BOARD MEETING DATE: July 11, 2008
AGENDA NO. 22

RECOMMENDED ACTIONS:

1. Approve a funding augmentation in an amount not to exceed $360,000 to existing contract #MS08003 with A-Z Bus Sales under the Alternative Fuel School Bus Incentives Program, using unallocated funds, as part of the FY 2007-08 Work Program;
2. Approve the Partial FY 2008-09 AB 2766 Discretionary Fund Work Program with the following elements:
1. Incentives for Alternative Fuel Heavy-Duty Engines for On-Road Vehicles totaling $4,861,627;
2. Local Government Match Program projects totaling $1,189,435;
3. Alternative Fuel Infrastructure Funding Opportunities totaling $5,186,600; and
4. Conversion of Taxicabs to Dedicated CNG totaling $225,000;
3. Approve augmentations totaling $1,460,002 for six contracts/awards, and the award of six additional contracts totaling $3,401,625, under the Alternative Fuel Heavy-Duty Engines for On-Road Vehicles Program as part of the FY 2008-09 Work Program, as described in this letter and as follows:
1. Augmentation of award to the City of San Bernardino in an amount not to exceed $206,304 as part of the FY 2008-09 Work Program, which together with $183,696 previously awarded as part of the FY 2007-08 Work Program, will result in a combined award amount of $390,000 for the purchase of up to 13 heavy-duty, low-emission natural gas vehicles;
2. Augmentation of award to Burrtec Waste Industries in an amount not to exceed $238,044 as part of the FY 2008-09 Work Program, which together with $211,956 previously awarded as part of the FY 2007-08 Work Program, will result in a combined award amount of $450,000 for the purchase of up to 15 heavy-duty, low-emission natural gas vehicles for their Azusa location;
3. Augmentation of award to Burrtec Waste Industries in an amount not to exceed $238,044 as part of the FY 2008-09 Work Program, which together with $211,956 previously awarded as part of the FY 2007-08 Work Program, will result in a combined award amount of $450,000 for the purchase of up to 15 heavy-duty, low-emission natural gas vehicles for their Saugus location;
4. Augmentation of award to United Parcel Service in an amount not to exceed $158,696 as part of the FY 2008-09 Work Program, which together with $141,304 previously awarded as part of the FY 2007-08 Work Program, will result in a combined award amount of $300,000 for the purchase of up to 10 heavy-duty, low-emission natural gas vehicles;
5. Augmentation of award to Diversified Truck Rental in an amount not to exceed $158,696 as part of the FY 2008-09 Work Program, which together with $141,304 previously awarded as part of the FY 2007-08 Work Program, will result in a combined award amount of $300,000 for the purchase of up to 10 heavy-duty, low-emission natural gas vehicles;
6. Augmentation of award to Los Angeles World Airports (City of Los Angeles) in an amount not to exceed $460,218 as part of the FY 2008-09 Work Program, which together with $409,782 previously awarded as part of the FY 2007-08 Work Program, will result in a combined award amount of $870,000 for the purchase of up to 29 heavy-duty, low-emission natural gas vehicles;
7. A contract with Omnitrans in an amount not to exceed $900,000 for the purchase of up to 30 heavy-duty, low-emission natural gas vehicles;
8. A contract with the County of Los Angeles, Department of Public Works, in an amount not to exceed $90,000 for the purchase of up to 3 heavy-duty, low-emission natural gas vehicles;
9. A contract with Enterprise Rent-A-Car in an amount not to exceed $300,000 for the purchase of up to 10 heavy-duty, low-emission natural gas vehicles;
10. A contract with Ware Disposal Company in an amount not to exceed $900,000 for the purchase of up to 30 heavy-duty, low-emission natural gas vehicles;
11. A contract with CalMet Services in an amount not to exceed $900,000 for the purchase of up to 30 heavy-duty, low-emission natural gas vehicles;
12. A contract with Sunline Transit Agency in an amount not to exceed $311,625 for the purchase of up to 15 heavy-duty, low-emission natural gas vehicles;
4. Approve the award of 29 contracts totaling $4,189,435 (using the $3 million originally allocated in the FY 2007-08 Work Program plus $1,189,435 from the FY 2008-09 Work Program) for the Local Government Match Program as part of the FYs 2007-08 and 2008-09 Work Programs, as described in this letter and as follows:
