BOARD MEETING DATE: February 2, 2007
AGENDA NO. 8

Execute Contracts for Rule 2202 AQIP and 2007 Lawn Mower and Leaf Blower Exchange Programs

SYNOPSIS:

At its October 6, 2006 meeting, the Board approved release of an RFP to solicit projects to meet Rule 2202 Air Quality Investment Program (AQIP) emission reduction targets for the first semi-annual period of 2006, and to solicit vendors for the 2007 Lawn Mower and Leaf Blower Exchange Programs.  Proposals for the three funding opportunities have been reviewed.  This action is to:  (1) fund two AQIP projects in an amount not to exceed $1,400,000, one with AQMS Automotive, LLC and one with Environmental Engineering Studies, Inc., to generate mobile source credits; (2) award a contract to Pacific Stihl to conduct the Leaf Blower Exchange Program in an amount not to exceed $266,925; (3) award a contract to Neuton, Inc. to conduct the Lawn Mower Exchange Program in an amount not to exceed $730,000; and (4) allocate $116,000 from the AQIP Fund to carry out the 2007 Lawnmower Exchange Program.

COMMITTEE:

Technology, January 26, 2007, Recommended for Approval

RECOMMENDED ACTION:

1. Authorize the Chairman to execute the following contracts for a total amount not to exceed $1,400,000 from the Rule 2202 AQIP Special Revenue Fund:

1. A contract with AQMS Automotive, LLC to generate emission reductions by scrapping old vehicles under Rule 1610 and using Rule 1612 credits in an amount not to exceed $1,000,000;
2. A contract with Environmental Engineering Studies, Inc., to generate emission reductions by using programs administered under Rules 1610 in an amount not to exceed $400,000.

2. A contract with Neuton Lawnmower Company to purchase up to 4,000 electric lawnmowers and to conduct “Mow Down Air Pollution 2007” Lawnmower Exchange events in an amount not to exceed $730,000 from the AQIP Special Revenue Fund.
3. Transfer $116,000 from the AQIP Special Revenue Fund to Science & Technology’s FY 2006-07 Budget, Services and Supplies Major Object to solicit outside business and organizational support to assist in implementing AQMD’s “Mow Down Air Pollution 2007” program.
4. A contract with Pacific Stihl to purchase 1,500 BR500 Backpack Leaf Blowers and to conduct “2007 Leaf Blower Exchange Program” in an amount not to exceed $266,925.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

The 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 first semi-annual period of 2006.

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 first half of calendar year 2006 participation period ended on June 30, 2006 with 75 employers participating in the AQIP program.  The total amount of AQIP funds received during this period was $1,463,420, which includes both annual and triennial participants.  In addition, an amount of $667,200 is available from two withdrawn projects (Hood Plumbing (C06040) for $135,000 and Ryerson, Master & Associates (C03397) for $532,200).  An additional amount of $412,958 is available from interest accrued in FY 2005-06.  Therefore, the total amount available for this period is $2,547,785 (see Attachment 1, Table 4).  Staff recommends that $2,512,925 be used to achieve emission reductions to satisfy the target for the first semiannual period of 2006.

Proposal Evaluation

During the bidding process for the first semiannual period of 2006, five proposals were received requesting funds ranging from $25,000 to $1,500,000.  Attachment 2 gives a summary of emission reduction targets and the emission reduction credit balance.  Attachment 3 gives a summary of each proposal received and funds requested. 

According to the October 6, 2006 revision of the RFP (2007-13), the proposals were divided into two 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 were reviewed and scored based on the information in the proposal as submitted to the AQMD.  After the proposals were scored they were ranked by total score (as described in the RFP).

