PURPOSE:

In response to City Council�s direction to assess the feasibility of creating a �Clean Construction Equipment� ordinance, this report is being presented as the second step in the �one-step, two-step� agenda process.

BACKGROUND:

In October 2005, Vice Mayor Todd Campbell provided staff with a sample ordinance drafted by Environmental Defense that would require all diesel fueled construction equipment over 50 horsepower owned and used by the City and/or contractors working for the City on City projects to meet more stringent emissions standards than are currently enforced by various air quality control agencies.  On November 22, 2005, Council directed staff to evaluate the effects of implementing such an ordinance in the City of Burbank.

The proposed ordinance requires the phase-in of lower emitting construction equipment from both City-owned and contractor-owned construction equipment.  The ordinance under consideration has key benchmarks established through 2016, at which time all off-road equipment used for City construction projects would be compliant with the most stringent emission standards of that time. 

ANALYSIS:

City staff�s analysis of the proposed ordinance resulted in the finding that there is a concurrent effort by the California Air Resources Board (ARB) to promulgate a progressive statewide rule to reduce emissions from in-use construction equipment fleets in California.  In effect, this ruling would require all construction equipment fleets in the State of California to comply with increasingly stringent emissions regulations with certain target dates established by ARB.  The draft proposed rule will be available for public review in mid-October and is scheduled for Board consideration in December 2006. 

This rule is significant because it will achieve the desired results of the proposed ordinance, but on a statewide level.  All construction equipment fleets working in the City of Burbank, as well as the rest of California, will be required to re-power, retrofit or replace construction equipment that does not meet the new, much stricter emission reduction standards set by ARB.   

City staff is grateful to Environmental Defense for initiating this ordinance feasibility study completed by staff.  The research necessary to determine its practical implementation has led staff to more closely examine the long-term replacement cycle of City construction equipment and to produce a long-term plan for its replacement or opportunities to retrofit it with emission reduction devices over and above what will be required by the ARB rule.  Using this long-term forecast, staff will submit a Carl Moyer Program grant application for retrofit equipment and engine re-powers that will not be eligible for said grant funding after the ARB rule is in effect.  The Carl Moyer Program (CMP) is the leading grant program in California, funding several million dollars worth of construction equipment re-power and retrofit programs.  These programs are one of the most cost-effective methods of reducing emissions from older construction equipment.  However, the CMP very specifically prohibits grant funding of projects that are otherwise required by local, state or federal laws or requirements.  As a result, CMP grants may not be available for construction equipment retrofits and re-powers after the implementation of the ARB rule.

Having completed this analysis the City is able to expedite and exceed the requirements for each scheduled phase-in of the ARB ruling, while also seeking to mitigate compliance costs by applying for grant funding opportunities offered by the Carl Moyer Program.  City staff is now in a better position to evaluate grant funding opportunities not only for equipment that must meet immediate ARB rule requirements, but also for that which will be subject to future emission regulations, as well, thereby potentially reducing those future costs. [S1] 

FISCAL IMPACT:

Information compiled as a result of the ordinance feasibility study has shown that the City�s estimated costs to comply with the upcoming ARB rule will be between $130,000 to $468,000 depending on the technologies that are approved and available for purchase.  The costs are for a combination of early replacements and the purchase of retrofit devices and engine upgrades.  Staff will apply for Carl Moyer Grant funding in order to offset some of this cost.  

RECOMMENDATION:

To conclude this process, staff recommends returning to Council with an official policy to pursue alternative fuel grant funding opportunities.  Currently, this is a standard practice, but not an official policy.   In an additional effort go beyond regulatory requirements, staff also recommends the Public Works Department and Burbank Water & Power work with the Finance Department to develop an incentive program for contractors who use construction equipment on City projects that is cleaner than what is required with each phase of the ARB ruling.  This program may be influential in motivating vendors to clean up their equipment faster than what the State legislates.

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