BOARD MEETING DATE: August 1, 2003
AGENDA NO. 5

Execute Contracts for AQIP Proposals Received During Fourth Quarter of 2002

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 fourth quarter of 2002 and recommends projects for funding. The amount available for this quarter is $2,114,833.

COMMITTEE:

Mobile Source, July 25, 2003

RECOMMENDED ACTION:

1. Authorize the Chairman to execute the following contracts for a total amount not to exceed $1,620,000 from the AQIP Special Revenue Fund.

1. A contract with OceanAir Environmental to repower four pre-1988 crane engines with Model Year 2003 compliant low-emission engines, upgrade three model EMD 645E locomotive engines (switcher, 150 H.P. each) in an amount not to exceed $600,000.
2. A contract with Super Shuttle to purchase 20 E-350 Ford CNG vans to be used in service to and from major airports in the South Coast Air Quality Management District’s jurisdiction in an amount not to exceed $220,000.
3. A contract with Pick Your Part Auto Wrecking to generate emission reductions by scrapping old vehicles under Regulation XVI in an amount not to exceed $800,000.

2. Approve increasing the maximum allowable assistance level for purchase of natural gas vehicles for taxicab services to a maximum of $16,000 per vehicle for the remaining balance of $340,450 contracted with Cabco Yellow Cab Company and Enterprise Finance, Inc., originally approved by the Board on February 1, 2002.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

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 fourth quarter of 2002.

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 fourth quarter of the 2002 participation period ended on September 30, 2002 with 68 employers participating in the AQIP program. The total amount of AQIP funds received during this period was $1,294,295, which includes both annual and triennial participants. In addition, $467,104 is being carried forward from the previous quarter. At its May 2, 2003 meeting, the Board allocated $453,500 from the funds towards the exchange of 1,500 lawn mowers (gasoline to electric) in Orange and Riverside counties. In addition, $806,934 is available from three withdrawn projects (Michael Reese Enterprises for $400,000; Mobil Check Point Services for $400,000; and California Highway Patrol for $6,934). Therefore the total amount available for this quarter is $2,114,833 (see Attachment 1, Table 4). Staff recommends that $1,620,000 be used to purchase emission reductions to satisfy the target for the quarter.

The Board, at its meeting on December 21, 2001, authorized the Executive Officer to execute contracts, using AQIP money with six taxicab services in an amount not to exceed $2,948,787 to assist the purchase of natural gas vehicles. This amount was adjusted to $2,884,098 by the Board at its February 1, 2002 meeting. The maximum funding assistance was limited to $10,674 per vehicle. Due to the shortage of the specific models $340,450 of these funds remain unused in contracts with Cabco Yellow Cab Company (Contract# 02235; $159,991 remaining) and Enterprise Finance, Inc., (Contract# 02302; $181,459 remaining). Staff believes that an increase in the funding assistance level amounting up to a maximum of $16,000 per vehicle for the available balance of $340,450, will enable the deployment of newer model long range natural gas vehicles.

Proposal Evaluation

During the bidding process of the fourth quarter of 2002, 17 proposals were received requesting funds ranging from $33,470 to $1,977,150. Attachment 2 gives a summary of emission reduction targets and the emission reduction credit balance. 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 four-member evaluation panel comprised of one Engineering and Compliance Senior Manager, one Transportation Programs Manager, one Technology Advancement Program Manager and one Air Quality Specialist, of which one is female and three are male and relative to ethnicity; one Asian-Indian and three Caucasian. Attachment 5 discusses the selection criteria and the overall ratings for each proposal.

Selection Criteria

Attachment 5 provides a summary of the proposal rankings. After all the proposals were scored and ranked, the evaluation panel proceeded to select projects from the highest scoring proposals with the specific goal of meeting the emission reduction targets for VOC, NOx, and CO. Staff selected projects first to meet the one-year Nox target followed by VOC and then CO targets, respectively. As part of the selection process, the panel based its selection on the scoring criteria outlined in the RFP.

The evaluation panel was able to select projects from the highest ranking proposals to meet the Nox, VOC and CO targets. Remaining funds were used to purchase additional emission reductions from alternative fuel shuttle service to the airport since this project would reduce commuter trips consistent with the rule objectives.

