BOARD MEETING DATE: June 2, 2006
AGENDA NO. 6

Approve Grants to Replace Pre-1977 School Buses with New CNG Buses

SYNOPSIS:

The state has allocated $2.1 million to AQMD under the State FY 2005-06 Budget Act of 2005 to replace 15 of the oldest pre-1977 school buses operating in the South Coast Air Basin.  Five public school districts with 15 of the oldest pre-1977 diesel buses have been identified.  This action is to replace these 15 buses with new CNG buses and to cover the cost of the associated infrastructure in an amount not to exceed $2,957,750, comprised of $2,100,000 from the Lower-Emission School Bus Fund, $322,000 from the Clean Fuels Fund, and $535,750 from the Carl Moyer Program Fund AB 923 Account.

COMMITTEE:

Technology, May 26, 2006, Recommended for Approval

RECOMMENDED ACTION:

1. Recognize, upon receipt, up to $2,100,000 in state funds from CARB to the Lower-Emission School Bus Program Fund.
2. Authorize the Chairman to approve grants to public school districts for replacement of the 15 oldest school buses and infrastructure as set forth in Table 2, in an amount not to exceed $2,957,750, comprised of $2,100,000 from the Lower-Emission School Bus Fund, up to $535,750 from the Carl Moyer Program Fund AB 923 Account, and up to $322,000 from the Clean Fuels Fund.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

Exhaust emissions from high emitting, older, diesel-fueled school buses are harmful to children and are a source of public exposure to toxic diesel particulate matter (PM) and smog-forming pollutants.  To reduce emissions from these vehicles, since 2000-2001, AQMD has allocated $55.8 million to replace 357 pre-1987 buses with 271 new CNG, and 86 lower-emitting diesel buses, and to retrofit over 2,100 school buses with Level 3 PM traps.  On May 5, 2006, the Board approved issuance of a new program announcement allocating $14 million for replacement of pre-1987 school buses with new CNG buses, and $5,449,000 for retrofit of 1994 and newer school buses with Level 3 PM traps.

In the continuing effort to replace the oldest school buses, California state legislators, in the Budget Act of 2005, set aside funds to replace 89 of the oldest pre-1977 buses in the state.  Pursuant to this legislation, CARB has identified 15 of these oldest buses as owned and operated by five public school districts in the South Coast Air Basin, and has allocated $2.1 million to AQMD for their replacement.

Proposal

Unlike the regular Lower-Emission School Bus Program, the five public schools districts identified under this program are not required to pay any matching funds.  School districts’ only obligation is to crush the pre-1977 buses identified by the state.  The five school districts in the Basin with 15 of the oldest school buses identified by CARB are listed in Table 1.

Table 1: Oldest 15 Buses Identified by CARB

School District	Buses Identified for Replacement
	Make	Year	License Plate #
ABC Unified (Artesia, et al.)	Crown	72	E607900
Azusa Unified	Crown Crown	67 69	E512004 E543999
Downey Unified	Crown Crown	69 72	E546222 E602383
Fontana Unified	Crown Crown Crown Crown Crown Crown Crown Crown	59 60 62 62 69 68 68 68	E131405 E131413 E61866 E61867 E516344 E516343 E516342 E516341
Huntington Beach City	Crown Crown	69 71	546551 585341
Total Pre-1977 Buses		15

CARB’s allocated funding of $2.1 million will only cover $140,000 per bus for the new purchases.  Staff recommends the Board augment CARB’s funding with AQMD funds to cover the entire cost of replacing these high polluting diesel school buses and the associated infrastructure.  The award for each bus will cover the bus purchase price including the CNG package, sales tax, and if desired by the school district, the option of installing a fire suppressant system in an amount not to exceed $4,000.  In addition, $16,000 per bus (equal to approximately ten percent of the bus price) will be offered for installation or expansion of the CNG fueling infrastructure and garage upgrades directly related to the purchase of the buses.

Fontana USD’s eight pre-1977 buses, as shown in Table 1, are by far the largest fleet of the oldest pre-1977 school buses in the Basin.  Replacement of these buses with new CNG school buses will require the installation of a relatively large sized fueling infrastructure with its associated garage upgrades.  Based on a site visit and a report generated on March 16, 2006 by AQMD’s consultant on CNG fueling, Burnett and Burnette, the cost of a fueling infrastructure and necessary garage upgrades is estimated at $450,000.  The $16,000 per bus designated for fueling infrastructure will only amount to $128,000 for eight buses.  Staff therefore recommends awarding Fontana USD an additional amount of up to $322,000 from the Clean Fuels Fund to help fully pay for the costs of installing a new CNG infrastructure, and garage upgrades.

