CMAQ COST-EFFECTIVENESS THRESHOLD DOCUMENTATION 

FOR THE Kings County Association of Governments 2011 FTIP 

The Congestion Mitigation and Air Quality (CMAQ) program provides funding for 

transportation projects or programs that contribute to attainment or maintenance of the 

national ambient air quality standards. All San Joaquin Valley Metropolitan Planning 

Organizations (MPOs) adopted policies in 2007 for distributing at least 20 percent of the 

CMAQ funds to projects that meet a cost-effectiveness threshold for emission reductions 

beginning in Fiscal Year (FY) 2011. For the 2011 Federal Transportation Improvement 

Program (FTIP), this applies to years 2010-2011 through 2013-2014. The Kings County 

Association of Governments (KCAG) has made every effort to expend the minimum 20 

percent funding for cost-effective projects over the course of the FTIP and the attached 

spreadsheet demonstrates that KCAG has met the 20 percent funding goal. 

Project eligibility continues to be based on federal CMAQ guidance. MPOs can fund projects 

within local jurisdictions or contribute funding to the San Joaquin Valley Air Pollution 

Control District (SJVAPCD) grant incentive programs to meet the cost-effectiveness 

threshold requirements. Funds contributed to the SJVAPCD grant incentive programs will 

be assumed to have met the threshold, as that threshold is more stringent than the one 

established by the CMAQ cost-effectiveness policy. 

Emission benefits and cost-effectiveness calculations are based on the applicable pollutants 

for the region, including the components of ozone (nitrogen oxides [NOx] and reactive 

organic gases [ROG]) and particulate matter (PM). The “Methods to Find the CostEffectiveness of Funding Air Quality Projects” document developed by the Air Resources 

Board (ARB) is currently the appropriate methodology for calculating cost-effectiveness. 

Cost-effectiveness is expressed as dollars spent per pound of pollutant reduced (ROG + NOx

+ PM10). The cost-effectiveness threshold for the 2011 FTIP has been maintained at the 

previously recommended level of $30 per pound ($60,000 per ton) and is based on CMAQ 

dollars only, not total project cost. 

KCAG has identified, through existing programmed projects in those years or other selection 

methods, projects that qualify for the cost-effectiveness policy. KCAG revised our CMAQ 

project selection and scoring criteria to incorporate the 2007 CMAQ Cost effectiveness 

policy. The KCAG CMAQ scoring criteria was developed in consultation with the county, 

cities, and transit agencies in Kings County. The KCAG Technical Advisory Committee and 

Transportation Policy Committee approved the revised CMAQ scoring criteria as part of our 

ongoing CMAQ program.

As stated in the Cost-Effectiveness Policy, KCAG has agreed to post information related to 

the implementation of the cost-effectiveness CMAQ policy on its website. Attached is 

documentation that fulfills this requirement and demonstrates that KCAG has estimated the 

amount of funding in the 2011 FTIP necessary to meet the 20 percent cost-effectiveness goal 

and provided a summary of the CMAQ projects that meet the minimum cost-effectiveness 

threshold. 

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EXHIBIT A 

LOCAL COST-EFFECTIVENESS CMAQ POLICY

Summary

The Congestion Mitigation and Air Quality (CMAQ) program provides funding for transportation 

projects or programs that will contribute to attainment or maintenance of the national ambient air 

quality standards. The CMAQ program supports two important goals of the Department of 

Transportation: improving air quality and relieving congestion. SAFETEA-LU strengthens these 

goals by establishing priority consideration for cost-effective emission reduction and congestion 

mitigation activities. Exhibit A provides a summary of the policy for distributing at least 20% of 

the CMAQ funds to projects that meet a minimum cost-effectiveness threshold for emission 

reductions beginning in FY 2011. This policy will focus on achieving the most cost-effective 

emission reductions, while maintaining the flexibility to meet local needs. 

Estimates of Available Funds

Caltrans Programming provides apportionment estimates to all regions of the state. The FTIP is 

currently developed for a four-year programming cycle. With each new FTIP document, the 

Kings County Association of Governments (KCAG) will use the Caltrans estimate to develop the 

available CMAQ funds over the four-year period. KCAG commits to dedicate at least 20% of 

the total funding for the four-year period of each FTIP as part of the local cost-effectiveness 

CMAQ policy. For example, if a region is estimated to receive $20 million over a four year 

period, it would allocate 20%, or $4 million, of the CMAQ program funds to projects that meet a 

minimum cost-effectiveness. 

The CMAQ allocation formula is currently based on population, ozone status, and carbon 

monoxide status. Revisions to the formula or updates to estimates may result in changes to 

available funds for the KCAG CMAQ program; such updates will also affect the funds available 

for the local cost-effectiveness policy. CMAQ estimates may be revised at any time due to 

changes from Caltrans, Federal legislation, or classification of the air quality standards in the 

San Joaquin Valley or other air basins. 

Timeframe

The local cost-effectiveness CMAQ policy is scheduled to be implemented in FY 2011 because 

the 2007 and 2009 Federal Transportation Improvement Programs (FTIPs) had committed 

CMAQ funds through FY 2009 and FY 2010. In addition, the 2007 and 2009 CMAQ 

programming was assisting in implementing approved local RACM (Amended 2003 PM-10 

Plan) that are committed through 2010. 

The San Joaquin Valley Air Basin was classified as a serious ozone nonattainment area in 

2007, with an attainment deadline of 2013. As part of the 2007 Ozone plan, the Air District 

requested and received an “extreme” classification, which delays the attainment deadline until 

2023. Assuming no change to the current funding formula, the MPOs may continue to receive 

CMAQ funding through that time (2023). The local cost-effectiveness CMAQ policy may remain 

in effect through 2023; however, continuation of the policy will be reviewed on a regular basis 

per the Policy Review section below. 

