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Bond Calendar 
When a drunk driver crashed into a former school bus on the night of May 14, 1988, the ensuing tragedy wouldn’t just affect the lives of everyone involved in the accident. It would change how school buses were designed, regulated, bought and sold, both in Kentucky and across the nation, in ways that are still saving lives more than 30 years later.
While the responsibility for the crash lay with the drunk driver, the design of the bus contributed to the scale of the tragedy. At the time of the crash, most school buses were powered by gasoline, a fuel much more combustible than diesel. The bus’s fuel tank was unprotected, making it more vulnerable to punctures in a collision—one of the main causes of the fire that led to the vast majority of the deaths and injuries in the Carrollton crash. Additionally, the only exits on school buses were the front and rear doors; emergency side door, roof, and window exits did not exist.
Following the accident, agencies across the country changed their regulations in an effort to prevent another tragedy like the Carrollton crash. Nowhere led the charge like Kentucky, where school bus safety became a top priority for school officials, state legislators, and the Kentucky Department of Education.
Kentucky developed stringent requirements for bus safety features, including nine emergency exits—exceeding all other state or federal standards—flame-retardant seat and flooring material, protection around fuel tanks, stronger frames to resist collapse in the case of impact or rollover, and strobe lights and reflective tape on the exterior. Additionally, all school buses were required to be diesel powered.
While the necessity of these changes was obvious, the new safety standards put school districts in a difficult position: they needed to upgrade their fleets as quickly as possible, but lacked the cash to purchase new buses immediately. They needed a unique financing option that would allow them to obtain new buses quickly and at a competitive borrowing cost.
That solution came in the form of an association known as KISTA: the Kentucky Interlocal
School Transportation Association. Formed by a number of superintendents led by Elliott
County Schools Superintendent Eugene Binion, along with help from financial agencies like RSA Advisors LLC, the not-for-profit group was created to provide school districts with a financing tool for purchasing the safer buses they needed. The resulting KISTA Bus Financing Program allowed districts to upgrade their fleets with less money up front by financing the purchases over a ten-year term, spreading the purchase out over time. The program also allowed districts across the state to pool together their individual financing needs to take advantage of the low-interest-rates available in the tax-exempt municipal bond market.
By participating in the KISTA Bus Financing Program, the issuance costs related to a traditional bond issue are shared among the participating districts, decreasing costs for each district and allowing them to use more of their budget for bus purchases.
While KISTA was formed in response to increased safety standards in the aftermath of the Carrollton crash, it continues to be used today. Even though all Kentucky school buses are now powered by diesel and equipped with modern safety features, districts across the state continue to use KISTA for their financing needs as they replace older vehicles. And with recent EPA requirements, the cost of new buses has increased, making a financing option like KISTA even more important for districts across the state.
In the decades since the formation of KISTA, the Bus Financing Program has financed the purchases of over 3,600 new school buses, totaling more than $210 million. The program has given Kentucky districts of all sizes a cost-effective way to continue to upgrade their bus fleets, keeping students and bus drivers safer on the roads while reducing maintenance costs associated with older vehicles.
“It’s rewarding to see districts that otherwise may be unable to improve their fleet use the KISTA
Bus Financing Program to modernize more quickly,” said Lincoln Theinert, Vice President of RSA Advisors, LLC and administrator of the KISTA Bus Financing Program. “In some cases, existing buses may be 15 years old, and the annual cost of repairs may be equivalent to the principal/interest payments on a KISTA-financed bus loan.”
As Kentucky school districts have modernized their bus fleets, they’ve been left with a surplus of vehicles, which they are required to sell at public auction. Through KISTA’s Used Bus Program— a pooled auction for selling used buses—districts can access a wide range of bidders nationwide through a sealed bid, often resulting in better prices for their used buses.
From the Used Bus Program to the Bus Financing Program, KISTA continues to help school districts reduce administrative costs and manage their bus fleets. The program has helped those districts save money while meeting Kentucky’s safety requirements. Most importantly, KISTA has helped districts protect the lives of students, drivers, and future owners and passengers of their bus fleets, all in the effort to prevent a tragedy like the Carrollton crash from ever happening again.
Financing program offers Kentucky school districts options to upgrade fleets and reduce costs
Lexington, KY: KISTA, the Kentucky Interlocal School Transportation Association, has spent the past 30 years helping Kentucky school districts buy, sell, and upgrade their school bus fleets. Formed in the wake of the 1988 Carrollton bus crash, the program offers financing options to help districts invest in newer, safer school buses. To date, KISTA has financed over 3,600 school buses, totaling more than $210 million.
“It’s rewarding to see districts that otherwise may be unable to improve their fleet use the
KISTA Bus Financing Program to modernize more quickly,” said Lincoln Theinert, Vice President of RSA Advisors, LLC and administrator of the KISTA Bus Financing Program. “In some cases, existing buses may be 15 years old, and the annual cost of repairs may be equivalent to the principal/interest payments on a KISTA-financed bus loan.”
The Carrollton crash put bus safety into focus on a national scale, and Kentucky implemented some of the strictest bus safety standards in the nation. Kentucky school districts needed to upgrade their fleets as quickly as possible, but some lacked the up-front cash to make the purchases.
In response, a number of superintendents, led by Elliott County Schools Superintendent Eugene Binion, along with help from financial agencies like RSA Advisors LLC, formed KISTA, anot-for-profit group to provide school districts with a financing tool for purchasing the safer buses they needed. The program also allowed districts across the state to pool together their individual financing needs to take advantage of the low-interest-rates available in thetax-exempt municipal bond market.
In recent years, KISTA has grown to include a pooled auction for districts to sell used buses, as well as offering technology financing and a new program focused on energy improvement projects.