1. A contract with the City of Villa Park in an amount not to exceed $6,500 for the upgrade of their existing natural gas refueling facility ($4,998 as part of the FY 2007-08 Work Program and $1,502 as part of the FY 2008-09 Work Program);
2. A contract with the City of Anaheim in an amount not to exceed $550,000 for the purchase of up to 22 liquefied petroleum gas (LPG) heavy-duty vehicles ($422,882 as part of the FY 2007-08 Work Program and $127,118 as part of the FY 2008-09 Work Program);
3. A contract with the County of Los Angeles, Department of Public Works, in an amount not to exceed $75,000 for remote vehicle diagnostics for up to 150 vehicles ($52,806 as part of the FY 2007-08 Work Program and $22,194 as part of the FY 2008-09 Work Program);
4. A contract with the County of Los Angeles, Department of Public Works, in an amount not to exceed $275,000 for the purchase of up to 11 LPG heavy-duty vehicles ($211,441 as part of the FY 2007-08 Work Program and $63,559 as part of the FY 2008-09 Work Program);
5. A contract with the County of Los Angeles, Department of Public Works, in an amount not to exceed $6,901 for remote vehicle diagnostics for up to 34 vehicles ($4,859 as part of the FY 2007-08 Work Program and $2,042 as part of the FY 2008-09 Work Program);
6. A contract with the City of Santa Monica in an amount not to exceed $600,000 for the purchase of up to 24 natural gas heavy-duty vehicles ($461,326 as part of the FY 2007-08 Work Program and $138,674 as part of the FY 2008-09 Work Program);
7. A contract with the City of Gardena in an amount not to exceed $25,000 for the purchase ofone LPG heavy-duty vehicle ($19,222 as part of the FY 2007-08 Work Program and $5,778 as part of the FY 2008-09 Work Program);
8. A contract with the City of Azusa in an amount not to exceed $25,000 for the purchase of one LPG heavy-duty vehicle ($19,222 as part of the FY 2007-08 Work Program and $5,778 as part of the FY 2008-09 Work Program);
9. A contract with the City of Claremont in an amount not to exceed $72,500 for the expansion of their existing natural gas refueling facility ($55,743 as part of the FY 2007-08 Work Program and $16,757 as part of the FY 2008-09 Work Program);
10. A contract with the City of Irvine in an amount not to exceed $9,000 for remote vehicle diagnostics for up to 36 vehicles ($6,920 as part of the FY 2007-08 Work Program and $2,080 as part of the FY 2008-09 Work Program);
11. A contract with the County of San Bernardino, Department of Public Works, in an amount not to exceed $14,875 for remote vehicle diagnostics for up to 70 vehicles as part of the FY 2007-08 Work Program;
12. A contract with the County of San Bernardino, Department of Public Works, in an amount not to exceed $200,000 for the purchase of up to eight natural gas heavy-duty vehicles as part of the FY 2007-08 Work Program;
13. A contract with the City of La Verne in an amount not to exceed $11,925 for remote vehicle diagnostics for up to 53 vehicles ($9,169 as part of the FY 2007-08 Work Program and $2,756 as part of the FY 2008-09 Work Program);
14. A contract with the City of South Pasadena in an amount not to exceed $169,421 for the construction of a new CNG refueling station ($130,264 as part of the FY 2007-08 Work Program and $39,157 as part of the FY 2008-09 Work Program);
15. A contract with the City of Glendale in an amount not to exceed $325,000 for the purchase of up to 13 natural gas heavy-duty vehicles ($249,884 as part of the FY 2007-08 Work Program and $75,116 as part of the FY 2008-09 Work Program);
16. A contract with the City of Los Angeles, Department of Water and Power, in an amount not to exceed $1,050,000 for the purchase of up to 42 natural gas heavy-duty vehicles ($807,320 as part of the FY 2007-08 Work Program and $242,680 as part of the FY 2008-09 Work Program);
17. A contract with the City of Rancho Palos Verdes in an amount not to exceed $50,000 for the purchase of up to two LPG heavy-duty vehicles ($38,444 as part of the FY 2007-08 Work Program and $11,556 as part of the FY 2008-09 Work Program);
18. A contract with the City of Riverside in an amount not to exceed $105,500 for the expansion of their existing natural gas refueling facility and modifications to their maintenance facility as part of the FY 2007-08 Work Program;
19. A contract with the City of Los Angeles, Department of Transportation, in an amount not to exceed $14,600 for remote vehicle diagnostics for up to 73 vehicles as part of the FY 2008-09 Work Program;
