BOARD MEETING DATE: August 6, 2004
AGENDA NO. 16

Approve in Concept FY 2004-05 $15.3 Million AB 2766 Discretionary Fund Work Program, Release of Six Solicitations, Two Sole-Source Contracts, and Commitments for Three Additional Elements

SYNOPSIS:

For FY 2004-05 the MSRC has proposed a $15.3 million Work Program consisting of 11 program elements. The MSRC requests Board approval of the $15.3 Million FY 2003-04 Conceptual Work Program, release of six solicitations providing up to $10.5 million, two sole-source contracts totaling $1.06 million, and commitment of $3.75 million for three additional elements. The MSRC also requests authority to adjust contracts up to 5%.

COMMITTEE:

Mobile Source Air Pollution Reduction Review, June 24 and July 22, 2004

RECOMMENDED ACTIONS:

1. Approve $15.3 Million FY 2003-04 AB 2766 Discretionary Fund Conceptual Work Program;
    
2. Approve release of four RFPs and two Program Announcements, providing funding up to $10.5 million, as attached;
    
3. Approve a sole-source contract with Johnson|Ukropina for $1 million to implement a follow-on Pick-A-Day Media Campaign;
    
4. Approve a sole-source (or amendment) contract with TransVironmental Solutions Inc. for $60,000 to implement an expanded Guaranteed Ride Home Program;
    
5. Approve commitment of $1 million for a CNG School Bus Incentives Program, subject to MSRC and AQMD Board approval at a later date;
    
6. Approve commitment of $1.75 million for an On-Road Diesel Vehicle Replacement Program, subject to MSRC and AQMD Board approval at a later date;
    
7. Approve commitment of $1 million for a Law Enforcement Diesel Bus Engine Replacement Program, subject to MSRC and AQMD Board approval at a later date;
    
8. Authorize MSRC the authority to adjust contracts up to 5%, as necessary; and
    
9. Authorize the Chairman of the Board to execute one contract and one amendment (Items 3 & 4).

Gwenn Norton-Perry
Vice-Chair, MSRC

Background

1. FY 2004-05 Conceptual Work Program
In September 1990 Assembly Bill 2766 was signed into law (Health & Safety Code Sections 44220-44247) authorizing the imposition of an annual $4 motor vehicle registration fee to fund the implementation of programs exclusively to reduce air pollution from motor vehicles. AB 2766 provides that 30 percent of the annual $4 vehicle registration fee subvened to the AQMD be placed into an account to be allocated pursuant to a work program developed and adopted by the MSRC and approved by the AQMD Governing Board. It is projected that more than $15 million will be available in the Discretionary Fund in FY 2004-05 from revenue, interest and turnback funds. This includes allocation of the prudent reserve typically maintained by the MSRC.

Proposals

To utilize FY 2004-05 funds and achieve the maximum emissions reduction benefits, the MSRC developed a $15.3 million FY 2004-05 AB 2766 Discretionary Fund Conceptual Work Program. The Work Program consists of the following elements.

Clean Fuels Programs ($10.75 million)

