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Lincoln Way 210 board approves purchase of 40 gasoline buses with 7-year financing
Summary
The board voted to buy 40 gasoline buses from Central States and use a seven-year financing plan funded by debt certificates (not to exceed $4.6M) to replace leases; administration said ownership will yield long-term savings and allow in-house warranty work.
Trustees voted unanimously Nov. 21 to purchase 40 gasoline school buses and to finance the purchase with a seven-year installment-purchase arrangement, administration said during a detailed presentation on bus procurement.
Administration recommended purchasing 40 gasoline buses from Central States after bids clustered around $5.8 million. The recommended financing uses a debt-certificate structure with approximately $4,565,000 in proceeds and about $1,164,200 coming from district budget plans in fiscal 2026; annual payments are projected at roughly $850,000–$860,000 for seven years.
Finance staff said the financing-to-own model keeps annual cash outflows near current lease costs while creating an owned asset with resale value at the end of the financing period. "That also keeps our rate a little bit lower than if we were to go through a third-party leasing agency," a district finance official said. The district estimated residual asset value after seven years in the $1.2–$1.5 million range and said district staff expect to perform significant warranty and maintenance work in-house.
Trustees asked about interest rates, maintenance responsibilities and whether owning vehicles changes insurance obligations. Staff said the interest on the financing is in the low-4% range (4.31% was cited during Q&A) and that warranty coverage includes five-year full warranties for key components, with dealer/Ford coverage on major drivetrain items and district shop handling other repairs.
Because several feeder districts participate in intergovernmental agreements for transportation, staff noted the purchase decision considered intergovernmental relationships and the potential need to sell vehicles if agreements changed. The board also approved a related resolution authorizing issuance of debt certificates not to exceed $4,600,000 for this purpose.
Next steps include finalizing financing documentation with PMA and bond counsel and closing on the purchase and financing consistent with board approvals.
