BOARD MEETING DATE: September 10, 2010
AGENDA NO. 5
PROPOSAL:
Execute Contract to Administer Hybrid Truck and Bus Voucher Incentive Project and Appropriate Funds from Undesignated Fund Balance
SYNOPSIS:
In December 2009, the Board approved the allocation of $1.5 million to cost-share the hybrid truck and bus voucher incentive project (HVIP) which reduces the high cost of hybrid vehicles within the AQMD region. This action is to execute a contract with CALSTART for the HVIP in an amount not to exceed $1.5 million from the Clean Fuels Fund. In addition, the Board previously recognized $1 million from the U.S. EPA for truck retrofits, but the contract was not executed by the end of the fiscal year due to a delay of Proposition 1B state funds as match for these projects. As a result, this action is to also appropriate funds from the undesignated fund balance to conduct the project.
COMMITTEE:
Technology, July 23, 2010, Recommended for Approval
RECOMMENDED ACTIONS:
Authorize the Executive Officer to execute a contract with CALSTART to administer and implement the HVIP in an amount not to exceed $1.5 million from the Clean Fuels Fund (31); and
Appropriate $1 million from the Undesignated Fund Balance to the FY 2010-11 Science and Technology Advancement Budget, Professional and Special Services Account related to the U.S. EPA grant.
Barry R. Wallerstein, D.Env.
Executive Officer
Background
HVIP
In 2007, Governor Schwarzenegger signed into law the California Alternative and Renewable Fuel, Vehicle Technology, Clean Air, and Carbon Reduction Act of 2007 (AB 118, Statutes of 2007, Chapter 750). AB 118 created the Air Quality Improvement Program (AQIP), a voluntary incentive program administered by the California Air Resources Board (CARB) to fund clean vehicle and equipment projects, air quality research, and workforce training. In April 2009, CARB also approved the AQIP Funding Plan for FY 2009-10, which serves as the blueprint for expending the FY 2009-10 AQIP funds. The Funding Plan establishes the Hybrid Truck & Bus Voucher Incentive Project (HVIP) as the cornerstone of the AQIP for FY 2009-10, accounting for about 60 percent of this year’s funds. The purpose of the HVIP is to offset about half of the incremental cost of eligible medium- and heavy-duty hybrid vehicles to facilitate deployment and help commercialize these lower-emitting hybrid vehicle technologies. The HVIP is expected to support a critical ramp-up in production that is necessary to deploy a large number of hybrid vehicles which will help achieve California’s clean air goals. Approximately ninety-five percent of HVIP funds are reserved for the purchase of new hybrid vehicles meeting the program’s eligibility criteria.
In November 2009, CARB selected CALSTART, through a competitive grant solicitation, to serve as the program administrator for the statewide HVIP. The statewide HVIP will be administered and implemented through a partnership between CARB and CALSTART. Subsequently, in December 2009, the Board approved a local match allocation of $1.5 million from the Clean Fuels Fund to deploy additional hybrid vehicles meeting the HVIP requirements in the geographical boundaries of the AQMD.
As of June 30, 2010, CALSTART has received and approved vouchers for 612 vehicles, which equates to $18,330,000, consisting of 37 public fleets and 575 private fleets. Various categories of vehicles have been awarded vouchers ranging from delivery trucks (beverage, parcel, linen, or fuel) to refuse haulers and dump trucks. CALSTART anticipates that they will exhaust the remainder of the project funds totaling $1,119,376 by the end of August 2010.
EPA National Clean Diesel Funding Assistance Program – Gardner Trucking
On March 6, 2009, the Board recognized $1 million in grant funds from the U.S. EPA under the National Clean Diesel Funding Assistance Program to supplement funds from the CARB under Proposition 1B and Gardner Trucking for a truck retrofit project. At the same time, the Board appropriated funds from the undesignated fund balance to the FY 2008-09 Science and Technology Advancement Budget, Professional and Special Services Account and awarded the $1 million to Gardner Trucking to retrofit 200 heavy-duty diesel trucks with diesel particulate filters. However, the contract negotiation was not completed by the end of the fiscal year because the CARB Proposition 1B funds were available after April 2010. As such, a Board action is required to appropriate $1 million from the Undesignated Fund Balance to the FY 2010-11 Science and Technology Advancement Budget, Professional and Special Services Account and reissue the award to Gardner Trucking.
Proposal
HVIP
This action is to execute a contract with CALSTART for an amount not to exceed $1.5 million (including approximately 4.67% in administrative costs) to administer and implement the HVIP on behalf of the AQMD. The HVIP provides vouchers of up to $45,000 on a first-come first-served basis for the purchase of an eligible new hybrid truck or bus.
CALSTART will administer and implement the HVIP on behalf of the AQMD in accordance with the HVIP requirements specified in the grant agreement between CARB and CALSTART, with the additional requirement that the AQMD funds be used only for eligible hybrid vehicles that will be operated in the geographical boundaries of the AQMD. CALSTART will be responsible to conduct public outreach to vehicle dealers and fleets to solicit interest in the program within geographical boundaries of the AQMD.
AQMD will maintain oversight of the program and work closely in conjunction with CALSTART to ensure timely progress is being made with respect to the critical milestones under this contract.
EPA National Clean Diesel Funding Assistance Program – Gardner Trucking
This action is to appropriate $1 million from the Undesignated Fund Balance to the FY 2010-11 Science and Technology Advancement Budget, Professional and Special Services Account and reissue the original award to Gardner Trucking. The original project was solicited and evaluated under the CARB Proposition 1B Program.
Benefits to AQMD
The successful implementation of the proposed projects will reduce NOx and PM emissions in a cost-effective and expeditious manner to assist in meeting the goals of the 2007 AQMP. In addition, the deployment of the hybrid vehicles as part of the HVIP will result in significant reductions of greenhouse gas emissions. The above proposed vehicles and equipment will operate for many years in the South Coast region and provide long-term emission reduction benefits.
Resource Impacts
HVIP
The proposed contract with CALSTART shall not exceed $1.5 million, including approximately 4.67% in administrative costs, from the Clean Fuels Fund. Sufficient funds are available from the Clean Fuels Fund, established as a special revenue fund resulting from the state-mandated Clean Fuels Program. The Clean Fuels Program, under Health and Safety Code Sections 40448.5 and 40512 and Vehicle Code Section 9250.11, established mechanisms to collect revenues from mobile sources to support projects to increase the utilization of clean fuels, including the development of the necessary advanced enabling technologies. Funds collected from motor vehicles are restricted, by statute, to be used for projects and program activities related to mobile sources that support the objectives of the Clean Fuels Program.
EPA National Clean Diesel Funding Assistance Program – Gardner Trucking
The $1 million contract with Gardner Trucking will be funded with the EPA National Clean Diesel grant.