• RFP #P2005-09: On-Road Heavy-Duty Alternative Fuel Vehicle Program, providing co-funding for on-road heavy-duty alternative fuel vehicle purchases for engines certified at 1.8 grams/bhp-hr. It would also provide funding for alternative fueling stations up to 50% of costs not to exceed $150,000 MSRC co-funding with a minimum vehicle purchase as well as $10,000 for facility modifications and $5,000 for mechanic training. Funding will be awarded on a cost-effectiveness basis with projects of $13,600 tons per NOx reduced eligible. ($1 million);
• RFP #P2005-06: Off-Road Heavy-Duty Diesel Pollution Reduction Program, providing co-funding for off-road heavy-duty vehicles, allowing alternative fuel and diesel-to-diesel repowers utilizing Tier II engines. Infrastructure funding is also available with a minimum vehicle purchase. Funds will be awarded on a cost-effectiveness basis ($2.75 million);
• RFP #P2005-08: Alternative Fuel & Advanced Technology Transit Bus Program, providing co-funding for alternative fuel buses including articulated CNGs, hybrid-electric and gasoline-hybrid electric buses. A geographic minimum of $150,000 per county will be included, after which funds will be distributed on a cost-effectiveness basis ($1 million);
• RFP #P2005-07: Upgrade/Expansion of Existing CNG & LNG Stations, providing funds up to $150,000 per station with a $250,000 cap per entity for station modifications to resolve safety issues and alternative refueling stations intending to expand fuel storage, increase fuel compression capability, add CNG capability at existing LNG only stations, modify the station to provide public accessibility, upgrade card readers, and/or add additional fuel dispensers ($1.25 million);
• PA #2005-02: Diesel Exhaust After-Treatment Retrofit Program, providing up to $8,500 per unit to retrofit existing diesel vehicles with CARB-certified exhaust after-treatment devices. Units reducing both NOx and PM will be funded up to $18,500 per unit, but no low-sulfur fuel subsidy will be provided in this year’s program ($1 million);
• CNG School Bus Incentives Program, providing incentives for both public school districts and private providers wanting to purchase CNG school buses. Although the incentives will be available through the three previously qualified vendors, California Bus Sales, A-Z Bus Sales and Bus West, the specifics of this program are still being developed and are subject to MSRC and AQMD Board approval at a later date ($1 million);
• On-Road Diesel Vehicle Replacement Program, modeled after the Gateway Cities On-Road Diesel Truck Replacement Program but expanded beyond the Ports of Los Angeles and Long Beach to include high-emitting diesel trucks throughout the South Coast region. This element is still under development, subject to MSRC and AQMD Board approval at a later date ($1.75 million); and
• Law Enforcement Diesel Bus Engine Replacement, providing co-funding for the replacement of diesel engines in heavy-duty buses used for law enforcement activities. This element is still under development, subject to MSRC and AQMD Board approval at a later date ($1 million).

TCM Programs ($4.56 million)

• PA #2005-03: Local Government Match Program, providing matching funds to AB 2766 City Subvention Funds towards the purchases of alternative fuel vehicles and infrastructure, video-conferencing equipment and multi-jurisdictional signal synchronization projects ($3.5 million);
• Pick-A-Day Media Campaign, following on last year’s successful radio campaign, this sole-source contract to Johnson|Ukropina will utilize the same creative materials, but include three phases during peak hours to encourage listeners to rideshare and would include pre- and post-surveys. ($1 million); and
• Guaranteed Ride Home Program, expanding the existing successful program, which offers a guaranteed ride home for carpoolers through participating taxi companies, this sole-source contract (or amendment) will focus on attracting additional employers and increasing employee participation ($60,000).

The MSRC initially approved the above framework for its FY 2004-05 Conceptual Work Program on June 24, 2004. The solicitation documents to carry out the Work Program were unanimously approved by the MSRC on July 22, 2004. The target funding allocations for the solicitations may be reassigned by the MSRC based on its review of proposals received in each respective category and to allow for mid-year adjustments. Also, additional dollars may be allocated to each solicitation if the MSRC receives additional revenue or turnback funds.

The MSRC will consider the details for three elements of its Work Program in the next few months. These include the following: 1) CNG School Bus Incentives Program; 2) On-Road Diesel Vehicle Replacement Program; and 3) Law Enforcement Diesel Bus Engine Replacement. At its July 22, 2004 meeting, the MSRC unanimously approved committing $3.75 million for these three elements and currently seeks Board approval of the FY 2004-05 Conceptual Work Program, including target funding commitments for these three programs. The MSRC will take further action when program details are more defined and bring them forward to the AQMD Board for consideration at that time.

