Rising prices impact Cheney School District's bus replacement plans

By DAVID TELLER

Staff Reporter

Despite skyrocketing vehicle costs, the Cheney School District will have 45 buses in its fleet by the end of this fall and 62 when the 2006 transportation levy is exhausted.

Cheney School District finance director Brian Aiken said the district has purchased 23 new buses with funding levy.

Under the conditions of the Transportation Vehicle Fund (TVF) levy, the district planned to purchase four to five buses a year for six years even though monies were collected for only two years. Aiken said the funds go into a transportation fund and sit there drawing interest until they are used.

“That's all it can be used for, is the purchase of our school buses,” he said.

Aiken said the levy is first collected in April and the next is collected in November. He said this November is the last collection of monies for that levy. There have been significant changes outside the school district since the levy was approved. He said the school district staff got to looking at the prices and noticed a substantial change after hurricane Katrina.

“The bus prices just skyrocketed,” Aiken said.

In 2007 a new bus cost $74,000. For the 2009 school year, the district is looking at a price tag in the neighborhood of $95,000. Aiken said the $21,000 jump in price in two years is huge, however he has no choice but to buy the buses. The need comes from the emergence of additional routes created by the growth of the district, which is one of the largest in the state at 380 square miles. The district just added a new route by Sunset Elementary.

So far, the school district purchased 23 of the 26 they had planned.

Aiken said in the first year of the levy, the school district planned to buy six buses and then follow up with five the next year. When prices jumped $12,000 a bus, the district decided to borrow from the capital projects fund and buy an additional six buses a year early to avoid the escalating prices. Eleven buses were purchased at once.

The school district returned to the original purchase schedule this year.

“Five of them will be coming in November, and we've already received one,” Aiken said.

The district is paying the 2006 TVF debt back to the capital projects fund. The benefit is the interest. The county treasurer determines the interest of the loan, in this particular case, Aiken said the “we're paying interest to ourselves.”

“It's easier to borrow it from yourself and pay it back,” he said.

The process of bus buying is a three-way transaction. As Aiken explains, the state bids a “barebones bus.” The districts have to come up with the funding in advance and the state pays it back to the district on what's called a depreciation schedule.

“We should be paid back enough over that (time) to be able to replace that bus,” Aiken said.

The depreciation status of a bus can affect use and repairs. If a bus wears down but is still on the depreciation list, maintenance keeps it in the district's fleet. Repairs are the district's expense.

“We basically fix them if they're still on the depreciation schedule,” Aiken said.

Repairs are limited to 25 percent for the original value of the bus. If a repair exceeds that amount, then the cost is rolled into the capital projects and the district can get the money back. Aiken said that is rare. He added that the district uses the TVF fund to buy buses “and that's about it.”

This year, Aiken said there were seven buses removed from the depreciation list, which means they are no longer generating revenue for the district because the state paid them off.

As for the remaining three buses that have not yet been purchased, Aiken said the school district is doing an analysis to see how much levy funding has been spent. He said the school district transportation director Paul Harris will make a report of the findings and present them to the school board.

Currently, there are 44 buses on 50 routes, with a route being “to and from” school. Aiken said there are midday routes, so many of the buses are being used for “double duty.” He added that the school district is transporting 54 percent of its students and he expects the number of riders to increase because of the price of fuel.

“A lot students are finding it hard to put gas in their vehicles and the school bus is becoming an option,” Aiken said.

David Teller can be reached at [email protected]