BOARD MEETING DATE: September 5, 2003
AGENDA NO. 7

Approve Issuance of Program Announcement & Application for Lower-Emission School Bus Replacement, and School Backup Generator Retrofit; Approve the Use of Unspent Funds Awarded to Schools in June 2001 and March 2002 to Upgrade Garages for their Alternative Fuel Fleet

SYNOPSIS:

The proposed program announcement and application would provide funding to replace diesel buses with CNG buses in an amount not to exceed $2,175,000 from the Lower Emission School Bus Fund, and to retrofit school backup generators with PM traps in an amount not to exceed $250,000. Funding for the retrofit of backup generators was previously approved by the Board on July 12, 2002, from the State BUG Program Fund, which was placed in the Lower-Emission School Bus Program fund, but was unspent due to lack of applications. Staff also recommends using unspent funds from awards made to schools for purchase of CNG buses and infrastructure on June 15, 2001, and March 1, 2002, to upgrade their garages and infrastructure facilities for their CNG fleet.

COMMITTEE:

Technology, August 22, 2003. Less than a quorum was present during the discussion of this item; the acting Chair communicated her concurrence and recommendation that this item be forwarded for Board consideration with no approval or disapproval recommendation from the Committee.

RECOMMENDED ACTION:

1. Approve issuance of Program Announcement & Application #PA 2004-01 to replace school buses with new alternative fuel buses in an amount not to exceed $2,175,000 (from State Proposition 40 funding) to be placed in the Lower-Emission School Bus Program Fund, and to install PM traps on diesel backup generators at public school districts in an amount not to exceed $250,000 from the Lower- Emission School Bus Fund previously approved by the Board on July 12, 2002.
    
2. Authorize the Executive Officer to amend grant agreements made to public school districts for purchase of compressed natural gas (CNG) school buses and infrastructure on June 15, 2001, and March 1, 2002, to allow for the upgrade of garages and infrastructure facilities for the service of their CNG school bus fleet with the remaining balance of their existing award as identified in Table 1.
    
3. Approve the addition of the Covina-Valley School District bid to the bids approved by the Board on December 6, 2002, through which school districts can order new school buses at competitive prices.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

Exhaust emissions from high emitting diesel-fueled school buses are harmful to children and are a 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. To reduce emissions from these vehicles, AQMD has used state funds and its own funds to replace older diesel buses with new lower-emitting diesel or CNG buses, and to retrofit particulate traps on school buses. Over 50 percent of these funds have gone to school buses operating in areas meeting criteria for disproportionate impacts.

This new round of school bus funding originates from Proposition 40, passed by the state electorate on March 5, 2002, to conserve natural resources and improve state and local parks. Assembly Bill (AB) 425 (Statutes of 2002, Chapter 379) provides school bus funding from Proposition 40. AB 425 directs that 20 percent of the Proposition 40 funds be made available to public school districts to purchase clean burning buses transporting school children. For FY2002-03, on a statewide basis, this amounts to $4,920,000, of which AQMD has been allocated $2,175,000 to purchase new CNG buses.

As stated in the state guidelines, the ratio of new CNG buses to new cleaner diesel buses on a statewide basis is to be on the order of 2:1. Since many districts outside of AQMD plan to purchase cleaner diesel buses, the AQMD has been given the flexibility to allocate its share towards new CNG buses exclusively.

Proposal

Several actions are proposed as part of this request to the Board and are discussed in the following sections.

School Bus Replacement Program Announcement
The AQMD expects to receive $2,175,000 from CARB for the school bus replacement program. Staff recommends the Board approve the issuance of the Program Announcement & Applications #2004-01 to make these funds available for replacement of existing diesel-fueled buses with new alternative fuel buses. The Program Announcement is in accordance with all the guidelines of the CARB’s Lower-Emission School Bus Program. The new buses shall meet CARB’s NOx and PM engine certification standards of 2.5 g/bhp-hr and .03 g/bhp-hr, respectively and be equipped with an oxidation catalyst. Ten percent of funds will also be made available for CNG infrastructure.