Selection Criteria

Attachment 5 provides a summary of the proposal rankings.  All the proposals were scored collectively by overall cost-effectiveness for a combination of VOC, NOx and CO emissions and then separated into different categories.  Staff selected the highest ranking projects that would meet the one-year targets for all three pollutants.  As part of the selection process, staff 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 scored collectively by overall cost-effectiveness for a combination of VOC, NOx and CO emissions (with the most cost-effective proposal receiving a score of 100) and then divided into separate categories and ranked by total score within each specific category as provided in the RFP.  The two top scoring proposals in category #2 (old-vehicle scrapping (AQMS Automotive, LLC and Environmental Engineering Studies, Inc.) were selected as described above to meet the targets of all three pollutants VOC, NOx and CO.  Only one proposal was received in the on-road category.  However, this proposal is not recommended for award since the proposal provides minimal emission reductions and is deemed not cost-effective.

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

1.    AQMS Automotive, LLC                                                        Option 1: $1,000,000
                                                                                                  County:  All

AQMS Automotive, LLC proposes to generate emission reductions by scrapping old vehicles under Rule 1610 and using Rule 1612 credits.  The cost-effectiveness of these proposals is $2.12 and $2.13 per pound under Options 1 and 2 respectively.  (Option 1 ranked first overall and is recommended for funding.)

2.    Environmental Engineering Studies, Inc.                                                  $400,000
                                                                                                                      County:  All

Environmental Engineering Studies, Inc. proposes to generate emission reductions by scrapping old vehicles under Rule 1610 at a cost-effectiveness of $2.30 per pound.  (Recommended for partial funding; ranked second in its category.)

Lawn Mower Exchange

A typical gasoline lawnmower used weekly can produce as much pollution in a year as 43 new cars driven 12,000 miles each.  For the past four years, the AQMD has conducted lawnmower exchange programs through which nearly 15,648 gasoline-powered lawn mowers were traded in for cordless, electric mowers that produce zero emissions.  Staff proposes to carry out a similar exchange program in 2007, with a goal of exchanging up to 4,000 gasoline mowers for electric mowers.  To lock in a lower price for 2008, staff also proposes to offer an option to the vendor for 2008 if the funds are available.

At its October, 2006 meeting, the Board approved release of a Program Announcement (PA #2007-03) to solicit bids from qualified manufacturers to produce and provide up to 4,000 cordless electric lawnmowers to be used for the AQMD’s 2007 Lawnmower Exchange Program with an option for a similar program in 2008 if funds are available.  One bid with two options was received by the specified deadline.  The following table summarizes the two options.

Summary of Lawn Mower Proposal

The AQMD intends to again offer the mowers to the public for $100 each.

Leaf Blower Exchange

At its October, 2006 meeting, the Board approved release of a Program Announcement (PA #2007-02) to solicit bids from potential manufacturers/suppliers of low-emission/low-noise backpack leaf blowers to provide between 1,000 and 2,000 new blowers at a discounted price to be used for the AQMD’s 2007 Leaf Blower Exchange Program.  One bid (Pacific Stihl) with a choice of three models was received by the specified deadline.  The following table provides the specifications of the three models

The primary goal of this project is to replace existing back pack blowers currently used by commercial landscapers/gardeners within the South Coast Air Basin with back pack blowers which have significantly reduced emission and noise levels.  The current CARB II emission standard is 72 grams of HC + NOx per kilowatt hour.  The BR500 model has been certified by CARB at 19 grams of HC + NOx per kilowatt hour.  The 19 gram per kilowatt hour exceeds CARB’s BLUE SKY criteria of 36 grams for product in its displacement category.  The cost-effectiveness of this project $0.71 per pound ($1,420/ton.)  Because of its low emission levels and low noise level rating Model BR500 was used in the 2006 Leaf Blower Exchange.  Staff recommends the same model be used in the 2007 Leaf Blower Exchange Program.

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.

Resource Impact

Total cost of expenditure for the proposed projects and implementation support shall not exceed $2,512,925 from the Rule 2202 Air Quality Investment Program Special Revenue Fund.

Attachments (DOC 163.5kb)

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