BOARD MEETING DATE: December 5, 2003
AGENDA NO. 4

Approve Grants to Public School Districts to Purchase 22 New CNG School Buses and Infrastructure

SYNOPSIS:

On September 5, 2003, AQMD issued Program Announcement & Application #PA2004-01, titled "Lower-Emission School Bus Replacement and School Backup Generator Retrofit Program," soliciting applications for new CNG replacement buses. Sixteen public school districts applied for 82 new CNG school buses and three schools applied for PM traps on diesel backup generator sets. From the state Proposition 40 funding, staff recommends the approval of school bus replacement awards for 16 CNG school buses and infrastructure in an amount not to exceed $2,087,965. From the interest accumulated in the Lower Emission School Bus Fund, staff recommends an additional award of six new CNG buses and infrastructure in an amount not to exceed $847,979.

COMMITTEE:

Technology, November 21, 2003, Recommended for Approval

RECOMMENDED ACTION:

1. Recognize up to $2,175,000 of Proposition 40 funding, from the California Air Resources Board and as apportioned by AB 425, to the Lower-Emission School Bus Program Fund.
    
2. Authorize the Chairman to approve grants to public school districts to purchase 16 new CNG school buses and infrastructure as set forth in Table 2, in an amount not to exceed $2,087,965 from Proposition 40 funding to be placed in the Lower-Emission School Bus Fund.
    
3. Authorize the Chairman to grant an additional six new CNG buses as set forth in Table 3, for a total of 22 buses, in an amount not to exceed $847,979 from the interest accumulated in the Lower Emission School Bus Program Fund.
    
4. Approve acceptance of applications for installation of PM traps on diesel backup generators under Appendix B of Program Announcement & Application #PA 2004-01, originally issued on September 5, 2003, until applications reaching the amount of $250,000 from the Lower-Emission School Bus Fund has been received but no later than June 30, 2004.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

Exhaust emissions from high-emitting diesel-fueled school buses are a source of public exposure to toxic diesel particulate matter and smog-forming pollutants, and present a particular health risk to vulnerable populations such as children. There are thousands of older school buses on the road that have remained in service simply because school districts lack funds to replace them. 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 fifty percent of these funds have gone to school buses operating in communities meeting legislated criteria for disproportionate impacts, as set in Health and Safety Code Section 43023.5 (AB1390, Firebaugh) (See criteria in Proposal section of this Board letter.).

Table 1 summarizes awards made under previous AQMD program announcements for replacement of pre-1987 school buses and retrofit of 1994 and newer school buses with PM traps.

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

This new round of school bus funding originates from Proposition 40, passed by the state electorate on March 5, 2002, to conserve natural resources and improve state and local parks. AB 425 (Statutes of 2002, Chapter 379) provides school bus funding from Proposition 40. AB 425 directs that 20 percent of the Proposition 40 funds be made available to public school districts to purchase clean burning buses transporting school children. For FY2002-03, on a statewide basis, this amounts to $4,920,000, of which AQMD has been allocated $2,175,000 to purchase new CNG buses.

At its September 5, 2003 meeting, the Board approved the issuance of the Program Announcement & Applications #PA2004-01 to make these funds available for replacement of existing diesel-fueled buses with new alternative fuel buses. In accordance with the CARB Lower-Emission School Bus Program guidelines, the program announcement solicited applications for new CNG buses equipped with an oxidation catalyst that meet CARB’s NOx and PM engine certification standards of 2.5 g/bhp-hr and .03 g/bhp-hr, respectively. In addition, ten percent of the funds are made available for CNG infrastructure.

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. In previous rounds of funding, school districts, if they chose to, could purchase new buses through vendors listed by either the California Department of General Services (DGS) or alternative bids such as the Waterford District bid or the South-West Transportation bid. State DGS bids have expired, and unless renewed in the future, are no longer valid. Thus, at its December 6, 2002 meeting, the Board approved that schools purchase their buses through either the Waterford or the South-West Transportation bids. Subsequently, at its September 5, 2003 meeting, the Board also approved the Covina-Valley School District bid. The school buses purchased through these three bids were 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 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.

Contribution from School Districts

Under this program, public school districts will pay a maximum of $25,000 for each new CNG bus to replace a pre-1987 school bus, and a maximum of $10,000 for a new CNG bus that replaces a pre-1977 bus.

