Memorandum

City of Lawrence

City Manager’s Office

 

TO:

David L. Corliss, City Manager

 

FROM:

Diane Stoddard, Assistant City Manager

Bob Nugent, Public Transit Administrator

 

CC:

Cynthia Wagner, Assistant City Manager

 

Date:

 

November 20, 2013

RE:

Vehicle Replacement and CNG

 

In response to staff’s recent request to purchase three heavy-duty fixed route vehicles City Commission directed staff to revaluate the recommendations of the Fuels Task Force which were presented to City Commission on April 28, 2009.

 

In reviewing the Fuels Task Force’s initial recommendations, staff wanted to provide the City Commission with updates. The following provides excerpts (in italics) from the initial Fuels Task Force recommendations and is immediately followed by actions and updates that have taken place over the last few years:

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 Fuels Task Force Recommendation:

Compressed Natural Gas. CNG would reduce NOx EPA-regulated pollutants slightly more than the other options.  However, CO/HC emissions would be the same, if not slightly higher than the other technologies considered.  In addition, fuel economy is the lowest of the three technologies considered and will require vehicles to fill-up more frequently.  There were significantly more operational issues with this technology.  For instance, there is currently no CNG fueling station in Lawrence.  Without a CNG fueling station (public or privately owned) in place, the City would run the risk of having vehicles that they could not operate.  A fast fill, CNG fueling station would cost approximately one million dollars.  A private vendor could establish a CNG fueling station; however, it is unlikely that the City’s transit fleet is a large enough client to make private investment in this infrastructure feasible.  This would also put the City in a position of having to rely on a single vendor for fuel.  In addition, other resources and infrastructure (trained CNG mechanics, an appropriately equipped maintenance facility, etc.) needed to support this technology are not in place at this time. 

 

Update

Locating a fueling station off-site or utilizing a private vendor for fueling would greatly increase the operational costs and complexities of our service. Currently, all City and KU transit vehicles are fueled at our maintenance facility which is located on Timberedge Road. The decision to include a fueling station (for diesel and gasoline) at this location was based on reducing the amount of travel time needed to fuel vehicles. Since there was no on-site fueling ability at our previous location, it was necessary for drivers to travel across town to fuel. This caused a considerable amount of unproductive labor time when drivers had to wait in a cue to fuel vehicles. At the new facility, vehicles are staged at the end of the service day and utility maintenance workers fuel the vehicles at the same time they are performing additional tasks such as washing and checking fluids. Although this process takes several hours every night, the amount of unproductive labor by higher paid drivers has been reduced.

 

Constructing a fueling station at our current facility may present difficulties due to the fact that it is owned by KU. The City currently leases portions of the facility for operating service. Since KU has shown no interest in making a transition to alternative drive platforms, it is unclear as to whether land would be made available for constructing an on-site station for CNG. If land were made available, we would expect that the City would be responsible for the full burden of constructing the station.

 

A fast fill, CNG fueling station that would support an expanding use of CNG fueled vehicles is expected to cost approximately $2 million. This is based on the experience of KCATA which recently signed a contract to build a CNG fueling station. Additionally, retrofitting the existing maintenance facility is expected to cost approximately $200K. Additional maintenance costs may also be required for the replacement of holding tanks.

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 Fuels Task Force Recommendation:

Hybrid Electric / Biodiesel.  Hybrid electric/biodiesel vehicles would still provide environmental benefits through significant carbon emission reduction and the reduction of EPA regulated pollutants.  The fuel economy is the best of the three options.  Hybrids provide more flexibility than CNG because they can run on biodiesel, and much of the support for the technology is already in place.  There will be operational issues (need to train mechanics on hybrid technologies) as well as additional maintenance costs (batteries require replacement after 6 years at a cost of approximately $36,000.)  The upfront cost of the vehicle is also roughly 60% more than a non-hybrid biodiesel vehicle.

 

Update

We have been able to address operational issues such as training mechanics with the assistance of the vehicle manufacturer. Since our vehicles are parallel hybrids they still operate on diesel fuel. Our maintenance staff are well versed in the diesel fuel and have been able to acquire the necessary experience in hybrid technology through manufacturer provided training. Any additional cost associated with battery life has not been fully determined at this time.  

