BOARD MEETING DATE: June 4, 2004
AGENDA NO. 17

Approve Additional Contract Awards as Part of MSRC’s FY 2003-04 AB 2766 Discretionary Fund Work Program; Allocate Funds for Technical Advisor Services for FY 2004-05; Grant MSRC Authority to Adjust Project Costs Up to Five Percent; and Authorize Board Chairman to Execute Agreements

SYNOPSIS:

The MSRC developed a $14.5 million FY 2003-04 Work Program and subsequently released seven solicitations. On May 7, 2004, the AQMD Board approved several awards recommended by the MSRC under three program solicitations. At its May 27, 2004 meeting, the MSRC recommended multiple contract awards from proposals received under two more solicitations and decided not to fund any proposals received under a sixth solicitation. Additionally, they recommended funding projects from three eligible backup lists using turn-back funds. The MSRC requests the AQMD Board’s approval of these awards as part of the FY 2003-04 Work Program. Proposals received under the last solicitation, the Diesel Exhaust After-Treatment Retrofit Program, will be considered by the MSRC next month and will be subsequently presented for AQMD Board approval. The MSRC further recommends allocating funds as part of the FY 2004-05 Work Program to continue Technical Advisor services through June 30, 2005. Last, the MSRC requests authority to adjust contracts up to five percent and authority for the Board Chairman to execute agreements. (Review: Mobile Source Air Pollution Reduction Review Committee, May 27, 2004)

COMMITTEE:

Mobile Source Air Pollution Reduction Review Committee, May 27, 2004, Approved

RECOMMENDED ACTION:

