Update on the American Rescue Plan (ARP) Strategic Plan Implementation area of Climate Action; consider approval of $130,000 in Climate Action ARP Funding for Yolo County Agricultural Equipment Replacement Program Implementation. (No general fund impact) (Lindbo/Wraithwall) (Est. Time: 7 min)

Update on ARP Expenditures

On September 28, 2021, the Board of Supervisors (Board) approved the initial American Rescue Plan (ARP) Expenditure Plan, which included $1,000,000 for projects under Climate Action within the Strategic Plan Implementation category. The Board subsequently reviewed and provided direction on certain climate action funding at the June 7, 2022, and the November 22, 2022, Board meetings. An additional climate action project, the Yolo Agricultural Equipment Replacement Program (Att. A.), is being brought forward for board review and approval at the May 23, 2023, meeting. The approved projects and the amount funded are presented in the table below. If the Agricultural Equipment Replacement Program is approved by the Board, the total amount committed will total $456,232, which leaves $543,768 to be committed to projects in the future. 
 

Project Title	Lead Entity	Amount Funded
Early Action Project: Carbon Farming Partnership	Center for Land Based Learning	$149,845
Early Action Project: Electrification Retrofit Rebate Outreach Program	Valley Clean Energy	$100,000
Climate Action and Adaptation Plan (CAAP) Support: Yolo Resource Conservation District Support for CAAP	Yolo Resource Conservation District	$45,287
Climate Action and Adaptation Plan (CAAP) Support: Community Engagement Package	Community Services	$31,100
Early Action Project: Agricultural Equipment Replacement Program*	Community Services	$130,000
	Total Allocated:	$456,232
	Total Remaining:	$543,768

*Pending approval by Board of Supervisors

At the Board's direction, staff have reserved ARP funds primarily to be used as match for state and federal grants unless there is an urgent need for funding. Staff have developed a Climate Early Action Funding and Implementation Strategy (reviewed by the Board at the July 26, 2022 meeting), which pairs Board-approved early action projects with grant opportunities, with the intention of leveraging Climate Action ARP funds as grant match. For non-match projects, County staff developed three criteria for recommending an early action priority for ARP funding (presented to the Board at the June 7, 2022 meeting): 1) the project is urgent and therefore requires an investment of funds now; or 2) the project is ready to implement or "shovel-ready"; or 3) allocation of the funds now will allow development of implementation actions for which the County can pursue grant funds in the near future. 

While the priority has been to reserve ARP funding to be used as grant match, there are several shovel-ready, Board-approved project concepts, such as the Inventory and Feasibility Study to Remove Fossil Fuels from County Operations, that could be funded in-full and implemented immediately if the Board wishes to mobilize ARP funds for these approved project concepts more quickly. Additionally, there are early action projects that have already received ARP funding for planning, such as the Carbon Farming Partnership and the Electrification Retrofit Rebate Outreach Program, that could benefit from the allocation of additional implementation funds. 

Background on Early Action Projects

From September 2021 to January 2022, Yolo County staff and the Yolo County Climate Action Commission (Commission) sought applications from the public for early action projects that could leverage this ARP funding to further Yolo County’s climate action and sustainability initiatives and support the goals in the 2020 emergency climate resolution. The effort focused on short-term actions Yolo County can undertake to reduce greenhouse gas emissions and sequester carbon prior to development of the updated Climate Action and Adaptation Plan (CAAP). In January 2022, the Commission approved early action eligibility and prioritization criteria, which Yolo County staff used to recommend rankings of the 21 early action proposals received by the Commission.

County staff used the approved prioritization criteria to recommend seven (7) early action priorities to the Climate Action Commission. The first six (6) of these projects were approved by the Board of Supervisors on June 7th, 2022. The Commission recommended that approval of the seventh project, the Yolo Agricultural Equipment Replacement Program (AER Program), be deferred to allow for additional research by staff and further review by the Commission. County staff discussed the project with the Board Subcommittee on Climate (Subcommittee) in July 2022 and February 2023, and requested input from the Yolo Solano Air Quality Management District (YSAQMD), the Yolo Resource Conservation District, the CAAP’s Natural and Working Lands Technical Advisory Committee (NWL TAC), and the Farm Bureau. An updated version of the AER Project Description (Attachment A) was brought before the Commission and approved in March 2023.

Overview of the Agricultural Equipment Replacement (AER) Program

The proposed early action project will expand the YSAQMD's Funding Agricultural Replacement Measures for Emissions Reductions (FARMER) Program or other programs accomplishing similar objectives by providing a dedicated funding stream for Yolo County farmers to replace gas-powered utility task vehicles (UTVs) with electric UTV equivalents (eUTVs). The FARMER Program provides funding to reduce greenhouse gas emissions from agricultural harvesting equipment, heavy-duty trucks, agricultural irrigation pump engines, tractors and/or other equipment used in agricultural operations. Funding programs such as FARMER often limit farmers to receiving funding to replace only two pieces of equipment, meaning that relatively lower-cost items such as UTVs are de-prioritized by farmers in favor of higher-cost replacements such as tractors. By providing supplemental, dedicated funding targeted at eUTVs—a request that YSAQMD has received from Yolo County farmers—the County can increase access to electric equipment without displacing funding from other critical funding programs.

