The narrator asks, “How much do you pay for a bus after you pay for a bus?” The video—produced by Thomas Built Buses—goes on to state that it’s not just about the purchase price, that procuring a new bus means considering fuel and maintenance costs, as well as replacement parts, and all this on top of “overall durability.”
This all equates to the Total Cost of Ownership, often referred to as TCO, and for school districts nationwide, it determines whether a transportation department purchases new vehicles or extends the shelf life of their existing fleet.
Yet, Total Cost of Ownership goes beyond the purchasing price. It is the sum of events that a school bus endures over the course of its functional existence to and from school. It is the theoretical litmus test that manufacturers and transportation department directors utilize, since a school bus, the notion holds, should serve the needs of a couple generations of children with little fail.
A school bus is a long-term investment. Make no doubt about that. For example, in North Carolina, where Thomas Built Buses is headquartered, school districts use the metric of 20 years or 250,000 miles to gauge the basic necessity of vehicle replacement.
As Nicholas Smith, a spokesman for Thomas Built Buses parent Daimler Trucks North America, puts it: “Certainly climate, terrain and routes, among other things, play a significant role in the life of a bus. Thomas Built Buses builds buses that can last upwards of 15-20 years, again dependent on the previous comment.”
A Lasting Deal
For school bus manufacturers, the goal is to reduce the total cost of ownership enough for school districts that they deem it sensible to purchase new vehicles for their fleet. To accomplish this, companies construct buses that are reliably safe and consistently proficient, no matter the setting their driven in. “The purchase cycle certainly varies from state to state, district to district, province to province,” said Smith.
Thomas Built Buses, which as been providing school buses since 1936, operates with one vision: “Build the kind of bus that we want our own children to ride.” According to the company’s website, currently, one in three children ride on a bus assembled by Thomas.
“In some ways, we lower the total cost of ownership and help extend the life of the bus by offering corrosion protection packages, heavy-duty harnesses and industry leading warranties, in addition to utilizing manufacturing processes and capabilities that sets the bar for product durability in our industry,” said Smith.
Transportation departments continuously evaluate how to make the best economic decisions when either maintaining or updating busing fleets. When examining total ownership costs over the length of a bus’ lifetime, school districts can establish a clearer idea of price in the long run.
Since 2011, Washingtonville Central School District, a system of schools in the southern portion of New York State, has used propane-powered school buses from Blue Bird. While the upfront costs were higher than the purchase price of the traditional diesel buses, Washingtonville CSD was able to recoup the lost revenue through fuel savings.
“Environmental reasons were a large part of our decision to purchase propane auto-gas buses, as much as cost savings,” said Paul Nienstadt, the district’s executive director of operations.
Routine maintenance costs dropped 30 percent for its alternative fuel buses compared to the district’s diesel buses in addition to the thousands of dollars saved per year on fuel costs.
“School district fleet managers across the nation are finding, through their comprehensive evaluation, that Blue Bird school buses make economic sense,” said Phil Horlock, president and CEO of Blue Bird.
Since 1927, the Blue Bird Corporation has maintained an industry standard in “its innovative design and manufacturing capabilities,” according to its website. To help reduce the total cost of ownership for districts, the company claims to have a higher percentage of school buses on the road than in the shop for repairs.
“We had a quick return on investment due to the immediate savings from both fuel and routine maintenance expenses, and this factors into our overall cost of ownership,” said Nienstadt.
Running that Bus to the End
To determine Total Cost of Ownership, the Thomas Built Buses website provides a calculator to clarify the projected price tag for school districts seeking to update their school bus fleet. Yet, what of the districts that continue to reap the benefits of acquiring resilient vehicles some time ago?
Pete Meslin, the transportation director for the Newport-Mesa Unified School District, has a fleet with buses that are on average roughly 13 years old. Meslin said he relies on the superb skills of his technicians to expand the time the aging fleet is on the road. Like most school districts nationwide, Newport-Mesa USD depends on grant money to keep its school buses current.
“We try to purchase a couple of buses per year, unless we receive grant money, in which case we maximize the grant offering. That means that some years, we may purchase 15 or so vehicles, while other years we purchase just one or two,” said Meslin.
While the Total Cost of Ownership is valuable in the long term, it’s that initial cost to buy new buses that forces a number a transportation department to explore other options.
Most options involve seeking money from outside sources, since the ability to buy larger buses, as Meslin reported, doesn’t make sense to purchase without grant assistance, which usually has stipulations, like purchasing alternative fuel buses.
“Periodically, they do offer grants, which provide significant assistance in purchasing these more expensive alternative fuel buses in exchange for destroying older diesel buses. Unfortunately, the grant money hasn’t been able to meet the demand. Therefore, our fleet is aging,” said Meslin.
While Thomas doesn’t offer grants, Smith mentioned that there are numerous grant opportunities for school districts to pursue. “Most notably for the purchase of alternative fuels vehicles or for the replacement of buses for new buses with cleaner burning diesel engines that adhere to current EPA standards,” said Smith.
For the state of Nevada, the rule of thumb is that the larger districts buy new buses and smaller districts buy used buses. Most of the new buses purchased by smaller districts are the result of grant money.
If grants are unattainable, these smaller districts “purchase used buses due to budget constraints. To some of them, a 15-year-old bus is new,” said Diana Hollander, director of pupil transportation for the Nevada Department of Education.
Hollander reported that Nevada has no mandated replacement schedule, leaving it up to the districts to determine when replacement is necessary. This can mean that, statewide, the average age of the fleet is typically between 10-15 years old, with some as old as 20 years old.
A large portion of school districts “generally won’t buy buses that require refurbishment because that just adds to the expense. Older buses require more maintenance expense, but it’s still a limited amount of money the transportation gets and they must do the best they can,” said Hollander.
School districts in the Silver State, according to Hollander, “receive a lump sum via the Distributive Account, and are expected to manage all school related costs with this money, including funding school transportation.”
These costs include regular maintenance, which is as important if not more so to keeping school buses in tip-top condition. Technology, such as remote diagnostics, provides tools fleet managers have never had before to get ahead of mechanical issues. But, coupled with such advancements as the latest engine and emissions controls, the result has been higher price tags for new vehicles. But per the principles of Total Cost of Ownership, fleets should be basing their decisions on how the technology can increase efficiency and safety long term, thus amortizing any price increases over the number of years the operation needs the bus to remain in service.
Trish Reed, vice president and GM of IC Bus, points to innovations, such as fleet management programs, that have helped school bus operators save both time and money, as fleets are able to transform to a more proactive preventive maintenance model, thus decreasing a vehicles TCO.
“Greater uptime can be realized by monitoring bus health in real-time, instead of the standard method of operator initiated paperwork, which can cause delays and unplanned downtime,” said Reed. “Key pre- and post-trip functions are also monitored helping maintenance teams and operators.”