1.		Approve the award of 37 contracts totaling $4,394,880 under the Local Government Match Program, funded with $3,000,000 from the FY 2003-04 AB 2766 Discretionary Fund Work Program and $1,394,800 from turn-back funds available in the FY 2003-04 AB 2766 Discretionary Fund Work Program, as described in this letter and as follows:
	1.1	A contract with City of Montclair in an amount not to exceed $50,000 for up to one heavy-duty and three medium-duty CNG vehicles;
	1.2	A contract with City of Beaumont in an amount not to exceed $220,400 for up to one heavy-duty and three medium-duty CNG vehicles and infrastructure;
	1.3	A contract with City of Whittier in an amount not to exceed $260,400 for up to three heavy-duty and three medium-duty CNG vehicles and infrastructure;
	1.4	A contract with City of Baldwin Park in an amount not to exceed $63,350 for up to two medium-duty CNG vehicles and infrastructure;
	1.5	A contract with City of San Bernardino in an amount not to exceed $80,000 for up to eight medium-duty CNG vehicles;
	1.6	A contract with County of Los Angeles, Department of Public Works in an amount not to exceed $140,000 for up to seven LPG street sweepers;
	1.7	A contract with City of Colton in an amount not to exceed $40,000 for up to four medium-duty CNG vehicles;
	1.8	A contract with City of Burbank in an amount not to exceed $270,000 for up to three medium-duty and 12 heavy-duty CNG vehicles;
	1.9	A contract with City of Inglewood in an amount not to exceed $312,500 for up to five heavy-duty CNG vehicles and infrastructure;
	1.10	A contract with City of San Fernando in an amount not to exceed $162,000 for CNG infrastructure;
	1.11	A contract with City of Cathedral City in an amount not to exceed $50,000 for up to one medium-duty and two heavy-duty CNG vehicles;
	1.12	A contract with County of Orange in an amount not to exceed $350,000 for CNG infrastructure;
	1.13	A contract with City of San Fernando in an amount not to exceed $115,642 for up to two medium-duty and three heavy-duty CNG vehicles and infrastructure;
	1.14	A contract with City of Palm Desert in an amount not to exceed $20,000 for one heavy-duty CNG vehicle;
	1.15	A contract with City of La Verne in an amount not to exceed $234,600 for up to three medium-duty and one heavy-duty CNG vehicles and infrastructure;
	1.16	A contract with City of Orange in an amount not to exceed $20,000 for one heavy-duty CNG vehicle;
	1.17	A contract with City of Tustin in an amount not to exceed $40,000 for up to two heavy-duty LPG vehicles;
	1.18	A contract with City of Lawndale in an amount not to exceed $20,000 for one heavy-duty CNG vehicle;
	1.19	A contract with County of Los Angeles, Beaches & Harbors, in an amount not to exceed $255,000 for up to two medium-duty and three heavy-duty CNG vehicles and infrastructure
	1.20	A contract with County of Los Angeles, Beaches & Harbors, in an amount not to exceed $205,000 for up to one medium-duty and one heavy-duty CNG vehicle and infrastructure;
	1.21	A contract with County of Los Angeles, Department of Public Works, in an amount not to exceed $100,000 for park & ride rehabilitation;
	1.22	A contract with County of Los Angeles, Department of Public Works, in an amount not to exceed $100,000 for park & ride rehabilitation;
	1.23	A contract with County of Los Angeles, Department of Public Works, in an amount not to exceed $60,000 for up to three heavy-duty LPG vehicles;
	1.24	A contract with County of Los Angeles, Department of Public Works, in an amount not to exceed $20,000 for one heavy-duty LPG vehicle;
	1.25	A contract with City of Los Angeles in an amount not to exceed $29,032 to expand video-conferencing equipment;
	1.26	A contract with City of Los Angeles in an amount not to exceed $480,000 for up to two heavy-duty LNG and 22 heavy-duty CNG vehicles
	1.27	A contract with City of Santa Clarita in an amount not to exceed $20,000 for one heavy-duty CNG vehicle;
	1.28	A contract with San Bernardino County, Department of Public Works, in an amount not to exceed $120,000 for up to six heavy-duty LNG vehicles;
	1.29	A contract with County of Orange in an amount not to exceed $90,000 for up to one heavy-duty and seven medium-duty CNG vehicles;
	1.30	A contract with City of Desert Hot Springs in an amount not to exceed $40,000 for up to two medium-duty CNG vehicles and infrastructure;
	1.31	A contract with City of Bellflower in an amount not to exceed $60,000 for up to six medium-duty CNG vehicles;
	1.32	A contract with County of Los Angeles in an amount not to exceed $26,956 to expand video-conferencing equipment;
	1.33	A contract with City of Hemet in an amount not to exceed $60,000 for up to three heavy-duty CNG vehicles;
	1.34	A contract with City of Riverside in an amount not to exceed $190,000 for up to five medium-duty and seven heavy-duty CNG vehicles;
	1.35	A contract with City of Moreno Valley in an amount not to exceed $40,000 for up to two medium-duty and one heavy-duty CNG vehicles;
	1.36	A contract with City of Hawthorne in an amount not to exceed $40,000 for up to two heavy-duty CNG vehicles; and
	1.37	A contract with City of Lakewood in an amount not to exceed $10,000 for one medium-duty CNG vehicle.
2.		Approve the award of five contracts totaling $1,250,000 under the Publicly Accessible Alternative Fuel Infrastructure Program as part of the FY 2003-04 AB 2766 Discretionary Fund Work Program, as described in this letter and as follows:
	2.1	A contract with NorthStar in an amount not to exceed $250,000 for construction of a new LNG fueling station in Santa Clarita at Burrtec Waste Industries;
	2.2	A contract with Downs Commercial Fueling in an amount not to exceed $250,000 for construction of a new LNG/L-CNG station in Temecula;
	2.3	A contract with Clean Energy in an amount not to exceed $250,000 for construction of a new CNG station in the mid-Wilshire area of Los Angeles at City of Los Angeles Western Water District;
	2.4	A contract with Clean Energy in an amount not to exceed $250,000 for construction of a new CNG station in Mission Viejo at Atlas Properties; and
	2.5	A contract with R.F. Dickson Company in an amount not to exceed $250,000 for the upgrade and expansion of an existing CNG station located at Bellflower Unified School District.
3.		Approve the award of two contracts totaling $927,555 under the Alternative Fuel/Advanced Technology Transit Bus Program with turn-back funds available in the FY 2003-04 AB 2766 Discretionary Fund Work Program, and adjust and correct one previously authorized award under the Alternative Fuel/Advanced Technology Transit Bus Program as part of the FY 2003-04 AB 2766 Discretionary Fund Work Program, as described in this letter and as follows:
	3.1	A contract with Los Angeles County Metropolitan Transportation Authority in the amount of $722,555 for up to 42 compressed natural gas transit buses;
	3.2	A contract with Orange County Transportation Authority in the amount of $205,000 for up to five gasoline hybrid-electric transit buses and mechanic training; and
	3.3	Adjust a contract with Foothill Transit in an amount not to exceed $715,000 for up to 75, instead of 25, compressed natural gas transit buses and refueling infrastructure.
4.		Approve three contracts totaling $1,322,538 under the Off-Road Heavy-Duty Diesel Pollution Reduction Program with turn-back funds available in the FY 2003-04 AB 2766 Discretionary Fund Work Program, as described in this letter and as follows:
	4.1	A contract with Herigstad Equipment in the amount of $970,586 for up to nine heavy-duty, Tier II diesel fuel scrapers;
	4.2	A contract with Road Builders, Inc. in the amount of $120,296 for up to two heavy-duty, Tier II diesel fuel scrapers;
	4.3	A contract with Herigstad Equipment in the amount of $231,656 as partial funding for the request of up to ten heavy-duty, Tier II diesel fuel scrapers.
5.		Exercise third year option clause to extend the contract with Raymond J. Gorski for FY 2004-05 technical advisor services for another additional year in an amount not to exceed $152,240, with 75% (or an amount not to exceed $114,180) allocated as part of the FY 2004-05 Conceptual Work Program and 25% (or an amount not to exceed $38,060) allocated as part of the MSRC FY 2004-05 5% Administrative Budget, as described in this letter.
6.		Authorize MSRC the authority to adjust contract awards up to five percent, as necessary; and
7.		Authorize the Chairman of the Board to execute multiple contracts as part of the FY 2003-04 and 2004-05 AB 2766 Discretionary Fund Work Programs, as described above.