Installation of PM traps on Diesel Backup Generators
At its July 12, 2002 meeting, the Board approved the issuance of a program announcement to award funds to school districts to install PM traps on their diesel backup generators in an amount not to exceed $250,000. This fund was from the State Backup Generator (BUG) Program Fund, which was placed in the Lower-Emission School Bus Fund. Due to lack of applications, the fund remains unspent. Staff recommends to make this opportunity available again through the issuance of PA #2004-01, by including the application for this program as a separate appendix.

Recognition of Vendors Who Have Provided Competitive Bids
Typically, school districts order new school buses (CNG, diesel or gasoline) through piggy-back bids issued by other public school districts, joint power authorities, etc. In previous rounds of funding, school districts, if they chose to, could purchase new buses through vendors listed by either the California Department of General Services (DGS) or alternative bids such as the Waterford District bid or South-West Transportation bid. State DGS bids have expired, and unless renewed in the future, are no longer valid. Thus, for the December 2002 meeting, the Board approved that schools purchase their buses through either the Waterford or South-West Transportation bids. Since that Board award, Covina-Valley School District has issued a third piggy-back bid. The school buses to be furnished through this bid, like other bids in the market, were required to comply with all current California and Federal motor vehicle performance, safety and emission standards in effect at time of bid. This new bid would allow more options and flexibility for not only Covina-Valley School District, but also other school districts who may choose to use this third bid. Staff recommends that the Board approve school bus purchases through this bid, as long as the funds expended for purchase of new school buses do not exceed the maximum amount approved by the Board for individual school districts.

Use of Unspent Funds to Upgrade Infrastructure or Maintenance Facilities
Due to the availability of limited funds, many school districts have expressed concern for the need to upgrade their garages and CNG fueling infrastructure to make them compatible with safety and maintenance needs for their CNG fleets. Funds received from CARB, which were awarded for school bus replacements on June 15, 2001, and March 1, 2002, required ten percent in match funds from the AQMD. In addition to that ten percent requirement, the AQMD provided $1,000,000 for the purchase of CNG school buses and infrastructure. Since then all the buses have been purchased and have been paid for. In some cases, the funds awarded for CNG school buses and infrastructure have been under-spent by some of the school districts. Thus, staff is recommending to allow school districts to use the unspent portion of their award for school bus replacements and up to fifty percent of their infrastructure award in cases where the AQMD has not been billed yet, originally approved by the Board in June 15, 2001, and/or March 1, 2002, to upgrade their garages and infrastructure to meet safety and maintenance needs for their CNG fleets. This approach would encourage efficiency in purchasing school buses, as well as expand the refueling capability for these buses. Funds to be used by eligible school districts plus funds already spent will not exceed the maximum amount of their original award. Total unspent funds by all the school districts is less than the $1,000,000 that the AQMD provided, which was in addition to its ten percent required match fund. The amount of unspent funds available to each school district is shown in Table 1:

Table 1
Maximum Unspent Funds Available for CNG Garage and Infrastructure Upgrades
 

Funding Distribution

For the school bus replacement, staff recommends to distribute one-half of the total funding of $2,175,000 in compliance with Health and Safety Code Section 43023.5 (AB1390, Firebaugh), to directly benefit low-income communities and communities of color that are disproportionately impacted by air pollution. Thus, 50 percent of the funds will be allocated to school districts that qualify under this category. All applications will be evaluated for poverty level, PM exposure, and toxic exposure according to the following criteria:
 

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, will be eligible to be ranked in this category.
B)	PM Exposure: All school districts in areas with the highest 15% of PM concentration will be eligible to be ranked in this category. Based on an annual average, the highest 15% of PM concentration is 46 micrograms per cubic meter and above.
C)	Toxic Exposure: Based on AQMD’s MATES II estimates, all projects in areas with the highest 15% of toxic exposure, will be eligible to be ranked in this category. The highest 15% represents a cancer risk of 1,139 in a million and above (Mates II study).

