Running Incentive Programs Running Incentive Programs at the Local Levelat the Local Level

Kristian Damkier, P.E.Kristian Damkier, P.E.

Sacramento Metropolitan AQMDSacramento Metropolitan AQMD

June 7, 2007June 7, 2007

Presentation OverviewPresentation Overview

BackgroundBackground Funding History & Funding History &

ChallengesChallenges AdministrationAdministration Implementation IssuesImplementation Issues Evaluation & FeedbackEvaluation & Feedback Future PlansFuture Plans Questions & CommentsQuestions & Comments

Sacramento RegionSacramento Region

Home to over 2 million people in mixed Home to over 2 million people in mixed urban, suburban, and rural environmentsurban, suburban, and rural environments

77thth Worst Air in the United States with Worst Air in the United States with AQI>100 over 35 days per yearAQI>100 over 35 days per year

Little heavy industry but heavily impacted by Little heavy industry but heavily impacted by mobile sources (70% of pollution)mobile sources (70% of pollution)

Goods movement, agriculture, construction, Goods movement, agriculture, construction, and 1.3 million vehicles in a large valleyand 1.3 million vehicles in a large valley

Summer ozone, winter PM 2.5, yearly TACSummer ozone, winter PM 2.5, yearly TAC

Incentive Funding HistoryIncentive Funding History

1988 – Added $4 surcharge to DMV registration1988 – Added $4 surcharge to DMV registration 1988 – Sacramento County Measure A Sales Tax1988 – Sacramento County Measure A Sales Tax 1991 – Congestion Mitigation & Air Quality (CMAQ) 1991 – Congestion Mitigation & Air Quality (CMAQ) 1994 – Sacramento SIP with Mobile Source Commitment1994 – Sacramento SIP with Mobile Source Commitment 1996 – SMAQMD Heavy-Duty Incentive Program Established1996 – SMAQMD Heavy-Duty Incentive Program Established 1998 – Carl Moyer Program Established1998 – Carl Moyer Program Established 2000 – Sacramento Emergency Clean Air Transportation (SECAT) 2000 – Sacramento Emergency Clean Air Transportation (SECAT)

Program EstablishedProgram Established 2002 – SECAT Funding Frozen due to State Budget Crisis2002 – SECAT Funding Frozen due to State Budget Crisis 2004 – Permanent Funding for Carl Moyer Program through 20152004 – Permanent Funding for Carl Moyer Program through 2015 2006 – SECAT Funding Re-Released2006 – SECAT Funding Re-Released 2007 – Local Incentive Funding Passes $100 million Mark!2007 – Local Incentive Funding Passes $100 million Mark!

ResultsResults

Allocated $113 million since 1996Allocated $113 million since 1996 Saved over $1.4 billion in health and social costs, including Saved over $1.4 billion in health and social costs, including

over 100 avoided premature deathsover 100 avoided premature deaths Eliminated over 14,000 tons of NOx and over 1,100 of Eliminated over 14,000 tons of NOx and over 1,100 of

Diesel Particulate MatterDiesel Particulate Matter NOx = 4 Egyptian PyramidsNOx = 4 Egyptian Pyramids PM = 11 Railroad Cars of CoalPM = 11 Railroad Cars of Coal

Hard to Get, Easy to SpendHard to Get, Easy to Spend

Competing InterestsCompeting Interests Case for ActionCase for Action Public SupportPublic Support Industry StakeholdersIndustry Stakeholders Value to SocietyValue to Society Identifying New TaxesIdentifying New Taxes Local, State, Federal, Local, State, Federal,

Global RequirementsGlobal Requirements

Money (That’s What I Want)Money (That’s What I Want)

Obtaining funding constantly challenges all programsObtaining funding constantly challenges all programs Very difficult to establish new funding even in favorable Very difficult to establish new funding even in favorable

political climatespolitical climates Be creative (i.e. penalties, environmental fees, tire/battery/ Be creative (i.e. penalties, environmental fees, tire/battery/

hazmat fees, federal & state programs)hazmat fees, federal & state programs) Build support with local politicians, industry, and Build support with local politicians, industry, and

environmental groups to establish new fundingenvironmental groups to establish new funding Focus on EROI (Environmental Return on Investment) and Focus on EROI (Environmental Return on Investment) and

cost-effectivenesscost-effectiveness Create a business friendly incentive program to gain Create a business friendly incentive program to gain

business and industry supportbusiness and industry support

Paging Mr. SmithPaging Mr. Smith

Free Market ApproachFree Market Approach Cost Effectiveness ($/ton)Cost Effectiveness ($/ton) Understanding BusinessUnderstanding Business Profit MotiveProfit Motive Economic EvolutionEconomic Evolution When all stakeholders have When all stakeholders have

a positive financial interest a positive financial interest in the program, everyone in the program, everyone benefits and participatesbenefits and participates

