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BOARD MEETING DATE: June 11, 1999 AGENDA NO. 2

PROPOSAL:

Execute Contracts for AQIP Proposals Received During the Third and Fourth Quarters of 1998 and the First Quarter of 1999

SYNOPSIS:

Rule 2202 - On-Road Motor Vehicle Mitigation Options was adopted on December 8, 1995. One of the compliance strategies under Rule 2202 allows employers to invest in the AQIP. Monies received are placed in a restricted account to fund programs that result in equivalent emission reductions that would otherwise have been achieved by the participating employers. Staff evaluated the proposals received during the third and fourth quarters of 1998 and the First Quarter of 1999 and this action is to recommend three for funding. The amount available for these three quarters is $1,682,262.

COMMITTEE:

Mobile Source, May 28, 1999, Recommended for Approval

RECOMMENDED ACTION:

Authorize the Chairman to execute three respective contracts for a total amount not to exceed $1,620,153 from the AQIP Special Revenue Fund to obtain mobile source emission reductions with Ocean Air Environmental for an amount not to exceed $459,402; Earthguard Environmental Services not to exceed $94,352 and Ecology Auto Wrecking not to exceed $1,066, 399.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

The Rule 2202 AQIP allows subject employers to participate by electing to invest in an AQMD-administered restricted fund. Investment can be either $60 annually per employee reporting to the worksite during the 6:00 a.m. to 10:00 a.m. peak window, or $125 triennially per employee. The restricted monies are to be used by the AQMD to fund proposals that achieve mobile source emission reductions that would otherwise have been achieved by implementing a rideshare program. This Board letter contains a discussion regarding the disbursal of funds from the AQIP compliance option for the third quarter of 1998.

Upon registering under this option and submitting the designated investment amount, an employer is considered to be in compliance with the rule and there is no need for the employer to take further action to reduce mobile source emissions. The collected monies are used to fund alternative mobile source emission reduction strategies that reduce mobile source emissions at a more cost-effective rate which could potentially result in greater overall emission reductions.

The first quarter of 1999 submittal period ended on March 30, 1999 with 14 employers participating in the AQIP program. The total AQIP funds received during this period were $128,064, which includes both annual and triennial participants (See Attachment 1). Totals of $158,886 and $274,899 were received in the third and the fourth quarters of 1998, respectively. In addition, $165,961 is being carried forward from the previous quarters. Market Based Solutions withdrew their bid of $277,290 from the third quarter of 1997. Pick Your Part Auto-Wrecking withdrew their bid of $350,005 from the second quarter of 1998 and the City of Santa Fe Springs withdrew their bid of $150,000 from the fourth quarter of 1996. An interest of $177,157 was accrued during the fiscal year 1997-98. Therefore, the total amount available for this quarter is $1,682,262 (See Attachment 1, Table 4). Staff recommends that $1,620,153 be used to purchase emission reductions to satisfy the one-year and the three-year requirements for the three quarters.

Proposal Evaluation

During the re-bidding process of the third and the fourth quarters of 1998, ten proposals were received requesting funds ranging from $50,000 to $1,102,000. Three proposals were received during the first quarter of 1999 requesting funds ranging from $81,468 and $476,717. The project proposals received can be grouped in four categories: old-vehicle scrapping, transportation demand management, alternate fuel and other. Attachment 2 gives a summary of emission reduction targets and the emission reduction credit balance. The emission reduction targets for the third and fourth quarters of 1998 have been accounted for in the starting emission bank balance in Attachment 2 (Table 2). Attachment 3 gives a summary of each proposal received and funds requested. Attachment 4 provides an overall summary of the proposals by type, listing the proposals received, funds requested, total proposal costs, and emission reductions expected from each proposal.

All proposals submitted were reviewed and scored based on the information in the proposal as submitted to the AQMD, and according to the selection criteria described in the RFP. The evaluation panel consisted of five AQMD employees: three from Transportation Programs; one from Planning; and one from Technology Advancement; comprised of three Program Supervisors, one Air Quality Specialist and one Transportation Specialist. The panel consisted of one female and four males; one Asian/Pacific Islander, two Caucasian, and two Hispanic. Attachment 5 discusses the selection criteria, the scoring process, and the overall ratings for each proposal.

Attachment 5 provides a summary of the proposal rankings. While cost-effectiveness is the most heavily weighted criteria for determining ranking, the amount of funding available ultimately determines the recommendation. Ocean Air Environmental's option C and Earthguard Environmental Services' option B, and Ecology Auto Wrecking's Option C were the most cost-effective in regard to available funds and meeting the necessary emission reduction targets.

The following proposals are recommended for approval:

1. OceanAir Environmental

   Option A $459,402

   OceanAir Environmental proposes to generate Emission Reduction Credits by repowering a pusher tug boat, the Kahu, based in the Port of Long Beach with a low-emissions diesel engine. The cost-effectiveness of this proposal is $1.00 per pound.

2. Earthguard Environmental Services

   Option D $94,352

   Earthguard Environmental Services’ (EES) proposal represents the first time Emission Reduction Credits (ERCs) have been offered under the Air Quality Investment Program (AQIP). These ERCs are a result of a "Process Change" which resulted in emission reductions greater than those required by District Regulations. EES replaced its plastics and coating operations with one that utilized paper pulp and water-based dyes; in essence, creating a zero-emitting facility. The quantification of these ERCs were verified by the District according to the methodology contained in Regulation XIII, Rule 1306. The cost-effectiveness of this proposal is $1.10 per pound.