Any applicant qualifying based on both the poverty level and either PM or toxic exposure categories will qualify for disproportionate impact funding. If available funds are oversubscribed, then these school districts will be ranked. A maximum of 40 percent weight would be assigned to school districts in areas with highest poverty levels. Following this, 30 percent maximum weight will be assigned to school districts with the highest PM levels and 30 percent maximum for areas with highest cancer risk levels. All other schools would be rated proportionately. Awards will be granted to applicants in descending order until 50 percent of all the funds, or $1,087,500, is exhausted.

Schools, unable to qualify under AB 1390, can qualify for the remaining 50 percent of the funding. Staff recommends granting each school district in this category with at least one new CNG bus. However, if the number of applicants exceeds the number of available CNG buses, preference would be given to school districts with existing CNG buses in their fleet. On the other hand, if funds are still available after each school district receives one CNG bus, then the remaining balance of funds will be awarded based on a first-come first-served basis under this category.

In addition, given the limited funds being made available relative to previous years, the distribution of funding in proportion to the four-county population will not be applied. This is due to the concern that counties with smaller population would receive minimal funding. Other criteria that would be considered are:

• Los Angeles Unified School District’s (L.A. Unified) funding eligibility will be limited to a maximum of thirty-one percent of the total funds. This is in line with previous rounds of funding, where L.A. Unified was limited to 50 percent of funds allocated to Los Angeles County, which was 62% of total funds.
• Because of the special funding for school bus replacement under the AES Settlement Fund, Jurupa Unified School District will not be eligible for this specific solicitation.

Outreach

In accordance with the AQMD’s consulting and contracting policies, a public notice advertising the Program Announcement & Application and inviting applications will be published in the following publications:
 

1.	Antelope Valley Press	10.	Korea Central Daily	19.	Precinct Reporter
2.	Black Voice News	11.	La Opinion	20.	Press Enterprise
3.	Chinese Daily News	12.	La Prensa Hispana	21.	Rafu Shimpo
4.	Desert Sun	13.	La Voz Publications	22.	San Bernardino Sun
5.	Eastern Group Publications	14.	Los Angeles Daily News	23.	State of California Contracts
6.	El Chicano	15.	Los Angeles Sentinel		Register
7.	El Informador	16.	Los Angeles Times	24.	The Excelsior
8.	Inland Empire Hispanic News	17.	Orange County Register	25.	The Signal
9.	Inland Valley Daily Bulletin	18.	Philippine News	26.	Wave Community Newspapers

Additionally, potential applicants will be notified utilizing the Los Angeles County MTA and Cal Trans Directories of Certified Minority, Women, Disadvantaged and Disabled Veterans Business Enterprises; the Inland Area Opportunity Pages Ethnic/Women Business & Professional Directory; AQMD’s own electronic listing of certified minority vendors; and AQMD Purchasing’s mailing list. Notice of the Program Announcement & Application will be mailed to the Black and Latino Legislative Caucuses and various minority chambers of commerce and business associations; and placed on the Internet at AQMD’s Web site [http://www.aqmd.gov, "Business and Job Opportunities" icon] and AQMD’s bidder’s 24-hour telephone message line (909) 396-2724.

Benefits to AQMD

The successful implementation of the Lower-Emission School Bus Replacement program will provide less polluting and safer school transportation for school children, and will reduce public exposure to toxic diesel particulate matter emissions.

The selection methodology, using AB 1390 criteria, for the school bus replacement awards 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 Board.

The installation of PM traps on diesel-fueled backup generators at schools would achieve similar goals of reducing diesel exhaust emissions from stationary diesel sources.

Resource Impacts

Total funding for the purchase of new school buses and infrastructure shall not exceed $2,175,000 from the Lower Emission School Bus Fund. Total funding for the retrofit of school backup generators shall not exceed $250,000 from the Lower Emission School Bus Fund, which was previously approved by the Board on July 12, 2002.

Attachment

Program Announcement & Application #PA 2004-01 – Lower Emission School Bus
     Replacement and School Backup Generator PM Trap Program

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