Spokane Transit Authority squandered taxpayer money on expensive buses

STA chose to buy hybrid buses in 2007-2009 to reduce costs. This decision apparently failed to deliver the cost reductions and here is why.

December 10, 2007:

STA probably won’t recoup the $211,000 price difference between each hybrid and its fully diesel counterpart unless fuel prices increase dramatically over the expected 15-year life of each hybrid.

March 24, 2009:

The acquisition of new buses, including the hybrids, will reduce ongoing maintenance costs for older buses as well as save on fuel costs.

December 9, 2009:

The 29-foot coaches from Gillig Corp., of Hayward, Calif., will get better fuel mileage and have reduced maintenance costs. The savings should offset their additional purchase price over the life of the buses.

How did that cost reduction work out?

March 10, 2014

The agency opted not to continue purchases of Gillig electric hybrid buses based on overall costs.

The STA bet on a high rate of gas price increases:

At today’s diesel prices [2007], each hybrid will save $90,000 in fuel costs over 12 years, Meyer said. If prices go up 80 cents per gallon, that savings would be $128,000.

Here is the fuel price forecast made by the Federal  Transit Agency in the year 2007:

The price of fuel in 2007 dollars is predicted to drop substantially over the next 12 years according to the AEO forecast

What actually happened with Diesel gas prices (chart from U.S. Energy Information Administration):

DieselPrices

Actual price change over the period is essentially zero.  We do not know if the hybrid buses achieved their claimed mileage or maintenance advantage.  STA acknowledges their overall costs were too high. Seattle found many hybrid buses had worse gas mileage than the diesels they replaced. Spokane’s probably did too as they were similar to the buses tested by the National Renewable Energy Laboratory which found worse gas mileage on the diesel hybrids than expected.

What the Federal Transit Agency determined as life cycle costs of diesel, hybrid and other bus technologies, as of 2007:

BusComparisonCosts

Per the Federal Transit Agency, hybrid buses always cost more to acquire, maintain and use (as of 2007 when the STA made their decision). The FTA points out that without subsidies from other taxpayers, expensive buses do not make financial sense.

The STA bet on higher gas prices and squandered taxpayer money. The data and research available in 2007 when the STA began its hybrid program all indicated higher costs for choosing the hybrid buses.

The hybrid choice was a bad management decision.

Now they want to buy expensive electric buses made in China because, you know, Spokane has money to burn! May be the electrics are good, may be not. May be they have invisible benefits that we can imagine make them a better deal. But can we trust STA to make the right decision?

Spokane institutions have serious management problems that are never addressed.

Sort of like the PFD‘s poor management that led to a steady decline in facility usage since 2000. In spite of taxpayers funding every expansion the PFD asked for and promises to deliver more visitors, more jobs and more attendance.

And may be Spokane’s media problems too: how are those news reports on the 13 year decline in PFD usage coming along Spokane media? Oh, dead silence.

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