MET Transit has three paratransit vans that will reach the end of their useful life over the next few months, as determined by both Federal Transit Administration Regulations and the City of Billings Equipment Replacement Plan (ERP).  Because of the age of the vans, maintenance costs would be an ongoing issue if the City retained them.
On February 8, 2010, the MET received Council approval to accept the bid from Harlows Bus Sales, Inc. for a multi-year van replacement program.  This approval allowed MET Transit to order two vans in Fiscal Year 2010, and secure five future year purchase options with the vendor.  The agreement sets the cost of the vans in the future option years, based on the original bid price adjusted by the Producer Price Index (PPI)  for Transportation Equipment.  This index is the industry standard for determining price adjustments for future option years.  The Council is being asked to approve purchasing three (3) vans per the FY 11 budget, the ERP and the Harlows agreement.

The Council may:

• Approve the purchase of three paratransit vans; or
• Not approve the purchase of three paratransit vans.

These vans will be purchased through the Federal Transit Administrations (FTA) Section 5309 Grant program. FTA suppliles 80% ($184,872.77) of the purchase price and the 20% local share equals $46,218.19. The purchase price represents an increase of $2,380.32 (3.19%) per van over last year's van purchase price.

Staff recommends that the City Council approve purchasing three paratransit vans at a price of $231,090.96 from Harlows Bus Sales, Inc.