BOARD MEETING DATE: March 1, 2002
AGENDA NO. 8

Approve Grants to Public School Districts to Purchase Lower-Emitting Diesel and Alternative Fuel School Buses and Infrastructure under Lower-Emission School Bus Replacement Program for FY 2001-02

SYNOPSIS:

The AQMD Program Announcement & Application PA2002-03 "Lower-Emission School Bus Program" was issued on December 21, 2001 to replace older school buses with new alternative fuel and lower-emitting diesel buses. A total of 32 applications were received. Staff recommends the approval of the school bus replacement awards for 39 CNG and 20 lower-emitting diesel buses in an amount not to exceed $6.841 million, comprised of $5.841 million from the Lower-Emission School Bus Fund, and $1 million from the AES Settlement Projects Fund set aside for the Adopt-a-School Bus Foundation. Staff also recommends an increase in the sales tax allocation for buses awarded in FY 2000-01 by a quarter of a percent in an amount not to exceed $48,067 due to increase in sales tax rate.

COMMITTEE:

Technology, February 22, 2002

RECOMMENDED ACTION:

1. Transfer $1 million from the AES Settlement Projects Fund, earlier set aside for the Adopt a School Bus Foundation (but not transferred), to the Lower-Emission School Bus Replacement Fund. These transferred funds will be used exclusively to purchase new CNG school buses.
   
    
2. Authorize the Chairman to approve grants to public school districts to purchase lower-emitting diesel and alternative fuel school buses and infrastructure under the Lower-Emission School Bus Replacement Program for FY 2001-02, in an amount not to exceed $6.841 million from the Lower-Emission School Bus Fund, as set forth in Tables 2 and 3.
   
    
3. Authorize increase in the sales tax allocations to the 169 school buses awarded in FY 2000-01 by a quarter of a percent for a total amount not to exceed $48,067 due to the increase in the state’s sales tax rate to be allocated from the Lower-Emission School Bus Fund as set forth in Table 5.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

Exhaust emissions from high emitting diesel-fueled school buses are harmful to children and are a key source of public exposure to toxic diesel particulate matter and smog forming pollutants. There are thousands of older school buses on the road that have remained in service simply because school districts lack funds to replace them. Last fiscal year (FY 2000-01) the AQMD awarded 102 compressed natural gas (CNG), and 62 lower-emitting diesel school buses to public school districts in the Basin to replace older high polluting school buses. Total funds made available last year for the school bus replacement program was $17.91 million, including 16.25 million from the state and $1.66 million matching funds from the AQMD’s Clean Fuels Fund.

For this fiscal year (FY 2001-02), $6.841 million in awards is being recommended for the Lower-Emission School Bus Program, of which the state is contributing $5.31 million and staff is recommending that the AQMD contribute $531,000 from its Clean Fuels Fund and $1 million from the AES project settlement funds previously set aside for the Adopt-a-School Bus Foundation. Staff evaluated the various applications using the criteria that were approved by the Board at its December 21, 2001 meeting. Specifically, 50% of the funds is first distributed according to the requirements of AB 1390 (Firebaugh), and the remaining balance is distributed according to the point ranking methodologies for CNG and lower-emitting diesel buses shown in Attachments 1 and 2, respectively. Other criteria that were considered in the evaluation process are:

• Funds are distributed proportional to each county’s general population in the Basin.
  
   
• Los Angeles Unified School District’s eligibility is limited to a maximum of fifty percent of the total funds allocated for Los Angeles County.

Funding Distribution

Total funds available for this year’s program is $6.841 million. The state requires that its portion of funding ($5.31 million) be split such that one-third ($1.77 million) be set aside for lower-emitting diesel and the remaining two thirds (3.54 million) be set aside for new CNG buses. AQMD’s contribution of $1.531 million will be used to buy new CNG buses and infrastructure only. Thus, the money available for buying lower-emitting diesel buses is $1.77 million, while $5.071 is available for new CNG buses. Proposed distribution of funds proportional to each county’s general population is shown in Table 1.

Table 1: Proposed Distribution of Funds for School Bus Replacement
 

AB 1390 (Firebaugh), Point Ranking and Awards Recommendation

By the due date of February 01, 2002, a total of 32 applications submitted by public school districts were deemed complete and qualified for the school bus replacement program. Fifty percent of the funds are recommended for awards to schools eligible under AB 1390 (Firebaugh), which requires funds be spent to reduce pollution or risks from airborne toxics and particulate matter in areas that have the most significant exposure to air pollution or localized air pollution, including low income communities or minority communities or both. The methodology approved by the Board at its December 21, 2001 meeting was used for the implementation of AB 1390. School districts located in the following areas were qualified under AB1390:

• School districts in areas where at least 10% of the population falls below the Federal poverty level based on the Year 2000 census data in combination with,
  
   
• Being in areas with the highest 15% of PM concentration,

OR

• Being in areas with the highest 15% of toxic exposure.

