BOARD MEETING DATE: August 3, 2009
AGENDA NO. 1

PROPOSAL:

Execute Memorandum of Understanding with Ports for Proposition 1B Grant Agreements

SYNOPSIS:

At the July 10, 2009 Board Meeting, the Board released the Proposition 1B program announcement to replace diesel drayage trucks at the ports and recognized the funding to implement the program from CARB and the Ports. This action is to execute a memorandum of understanding with the Ports to verify program and financial responsibilities for administration of the Clean Truck Program at the Ports.

COMMITTEE:

NA

RECOMMENDED ACTION:

Authorize the Executive Officer to Execute a Memorandum of Understanding with the Cities of Los Angeles and Long Beach, acting by and through their respective Board of Harbor Commissioners, to administer the Proposition 1B Clean Trucks Program.
 

Barry R. Wallerstein, D.Env.
Executive Officer

Background

In May 2009, CARB authorized the re-initiation of the Proposition 1B Goods Movement Program and directed $49 million to the Ports of Los Angeles and Long Beach (Ports) to replace heavy-duty diesel drayage trucks. Shortly thereafter, the AQMD was asked to administer the program by both CARB and the Ports to avoid changes to the Ports’ policy of exempting alternative fuel trucks from gate fees if funded by the Ports. At the June 5, 2009 Board Meeting, the Board agreed to administer the Ports’ Clean Truck Program (CTP), acknowledging the severe time constraints and potential administrative costs associated with the program.

At the July 10, 2009 Board Meeting, the Board authorized the release of Program Announcement #2010-02 for the replacement of heavy-duty diesel drayage trucks with new diesel or alternative fuel trucks, otherwise known as the Proposition 1B Clean Truck Program. In order to solicit, review, approve, contract, fund and deliver the maximum number of trucks by December 31, 2009, when the drayage truck regulation takes effect, staff requested the program announcement and receipt of funds be approved while more time be allowed to negotiate the specific requirements by each entity in a memorandum of understanding (MOU).
 

Proposal

The attached MOU outlines the specific requirements by the Ports and the AQMD. The main components of the MOU are

• The AQMD will be the new Proposition 1B Grant Administrator;
• CARB will disburse the $49 million to the AQMD less the previous amount incurred by POLB for 71 trucks;
• POLA will contribute $12.5 million for alternative fuel trucks;
• POLB will contribute $5 million for alternative fuel trucks;
• AQMD will contribute $7.5 million for alternative fuel trucks;
• Two types of grants will be provided:
  • Prop 1B-only grants: up to $50,000 per truck for qualifying new diesel or alternative fuel truck; and
  • Mixed funding grants: up to $50,000 from qualifying Prop 1B funds and an additional $50,000 from the Ports and/or AQMD for alternative fuel truck.

Several key issues in the MOU are related to the mixed funding grants since these contain additional requirements included by the Ports and not by Proposition 1B. For the mixed funding grant trucks (alternative fuel), the Ports require these be purchased from sales offices located in the cities of Los Angeles or Long Beach to ensure sales tax benefits are accrued by the cities. Additionally, the Ports require that mixed funding grant trucks conduct at least 300 trips to the Ports for five years, whereas Proposition 1B only requires 150 trips. Staff has resolved these issues to ensure there is no delay in implementing alternative fuel trucks and that these non-Proposition 1B requirements will be the joint responsibility of the Ports and AQMD.
 

Benefits to the AQMD

The successful implementation of the proposed projects will achieve emission reductions of NOx, PM and other pollutants in a cost-effective and expeditious manner to meet the goals of the 2007 AQMP. In addition, replacement of diesel engines with LNG engines will result in a 25% reduction of greenhouse gas emissions. The vehicles funded under this program will operate many years and will provide long-term emission reductions.
 

Resource Impacts

This Program will be cost shared through a combination of funding sources, including Proposition 1B-Goods Movement Program funds, EPA’s Congressional earmark grant, and funding contributions from the Ports of Los Angeles and Long Beach. All the funding sources and the specific funding amounts will be described in detail at the time of the awards.
 

Attachment

MOU  (DOC, 159k)