The Board of Aldermen voted Thursday night to have Hocon Gas Inc. build a propane fueling station on Riverdale Avenue for the city.
The facility would be used primarily by the 60 new propane-powered school buses purchased by the city but could potentially be a dual fueling facility for other city vehicles. Hocon will provide the propane as well as construct the station.
The city will pay $107,500 for the fueling station but then would own the facility after five years. Technically, the city and Hocon will enter into a lease-purchase agreement.
Alderman Jack Finn, the lone Democrat on the legislative board, asked if the propane fueling station contract had gone out to bid.
Mayor Mark Lauretti, a Republican, replied it had not. The aldermen had previously voted to waive bids for the propane fueling facility contract.
Lauretti said the city expects to save in the range of $200,000 annually by using propane instead of diesel for the school buses. He said the city likely would pay just over $1 per gallon for propane (that price includes a 50 cents per gallon rebate from the federal government) compared to about $3.20 per gallon for diesel.
Other bus service approvals
The aldermen also voted to approve an operating agreement for use of the buses with Landmark.
Some aldermen questioned who would be responsible for maintenance, warranty issues and security on the buses. Lauretti said the city ultimately is responsible as the owner of the vehicles.
In addition, the aldermen voted to allow the new school bus service contractor — Landmark Student Transportation— to use a portion of a city-owned maintenance garage at 40 Riverdale Ave. for offices and a training facility.
The city now is making improvements to the garage building.
Landmark will pay the city $60,000 per year for five years to use a part of the building. Most of the structure will be utilized to handle maintenance on the buses and possibly other municipal vehicles.
The city is spending $268,000 to make improvements to the building to prepare it for bus maintenance duties and the Landmark offices.
Lauretti cites propane savings
Lauretti said despite skepticism on whether the propane buses will save the city money, they will do just that.
He said savings will come from using propane instead of diesel to power the buses, the city will own the buses after five years without needing to make any more payments on the purchase, and the city didn’t pay sales tax when buying the buses.
Anyone who questions the savings “doesn’t understand the numbers and all the moving parts,” Lauretti said. “I said to critics there’s big savings here,” he added.
He said because the city owns the buses rather than getting them from the bus service contractor, the cost of providing bus transportation will go down by $1.1 million in year six when the city finishes making annual payments on the purchase.
Life expectancy of the buses is 10 to 12 years, Lauretti said.
As for the sales tax, Lauretti said the city saved $350,000 by buying the buses directly rather than having the bus service provider do so. He said if a private company had bought the buses, it would have paid sales tax and then passed that cost on to the city.
‘A proven concept’
School systems in Connecticut usually get their buses through the contract with the outside bus service provider, so the buses typically are not owned by a municipality or Board of Education.
“This is a proven concept throughout the country,” Lauretti said of having the city own the buses.
Alderman Anthony Simonetti pointed out the propane buses will be better for the environment than diesel vehicles.
Propane also may be used to provide heat for the maintenance garage being upgraded as well as the adjacent animal shelter now under construction. Another option for a heat source for these structures is natural gas, with a gas line on Riverdale Avenue.