BOARD MEETING DATE: July 11, 2008
AGENDA NO. 16

RECOMMENDED ACTIONS:

Authorize the Chairman to:

1. Execute a grant with Rim of the World School District to replace five pre-1977 buses with new CNG buses as well as provide station funding in a total amount not to exceed $915,000, comprised of $700,000 from the Proposition 1B School Bus Fund (82) and $215,000 from the Carl Moyer Program AB 923 Fund (80); and
2. Amend the following grants, originally approved by the Board on December 7, 2007, to provide an additional $10,000 per bus to pay for the schools’ local match for the replacement of their pre-1977 buses with new CNG buses from the Carl Moyer Program AB 923 Fund (80):
1. $10,000 to the ABC Unified School District grant (one bus),
2. $10,000 to the Azusa Unified School District grant (one bus), and
3. $20,000 to the Temecula Unified School District grant (two buses).
3. Approve issuance of Program Announcement and Application PA #2009-01 to:
1. Replace 1977 to 1986 school buses owned by public school districts with new CNG school buses for approximately $47.4 million from the Proposition 1B School Bus Fund, and
2. Retrofit 1994 and newer diesel school buses owned by public school districts or private school bus operators with CARB-verified Level 3 PM traps in an amount not to exceed $20 million from the Proposition 1B School Bus Fund.
    

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 were awarded to school districts that operate school buses in communities meeting legislated criteria for disproportionate impacts, as set in Health and Safety Code Section 43023.5 (AB 1390, Firebaugh). Table 1 summarizes awards made under previous AQMD program announcements for the 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
 

In November 2006, California voters approved Proposition 1B, the Highway Safety, Traffic Reduction, Air Quality, and Port Security Bond Act of 2006. Proposition 1B provides $200 million for school bus replacements and retrofits to reduce air pollution and children’s exposure to diesel exhaust. After deducting $7 million for bond financing costs, the state legislature, under SB 88, allocated $193 million for the Lower-Emission School Bus Program to be administered by CARB. At its March 2008 Board meeting, CARB adopted the new Lower-Emission School Bus Program guidelines and approved the allocation of $70.1 million to the AQMD as its share of Proposition 1B school bus funds.

Proposal

Replace All pre-1977 Buses in the Basin
CARB in its latest guidelines requires that all pre-1977 school buses be replaced first, without any match funding requirement from school districts. The maximum allowable funding amount is $140,000 per bus from Proposition 1B funds. Thus, for the replacement of these buses, the remaining balance of the cost of the bus in addition to infrastructure funding of $14,000 per bus must be provided from AQMD’s AB 923 funds. CARB has identified a total of nine pre-1977 buses for replacement within AQMD’s jurisdiction as shown in Table 2.

Table 2: CARB’s List of Identified Pre-1977 School Buses

*Previously awarded in December 2007

Under the AQMD’s annual school bus solicitation, four pre-1977 buses were awarded on December 7, 2007. These were the buses belonging to ABC, Azusa, and Temecula school districts (Table 2). However, per requirements of the solicitation, the award recipients were to provide $10,000 per bus as their required local match. To comply with CARB’s recently adopted Lower-Emission School Bus Program guidelines, staff proposes Board approval to provide an additional $10,000 per bus from the Carl Moyer Program Fund, AB 923 Account, to reimburse $10,000 each to ABC and Azusa Unified School Districts, and $20,000 to Temecula Unified School District.

As a result, only five pre-1977 buses remain on CARB’s list for funding, all belonging to Rim of the World Unified School District, which did not participate in AQMD’s program solicitation in late 2007. To replace these five buses, staff proposes using Proposition 1 B funds to pay for the new bus portion of the award, up to $140,000 per bus, and AB 923 funds to pay for the remaining cost of the bus, in addition to $4,000 for an optional fire suppression or gas detection system and $14,000 per bus for CNG infrastructure. Table 3 outlines the detailed funding proposal for Rim of the World Unified School District.

Table 3: Source of Funds to Replace Rim of the World’s Pre-1977 School Buses 

According to the AQMD’s updated school bus inventory, Rim of the World Unified School District also owns a total of 12 pre-1987 school buses that qualify for funding under the AQMD’s School Bus Replacement Program. After the closure of the School Bus Replacement Program Announcement issued with this Board letter, AQMD staff will evaluate the infrastructure needs of the school depending on the number of their pre-1987 buses to be replaced and will recommend funding in addition to the allowed ten percent infrastructure funding from its own AB 923 funds.

