BOARD MEETING DATE: December 7, 2007
AGENDA NO. 5

RECOMMENDED ACTIONS:

1. Authorize the Chairman to approve grant awards to public schools for a total of 108 CNG school bus replacements and infrastructure, as set forth in Table 3, in an amount not to exceed $16,307,329 from either the Carl Moyer Program AB 923 Fund, or from the Prop. 1B – Lower Emission School Bus Fund when these funds become available. Specifically, authorize the Chair to enter contracts with the following public school districts in the following counties:

LA County

1. ABC Unified School District to purchase 8 CNG buses and infrastructure in an amount not to exceed $1,232,022.
2. Azusa Unified School District to purchase 3 CNG buses and infrastructure in an amount not to exceed $505,321.
3. Baldwin Park Unified School District to purchase 4 CNG buses and infrastructure in an amount not to exceed $590,161.
4. Castaic Unified School District to purchase 5 CNG buses and infrastructure in an amount not to exceed $776,202.
5. Downey Unified School District to purchase 4 CNG buses and infrastructure in an amount not to exceed $607,761.
6. Los Angeles Unified School District to purchase 40 CNG buses and infrastructure in an amount not to exceed $6,077,610.
7. Santa Monica-Malibu Unified School District to purchase 4 CNG buses and infrastructure in an amount not to exceed $590,161.
8. Torrance Unified School District to purchase 2 CNG buses and infrastructure in an amount not to exceed $295,081.

Orange County

9. Capistrano Unified School District to purchase 10 CNG buses and infrastructure in an amount not to exceed $1,511,318.
10. Huntington Beach High School District to purchase 1 CNG bus and infrastructure in an amount not to exceed $151,132.
11. Orange Unified School District to purchase 3 CNG buses and infrastructure in an amount not to exceed $440,196.

Riverside County

12. Hemet Unified School District to purchase 2 CNG buses and infrastructure in an amount not to exceed $302,264.
13. Temecula Unified School District to purchase 7 CNG buses and infrastructure in an amount not to exceed $1,027,122.

San Bernardino County

14. Chaffey Joint School District to purchase 2 CNG buses and infrastructure in an amount not to exceed $293,464.
15. Chino Valley Unified School District to purchase 4 CNG buses and infrastructure in an amount not to exceed $586,927.
16. Fontana Unified School District to purchase 9 CNG buses and infrastructure in an amount not to exceed $1,320,586.

2. Recognize state funds from Proposition 1B upon their allocation to the AQMD by CARB, and place the funds into the Prop. 1B - Lower-Emission School Bus Fund.
   
3. Authorize the Chairman to approve grant awards to public schools for an additional 67 CNG school bus replacements, as set forth in Table 4, in an amount not to exceed $10,143,537 from the Prop. 1B - Lower-Emission School Bus Fund when these funds become available. Specifically, authorize the Chair to enter into contracts with the following school districts:
    
   1. Los Angeles Unified School District to purchase 60 CNG buses and infrastructure in an amount not to exceed $9,116,415.
   2.  Chino Valley Unified School District to purchase 7 CNG buses and infrastructure in an amount not to exceed $1,027,122.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

Exhaust emissions from high emitting diesel-fueled school buses present a risk to children and are a source of public exposure to toxic diesel particulate matter and smog-forming pollutants. To reduce emissions from these vehicles, AQMD has funded the replacement of older diesel buses with new lower-emitting diesel or CNG buses, and the retrofit of diesel school buses with particulate (PM) traps. Over 50 percent of the funds have been awarded to school districts that operate school buses in communities meeting the AQMD’s criteria for disproportionately impacted areas, implementing Health and Safety Code Section 43023.5 (AB 1390, Firebaugh).

Table 1 summarizes awards made under previous AQMD program announcements for replacement of pre-1987 school buses, and retrofits of school buses with PM traps.

Table 1: Summary of Past AQMD School Bus and PM Trap Awards

*Includes at least ten percent for CNG infrastructure

Proposal

At its June 1, 2007 meeting, the Board issued program announcement PA #2007-13 seeking applications from school districts for new CNG buses. By the application deadline of July 31, 2007, 16 school districts applied for 175 new CNG school buses for a total funding request of $26,450,861. Staff recommends the Board approve funding for 108 new CNG school buses to replace pre-1987 diesel school buses owned and operated by public school districts as shown in Table 3, in an amount not to exceed $16,307,329. Two sources of funds are available to make these awards:

1. State Funds: In 2006, California voters passed Proposition 1B allocating $200 million for replacement and retrofit of polluting school buses. Staff recommends the Board approves the use of Proposition 1B funds to award the 108 new CNG school buses upon AQMD’s receipt of its allocated portion of these funds.
2. AQMD’s AB923 Funds: In case of delay in the receipt of 1B funds, staff recommends that the 108 new CNG school buses be funded from revenues generated in the Carl Moyer Program AB 923 Fund, as set aside by the Board at its February 2, 2007 meeting.

Upon receipt and adequacy of Proposition 1B funds, staff also recommends to fund an additional 67 new CNG school buses as listed in Table 4, to replace pre-1987 buses in an amount not to exceed $10,143, 537. This will achieve full funding of all requests received for new CNG buses under this program announcement.

