City council approves $155M bus deal
Published Wednesday, April 28, 2010 6:14PM EDT
Ottawa city council voted overwhelmingly to approve a $155-million deal with a major bus manufacturer to purchase 226 new diesel articulated buses.
New Flyer presented the city with an offer to purchase the buses at a discounted rate after Chicago backed out of the deal due to financial restraints.
City council voted 18-3 to accept the deal Wednesday, only one week after councillors and the public were given details of what's been billed a "limited time offer". If the city didn't jump on it, the company would take the proposal to another municipality.
"It came upon us very suddenly," admitted Coun. Alex Cullen.
Savings convince councillors
However, he added many councillors were in support of the deal because it offered significant savings.
"The deal is too good to walk away from. We need to consider it. Not only do we get these buses at a cheaper price, we get an extended warranty. It'll save us on fuel costs and will reduce our maintenance costs," Cullen told CTV Ottawa prior to the vote.
The deal was offered to the city after money concerns caused the City of Chicago to back out. Councillors say the offer included a 20 per cent discount plus a trade-in credit for older buses.
"The Chicago Transit Authority is facing some financial challenges. They have an aging infrastructure and their funding from the federal government in the U.S. is limited, so they had to make some tough choices," Cullen said.
Deal won't hike taxes, fares
Although money concerns are also facing Ottawa city hall with councillors voting in a two-year wage freeze for the mayor and city council two weeks ago, the city has developed a plan to pay for the new buses - one that councillors say won't hike bus fares or property taxes.
"We have a financing program in place to accommodate this. It's not going to impact fares, it's not going to impact taxes," said Cullen.
He added the city was already planning to replace aging buses over the next four years. He said this deal just accelerates the purchase.
However, not everyone supported the deal. Coun. Rick Chiarelli described the move as an "impulse" purchase.
"I think this is a good deal. The problem is I have three daughters and each day they present me with great deals, and they are good deals, but if we bought all of them, we'd be bankrupt," he said.
"I think that the reason this disturbs a lot of people is that it has a feel of an impulse buy. It appeared to come out of nowhere. It's curious that the opportunity is only available to the City of Ottawa when there are several other municipalities looking for buses in North America."
Although the city has had problems with buses supplied by New Flyer in the past, Cullen was quick to say those buses were under warranty and the company acted quickly to repair them.
"This is a newer model bus and again there's a warranty in place and we expect New Flyer to honour it if there are any problems."