20. A contract with the City of Ontario in an amount not to exceed $175,000 for the purchase of up to seven natural gas heavy-duty vehicles ($160,125 as part of the FY 2007-08 Work Program and $14,875 as part of the FY 2008-09 Work Program);
21. A contract with the City of Desert Hot Springs in an amount not to exceed $25,000 for the purchase of one natural gas heavy-duty vehicle as part of the FY 2007-08 Work Program;
22. A contract with the City of Chino in an amount not to exceed $25,000 for the purchase of one natural gas heavy-duty vehicle as part of the FY 2008-09 Work Program);
23. A contract with the City of Santa Clarita in an amount not to exceed $3,213 for remote vehicle diagnostics for up to 14 vehicles as part of the FY 2008-09 Work Program;
24. A contract with the City of Paramount in an amount not to exceed $25,000 for the purchase of one natural gas heavy-duty vehicle as part of the FY 2008-09 Work Program;
25. A contract with the City of Culver City in an amount not to exceed $150,000 for the purchase of up to six natural gas heavy-duty vehicles as part of the FY 2008-09 Work Program;
26. A contract with the City of Santa Clarita in an amount not to exceed $25,000 for the purchase of one natural gas heavy-duty vehicle as part of the FY 2008-09 Work Program;
27. A contract with the City of Cerritos in an amount not to exceed $25,000 for the purchase of one natural gas heavy-duty vehicle as part of the FY 2008-09 Work Program;
28. A contract with the City of Laguna Beach in an amount not to exceed $75,000 for the purchase of up to three LPG heavy-duty vehicles as part of the FY 2008-09 Work Program; and
29. A contract with the City of Colton in an amount not to exceed $75,000 for the purchase of up to three natural gas heavy-duty vehicles as part of the FY 2008-09 Work Program).
5. Approve the award of 28 contracts totaling $7,686,600 (using the $2.5 million originally allocated in the FY 2007-08 Work Program plus $5,186,600 from the FY 2008-09 Work Program) for the Alternative Fuel Infrastructure Funding Opportunities Program as part of the FYs 2007-08 and 2008-09 Work Programs, as described in this letter and as follows:
1. A contract with Burrtec Waste Industries in an amount not to exceed $100,000 for the construction of a new CNG refueling station in Fontana as part of the FY 2007-08 Work Program;
2. A contract with the City of Los Angeles, Bureau of Sanitation, in an amount not to exceed $400,000 for the construction of a new CNG fueling station at their North Central Yard as part of the FY 2007-08 Work Program;
3. A contract with Clean Energy in an amount not to exceed $400,000 for the construction of a new LNG refueling station in Fontana as part of the FY 2007-08 Work Program;
4. A contract with Clean Energy in an amount not to exceed $400,000 for the construction of a new LNG refueling station at the Port of Long Beach at Pier S and New Dock Street as part of the FY 2007-08 Work Program;
5. A contract with Clean Energy in an amount not to exceed $400,000 for the construction of a new LNG refueling station at the Port of Long Beach at Anaheim and I Streets as part of the FY 2007-08 Work Program;
6. A contract with Orange County Transportation Authority (OCTA) in an amount not to exceed $400,000 for the construction of a new CNG refueling station in Garden Grove as part of the FY 2007-08 Work Program;
7. A contract with Clean Energy in an amount not to exceed $400,000 for the construction of a new CNG refueling station at Ontario National Airport ($300,000 as part of the FY 2007-08 Work Program and $100,000 as part of the FY 2008-09 Work Program);
8. A contract with Burrtec Waste Industries in an amount not to exceed $100,000 for the construction of a new CNG refueling station in San Bernardino as part of the FY 2007-08 Work Program;
9. A contract with Burrtec Waste Industries in an amount not to exceed $100,000 for the construction of a new CNG refueling station in Azusa as part of the FY 2008-09 Work Program;
10. A contract with Clean Energy in an amount not to exceed $400,000 for the construction of a new CNG refueling station in Los Angeles as part of the FY 2008-09 Work Program;
11. A contract with Go Natural Gas Inc. in an amount not to exceed $400,000 for the construction of a new CNG refueling station in Rialto as part of the FY 2008-09 Work Program;