Gwenn Norton-Perry
Vice-Chair, MSRC

Background

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.

On November 7, 2003, the Board approved the MSRC’s $14.5 million FY 2003-04 AB 2766 Discretionary Fund Work Program in Concept, including the release of six solicitations. Subsequently, one additional solicitation was approved by the Board on December 5, 2003. On May 7, 2004, the AQMD Board approved 16 awards totaling $4,523,235, as recommended by the MSRC under three program solicitations, which closed January 30, 2004. Three more solicitations closed April 9, 2004. The status of each solicitation for which action is currently recommended is as follows:

1. Local Government Match Program

This Program Announcement (#PA2004-05) provided $3 million in co-funding for medium- and heavy-duty alternative fuel vehicle purchases and infrastructure as well as park & ride lot rehabilitation and purchase of new and expanding video-conferencing equipment. Funding was also available for alternative fuel infrastructure. A per county geographic minimum of $375,000 was established, after which applications would be funded on a first-come, first-serve basis. All projects received on the first day would be considered received at the same time. If eligible applications received the first day exceeded the available funding, projects would be funded on a prorated basis once geographic minimums were established. The application acceptance period was January 13, 2004 through April 9, 2004. Thirty-nine applications were received, two of which were deemed ineligible based on program parameters, and 27 of which were received the first day. On May 27, 2004, the MSRC considered recommendations from its Technical Advisory Committee; details are provided in the Proposals section.

2. Publicly Accessible Alternative Fuel Infrastructure Program

This RFP (#P2004-14) provided $1.25 million for construction and ongoing operation of new, strategically located, publicly accessible alternative fuel refueling infrastructure. A $250,000 maximum amount per station was established, and no business entity may receive greater than 60% of the total available funding. Proposals would be ranked based on strategic location, gap closure, potential for multiple users and fuel throughput/cost-effectiveness. Twelve proposals were received by the closing date of April 9, 2004. On May 27, 2004, the MSRC considered recommendations from its Technical Advisory Committee; details are provided in the Proposals section.

