R2010-109 AUTHORIZING AMENDMENT OF TIRE LEASE AGREEMENT

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Mass Transit Memorandum No. 050610-1 May 6, 2010 TO: Honorable Mayor McElroy and City Council Members FROM: Ryan McCrady, City Manager V'_ Paul McChancy, Mass Transit Administrator -� ; � ,t� _ SUBJECT: Amendment to Tire Lease Agreement with Bridgestone Americas Tire Operations, LLC. SUMMARY Staff recommends that Council adopt a Resolution amending RECOMMENDATION: the bus tire lease agreement with Bridgestone Americas Tire Operations, LLC, to include pricing for tires for the new buses. BACKGROUND: The City now has a bus tire lease agreement with Bridgestone that expires on June 30, 2014. The agreement lists the lease price per mile by year for the tire sizes used on the buses and trolleys. (See attached sheet.) But the agreement only shows the lease price for Year 1, ending June 30, 2010, for tire size 315/80R22.SCTR since that tire size is now only used on the old buses that are about to be replaced. The bus manufacturer, Gillig, has just informed staff that the four new buses to be delivered around August 1 St will require that size tire, not the same size tire as used on the other Gillig buses. Staff has been in contact with Bridgestone about the lease price for this tire size, and Bridgestone has submitted the following proposal: YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 $0.005535 $0.005812 $0.006102 $0.006407 $0.006728 The Year 1 price is the same as in the current agreement. The proposed prices for Years 2 - 5 increase by about 5%per year. Assuming that each new bus will travel 52,000 miles per year, the total lease cost for this tire size would increase by only$346 in Year 2 compared to Year 1 prices. Bridgestone also submitted the attached sheet that shows a comparison of recent bids by Bridge- stone and two competitors for this tire size. POTENTIAL No objections are expected. OBJECTION: INPUT FROM William F. Burgess, Western Division Manager, Mileage Sales, OTI3ER SOURCES: Bridgestone Americas Tire Operations, LLC. STAFF REFERENCE: Paul McChancy, Mass Transit Administrator BUDGET/TIME The lease of tires is a normal Transit operating cost. No additional IMPLICATIONS: staff time would be required.