BOARD MEETING DATE: August 6, 2004
AGENDA NO. 9

Amend Seven Contracts and Execute Contract for FY 2002-03 Carl Moyer Memorial Air Quality Standards Attainment Program and Issue RFP for 2004 Carl Moyer Memorial Air Quality Standards Attainment Program Funding

SYNOPSIS:

This action is to revise seven prior project awards, and approve additional awards not to exceed the total returned funds of $786,893 for the FY2002-03 Carl Moyer Memorial Air Quality Standards Program. Additionally, this action is to approve the release of an RFP to provide incentives for low emission on- and off-road vehicles and equipment for the 2004 Carl Moyer Air Quality Standards Program. The state FY 2003-04 Budget contains $18 million from Proposition 40 funds, and AQMD expects to receive approximately $7.4 million. The local match requirement is $3.7 million.

COMMITTEE:

Technology, July 23, 2004, Recommended for Approval

RECOMMENDED ACTION:

1. Authorize the Chairman to modify the following Carl Moyer Program awards:

1. A contract with Herigstad Equipment Rental originally approved on March 5, 2004 to repower the front engines of four diesel earth scrapers in an amount not to exceed $240,592, to instead repower the front and rear engines of four diesel earth scrapers in an amount not to exceed $360,888 available from returned funds to the Carl Moyer Program.
    
2. Increase the award amount from $1,786,980 to $1,949,840 to reflect a calculation correction in March 5, 2004 award to Seaboard Marine to repower 30 diesel marine engines. The additional amount of $162,860 is available from returned funds to the Carl Moyer Program.
    
3. A no-cost modification to the award to the City of Redlands to purchase three new LNG refuse trucks instead of three new CNG refuse trucks, in an amount not to exceed $23,762 from the Carl Moyer Proposition 40 funds originally approved on March 5, 2004.
    
4. A no-cost modification to the award to Road Builders, Inc. to repower one diesel rough loader, one diesel scraper and two diesel graders instead of repowering one diesel rough loader, two diesel scrapers and one diesel grader, in an amount not to exceed $198,969 from the Carl Moyer Program originally approved on March 5, 2004.
    
5. A no-cost modification to the award to the City of Long Beach to purchase 11 new LNG refuse haulers instead of 11 new CNG refuse haulers in an amount not to exceed $362,233 from the second round of FY 2001-02 Carl Moyer Program awards originally approved on February 7, 2003.

2. Authorize the Chairman to execute a contract with Los Angeles County Sanitation Districts to repower two LNG wheel dozers and four LNG wheel loaders in an amount not to exceed $472,468 available from returned funds to the Carl Moyer Program.
    
3. Authorize the Chairman to modify a contract with City of Long Beach to replace 22 Class 7/8 diesel-fueled trucks with LNG powered refuse haulers instead of CNG fueled Class 7/8 refuse haulers at the same cost of $724,467 as originally approved by the Board on February 7, 2003 from the RECLAIM Executive Order Emissions Mitigation Program Fund.
    
4. Authorize the Chairman to modify a contract with OceanAir Environmental to repower seven diesel forklifts instead of replacing five of the 12 remaining diesel forklifts. The cost will be in the amount of $190,369, instead of the remaining contract amount of $200,000 as originally approved by the Board on March 7, 2003 from the State Emissions Mitigation Program Fund.
    
5. Approve issuance of RFP 2005-02, in the amount of $7,448,659, to solicit projects for the FY 2003-04 Carl Moyer Memorial Air Quality Standards Attainment Program Funding.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

Carl Moyer Program: This is the sixth year of the Carl Moyer Memorial Air Quality Standards Attainment Program (CMP). The CMP provides funds on an incentive basis for the incremental cost differential of cleaner-than-required engines and equipment. Eligible projects include cleaner on-road, off-road, marine, locomotive and stationary agricultural pump engines, as well as forklifts, airport ground support equipment, and auxiliary power units. The program achieves near-term reductions in emissions of oxides of nitrogen (NOx), which are necessary for the AQMD to meet the State Implementation Plan. The CMP also reduces particulate matter (PM) a component of diesel exhaust, which has been identified by CARB as a toxic air contaminant.

In the spring of 2002, California voters passed Proposition 40 – the California Clean Water, Clean Air, Safe Neighborhood Parks and Coastal Protection Act. Proposition 40 allocated $50 million to CARB, over a period of two years, for distribution to the air districts for projects that "affect air quality in state and local parks and recreation areas," in accordance with the Carl Moyer guidelines. Of these funds, the Governor allocated $25 million for FY 2002-03 and $25 million for FY 2003-04. Furthermore, Assembly Bill 425 directs that 20 percent of the Proposition 40 funds be allocated for the acquisition of "clean, safe, school buses for use in California’s public schools that serve pupils in kindergarten and grades 1 to 12, inclusive." The school bus funds will be addressed through a separate Board action.