Currently, the MSRC requests the AQMD Board’s approval to issue four RFPs and two Program Announcements totaling $10.5 million, as part of the FY 2004-05 Conceptual Work Program. The Program Announcements are open for extended periods, with proposals accepted September 24, 2004 through October 26, 2004. Proposals for the four RFPs are due no later than 5:00 p.m. September 21, 2004. Funds will be distributed as discussed above.

Additionally, the MSRC approved $1 million for a Pick-A-Day Media Campaign. This program is intended as a follow-on to last year’s rideshare campaign in which the phrase "Pick-A-Day, Any Day" was launched to encourage ridesharing. It will use existing creative material and expand the number of radio spots. Three phases will be launched, one in the winter, a second in the spring and a third in the fall. The MSRC requests approval of this element as a sole-source contract to Johnson|Ukropina, the agency which developed and implemented the initial campaign last year, and as part of the FY 2004-05 Work Program in Concept. A sole-source justification is provided later in this Board letter.

The MSRC also approved $60,000 to expand the existing Guaranteed Ride Home Program. The goal is to attract additional employers and increase the number of participating employees. Participating employers and their employees who rideshare are guaranteed a ride home in event of emergencies or illnesses. The ride home is provided by participating taxi cab companies, which are issued a voucher for reimbursement. The MSRC requests approval of this element as a sole-source amendment to the existing contract with TransVironmental Solutions Inc. (TVS) and as part of the FY 2004-05 Work Program in Concept. The current contract with TVS is open through the end of the year and the intent is to modify the current contract, adding the additional dollars and program goals.

Finally, the MSRC requests authority to adjust the funds allocated to the above two sole-source contracts by up to five percent, if deemed necessary by the MSRC, and to have the AQMD Board Chairman execute these two agreements. The Board has previously granted the MSRC authority to adjust contract costs up to five percent.

Outreach

The funding solicitations described above, in accordance with the AQMD's consulting and contracting policies, will be advertised in a public notice each on two different days in 25 newspapers and publications, including several targeting minorities.

The funding solicitations will be placed on the MSRC's website at "http://www.msrc-cleanair.org" and also included on the AQMD's website under the "Business and Job Opportunities" icon, and information will be included about the RFP/Qs on the AQMD's bidder's 24-hour telephone message line (909) 396-2724. A press release will also be issued and placed on the MSRC’s website.

In addition to the AQMD's standard practices, a postcard announcing these funding opportunities is being mailed to over 1,800 interested parties on the MSRC's mailing list, as well as to the Black and Latino Legislative Caucuses, Ethnic Community Advisory Group, City Managers, Chambers of Commerce, and business associations. The postcard will also be mailed to local legislators, mayors, city council members and city managers in the four counties, and AB 2766 Subvention Fund city administrators. The Program Application & Announcement for the Local Government Match Program will be directly mailed to all local jurisdictions receiving AB 2766 Subvention Funds.

To assist potential bidders in submitting qualified proposals, bidders’ conferences will be conducted at AQMD Headquarters in Room CC6 as follows:
 

Solicitation	Date	Time
Local Government Match Program	August 25, 2004	1:30 p.m.
On-Road Heavy-Duty Alternative Fuel Vehicle Program	August 24, 2004	10:00 a.m.
Off-Road Heavy-Duty Diesel Pollution Reduction Program	August 24, 2004	1:30 p.m.
Alternative Fuel & Advanced Technology Transit Bus Program	August 24, 2004	3:00 p.m.
Upgrade/Expansion of Existing CNG & LNG Stations	August 27, 2004	10:00 a.m.
Diesel Exhaust After-Treatment Retrofit Program	August 27, 2004	1:30 p.m.

Proposal Evaluation and Panel Composition

Proposals received for the Work Program’s funding solicitations (outlined under the proposals section) will be evaluated by members of the MSRC-TAC, a diverse group of individuals appointed by participating members as prescribed in the Health & Safety Code. Several evaluation teams will be formed to evaluate proposals in the various program solicitations, the membership of which will be identified in the Board letter recommending specific contract awards.