The expansion will prioritize eUTV funding for Yolo County farmers who meet the following criteria: 1) Socially Disadvantaged Farmers and Ranchers and/or Priority Populations (as defined in Attachment A); 2) farming operations where equipment replacement would have the largest greenhouse gas (GHG) emission reduction impact. However, all farmers are eligible to apply, regardless of whether they meet any/all priority criteria. The action will focus on replacing UTVs with electric alternatives for which the YSAQMD can easily quantify greenhouse gas emission reduction. By providing a dedicated funding stream for eUTV replacement, the County can increase the fuel efficiency of on-farm equipment, reduce exhaust emissions, and provide additional opportunities for farmers to explore equipment replacement. The County will partner with the Yolo County Farm Bureau and the Yolo-Solano Air Quality Management District to conduct outreach to farmers, particularly those who might identify as Socially Disadvantaged Farmers and Ranchers, to inform them of this expanded opportunity. This program will help the County achieve its goal of reaching net-negative greenhouse gas emissions by 2030. If successful, it could serve as a replicable model for other counties.

Potential Funding and Replicability of the AER Program

The County spoke with YSAQMD to discuss funding structures for the AER Program. If the AER Program receives approval by the Board, YSAQMD will consider designating match funds (in conversations with YSAQMD staff, it is possible that the Air District could provide up to $75,000 in additional funding to support this program, pending approval by the YSAQMD board for eUTV replacements which includes in-kind administrative and outreach support.This will significantly multiply the impact of the County’s ARP contributions.

Staff recommends dedicating $130,000 of Climate Action ARP funds for the AER Program. County staff proposes offering $10,000 in replacement funding for standard selected/eligible applicants and $15,000 (or up to 100% of the vehicle replacement cost, whichever is lower) for selected/eligible applicants who are socially disadvantaged farmers and ranchers and/or priority populations. This would enable the County to complete approximately 10-15 projects depending on the grants awarded and YSAQMD match provided.

Based on conversations with YSAQMD, if the AER early action project implementation is successful, then YSAQMD may consider turning this into an annual program with dedicated funding. Without the County funding a test pilot, the agricultural community would not have this program available for several years. Utilizing ARP funds to support this program has the potential to position the County as a catalyst for a new, ongoing, emissions reduction program.

Benefits and Concerns of Funding eUTVs

The FARMER program limits funding to two pieces of equipment per operation which farmers will often use for higher cost, heavy-duty vehicles. Given conversations with YSAQMD staff, providing a dedicated funding stream for high-use eUTVs would serve as an expansion of existing equipment replacement programs by increasing funding opportunities for farmers to electrify a piece of equipment that is generally overlooked when applying for replacement funding.

YSAQMD staff have shared that they have received numerous requests for eUTV-specific funding programs in recent years. Electric UTVs have gained popularity due to their clean and efficient operation, as well as their versatility for use in a variety of outdoor and industrial applications. In comparison to traditional UTVs, electric UTVs offer several environmental and financial benefits. The reduced maintenance requirements and increased durability of electric UTVs reduces the need for frequent replacement of parts and disposal of used vehicles. Electric UTVs are quieter, have a longer lifespan, and are often found to be more cost-effective than gas-powered UTVs in the long run.

It is worth noting that during our outreach, County staff found that some Yolo County farmers do have concerns about the power of eUTVs as compared to their gas-powered counterparts. Farm Bureau staff also shared that it was important that this program be truly supplemental, and not take away funding from other equipment replacement programs.

Emissions Reduction Data of eUTV Replacements

UTVs are high-use pieces of equipment that are often fueled with gas-powered engines, meaning that electrification is capable of significant greenhouse gas (GHG) emissions reductions. Conversations with YSAQMD staff revealed that over the past five years, the average FARMER program UTV replacement project led to emissions reductions of 28.65 metric tons CO2 equivalent (CO2e) over the project lifespan. For reference, one metric ton of CO2e is equivalent to driving approximately 2,500 miles in the average car. If the program funds 10 UTV replacements, the estimated greenhouse gas emissions reduced would be equivalent to the emissions of driving around the world 28 times. These emissions reductions are substantially higher than many other funding categories, particularly considering the relatively low cost for each project. This supports eUTV replacement being a cost-effective way to maximize GHG reductions by project.

Cost and Performance of eUTVs

The upfront costs of eUTVs range from $8,000 to $25,000, with the most popular models ranging from $10,000 to $18,000 (based on staff conversations with local distributors and YSAQMD). While data is limited, electric UTV distributors note that eUTVs can be 25 to 50 percent less expensive to operate than gas-powered equivalents, as they do not require gas, oil changes, spark plugs, fuel filters, etc. If this program is approved, the County will consider working with YSAQMD to provide technical assistance to help farmers identify additional funding for charging infrastructure to support eUTV charging.

Next Steps

Pending review and approval by the Board, the next steps and estimated timeline for the Agricultural Equipment Retrofit program are as follows:

County staff closely collaborated with the Yolo Solano Air Quality Management District (YSAQMD) on the design of this program, and YSAQMD will be a critical partner in implementing this program if it is approved by the Board. This program design was approved by the Yolo County Climate Action Commission. Input was requested from the Board Subcommittee on Climate, the Climate Action and Adaptation Plan's Natural and Working Lands Technical Advisory Committee, the Yolo County Resource Conservation District, and the Yolo County Farm Bureau.