Anchorage asked to raise bus tire contract authority by $500,000

Anchorage's Public Transportation Department is asking the Anchorage Assembly to raise change order authority on the city's bus tire contract with Goodyear Rubber & Tire Company by up to $500,000, citing rising tire leasing and labor rates. Mayor Suzanne LaFrance submitted the amendment for the Assembly's Tuesday, Aug. 4 meeting. The amendment carries a total financial impact of $644,055.47.

The department said the added authority would cover higher tire leasing and hourly labor rates for service from June 26, 2026, through June 25, 2028. The department leases rather than buys tires for the 63 buses in the People Mover fleet. The request is a small share of the department's proposed $33,798,870 direct-cost budget for 2026.

The contract was executed June 26, 2023, at $878,939.28, with an original term through June 25, 2026, and two two-year extension options. Amendment No. 1 added $175,787.85 to the base period to account for service utilization overages, raising the not-to-exceed amount to $1,054,727.13. Amendment No. 2 adjusted rates for the renewal period, increasing labor hour rates 4.1% and leasing rates 3%. Rates are expected to climb another 4% at each optional renewal. If all extensions are exercised, the total not-to-exceed amount reaches $2,192,812.44.

The memorandum does not include a fresh best-value review, since the contract has grown through amendments. It notes the original award came from competitive bid ITB 2023B029, approved by the Assembly under AM 417-2023 on May 23, 2023. For riders, the stakes go beyond procurement mechanics. Tire quality and supply continuity affect breakdowns, delays and ride quality on the fixed-route fleet. For taxpayers, a larger tire contract can tighten flexibility in the transit budget even when the money comes from restricted sources.

The contract is non-encumbering. Funding will come from multiple sources, including Transit Capital Improvement Program bond proceeds and grants, rather than general fund dollars.

LaFrance submitted the amendment, and the administration recommends approval.