The Chinook School Division will be taking over the busing service for students within the city of Swift Current.
Announced yesterday afternoon is a transaction between Rilling Bus Ltd. and the school division worth roughly $1.84 million.
The deal includes Chinook acquiring 22 buses, while also compensating Rilling for loan penalties and paying a nominal amount for buying out the contract a year early.
According to Rod Quintin, the chief financial officer with Chinook School Division, the transaction will be paid for through debt financing over an amortization of 5-6 year and has been approved by the ministry.
"With respect to the loan for financing this, the cost of repayment of the loan principal and interest will be financed out of money that's already been committed to the contract as it exists," Quintin explained. "So there is no new dollars related to repaying the loan."
Chinook believes the shift in busing services would save approximately $80,000-$100,000, bringing the current price of service at $1.07 million to under the $1 million mark.
"The possibility of us taking over the operation of the buses and the business case proved to be pretty favourable in our estimation around the cost being somewhat reduced from what we're paying now," he said. "And definitely more cost certain going forward because we wouldn't be in a position as we go forward to have to go out to the market for another tender in June of 2019."
With the transaction, it would also see the Chinook School Division add about 26 new staff to their payroll as the bus drivers would shift employers too.
"It's really a once in a lifetime for the division to look forward too," Quintin stated. "We have all the capacity, the infrastructure in place, we have the bus garage, we have the HR supports, we have the payroll capacity. All of those things that you need to run a business like this, we already have."
Starting in the fall of 2018, 25 buses (22 bought and 3 procured) will start delivering the Chinook School Division bus service to students within the city of Swift Current for the first time.
The Holy Trinity Catholic School Division will be buying the new service from Chinook as well paying for the cost to get their students to All Saints Catholic School, but won't be chipping in on the seven-figure transaction between Rilling and the Chinook School Division.