RelationshipsRelationships

Good relationships are essential to successful programsGood relationships are essential to successful programs Relationships with customers, suppliers & dealersRelationships with customers, suppliers & dealers Build trust and opportunities for new projectsBuild trust and opportunities for new projects Speeds up the process working with everyoneSpeeds up the process working with everyone Take advantage of all networking opportunitiesTake advantage of all networking opportunities They know more than you do about the industryThey know more than you do about the industry

Team PlayersTeam Players

Participants are a major part of any Participants are a major part of any successful incentive programsuccessful incentive program

Cast a wide net and offer something Cast a wide net and offer something interesting and profitableinteresting and profitable

Screen applicants to reduce potential for Screen applicants to reduce potential for fraud and “bad apples”fraud and “bad apples”

Learn about the industry and speak in their Learn about the industry and speak in their terms and forumsterms and forums

Help the participants market the programHelp the participants market the program

More PlayersMore Players

Dealers and suppliers can help market your Dealers and suppliers can help market your program if encouraged by profitprogram if encouraged by profit

Make them part of the program!Make them part of the program! Use dealer/supplier agreements to keep Use dealer/supplier agreements to keep

control of the program and maintain control of the program and maintain accountabilityaccountability

They know MUCH more than you doThey know MUCH more than you do

Even More PlayersEven More Players

Private SectorPrivate Sector– Industry groupsIndustry groups– Local businessesLocal businesses– Vehicle and equipment Vehicle and equipment

manufacturersmanufacturers

Public SectorPublic Sector– Elected officialsElected officials– State and local State and local

environmental agenciesenvironmental agencies– Funding partnersFunding partners

How We WorkHow We Work

First come, first served application processFirst come, first served application process Fixed cost effectiveness and pre-application Fixed cost effectiveness and pre-application

funding estimatesfunding estimates Applications come through dealer solicitation, Applications come through dealer solicitation,

mass mailings, public workshops, and web trafficmass mailings, public workshops, and web traffic Projects funded until funding is exhausted with no Projects funded until funding is exhausted with no

major limits on industry, project type, or major limits on industry, project type, or socioeconomics (unless mandated)socioeconomics (unless mandated)

Some funding sources have specific limitations Some funding sources have specific limitations (i.e. on-road, verified technologies, location)(i.e. on-road, verified technologies, location)

Application ProcessApplication Process

Fill out ApplicationFill out Application Submit Application & Supplemental InfoSubmit Application & Supplemental Info Initial Evaluation within 3-5 business daysInitial Evaluation within 3-5 business days Pre-Inspection by InspectorPre-Inspection by Inspector Funding Agreements Circulated for Funding Agreements Circulated for

SignaturesSignatures Project Work CompletedProject Work Completed Post-Inspection by InspectorPost-Inspection by Inspector Participant Invoices for ReimbursementParticipant Invoices for Reimbursement Funding Check sent to ParticipantFunding Check sent to Participant Participant Reports OperationParticipant Reports Operation Periodic AuditsPeriodic Audits Final Inspection and ReleaseFinal Inspection and Release

Project AdministrationProject Administration

Project ManagersProject Managers– Project assigned to one Project assigned to one

person throughout person throughout application processapplication process

– Evaluates applications Evaluates applications and determines project and determines project funding amountsfunding amounts

– Handles all paperwork Handles all paperwork including contracts and including contracts and funding invoicesfunding invoices

InspectorsInspectors– Perform inspections of Perform inspections of

equipment for project equipment for project verificationverification

– Audit existing projects Audit existing projects to show complianceto show compliance

– Help with customer Help with customer outreach and solicit new outreach and solicit new applicationsapplications

Monitoring & AuditingMonitoring & Auditing

Vital to ensure real Vital to ensure real benefits and avoid fraudbenefits and avoid fraud

Involves reporting, Involves reporting, physical audits, and physical audits, and corrective actionscorrective actions

Must have full agency Must have full agency support including potential support including potential legal actionslegal actions

Small portion of projects Small portion of projects consume most staff timeconsume most staff time

Keeps staff busyKeeps staff busy

What Really Works?What Really Works?