Per CARB guidelines, and after deducting the school contribution, the AQMD 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 a fire suppressant system not exceeding $4,000, if desired by the school district. Additionally, ten percent of the award would be given to the qualifying school district for CNG infrastructure.

Proposal

AB 1390 (Firebaugh), and Awards Recommendation
By the end of the closing date, October 22, 2003, sixteen public school districts applied for 82 new CNG school buses. The list of the applicants for school bus replacements and the number of buses requested are shown in Attachment 1. Staff recommends to distribute one-half of the total available funding 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. Thus, 50 percent of the funds will be allocated to school districts that qualify under this category. All applications will be evaluated for poverty level, PM exposure, and toxic exposure according to the following criteria:
 

A)	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.
B)	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.
C)	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 qualify for disproportionate impact funding. Since funds are oversubscribed under AB 1390, these school districts are ranked. A maximum of 40 percent weight is assigned to school districts in areas with the 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 the highest cancer risk levels. Other qualified school districts are rated proportionately. Eight public school districts qualified under AB 1390 and their rankings based on the above-described criteria are shown in Attachment 2. New school bus awards are granted to applicants in descending order until 50 percent of all funds are exhausted.

Schools, unable to qualify or not receiving awards under AB 1390, qualify for the remaining 50 percent of the funding. Since the number of applicants exceeds the number of available CNG buses under this category as well, one CNG school bus is recommended to awarded to each school district with an existing CNG school bus fleet on a first-come first-served basis until funds are exhausted.

For funds allocated to the AQMD under Proposition 40, staff recommends the approval of school bus replacement awards to ten public school districts for 16 new CNG buses as shown in Table 2, in an amount not to exceed $2,087,965. 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.

In addition, staff recommends the approval of one new CNG bus to each of the remaining six applicants as shown in Table 3, in an amount not to exceed $847,979, from the interest accumulated in the AQMD Lower Emission School Bus Fund. These applicants would each have received one bus in accordance with the original program announcement guidelines.

Table 2
CNG School Bus Replacement & Infrastructure Recommendation List
From Proposition 40 Funding
 

Table 3
CNG School Bus Replacement & Infrastructure Recommendation List
From Accumulated Interest Fund
 

Los Angeles, Bellflower, Garden Grove, Fullerton, Covina Valley, Moreno Valley, Azusa, and Redlands unified school districts qualify under AB 1390 (Firebaugh) provisions. They are jointly awarded $1,828,727 for 14 buses, resulting in 62% of the total funds to be awarded to schools qualifying under AB 1390.

In the event school districts spend less than the amounts allocated to them from Proposition 40 funds as listed in Table 2, and if the collective amount of these unspent funds equals to the AQMD contribution amount of at least one bus, then this balance will be used first to fund buses listed in Table 3, before funds from accumulated interest in the Lower-Emission School Bus Fund are utilized. Total expenditure from Proposition 40 Funds for buses and infrastructure listed in Tables 2 & 3 shall not exceed $2,175,000.

Other Applications

Also staff received three applications for PM traps for backup diesel generator sets, two from public school districts and one from a private school. Since a PM trap for diesel backup generator sets has not yet been verified by CARB, staff recommends the Board approve the acceptance of applications for retrofitting diesel backup generators under Appendix B of Program Announcement & Application #PA2004-01 originally issued on September 5, 2003. Staff recommends to accept applications until the $250,000 available under the Lower-Emission School Bus Fund is expended but no later than June 30, 2004. All these applications and the already submitted ones would be considered for awards once PM trap(s) have been verified by CARB.

Benefits to AQMD

The AQMP relies on the expedited implementation of advanced technologies and clean 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 Governing Board.

Resource Impacts

The total amount of funding for the school bus replacement program shall not exceed $2,935,944. Sufficient funds will be available from the Lower-Emission School Bus Fund upon receipt of Proposition 40 funds from CARB. The Lower-Emission School Bus Fund has been established as a separate fund by the AQMD, to be used for the replacement and retrofit of school buses in the Basin.

Attachments

1: Number of requested buses
2: Ranking of schools under AB1390

 

ATTACHMENT 2
#PA2004-01 RANKING OF SCHOOLS QUALIFIED UNDER AB 1390
 

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