3. Regional Commuter Bus Pool Program

The objective of this Program Opportunity Notice (PON #2004-01) was to seek innovative pre-proposals toward development and coordination of a regional program to facilitate the creation of new commuter bus pools. The MSRC allocated $800,000 for this category and received five pre-proposals by the closing date of January 30, 2004. On May 27, 2004, the MSRC considered recommendations from its Technical Advisory Committee; details are provided in the Proposals section.

4. Alternative Fuel/Advanced Technology Transit Bus Program

This RFP (P2004-13) provided $1.5 million in funding for medium- and full-size alternative fuel and advanced technology transit buses. A per county geographic minimum of $200,000 was established with projects not to exceed a cost-effectiveness threshold of $13,600 per ton of NOx reduced. Funding was also provided for refueling infrastructure up to $100,000 with a minimum purchase of eight transit buses, for facility modifications up to $10,000, and for mechanic training up to $5,000. Five proposals requesting MSRC funds in the amount of $3,395,701 were received by January 30, 2004. On April 22, 2004, the MSRC approved awarding partial funding for each of the five proposals totaling $1,500,000, which was subsequently approved by the AQMD Board. The MSRC also established a backup list of eligible projects requesting $927,555. On May 27, 2004, the MSRC evaluated its uncommitted and turnback funds to determine if and which proposals might be funded from the backup list. Details are described below in the Proposals section.

5. Off-Road Heavy-Duty Diesel Pollution Reduction Program

This RFP (#P2004-12) provided $2 million in co-funding to qualifying new, off-road alternative fuel heavy-duty vehicles and diesel-to-diesel repowers to Tier 2 off-road engines. Tier 2 engines must achieve an emissions level of 4.8 g/bhp-hr NOx plus NMHC. Proposals were ranked based on cost effectiveness with a maximum threshold not exceeding $13,600 per ton of NOx reduced. In the event proposals had equal cost effectiveness, they were ranked in order of receipt. Funding was also available for refueling infrastructure with a minimum purchase of vehicles; up to $100,000 with ten qualifying vehicles and up to $50,000 with five qualifying vehicles. Nine proposals were received on the closing date of January 30, 2004, requesting MSRC funds in the amount of $7,529,520. On April 22, 2004, the MSRC approved funding four proposals totaling $2,000,000, which was subsequently approved by the AQMD Board. The MSRC also established a backup list of eligible projects requesting $6,590,219. On May 27, 2004, the MSRC evaluated its uncommitted and turnback funds to determine if and which proposals might be funded from the backup list. Details are described below in the Proposals section.

6. Diesel Exhaust After-Treatment Retrofit Program

This Program Announcement (#PA2004-06) provided $500,000 to fund 100% of the cost of purchasing and installing a CARB-verified particulate filter or diesel oxidation catalyst, up to a maximum of $8,000 per vehicle and $500 per vehicle to offset low-sulfur fuel costs. Projects would be funded on a first-come, first-serve basis. Ten applications were received totaling $4,912,686 by the closing date on April 9, 2004. Further details are described below in the Proposals section.

7. FY 2004-05 Technical Advisor Services

Included within each annual conceptual work program is an allocation for technical advisor services during the fiscal year. Additionally, every May the MSRC establishes an Administrative Budget to ensure expenditures stay within the 5% mandated cap. For the last few years the MSRC has divided costs for these services between the Administrative Budget and the conceptual work program. The current Technical Advisor is Raymond J. Gorski, and his contract includes three one-year options incorporating a 4% annual inflation adjustment, with discretion by the MSRC to exercise said options, as granted by the AQMD Board. On May 27, 2004, the MSRC considered exercising the third and final option in his contract; details are provided in the Proposals section.