According to AQMD’s Procurement Policy and Paragraph E of Section VI of RFP #9596-23 the Executive Officer or the Governing Board may award contracts to proposers other than the proposer receiving the highest rating in the event the Executive Officer determines that another proposer from among those technically qualified would provide the best value to the AQMD considering cost and technical factors. The decisions in the following two paragraphs reflect this principle, and are needed to provide the best value.

Projects with gasoline-powered outboards were not recommended due to the lack of set protocols for the generation of emission reductions. In addition, the smaller outboards are not readily conducive to the installation of GPS units and generate negative Nox emission reductions.

Lastly, given the need to achieve further emission reductions as early as possible, project proposals that offer existing stationary or mobile source emission reduction credits (ERC) are given a lower priority. However, employers subject to Rule 2202 continue to have the option to purchase such ERCs as allowed under Rule 2202.

The following proposals are recommended for approval (as detailed in Attachment 6):
 

1.	OceanAir Environmental	Option 2     $600,000 County: Los Angeles
	OceanAir Environmental offers three options to generate emission reductions. Option 2 consists of repowering of 4 pre 1988 Cranes; upgrading of 3 locomotive engines; repowering of 3 2-stroke gas outboards with 4-stroke engines at a total cost-effectiveness of $0.61 per pound. (Option 2 is being recommended for funding with the exception of the outboard marine vessels. Deletion of the outboards increases the cost-effectiveness to $0.66 per pound. Options 1 & 3 are not being recommended because they include some projects of Option 2 which is being recommended for funding.)
2.	Super Shuttle	$220,000 County: All
	Super Shuttle proposes to generate emission reductions by purchasing 40 E-350 Ford CNG Vans to be used in service to and from the major airports in the South Coast Air Quality Management District’s region. The requested funding amount is $440,000 and the cost-effectiveness of this proposal is $2.57 per pound. (Recommendation made to fund the purchase of 20 vans. These shuttles operate on alternative fuel, to and from the airports, and reduce single occupancy vehicle trips.)
3.	Pick Your Part Auto Wrecking	Option 2     $800,000 County: All
	Pick Your Part Auto Wrecking proposes to generate emission reductions by scrapping old vehicles under Regulation XVI. The cost-effectiveness of the two options in this proposal is $2.30 and $2.34 per pound respectively. (Option 2 is being recommended as this project generates emission reductions to meet the targets for all three pollutants.)

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:
 

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

Additionally, potential bidders were identified from the 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 placed on the Internet at AQMD’s Web site [http://www.aqmd.gov, "Business and Job Opportunities" icon] and AQMD’s 24-hour telephone message line for bidders (909) 396-2724.

A Bidders’ Conference was convened at the AQMD on December 12, 2002 to highlight the requirements of the proposals and to answer questions from the 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 – 4th Quarter 2002

TABLE 1

Funds Received (as of September 30, 2002)

TABLE 2

Annual Participation

TABLE 3

Triennial Participation

ATTACHMENT 1

(Continued)

Total Available Funding
 

ATTACHMENT 2

TABLE 1

Emission Reduction Targets
(Pounds)

TABLE 2

Emission Reduction Credit Balances (through CY 2013)
(Pounds)
 

TABLE 2 (Continued)

Emission Reduction Credit Balances (through CY 2013)
(Pounds)
 

ATTACHMENT 3

Summary
Air Quality Investment Program
Proposals Received

The following proposals were received in response to the AQIP Request for Proposals (RFP) on or before January 31, 2003. The proposals are listed alphabetically, not by classification or rank.
 