Award recipients will have to provide a maximum of $25,000 for replacing and crushing a pre-1987 school bus or a maximum of $10,000 for replacing and crushing a pre-1977 school bus.  After deducting the school district’s contribution, the AQMD award for each bus will cover the balance of the base price for a new CNG bus as outlined below:

• For replacement of a pre-1987 school bus, AQMD’s maximum contribution for a new CNG bus will be $134,128 for Los Angeles County; and $133,393 for Orange, Riverside, and San Bernardino Counties.
• For replacement of a pre-1977 school bus, AQMD’s maximum contribution for a new CNG bus will be $149,128 in Los Angeles County, and $148,393 in the other counties.
• In addition, AQMD will pay up to $4,000 per bus if the applicant opts to install a fire suppression system in the new CNG bus.
• AQMD will also pay up to ten percent of the new CNG bus award amount for installing or expanding CNG fueling infrastructure.

Table 3: CNG School Bus & Infrastructure Award Recommendation List

AQMD award covers the cost of a new CNG bus (up to $147,000) plus sales tax, minus the school match, and, if requested, a fire suppression system ($4,000) .

*Schools crushing one or more pre-1977 school bus, with number of pre-1977 buses listed in parenthesis.

**Orange School District will be donating three of its 1993 model year school buses equipped with diesel oxidation catalysts to Bear Valley Unified School District in exchange for receiving three new CNG school buses. Orange School District will contribute $25,000 for each new CNG school bus.

Table 4: Additional CNG Bus & Infrastructure Awards
with Availability of Prop 1B Bond Funds

School Bus Purchases through Competitive Bids

School buses must be purchased through valid piggy-back bids issued by other public school districts, joint power authorities, etc. These bids require that new school buses 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. Currently, there are two legally valid bids available, Waterford (A-Z Bus Sales) and Covina-Valley (BusWest). Staff recommends that the Board approve school bus purchases through these two legally valid bids and any other subsequent valid bid as long as the price does not exceed the price of the existing bids.

Staff has previously met with the school bus vendors and discussed the issue of potential tax credits allowed under the Energy Bill. In case of availability of tax credits from the sale of these buses, the school bus vendors have agreed to work with staff in order to use the credits towards the sale of more buses as requested by public school districts.

Emission Limits

According to the revised Lower-Emission School Bus Program guidelines adopted by CARB on February 23, 2006, the new CNG buses must meet CARB’s engine certification standards of 1.2 g/bhp-hr for NMHC and NOx, and 0.01 g/bhp-hr for PM.

Funding Distribution

Funding under PA #2007-13 is awarded in compliance with the requirements of AB 1390 (Firebaugh). Awards have been distributed so that at least one-half of the total funding directly benefit low-income communities and communities of color that are disproportionately impacted by air pollution according to the following criteria:  

• 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.
• 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.
• 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).

Under AB 1390 provisions, school districts qualify for disproportionate impact funding if they serve students that reside in areas with high poverty rates and with either high PM or toxic exposures. Los Angeles Unified, Azusa, Baldwin Park, Downey, Chaffey Joint, and Fontana qualify for funding under AB 1390. Awards to these school districts equal a total of 62 buses out of 108 buses awarded, or $9.4 million out of $16.3 million, accounting for 57 percent of the total funding amount. If state bonds funds are received, Los Angeles will receive 60 new CNG buses out of the additional 67 buses awarded, totaling $9.1 million out of $10.1 million.

Outreach

In accordance with AQMD’s Procurement Policy and Procedure, a public notice advertising the program announcement and inviting bids was published in the Los Angeles Times, the Orange County Register, the San Bernardino Sun, and Riverside County Press Enterprise newspapers to leverage the most cost-effective method of outreach to the entire South Coast Basin.

Additionally, potential bidders may have been notified utilizing AQMD’s own electronic listing of certified minority vendors. Notice of the program announcement was mailed to the Black and Latino Legislative Caucuses and various minority chambers of commerce and business associations, the State of California Contracts Register website, and placed on the Internet at AQMD’s Web site (http://www.aqmd.gov). Information was also available on AQMD’s bidder’s 24-hour telephone message line (909) 396-2724.

The program announcement was also mailed directly to the Directors of Transportation at public school districts within the AQMD’s jurisdiction.

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.  In addition, these awards will comply with AB 1390 requirements, such that it would reduce air pollution in low-income, high-diesel and high-PM10 exposure areas as well as enhance the objectives of the Environmental Justice and Children’s Health Initiatives adopted by the AQMD Board.

Resource Impacts

Total funding for replacement of 108 school buses and its associated infrastructure shall not exceed $16,307,329. In the absence of state bond funds, sufficient funds will be available in the Carl Moyer Program AB923 Fund to cover this expenditure. If AQMD receives state bond funds, these funds will be placed in the Prop. 1B - Lower-Emission School Bus Fund and will be used first to fund these buses.

After receiving and placing the Proposition 1B funds into the Prop. 1B - Lower-Emission School Bus Fund, AQMD will use the additional funds to award an additional 67 new CNG buses in an amount not to exceed $10,143,537.