Appendix K 

School Bus Cost Methodology 

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School Bus Cost Methodology

This appendix describes the methodology and staff assumptions made when 

determining the associated costs to both public and private school bus fleets for 

compliance with the proposed regulation. The regulatory cost of the proposed 

regulation on school bus fleets was estimated to be $69 million, with $27 million in costs 

attributed to the public school bus fleet and $42 million in regulatory costs to be incurred 

by the private school bus fleets, based on the cost value of money analysis in 2008 

dollars. The capitol costs associated with the proposed regulation on school bus fleets 

is estimated at $190 million, with $119 million being associated with public school bus 

fleet compliance and $72 million in capitol outlays for the private school bus fleet. 

A. Methodology 

Costs of regulatory compliance are divided between publically owned fleets and 

privately owned school bus fleets based on the cost associated with retrofit of existing 

buses and the replacement of school buses that are not retrofittable with a VDECS. 

The regulatory cost for school bus replacement was estimated by multiplying the 

number of school buses that need to be replaced by the fraction of years remaining in 

the buses service life multiplied by the cost for a replacement school bus. It was 

assumed that a school bus that does not have a retrofittable engine would be replaced 

with a new bus, rather than purchasing a used bus or repowering the school bus with a 

newer engine. 

The regulatory cost for school bus retrofits was estimated by multiplying the number of 

school buses that need to be retrofitted by the cost for the applicable retrofit device. 

The applicable retrofit device utilized (passive or active) varies by model year and is 

detailed below as well as the associated costs. 

1. Implementation Options 

It is assumed that public school bus fleets will follow the BACT Schedule for School Bus 

Fleets as the preferred compliance option and private fleets will use the BACT 

Percentage Limit method for compliance, see Table 1 below. Public school bus fleets 

tend to have a distribution of older school buses while their private counterparts tend to 

have newer school bus fleets. For the purpose of estimating the cost of the proposed 

regulation on school bus fleets it is assumed that no fleet would utilize the Fleet 

Average method for compliance with the proposed regulation, although some school 

bus fleets with large numbers of alternative-fueled buses and relatively few older dieselfueled buses could find the fleet average compliance option less expensive. 
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Table 1: Compliance Options Used in School Bus Cost Methodology 

Compliance Deadline, as 

of January 1 

BACT Schedule, Model 

Year Buses Retrofitted 

by Compliance Deadline 

Percentage of Fleet 

Method, Percentage of 

Fleet Retrofitted by 

Compliance Date 

2011 2000 & newer 25% 

2012 1994 - 1999 50% 

2013 1987 - 1993 75% 

2014 Pre-1987 100% 

2. School Bus Population 

School buses are required to be inspected by the California Highway Patrol (CHP) 

every 13 months to insure that they are in good working order and meet all state and 

federal safety requirements. The CHP issues a CHP form 292 to indicate that a school 

bus is in compliance with all school bus safety requirements and the form is required to 

be posted within the bus to legally transport students from home to school. In 2006, the 

CHP created a one-time electronic database of all the vehicles in 2005 that received a 

CHP form 292. In the fall of 2006, in support of the 2008 Lower-Emission School Bus 

Program guidelines, the ARB conducted phone surveys of public school districts with 

the pre-1987 school bus in their fleet to verify data presented in the CHP database. 

This 2005 CHP database has been a very important tool for the ARB in determining 

funding allocations to local air districts for implementation of the Lower-Emission School 

Bus Program. From the 2005 CHP Safety Certification Database it has been estimated 

that in 2010 there will be approximately 15,500 diesel-fueled school buses that will be 

covered by the proposed regulation, of which nearly one-half are already compliant with 

the proposed regulation or will be in the near future due to available State or local 

funding. 

The population of school buses that are estimated to need either replacement or retrofit 

to comply with the proposed regulation can be found in Table 2. 
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Table 2: School Bus Population Needing Action to Comply with 

Proposed Regulation in 2010 

Model Year 

Group 

Applicable 

Retrofit Device 

Buses Requiring 

Retrofit 

Buses Requiring 

Replacement 

 Pubic Private Public Private 

Pre-1987 No Device 

Available 

0 0 1642* 0* 

1987 2-

Strokes 

No Device 

Available 

0 0 127* 15* 

1988 to 1993 

2-strokes 

No Device 

Available 

0 0 688 170 

1987 to 1993 

4-strokes 

Active DPF 658 151 0 0 

1994 to 2002 1⁄2 Active 1⁄2 

Passive 

394 2016 0 0 

2003 to 2006 Passive DPF 678 1773 0 0 

* No associated costs for replacement in 2017. 

3. Public Fleets 

Public school bus fleets are typically owned by public school districts, a Joint Powers 

Authority (JPA, formed by several public school districts), County Departments of 

Education, the California Department of Education, or by public charter schools. The 

vast majority of public school bus fleets are owned and operated by public school 

districts or JPA’s. Public school bus fleets typically operate their own maintenance 

shops able to perform most school bus maintenance operations. Public fleet size can 

vary between the rural one-bus school districts to the thousands of buses operated by 

Los Angeles Unified School District. As a result, the composition of the fleet can consist 

of many different fuel types, such as gasoline, diesel, natural gas, and propane in many 

different weight categories. Only diesel-fueled school buses over 14,000 GVWR are 

impacted by this proposed regulation. 

4. Private Fleets 

Private school bus fleets can be owned by companies, individuals, or private schools. 

Private fleets can have their own maintenance facilities or can utilize maintenance 

contracts with engine dealers or other maintenance facilities. Private school bus fleets 

can be as varied as their publicly owned counterparts, with fleets of one school bus to 

thousands of buses found in larger private school bus contractors. 

