Whereas: Empower College Prep's enrollment projections require an additional bus route for the 2025-2026 school year, and

Whereas: The buses Empower College Prep sold to Abundant Transportation include one bus manufactured in 2012 that is aging and may need to be replaced during the 2025-2026 school year, and 

Whereas: The cost to purchase a new bus exceeds $150K while Abundant Transportation typically purchases buses for $80K, and 

Whereas: Empower College Prep excluded the cost of depreciation when determining the rate for contracting with Abundant Transportation in order to protect its net income and DSCR metrics, and 

Whereas: Abundant Transportation's 15 contracted routes and field trips provide adequate revenue to operate with a margin of $60K - $100K annually but insufficient margin to replace the 7 busses Empower College Prep sold to them, and

Whereas: Abundant Transportation's 5-year pro forma indicates that at 22 contracted routes Abundant Transportation will have adequate margin to replace its buses and add new routes with the net income it is generating, and 

Whereas: The costs to Empower College Prep that are associated with operating its own transportation services (including insurance, maintenance, fuel, personnel, depreciation) are significantly greater than the cost to contract with Abundant Transportation by about $100K annually for daily routes and field trips, and

Whereas: Cash Empower College Prep spends to finance the purchase of buses by Abundant Transportation has no negative effect on Empower College Prep's net income or DSCR, but rather has a small positive effect due to the interest received, and

Whereas: Empower College Prep's cash position exceeds 90 days of cash on hand, twice the requirement by investors, and will only be impacted by about 6 days if lending $240K, while its net income and associated DSCR metric would fall below the 1.2 requirement to expand if expenses associated with operating transportation internally were added to the existing budget. 

Therefore, let it be resolved that: Empower College Prep approve financing Abundant Transportation to purchase buses in an amount no greater than $240K at a rate no lower than 5% for a period no greater than 10 years with principal and interest being paid in Year 1. 

Whereas: The State of Arizona requires schools to submit revised budgets to ADE by May 15 if its adopted budget student count was overestimated, and 

Whereas: The attached budget reflects the amount shared at prior Board meetings and is in the format required by the state. 

Therefore, let it be resolved that Empower College Prep's Governing Board approves the revised budget.