Consent 1.A.2.
Regular City Council Meeting
- Meeting Date:
- 09/12/2016
- TITLE
- Bid Award for MET Transit Bus Tire Mileage Lease Program
- PRESENTED BY:
- Kevin Ploehn
- Department:
- Transit
Presentation:
PROBLEM/ISSUE STATEMENT
For the past twenty-three (23) years, MET Transit has participated in multi-year tire mileage leases for tires on its Transit bus fleet. Due to the unique size and heavy-duty sidewall construction of the intra-city radial tires, this type of tire can only be leased and is not available for purchase.
The current Lease expired on August 31, 2016. The MET is exercising an optional "run out" period for six months. The new Lease will be in place prior to the expiration of the "run out" period. Bids were solicited by placing ads in the local paper, on the City's Website, and mailing bid packages to three vendors. Bids were received on Tuesday, July 26, 2016. Historically, MET Transit has received bids from three manufacturers. However, for this bid, MET Transit only received a response from our current provider Bridgestone America Tire Operations and it is as follows:
Bids Received:
Bridgestone America Tire Operations
Bidder 1) Name: Bridgestone Tire
The following formula is utilized to convert these rates into projected budget details. The formula consists of a projected 590,000 bus miles per year, times six tires per bus, for a total fleet mileage of 3,540,000. The first year the tire cost would predominantly be the 315/80R22.5 tires, because the new buses come with 5 spare 225/70R19.5 tires each. In the following years, the projected mileage would be split 90% for the 315/80R22.5 tires and 10% for the 225/70R19.5. By applying the formula, the following bid totals are identified:
The current Lease expired on August 31, 2016. The MET is exercising an optional "run out" period for six months. The new Lease will be in place prior to the expiration of the "run out" period. Bids were solicited by placing ads in the local paper, on the City's Website, and mailing bid packages to three vendors. Bids were received on Tuesday, July 26, 2016. Historically, MET Transit has received bids from three manufacturers. However, for this bid, MET Transit only received a response from our current provider Bridgestone America Tire Operations and it is as follows:
Bids Received:
Bridgestone America Tire Operations
Bidder 1) Name: Bridgestone Tire
| Tire Size | Cost | FY 17 | FY 18 | FY 19 | FY 20 | FY 21 |
| 315/80R22.5 | Per Mile | 0.005074 | 0.005175 | 0.005382 | 0.005598 | $ 0.005822 |
| 225/70R19.5 | Per Mile | 0.005175 | 0.005279 | 0.005490 | 0.005710 | $ 0.005938 |
The following formula is utilized to convert these rates into projected budget details. The formula consists of a projected 590,000 bus miles per year, times six tires per bus, for a total fleet mileage of 3,540,000. The first year the tire cost would predominantly be the 315/80R22.5 tires, because the new buses come with 5 spare 225/70R19.5 tires each. In the following years, the projected mileage would be split 90% for the 315/80R22.5 tires and 10% for the 225/70R19.5. By applying the formula, the following bid totals are identified:
| Tire Size | FY 17 | FY 18 | FY 19 | FY 20 | FY 21 |
| 315/80R22.5 | $17,962 | $16,488 | $17,147 | $17,835 | $18,549 |
| 225/70R19.5 | Use extra tires Provided by bus manufacturer | $1,869 | $1,943 | $2,021 | $2,102 |
ALTERNATIVES ANALYZED
City Council may:
- Approve the bid received from Bridgestone America Tire Operations for the Five-Year Tire Lease Program; or
- Disapprove the bid and direct staff on how to proceed.
FINANCIAL IMPACT
Funding for the Tire Mileage Lease has been included in the FY17 Operating Budget. The bid is less than was anticipated and subsequently the budget is more than adequate to cover the first year costs of $17,962.
RECOMMENDATION
Staff recommends that Council approve the Five-Year Tire Mileage Lease Contract with Bridgestone America Tire Operations and authorize the Mayor to execute the Contract.