Word-Of-Mouth Advertising is sole predictor Word-Of-Mouth Advertising is sole predictor of successof success

Industry trusts dealers and participants more Industry trusts dealers and participants more than governmentthan government

Provide solutions that improve profitabilityProvide solutions that improve profitability Develop a rigorous application and auditing Develop a rigorous application and auditing

process to maintain accountabilityprocess to maintain accountability CUSTOMER SERVICE IS KING!!!!!CUSTOMER SERVICE IS KING!!!!!

Measuring SuccessMeasuring Success

Actions subject to several 3Actions subject to several 3rdrd party auditsparty audits

Audit results positive with minor Audit results positive with minor correctionscorrections

Popular with all stakeholders Popular with all stakeholders including finding new fundingincluding finding new funding

Large demand for funding Large demand for funding including many pending including many pending applicationsapplications

Ability to easily quantify results Ability to easily quantify results including funding & emissionsincluding funding & emissions

Happy Participants!Happy Participants!

Our Electronic BrainOur Electronic Brain

Obtained funding to establish emission tracking databaseObtained funding to establish emission tracking database Tracking database has become a mission critical element Tracking database has become a mission critical element

and a key to our successand a key to our success The database does the following:The database does the following:

– Track applications, companies, and enginesTrack applications, companies, and engines– Calculate emission benefits automaticallyCalculate emission benefits automatically– Electronic log of all actions including fundingElectronic log of all actions including funding– Generate reports with pre-filled dataGenerate reports with pre-filled data– Generate administrative summaries of emission benefits and Generate administrative summaries of emission benefits and

detailed funding reportsdetailed funding reports Migrating from Access to Web-based SQL to allow more Migrating from Access to Web-based SQL to allow more

tools including on-line applications and reporting and tools including on-line applications and reporting and remote access for staffremote access for staff

New ConcernsNew Concerns

Low Income and Low Income and Minority PopulationsMinority Populations

Environmental JusticeEnvironmental Justice Small BusinessesSmall Businesses Global Climate Global Climate

Change ConcernsChange Concerns Changing Role of Changing Role of

GovernmentGovernment Health ConcernsHealth Concerns

New HorizonsNew Horizons

Light Duty ScrappageLight Duty Scrappage Electrification of Stationary Diesel EnginesElectrification of Stationary Diesel Engines Early Actions under new California In-Use Early Actions under new California In-Use

Diesel RegulationsDiesel Regulations Goods Movement ProjectsGoods Movement Projects Energy Efficiency ProjectsEnergy Efficiency Projects Potential for Carbon Reduction ProjectsPotential for Carbon Reduction Projects

Successful ImplementationSuccessful Implementation

Identify secure funding sources and watch each dollarIdentify secure funding sources and watch each dollar Develop a program that provides real value to all Develop a program that provides real value to all

stakeholdersstakeholders Implement safeguards to screen problem applicants, Implement safeguards to screen problem applicants,

mitigate future problems, and account for all actionsmitigate future problems, and account for all actions Establish tracking and monitoring programs to allow Establish tracking and monitoring programs to allow

stakeholders and staff to easily access general and specific stakeholders and staff to easily access general and specific project dataproject data

Treat all participants and suppliers as customers and build Treat all participants and suppliers as customers and build strong working relationships with bothstrong working relationships with both

Be flexible and adapt to changing political landscapesBe flexible and adapt to changing political landscapes

Questions & CommentsQuestions & Comments

Contact Information:Contact Information:

Kristian Damkier, P.E.Kristian Damkier, P.E.

Sacramento Metropolitan AQMDSacramento Metropolitan AQMD

777 12777 12thth St, 3 St, 3rdrd Floor Floor

Sacramento, CA 95814Sacramento, CA 95814

(916) 874-4892(916) 874-4892

kdamkier@airquality.orgkdamkier@airquality.org