The remainder of funds are recommended according to the adopted ranking methodology for CNG and lower-emitting diesel buses as shown in Attachments 1 and 2, respectively. The number and type of buses requested by each applicant are shown in Attachment 3. Based on these criteria, a detailed list of the rankings for all the applicants requesting CNG, and lower-emitting diesel buses are shown in Attachments 4 and 5, respectively.

Staff recommends the approval of school bus replacement awards for CNG and lower-emitting diesel buses as shown in Tables 2 and 3, respectively. The recommended lists show school districts awarded both under AB 1390 (Firebaugh) and school districts awarded under point ranking system starting with school districts with the highest-ranking points in each county, continuing in descending order until funds have been exhausted.

All the requested buses, and the purchase prices including sales tax and any applicable procurement fees have been discussed and confirmed with the applicants after the submittal of the applications. However, if any of these parameters change during the execution of the grant agreements, the AQMD will grant any available funds to the next eligible applicant from the point-ranking list.

Among the applicant school districts listed in Tables 2 and 3, nine have submitted their applications for both. This means their requested number of buses may be either CNG or lower-emitting diesel. These applicants have been recommended for awards in the category where they have ranked highest.

Table 2: CNG School Bus & Infrastructure Award Recommendation List
 

Table 3: Lower-Emitting Diesel School Bus Award Recommendation List
 

Montebello, LAUSD, Bassett, Downey, Garden Grove, Anaheim Union, Banning, Coachella Valley, Cucamonga, and Colton Joint were eligible for AB 1390 (Firebaugh).

Summary of Meeting AB1390 (Firebaugh) Requirement

Table 4 shows a summary of the actual funding allocations to school districts according to the requirements of AB1390, and the point ranking system. Some school districts qualified under both AB1390, and the point ranking system:

Table 4: Funds Allocation from the State, Clean Fuels Fund, & Adopt-a-School Bus Foundation
 

Sales Tax Adjustment to FY 2000-01 Awards

A total of 102 CNG and 67 lower-emitting diesel buses were awarded under the Lower-Emission School Bus Replacement Program in FY 2000-01. The sales taxes calculated for these buses were based on 8 percent for Los Angeles and 7.5 percent for Orange, San Bernardino, and Riverside counties. However, effective January 1, 2002, the sales tax rates increased by quarter of a percent. Since the awarded buses will be delivered during 2002, the proper sales tax adjustments have been made for each award recipient and are shown in Table 5. Staff recommends the approval of sales tax adjustments for the school buses awarded in FY 2000-01, for a total amount not to exceed $48,067.

Table 5: CNG & Lower-Emitting Diesel Buses Awarded in FY 2000-01
 

Benefits to AQMD

The AQMP relies on the expedited implementation of advanced technologies and clean-burning fuels in Southern California to achieve air quality standards.

School buses operate in close proximity to students, teachers and neighbors. Many schools provide bus services in heavily populated areas. The successful implementation of the school bus replacement program will provide less polluting and safer school transportation for school children. In addition, the program will maximize the potential emission benefits in low income, high diesel and high PM10 exposure areas, and will enhance the objectives of the Environmental Justice, and Children’s Health initiatives adopted by the Governing Board.

Resource Impacts

The total amount of funding for the school bus replacement program shall not exceed $6.841 million. Sufficient funds are available from the Lower-Emission School Bus Replacement and Retrofit Fund, which has been established as a separate fund by the AQMD, to be used for the replacement and retrofit of school buses in the Basin. The $6.841 million is comprised of $5.31 million from CARB under the replacement part of the Lower-Emission School Bus Program, $1 million of AES Settlement monies set aside for AQMD sponsored Adopt-a-School Bus Foundation, and $531,000 from the AQMD Clean Fuels Fund to the Lower-Emission School Bus Fund.

Total amount of funding for sales tax increase of the FY 2000-01 awards shall not exceed $48,067. Sufficient funds are available in the Lower-Emission School Bus Fund.

Attachments

1. Ranking Criteria for CNG School Bus Funding
2. Ranking Criteria for Low-Emitting Diesel School Bus Funding
3. Number & Type of Requested Buses
4. Final Ranking of CNG School Bus Applicants
5. Final Ranking of Lower-Emitting Diesel School Bus Applicants

ATTACHMENT 1

RANKING CRITERIA FOR CNG SCHOOL BUS FUNDING
 

ATTACHMENT 2

RANKING CRITERIA FOR LOW-EMITTING DIESEL SCHOOL BUS FUNDING
 

ATTACHMENT 3: NUMBER & TYPE OF REQUESTED BUSES
 

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