South Coast Air Quality Management District

Issue RFP to Solicit Projects for FY 2000-01 Remaining Funds and FY 2001-02 Carl Moyer Memorial Air Quality Standards Attainment Program Funding

SYNOPSIS:

The State’s FY 2001-02 Budget contains $16 million to continue the Carl Moyer program. The AQMD has received approximately $7 million of this funding. This FY 2001-02 allocation as well as unallocated funds from the FY 2000-01 Moyer Program totaling $4.5 million are included in the RFP. The proposed RFP for up to $11.5 million will provide incentives for low emission on- and off-road vehicles and equipment.

COMMITTEE:

Technology, December 7, 2001, Recommended for Approval

RECOMMENDED ACTION:

Approve issuance of RFP #P2002-22, in an amount not to exceed $11.5 million, to solicit projects for Carl Moyer Memorial Air Quality Standards Attainment Program Funding.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

The Federal Clean Air Act Amendments of 1990 classified the South Coast Air Basin as "extreme" nonattainment for ozone, and "serious" nonattainment for fine particulate matter (PM₁₀) and carbon monoxide. With an increasing number of trucks and other heavy-duty vehicles and a multiplying of vehicle miles traveled (VMT), the need for reducing emissions from these sources is critically important to meet clean air goals.

The Basin includes 39% of the state’s Class 7 and 8 trucks, and accounts for 43% of the state’s VMT for these vehicles. Among the State’s eight largest air districts, the South Coast accounts for 36.8% of the heavy-duty engine NOx emissions inventory, and represents 50.5% of the exposed population.

The majority of heavy-duty vehicles in the Basin are powered by diesel engines, which contribute significantly to the Basin’s emissions of NOx and particulates. The AQMD has long recognized the adverse air quality and health impacts of diesel exhaust. The AQMD’s Environmental Justice Initiative No. 7 targets the reduction of diesel exhaust emissions in the Basin. The Board reaffirmed its position supporting the purchase and use of alternative fuel vehicles in transit and other fleets at its October 1998 meeting. In September 1998, the CARB approved its Science Review Panel's recommendation and listed diesel particulate as a toxic air contaminant based on its potential human cancer risk. At the January 1999 meeting, the Board adopted a "Children’s Air Quality Agenda" to pursue additional measures to protect children from the disproportionate impacts of air pollution. The results of the MATES II study, published by the AQMD in March 2000, confirmed the significant contributions of diesel exhaust to the Basin's air pollution. The Carl Moyer program together with a series of fleet rules adopted by the Board in 2000, has provided the necessary incentives to diesel vehicle operators to purchase cleaner burning vehicles and reduce public exposure to toxic and criteria pollutant emissions.

Governor Davis and the Legislature have placed $16 million in CARB's FY 2001-02 Budget to continue the Moyer program for low-emission heavy-duty vehicles. A new requirement has been added to the distribution of funds pursuant to AB 1390 (Firebaugh). Each air district must spend at least 50% of their allotted funds to directly benefit areas that are most significantly impacted by air pollution, including low income communities and communities of color. The AQMD is allocating 50% of the total $11.5 million for areas of disproportionate impact. Each district will develop the distribution guidelines for its own area.

Proposal

Staff proposes that the AQMD release an RFP to solicit projects for the remaining $4.5 million of FY 2000-01 Moyer Program funds, and for $7 million for the FY 2001-02 Moyer Program funds. The RFP is for an amount not to exceed $11.5 million, for vehicle and equipment incentives. The Moyer Program requires local match funds on a 1:2 basis; the AQMD’s required match would be $3.5 million. Infrastructure projects funded with penalty monies during this last year will be used to meet the $3.5 million match-funding requirement.

The proposed RFP will solicit projects for vehicles and equipment, including refuse haulers, on-road trucks, transit buses, marine and port applications, construction and other vehicles and equipment. New engines and retrofits are allowed within the program. Diesel to diesel repowers will only be funded in the off-road sector, provided no feasible alternative fuel engine is available. After consulting with the AQMD’s Carl Moyer Program Advisory Group, staff is proposing to allocate $5 million for on-road vehicles, $2 million for transit buses, and $4.5 million for off-road vehicles. A minimum of $1 million for marine vessels and $2 million for construction equipment has been established in the off-road category with the remaining $1.5 million to be allocated based on applications received. Should insufficient qualifying proposals be received in any project area, the AQMD reserves the right to reallocate funds to another category or subcategory.

CARB requires that all projects meet a $13,000/ton cost-effectiveness for NOx reductions, and the emission reductions be a minimum of 15 percent for repower or retrofit applications and 30 percent for new engines. Additionally, CARB requires that AQMD reduce PM₁₀ by 25 percent on an overall program basis. Staff proposes that only alternative fuel proposals be eligible except for the off-road category in RFP #P2002-22. Further, staff proposes a more stringent criteria for cost-effectiveness in some sectors based on experiences derived from past solicitations. Proposals received under each category will be ranked by their cost-effectiveness to achieve the maximum potential emission reductions. The table below describes the proposed funding allocations and maximum allowed cost-effectiveness requirements for each category and subcategory:
 

Proposals for all categories will be due no later than 5:00 p.m., Friday, March 29, 2002. This will provide sufficient time for proposers to coordinate their plans with engine and chassis manufacturers, fuel providers, and others necessary to complete and submit proposals.

Staff expects to finalize the review and evaluation of the proposals and recommend for Board approval of awards on or before the June 2002 Governing Board meeting, contingent upon approval and awards of the required funds from CARB.

