BOARD MEETING DATE: February 3, 2006
AGENDA NO. 6

Execute Contracts for FY 2004-05 Carl Moyer Memorial Air Qual-ity Standards Attainment Program and Modify Previous Award and Amend Existing Contract under the Carl Moyer Program

SYNPOSIS:

On September 30, 2005, proposals were received in response to the RFP that was issued for the FY 2004-05 Carl Moyer Air Quality Standards Attainment Program. This action is to execute new con-tracts under the Carl Moyer Program with $11,636,750 in funding from SB1107, $6,580,958 in funding from AB923, and $1,019,292 in funding from previous years’ turnback funds. Including the projects approved by the Board on December 2, 2005, the total expenditures under SB1107 and AB923 are $11,905,985 and $6,700,400 respectively, for the FY 2004-05 Carl Moyer Program. In addition, this action is to modify a previous award and an existing contract under the Carl Moyer Program.

COMMITTEE:

Technology, January 27, 2006. Less than a quorum was present during the discussion of this item; the Chairman communicated his concurrence and recommendation that this item be forwarded for Board consideration.

RECOMMENDED ACTIONS:

1. Authorize the Chairman to execute the following contracts for the FY 2004-05 Carl Moyer Program with funding from SB1107 and AB923:

1. A contract with UCLA for the purchase of 6 new CNG campus shuttles in an amount not to exceed $31,897 from the Carl Moyer Program Fund AB923 Ac-count.
2. A contract with Destination Shuttles for the purchase of 16 new CNG shuttles in an amount not to exceed $653,584 from the Carl Moyer Program Fund AB923 Account.
3. A contract with TAMCO Steel for the purchase of 1 new diesel industrial locomotive in an amount not to exceed $232,400 fund which includes the cost of an auto engine stop device and installation costs, from the Carl Moyer Program Fund AB923 Account.
4. A contract with Sukut Equipment for the repower of 1 dual engine and 16 single engine diesel scrapers in an amount not to exceed $1,488,925 from the Carl Moyer Program Fund AB923 Account.
5. A contract with Pick-Your-Part Auto Wrecking, Inc. for the repower of 16 diesel scrap metal loaders in an amount not to exceed $496,988 from the Carl Moyer Program Fund AB923 Account.
6. A contract with Tectonics, Inc. for the repower of 2 diesel forklifts in an amount not to exceed $23,878 from the Carl Moyer Program Fund AB923 Account.
7. A contract with the City of Newport Beach for the purchase of 6 new CNG refuse vehicles in an amount not to exceed $57,494 from the Carl Moyer Program Fund AB923 Account.
8. A contract with Jagur Tractor for the repower of 9 diesel scrapers in an amount not to exceed $794,903 from the Carl Moyer Program Fund AB923 Account.
9. A contract with the City of Alhambra for the purchase of 1 new CNG street sweeper in an amount not to exceed $8,137 from the Carl Moyer Program Fund AB923 Account.
10. A contract with Dennis McCoy & Sons for the repower of 8 dual engine scrapers in an amount not to exceed $1,589,752 from the Carl Moyer Program Fund AB923 Account.
11. A contract with Pacific Harbor Lines for the repower of 9 diesel switcher loco-motives in an amount not to exceed $1,203,000 from the Carl Moyer Program Fund AB923 Account and $2,406,000 from the Carl Moyer Program Fund SB 1107 Account.
12. A contract with Dy-Dee Service of Pasadena Inc for the purchase of 4 new CNG delivery vans in an amount not to exceed $109,979 from the Carl Moyer Pro-gram Fund SB 1107 Account.
13. A contract with U.S. Air Conditioning for the purchase of 7 new CNG trucks in an amount not to exceed $210,000 from the Carl Moyer Program Fund SB 1107 Accountnd.
14. A contract with the City of Los Angeles Environmental Affairs Department for the installation of 41 diesel emission control systems in an amount not to exceed $348,500 from the Carl Moyer Program Fund SB 1107 Account.
15. A contract with Cummins Cal Pacific for the installation of 9 diesel emission control systems in an amount not to exceed $196,992 from the Carl Moyer Pro-gram Fund SB 1107 Account.
16. A contract with LAMTA for the repower of 100 CNG urban buses in an amount not to exceed $1,046,970 from the Carl Moyer Program Fund SB 1107 Account.
17. A contract with Schwan’s Home Service for the purchase of 6 new LPG delivery trucks in an amount not to exceed $28,200 from the Carl Moyer Program Fund SB 1107 Account.
18. A contract with SSA Marine for the retrofit of 41 diesel emission control systems in an amount not to exceed $120,469 from the Carl Moyer Program Fund SB 1107 Account.
19. A contract with Burrtec for the purchase of 14 new CNG refuse vehicles in an amount not to exceed $392,630 from the Carl Moyer Program Fund SB 1107 Account.
20. A contract with the City of Los Angeles for the purchase of 50 new CNG refuse vehicles and 25 new CNG street sweepers in an amount not to exceed $960,749 from the Carl Moyer Program Fund SB 1107 Account.
21. A contract with CR&R, for the purchase of 75 new CNG refuse vehicles in an amount not to exceed $2,133,900 from the Carl Moyer Program Fund SB 1107 Account.
22. A contract with the Norwalk-La Mirada Unified School District for the installation of 2 diesel emission control systems in an amount not to exceed $7,253 from the Carl Moyer Program Fund SB 1107 Account.
23. A contract with MCM Construction Co. for the repower of 8 diesel lattice boom crawlers in an amount not to exceed $536,892 from the Carl Moyer Program Fund SB 1107 Account.
24. A contract with Grade Pros for the repower of 9 diesel scrapers in an amount not to exceed $698,165 from the Carl Moyer Program Fund SB 1107 Account.
25. A contract with Yeager Skanska, Inc for the repower of 7 diesel dual engine scrapers in an amount not to exceed $1,316,959 from the Carl Moyer Program Fund SB 1107 Account.
26. A contract with Universal Studios for the repower of off-road people movers with 10 diesel engines in an amount not to exceed $170,000 from the Carl Moyer Program Fund SB 1107 Account.
27. A contract with UCI Special Event Parking for the installation of 3 diesel emission control systems in an amount not to exceed $8,294 from the Carl Moyer Program Fund SB 1107 Account.
28. A contract with Peed Equipment for the repower of 2 diesel scrapers in an amount not to exceed $221,840 from the Carl Moyer Program Fund SB 1107 Account.
29. A contract with Reed Thomas Co. Inc. for the repower of 2 diesel dual engine scrapers in an amount not to exceed $331,018 from the Carl Moyer Program Fund SB 1107 Account.
30. A contract with Altfillisch Contractors, Inc. for the repower of 1 single engine and 3 dual engine diesel scrapers in an amount not to exceed $391,940 from the Carl Moyer Program Fund SB 1107 Account.