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 Fuels Task Force Recommendation:

 Replace four of the existing fixed route vehicles with four heavy-duty, biodiesel vehicles.  At a cost of $350,000- $370,000 each depending on length, total cost = $1.40M to $1.48M.

 

Update

In 2011 replaced three fixed route vehicles with three 30-foot heavy-duty, biodiesel units.

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Fuels Task Force Recommendation:

Replace two of the existing fixed route vehicles with two heavy duty, forty-foot hybrid electric / biodiesel vehicles.  At a cost of $580,000 each, total cost = $1.16M.

 

Update

In 2011 replaced three fixed route vehicles with three 40-foot heavy duty hybrid electric /biodiesel units. These vehicles were dedicated to service on Route 11 due to high passenger activity.  

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Fuels Task Force Recommendation:

Replace five of the existing fixed route vehicles with five medium duty, advanced body-on-chassis vehicles.  Initial indications from Olsson are that six to eight heavy-duty vehicles should be sufficient for the City’s fleet.  However, due to the limited time to develop recommendations, the task force has not completed their research related to medium duty, body-on-chassis vehicles. A recommendation will be made by June 15 on what vehicle will work from an operational standpoint and maximize fuel economy while minimizing environmental impact.  Cost estimates are not available at this time; however, initial research has indicated substantially lower cost than the heavy-duty transit vehicles.   

 

Update

In 2010 replaced six fixed route vehicles with six 25-foot light duty gasoline units.

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Fuels Task Force Recommendation:

Retain resources for an additional fixed route vehicle to respond to 2010 recommendations.  It is possible that in January of 2010, Olsson will recommend the City operate seven or eight heavy-duty vehicles.  Therefore, the task force recommends retaining resources until Olsson Associates conclude their work.  At that time, if appropriate, the task force would recommend the purchase of one or two additional heavy-duty hybrid vehicles.  Alternatively, if Olsson recommends operating six body-on chassis vehicles on the fixed route, the task force would recommend purchasing additional medium duty vehicle. 

 

Update

Due to increased vehicle demands, six 29-foot medium duty vehicles originally purchased in 2000 were given a limited refurbishment and kept in service. These vehicles originally had a life expectancy of seven years and are now thirteen years old.

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Fuels Task Force Recommendation:

Incorporate alternative fuel technology into replacement schedule for Paratransit fleet.  Once the task force has gathered information and developed a recommendation on the medium duty vehicles, the task force recommends incorporating the same technology into the City’s Paratransit fleet.  Typically, three Paratransit vehicles are replaced each year (although no vehicles were replaced in 2008 due to the sales tax election.)  Depending on the cost of the advanced body-on-chassis vehicle, resources may only cover the replacement cost of two vehicles each year.

 

Update

The vehicle replacement plan calls for the replacement of three paratransit vehicles every year. These vehicles are purchased through a State contract which is limited in the type of vehicles that can be purchased. Over the last few years, light duty paratransit vehicles purchased off of the State contract were only available with gasoline engines. Staff has been monitoring the availability and cost of alternatively powered low-floor vehicles over the past few years. At this point, the cost and dependability of these types of vehicles are still in question.

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Fuels Task Force Recommendation:

Implement a fleet replacement plan for the fixed route fleet.  In order to avoid a situation where the City must replacement its entire fixed route fleet at once, the task force recommends the City develop and implement a fleet replacement plan.

 

Update

Our fleet is currently comprised of heavy duty (12 year), medium duty (7 year), and light duty (5 year) vehicles. This fleet mix was developed to match the type of vehicle with the type of service that was being operated. By acquiring different types of vehicles the replacement schedule for the entire fleet has been dispersed. As ridership continues to increase, and as service continues to evolve, the type and number of vehicles will continue to change. This will be especially true once we change our primary transfer location. Staff is currently working on an MOU that will allow for additional coordination and flexibility between the City and KU in the use of use vehicles.

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Fuels Task Force Recommendation:

Get older vehicles off the road.  As the City and University continue to coordinate transit services, the task force would recommend trying to replace older vehicles as soon as possible.  The University has some older transit vehicles.  Removing these vehicles, which operated under different emission standards, with new low emission vehicles would have a significant impact on the environment. 

