Source: Sherman Publications

News
District opts to leases buses

by Susan Bromley

December 21, 2011

Brandon Twp.- Lease or buy?

For the school district, for at least the next three years, the answer is lease.

The school board unanimously voted at the Dec. 19 board meeting to approve the leasing of seven buses (with a capacity of 77 passengers per bus) at a cost of $11,990 per bus per year for a total annual cost of $83,930. The contract is for three years with Capital City Bus from Lansing.

“We will turn over our fleet every three years compared to the current method of 12 years,” said Executive Director of Fiscal Affairs Steve Lenar. “While we would be using the buses, the major components would always be under warranty, the reliability of our bus schedule would increase and we would save money.”

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. Lenar, who is also finance director for the Holly School District, said bus leasing has been done there for 11 years, and the district has saved $1 million by leasing, avoiding have to buy new buses or make costly major repairs.

Brandon 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.”

The cost of purchasing a new bus is about $84,000, he said, 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.