State Emissions Mitigation Program: In 2001, Governor Davis created a statewide NOx and PM Reduction Program to mitigate excess emissions from peaker power generation units needed to alleviate the power crisis in California. In response to this request, the Board at its July 20, 2001 meeting approved the establishment of the State Emissions Mitigation Fund. The AQMD received a total of $28,922,925 under this program in Calendar Years 2001 and 2002. A significant portion of the available funds have been awarded and projects are underway or have been completed.

RECLAIM Executive Officer’s Emissions Mitigation Program: On January 17, 2001, Governor Davis proclaimed a State of Emergency in response to the imminent threat of widespread and prolonged disruption of electrical power. In response, on February 6, 2001, the AQMD’s Executive Officer executed Rule 118 Executive Order (EO) #01-03 for NOx emissions and Rule 118 EO #01-04 for CO emissions. This program is also known as the RECLAIM EO Emissions Mitigation program. As part of this order, mitigation fees would be paid to the AQMD for emissions in excess of RECLAIM allocations from RECLAIM power producing facilities having the capability to produce 50 MW or more. These funds are used to mitigate the excess power plant emissions. Since May 2001, AQMD has received $23,094,404 as mitigation fees pursuant to the Executive Order. Out of this amount, $17,972,034 has been approved by the Board for various projects.

Proposal

At its March 5, 2004 meeting, the Board approved a total of 47 new projects under the Carl Moyer Program. In order to facilitate the use of funds more expeditiously, the Board also authorized staff to return to the Board with new funding proposals utilizing the list of proposals under the same solicitation (RFP #2004-04) as the basis for further awards, should additional funds became available. Since the Board action, turn-back funds have become available. Table 1 shows the total amount of funds available from turn-back and unused funds. Table 2 shows the detailed breakdown of the entities who have returned funds to the CMP.

Table 2. Entities That Have Turned Back Funds
 

Staff is recommending modifications to four awards approved by the Board on March 5, 2004, and one award approved by the Board on February 7, 2003. In addition, staff is recommending the approval of a new award to one project under the Carl Moyer Program as outlined below:

1. Modification of award to Herigstad originally approved on March 5, 2004, to fund the repower of the front and rear engines from four approved pieces of construction equipment. The original award provided funding for front engines only. The recommended action would result in an additional $120,296 to cover the cost of the rear engines on the four pieces of construction equipment. Total award amount would increase from $240,592 to $360,888. Sufficient funds are available to cover the increased cost of $120,296 from returned funds identified in Table 1 to the Carl Moyer Program.
    

2. Modification of award to Seaboard Marine to reflect a calculation correction related to amount of fuel usage in the original award recommendation on March 5, 2004. The modification will result in an increase in the original award amount to Seaboard Marine approved on March 5, 2004 by $162,860. The total award amount to repower 30 diesel marine engines will increase from $1,786,980 to $1,949,840. Sufficient funds are available to cover the increased cost of $162,860 from returned funds identified in Table 1 to the Carl Moyer Program.
    

3. A no-cost modification to the award to the City of Redland to purchase three LNG refuse trucks instead of three CNG trucks in an unchanged amount of $23,762 originally approved on March 5, 2004 from the Carl Moyer Program Fund.
    

4. A no-cost modification to the award to Road Builders, Inc., to correct regarding the description of the construction equipment to be repowered. The four pieces of construction equipment to be repowered are one rough loader, one scraper, and two graders instead of one rough loader, two scrapers, and one grader. The correction of the equipment description does not result in any changes to the award amount of $198,969 originally approved on March 5, 2004 from the Carl Moyer Program Fund.
    

5. A no-cost modification to the award to the City of Long Beach to purchase 11 new LNG refuse haulers instead of 11 CNG refuse haulers in an unchanged amount of $362,233 originally approved on February 7, 2003 from the Carl Moyer Program Fund.
    

6. Approve a new award to the Los Angeles County Sanitation Districts to repower two LNG wheel dozers and four LNG wheel loaders in an amount not exceed $472,468 returned funds identified in Table 1 from the Carl Moyer Program. New certified on-road LNG engines will be installed in off-road equipment for this project.

Additional no-cost modifications are requested for one project under the RECLAIM Executive Order Emissions Mitigation Program and one project under the State Emissions Mitigation Program as outlined below:

1. A no-cost modification to the award to the City of Long Beach to replace 22 Class 7/8 diesel fueled trucks with LNG powered refuse haulers instead of CNG fueled Class 7/8 refuse haulers in an unchanged amount of $724,467 originally approved on February 7, 2003 under the RECLAIM Executive Order Emissions Mitigation Program.
    

2. A modification to the award to OceanAir Environmental to repower seven diesel forklifts instead of replacing five of the remaining 12 diesel forklifts as originally approved on March 7, 2003 under the State Emissions Mitigation Program. The original award was in the amount of $480,000 at a cost of $40,000 per forklift. OceanAir Environmental has already replaced seven forklifts at a total cost of $280,000. Instead of replacing the remaining five forklifts at a total cost of $200,000, the contractor is requesting to repower seven forklifts at a total cost of $190,369, thus reducing the total contract amount by $9,631.

