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District considers leasing buses

August 31, 2011 - Brandon Twp.- For years, debate has raged— is it better to buy or lease a car?

At the school district's finance committee meeting Tuesday night, the question had a new variation— is it better to buy or lease a fleet of buses? District officials appear ready to answer "lease."

With half the buses in the current fleet 10 or more years old, the school district faces ever-increasing repair costs and a need to replace buses.

Steve Lenar, executive director of fiscal affairs, recommends the board move to leasing buses.

"We have old buses and we are spending a lot of money to repair them," he said. "We need to upgrade our fleet. We will have bus payments, but reduce our repair costs and would still see a savings of $30,000 to $40,000 per year."

The district has 27 buses that are used regularly, as well as nine "spare" buses. Each bus logs about 16,000-18,000 miles per year. In the 2011 budget, the district spent $121,361.80 on repair parts, up from $73,196 in 2010.

"The long-term cost savings comes in the cost it takes to maintain the buses," said Lenar. "If you are rolling over a third of your fleet each year, you never get into heavy duty engine or transmission replacement. All you have are brakes, oil changes, costs that will be minimal to keep buses operating opposed to the major things."

Lenar has experience with leasing buses in the Holly School District, where he said over the past decade, that district has saved more than $1 million by leasing.

The cost of purchasing a new bus is about $84,000, he points out, and to purchase three full-size buses per year would require a cash outlay of about $240,000 and the district would be financing loans every year. The district can lease six new buses for the 2012-2013 school year at a cost of about $84,000.

"It's a great idea to lease buses, because it's less expensive than to purchase and it gets us on regular replacement schedule," said Transportation Director Betty Martin. "We could reduce our parts budget by 75 percent by going to leasing. I fully support this move."

Lenar and Superintendent Lorrie McMahon said this move was not made with privatization in mind.

"We are not considering privatization of transportation at this moment," McMahon said. "With such an unpredictable financial situation, I can't say we wouldn't consider it, but going to leasing gives us a more stable predictable cost each year, and it won't be fluctuating. At least expenditures will be predictable even if can't predict revenue."

Susan covers Brandon Township and Ortonville
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