Outreach

In accordance with the AQMD's consulting and contracting policies, a public notice advertising the solicitations was published on two different days in 25 newspapers and publications, including several targeting minorities. The solicitations were also was placed on the MSRC's website at "http://www.msrc-cleanair.org" as well as the AQMD's website at "http://www.aqmd.gov" under the "Business and Job Opportunities" icon, and information was included about them on the AQMD's 24-hour telephone message line for bidders at (909) 396-2724.

In addition to the AQMD's standard practices, a brochure announcing all of the MSRC's funding opportunities was mailed to over 1,600 interested parties on the MSRC's mailing list, as well as to the Black and Latino Legislative Caucuses, City Managers, Chambers of Commerce, the AQMD's Ethnic Communities Advisory Group, and business associations. Solicitations were downloaded from the MSRC's website and mailed upon request. Additionally, a target mailing for the Commuter Bus Pool Program PON was sent to shuttle bus companies.

Bidders' Conferences

Bidders' Conferences were conducted in early December 2003 at AQMD headquarters. A general question-and-answer session was conducted.

Evaluation Process

The MSRC's Technical Advisory Committee formed an evaluation subcommittee to review the proposals/pre-proposals to determine eligibility, using the criteria within the solicitations (described above). At its May 27, 2004 meeting, the MSRC considered recommendations from its Technical Advisory Committee.

Proposals

On May 27, 2004, as part of the FY 2003-04 Work Program, the MSRC considered several recommendations from its Technical Advisory Committee. The MSRC was apprised that up to $4.1 million is available from uncommitted revenue and turn-back funds. The MSRC was also advised that a prudent reserve should be kept, and about $3.6 million could be used to fund projects on the backup lists. This enabled the MSRC to fund the Local Government Match and Alternative Fuel/Advanced Technology Transit Bus Programs in full, and partially fund the backup list for the Off-Road Heavy-Duty Diesel Pollution Reduction Program. The MSRC’s actions and recommended contract awards are detailed below:

1. Local Government Match Program
   The MSRC unanimously approved funding 37 applications totaling $4,394,880 under the Local Government Match Program. Initially the MSRC approved funding only a portion of the eligible applications based on the available funding of $3 million set aside for this category. Ultimately, the MSRC unanimously approved funding all eligible applications received under the Local Government Match Program, using $1,394,880 from turn-back funds. Since proposals received from San Bernardino County only totaled $290,000, the monies set aside for the geographic minimum became available for projects in the other counties. A summary of all contract awards specifying applicant, funding amount and project specifics is attached and detailed in the recommended actions above.
    
2. Publicly Accessible Alternative Fuel Infrastructure Program
   On 6-0 vote with one abstention, the MSRC approved funding five contracts totaling $1,250,000 under this category, as follows:

• NorthStar in an amount not to exceed $250,000 for construction of a new LNG fueling station in Santa Clarita at Burrtec Waste Industries;
• Downs Commercial Fueling in an amount not to exceed $250,000 for construction of a new LNG/L-CNG station in Temecula;
• Clean Energy in an amount not to exceed $250,000 for construction of a new CNG station in the mid-Wilshire area of Los Angeles at City of Los Angeles Western Water District;
• Clean Energy in an amount not to exceed $250,000 for construction of a new CNG station in Mission Viejo at Atlas Properties; and
• R.F. Dickson Company in an amount not to exceed $250,000 for the upgrade and expansion of an existing CNG station located at Bellflower Unified School District.

There is a possibility that Downs Commercial Fueling may not need the full funding requested. If this is the case, the MSRC approved funding all or a portion of the sixth ranked proposal up to the amount not needed by Downs. The sixth ranked proposal is from Chart Industries/NexGen Fueling, which requested $250,000 for construction of a new LNG station in Long Beach. The MSRC will seek Board approval at a later date if an award is deemed appropriate for Chart Industries.