Sole-Source Justifications

The MSRC allocated $800,000 as part of the FY 2002-03 Work Program to re-introduce the Rideshare Thursday campaign within the four-county region. Johnson|Ukropina Creative Marketing was selected through an RFP process to develop and implement the campaign and they developed the theme "Pick a Day, Any Day" to update the campaign and broaden the appeal of ridesharing. The campaign was launched via a mix of radio, print and outdoor media in two phases beginning September 2003 and January 2004, respectively.

Based on the results from the first phase of "Pick a Day, Any Day," the MSRC allocated $1,000,000 to continue implementation of the campaign as an element of their FY 2004-05 Work Program. The bulk of these funds are to be devoted to the purchase of radio air time. However, the campaign implementer will also be expected to seek partnerships and publicity opportunities and to conduct a media event, as well as conduct pre- and post-campaign evaluation.

The selection of a firm other than the original designer would translate into a significant delay in the purchase of radio air time, with a consequent increase in air time cost and/or an inability to implement the campaign during the timeframe envisioned by the MSRC. Additionally, Johnson|Ukropina has prior experience with conducting surveys to measure changes in awareness and recall associated with "Pick a Day, Any Day," and they will only need to make minor modifications to their survey instrument and procedure for the follow-on campaign.

While the MSRC and AQMD strive to retain technical services on a competitive basis when feasible, the AQMD Procurement Policy and Procedure recognizes that, at times, the unique experience of one vendor makes the pursuit of a competitive procurement futile. Such is the case for procuring follow-on implementation of the "Pick a Day, Any Day" campaign. This request for a sole source award is made under provision B.2.c.(1): The desired services are available from only the sole source due to the unique experience and capabilities of the proposed contractor or contractor team. Johnson|Ukropina possesses unique knowledge and experience that cannot realistically be duplicated by another firm within the timeframe required by the MSRC.

PERIOD OF PERFORMANCE: The period of performance under the sole source contract will not exceed eighteen (18) months. The recommended FY 2004-05 funding allocation for continued implementation of the "Pick a Day, Any Day" campaign is $1,000,000.

The MSRC also allocated $200,000 as part of their FY 2001-02 Work Program for the development, implementation and administration of a regional guaranteed ride home program. The sense of security engendered by such a program alleviates one of the major qualms associated with ridesharing. TVS was selected through an RFP process to develop and implement the program. TVS developed and produced marketing materials including the theme "Get Home on Us." TVS began conducting outreach and administering guaranteed ride services in the summer of 2002 and 216 employers have been enrolled to date, impacting approximately 64,000 employees. Lower than expected incidence of emergency rides has allowed the program term to be extended to serve the currently enrolled employers through July 2005.

Based on the success of "Get Home on Us," the MSRC allocated $60,000 as an element of their FY 2004-05 Work Program to fund additional outreach in order to enroll additional employers. A portion of these funds are also to be devoted to the program management and emergency ride costs associated with increased enrollment.

Given that TVS remains under contract to administer the program for currently enrolled employers, bringing in another firm to conduct outreach and administer the program for additional employers would entail a costly duplication of effort and would probably delay the enrollment of such employers and delay the emissions reductions achieved through increased ridesharing.

This request for a sole-source award is made under provision B.2.d.: Other circumstances exist which in the determination of the Executive Officer require such waiver in the best interests of the AQMD. TVS is in a unique position to increase employer enrollment and administer the expanded program. It is the intent to simply amend the existing contract, adding the dollars and expanding the scope.

Resource Impacts

The AQMD acts as fiscal administrator for the AB 2766 Discretionary Fund Program (Health & Safety Code Section 44243). Money received for this program is recorded in a special revenue fund (Fund 23) and the contracts will be drawn from this fund. These contracts will have no fiscal impact on the AQMD’s operational budget.

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