BOARD MEETING DATE: June 1, 2007
AGENDA NO. 9

PROPOSAL:

Execute Contracts for Rule 2202 AQIP

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. Proposals for the funding opportunity have been reviewed. This action is to fund AQIP projects in an amount not to exceed $2,173,614.

COMMITTEE:

Mobile Source, May 25, 2007, Recommended for Approval

RECOMMENDED ACTION:

1. Authorize the Chairman to execute the following contracts for a total amount not to exceed $2,173,614 from the Rule 2202 AQIP Special Revenue Fund.
   1. A contract with Peed Equipment to generate emission reductions by repowering two dual engine wheel-type scrapers with new low-emission engines certified to Tier 3 emission levels in an amount not to exceed $514,814.
   2. 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 $500,000.
   3. A contract with Pick Your Part Auto Wrecking to generate emission reductions by scrapping old vehicles under Rule 1610 and using Rule 1612 credits in an amount not to exceed $500,000.
   4. A contract with Clean Energy to generate emission reductions by deploying 40 natural gas taxis through out the South Coast Air Basin in an amount not to exceed $658,800.

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 second 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 second half of calendar year 2006 participation period ended on December 31, 2006 with 85 employers participating in the AQIP program. The total amount of AQIP funds received during this period was $1,620,644, which includes both annual and triennial participants. An unspent amount of $34,860 from the prior period is available for funding in this period. In addition, an amount of 739,179 is available from two de-obligated projects, (Scarbrough Construction (C03392 and C03393) for $161,194 and $372,985 respectively, and Anaheim Transportation Network (C01194) for $205,000). An amount of $122,295 is deducted for Administrative costs in FY 2005-06. Therefore, the total amount available for this period is $2,272,388 (see Attachment 1, Table 4). Staff recommends that $2,173,614 be used to purchase emission reductions to satisfy the target for the second semiannual period of 2006.

Proposal Evaluation

During the bidding process for the second semiannual period of 2006, nine proposals were received requesting funds ranging from $901,554 to $1,400,000. 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 four 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 of 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 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 RFP provides that the District will select the highest ranking proposals from each category, or that combination of high-ranking proposals from each category as will obtain all needed pollutant emission reductions at least cost. The top scoring proposal in category #1, Off-road diesel repowering (Peed Equipment); category #3, On-road alternative fuel projects (Clean Energy); the second and third ranking proposals from category #2, Old-vehicle scrapping (AQMS Automotive, LLC, Proposal #1, Option #2, and Pick Your Part Auto Wrecking ) were selected as described above to meet the targets of all three pollutants VOC, NOx and CO. Two proposals received under the Marine Vessel repowering category were not selected as currently there is no approved calculation protocol for this category at this time. The highest ranking proposal in the Old-vehicle scrapping category submitted by Science and Technology Development Corporation was not selected as this contractor is yet to implement a similar contract awarded in March 2006.

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

Peed Equipment proposes to repower two dual engine wheel-type scrapers with new low-emission engines certified to Tier 3 emission levels. The cost-effectiveness of this proposal is $1.96 per pound. (Recommended for funding; ranked first in its category.)

AQMS Automotive proposes to generate emission reductions by scrapping old vehicles under Rule 1610 and credits generated under Rule 1612. The cost-effectiveness of these proposals is $2.25 per pound under both options. (The proposal ranked second in its category, Option 2 is recommended for funding.)

Pick Your Part Auto Wrecking proposes to generate emission reductions by using programs administered under Rule 1610 – Old-Vehicle Scrapping; and Rule 1612 - .Credits for Clean On-Road Vehicles. The cost-effectiveness of this proposal is $2.06 per pound. (Recommended for partial funding; Best cost-effectiveness in its category.)

Clean Energy proposes to generate emission reductions by deploying 85 natural gas taxis through out the South Coast Air Basin at a cost-effectiveness of $154.40 per pound. (Only proposal in its category; recommended for partial funding.)

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 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.

Resource Impact

Total cost of expenditure for the proposed projects and implementation support shall not exceed $2,173,614 from the Rule 2202 Air Quality Investment Program Special Revenue Fund.

Attachments (DOC 156kb)

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