 

Update

The City continues to operate older vehicles. At the present time, continuing to operate these vehicles is necessary to maintain service.

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Fuels Task Force Recommendation:

Continue to explore CNG as an option and explore partnerships with Douglas County, USD #497, and other large fleet users in Lawrence.  By collaborating with other large fleet users, a compressed natural gas fueling station may be more attractive to a private vendor.  The task force recommends the City continue to explore that option so that when the City begins to consider replacing the fixed route vehicles in ten years, the infrastructure costs could be shared and not the sole responsibility of the transit system.

 

Update

Collaborating with other entities in constructing a fueling station may not be feasible due to operational constraints. For example, the city transit operation is co-located with KU transit’s facility in the Santa Fe Industrial Park.  This facility includes diesel fueling facilities.  The other primary city fueling facilities are located at 11th and Haskell and on property near the water plant facility on Wakarusa.  If the city were to pursue adding a joint CNG fueling facility, the location of the facility would be an issue and some portion of the city’s fleet would incur additional travel time/labor and fuel relating to additional travel to a central facility.  If the city were to pursue adding separate CNG facilities, the city would have duplicate capital costs related to the CNG installation.

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Fuels Task Force Recommendation:

Continue to explore other technologies.  The task force would recommend the City continue to use this task force or a similar group to explore other infrastructure/alternative fuel technologies (liquefied petroleum gas, liquefied natural gas, propane, ethanol, etc.) over the next ten years in order to prepare for the next round of transit fleet replacement.       

 

Update

Staff continues to monitor and evaluate alternative platforms.

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Project Benefit / Return on Investment

Based on the original recommendations of the Fuels Task Force, staff developed a fixed route, heavy-duty, vehicle replacement plan that incorporated the use of biodiesel fuel and hybrid-electric technology. A vehicle replacement plan for paratransit, light-duty vehicles was also developed, however, the availability of alternative fuel and alternative power platforms were not readily available under the existing State contract for this type of vehicle.

 

In revisiting the recommendations of the Fuels Task Force, staff evaluated alternate fuel platforms for all vehicle types. The following three scenarios were considered in this evaluation:

 

·         Transitioning the entire fleet over to CNG.

·         Transitioning the entire fleet over to hybrid-electric, and

·         Continuing the current vehicle replacement plan.

 

All three approaches seek to reduce negative emissions and reduce the cost of operating vehicles.

 

CNG Scenario

CNG prices are lower than diesel and are projected to remain relatively stable over the next ten years. Therefore transitioning from diesel to CNG appears to offer an immediate means to lower fuel costs. However, CNG requires not only a transition in vehicles but also in how the vehicles are fueled. In order to successfully transition to CNG a considerable upfront capital investment would be required for the construction of a fueling station. This initial investment makes it necessary for a rapid and complete transition of the fleet in order to fully experience the benefits of lower CNG prices.

 

The following elements were considered in evaluating a complete transition to CNG vehicles:

 

 

The preferred site for a CNG fueling facility would be at the existing University owned maintenance facility which is located at 1260 Timberedge Road. Lawrence Transit operates out of the facility through a long term lease. This facility serves as the storage, maintenance, wash, and fueling site for both the University and City fleets. A fueling facility located “off-site” would require considerable increases in labor costs in order to shuttle vehicles to and from the fueling site. At this time the University is not considering CNG or other alternative drive platforms for their transit fleet and has no immediate plans to construct a CNG fueling station at the maintenance facility.

 

 

 

 

 

 

Hybrid Scenario 

It is important to note that the fuel economy of hybrid vehicles depends upon driving speed and technique more so than with other vehicles. Because the electric battery is recharged through braking, hybrids can be much more fuel efficient than their conventional counterparts in stop-and-go traffic, while their fuel economy decreases on hills, at higher operating speeds, or when accelerating quickly. Our recent experience with hybrid buses has shown an improvement of 38% in fuel economy over similar diesel powered vehicles. Maintenance costs have also remained consistent with diesel powered vehicles.

 

The primary challenge associated with hybrid electric buses is the initial purchase price of the vehicle. A successful transition to a hybrid fleet is compounded the additional cost with every vehicle that is acquired. Different than the CNG, which requires a one time capital investment prior to the transition every hybrid purchased provides additional expenditures. Therefore the ability to recognize cost savings is greatly reduced.