2. Authorize the Chairman to execute the following contracts with turn-back dollars from the Carl Moyer Program Fund:
   1. A contract with George M. Huff Lumber for the repower of 7 lumber loaders in an amount not to exceed $187,563 from the Carl Moyer Program Fund Prop. 40 Account and the Carl Moyer Program Fund.
   2. A contract with Omnitrans for the repower of 82 CNG urban buses in an amount not to exceed $750,705 from the Carl Moyer Program Fund.
   3. A contract with the City of Banning for the purchase of a new CNG street sweeper and a new CNG vector/maintenance vehicle in an amount not to exceed $11,173 from the Carl Moyer Program Fund.
   4. A contract with Avcogas Propane Sales & Services for the purchase of 1 new LPG truck in an amount not to exceed $11,095 from the Carl Moyer Program Fund.
   5. A contract with Rainbow Disposal for the purchase of 6 new CNG refuse vehicles in an amount not to exceed $58,756 from the Carl Moyer Program Fund.
3. Authorize the Chairman to modify the following Carl Moyer Program award and con-tract:
   1. From the award with Pacific Harbor Line, Inc. to purchase 8 new diesel locomotives in an amount not to exceed $3,200,000, to repower 8 diesel locomotives in the same unchanged amount from the Carl Moyer Program Fund Prop. 40 Ac-count originally awarded on March 5, 2004.
   2. From the contract with Varner Construction Inc. to repower 17 diesel scrapers and 2 diesel rock trucks with Tier III engines in an amount not to exceed $1,444,414 from the Carl Moyer Program Prop. 40 Fund originally approved on March 4, 2005, to a contract that allows 7 of the scrapers to be repowered to Tier II engines with a reduced contract amount not to exceed $1,359,350 from the Carl Moyer Program Fund Prop. 40 Account.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

