Date: March 7, 2023
Author: Mike Courson, The Great Bend Post
“The USD 428 Great Bend Board of Education failed to prove a lease program with Enterprise Fleet Management was too good to be true. The board first heard from an Enterprise consultant during the January meeting. Last month, the body moved forward to the next stage with no fees attached. Monday night, the board made the biggest leap yet by approving 6-0 the lease of 10 2023 Chevy Traverse SUVs to replace 10 of the 38 older vehicles in the district's fleet.
"We really feel like the vans we're looking at replacing, we really do need to replace," said Assistant Superintendent John Popp. "If we don't replace them this way, we're going to be coming to you with a lot of purchases anyway. We feel like this is a really good option. Ten vehicles, it's just a start to get an idea of how this is really going to work for us. It gets some of our most immediate needs met right off the bat. I don't think it's too big a step that we can't handle it even if we decide this isn't the way we want to go with the vehicles in the future."
The price of each Traverse is listed at $35,335. The district will pay a monthly lease fee of $682 for each vehicle, plus a $44 monthly maintenance fee for a total of $727.29. The annual cost of the 10 leases will cost the district $87,240. Enterprise will sell the 10 vehicles the district is replacing, and the Enterprise consultant believes those vehicles should fetch at least $50,000 in sales.
"He really feels confident he'll be able to totally cover our lease payments for a year out of just the sale of these 10 vehicles," Popp said, "so somewhere in the realm of $50-100,000."
According to Enterprise, the district would save approximately $89,000 in its first year using the lease program if it switched out its 23 oldest vehicles. By phasing out all 38 vehicles within six years, Enterprise estimates $359,000 in savings over 10 years. The process centers around the resale of both the district's vehicles and the leased vehicles at the end of their term. Enterprise can maximize the equity in those vehicles to generate savings.
"Add to that, he said there are not very many minivans out there for resale so they're a pretty hot item," said Popp. "People are wanting minivans, especially ones that look as good as ours, even though they have some miles on them."
The board agreed to a 36-month lease program on the 10 SUVs. The $727 monthly fee for each vehicle is locked in for that duration, and the district will have the option of buying each Chevy for $18,303 at the end of the 3-year term. Enterprise believes it can net $30,000 from the sale of each Traverse at the end of the term and put those earnings toward the next round of leases. Enterprise has the 10 vehicles on hand, and Popp hopes for delivery within a month. The Enterprise Fleet Management program is utilized by several other districts and municipalities in Kansas.
"I think the 10 is a really good number to get started with," Popp said. "If all of a sudden we realize there's a catch or things aren't working right, we can stop and pay out the rest of this without taxing our budget."