BOARD MEETING DATE: May 2, 2003
AGENDA NO. 32

Approve Chairman’s School Bus Initiative Program Plan

SYNOPSIS:

At the Board meeting on February 7, 2003, Chairman Burke appointed an ad hoc Committee to oversee the implementation of Chairman’s School Bus Program Initiative. Funding for this program will be allocated from seventy percent of the penalty fees collected by AQMD in CY2003. The ad hoc Committee first met on March 7, 2003. On April 4, 2003, and the Committee concluded its deliberations and prepared recommendations for Board approval.

COMMITTEE:

Not applicable

RECOMMENDED ACTION:

Approve Ad Hoc Committee recommendations regarding Chairman’s School Bus Initiative Program Plan to be funded in an amount not to exceed seventy percent of AQMD penalty fees collected in CY 2003.

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 exhaust emissions and smog-forming pollutants. Since 1999, with the help of state funding, AQMD has approved more than $43 million to clean up and replace diesel-powered school buses in the Southland. Projects approved include the purchase of compressed natural gas-powered school buses, lower-emitting new diesel buses and the retrofitting of diesel buses with particulate emission traps. Other sources of funding for school buses are funds through the passage of Proposition 40, and the Mobile Source Air Pollution Reduction Review Committee (MSRC) program.

Proposition 40, a state-wide ballot initiative was passed by the electorate in March 2002, and allocates statewide $50 million over two years to the Carl Moyer Program for cleaner heavy-duty engines. Twenty percent of these funds will be allocated to the lower-emission school bus program statewide to purchase either alternative fuel or lower-emitting diesel school buses. AQMD is expected to receive approximately $2 million in the first year.

MSRC has set aside $2 million for the purchase of new CNG school buses. The proposed plan discussed later proposes to follow the same allocation of incentive funding set aside to purchase a new CNG bus as the MSRC program. With current school bus purchase requests, the MSRC program has a balance of $1 million available at this time.

At the January 2003 Board Meeting, Chairman Burke proposed the School Bus Initiative to increase funding for low-emission school buses using AQMD’s penalty revenues. The Board approved this initiative on February 7, 2003.

Committee Directives

An ad hoc oversight committee, composed of Board Vice Chair Roy Wilson, Board Members Michael Antonovich, Jane Carney, William Craycraft, Beatrice LaPisto-Kirtley, and Ronald Loveridge, was formed to develop recommendations on program implementation of the School Bus Initiative. This Committee is expected to meet on an as-needed basis. Quarterly reports will also be provided to the Administrative Committee of the Board. At its first meeting on March 7, 2003, the ad hoc Committee directed staff to develop an implementation plan with the following guidelines:

1. The funding ratio of alternative fuel replacement buses & related infrastructure to particulate trap retrofits will be 60 to 40 percent respectively.
2. Public schools and private operators are eligible for alternative fuel buses, infrastructure, and PM trap retrofits. Public schools will be given first preference in all categories.
3. The acquisition of new CNG buses and the concomitant crushing of older highly polluting diesel-fueled school buses will replace pre-1987 buses, with pre-1977 buses having priority.
4. Payment for CNG infrastructure will be allowed only for fleets without adequate infrastructure for the operation of the new buses.
5. Purchase and installation of PM traps will be on 1994 and newer diesel buses. These buses will be required to operate on low-sulfur diesel fuel with 15 ppm or lower sulfur content.
6. Distribution of the penalty funds for both school buses and PM retrofits will take into consideration the environmental justice provisions of the Health & Safety Code as amended by AB-1390 (Firebaugh).
7. Up to $60,000 will be provided for a new CNG school bus.

Implementation Plan

At the April 4, 2003 Committee meeting, staff presented a plan based on the foregoing directives that was approved by the Committee. The plan is as follows:

A) Funding for CNG Buses:
Sixty percent of the penalty funds allocated by the AQMD for the Chairman’s School Bus Initiative will go towards the purchase of CNG school buses and infrastructure, whenever deemed necessary. Award amounts will follow the MSRC guidelines for new CNG bus funding. In particular, these guidelines provide for three levels of funding, depending on the size of the CNG bus being requested:

a)	Type D, CNG transit bus, the largest full-size school bus, will be awarded up to $60,000. This funding will more than offset the incremental cost of the CNG bus compared to a diesel bus.
b)	Mid-size CNG bus will be eligible for funding of up to $50,000.
c)	Type A, CNG bus, or the smallest size bus, will be eligible for funding of up to $25,000.

