The Lee’s Summit R-7 School District Board of Education in Missouri recently approved one of the largest transitions to CNG school buses in history with a $25.8 million lease-purchase agreement that included an $18.1 million investment in transportation, $2.1 million in facility services associated with the CNG vehicle transition and a $5.6 million investment in technology, infrastructure, equipment and property.
The plan includes financing for 149 new Thomas Built compressed natural gas (CNG)-fueled buses and 42 new trucks and vans, along with CNG technology, infrastructure, equipment and property for fueling stations.
JUST LOOKING AT THE BUSES
Thomas Built Buses, its dealers and Daimler Truck Financial work closely to present the very best financing options to their customers. In the case of Lee’s Summit, the three partners were able to offer an inclusive and well-rounded proposal, which made financing the new fleet the best choice to achieve the district’s transportation and environmental goals. In the jointly-prepared proposal, the municipal lease-purchase plan allows the school district to make payments from its operating budget for the term of the agreement. The contract is treated as a lease, not a debt on its books since the contractual liability is only recognized upon annual budget approvals.* Even though the contract is treated as a lease for accounting purposes, the district owns the buses at the end of the contract. The approach was made possible by combining the sophisticated knowledge of the Daimler Truck Financial team with very competitive interest rates,** reliable and environmentally-friendly buses from Thomas Built and dependable service and support from the selling dealer.
DOING THE MATH
Annual new bus budget for the school district is $750,000 ($7.5 million over 10 years).
Total purchase price of the 149 CNG buses through Daimler Truck Financial, $18.1 million
Estimated fuel and maintenance savings of new fleet (over 10 years), $11 million
Total cost of 149 new buses after fuel and maintenance savings is realized, $7.1 million or $48,322 per bus
Beyond the immediate operational savings of the new buses, Lee’s Summit is looking forward to even more benefits from the conversion to CNG, including:
Savings*
- Local utility energy credits
- Elimination of costs associated with activity and athletics bus rental program
- Federal/state/public grants, tax rebates and ARRA Phase II funding
Revenue
- Private contributions, incentives and/or corporate partnerships
- Public filling station royalties and federal fuel tax rebates
Plus, the district is benefiting from newer, cleaner, more efficient buses which are just as friendly to the environment as they are to the district’s bottom line.
Every school bus purchase is different, but what is similar is the partnership that Thomas Built Buses and its dealers have with Daimler Truck Financial, which allows each bid to provide multiple alternative and flexible financing options that can actually save money. Daimler Truck Financial offers tax-exempt municipal financing and competitive-rate retail loans and leases, with the option for periodic payments on terms up to 7 years.** It even offers up to 100 percent financing for qualified contractors. To learn more, visit http://www.thomasbus.com/financing/.
* Daimler Truck Financial does not offer or endorse any tax advice, accounting advice or tax strategy to its dealers, customers or potential customers. Please consult with your tax or financial adviser for tax and accounting treatment.
** Actual rates, terms, down payment, advance and program eligibility will be determined by the Daimler Truck Financial Credit team based on creditworthiness of customer.