1.	C. W. Poss, Inc.	Option 1     $380,655 Option 2     $263,770 County: Orange
	C. W. Poss, Inc., proposes to generate emission reductions over 10 years by re-powering off-road diesel engines used in 3 wheel type scrapers under Option 1 and 2 wheel type scrapers under Option 2. The cost-effectiveness of this proposal is $1.06 and $1.10 per pound respectively. (Not recommended for funding due to high cost-effectiveness and low ranking compared to other projects.)
2.	California Street Maintenance	$400,000 County: All
	California Street Maintenance of Gardena proposes to generate emission reductions by replacing 4 diesel street sweepers with new lower-emission LPG sweepers and repowering 4 diesel street sweepers with new lower-emission LPG sweepers. The requested amount of funding was $400,000. The cost-effectiveness of this proposal is $1.11 per pound. (This project was not selected because it does not generate sufficient VOC or CO reductions)
3.	Cero View	$232,400 County: Orange
	Cero View proposes to generate emission reductions over 5 years by using a GPS truck tracking and routing system at the Ports of Long Beach and Los Angeles at a cost-effectiveness of $8.39 per pound. (Not recommended for funding due to high cost-effectiveness and low ranking compared to other projects.)
4.	Earthguard Environmental Services	$1,200,000 County: Los Angeles
	Earthguard Environmental Services proposes to provide 246 pounds of AQMD-approved VOC Emission Reduction Credits (ERCs) from stationary sources generated by "Process Change." The quantification of these ERCs was verified by the AQMD according to the methodology contained in Regulation XIII, Rule 1306. These ERCs are offered in perpetuity and the cost-effectiveness of this proposal calculated over a 15 year period is $0.89 per pound. (This project was not selected because it does not generate Nox or CO reductions and the direction to place priority to projects that offer new emission reductions.)
5.	Ebensteiner	Option 1     $344,000 Option 2     $352,968 County: Los Angeles
	Ebensteiner proposes to generate emission reductions by re-powering diesel engines on 4 CAT 651B wheel type scrapers under both options. The cost-effectiveness of these proposals is $1.06 and $1.09 per pound respectively. (Not recommended for funding due to high cost-effectiveness and low ranking compared to other projects.)
6.	Jagur Tractor	$261,742 County: Los Angeles
	Jagur Tractor proposes to generate emission reductions by re-powering 2 diesel powered CAT 657E dual engine wheel type scrapers. The cost-effectiveness of this proposal is $1.17 per pound. (Not recommended for funding due to high cost-effectiveness and low ranking compared to other projects.)
7.	Nationwide Environmental Services	$300,000 County: All
	Nationwide Environmental Services of Norwalk proposes to generate emission reductions by replacing 5 diesel street sweepers with new lower-emission CNG sweepers. The cost-effectiveness of this proposal is $1.16 per pound. (This proposal was withdrawn.)
8.	OceanAir Environmental	Option 1     $630,000 Option 2     $630,000 Option 3  $1,260,000 County: Los Angeles
	OceanAir Environmental offers three options to generate emission reductions. Option 1 consists of repowering 2 two-stroke gas outboards w/ 4-stroke; replace 2 pre 1988 yard hostlers at Long Beach port with low emission; replacement of 10 pre 1988 fork lifts (w/ low emission) port side at a cost-effectiveness of $1.09 per pound; Option 2 consists of repowering of 4 pre 1988 Cranes; upgrading of 3 locomotive engines; repowering of 3 2-stroke gas outboards with 4-stroke engines at a cost-effectiveness of $0.61 per pound; Option 3 consists of repowering of 2 two-stroke gas outboards w/ 4-stroke; replace 2 pre 1988 yard hostlers at Long Beach port with low emission; replacement of 10 pre 1988 fork lifts (w/ low emission) port side; repowering of 4 pre 1988 Cranes; upgrading of 3 locomotive engines; repowering of 3 2-stroke gas outboards with 4-stroke engines. (Option 2 is being recommended for funding with the exception of the outboards due to its high score and low cost-effectiveness. Options 1 & 3 are not being recommended because they include some projects of Option 2 which is being recommended for funding.)
9.	Peed Equipment	$261,742 County: All
	Peed Equipment proposes to generate emission reductions over 7 years by re-powering off-road diesel engines used in 2 CAT 657E dual engine wheel type scrapers. The cost-effectiveness of this proposal is $0.99 per pound. (Not recommended for funding due to high cost-effectiveness and low ranking compared to other projects.)