The Carl Moyer Memorial Air Quality Standards Attainment Program (CMP) provides funding on an incentive basis for the incremental cost of purchasing cleaner than required engines and equipment. Eligible projects include cleaner on- and off-road, marine, loco-motive, and agricultural engines, as well as forklifts, airport ground support equipment, and auxiliary power units.

This is the seventh year of the CMP. However, this is the first year of the program with a long-term source of funding generated under SB 1107 and AB 923. CARB has allocated $11,906,373 in project funds under SB1107 to the AQMD for the FY 2004-05 Carl Moyer Program. In addition, the AQMD has added approximately $6.7 million in AB923 funding to the CMP, which includes the required local match of $5,421,846 for the FY 2004-05 program.

At its July 8, 2005 meeting, the Board approved the release of RFP #P2006-01 to solicit proposals for Year Seven of the Carl Moyer Program for approximately $18.6 million. By the closing date of September 30, 2005, a total of 72 proposals were submitted re-questing approximately $52 million in funding. On December 2, 2005, the Board approved awards for the agricultural engine, marine vessel, and forklift categories totaling $388,677. This comprised $269,235 in SB 1107 and $119,442 in AB923. Table 1 shows the total amount of the remaining dollars currently available under SB 1107 and AB923, in addition to turn-back dollars from previous years’ Carl Moyer Program funds. Table 2 shows the detailed breakdown of the turn-back dollars.

Table 1. Carl Moyer Program Available Dollars

Table 2. Returned Program Dollars

Proposal

Carl Moyer Program

This action is to approve recommended projects from the remaining Carl Moyer Program funds for FY 2004-05 under SB 1107 & AB 923, and from the previous years’ Carl Moyer Program turn-back dollars. Awards using SB 1107, AB 923, and turn-back dollars will not be commingled and will be allocated separately.

Prior to this year, only projects that reduce NOx emissions qualified for funding. How-ever, based on the newly developed guidelines by CARB, projects that reduce NOx, PM, and ROG/VOCs now qualify for funding with the cost-effectiveness calculations including all three pollutants. Additionally, due to calculation modifications contained in the new CMP guidelines adopted by CARB on November 17, 2005, PM emissions are calculated at 20 times the actual emission reduction value (due to greater health impacts). The cost-effectiveness calculations of the Carl Moyer Program projects are based on equipment life.

Funding eligibility of projects subject to CARB rules and compliance plans have been discussed with and approved by CARB staff.

Table 3 provides a detailed list of all the projects proposed for funding under SB 1107, AB 923, and turn-back dollars. Proposed funding amounts for the proposed projects under the FY 2004-05 Carl Moyer Program are based on the following:

• SB 1107: $11,905,985 (comprised of $11,636,750 recommended today and $269,235 approved on December 2, 2005)
• AB923: $6,700,400 (comprised of 6,580,958 recommended today and $119,442 approved on December 2, 2005)
• Turn-back: $1,019,292 (from previous years’ Carl Moyer Program Fund)

Total NOx and PM reductions from the recommended projects are approximately 792 tons/year and 24 tons/year, respectively.

Table 4 summarizes staff’s recommendation for awards in disproportionately impacted areas under the requirements of AB1390. The total amount of projects funded in disproportionately impacted areas is $14,270,460. The total amount of projects funded solely based on cost-effectiveness is $5,355,217. In summary, 72.7% of the projects are in disproportionately impacted areas.

The recent adoption of the Cargo Handling Equipment and Public Fleet Rules by CARB on December 8, 2005 has an impact on projects submitted to the Carl Moyer Program. Therefore, staff is proposing that these applications be reconsidered in Year Eight of the program, for which staff is requesting the issuance of RFP #P2006-15 as part of today’s agenda. All of the other eligible projects that are not recommended for funding in this round will also remain eligible for Year Eight of the CMP if the applicants request reconsideration of their projects in writing with any additional information and updates as deemed necessary by staff.