 

The following elements were considered in evaluating a complete transition to Hybrid vehicles:

 

 

 

 

Current Replacement Scenario

Our current vehicle replacement plan utilizes a mixed fleet of hybrid, diesel and gasoline vehicles. The combination of these three types of vehicles, as well as, the use of biodiesel fuels provides both fuel savings and environmental benefits. Although not as significant as a fully converted fleet, it does allow for fuel savings to be recognized without additional capital expenses for vehicles and/or facilities.

 

Replacing old diesel vehicles under the new EPA standards provides for immediate environmental benefits. Secondarily, the replacement of older diesels provides for fuel savings that result from the improved efficiency of a newer engine. Our recent experience with transitioning like style vehicles from older to newer diesels has shown a 15-20% increase in fuel efficiency.

 

The current performance of the hybrid vehicles has proven even better. Comparing to like style vehicles (older heavy-duty 40 foot that operated on the identical route) fuel efficiency has improved over 35%.

 

The following elements were considered in evaluating a complete transition to Hybrid vehicles:

 

 

 

Findings

Using the data and information provided above, the three scenarios were compared. For each of these scenarios the base line (common) comparison was to existing older vehicles. These older vehicles, for the most part, represent old technology engines with lower fuel efficiency and higher negative emissions. This comparison used the same vehicle replacement schedule as prescribed under the typical life expectancy of our fleet. No inflation factor was used for any element of this analysis.

 

Different than larger transit providers the high capital cost of vehicles and facilities makes it difficult to fully realize the cost saving from operating alternative vehicles in a short period of time. As can be seen in the following table a complete transition to a hybrid fleet is the most expensive option. Due to the high additional cost for the purchase of each hybrid vehicle the benefits from fuel economies are never fully realized by 2024.

 

A complete transition to a CNG fleet also has a high cost due to the necessary construction of a fueling station. However the lower cost of CNG allows for a faster return in savings. Although not shown in the graph it would be expected that return on the initial investment could be achieved in 2025 or 2026.

 

The current replacement approach provides the fastest return. Replacing older vehicles with newer more efficient vehicles provides savings without additional costs. Supplementing standard diesel and gasoline vehicles with a limited number of hybrid electric vehicles improves our efficiency without having to experience the additional costs of alternative vehicles. The current approach will have five hybrid electric vehicles in operation by 2015. As can be seen in the graph this approach provides for a full return on our investment by 2017. Based on this analysis continuing to operate a mixed fleet provides the fastest return over the next ten years.

 

 

In moving forward, there are three foreseeable options that can be pursued. The first would be to continue our current vehicle replacement approach. The second would be to make a full transition to CNG. The third, would be to once again commission the Fuels Task Force to evaluate options and approaches.

 

In considering which option to choose it is imperative that consideration be given to the immediate need to replace vehicles that have almost double their usable life. It is also important to keep in mind that since the future of our transit center is yet unknown there will be immediate needs for additional buses to support the restructuring of service.

 

Recommendation:

Based on the immediate need for vehicles and the rate at which cost savings would be realized staff recommends continuing the current vehicle replacement plan. In doing so staff recommends the purchase of three (3) heavy-duty 30-foot buses (as described above) to replace vehicles of the fixed route fleet. In order to expedite our efforts to acquire replacement vehicles staff decided to utilize the current Brownsville, Texas Contract with Gillig Corporation.

 

Under this “piggyback” opportunity staff would like to pursue the purchase of two (2) heavy-duty, 30-foot, low-floor diesel powered buses ($350,000/bus) and one (1) heavy-duty 30-foot, low-floor hybrid powered bus ($575,000/bus).The total estimated cost of these buses would be $1,275,000. Of this $1,058,250 will come from existing Federal grants. The local match of $216,750 will be provided out of the 0.05% Transit Expanded Sales Tax. 

 

Action Requested:

If appropriate, authorize staff to acquire three (3) fixed-route vehicles as replacements for three (3) existing fixed-route transit vehicles which have surpassed both the manufacturer and Federal Transit Administration useful life requirements. These vehicles would be purchased off of the existing Brownsville, Texas Contract with Gillig Corporation.