Area’s VanGo program facing high hurdles thanks to federal mandates
December 22, 2012
Community transit systems such as Northern Colorado's VanGo Vanpool Program that receive local, state and — primarily — federal funding from were already restricted in the types of vehicles they could purchase thanks to Buy America provisions aimed at keeping jobs and products within our borders.
Now it's a little more complicated and stands to cost users big time.
A November decision in the nation's capital effectively gave a new vehicle company — Florida-based Vehicle Production Group LLC — a stranglehold on vanpool funded by the Federal Transit Administration across the country, upsetting many in the industry who call the move short-sighted and illogical.
Under the prior system, a waiver was issued in June 2010 that allowed groups such as the popular northern Colorado rideshare program to purchase Chrysler and Dodge minivans, despite a production move to Ontario, Canada, in 2009.
Those vans have been touted for their affordability, decent gas mileage and seating capacity. Because there were no other similar vehicles that qualified as "made in America" at the time, the system continued untouched.
But the FTA, rescinded that waiver Nov. 27 and replaced it with a mandate that all new vehicles from programs buying with federal funds in any way have to opt for the new MV-1 — a vehicle made in Mishawaka, Ind., that meets the Buy America requirements.
"As long as there is a domestic manufacturer for a product, FTA cannot grant a non-availability waiver or permit a non-availability waiver to stand," according to the report from the Federal Register.
But being American-built may not be the best thing for the industry, and hundreds of leaders and consumers across the country already have voiced concerns with the administration.
The vehicle — which is reminiscent of a small armored car or Hummer — was initially designed for wheelchair users and is not fitting for vanpool programs, critics have argued.
It weighs in up to 1,400 pounds more than vans already in the VanGo fleet and can seat three fewer people, according to Jeff McVay with the program, which operates within the North Front Range Metropolitan Planning Organization. It also costs nearly twice as much as traditional vans, with its average price tag about $40,000. Existing vans usually cost about $25,000.
The new vehicles, which are not directly classified as "minivans" according the report, take a hit at the pump, with a noticeable drop in fuel efficiency stemming from a gas-guzzling V8 engine and older technology. Current vans get about 25 miles per gallon, compared to the MV-1's 18. Among other things, they use rear-wheel drive, potentially spelling disaster in Colorado winter.
McVay said the program would likely need to purchase as many as eight new vans in 2013 to replace aging and deteriorating ones in the existing fleet of nearly 100. As it stands with FTA funds, they would be forced to purchase the MV-1. The additional cost to completely retrofit the fleet with the new vehicles could total more than $2 million, he said, adding that at some point, a potential fare increase could be inevitable.
The move has sent leaders from similar programs across the country scrambling.
"In this day and age, where are we going to get that additional funding?" McVay asked. "It's a real double-edged, if not more, sword. This literally has caught everybody totally flat-footed, totally shocked (and) totally surprised."
Monday through Friday, the VanGo program shuttles more than 435 people across the Front Range in 78 vans, keeping hundreds of cars off of the highways and out of rush hour bottlenecks. Trips reach every corner of the region from Golden to Greeley and Fort Collins to Denver.
Van fares for 2013 range from $91 to $337 monthly, already 3 percent higher than 2012, McVay said.
The move has garnered the attention of local leaders, including Weld County Commissioner Sean Conway, who stressed that unless a waiver is granted and leaders spring into action, it could spell the end of the popular ride-share program.
"This, quite frankly, is just government run amuck," he said. "There's no other way to put it."
Conway recognized the merits of the Buy America provisions and the far-reaching benefits of supporting homegrown production, but he said when Congress supported the act, this type of tie-up was the furthest thing from everyone's mind.
"This is what happens when you don't look at the unintended consequences of legislation," he said. "This is where life is actually stranger than fiction."
There are options, though.
The mandate for the MV-1 only occurs if programs want to use FTA funds to purchase a new vehicle. Alternative funding streams are being explored to curb the pressures from the government, though McVay admitted it would require considerable time and effort.
"It's very frustrating from our standpoint," he said, highlighting the progress that has been made during 16 years of growth since the program's inception in Fort Collins. "There's nothing easy about it."
Waivers may become available, though leaving aging or deteriorating vans in the fleet while approval is sought during the coming months could ultimately cost the program anyway in repairs.
The North Front Range Planning Organization also has been in talks with other groups across the nation that are dealing with the changing requirements, most notably, the Association for Commuter Transportation. It is a trade association that organizes transit industry leaders on a host of issues, including traffic congestion, vanpooling and air quality.
McVay said as the issue progresses, the association and local groups would work to pressure officials in Washington in search of a compromise.
Meetings are scheduled throughout the remainder of the year and into 2013 as officials and programs nationally race to find a solution that can work for everyone. McVay was wary and quick to note that dealing with this sort of issue, which blindsided so many, will be touchy moving forward.
"There's no black and white in any of this," McVay said. "It's all just shades of gray, so to speak."
Immediately, plans include reaching out to elected officials who have a voice on the federal level. The VanGo program will continue to operate as is, but it's only a matter of time before something has to give, he said.
"We're not dealing with logic," he added. "We're being forced to play the cards that we have right now, and obviously our hands are pretty severely tied at this point."