Lastly, staff is requesting the Board’s approval to release RFP #2005-02 in the amount of $7,448,659 to solicit projects for the 2004 CMP. The CMP requires local match funding on a 1:2 basis. AQMD’s required match funding is $3.7 million, which is shown in Attachment 1. Infrastructure projects funded with Clean Fuel Program Funds, Environmental Justice, hydrogen projects and administrative costs of up to 15% of the total project award may be used to meet the match-funding requirement.

The proposed RFP will solicit projects for on- and off-road vehicles and equipment, including refuse haulers, over-the-road trucks, transit buses, locomotives, agricultural pumps, marine and port applications, and other vehicles and equipment. New engines, repowers and retrofits are allowed within the program. As in previous years, AQMD will fund diesel-to-diesel applications only when CARB certified alt. fuel engines/vehicles are not available.

The CMP Guidelines require that all projects meet a $13,600/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. Staff proposes a more stringent criteria for cost-effectiveness in some sectors based on experiences derived from past solicitations. Table 3 describes the proposed funding allocations and maximum allowed cost-effectiveness requirements for each category and subcategory:

Table 3. FY 2004 Proposed Funding and Cost-Effectiveness

Proposals for all categories will be due no later than 5:00 p.m., Thursday October 28, 2004.

Staff expects to finalize the review and evaluation of the proposals and recommend awards for Board approval of awards on or before the February 2005 Governing Board meeting, contingent upon approval and award of the required funds from CARB.

Funding Distribution

The new CMP Guidelines include the requirement that at least 50% of the program funds must be spent in areas disproportionately impacted by air pollution. CARB’s allocation to the AQMD for this year is $7.4 million; therefore to meet the requirements of the CMP, approximately $3.7 million, must be allocated in identified disproportionately impacted areas. It has been the policy of the AQMD to allocate at least 50% of all funding available in the CMP, including roll-over funding from previous years and turnback funds, to disproportionately impacted areas.

Disproportionately Impacted Areas Point Ranking

The requirements of the CMP will be implemented according to the following criteria.
 

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 funding as a disproportionately impacted area:   a)   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, are eligible to be included in this category, and   b)   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   c)   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.

The maximum score will be comprised of 40 percent for poverty level, and 30 percent each for PM and toxic exposures. Special circumstances exist in some areas, such as the Ports of Long Beach and Los Angeles. Since there are no residents within the ports, poverty ranking could not be established. In this case, the poverty ranking from the adjacent on-shore areas were extended to the port since these populated areas are directly impacted by port activities.

Outreach

In accordance with AQMD’s Procurement Policy and Procedure, a public notice advertising the RFP/RFQ and inviting bids will be published in the following publications:
 

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

Additionally, potential bidders will be notified utilizing the Los Angeles County MTA Directory of Certified Firms, the Inland Area Opportunity Pages Ethnic/Women Business & Professional Directory; and AQMD’s own electronic listing of certified minority vendors. Notice of the RFP/RFQ 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 where it can be viewed by making menu selections "Inside AQMD"/"Employment and Business Opportunities"/"Business Opportunities" or by going directly to http://www.aqmd.gov/rfp/index.html). Information is also available on AQMD’s bidder’s 24-hour telephone message line (909) 396-2724.

Benefits to AQMD

AQMD’s Clean Fuels Program has been active in funding the development and demonstration of low emission, alternative fuel technologies within its Technology Advancement Office. The AQMD has also supported a number of activities directed to commercialization of low-emission alternative fuel technologies. The successful implementation of the Carl Moyer Program, the State Emissions Mitigation, and the RECLAIM Executive Order Emissions Mitigation Programs are a direct result of these Technology Advancement activities. The vehicles and equipment funded under this RFP and the State and RECLAIM EO Emissions Mitigation Programs will operate many years, providing long-term emissions reductions.

Resource Impacts

The AQMD is expected to receive $7,448,659 of the available Carl Moyer funds for FY 2004 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. Match funds can be funding that has been expended for projects that would be eligible for CMP funding. Attachment 1 lists those projects approved for funding to be used as the required CMP match. Monies received from CARB will be placed in the Prop. 40 - 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.

Total amount of funding for a new project and two modified projects with cost increases shall not exceed $755,624 from the Carl Moyer Program Fund. There are sufficient funds in the Carl Moyer Program Fund due to availability of $786,893 in returned projects and unused funds.

Attachments (1,298 KB)

Attachment 1 - Qualified Match Fund Projects
Attachment 2 - RFP# P2005-02

ATTACHMENT 1
South Coast Air Quality Management District
Qualified Match Fund Projects
Carl Moyer FY 2003-04
 

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