presupposed that a routine PCGA budget revision of the federal allocation would amend the oversight. In April 2015 the FTA notified Transfort that the two additional BRT buses purchased would not be eligible for federal funds within the MAX project due to the above referenced reasoning, and that FTA needed to retain 80% interest in all six of the original buses purchased for MAX. FTA could not authorize a revision to the PCGA without authorization from Congress. FTA staff does not recommend asking Congress for a revision such as this. Therefore, staff is requesting a new appropriation of non-Federal funds to purchase the BRT buses as the buses are essential for MAX operations. CHRONOLOGY OF EVENTS 11/2008 – Submittal of Fleet Management Plan to the FTA – Bus Requirements Projected December 2010–Submittal of Finance Management Plan to the FTA – Contained Details of the City’s Local Match for MAX Project – Reference to 3 of 6 Buses Being Funded via State Grants September 2012–The FTA Approved Full Funding for the MAX Project via the Project Construction Grant Agreement – Federal Match for 6 Buses at 80% not 50% May 2014-MAX Service Begins Staff Projection – 5 Buses Required for Peak Service Actual – 7 Buses Required for Peak Service September 2014–FTA Concurrence Received to Purchase 3 Additional Buses September 2014–2 Buses Ordered from Manufacturer November 2014–FTA Voiced Concerns over Eligibility of State-Funded Buses in Project April 2015–Notified by FTA that Additional 2 Bus Order was not Eligible for Federal Funding July 2015–Notified by FTA that State-Funded Buses Required 80% Federal Interest August 2015–Asked CDOT to Subordinate their 80% Interest in 3 Buses for 20% Interest in 6 Buses (Pending) August 2015–Buses Received from Manufacturer - Payment Due Within 30 Days after Acceptance CITY FINANCIAL IMPACTS The cost of the two BRT buses will be allocated among two separate City Funds and the MAX project. Funding Summary: $ 732,599 Fund 290 - Transit Fund Reserves 741,288 Fund 292 - Transportation Fund Reserves $1,473,887 260,711 Existing appropriation $1,734,598 Total cost of the 2 BRT buses The two buses will be owned by the City and will have a minimum service life of 12 years. - 1 - ORDINANCE NO. 130, 2015 OF THE COUNCIL OF THE CITY OF FORT COLLINS APPROPRIATING PRIOR YEAR RESERVES IN THE TRANSIT SERVICES FUND AND PRIOR YEAR RESERVES IN THE TRANSPORTATION FUND AND AUTHORIZING THE TRANSFER OF APPROPRIATIONS INTO THE CAPITAL PROJECTS FUND AND APPROPRIATING THEREIN FOR THE MASON CORRIDOR PROJECT FOR THE PURCHASE OF TWO RAPID TRANSIT BUSES WHEREAS, the MAX transit system project (MAX) is a five-mile, north-south byway extending from Cherry Street to just south of Harmony Road; and WHEREAS, MAX includes seven park-n-ride lots, eight stations with pedestrian and bicycle access, eight curb-side stops, and two transit centers; and WHEREAS, six buses were acquired to provide the MAX services; and WHEREAS, the six buses are all utilized for service leaving no spare vehicles and City staff has determined that two additional buses are needed to provide an adequate spare ratio; and WHEREAS, the total cost of the two buses is $1,734,598 of which $732,599 will be funded by prior year reserves in the Transit Services Fund and authorized for transfer into the Capital Projects Fund and appropriated therein for the Mason Corridor Project and $741,288 will be funded by prior year reserves in the Transportation Fund and authorized for transfer into the Capital Projects Fund and appropriated therein for the Mason Corridor Project; and WHEREAS, the appropriation from the Transportation Fund is in accordance with the provisions of Fort Collins City Code Section 8-57; and WHEREAS, existing appropriations of $260,711 in the Capital Projects Fund, Mason Corridor Project will complete the funding; and WHEREAS, Article V, Section 9, of the City Charter permits the City Council to make supplemental appropriations by ordinance at any time during the fiscal year, provided that the total amount of such supplemental appropriations, in combination with all previous appropriations for that fiscal year, does not exceed the current estimate of actual and anticipated revenues to be received during the fiscal year; and WHEREAS, Article V, Section 10, of the City Charter authorizes the City Council to transfer by ordinance any unexpended and unencumbered appropriated amount or portion thereof from one fund or capital project account to another fund or capital project account, provided that the purpose for which the transferred funds are to be expended remains unchanged. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows: - 2 - Section 1. The foregoing recitals are adopted by reference as findings of fact as if expressly set forth herein. Section 2. That there is hereby appropriated for expenditure from prior year reserves in the Transit Services Fund the sum of SEVEN HUNDRED THIRTY TWO THOUSAND FIVE HUNDRED NINTY-NINE DOLLARS ($732,599) and authorized for transfer to the Capital Projects Fund and appropriated therein for the Mason Corridor Project for the additional buses. Section 3. That there is hereby appropriated for expenditure from prior year reserves in the Transportation Fund the sum of SEVEN HUNDRED FORTY ONE THOUSAND TWO HUNDRED EIGHTY-EIGHT DOLLARS ($741,288) and authorized for transfer to the Capital Projects Fund pursuant to City Code Section 8-57(c), and appropriated therein for the Mason Corridor Project for the additional buses. It is the City Council’s intent that these appropriated funds be used for additional buses as described in this Ordinance notwithstanding any provisions to the contrary in City Code Chapter 8. Introduced, considered favorably on first reading, and ordered published this 20th day of October, A.D. 2015, and to be presented for final passage on the 3rd day of November, A.D. 2015. __________________________________ Mayor ATTEST: _____________________________ City Clerk Passed and adopted on final reading on this 3rd day of November, A.D. 2015. __________________________________ Mayor ATTEST: _____________________________ City Clerk