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Board authorizes lease purchase financing for three school buses to preserve short‑term budget flexibility
Summary
On June 23 the board authorized the administration to enter lease‑purchase financing for three new school buses (one 83‑seat with AC and two 90‑seat buses) with American Capital for an estimated $652,906.76 at an offered rate of 4.575 percent, with an option to prepay early.
Richfield Public Schools authorized administration to pursue lease‑purchase financing for three school buses at the June 23 meeting, a move district leaders said provides short‑term flexibility while preserving cash for curriculum and capital needs.
Finance staff recommended a lease purchase with American Capital after soliciting other proposals. Staff said American Capital offered the most favorable financing rate at 4.575 percent; alternative proposals returned higher rates (6.5 percent to over 9 percent). The financing package covers one 83‑passenger bus with air conditioning and two 90‑passenger buses, with a total estimated financing amount of $652,906.76.
The board debated the merits of leasing versus outright purchase. Administrators noted the district could repay the lease early and that the interest differential between the financing rate and current short‑term investment returns (about 4.1 percent at the time of presentation) was small, making the flexibility comparatively low cost. Staff said the district last used lease purchase financing in 2018 and recommended this limited transaction to manage near‑term pressures related to curriculum purchases and uncertainty in state funding beyond FY26.
Board members emphasized this should not become a routine practice; several said financing should be used sparingly and repaid early if revenue improves. District legal counsel and municipal advisors will review documentation; the administration named Zach Cronin of Squires, Walzburg and Mace as legal counsel to draft lease documents.
Director Paulus moved to authorize the lease purchase financing; Director Cole seconded. The motion passed by voice vote with the chair voting aye. Administration said the buses were ordered previously and are arriving this summer; the lease covers payment timing rather than a new procurement.