Disproportionate Impacts

AB 1390 (Firebaugh) requires that for the FY 2001-02 Moyer Program, at least 50% of the State funds be spent in areas that are most significantly impacted by air pollution including low income communities or communities of color or both. CARB has issued broad goals and left the details of how to implement this requirement to each air agency.

Staff is recommending the following method to meet the new requirements.

1. All projects must qualify for the Carl Moyer program by meeting the cost effectiveness limits established in the RFP.
   
   
2. All projects will be evaluated according to the following criteria to qualify for disproportionate impact funding:
   
   
   1. Poverty Level: All projects in areas where at least 10% of the population falls below the Federal poverty level based on the year 2000 census data, will be eligible to be included in this category, and
       
   2. PM Exposure: All projects in areas with the highest 15% of PM concentration will be eligible to be ranked in this category. The highest 15% of PM concentration is 46 micrograms per cubic meter and above, on an annual average, or
       
   3. Air Toxics Exposure: All projects in areas with a cancer risk of 1,000 in a million and above (based on Mates II estimates) will be eligible to be ranked in this category.

After the presentation of the selection methodology for projects in the disproportionately impacted areas at the Technology Committee meeting on December 7, 2001, the minimum requirement for cancer risk was lowered from 1,139 to 1,000 in a million to cover larger impacted areas.

Data for the poverty level and PM and toxic exposures were obtained from the U.S. Census, the 1998 AQMD monitoring data and Mates II study, respectively.

3. Fifty percent of the $11.5 million for this RFP will be allocated among proposals located in disproportionately impacted areas. If available funding is not exhausted with the outlined methodology, then AQMD staff will return to the Governing Board for direction. If funding requests exceed the available funding levels, then all qualified projects will be ranked for poverty level, PM and toxic exposures. The maximum score will be comprised of 40% for poverty level, and 30% each for PM and toxic exposures.

All the proposals not awarded under the fifty percent disproportionate impact funding will then be ranked according to cost effectiveness, with the most cost effective project funded first and then in descending order for each funding category until the remainder of the Moyer Funds are exhausted.

Outreach

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

1.	Angeles Mesa Wave, The	11.	Inland Valley Daily Bulletin	21.	Palm Springs Desert Sun
2.	Antelope Valley Press	12.	Korea Central Daily	22.	Philippine News
3.	Black Voice News	13.	La Opinion	23.	Precinct Reporter
4.	Central News Wave	14	La Prensa Hispana	24.	Rafu Shimpo
5.	Chinese Daily News	15.	La Voz	25.	Press Enterprise
6.	Eastern Group Publications	16.	Los Angeles Daily News	26.	San Bernardino Sun
7.	El Chicano	17.	Los Angeles Sentinel	27.	Santa Clarita Signal
8	El Informador	18.	Los Angeles Times	28.	The Wave
9.	Excelsior, The	19.	M/W/DVBE Source	29.	State of California Contracts
10.	Inland Empire Hispanic News	20.	Orange County Register		Register

Additionally, potential bidders will be notified from the Los Angeles County MTA and Cal Trans Directories of Certified Minority, Women, Disadvantaged and Disabled Veterans Business Enterprises; the Inland Area Opportunity Pages Ethnic/Women Business & Professional Directory; AQMD’s own electronic listing of certified minority vendors; and AQMD Purchasing’s mailing list. Notice of the RFP will be mailed to the Black and Latino Legislative Caucuses and various minority chambers of commerce and business associations; and placed on the Internet at AQMD’s Web site [http://www.aqmd.gov, "Business and Job Opportunities"] and AQMD’s bidder’s 24-hour telephone message line (909) 396-2724. Staff will also conduct outreach efforts to specific sectors, such as transportation providers, construction and building industry, and port operations.

Benefits to AQMD

Projects funded under the Carl Moyer Program in the first two years resulted in NOx emissions reductions of over 1000 tons per year. Projects funded to date with FY 2000-01 funds will result in 718 tons per year of NOx and 17 tons per year of PM. These totals will increase with the awarding of the remaining $4.5 million that will be a part of this RFP. It is anticipated that results from the current RFP will yield similar reductions. The AQMD Moyer program is required to obtain a 25% programmatic reduction in PM. In FY 2000-01, AQMD’s total programmatic reduction of PM was 89%. Staff expects that we can meet the 25% requirement for this RFP.

Resource Impacts

The AQMD is expected to receive $7 million of the available Carl Moyer funds for FY 2001-02 from CARB. The Carl Moyer Program requires that the local air district provide matching funds for engine, vehicle and equipment incentives on a 1:2 basis. The AQMD local match local match requirement is $3.5 million in funding from AQMD program funds, program administration support, and other qualified projects. Match funds can be used to fund projects that would meet the requirements of the Moyer program, but are approved and funded under some other program. The penalty funds used this year to fund infrastructure projects will be used to meet AQMD’s match requirements.

Monies received from CARB will be placed in the Carl Moyer Program Fund. Funds from this program are restricted to be used as incentives to private companies or public agencies operating heavy-duty engines in California to cover an incremental portion of the cost of cleaner on-road, off-road and marine engines.

Attachment

RFP #P2002-22 - Carl Moyer Memorial Air Quality Standards Attainment Program Funding
Appendix 1 - On-Road Heavy-Duty Vehicles
Appendix 2 - Off-Road Heavy-Duty Vehicles
Appendix 3 - Marine Vessels
Appendix 4 - Forklifts
Appendix 5 - Auxiliary Power Units for Reducing Idling Emissions from Heavy-Duty Vehicles

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