Unanimity is a rare thing on our contentious city council, but last week councillors rallied overwhelmingly around a $155-million deal to buy new buses. (Earlier in the day, they had wrangled tirelessly over $200,000 for a couple of drinking water trucks.)
The city of Chicago, which saw its revenue from state sales tax tank in the economic downturn, had cancelled a large order from Winnipeg’s New Flyer Industries, leaving the company ready to make a deal on our 226-bus order, knocking about $100,000 of the price of each one. The only catch was they needed an answer fast.
It’s also an election year, and a council with a modest record of achievement grabbed for the deal with gusto. Any buyer’s remorse will almost certainly manifest sometime after the election, and problems could take years to come to light.
Councillors Diane Deans, Rick Chiarelli and Bob Monette were the only nays, reluctant to commit to such a massive purchase on such short notice. New Flyer made the offer March 3 and they demanded an answer by the end of April.
Still, even the doubters had to admit it looks, on the surface, like a good deal. Some of the financial calculations from city staff frankly made my head hurt, but they’re claiming that the $155.7-million purchase price will be offset by cash savings or cost avoidance of $156.9 million, leaving taxpayers $1.2 million ahead of the game. (When interest on the money borrowed to buy the buses is added, it’s more like $210 million total over 15 years.)
A big attraction is the trade-in of 226 older buses we bought from New Flyer between 2001 and 2004, buses which have been plagued by problems with the connectors of the articulated sections and brakes. By unloading them, we’re expected to save an estimated $66 million we would have had to spend overhauling them over the next four years.
New Flyer tells us the new buses, in addition to solving the problems of the older model, offer greater fuel efficiency and reliability, along with lower emissions, ticking a number of OC Transpo’s policy boxes.
The contract includes a number of extras, including a comprehensive five-year warranty, a $16 million credit on replacement parts and an anti-graffiti package. A replaceable acrylic lining fits over windows and can be discarded when some dork carves his name in it.
The first of the new buses should arrive in August. When the rubber hits the road, we’ll know whether this deal was too good to pass up, or too good to be true.
– Steve Collins lives, writes and walks in Ottawa; email@example.com