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Execute Contract to Expand AQMD Socioeconomic Assessment Program

SYNOPSIS: 

To assist AQMD staff in assessing potential economic impacts of plans, proposed rules and BACT determinations, staff is recommending developing additional assessment tools and enhancing existing models. AQMD uses the Regional Economic Models, Inc. (REMI) model to perform secondary economic impact assessments of air quality regulations and is recommending an upgrade to reflect geographic, social, and economic variations within each county for the 2001 AQMP up to $80,500. Funding is available in the FY1999-2000 budget. Staff is also recommending the release of an RFP, under a separate Board item, to develop and enhance existing socioeconomic analysis tools to conduct facility-based assessments, affordability analyses, and review of small business impacts. This item was reviewed by the Administrative Committee on May 12, 2000, and recommended for approval.

COMMITTEE: 

Administrative, May 12, 2000, Recommended for Approval

RECOMMENDED ACTION:

Authorize the Chairman to execute a contract with Regional Economic Models, Inc. in the amount not to exceed $80,500 for the upgrade of the REMI model to sub-county level.

Barry Wallerstein, D. Env.
Executive Officer

Background

Pursuant to the Board’s resolutions and state legislation, the AQMD has been performing socioeconomic assessments of its air quality regulations. The AQMD has used a number of tools and approaches in this endeavor. Over the years the AQMD has worked with the regulated community and the public to refine and strengthen its socioeconomic analysis. To this end, the assessments have increased in breadth and depth.

One of the key tools the staff relies upon is a socioeconomic model developed by Regional Economic Models, Inc. (REMI). The REMI model is an economic and demographic model for forecasting and policy simulations. The REMI model was developed in the early 1980s and has since been peer-reviewed extensively. The AQMD purchased the REMI model in 1990 and has used the model to assess secondary impacts of the AQMD air quality regulations on the local economy. The model has also been used by consultants, academicians, and other governmental agencies, including U.S. EPA and ARB.

In addition to the AQMD’s use of the REMI model, staff has been continuing to enhance its assessment of impacts on a facility basis, including small businesses. As an example, AQMD purchased from Dun & Bradstreet (D&B) data of employment, sales, and SIC codes on 27,300 companies in 1998. The data has been used to support permit-streamlining activities and to analyze economic impacts of individual rules and BACT determinations. AQMD is currently working with D&B to update the information on a regular basis.

Proposal

Staff is recommending an upgrade to the REMI model to reflect geographic, social, and economic variations within each county for the 2001 AQMP. The AQMD has been using the REMI model at the county level to assess secondary impacts of air quality regulations. Upgrading the REMI model to the sub-county level will better align job impacts with the cost and health benefit assessments in the AQMP. This upgrade will complement other work that is being developed for the 2001 AQMP.

In an effort to further refine the AQMD socioeconomic analysis, staff is also recommending the release of an RFP, under a separate Board item, to expand the available socioeconomic analysis tools to include a framework for facility-based analysis (including affordability and business location) and post-rule retroactive analysis in the fiscal year 2000-2001. The framework will focus on those industries that have a higher concentration of small businesses.

Sole Source Justification for the REMI Model Contract

Section II, Step 3 (C) of the Consultant Selection Policy and Procedure identifies four provisions under which a sole-source award may be justified: (1) cost to prepare documents exceeds cost for consultant, (2) delay would result in the endangerment of public health, (3) services are only available from sole source, and (4) other circumstances exist identifying sole source as in the best interests of the AQMD. This request for a sole-source award is made under provision (3).

The proposed upgrade to the REMI model requires extensive experience with the REMI model, knowledge of the REMI framework and various economic databases, and understanding of the programming codes in the REMI model. REMI is the only vendor of the REMI model and has exclusive rights to its framework and programming codes.

Resource Impacts

The cost of the proposed REMI upgrade is $80,500 and the funding is available under Socioeconomic Data Acquisition in the FY1999-00 Budget for the Office of Planning, Rule Development and Area Sources.

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