BOARD MEETING DATE: July 11, 2008
AGENDA NO. 11

RECOMMENDED ACTIONS:

Authorize the Chairman to execute a contract with the team of Rasmussen Iron Works/Robert H. Peterson Co. to implement the gas log buy-down program in an amount not to exceed $500,000 from the Rule 1309.1 Priority Reserve Fund (36).
 

Barry R. Wallerstein, D.Env.
Executive Officer

Background

Residents of the South Coast Air Basin are exposed to some of the highest ambient concentrations of fine particulate matter in the nation. Rule 445 – Wood Burning Devices was adopted by the Governing Board on March 7, 2008 to implement control measure BCM-03 from the 2007 AQMP. As part of the Healthy Hearths Initiative, to maximize the emission reductions potential from this source category, the Governing Board also approved release of a Program Announcement to hire one or more contractors to implement a Gas Log Buy-Down Pilot Program at the March Board meeting. The goal of the program is to provide the public with financial incentives to encourage the installation of gas logs to replace existing wood burning fireplaces.
 

Outreach

In accordance with AQMD’s Procurement Policy and Procedure, a public notice advertising the Program Announcement and inviting bids was published in the Los Angeles Times, the Orange County Register, the San Bernardino Sun, and Riverside County Press Enterprise newspapers on March 12 and 19, 2008 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 Program Announcement was 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]. Information was also distributed to hearth-related businesses identified through a Standard Industrial Code (SIC) database and through a professional industry association.
 

Bid Evaluation

By the closing date of April 16, 2008, two responses to the Program Announcement were received. Both proposals were reviewed based on the evaluation criteria that consisted of 50 points for qualifications and experience, 35 points for cost, and 15 points for additional incentives in Environmental Justice areas. In accordance with District Policies and Procedures, additional points were also provided for disadvantaged or local businesses. An evaluation team (Panel) with experience in hearth products and incentive programs was assembled and consisted of AQMD staff from the Technology Advancement Office, Area Sources and a staff member from the Sacramento Metropolitan Air Quality Management District. The Panel makeup was two Caucasian, and one Asian; three male.
 

Proposal

The Panel determined that one of the two respondents did not submit a complete proposal and therefore could not be considered. The other respondent submitted a complete proposal and was considered technically qualified. Accordingly, staff recommends that the Board award a contract to the team of Rasmussen Iron Works and Robert H. Peterson Co. (Rasmussen/Peterson) for an amount not to exceed $500,000. Rasmussen/Peterson has prior experience in working with similar incentive programs involving the public. The corporate offices for the both companies are in the South Coast Air Basin and together the team offers over 90 styles of traditional gas logs and alternative gas fire installations that are certified to applicable national standards.

Under the proposal, a $125 discount off of an authorized dealer’s best price would be provided to customers that purchase gas log sets and receive professional installation services. The $125 discount would consist of $100 in AQMD-provided funds and an additional $25 in funding from authorized dealers. Additional outreach will be conducted in Environmental Justice areas. To facilitate program implementation, the contractor team has identified 96 authorized dealers that are distributed throughout the Basin (i.e., Los Angeles County - 45, Orange County - 30, Riverside County – 9, and San Bernardino County – 12). Approximately 25% of the dealers are located within Environmental Justice areas. All program advertising and administrative costs will be absorbed by the contractor team. AQMD will assist in information distribution through web page links, email, flier distribution, and AQMD publications (e.g., Advisor and Clean Air Congress). It is anticipated that program advertisement would begin in August of 2008 with program implementation starting in September 2008. The incentive would be offered to customers on a first come, first served basis until the funding has been expended.
 

Benefits

Replacing wood burning devices with cleaner burning gas log sets will reduce PM2.5 emissions. VOC, CO, and toxics will also be reduced. Rule 1309.1 program funding will directly be used for the incentive program and associated emission reductions since advertising and administrative costs will be absorbed by the contractor (including additional incentive funds).
 

Resource Impacts

The total cost of the proposed pilot program will not exceed $500,000. Sufficient funds are available from the Rule 1309.1 Priority Reserve Fund. Existing AQMD staff resources are available to implement this program.

Schedule

With approval of the staff recommendation, it is anticipated that the contract will be issued in time to begin program advertisement in August of 2008 and program implementation starting in September 2008. The program will be conducted until all funds are expended. Updates on the incentive program will be provided to the Stationary Source Committee as part of the annual implementation reports required by the Rule 445 adoption resolution.