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Local Allocation of Funds

The most current CMAQ guidance based on SAFETEA-LU was released by the Federal 

Highway Administration (FHWA) on October 31, 2008. The new legislation and guidance 

clarifies project eligibility, including advanced truck stop electrification systems and the purchase 

of diesel retrofits. SAFETEA-LU directs States and MPOs to give priority to diesel retrofits and 

to cost-effective congestion mitigation activities that provide air quality benefits. Though 

SAFETEA-LU establishes these investment priorities, it also retains State and local agencies' 

authority in project selection, meaning that changes to local procedures are not required by 

SAFETEA-LU. KCAG has previously developed procedures for allocating CMAQ funds; the 

local cost-effectiveness CMAQ policy will be incorporated into existing procedures. Prioritization 

and funding of projects will continue to be based on criteria developed by KCAG. 

 

Cost-Effectiveness Threshold

Cost-effectiveness is a key component of providing funding to projects that improve air quality 

and reduce congestion. The cost-effectiveness of an air quality project is based on the amount 

of pollution it eliminates for each dollar spent. Policies that focus on cost-effectiveness will 

result in the largest emission reductions for the lowest cost. Cost-effectiveness can be based 

on total project costs, including capital investments and operating costs. However, for the 

purposes of this policy, cost-effectiveness is based on CMAQ funding dollars only. 

In the state of California, the Air Resources Board (ARB) provides funding for air quality 

improvement projects through the Carl Moyer Program, which requires that heavy-duty vehicle 

projects meet a cost-effectiveness threshold. The San Joaquin Valley Air Pollution Control 

District (SJVAPCD) also uses cost-effectiveness thresholds for projects funded through the 

REMOVE II and Heavy-Duty Incentive Programs. However, at the time of the development of 

this policy there was no minimum cost-effectiveness established for the CMAQ program, and 

according to studies, the numbers varied widely across the country and by project type. 

The SJV MPOs in consultation with the interagency consultation (IAC) partners developed the 

minimum cost-effectiveness threshold at $30.00 per pound of pollutants removed. This policy 

will be reviewed at a later date and the threshold may change. While other criteria may be 

developed at the discretion of KCAG, all projects funded by the 20% of CMAQ dollars related to 

the local cost-effectiveness CMAQ policy must meet that minimum threshold. 

Expenditure of Funds under the Local Cost-Effectiveness Policy

KCAG will make every effort to expend the minimum 20% funding for the cost-effective projects 

as soon as possible beginning in FY 2011. However, recognizing that there are additional 

issues related to project delivery and financial constraint, KCAG will be allowed to meet the 20% 

funding over the course of the FTIP. For example, if the four-year estimate is $5 million, then 

the MPO must spend $1 million over the four year FTIP cycle. 

Project eligibility will continue to be based on federal CMAQ guidance. MPOs can continue to 

fund projects within the local jurisdictions, or contribute funding to the SJVAPCD air quality grant 

incentive programs to meet their cost-effectiveness threshold requirements. 

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Emissions Estimates

CMAQ projects must demonstrate an air quality benefit, and the expected emissions reductions 

will continue to be estimated with the most recent methodology. As of 2011, the ARB “Methods 

to Find the Cost-Effectiveness of Funding Air Quality Projects” released in 2005 is an 

appropriate methodology for quantitative analysis of cost-effectiveness. If necessary, 

interagency consultation will be used to reach agreement on the methodology for future 

estimates. Emission benefits and cost-effectiveness calculations will continue to be based on 

the applicable pollutants for the region, including nitrogen oxides (NOx), volatile organic 

compounds (VOC), and particulate matter (PM). 

Reporting Requirements

Tracking of the CMAQ policy will be achieved through several methods. MPOs must develop 

annual reports for Caltrans and FHWA that specify how CMAQ funds have been spent and the 

expected air quality benefits. This report is due to Caltrans by December 31 and to FHWA by 

the first day of February following the end of the previous Federal fiscal year (September 30) 

and covers all CMAQ obligations for that fiscal year. A copy of the CMAQ annual report will 

also be submitted to the Air District for information purposes. In addition to the required annual 

report, KCAG will post information related to the implementation of the local cost-effectiveness 

CMAQ policy on its website; this includes a summary of the projects selected for the minimum 

cost-effectiveness threshold that will be made available at the earliest opportunity. 

Policy Review

Due to changes in project costs and technology over time, the MPOs will revisit the minimum 

cost-effectiveness threshold, as well as policy feasibility, at least once every four years prior to 

FTIP development. A periodic review of the policy is necessary due to potential changes in 

federal transportation legislation, apportionments, and project eligibility. This policy will only 

affect 20% of the allocated federal CMAQ funds, and does not imply changes to other funding 

programs. Should future transportation legislation not include CMAQ funding, this policy will no 

longer be in effect. 

Example Schedule

The following is an example schedule of the policy implementation and updates. This 

information is only representative of the general approach and specific schedules will be 

developed in the future (annual reports will continue to be prepared and submitted as required). 

Summer 2007 Develop cost-effectiveness threshold through interagency consultation. 

Fall 2007 Identify funding available in the 2008 FTIP related to the 20% local costeffectiveness policy. 

Spring 2008 KCAG call for projects – Quantify, rank, and select CMAQ projects. 

Summer 2008 Approve 2008 FTIP. 

Summer 2011 Review policy feasibility. If policy is continued, proceed with following 

steps. 

Update cost-effectiveness threshold through interagency consultation. 

Fall 2011 Identify funding available in the 2012 FTIP related to the 20% local costeffectiveness policy. 

Spring 2012 KCAG call for projects – Quantify, rank, and select CMAQ projects. 

Summer 2012 Approve 2012 FTIP.