3. Regional Commuter Bus Pool Program
   Of the five proposals received, two were not consistent with the intent of the PON and the other three pre-proposers (First Student, Buspool.org, and TransVironmental Solutions) were asked to provide additional information. The final contender was Buspool.org. However, although Buspool.org’s pre-proposal seemed to offer a promising and innovative approach, upon further evaluation and consideration, the MSRC decided satisfactory parameters and milestones could not be developed to ensure operation of sustainable commuter bus pools within the region. The MSRC unanimously decided not to fund any pre-proposals and released the $800,000 set aside for this category for use in funding eligible projects on backup lists in other categories.
    
4. Alternative Fuel/Advanced Technology Transit Bus Program
   Last month the MSRC approved awarding partial funding for each of the five proposals received totaling $1,500,000 and established a backup list of two eligible projects requesting $927,555. On May 27, 2004, the MSRC unanimously decided to fund the two eligible projects in full using uncommitted revenues and turn-back funds, as follows:

• Los Angeles County Metropolitan Transportation Authority in the amount of $722,555 for up to 42 compressed natural gas transit buses; and
• Orange County Transportation Authority in the amount of $205,000 for up to five gasoline hybrid-electric transit buses and mechanic training.

One of the projects approved by the MSRC last month was intended to provide Foothill Transit an award of $715,000 for up to 75 compressed natural gas transit buses and refueling infrastructure. The May 7, 2004, letter to the AQMD Board seeking approval of this contract inadvertently listed the number of buses at 25. The MSRC seeks the AQMD Board’s approval to adjust and correct this previously authorized award for up to 75 buses, not 25.

5. Off-Road Heavy-Duty Diesel Pollution Reduction Program
   Last month the MSRC funded four proposals totaling $2,000,000 in this category and established a backup list of several eligible projects requesting $6,590,219. On May 27, 2004, the MSRC unanimously decided to fund the three top ranked eligible projects on the backup list up to the amount available from uncommitted revenues and turn-back funds excluding a prudent reserve. The awards are as follows:

• Herigstad Equipment in an amount not to exceed $970,586 for up to nine heavy-duty, Tier II diesel fuel scrapers;
• Road Builders, Inc. in an amount not to exceed $120,296 for up to tow heavy-duty, Tier II diesel fuel scrapers; and
• Herigstad Equipment in an amount not to exceed $231,656 as partial funding for the request of up to ten heavy-duty, Tier II diesel fuel scrapers.

6. Diesel Exhaust After-Treatment Retrofit Program
   Evaluation of the ten applications received by the closing date is still underway. The MSRC will consider awards under this last element of the FY 2003-04 Work Program in the next month or two. Any contract awards that result will be presented for approval to the AQMD Board at that time.
    
7. FY 2004-05 Technical Advisor Services
   As explained in the background section, the MSRC’s contract with Raymond J. Gorski includes three one-year options incorporating a 4% annual inflation adjustment, with discretion by the MSRC to exercise said options, as granted by the AQMD Board. The MSRC unanimously approved exercising the third and final option year in Mr. Gorski’s contract. The third option is for an amount not to exceed $152,240, with 75% (or an amount not to exceed $114,180) allocated as part of the FY 2004-05 Conceptual Work Program and 25% (or an amount not to exceed $38,060) allocated as part of the MSRC FY 2004-05 5% Administrative Budget. As this time the MSRC seeks Board approval of this allocation as part of the FY 2004-05 Conceptual Work Program.

In some cases the full amount requested in a proposal is not recommended for funding or the proposed scope of work has been modified. This is consistent with the MSRC's administrative policies, which allow the MSRC to approve a portion of a proposer’s scope of work and/or funding request. In those cases where the proposed funding level or scope of work has been modified by the MSRC, and the proposer cannot perform the project as approved, the MSRC may rescind the funding commitment and retain the funds in the Discretionary Fund for future work programs.

The MSRC requests authority to adjust the funds allocated to each project specified in this Board letter by up to five percent of the project's recommended funding. The Board has granted this authority to the MSRC for all past work programs. Finally, the MSRC requests the Board authorize the AQMD Chairman of the Board the authority to execute all agreements described in this letter as part of the FY 2003-04 Work Program.

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.

Attachment

FY 2003-04 Local Government Match Program Summary

Attachment

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