10.	Pick Your Part Auto Wrecking	Option 1     $400,000 Option 2     $800,000 County: All
	Pick Your Part Auto Wrecking proposes to generate emission reductions by scrapping old vehicles under Regulation XVI. The cost-effectiveness of these proposals is $2.34 and $2.30 per pound respectively. (Option 2 is being recommended as this project generates emission reductions to meet the targets for all three pollutants.)
11.	Ryerson, Master & Associates, Inc. (Proposal 1)	$564,360 County: Los Angeles
	Ryerson, Master & Associates, Inc. proposes to generate emission reductions over a period of 7 years by re-powering 6 Terex TS-24B dual engine wheel type scrapers at a cost-effectiveness of $1.66 per pound. (This proposal was withdrawn)
12.	Ryerson, Master & Associates, Inc. (Proposal 2)	$368,093 County: Los Angeles
	Ryerson, Master & Associates, Inc. proposes to generate emission reductions over a period of 5 years by re-powering 5 diesel engines on Marine Vessel ‘Price Tide’. The cost-effectiveness of this proposal is $1.45 per pound. (Not recommended for funding due to high cost-effectiveness and low ranking compared to other projects.)
13.	Ryerson, Master & Associates, Inc. (Proposal 3)	$33,470 County: Los Angeles
	Ryerson, Master & Associates, Inc. proposes to generate emission reductions over a period of 5 years by replacing 20 2-stroke gasoline outboard engines with 4-stroke, 6hp CARB certified engines at a cost effectiveness of $0.16 per pound. (Not recommended for funding as the 6 hp engines and boats are small and not readily conducive to the installation of GPS units.)
14.	Seaboard Marine	$1,977,150 County: All
	Seaboard Marine proposes to generate emission reductions over 5 years by re-powering 19 marine vessels with 32 low emission diesel engines. The over-all cost-effectiveness of this proposal is 2.03 per pound. (Not recommended for funding due to high cost-effectiveness and low ranking compared to other projects.)
15.	Specialty Environmental Services (Proposal 1)	Option 1     $75,000 Option 2     $60,000 Option 3     $35,000 Option 4     $62,000 Option 5     $45,000 Option 6     $56,000 Option 7     $50,000 Option 8     $92,000 Option 9     $35,000 County: Los Angeles
	Specialty Environmental Services proposes to generate emission reductions by re-powering outboard power boats operating on gasoline using 4-stroke engines. All the options are for a period of 5 years. Option 1 is to re-power 3 movie industry support boats at a cost-effectiveness of $0.35 per pound; Option 2 is to re-power 7 camp boats on Catalina at a cost-effectiveness of $0.32 per pound; Option 3 is to re-power 3 camp boats on Catalina at a cost-effectiveness of $0.34 per pound; Option 4 is to re-power 2 oil spill response boats in LA harbor at a cost-effectiveness of $0.22 per pound; Option 5 is to re-power 5 rental boats in Long Beach harbor at a cost-effectiveness of $0.29 per pound; Option 6 is to re-power rental boats in San Pedro harbor at a cost-effectiveness of $0.23 per pound; Option 7 is to re-power 4 Cal State Northridge boats at Castaic at a cost-effectiveness of $0.33 per pound; Option 8 is to re-power 7 hull cleaning and commercial dive at a cost-effectiveness of $0.28 per pound; Option 9 is to repower 2 snorkeling excursion boats at a cost-effectiveness of $0.28 per pound. (In spite of its low cost-effectiveness these projects are not being recommended as there are no set protocols for the generation of emission reductions from outboards.)
16.	Splash Water Truck Service	$34,875 County: Orange
	Splash Water Truck Service of Laguna Hills proposes to generate emission reductions by re-powering 1 off-road diesel water truck with new engine. The cost-effectiveness of this proposal is $0.74 per pound. (Not recommended for funding due to low VOC and CO reductions.)
17.	Super Shuttle	$440,000 County: Orange
	Super Shuttle proposes to generate emission reductions by purchasing 40 E-350 Ford CNG Vans to be used in service to and from the major airports in the South Coast Air Quality Management District’s region. The cost-effectiveness of this proposal is $2.57 per pound. (Recommendation made to fund the purchase of 20 vans, for a total of $220,000 amounting to half of the proposed amount.) These shuttles operate on alternative fuel, to and from the airports, and reduce single occupancy vehicle trips)

ATTACHMENT 4

Proposal Summary by Type
 

ATTACHMENT 4
(Continued)
 

ATTACHMENT 5

Proposal Evaluation/Contractor Selection
 

ATTACHMENT 5

(Continued)
 

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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