Pittsfield City Schools to buy new buses rather than lease
PITTSFIELD -- City school officials have found a way to purchase a new fleet of buses at about the same long-term cost -- or even less -- than an earlier plan that involved leasing.
The leasing plan would have provided a three-year budget reduction for the district, but that plan stalled when officials learned leasing was not an option under the current financing arrangement.
Assistant Superintendent for Business and Finance Kristen C. Behnke, who recently briefed the School Committee on the revised bus replacement process, said bids to purchase 43 school buses and accept trade-ins will be advertised for next week.
In preparing the current school year budget, the committee decided to lease buses rather than purchase new ones, which was estimated to cost about $200,000 a year for three years. That compares to the cost of purchasing buses outright, estimated to cost $550,000 to 620,000 per year.
The leasing proposal, which emerged during annual budget deliberations last spring, followed lengthy consideration by officials of many complex options available for replacing aging city school buses and calculating the most cost-effective method.
However, after receiving bids for a lease/purchase agreement for buses, the committee was advised by the city's bond counsel that, because the current fleet was purchased in 2006 as part of a larger bond that won't be paid off until 2020, money from trading in old buses could only go toward purchasing new vehicles, but not toward a lease.
Behnke said it also was thought until recently that the purchase and trade-in deals had to be bid separately, which she feared could have left the city for a time without a fleet if new buses could not be delivered on time.
But she said a consultant known to Superintendent Jason "Jake" McCandless -- Richard Labrie -- was hired to review the planned bidding process and was able to convince the bond counsel that the purchase and trade-in deals could legally be bid as one, utilizing the same vendor. That, Behnke said, also is believed to be the way to obtain the best price.
Labrie, a former executive director of the Lower Pioneer Valley Educational Collaborative and now an independent consultant, was paid $717 to look over the bidding process and make recommendations, Behnke said, adding that the advice should save the school more than the fee.
While the cost per year will be higher initially, she said the city will have equity in the buses after five years, and also expects to keep some of the buses that are used on shorter, less demanding routes longer before trading them in. Those factors should result an overall cost to the system equal to or lower than that of the lease-purchase arrangement, she said.
As for the impact on budgets, Behnke said some of the higher cost for new buses this year can be covered through funds in a rollover account for bus purchasing, but in subsequent years the higher amounts will have to be worked into the annual spending plans.