3. Ecology Auto Wrecking

   $1,066,399

   Ecology Auto Wrecking proposes to generate MSERCs through an old-vehicle scrapping program and provide triennial credits. Based on the information provided, the proposal is estimated to have a cost-effectiveness of $1.63 per pound.

Outreach

In accordance with the AQMD’s consulting and contracting policies, a public notice advertising the RFP and inviting bids was published in the following publications:

Additionally, potential bidders were identified through Los Angeles County MTA and Caltrans Directories of Certified Minority, Women, Disadvantaged and Disabled Veterans Business Enterprises; the Inland Area Opportunity Pages Ethnic/Women Business & Professional Directory; the AQMD’s own electronic listing of certified minority vendors; and AQMD Purchasing’s mailing list. Notice of the RFP was mailed to the Black and Latino Legislative Caucuses and various minority chambers of commerce and business associations; and were placed on the Internet at AQMD’s Web site [http://www.aqmd.gov, "Business and Job Opportunities" icon] and on AQMD’s 24-hour telephone message line for bidders (909) 396-2724.

A Bidders Conference was convened at the AQMD on April 8, 1999 to highlight the requirements of the proposals and to answer questions from the eight prospective bidders in attendance.

Resource Impact

Not applicable.

Attachments

1. AQIP Funding and Participation
2. Summary of Emission Reduction Targets and Credit Balances
3. Summary of AQIP Proposals Received
4. Summary of Proposals By Type
5. Summary of Proposal Ratings
6. Recommendation for Funding

ATTACHMENT 1

AQIP - 1^st Quarter 1999

TABLE 1

Funds Received (as of March 31, 1999)

TABLE 2

Annual Participation

TABLE 3

Triennial Participation

ATTACHMENT 1

(Continued)

TABLE 4

Total Available Funding

ATTACHMENT 2

TABLE 1

Emission Reduction Targets

(Pounds)

TABLE 2

Emission Reduction Credit Balances

(Pounds)

ATTACHMENT 3

Summary
Air Quality Investment Program
Proposals Receive

The following proposals were received in response to the AQIP Request for Proposals (RFP) on or before April 9 1999. The proposals are not listed by classification or rank.

Ecology Auto Wrecking proposes to generate MSERCs through an old-vehicle scrapping program and provide triennial credits. Based on the information provided, the proposal is estimated to have a cost-effectiveness range of $1.63 to $1.66 per pound. (Funded Option C: Ranked first among old-vehicle scrapping proposals.)

Pick Your Part Auto Wrecking proposes to generate MSERCs by eliminating pre-1982 vehicles through old-vehicle scrapping. The ten options have a cost-effectiveness range of $1.87 to $2.00. (Not funded: Ranked second among the old-vehicle scrapping proposals.)

Market-Based Solutions proposes to generate MSERCs through an old-vehicle scrapping program. This proposal offers two options with cost-effectiveness values of $2.86 and $3.44 per pound respectively. (Not funded: Ranked third among the old-vehicle scrapping proposals.)

This project proposes to reduce emissions by replacing seventeen gasoline mail delivery vehicles with electric minivans in Harbor City. The project is being leveraged with other funds. (Not funded: Ranked very low among all the proposals.)

City of Anaheim proposes to reduce emissions by replacing diesel buses with hybrid electric buses in the Anaheim Resort at a cost effectiveness of $7.40 per pound. (Not funded: Ranked very low among all the proposals.)

OceanAir Environmental proposes to generate Emission Reduction Credits by repowering pusher tug boats based in the Port of Long Beach with a low-emissions diesel engine. The cost-effectiveness of this proposal ranges from $1 to $1.15 per pound. (Funded Option A: Ranked highest among all the proposals and is the most cost-effective.)

County of Riverside Health Services Agency (HSA) proposes to reduce emissions by building two video conferencing centers, one at HSA and the other at the Riverside County Regional Medical Center in Moreno valley, thereby reducing trips between the two facilities. The cost-effectiveness of this proposal is $1,021.85 per pound. (Not funded: Ranked last among all the proposals.)

City of Compton proposes to reduce emissions by operating CNG buses in the City Transit System. The cost-effectiveness of this proposal is $3.19 per pound. (Not funded: Low cost-effectiveness.)

Earthguard Environmental Services proposes to provide District approved Emission Reduction Credits (ERCs) generated by "Process Change." The quantification of these ERCs were verified by the District according to the methodology contained in Regulation XIII, Rule 1306. The cost-effectiveness of this proposal ranges from $1.10 to $1.21 per pound. (Funded Option D: Ranked second among all the proposals.)

County of Riverside proposes to reduce emissions by retiring/displacing gasoline and diesel powered vehicles and by using alternate fueled vehicles for carpools. (Not funded: Ranked very low in cost-effectiveness)

ATTACHMENT 4

Proposal Summary (By Type)

ATTACHMENT 4

(Continued)

Proposal Summary (By Type)

ATTACHMENT 5

Summary

Proposal Ratings

All proposals submitted were reviewed and scored according to the selection criteria in the Board-approved RFP. The evaluation process consists of two steps: Step 1 - Technical, and Step 2 - Cost and Other Factors. Proposals scoring a minimum of 70 points for technical criteria are then scored for cost and other factors. Proposals that score below 70 points are not scored any further and would be scored zero for the total score. The resulting total and average scores are summarized in the table below.

ATTACHMENT 6

TABLE 1

Proposals Recommended for Funding
Anticipated Emission Reductions
(Pounds/Year)

TABLE 2

Proposals Recommended for Funding
Funding Request

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