AGENDA #5b
TO: Mayor and Town Council
FROM: W. Calvin Horton, Town Manager
SUBJECT: Bid: (2) Electric Powered Compact Pickup Trucks
DATE: April 24, 2000
Resolution (A) would accept the alternate bid of Southlake Ford in the amount of $30,034 for a 3-year lease of two (2) electric powered compact pickup trucks and $3,600 for the purchase of two power control stations (battery charging equipment) for a total bid price of $33,634.
Resolution (B) would accept the bid of Southlake Ford in the amount of $72,600 for the purchase of two (2) electric powered compact pickup trucks and $3,600 for two power control stations for a total bid price of $76,200.
Based on direction from the Mayor and Town Council, we submitted a Mobile Source Emissions Reduction grant application to the Division of Air Quality, Department of Environment and Natural Resources (DENR), State of North Carolina on December 17, 1998. In a letter dated April 5, 1999, DENR notified us that our grant application was approved for $85,100. Of that amount, approximately $30,000 is available for the acquisition of two electric compact pickup trucks. One of the vehicles will be used by the Engineering Department and one will be used by the Public Works Department. The remaining $55,000 of grant funds is allocated for the acquisition of four compressed natural gas (CNG) vehicles and the associated refueling equipment. All four CNG vehicles have been ordered and we expect delivery in June or July. The CNG refueling equipment was delivered on April 12, 2000 and is scheduled for installation before the end of April.
Notice To Bidders and specifications were distributed to twelve (12) vendors in North Carolina, Georgia and Maryland, and to four (4) minority business organizations located in North Carolina.
The Notice To Bidders was published in The Chapel Hill News on March 19, 2000. One (1) bid was received and opened at 3:00 p.m., Thursday, March 30, 2000 as follows:
VENDOR QTY MAKE & MODEL BID
Southlake Ford 2 2000 Ford Ranger EV $72,600
Jonesboro, Ga. 2 Power
Control Stations $ 3,600
Total $76,200
Southlake Ford 2 2000 Ford Ranger EV $30,034
Jonesboro, Ga. 2 Power
Control Stations $ 3,600
Total $33,634
The fiscal year 1998/1999 Fleet Replacement Budget includes $33,200 for these vehicles. As noted above, the “Mobile Source Emissions Reduction Grant” awarded to the Town includes about $30,000 for two electric vehicles. If the Council elects to purchase the vehicles, the budget shortfall of $13,000 is available in the Fleet Replacement Fund due to favorable pricing on other vehicles. If the Council elects to enter into a 3-year lease for these vehicles, the $30,000 in grant funds allocated for these vehicles would cover most of the 3-year lease costs.
Under the lease option, we would be able to realize a cost avoidance of about $91,600 over an 8-year service life. (This assumes that the Town would renew the initial 3-year lease for additional periods for a total service life of eight years.) Under the Town’s fleet replacement program, an 8-year service life is typical for a light duty administrative vehicle. At the end of eight years, we believe that wear and tear on the chassis, interior and body of the vehicle will be about the same as for gasoline-powered vehicles. Most of the cost avoidance with the lease option is due to the high maintenance costs associated with ownership of these vehicles. For example, the cost of replacing the battery packs on two vehicles is about $24,000 and this must be done every two years. Under the lease option, most maintenance, including battery pack changes, is the responsibility of the vendor and is included in the lease price.
Clearly, Ford Motor Company’s lease option encourages customers to lease rather than purchase the Electric Ford Ranger. We believe that they are marketing the vehicle this way for several reasons. Under the lease program, Ford retains ownership of the vehicles, allowing them to collect data on vehicle performance and closely control the quality of vehicle and battery maintenance. Since electric vehicles are still an emerging technology, there are research and development benefits to Ford associated with retaining close control over the few vehicles that are currently in operation. We also believe that Ford is motivated by the desire to make sure that the Electric Ranger is a commercial success. At this time, they seem to be willing to take on much of the expense and risks associated with vehicle maintenance so that their customers will have a positive experience with this new technology.
In developing our recommendations, we examined the total cost of these vehicles over an 8-year service life. The life cycle cost of the purchase option (cost to the Town after reimbursement by grant funds) is about $146,200. The life cycle cost of the lease option for the same 8-year period is about $54,600. (Please see the 8-year life cycle cost comparison attached.) We did not include fuel costs in the comparison because it will be the same for both options. With a mileage of about 3 miles per kilowatt-hour, we expect the cost of electricity for these vehicles to be about $0.02 per mile. (About $200 per year for 10,000 miles traveled.) This compares to about $0.04 per mile for a similar gasoline powered vehicle.
The contract that defines the terms of our Mobile Source Emissions Reduction Grant specifies that the grant funds are for the purchase of these vehicles. In order to give the Town Council the option of leasing the vehicles, we requested a contract amendment from DENR. Our request was approved and we received the contract amendment on April 13, 2000.
That the Council adopt resolution (A) accepting the alternate bid of Southlake Ford in the amount of $33,634 for a 3-year lease of two (2) electric powered compact pickup trucks and the purchase of two (2) power control stations.
Resolution (B) would accept the bid of Southlake Ford for the purchase of the two (2) vehicles and the two power control stations.
1. Chart Of
Electric Truck Cost Comparisons (p. 6)
Resolution A
RESOLUTION ACCEPTING A BID FOR A 3-YEAR LEASE OF TWO ELECTRIC POWERED COMPACT PICKUP TRUCKS AND THE PURCHASE OF TWO CHARGING STATIONS (2000-04-24/R-6)
WHEREAS, the Town of Chapel Hill has solicited bids by legal notice in The Chapel Hill News on March 19, 2000 in accordance with General Statute 143-129 for two electric powered compact pickup trucks with charging stations; and
WHEREAS, the following bid was received and opened on March 30, 2000:
VENDOR QTY MAKE & MODEL BID
Southlake Ford 2 2000 Ford Ranger EV $72,600
Jonesboro, Ga. 2 Power
Control Stations $ 3,600
Total $76,200
Southlake Ford 2 2000 Ford Ranger EV $30,034
Jonesboro, Ga. 2 Power
Control Stations $ 3,600
Total $33,634
NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill that the Town accepts the bid of Southlake Ford in the amount of $33,634 for a 3-year lease of two electric powered compact trucks and the purchase of two charging stations.
This the 24th day of April, 2000.
RESOLUTION ACCEPTING A BID FOR THE PURCHASE OF TWO ELECTRIC POWERED COMPACT PICKUP TRUCKS WITH CHARGING STATIONS (2000-04-24/R-6.1)
WHEREAS, the Town of Chapel Hill has solicited bids by legal notice in The Chapel Hill News on March 19, 2000 in accordance with General Statute 143-129 for two electric powered compact pickup trucks with charging stations; and
WHEREAS, the following bid was received and opened on March 30, 2000:
VENDOR QTY MAKE & MODEL BID
Southlake Ford 2 2000 Ford Ranger EV $72,600
Jonesboro, Ga. 2 Power
Control Stations $ 3,600
Total $76,200
Southlake Ford 2 2000 Ford Ranger EV $30,034
Jonesboro, Ga. 2 Power
Control Stations $ 3,600
Total $33,634
NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill that the Town accepts the bid of Southlake Ford in the amount of $76,200 for two electric powered compact trucks with charging stations.
This the 24th day of April, 2000.