BOARD MEETING DATE: October 1, 2004
AGENDA NO. 4

Execute Contracts for AQIP Proposals Received During the Fourth Quarter of 2003 and First Semi-Annual Period of 2004

SYNOPSIS:

Rule 2202 - On-Road Motor Vehicle Mitigation Options was adopted on December 8, 1995 and amended on February 6, 2004. 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. Proposals received during the fourth quarter of 2003 and the first semi-annual period of 2004 were evaluated. This is to award projects for a total funding not to exceed $2,467,309.

COMMITTEE:

Mobile Source, September 24, 2004, Recommended for Approval

RECOMMENDED ACTION:

Authorize the Chairman to execute the following contracts for a total amount not to exceed $2,467,309 from the AQIP Special Revenue Fund.

1)	A contract with OceanAir Environmental, LLC to upgrade two diesel-powered locomotives in an amount not to exceed $700,000.
2)	A contract with OceanAir Environmental, LLC for the clean air upgrade of tug boat Brynn Foss in an amount not to exceed $460,000.
3)	A contract with Sukut Equipment Inc., to repower five diesel powered wheel scrapers in an amount not to exceed $446,450.
4)	A contract with Orange County and Quinn Shepherd Machinery Co. to repower two diesel powered Caterpillar dual engine wheel scrapers in an amount not to exceed $261,904.
5)	A contract with AQMS, LLC to generate emission credits by scrapping old vehicles under Regulation XVI in an amount not to exceed $598,955.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

Rule 2202 Air Quality Investment Program (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 2003 and the first semi annual period of 2004.

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 2003 and the first half of calendar year 2004 participation period ended on June 30, 2004 with 122 employers participating in the AQIP program. The total amount of AQIP funds received during this period was $1,774,290, which includes both annual and triennial participants. In addition, $24,043 is being carried forward from the previous quarter and an amount of $780,950 is available from unused funds from three projects (OceanAir Environmental for $54,000; R. F. Dickson for $660,000; Neuton Lawn Mower Company $66,950). Therefore, the total amount available for this quarter is $2,579,283 (see Attachment 1, Table 4). Staff recommends that $2,467,309 be used to purchase emission reductions to satisfy the target for the three quarters.

Proposal Evaluation

During the bidding process 15 proposals were received requesting funds ranging from $30,490 to $1,439,800. A summary of emission reduction targets and the emission reduction credit balance is provided in Attachment 2. Attachment 3 provides a summary of each proposal received and funds requested.

According to the March 5, 2004 revision of the RFP, the proposals were divided into six different categories as listed in Attachment 4. This attachment provides an overall summary of the proposals by category, 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 three-member evaluation panel comprised of one Transportation Programs Manager, one Air Quality Specialist and one independent external consultant on mobile sources; two female and one male; one Asian/Pacific Islander, one Caucasian and one Latino. After the proposals were scored within their respective categories, all proposals were ranked by total score (as described in the RFP). 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 respectively. Staff selected the highest ranking projects that would meet the one-year targets for all three pollutants. As part of the selection process, the panel based its selection on the scoring criteria outlined in the RFP. Reasons for recommendations made are provided at the end of each proposal summary in Attachment 3.

The proposals were ranked by score within each of the five categories and all proposals were ranked by total score as provided in the RFP. The evaluation panel was able to select projects from the highest ranking proposals from three of the five categories to meet the VOC, NOx and CO targets. As with prior proposal selections, the top proposals that gave the greatest amount of VOC reductions are chosen first followed by those proposals that provide the greatest amount of NOx reductions. Lastly, proposals that provided the greatest amount of CO reductions are selected. As such, the five highest ranking proposals are recommended for award to meet the VOC emission targets. The selection of the top five ranked proposals provided sufficient NOx and CO reductions to meet the respective emission reduction targets.

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

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:

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.

A Bidders’ Conference was convened at the AQMD on April 15, 2004 to highlight the requirements of the proposals and to answer questions from the prospective bidders in attendance.

Resource Impact

Total cost of expenditure for the proposed projects shall not exceed $2,467,309 from the Rule 2202 Air Quality Investment Program Special Revenue Fund.

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

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