BOARD MEETING DATE: February 6, 2004
AGENDA NO. 5

Execute Contract and Appropriate Funds from General Fund, Undesignated Fund Balance, to District Prosecutor's FY 2003-04 Budget

SYNOPSIS:

The District Prosecutor's office is currently involved in a litigation enforcement case against BP West Coast Products, et al. ("BP ARCO"). This action is to execute a contract with Industrial Economics Inc. litigation support and appropriate $341,711 from the General Fund, Undesignated Fund Balance to District Prosecutor's FY 2003-04 Budget.

COMMITTEE:

Administrative, January 16, 2004, Recommended for Approval

RECOMMENDED ACTION:

1. Appropriate $341,711 from the General Fund, Undesignated Fund Balance, to the District Prosecutor's FY 2003-04 Budget: Salary and Employee Benefits Major Object, $30,000 to Overtime; Services and Supplies Major Object in the following accounts: $277,711 to Professional and Special Services; $20,000 to Office Supplies; $4,000 to Postage; and $10,000 Travel.
    
2. Execute Contract with Industrial Economics Inc. in the amount of $83,211 for litigation support.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

The District is currently involved in an enforcement litigation matter against BP West Coast Products, the successor in interest to Atlantic Richfield Company, for tank self-inspection, public nuisance, permit condition, and flare monitoring violations at its Carson refinery.

To support the District's lawsuit, $83,211 will be allocated to Industrial Economics Inc., a firm that specializes in economic benefit analysis and calculation in support of environmental enforcement cases. The remaining funds will be allocated as follows: Salary and Employee Benefits Major Object, $30,000 to Overtime; Services and Supplies Major Object in the following accounts: $277,711 to Professional and Special Services; $20,000 to Office Supplies; $4,000 to Postage; and $10,000 to Travel.

Sole Source Justification

Industrial Economics Inc. qualify as a sole source for this project under Section VIII(B)(2)(d)(4) of the SCAQMD Procurement Policy and Procedures because other circumstances exist which in the determination of the Executive Officer require such waiver in the best interests of the SCAQMD. Such circumstances may include but are not limited to: (4) Level-of-effort expert consultation services.

The proposed contract with Industrial Economics Inc. will be a level-of-effort contract for expert consultation services. Industrial Economics Inc. is a firm specializing in applying economic factors, including economic benefit, to civil penalty factors in regulatory enforcement actions. The firm has supported hundreds of civil penalty cases involving violators of diverse sizes that range from multinational corporations to sole proprietorships. Industrial Economics provides economic benefit analysis and calculation by modeling a facility’s cash flow under hypothetical timely and effective compliance scenarios over against actual delayed compliance scenarios.

Proposal

Staff proposes to appropriate $341,711 from the General Fund, Undesignated Fund Balance to the District Prosecutor's FY 2003-04 Budget as follows: Salary and Employee Benefits Major Object, $30,000 to Overtime; Services and Supplies Major Object in the following accounts: $277,711 Professional and Special Services; $20,000 to Office Supplies; $4,000 to Postage; $10,000 to Travel. In addition, staff proposes to authorize the Executive Officer to execute a new contract with Industrial Economics Inc. in the amount of $83,211.

Resource Impacts

AQMD's Undesignated Fund Balance includes sufficient monies to expend the $341,711. Expending this amount from the fund balance will not reduce funds below what is necessary to maintain a prudent reserve.

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