School districts and private school bus transportation contractors would fund the remaining balance. Those school districts developing a CNG refueling infrastructure for the operation of the new buses would be eligible for up to $12,000 per CNG school bus as contribution towards the school’s CNG infrastructure. The balance will be funded by the school districts. All new CNG school bus awards are required to be equipped with an oxidation catalyst.

B) Funding for PM Particulate Matter Trap Retrofits of Diesel School Buses:
Particulate matter (PM) traps are capable of reducing diesel exhaust particulate matter emissions by over 85 percent and have been verified by CARB for 1994 and newer diesel buses. The AQMD has provided funds for the purchase and installation of over 1500 PM traps to date on 1994 and newer diesel school buses owned by public school district and private school bus transportation contractors. Past programs gave preference to buses owned by public school districts, and all public school districts which applied for PM traps were granted their full requests. Thus, there are only about 85 diesel buses owned by public school districts that remain eligible for retrofits, whereas there are about 1900 school buses owned by private school bus transportation contractors that are 1994 and newer and are potentially eligible for retrofits. Staff will contact the school districts with buses eligible for retrofit traps and offer funding for the installation of traps. The balance of the funding allocated for traps will be awarded to private contractors. It is proposed that $6,500 be awarded per diesel school bus retrofit to cover the purchase and installation costs of the PM traps, and an additional one-time $500 per bus to cover the initial incremental cost of low-sulfur fuel. Depending on available funds, staff recommends that buses owned by public school districts be given first preference.

C) Implementation Procedure:
A Program Announcement will be issued to solicit applications for replacement and retrofit under this program. The Program Announcement will be developed as part of the Proposition 40 School Bus Program solicitation as described in the following section and will be brought before the Governing Board as part of the Proposition 40 School Bus Program. Awards will be made according to the following criteria:

• Los Angeles Unified School District’s funding eligibility will be limited to a maximum of thirty-one percent of the total funds.
   
• At least one-half of the total funding will be expended in compliance with AB1390, Firebaugh, to directly benefit low-income communities and communities of color that are disproportionately impacted by air pollution. All applications will be evaluated against criteria of poverty level, PM exposure, and toxic exposure according to the following protocols:
   

  A)	Poverty Level: All school districts in areas where at least 10% of the population falls below the Federal poverty level based on the Year 2000 census data will be eligible to be ranked in this category.
  B)	PM Exposure: All applicants in areas with the highest 15% of PM concentration will be eligible to be ranked in this category. The highest 15% of PM concentration is 46 micrograms per cubic meter and above, based on an annual average.
  C)	Toxic Exposure: All applicants in areas with the highest 15% of toxic exposure (based on MATES II estimates), will be eligible to be ranked in this category. The highest 15% represents a cancer risk of 1,139 in a million and above.

In there is an oversubscription under AB1390, applicants will be ranked as follows: 1) 40 points to the applicant with the highest poverty level in its area, 2) 30 points to the applicant with the highest PM exposure level in its area, and 3) 30 points to the applicant with the highest cancer risk in its area. All the other applicants will be ranked proportionately in descending order in all three categories.

• Funds under AB1390 will be awarded starting with applicants with the highest overall score in descending order until one-half of total available funding has been expended. The remaining one-half of funds will be awarded to the remaining applicants on a first come first served basis.
   
• Applicants receiving the award for a new CNG bus will be required to crush a pre-1987 school bus, with pre-1977 buses to be crushed first, if present in the fleet. The award recipient could also offer its pre-1987 bus to another entity (such as a private school, private operator, etc.) to have a pre-1977 bus owned by that specific entity.

Public school districts, which apply will be given priority in the award of the PM traps, with private operators to be funded next. Only 1994 and newer diesel buses will be eligible for such retrofits. Pre-1994 diesel buses could be eligible if there is a CARB verification for that engine’s model year.

The AQMD is expected to receive funds from CARB under Proposition 40 for the im-plementation of the State’s Lower-Emission School Bus program by June 2003. Under this program schools contribute a maximum of $25,000 per school bus. Staff recom-mends to first issue a program announcement for the school bus funds under Proposition 40 by summer of this year, and then with adequate funds for at least ten school bus re-placements, to issue the program announcement for the Chairman’s School Bus Initiative. Staff will conduct an outreach effort to school districts with smaller fleets to make them aware of this funding opportunity and if necessary, help them with their application preparation. Staff will also coordinate the award schedule of this program with the MSRC program, since both programs would provide the same amount of incremental funding.

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 Chairman’s school bus initiative will provide less polluting and safer school transpor-tation 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 Impact

Total amount of funding for Chairman’s School Bus Initiative Program shall not exceed seventy percent of penalty fees collected by the AQMD in CY 2003.

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