A-W begins leasing buses

Posted February 28, 2013 at 6:00 am

By Julie Ann Madden

For the first time ever, Akron-Westfield Community School will not be purchasing buses.

At their Feb. 11 meeting, the Akron-Westfield School Board unanimously approved a resolution to sell five buses to Hoglund Bus Company Inc. of Marshalltown and lease buses from the company.

The resolution set a public hearing for 6:15 p.m., Monday, March 11 at the board’s next meeting regarding the proposed sale of buses.

District officials plan to sell their 2012 Blue Bird bus for $64,000; a 2000 Thomas bus, $3,000; a 1998 Thomas bus, $2000; a 1997 Thomas bus, $1,500; and a 1995 Thomas bus, $2,000.

Business Manager Jodi Ryan presented an analysis of three bus lease proposals to the school board, noting Shared Superintendent Randy Collins was recommending the Hoglund option.

Per the lease-purchase agreement, the school district will agree to lease five buses from Hoglund for three years. At the end of the three years, the district will sell these buses to the company and lease more buses, explained Ryan.

The whole purpose of leasing buses is to transfer Physical Plant & Equipment Levy (PPEL) and School Infrastructure Local Option (SILO) monies into the district’s General Fund.

The lease payments and bus purchases can be made with PPEL and SILO funds but when the buses are sold, the money goes into the district’s General Fund — not back into the PPEL and SILO funds.

“So all of a sudden you can use this money to pay teachers,” said Collins. “That’s what it’s all about.”

“That total is about half of our (cash) reserve,” said Collins, adding at one of his previous school districts they had thought of doing this but only short-term for one bus. “One sale didn’t seem worth it but when you do recurring, it’s a way that districts cannot only survive but we can thrive.”

“Districts get hurt because they don’t have money in the General Fund,” he said. “They don’t have the (Spending) Authority.”

“You can put your whole fleet on a lease agreement,” said Ryan, “and it also saves repair (costs) because we have three-year warranties with it.”

Ryan estimated this lease-purchase agreement would impact the district’s PPEL account by $355,568 over the three-year period, which is just $17,568 more than the cost to purchase buses outright.

However, with selling the five buses this year, the district will have $72,500 plus save about $24,000 in repair expenses. Furthermore, with selling the buses at the end of the lease period, Ryan estimated the sales netting the district $224.084, bringing a total of $320,584 into the General Fund in 2015-2016.

“We are getting rid of our five oldest buses which right now are costing us quite a bit,” said Ryan.

“And our kids are going to be in state-of-the-art transportation,” said Collins. “We’ll have our kids on safe buses that don’t break down.”

“We shouldn’t have to battle the rust issue,” added Board Member Roger Oetken.

“This is huge,” said Collins, who commended Ryan. “It has been a real joy to work with her. I’ve never worked with anyone so sharp. It took me a while to figure that out. It’s just wonderful for me to ask for something and I have it right away and it’s accurate.”

Even with the more than $320,000 impact to the district’s PPEL and SILO funds, “we’re going to be able to keep all the promises we made to the public as far as 1:1 (Computer Initiative) and technology with PPEL funds,” said Collins.

Leasing the buses will cost a little more than $10,000 a year per bus, said Ryan, estimating it’ll cost $44,000 a year.

“The big impact will be in fiscal year 2016 when we purchase the buses,” said Ryan.

“The only downside I see at all is if economic conditions really change at the time the lease is up,” said Board Member Jodi Thompson. “To renew another lease, whether it’s good or bad, you don’t have a crystal ball to know what that will be.”

“At that time, we could look into buying buses, too,” said Ryan.

And Thompson agreed, adding, “You’d buy them. Maybe not lease for a while. You don’t know.”

Oetken made the motion to accept the resolution setting the public hearing and Thompson seconded it. The vote was unanimous, 6-0 with Board Member Nick Schoenfelder absent.

Ryan explained after the public hearing, the board could approve the lease and sale agreements.

Collins also commended Principals Derek Briggs and Cathy Bobier “for the outstanding work they are doing.”

“It’s a busy time of year,” said Collins, “plus throwing a (state accreditation) site visit on top of that and the 1:1 program, we are truly blessed with our administrative team and handling things very, very well.”

“I feel really good about what we’re doing as far as what direction we are taking with programs and finances,” he said.

In other business, the Board approved hiring contracts for Julie Bundy as Drivers’ Education instructor; Mike Allner, In-School-Suspension officer; and Gary Hillrichs, custodian.

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