South Coast Air Quality Management District

Authorize Additional Funding from AES Settlement Fund for Installation of Microturbine Equipment

SYNOPSIS: 

At the April 20 and May 11, 2001 meetings, the Board approved the expenditure of $2,060,000 to purchase and install microturbine generators from the AES Settlement Fund. An additional $100,000 from this fund is required to cover higher installation costs, due to a requirement to pay prevailing wages on public works projects and other reasons.

COMMITTEE: 

Administrative, August 16, 2001, Recommended for Approval

RECOMMENDED ACTION:

1. Authorize an additional $100,000 for the installation of microturbine generators using the accrued interest in the AES Settlement Fund.
   
   
2. Authorize the Executive Officer to increase the amount of the contract with C-4, Inc. for an amount not to exceed $163,000 for the installation of the microturbines using: a) up to $100,000 of additional funding from the AES Settlement Fund; and b) up to $63,000 in unused funds previously authorized for heat exchangers, silencers and other equipment associated with the microturbines.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

At the April 20, 2001 and May 11, 2001 meetings, the Governing Board approved the expenditure of up to $2,060,000 from the AES Settlement Fund for the purchase and installation of microturbine generators within the Counties of Orange, Riverside, and San Bernardino. Installation of 31 Capstone microturbines with a combined power rating of 1440 kW has begun at 17 sites within the three counties.

The Executive Officer contracted with C-4, Inc. to install microturbines at 11 of the sites. Staff has learned that the actual installation costs will be significantly higher than originally estimated, for several reasons: 1) a requirement to pay prevailing wage rates on public works projects; and 2) higher overall installation costs, which include permitting, engineering, mechanical, electrical and plumbing costs.

California Labor Code Part 7, Chapter 1, Article 2, Sections 1770, 1773 and 1773.1 provides for all workers employed on public works projects to be compensated at not less than the general prevailing rate of per diem wages. Public works projects in general consist of construction, alteration, demolition, or repair work done under contract and paid for in whole or part out of public funds. Staff has determined that installation of microturbines using funds from AES Settlement Fund is a public works project.

The existing contract for $319,000 with C-4, Inc. does not include sufficient allowance to pay for the all of the increased costs.

Part of the $2,060,000 previously authorized by the Board was to be spent for heat exchangers, external silencers, software and other equipment associated with the microturbines. These expenses will now be about $63,000 less than expected. Therefore, these funds would be available for other installation costs that would be part of the C-4, Inc. contract.

Proposal

The total installation costs are expected to be about $482,000, an increase of $163,000 over the existing $319,000 contract. Approximately $63,000 of previously authorized funding is available, as previously discussed, leaving a $100,000 shortfall. Staff requests an additional $100,000 of funding for the installation of microturbines, using interest that has accrued from the AES Settlement fund, to cover the shortfall.

With the additional funding and unused equipment funds, the Executive Officer will amend the current contract with C-4, Inc. to provide additional funds needed for the installation of the microturbines.

Resource Impacts

AQMD funding for this additional installation cost shall not exceed $100,000, which is available in the AES Settlement Fund as accrued interest.

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