BOARD MEETING DATE: February 2, 2007
AGENDA NO. 7

Execute Contracts for Natural Gas Fueling Station Infrastructure at School Districts and Joint Power Authorities

SYNOPSIS:

On September 8, 2006, the Board approved release of an RFP to solicit proposals for funding up to 75 percent of the capital investment costs of fueling infrastructure and garage or maintenance facility upgrades at public school districts and joint power authorities. Total amount of funding available is $2,000,000 as approved by the Board with its September 2006 release of the RFP.  Eight proposals were received by the closing date. One of the eight proposals was deemed unresponsive by the proposal evaluation panel.  As the solicitation was oversubscribed, this action is to request an additional $526,553 from the Clean Fuels Fund to be used to award funding to seven school districts in the amount of $2,526,553.

COMMITTEE:

Technology, January 26, 2007, Recommended for Approval

RECOMMENDED ACTIONS:

1. Transfer the sum of $491,237, as approved by the Governing Board when the RFP was released on September 8, 2006, to the Clean Fuels Fund. ($1,508,763, the balance of the $2 million originally authorized for the RFP, is from the Clean Fuels Fund).
2. Authorize the Chairman to execute contracts with the following entities in an amount not to exceed $2,526,553 from the Clean Fuels Funds:

1. A contract with Pupil Transportation Cooperative, in an amount not to exceed $187,154, to upgrade an existing, full public access CNG fueling station.
2. A contract with Coachella Valley Unified School District, in an amount not to exceed $124,550, to offset the costs of purchasing and installing a new CNG fueling station.
3. A contract with the Capistrano Unified School District, in an amount not to exceed $696,869, to offset the costs of purchasing and installing a new, full public access CNG fueling station.
4. A contract with Redlands Unified School District, in an amount not to exceed $525,000, to offset the costs of purchasing and installing a new CNG fueling station.
5. A contract with Los Angeles Unified School District, in an amount not to exceed $617,480, to offset the costs of purchasing and installing a new CNG fueling station.
6. A contract with Beaumont Unified School District, in an amount not to exceed $288,000, to offset the costs of purchasing and installing a new public access CNG fueling station.
7. A contract with Menifee Unified School District, in an amount not to exceed $87,500, to offset the costs of purchasing and installing a new fueling station.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

At its September 2006 meeting, the Board authorized release of RFP #P2007-07 soliciting cost-shared proposals from school districts and joint power authorities for installing natural gas fueling and maintenance facilities.  Funds generated under AB 923 for the AQMD’s Lower-Emission School Bus Replacement Program have been made available in the past for funding of up to 10 percent of bus purchase awards for CNG fueling infrastructure. However, the cost of CNG fueling infrastructure and necessary garage upgrades can be quite burdensome for school districts.  The identified economic burden may severely limit the use and expansion of clean fuel CNG buses by local school districts, increasing the risk and exposure of children to toxic diesel particulate matter and smog-forming pollutants.  Expansion of the natural gas fueling infrastructure is needed to support school bus fleet fueling needs and support future incentive program awards such as the Chairman’s School Bus Replacement Initiative and the Carl Moyer Program.

The Board approved a total of $2 million to support the RFP.  Funding is designed to offset capital investment costs of fueling infrastructure and garage or maintenance facility upgrades.  For this RFP, funding was only provided for natural gas fueling infrastructure.  Applications were accepted from school districts and joint power authorities providing transportation for students and school districts.  Additional scoring consideration was given to those applicants that provide public access.

Funding of natural gas fueling infrastructure was offered to school districts totaling up to 75% of the cost of the new or upgraded equipment and/or system.  The level of cost share was scored based upon the amount of grant funds requested including cash expenditures by the applicant, (i.e. equipment, engineering, permits, installation, etc.) less all available fuel savings, manufacturer, equipment and fuel tax credits, and other infrastructure award moneys through AB 923 (Low Emission School Bus Program).  In-kind services were limited to 10 percent with the exception of actual installation by school district staff.  Staff has met with all the school bus vendors and discussed the issue of potential tax credits allowed under the Energy Bill. 

