BOARD MEETING DATE: December 2, 2005
AGENDA NO. 5

Execute Contracts to Generate Emission Reduction Credits Under Rule 1121 Mitigation Fee Program

SYNOPSIS:

In July 2005, a Program Announcement was issued to solicit NOx emission reduction projects as provided under Rule 1121. At the close of the solicitation deadline of September 1, 2005, nine proposals were received with a requested total funding of $3,150,907. This action is to execute contracts at a total cost not to exceed $1,525,407 to fund qualified stationary and mobile source NOx emission reduction projects.

COMMITTEE:

Technology, November 18, 2005, Recommended for Approval

RECOMMENDED ACTION:

Authorize the Chairman to execute the following contracts from the Rule 1121 Mitigation Fee Program Fund (Fund 27):

1.  A contract with Rentrac, Inc. to repower one dual engine 657B wheel type scraper and one 834B wheel dozer in an amount not to exceed $293,129.
2. A contract with MCM Construction, Inc. to repower four off-road construction lattice boom crawlers in an amount not to exceed $279,808.
3. A contract with Essex Rental Corp. to repower four off-road construction lattice boom crawlers in an amount not to exceed $287,808.
4. A contract with Martinez Trucking to repower three off-road cargo loaders in an amount not to exceed $99,072.
5. A contract with Terry Prouty Trucking, Inc. to repower two off-road steel loaders in an amount not to exceed $55,590.
6. A contract with County Sanitation Districts of Los Angeles County to repower one D8L crawler tractor, three D9N crawler tractors, and four 657E scrapers in an amount not to exceed $510,000.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

Under Rule 1121 - Control of Nitrogen Oxides from Residential Type Natural Gas Fired Water Heaters, emission mitigation fees are collected from water heater manufacturers to fund stationary and mobile source emission reduction projects targeted at offsetting NOx emissions from water heaters that do not currently meet Rule 1121 emission standards. Pursuant to Rule 1121, mitigation fees will be collected until January 1, 2008 after which, the water heater manufacturers will be required to meet more stringent NOx emission standards.

As of April 30, 2005, the AQMD has $1,526,917 available from emission mitigation fees collected under Rule 1121. Included in this amount is $589,332 in unspent funds from two cancelled projects that were previously approved by the Board at its June 2004 meeting.

The Board approved issuance of Program Announcement #PA2006-01 in July 2005 to solicit NOx emission reduction projects as provided under Rule 1121. At the close of the solicitation deadline of September 1, 2005, nine proposals were received with a requested total funding of $3,150,907.

Bid Evaluation

The proposals were reviewed and scored by three evaluators, all AQMD staff, comprised of one Program Supervisor, and two Air Quality Specialists; two Asian-Pacific Islander and one Caucasian; three male. The review panel evaluated and scored each proposal based on the selection criteria outlined in the Program Announcement, which encompassed cost effectiveness, project completion schedule, project category, and environmental justice, requirements of AB1390, (Firebaugh).

The proposals received and the proposed projects are summarized in Attachment A.

Proposal

Staff recommends that the five highest ranked proposals receive contract awards:

• Rentrac, Inc. to repower one dual engine 657B wheel type scraper and one 834B wheel dozer in an amount not to exceed $293,129;
• MCM Construction, Inc. to repower four off-road construction lattice boom crawlers in an amount not to exceed $279,808; and
• Essex Rental Corp. to repower four off-road construction lattice boom crawlers in an amount not to exceed $287,808;
• Martinez Trucking to repower three off-road cargo loaders in an amount not to exceed $99,072.
• Terry Prouty Trucking, Inc. to repower two off-road steel loaders in an amount not to exceed $55,590;
• County Sanitation Districts of Los Angeles County to repower a D8L crawler tractor, three D9N crawler tractors, and four 657E scrapers in an amount not to exceed $510,000.

The proposal from County Sanitation District of Los Angeles County is partially funded with the remaining available funds after funding the other proposals with higher average score as indicated in the attachment. These proposed projects with a total funding of $1,525,407 will reduce NOx emissions by approximately 57.83 tons per year. Rule 1121 mitigation provisions are provided to offset emissions from water heaters sold in the Basin during the current compliance period. The recommended project awards will exceed the NOx emission reductions required by the mitigation fee program. At the time the rule was adopted, the amount of mitigation fee worth $1,526,917 was expected to achieve NOx emission reductions of about 26 tons per year.

Outreach

In accordance with the AQMD’s consulting and contracting policies, a public notice advertising the Program Announcement & Application and inviting applications was published in the following publications:

Additionally, potential bidders were notified utilizing the Los Angeles County MTA Di-rectory 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 was 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). Information was also available on AQMD’s bidder’s 24-hour telephone message line (909) 396-2724.

Benefits to AQMD

The successful implementation of this program will result in reducing emissions from stationary and mobile sources for offsetting NOx emissions from water heaters that currently do not meet Rule 1121 emission standards. These projects will also produce concurrent toxic compound emission reductions (e.g., lowered diesel exhaust particulate matter), which is an additional benefit. The proposed projects will generate NOx emission reductions of approximately 57.83 tons/year.

Resource Impacts

Total cost of projects under Rule 1121 Mitigation Fee Program shall not exceed $1,525,407. There are sufficient funds in the Rule 1121 Mitigation Fee Program Fund.

Attachment

List of Proposals Received and Projects Proposed for Funding

ATTACHMENT A

Projects Proposed for Funding 

Proposals Received 

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