BOARD MEETING DATE: December 3, 2004
AGENDA NO. 12

Reallocate Rule 2202 AQIP Funds to Assist in Purchase of 2004 Model Year Passenger Vehicles for Taxicab Services and De-Obligate Prior Funding Commitments

SYNOPSIS:

The Board has previously allocated Rule 2202 AQIP funds to assist taxicab operators in the purchase of alternative-fueled passenger vehicles as allowed under Rule 1194. Currently there is sufficient funding to cover the acquisition of seven alternative fueled vehicles. Staff recently received a request from Yellow Cab Company of Northern Orange County, Inc., to assist in purchasing a total of 32 natural gas Ford Crown Victorias. This action is to provide funding assistance for these vehicles which represent the only vehicles locally available for the 2004 model year at a cost not to exceed $373,250. In order to cover the cost of the requested funding assistance, staff is recommending that unspent funds from prior awards for alternative fueled taxicabs under the Rule 2202 AQIP be de-obligated.

COMMITTEE:

Mobile Source, November 19, 2004, Recommended for Approval

RECOMMENDED ACTIONS:

1. Reduce the May 3, 2002 Board approved funding of $256,177.20 awarded to Enterprise Finance from the Rule 2202 AQIP Special Revenue Fund to $74,718.00. The unspent $181,459.20 will revert back to the Rule 2202 AQIP Special Revenue Fund (Fund 27).
    
2. Reduce the February 1, 2002 Board approved funding of $757,857.55 awarded to City Cab from the Rule 2202 AQIP Special Revenue Fund to $416,288.55. The unspent $341,569 will revert back to the Rule 2202 AQIP Special Revenue Fund (Fund 27).
    
3. Allocate $373,250 from Rule 2202 AQIP Special Revenue Fund (Fund 27) to assist in the purchase of alternative-fueled vehicles for taxicab services. Authorize the Executive Officer to approve (up to $14,930 per vehicle) disbursement of these funds to cover the co-funding requested for 25 model-year 2004 natural gas-powered Ford Crown Victorias from Yellow Cab of Northern Orange County in the same manner as prior Rule 2202 AQIP funding requests for taxicab service.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

Rule 2202 Air Quality Investment Program (AQIP) allows employers subject to this rule, to elect to participate in an AQMD-administered investment fund restricted to Rule 2202 emission reduction requirements (Rule 2202 AQIP Special Revenue Fund). The monies received from employers’ subject to Rule 2202 are used to fund proposals that generally achieve mobile source emission reductions commensurate with an otherwise employer-implemented rideshare program, and at a more cost-effective rate, resulting in potentially greater overall emission reductions.

Since December 2001, Rule 2202 AQIP funding has been allocated through multiple Board actions to offset the purchase cost of new natural gas-fueled Ford Crown Victorias for use as taxicabs serving commercial airports. Approximately 400 natural gas-fueled taxicabs have been funded to date from these Board actions.

Staff recently received a request from Yellow Cab Company of Northern Orange County, Inc. (Yellow Cab), seeking funding assistance for the purchase of 32 natural gas-powered Crown Victorias for taxicab services. Yellow Cab has authorization to pick-up passengers at John Wayne Airport. Based on information from Ford Motor Company, these vehicles are the last remaining 2004 model-year natural gas-powered Crown Victorias available for purchase in the District. Currently, funding approved by the Board is sufficient to cover only seven alternative fueled vehicles for taxicab services. However, additional funding for the remaining 25 vehicles could be made available from unspent funds that were originally allocated for the purchase of natural gas-powered Ford Crown Victorias.

Proposal

Staff is requesting the Board’s approval to de-obligate unspent funds from prior Rule 2202 AQIP awards for alternative fuel vehicles used for taxicab services. Should the Board approve this request, staff recommends that $373,250 be allocated from the Rule 2202 AQIP Fund to co-fund the cost of 25 natural-gas Ford Crown Victorias requested by Yellow Cab.

Two Rule 2202 AQIP awards by the Board for alternative-fueled vehicles for services have been completed. However, not all of the funds awarded were spent. Specifically:

1. On February 1, 2002, City Cab was awarded $757,857.55 for the purchase, delivery, and operation within the boundaries of the AQMD of 71 CNG vehicles. This project resulted in the purchase of 39 CNG vehicles and has a remaining balance of $341,569. City Cab has no plans to purchase any additional natural gas-powered Crown Victorias under this contract award and a contract modification will be effectuated. As a result, staff proposes that $341,569 revert to the Rule 2202 AQIP Special Revenue Fund.
    
2. On May 3, 2002, Enterprise Finance was awarded $256,177.20 for the purchase, delivery, and operation within the boundaries of the AQMD of 24 CNG vehicles. However, the contract with Enterprise Finance was for $74,718 for the purchase of 7 CNG taxicabs at Enterprise’ request. This project resulted in the purchase of 7 CNG vehicles and there is a $181,459.20 balance in the original award approved by the Board. Enterprise Finance has no plans to purchase any additional natural gas-powered Crown Victorias.

The sum of unspent monies from the two recommended Board actions identified above total $523,028.20 and with the Board’s approval would revert back to the Rule 2202 AQIP Fund.

As mentioned above, staff received a request from Yellow Cab, seeking funding assistance to support the purchase of 32 natural gas-powered Crown Victorias for taxicab services. Currently, within the Rule 1194 funding program, there is funding for seven vehicles only. However, additional funding for the remaining 25 vehicles could be made available from unspent funds that staff is requesting to be de-obligated and returned to the Rule 2202 AQIP Fund as discussed above. Staff believes that the 25 natural gas vehicles, if funding assistance is not available, would most likely be sold outside of the South Coast Air Basin and result in emission reductions foregone. As such, staff recommends that the Board:

1)	De-obligate $523,028.20 in unspent funds from prior Board awards that would have been use to co-fund the purchase of natural gas-powered Ford Crown Victorias, and reverting these funds back to Rule 2202 AQIP Special Revenue Fund, and
2)	Allocate $373,250 from Rule 2202 AQIP Special Revenue Fund to assist in the purchase of alternative-fueled vehicles for taxicab services.

Resource Impact

Funding in an amount of $523,028.20 is proposed to be reverted back to Rule 2202 AQIP Special Revenue Fund. Funding in an amount not to exceed $373,250 from Rule 2202 AQIP Special Revenue Fund is proposed to fund the purchase of 25 natural gas-powered vehicles for taxicab services. As such, the staff proposal would result in a net $149,778.20 that could be used for future Rule 2202 AQIP projects.

Benefits to AQMD

Providing funding assistance to taxicab operators to purchase cleaner, alternative-fueled vehicles will result in an overall air quality benefit to the region. and will assist in achieving the long-term advancement of mobile source technology. If funding is not available, the taxicab operator will most likely purchase existing, pre-owned gasoline-fueled vehicles. In addition, the 25 natural gas vehicles would most likely be sold outside of the South Coast Air Basin and result in emission reductions foregone. Finally, the 25 natural gas vehicles represent the last remaining 2004 model year natural gas–powered Crown Victorias in the District.

Staff estimates that the 25 natural-gas powered vehicles purchased with funding assistance from the AQMD will result in emission reductions of approximately 700 pounds of hydrocarbons and 3,000 pounds of NOx over the life of the project. Additionally, there will be a reduction in air toxics emissions especially in areas where the taxicab vehicles will be operating.

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