BOARD MEETING DATE: June 1, 2007
AGENDA NO. 13

RECOMMENDED ACTION:

Approve issuance of a Program Announcement and Application PA #2007-13 to replace pre-1987 school buses with new alternative fuel school buses in an amount of approximately $19 million from the Carl Moyer Program Fund, AB 923 Account.

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 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 communities meeting legislated criteria for disproportionate impacts, as set forth in 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 1994 and newer school buses with PM traps.

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

** Includes 10 percent funding for CNG Refueling Infrastructure

At its October 6, 2006 meeting, the Board approved the allocation of approximately $19 million for the Lower-Emission School Bus Replacement Program from revenues generated under AB 923 by the end of Calendar Year 2007.

Proposal

Staff is recommending that the Board issue Program Announcement and Application #PA 2007-13 for an amount of approximately $19 million in AB 923 funds to replace pre-1987 school buses owned by public school districts and joint power authorities with new alternative fuel school buses. The new buses must comply with CARB-specified emission limits.

Award recipients will provide a maximum of $25,000 if they crush a pre-1987 school bus or a maximum of $10,000 if they crush a pre-1977 school bus. After deducting the school district’s contribution, the AQMD award for each bus will cover the balance of the bus base price. The base price includes the alternative fuel bus package, oxidation catalyst, sales tax, and the option of installing a fire suppressant system at a cost not to exceed $4,000. Funding of up to 10 percent of the award amount for each new CNG bus will be made available for CNG fueling infrastructure.

School Bus Purchases Through Competitive Bids

School buses are required to be purchased by participating in valid, legal 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 (AZ Bus Sales) and Covina-Valley (Bus West). 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 met with all 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.

Trading

In the 2004-05 funding cycle, the AQMD allowed trading under the Chairman’s Initiative, Lower-Emission School Bus Program. This facilitated the removal of 14 additional pre-1977 school buses, which otherwise would have remained on the road. The proposed trading will permit public school districts who do not own any pre-1987 school bus to replace a post-1990 (i.e. 1991 or newer) school bus with a new alternative fuel bus, provided they donate their post-1990 bus free of charge to another public school district within the AQMD jurisdiction, and the receiving school, in turn, crushes a pre-1987 school bus. If the donated bus is 1991, 1992 or 1993 model year, then the bus must have, at minimum, a diesel oxidation catalyst (DOC) as its exhaust control. If the donated bus is 1994 or newer, the bus must have a Level 3 PM trap filter on it. The donor public school district will receive a new alternative fuel bus for a maximum of $25,000 as its local match. Staff recommends to allow trading under the proposed program.

Criteria for Funding Distribution

At least one-half of the total funding, or about $9,500,000, will be distributed in compliance with Health and Safety Code Section 43023.5 (AB 1390, Firebaugh), to directly benefit low-income communities and communities of color that are disproportionately impacted by air pollution. An AB 1390 School District will be defined as the school district that is directly receiving the funds from this program, and not the school district that is crushing a pre-1987 bus under the trading provisions of this program.

Thus, at least 50 percent of the funds will be allocated to school districts that qualify under this AB 1390 category. All applications will be evaluated for the school district's respective poverty level, PM exposure, and toxic exposure according to the following criteria:

1. 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.

2. 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.

3. 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 funds are oversubscribed under AB 1390, eligible school districts will be ranked. A maximum of 40 percent weight will be assigned to school districts in areas with highest poverty levels. Following this, 30 percent maximum weight is assigned to school districts with the highest PM levels and 30 percent maximum for areas with highest cancer risk levels. Other qualified school districts will be rated proportionately. New school bus awards will be granted to applicants in descending order until 50 percent of all the funds is exhausted.

Applicants unable to qualify or not receiving awards under AB 1390 can qualify for the remaining 50 percent of the funding. If adequate funding is available, as the first step, one bus will be awarded to each public school district. Following this step, the remaining funds will be distributed among public school districts on a first-come first-served basis subject to county allocation as listed in Table 2. If a school district applies for a disproportionately large number of buses compared to other applicants, except for Los Angeles Unified School District, no school district will receive more than 30 percent of the funds allocated for that county. Los Angeles Unified School District’s eligibility is limited to a maximum of fifty percent of the total funds allocated for Los Angeles County. If funds are undersubscribed in a particular county, the surplus funds would be transferred to the other counties.

Table 2: Proposed Distribution of Funds for School Bus Replacement

*The population numbers are estimates for year 2004, obtained from the official Website of the Census Bureau. http://quickfacts.census.gov/qfd/states/06/06071.html

**Funds allocated to each county will be close to the nearest amounts shown in the table.

Outreach

In accordance with AQMD’s Procurement Policy and Procedure, a public notice advertising the RFP/RFQ and inviting bids will be 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 be notified utilizing AQMD’s own electronic listing of certified minority vendors.  Notice of the RFP/RFQ will be 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 will be placed on the Internet at AQMD’s Web site (http://www.aqmd.gov where it can be viewed by making menu selections “Inside AQMD”/“Employment and Business Opportunities”/“Business Opportunities” or by going directly to http://www.aqmd.gov/rfp/index.html).  Information will also be available on 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.

Resource Impacts

Sufficient funds will be available in the Carl Moyer Program Fund AB 923 Account to fund the replacement of school buses for a total cost of approximately $19 million.

Attachments (DOC 669kb)
Program Announcement & Application #PA 2007-13