 
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5. Past and Current School Bus Retrofits and Replacements 

In the cost calculation for school buses affected by the proposed regulation it was 

assumed that all Proposition 1B funds have been fully expended. It is estimated that 

under the 2008 Lower-Emission School Bus Program that approximately 1,100 pre1987 model year school buses will be replaced and 3,500 Level-3 Diesel Particulate 

Filters (DPF) will be installed on middle-aged school buses. The estimated numbers of 

retrofit device installations from past and current funding sources are provided in Table 

3 below. It was assumed that past retrofit funding was allocated equally toward the 

retrofit of model years 1994 to 2002 based on each model year’s representation in the 

school bus population. Current funding with Proposition 1B funds was assumed to be 

allocated toward the retrofit of model year 1987 to 2006 bus engines based on that 

model years representation in the school bus population. Staff assumed that 90% of 

past retrofit funds have been allocated to public fleets and that 60% of Proposition 1B 

retrofit funds will be used by public school bus fleets, with the remaining retrofit funds 

going to private school bus fleets. It is important to note that retrofitted school buses 

with local funds have not been adequately captured. Therefore, the number of buses 

already retrofitted are slightly underestimated. 

Table 3: School Bus Population Already Retrofitted with VDECS in 2010 

MY Group Funding Source Public Private

1994 to 2002 State and Local 3304 367 

1987 to 2006 Prop 1B 2100* 1400* 

 *Anticipated, funds are currently being distributed. 

School buses that have been replaced or will be replaced with current funding have 

been removed from the population of school buses that still need action to comply with 

the proposed regulation. 

B. Costs 

1. School Bus Replacement Cost 

Currently, the Lower-Emission School Bus Program guidelines estimate the cost for a 

replacement school bus to be $140,000. The replacement school bus is assumed to be 

a transit-style diesel-fueled school bus, including tax. This same estimate is used as 

the cost associated with a school bus requiring replacement to be compliant with the 

proposed regulation. 

The proposed regulation would require school buses manufactured before April 1, 1977 

(pre-1977), before minimum federal safety standards, be removed from service by 

January 1, 2012. Currently, the Lower-Emission School Bus Program provides 

$140,000, without school district match, for the replacement of eligible pre-1977 public 

school buses. Therefore, no costs associated with the proposed regulation are 

attributed to the replacement of pre-1977 school buses under the proposed regulation. 
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In March of 2008 the ARB approved guideline revisions to the Lower-Emission School 

Bus Program where it was determined that 74 pre-1977 school buses were still in 

operation in public school bus fleets. All identified pre-1977 public school buses eligible 

for replacement are currently funded, with delivery of replacement buses expected by 

February 1, 2010. However, the existence of unidentified pre-1977 school buses in the 

public school bus fleet is probable into the near future. 

School buses that were manufactured before 1987, as well as those that utilize twostroke diesel engines are currently determined not to be retrofittable. Therefore, staff 

assumed these buses would be replaced in 2017. The service life of a school bus is 

estimated at 30 years, and by 2017 all 1987 and older buses are at or beyond their 

service life. Therefore, staff assumed that there is no associated regulatory cost for the 

replacement of pre-1987 model year school buses due to natural school bus fleet 

turnover. 

 

It is estimated from the 2005 CHP safety certification database that approximately 1,000 

two-stroke diesel fueled school buses model year 1987 to 1993 are still in use with 

California school bus fleets. These buses tend to have large seating capacity, some 

upwards of 90 students, which public school districts are reluctant to replace due to 

operational budgetary constraints. The estimated 1000, 1987 to 1993 two-stroke school 

buses will require replacement in 2017, in most cases before the end of their service 

life. The regulatory costs associated with school bus replacement are prorated to the 

remaining service life of the school bus. 

Using the described school bus replacement costs and the school bus population 

requiring replacement described in Table 2, it was calculated that the replacement cost 

to public fleets would be $8.8 million and the cost to private fleets would be $2.6 million, 

based on the cost value of money analysis in 2008 dollars. 

It is estimated that the remaining, 5670 school buses shown in Table 2, subject to the 

proposed regulation would meet the requirements by installing a VDECS as defined in 

the proposed regulation. 

2. School Bus Retrofit Costs 

It is estimated that a passive-style DPF cost about $11,000 and an active-style DPF will 

cost approximately $15,000. The only active-style VDECS currently available for school 

buses requires the installation of electrical infrastructure to allow for the DPF to be 

regenerated. Both active and passive-style DPFs have seen extensively use in the 

statewide school bus fleet. 

School buses with four-stroke engines were assumed to be retrofittable with active or 

passive-style DPFs according to Table 4 below. School buses with 2007 and newer 

model year engines are already equipped with particulate filters that meet the 

requirements of the proposed regulation. 
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Table 4: Applicable Retrofit Devices for Model Year Groups 

My Group Applicable Retrofit Device for 

Applicable MY Group 

Pre-1987 No Retrofit Device Available 

1987 to 1993 Active-Style DPF 

1994 to 2002 1⁄2 Active-Style 1⁄2 Passive-Style 

2003 to 2006 Passive-Style 

Using the described school bus retrofit costs and the school bus population needing 

retrofit to meet the requirements of the proposed regulation, it was calculated that the 

retrofit costs to public fleets would be $18 million and the cost to private fleets would be 

$39 million, based on the cost value of money analysis in 2008 dollars. 

3. Maintenance and Electrical Costs 

Public and private school bus fleets costs associated with filter maintenance and 

electrical costs are accounted for in Appendix I. Costs associated with reporting 

requirements to public or private school bus fleets are considered in Appendix I. The 

costs to public school districts that contract with private entities which would see 

additional operational costs due to the proposed regulation are not considered as a cost 

to the public school district but are attributed to the costs for private school bus fleets to 

comply with the proposed regulation.