Staff Response to Commission Inquiry – TTC Bus Donation Process
Meeting Date: July 19, 2006
Subject: Staff Response to Commission Inquiry – TTC Bus Donation Process
At its meeting of June 21, 2006, the Commission moved that staff report back on the process/policy regarding the donation of buses and other material.
The Commission has a policy, the Authorization for Sales policy, attached, that covers, through an exception, the donation of all material, be it parts or vehicles. All donated material requires the approval of the Chief General Manager. Due to a Commission directive on November 2, 2004, an additional process was developed and agreed to by then Vice-Chair Mihevc, Commissioner LiPreti and Commissioner Giambrone, in 2005 to assist in the donation process to worthy recipients. This process, attached, includes the input from the Commissioners and the approval of the Chief General Manager.
Currently, the Commission has a long term sale contract with CB Engineering in Michigan USA, to remove 233 surplus buses expected to occur throughout 2006 and early into 2007. As of June 7th 2006, we have already sold 60 buses through this contract. Under this contract the Commission receives $993.00 per bus.
In addition to the sale contract, the Commission has donated buses to various organizations with the appropriate approvals. Attached is a list of donations the Commission has made since 2004.
Currently, the Commission is in discussions with a Mayor in Uruguay for a donation of 2 to 5 buses for use as a travelling health centre. As well, the Commission is completing a donation of 2 surplus buses for Belka Enrichment Center for use as a travelling computer lab.
Recently, interest has been expressed by a Toronto resident, Paul Bedford, regarding the donation/supply up to 700 of our surplus buses to Cuba over the next 3 to 4 years. Interest has been expressed by the Canadian Urban Institute’s Cuba Representative Rafael Betancourt as well as Raul Diaz - Liarrux, Vice President of Havana City Province, in our surplus buses for the city of Havana Cuba. Francisco – Sanchez – Perdomo, Secretary of the Provincial Assembly in Cuba has expressed the desire to view our current surplus buses in the near future to determine if they would meet their requirements.
If there is a formal request from the Mayor of Havana Cuba, staff will produce a recommendation at a future Commission meeting for approval.
It should be noted that sale tenders stipulate that the buses are, as is where is. This also applies to the donated buses. At the July 14, 2005 Commission meeting, the Commission approved the decommissioning of 50 GM buses, the fleet of 25 Orion V 1991 CNG buses and 43 D901 Flyer buses; and that the subsequent sale be deferred to allow for Commissioner Mihevc, Vice-Chair Giambrone and Commissioner Li Preti to explore possible options for sale of these vehicles to developing countries at no incremental cost to the TTC. The organization receiving the donation is responsible for all costs to remove the buses from Commission property. The intention is that the Commission does not incur any additional costs in disposing of these vehicles. The Commission is however forfeiting the revenue that scrapped buses would generate which is currently about $993.00 per bus.
It is important that we understand why these buses are being made surplus. Generally surplus buses, are being retired because they have failed to pass a Ministry of Transportation of Ontario (MTO) inspection and would be costly to put in a state that would meet MTO standards. At a minimum, the Commission would incur a cost of approximately $25,000 or more if we were to repair these buses to road worthy conditions to the point where they would pass an inspection in the Province of Ontario. What must also be understood is that there will be a continuing cost stream even if the bus is brought back to the state of passing one MTO. If the bus passes the MTO inspection, the next inspection is 6 months away at which point another substantial sum of money will probably be required to pass the next MTO. The only way to have any chance of ongoing life is to do a complete rebuild at a cost in the vicinity of $250,000 and even if the funds are available, resources consisting of workforce and facilities are not. However, even if this is done, parts are going to be an ongoing issue as the older the bus is, the harder it will be to get parts for these aged vehicles.
Consideration for use of our surplus buses in other countries is possible because the standard and the local law or rules may be less stringent than that of the Province of Ontario.
The Commission expects over the next 3 years to have approximately 425 surplus buses available in addition to the 233 identified for 2006. These buses may not have driver’s seats and fare collection equipment because the parts are required to add to the repair pool for the existing fleet of buses. As well, the surplus buses will only have scrap tires since our tires are leased. Additional parts like engines and transmissions may be removed for maintenance of other older vehicles as a cost avoidance measure in place of purchasing new parts.
Belka Enrichment Center (a deputant at the last Commission meeting) has an additional request, attached, received June 27th. On October 26, 2005, Belka Enrichment Center was awarded 6 surplus buses on an as is where is basis. They picked up 2 of the better surplus buses and did not take possession of the other buses due to their condition. The new request is for the remaining 4 buses to be repaired to the point where they are driveable and will pass the provincial MTO emission and safety test. Considering the estimated $25,000 repair cost per vehicle resulting in a total cost of $100,000 to the Commission, staff will be denying the request for buses that will pass “emissions and safety tests”.
Interim Chief General Manager