‘Reimbursement’ is another word that seemed to pop up a lot
during conversations on leasing, with many states differing on the subject. Even with the newer lease structures that are avail- able, the reimbursement for Winnebago (Ill.) Community Unit School District 323 does not make for a case in favor of leasing. “With a lease program, once your fleet is gone you have no
equity. Most districts could not get back to owning their own fleet as it would become cost prohibitive,” said Transportation Director Mike Reinders. Although some, likeCentral States Bus Sales President and CEO
Gary G. Deeken, agree that the financial benefits of leasing largely depend on the methods used by each state’s Department of Edu- cation funding formula, there can definitely be some benefits. “In those states where some percentage of the transportation
operating costs are funded or reimbursed by the state, leasing can serve to help maximize that funding,” said Deeken. “In those states where there is no direct transportation funding, leasing does not tend to be as beneficial.”
A Little Financing to Ease Tose Worries? For some, the hybrid qualities of financing a school bus could
create the happy medium between buying them outright and leasing. Ridge Road Express will be taking delivery of 31 new school buses in early March thanks to financing. “Much like everyone has been trying to tell the Obama adminis-
tration, the banks and third party lenders are lending and at good rates,” said Tomas Weeks, president of the Lockport, N.Y., con- tractor that serves school districts in the western part of the state. Not everyone agrees with Weeks’ optimistic outlook. Michael
W. Wagner, from Polar Express School Bus Company in eastern Il- linois, sees a problem with financing, and it begins and ends with a lack of available funding from the banks. “It is extremely difficult to secure financing and the paperwork
and information necessary has increased significantly, in fact it is obnoxious at this point,” said Wagner. “Money is available if you look long enough and if you have good/excellent credit.” According to Wagner, small businesses not being able to secure
loans from banks makes their jobs extremely difficult “because our industry is so capital intense.” At the OEM level, some manufacturers are seeing a rise in the
popularity of financing, with more school districts looking for alternative means to be able to purchase the buses they need. “Flexible payment terms combined with competitive interest
rates allow a district to take old school buses out of service and (be) replaced with new school buses,” said IC Bus’ Keith Kladder. And since the buses they receive are brand new models, any
mechanical issues are covered by the warranty, which can help districts save additional money on operational maintenance costs. It can also allow schools to be more flexible with their avail- able funds while pulling older buses out of service and replacing them with newer school buses that typically are less expensive to maintain, according to Kladder. n
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