Table 2 provides a summary of the maximum funding amounts for each school district based on the following criteria:

• Base purchase price for a new CNG transit school bus in the maximum amount of $144,000.
• Fire suppressant option of up to $4,000 per bus.
• Sales tax is calculated at 8.25% for Los Angeles County and at 7.75% for all other counties.
• Infrastructure and garage upgrade amounts are calculated based on $16,000 per bus.
• Fontana USD’s infrastructure funding is augmented with additional amount of up to $322,000 from the Clean Fuels Fund.

Table 2 - CNG School Bus Replacement & Infrastructure Recommendation List

* Includes maximum allowable CNG bus base price of $144,000, plus up to $4,000 per bus for the fire suppressant option, and sales tax.

Table 3 summarizes the funding sources for the proposed program.

Table 3 - Source of Funds

Payments will be made to bus vendors as funds are received from CARB and the new buses are delivered to the school districts and the old buses are crushed.  New CNG buses awarded under this program must meet CARB’s NOx and PM engine certification standards as outlined below:

• For model year 2006, the new CNG buses have to meet CARB’s engine certification standards of 1.8 g/bhp-hr (for HC and NOx) and 0.01 g/bhp-hr for PM. 
• For model year 2007, the new CNG buses have to meet emission limits of 0.5 g/bhp-hr for NOx and 0.01 g/bhp-hr for PM.  

As approved by CARB staff, schools are allowed to purchase model year 2005 new CNG school buses from AZ Bus Sales, CBS, or Bus West if such buses are still available, since these buses are certified at the same level as 2006 model year buses with a larger passenger capacity.

School Bus Purchases Through Competitive Bids

Typically, school districts order new school buses (CNG, diesel or gasoline) through bids issued by other public school districts, joint power authorities, etc.  These include the Waterford bid, the Madera bid and the Covina-Valley School bid.   There are currently three bus vendors that supply new CNG transit size school buses: AZ Bus Sales, CBS and Bus West.  AZ Bus Sales supplies new CNG buses through the Waterford bid, CBS through the Madera bid, and Bus West through the Covina-Valley bid.

School buses purchased through these three valid bids (Waterford, Covina Valley and Madera) are required to comply with all current California and Federal motor vehicle performance, safety, and emission standards in effect at the time of bid.  Such competitive bids allow more options and flexibility for school districts.  Staff recommends that the Board approve school bus purchases through these three legal valid bids and any other subsequent valid bid as long as the funds expended for purchase of new school buses do not exceed the maximum amount approved by the Board for the buses for each school district.

Sole-Source Justification

Section VIII, (B)(2) of the Procurement Policy and Procedure identifies four major provisions under which a sole-source award may be justified.   This request for a sole source award is made under provision B.2.d.: other circumstances exist which in the determination of the Executive Officer require such waiver in the best interests of the AQMD.   Specifically, these circumstances are for Fontana Unified School District (FUSD) that has a disproportionate number of the oldest pre-1977 school buses among schools in the Basin.  Furthermore, FUSD is located in an area of high ozone and PM exposure levels.  Providing additional funding from the Clean Fuels Fund will enable FUSD to install the necessary fueling infrastructure to replace these selected pre-1977 buses with new CNG buses, and will encourage them to voluntarily modernize the remaining of their older high polluting diesel buses with CNG buses in the future.

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 Board.

Resource Impacts

Total amount of funding for the replacement of the 15 oldest school buses and the associated infrastructure shall not exceed $2,957,750, comprised of $2,100,000 from the Lower-Emission School Bus Program Fund, $535,750 from the Carl Moyer Program Fund AB 923 Account, and $322,000 from the Clean Fuels Fund.  Sufficient funds are available from all the funds.

The Clean Fuels Fund was established as a special revenue fund resulting from the state-mandated Clean Fuels program.  The Clean Fuels Program, under Health and Safety Code Sections 40448.5 and 40512 and Vehicle Code Section 9250.11, established mechanisms to collect revenues from mobile sources to support projects to increase the utilization of clean fuels, including the development of the necessary advanced enabling technologies.  Funds collected from motor vehicles are restricted, by statute, to be used for projects and program activities related to mobile sources that support the objectives of the Clean Fuels Program.