In order to facilitate use of funds more expeditiously, staff may return to the Board with new funding proposals in the event additional dollars become available utilizing the proposals from the RFP #P2006-01 solicitation as the basis for these awards.

Award and Contract Modification

1. A modification to the award with Pacific Harbor Lines Inc. is requested to correct an error that occurred when this project was approved by the Board on March 5, 2004. The award was approved for the purchase of eight new locomotives, whereas the evaluation and request was based on the repower of eight diesel locomotives. This modification will not result in any change in the award amount or in emission reductions.
2. The award with Varner Construction Inc. was approved by the Board on March 4, 2005. The applicant originally proposed and was awarded funding based on repowering 2 diesel trucks and 17 diesel scapers, 12 of which are Wabco 222G scrapers that they proposed to be repowered with Tier II Detroit Diesel Series 50 engines. Unfortunately, Detroit Diesel discontinued production of that engine. When this was discovered, Varner proposed replacement with Deutz engines, which were certified as Tier III. As a result, Varner entered into a contract to repower their engines at Tier III levels.

During the replacement process, after some of the engines were delivered, Varner discovered that the delivered engines were Tier II and that the Tier III engines were not yet available. Varner is requesting to be allowed to install the Tier II engines that have been delivered, a total of 7, and install Tier III engines for the remaining 5 pieces of equipment that have not yet been delivered. This action will result in higher emission reductions than were anticipated during the analysis and review process. Since Tier II engines cost less, the award will be reduced from $1,444,414 to $1,359,350. Additionally, the company performing the repowers has agreed to install the higher priced Tier III engines at their own cost. As a result, the air basin will benefit from 5 cleaner engines. The remaining 5 scrapers and 2 diesel trucks will still be repowered at Tier III levels in accordance with the contract.

Funding Distribution

Funding for projects has been recommended based on the priorities of the “Carl Moyer Program Guidelines under SB 1107 & AB 923” adopted by the Board on July 8, 2005. The priorities of the guideline are:

- Goods Movement (no less than 40%)
- Environmental Justice (no less than 50%)
- Cost Effectiveness
- Low Emission Engine/Vehicle Preference
- Early Commercialization of Advanced Technologies/Fuels
- Fleet Rules
- School Buses

Due to the types of applications received only about 25% of the recommended awards satisfy the Goods Movement objective. However, it is anticipated that with the addition of Fleet Modernization and funding of heavy-duty LNG trucks at the ports in the next round of funding this objective will be satisfied.

Approximately 72.7% of the award dollars are recommended for projects under the Environmental Justice category in disproportionately impacted (DI) areas as shown in Table 3. In the evaluation process, staff recommended cost-effective proposals in the DI areas first with 50% of the available funding based on their ranking as described below. The re-maining qualified DI proposals with all other qualified proposals were then recommended for funding based on cost effectiveness only.

Disproportionate Impact (DI) Point Ranking

The requirements of AB 1390 are 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 were evaluated according to the following criteria to qualify for funding under DI requirements:
   1. 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
   2. 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 level is 46 micrograms per cubic meter and above, on an annual average, or
   3. 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.

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 ports since these populated areas are directly impacted by port activities.

Table 3: Recommended Awards by Fund Account

Table 4: Award Recommendations and Proposed Funding Distribution

Outreach

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

Additionally, potential bidders were 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 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

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 is a direct result of these technology advancement activities. The vehicles and equipment funded under this RFP will operate many years and will pro-vide long-term emissions reductions.

Resource Impacts

Funding for Year Seven of the Carl Moyer Program shall not exceed $18,606,385, comprised of $11,905,985 in SB 1107 funding, and $6,700,400 in AB923 funding. The SB1107 and AB923 amounts include the awards previously approved by the Board on December 2, 2005, and reflect the total amount of awards for Year Seven of the Program. There are sufficient funds in the Carl Moyer Program Fund from dollars collected under AB923 and from funding to be received from CARB under SB1107. In addition, $1,019,292 is recommended for funding in turn-back dollars from the previous years’ award.

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