The general requirements of the RFP are identified below:

1. Proposed project must be located within the jurisdictional boundaries of the South Coast Air Quality Management District.
2. Proposed project shall be a natural gas station time-fill or fast-fill fueling station. Additional points will be granted to those applicants proposing stations with public access.
3. Project schedule shall be limited to an eighteen-month time frame. 
4. Applicants must submit approved five (5) year bus replacement / bus purchase schedule along with operating/maintenance costs, utility costs, other funding sources, average annual miles driven and diesel gallons used for each bus in present fleet.
5. Proposed project may request cost-share funds for natural gas infrastructure and associated garage/maintenance facility upgrades.

All awardees are to be contractually obligated to the proposed station’s throughput.

Proposal

As mentioned above, eight proposals were received by the RFP deadline of October 27, 2006.  All proposals received in response to RFP #2007-07 were evaluated and scored by a diverse, technically qualified panel in accordance with criteria contained in the RFP.  The evaluation panel’s technical scores for each proposal are provided in Attachment A.  One of the eight proposals was deemed unresponsive.

In addition to any funding provided by the AQMD, school districts have available a number of mechanisms that allow up to 100% of the project funding.  These other mechanisms include the following:

• Fuel savings - Diesel fuel without tax is currently about $2.80/gallon.  CNG fuel cost based on a diesel equivalent gallon (DEG) from a station owned by the user is about $1.40/DEG.  This is a $1.40/DEG saving.
• Federal Energy Bill for buses - Bill allows manufacturer tax credits up to 50% of the differential cost between diesel and CNG buses.
• Federal Energy Bill for fueling station - Bill allows the CNG station installer/manufacturer up to $30,000 tax credit for a CNG station.
• Highway Bill (H.R. 3), Sec. 11113 - Volumetric Excise Tax Credit for Alternative Fuels. Provides an excise tax credit (referred to as VEETC) to the seller (or user if there is no seller) of CNG or LNG.  The credit is 50 cents per gasoline-gallon-equivalent for CNG.
• AQMD infrastructure component award that accompanies CNG buses.

Benefits to AQMD

The AQMP relies on the expedited implementation of advanced technologies and clean-burning fuels in Southern California to achieve air quality standards.  School buses operate in close proximity to students, teachers and neighbors.   Many schools provide bus services in heavily populated areas.   The successful implementation of the school bus replacement program will provide less polluting and safer school transportation for school children.   In addition, the program will maximize the potential emission benefits in low income, high diesel and high PM10 exposure areas, and will enhance the objectives of the Environmental Justice and Children’s Health Initiatives adopted by the Board.

Outreach

In accordance with AQMD’s Procurement Policy and Procedure, a public notice advertising the RFP/RFQ and inviting bids was published in the Los Angeles Times, the Orange County Register, the San Bernardino Sun, and Riverside County Press Enterprise newspapers to leverage the most cost-effective method of outreach to the entire South Coast Basin.

Additionally, potential bidders may have been notified utilizing AQMD’s own electronic listing of certified minority vendors.  Notice of the RFP/RFQ have been mailed to the Black and Latino Legislative Caucuses and various minority chambers of commerce and business associations, the State of California Contracts Register website, 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.

Bid Evaluation

Proposals received were evaluated by a diverse, technically qualified panel in accordance with criteria contained in the RFP.  The evaluation panel consisted of a representative from CARB, an independent technical expert, a representative from the California Energy Commission and an AQMD Program Supervisor.  The panel make-up was four Caucasian; two female and two male.  Attachment A provides a summary of the proposals received ranked by the scores received from the evaluation panel

Resource Impacts

Total funding for the project will be made available from the Clean Fuels Fund in an amount not to exceed $2,526,553.  

The Clean Fuels Fund was established as a special revenue fund resulting from the state-mandated Clean Fuels program.  The Clean Fuels Program, under Health and Safety Code Sections 40448.5 and 40512 and Vehicle Code Section 9250.11, established mechanisms to collect revenues from mobile sources to support projects to increase the utilization of clean fuels, including the development of the necessary advanced enabling technologies.  Funds collected from motor vehicles are restricted, by statute, to be used for projects and program activities related to mobile sources that support the objectives of the Clean Fuels Program.

Attachment (DOC 43.5 kb)
A – Evaluation of Technically Qualified Proposals Submitted Under RFP #P2007-07