Issue Program Announcement for Replacement and Retrofit of School Buses

Table 4: Funding Sources and Available Amounts for the Program Announcement

In case AQMD’s contribution per school bus replacement and its related infrastructure cost exceeds the allowable limit of Proposition 1B Funds set by CARB, staff will propose to provide the additional balance from the AQMD’s AB 923 funds at the time of the awards approval.

According to the revised Lower-Emission School Bus Program guidelines adopted by CARB on March 27, 2008, the replaced buses must have a gross vehicle weight rating (GVWR) of at least 14,000 lbs. and must comply with the following requirements:

• For model years 2007-09, new CNG buses must meet CARB’s engine certification standards of 1.44 g/bhp-hr for NOx family emission limit (FEL), and 0.01 g/bhp-hr for PM.
• For model year 2010, new CNG buses must meet emission limits of 0.2 g/bhp-hr for NOx and 0.01 g/bhp-hr for PM.

Award recipients will have to provide a maximum of $25,000 in local match and crush the replaced bus. After deducting the local match, AQMD’s award for each bus will cover the balance of the bus base price. The base price includes the CNG package, oxidation catalyst, sales tax, and the option of installing a fire suppressant or a gas detector system at a cost not to exceed $4,000, if desired by the school district. Funding of up to ten percent of the award amount for each new CNG bus not exceeding $14,000 per bus will be made available for CNG fueling infrastructure. Up to a maximum of $140,000 per bus will be provided from the Proposition 1B School Bus Fund, and any remaining balance of AQMD’s contribution for the new bus in addition to the infrastructure funds will be provided from the Carl Moyer Program AB 923 Fund. Any additional funding required from AB 923 funds will be calculated during the award evaluations and will be proposed for Board’s consideration at the time of the awards.

School Bus Purchases Through Competitive Bids

Typically, school districts order new school buses through bids issued by other public school districts, joint power authorities, or other public mechanisms. The State Department of General Services (DGS) bids have expired, unless renewed in the future, and are no longer valid. Thus, at its December 6, 2002 meeting, the Board approved that schools purchase their buses through the Covina-Valley, Waterford or the South-West Transportation bids. School buses purchased through these bids, if unexpired, 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 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.

ii) Part B: Retrofit 1994 and Newer School Buses with PM Traps
Staff proposes to allocate up to $20 million from the Proposition 1B School Bus Fund to retrofit 1994 and newer school buses with CARB-verified Level 3 PM traps. Public school districts and private operators are eligible to apply. It is entirely up to the applicants to select the vendor and the type of the Level 3 verified unit. If funds are undersubscribed, then the surplus funds will be used for the replacement program to replace pre-1987 school buses with new CNG buses. Funding for the retrofits will cover the cost of purchase, installation, sales tax, data logging (if necessary), lifetime maintenance, and electrical infrastructure for up to $20,000 per unit.

CARB allows air districts to recover some of their administration expenses by using up to two percent of the school bus replacement funds and up to five percent of the school bus retrofit funds from the Proposition 1B funds as administrative cost. Given the proposed funding distribution for school bus replacements and retrofits, it is estimated that approximately $2 million of the total $70.1 million Proposition 1B funds will be used for administrative expenses. Once the actual number of school bus replacement and retrofit awards are identified, the precise amount of administrative costs will be calculated and disclosed in the Board letter for grants approval.

Funding Distribution

Awards resulting from the program announcement for the replacement and retrofit of school buses will be distributed in compliance with Health and Safety Code Section 43023.5 (AB 1390, Firebaugh), at least one-half of the total funding 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. Applications will be evaluated for 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, and
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, or
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 will be 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 funds is exhausted.

Additionally, applicants unable to qualify or not receiving awards under AB 1390 can qualify for the remaining 50 percent of the funds on a first-come first served basis subject to county allocation as listed in Table 5. If funds are oversubscribed in a county, no school will receive more than 30 percent of the funds allocated for that county except for the Los Angeles Unified School District, as it owns approximately 70 percent of the pre-1987 school buses in the Basin. In case funds are undersubscribed in a particular county, the surplus funds would flow to the other counties.

Table 5: 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 the Los Angeles County MTA Directory of Certified Firms, the Inland Area Opportunity Pages Ethnic/Women Business & Professional Directory; and 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, and 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 is also 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 and Retrofit 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 Proposition 1B School Bus Program Fund and in the Carl Moyer Program AB 923 Fund to cover:

1. The replacement of school buses in an amount not to exceed $47.4 million from the Proposition 1B School Bus Program Fund, and
2. The retrofit of school buses with PM trap filters in an amount not to exceed
   $20 million from the Proposition 1B School Bus Program Fund.

Attachment (doc 1266 kb)

Program Announcement and Application PA #2009-01