South Coast Air Quality Management District

Issue RFP to Solicit Projects for FY 2000-01 Carl Moyer Memorial Air Quality Standards Attainment Program Funding

SYNOPSIS:

The State’s FY 2000-01 Budget contains $50 million to continue the Carl Moyer program. The AQMD expects to receive approximately $19.745 million of this funding. The proposed RFP for up to $26.485 million (including $1.1 million from the CEC and the local match requirement) will provide additional incentives for low emission on- and off-road vehicles and equipment. The local match requirement is $5.64 million and is based on the first year Moyer program funding levels.

COMMITTEE:

Technology, December 1, 2000. Recommended for Approval

RECOMMENDED ACTION:

1. Submit a proposal to the ARB for the FY 2000-01 Carl Moyer Program funds.
   
   
2. Approve Resolution authorizing the Executive Officer to submit a proposal to the California Energy Commission (CEC) for funding to support alternative fuel infrastructure.
   
   
3. Approve issuance of RFP #P2001-26 in an amount not to exceed $26.485 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 emission 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 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 ARB 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 Board meeting, the Board adopted a "Children’s Air Quality Agenda" to pursue additional measures to protect children from the disproportionate impacts of air pollution.

Governor Davis and the Legislature have placed $50 million in ARB's FY 2000-01 budget to continue this incentive program for low-emission heavy-duty vehicles. Of those funds, the AQMD will receive approximately $19.745 million from ARB and $1.1 million from the CEC.

Proposal

Staff proposes that the AQMD release an RFP to solicit projects for FY 2000-01 Carl Moyer Program funding, at a cost not to exceed $26.485 million, for vehicle and equipment incentives, and fueling infrastructure support. Staff proposes to make up the $26.485 million total allocation with: (1) $19.745 million from ARB (2) $1.1 million from CEC; and (3) $5.64 million in local match funds. The Moyer Program Guidelines were modified this year specific to local match fund requirements. As a result local matching funds will be required on a 1:2 basis when the available statewide funding is $25 million or less, and in no case will the match funds be greater than the first year of the Moyer program.

Staff has requested $25 million from ARB, $5.25 million in excess of those allocated under the Carl Moyer guidelines. This additional amount was requested in anticipation of receiving any unused funds that are returned to the ARB from the FY 2000-01 program. Unless funding is requested, it cannot be awarded by ARB. The additional request will not require additional match funds, since the AQMD is paying the maximum match based on the first year Carl Moyer program.

The proposed RFP will solicit projects for on- and off-road vehicles and equipment, including refuse haulers, over-the-road trucks, transit and school buses, construction equipment, marine and port applications, auxiliary power units, and other vehicles and equipment. New engines, repowers and retrofits are allowed within the program. After consulting with the AQMD’s Carl Moyer Program Advisory Group, staff proposes that $16 - 24 million be allocated for on-road vehicles, $3 - 6 million for off-road vehicles/equipment and $1 - 2 million for infrastructure support. Should insufficient qualifying proposals be received in any project area, the AQMD will reserve the right to reallocate funds to another category or subcategory. The AQMD also reserves the right to offer partial funding to project applicants.

All proposals will be evaluated based on criteria set forth in this letter and the attached RFP. The AQMD will evaluate and/or verify information submitted by the applicant. At AQMD's discretion, consultants to the AQMD may conduct all or part of such evaluation and/or verification. As one of the principal criteria for awards is meeting cost effectiveness guidelines, information coming from the evaluation process may cause initial cost effectiveness rankings to change. The AQMD reserves the right to make adjustments to awards based on the subsequent verification of information as well as changes in cost effectiveness. Staff proposes that on-road projects continue to meet the 25% emission reductions for retrofit applications, but that off-road retrofit applications meet the new ARB guideline of 15% reductions. Funding for inter-district on-road vehicle applications will be considered on a case by case basis and in coordination with other air districts.

ARB requires that all projects meet a $13,000/ton cost-effectiveness for NOx reductions, and the emission reductions be a minimum of 15% for retrofit applications and repowers, and 30% for new engines. Staff proposes that alternative fuel proposals submitted under RFP #P2001-26 be given preference for funding. Further, staff proposes a more stringent criteria for cost-effectiveness in some sectors based on experiences derived from the previous years’ solicitation. Proposals received under each category will be ranked by their cost-effectiveness to achieve the maximum potential emission reduction. The table below describes the proposed funding allocations and maximum allowed cost-effectiveness requirements for each category and subcategory:
 

*Small fleets (20 vehicles or less, with GVW 14,000 lbs. and above), public sector, and diesel-to-diesel replacement (in order of preference) auxiliary power units (APU), inter-district alternative fuel vehicles.

**Construction, agricultural, ground support equipment, locomotive, auxiliary power units, etc.

Proposals for all categories, including infrastructure, will be due to the AQMD Headquarters in Diamond Bar no later than 5:00 p.m., Friday, April 20, 2001. This will provide ample time (3 months) for proposers to coordinate their plans with engine and chassis manufacturers, fuel providers, and others necessary to complete and submit proposals.

The staff expects to finalize the review and evaluation of the proposals and recommend for Board approval of awards on or before the July 2001 Governing Board meeting, contingent upon approval and awards of the required funds from ARB and CEC.

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

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 airports and associated transportation providers, construction and building industry, and port operations.

Benefits to AQMD

Projects funded under the Carl Moyer Program in FY 1998-99 resulted in NOx emissions reductions of over 400 tons per year. Projects funded in FY 1999-00 resulted in similar NOx reductions. It is anticipated that results from the current RFP will yield even larger reductions due to the magnitude of the awards. Additionally, this year the Carl Moyer program requires a 25% programmatic reduction in PM for areas designated as serious non-attainment for PM. Based on the types of projects funded in past years the AQMD can easily meet this requirement.

Resource Impacts

The AQMD is expected to receive, from the ARB and CEC, approximately $20.845 million of the available Carl Moyer funds for FY 2000-01. The Carl Moyer Program requires that the local air district provide matching funds for engine, vehicle and equipment incentives on a 1:2 basis but would be capped at the dollar amount of match funds required in FY 1998-1999. The local match funding may come from any project or program that meets the requirements of the Carl Moyer Program, including sources such as AQMD program funds, program administration support, and other qualified projects. Up to 15% of the match is allowed as in-kind costs. Therefore, up to $846,000 of the match funds required can be attributed to administrative support of the program.

Monies received from ARB and CEC 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, marine, locomotive engines and fueling infrastructure.

Sufficient funds are available from the AQMD program funds, creative settlements, the Air Quality Investment Program and other similar sources. Funds from these sources and programs support the objectives of the Carl Moyer Program.

Attachments

Attachment 1 – Resolution authorizing a proposal to the CEC for funding to support
alternative fuel infrastructures

/ / /