12. A contract with Go Natural Gas Inc. in an amount not to exceed $400,000 for the construction of a new CNG refueling station in Moreno Valley as part of the FY 2008-09 Work Program;
13. A contract with Hemet Unified School District in an amount not to exceed $75,000 for the expansion of their existing CNG refueling station as part of the FY 2008-09 Work Program;
14. A contract with Pupil Transportation Cooperative in an amount not to exceed $10,500 for the expansion of their existing CNG refueling station as part of the FY 2008-09 Work Program;
15. A contract with Clean Energy in an amount not to exceed $400,000 for the construction of a new CNG refueling station at Palm Springs Airport;
16. A contract with Trillium USA in an amount not to exceed $334,100 for the construction of a new CNG refueling station as part of the FY 2008-09 Work Program;
17. A contract with the Regents of the University of California in an amount not to exceed $400,000 for the construction of a new hydrogen refueling station as part of the FY 2008-09 Work Program;
18. A contract with Perris Union High School District in an amount not to exceed $225,000 for the construction of a new CNG refueling station as part of the FY 2008-09 Work Program;
19. A contract with Clean Energy in an amount not to exceed $400,000 for the construction of a new CNG refueling station in Paramount as part of the FY 2008-09 Work Program;
20. A contract with ABC Unified School District in an amount not to exceed $63,000 for the construction of a new CNG refueling station as part of the FY 2008-09 Work Program;
21. A contract with Clean Energy in an amount not to exceed $400,000 for the construction of a new CNG refueling station in Burbank as part of the FY 2008-09 Work Program;
22. A contract with Clean Energy in an amount not to exceed $400,000 for the construction of a new CNG refueling station in Norwalk as part of the FY 2008-09 Work Program;
23. A contract with the Fontana Unified School District in an amount not to exceed $323,500 for expansion of their existing CNG refueling station as part of the FY 2008-09 Work Program;
24. A contract with Disneyland in an amount not to exceed $200,000 for expansion of their existing CNG refueling station as part of the FY 2008-09 Work Program;
25. A contract with Hythane Company in an amount not to exceed $144,000 for the expansion of the existing Los Angeles World Airports’ LNG/LCNG refueling station through the addition of Hythane fueling capability as part of the FY 2008-09 Work Program;
26. A contract with Azusa Unified School district in an amount not to exceed $172,500 for construction of a new CNG refueling station and maintenance facility modifications as part of the FY 2008-09 Work Program;
27. A contract with Sunline Transit Agency in an amount not to exceed $189,000 for expansion of their existing CNG refueling station as part of the FY 2008-09 Work Program; and
28. A contract with ABC Unified School District in an amount not to exceed $50,000 for maintenance facility modifications.
6. Approve the award of a sole-source contract to Administrative Services Co-Op/Long Beach Yellow Cab, in an amount not to exceed $225,000, to place into service up to 15 dedicated CNG taxicabs, as part of the FY 2008-09 Work Program;
7. Transfer $58,876 from the AB 2766 Discretionary Fund, Special Fund 23, to the AQMD General Fund and appropriate $58,876 from the Undesignated Fund Balance to the Science and Technology Advancement Division’s FY 2008-09 Budget to facilitate the payment of MSRC Miscellaneous Direct and Travel Costs as provided in Table 1 of this letter;
8. Approve contract modification to existing contract #MS05071 with Raymond J. Gorski, which currently provides technical advisor services, adding funding in an amount not to exceed $15,000 for part-time staffing through a subcontractor, as part of the FY 2008-09 Administrative Budget;
9. Authorize MSRC the authority to adjust contract awards up to five percent, as necessary and previously granted in prior work programs; and
10. Authorize the Chairman of the Board to execute new and modified contracts under FYs 2007-08 and 2008-09 AB 2766 Discretionary Fund Work Programs, as described above and within this letter.
     

Ron Roberts
Chair, MSRC

Background

In September 1990 Assembly Bill 2766 was signed into law (Health & Safety Code Sections 44220-44247) authorizing the imposition of an annual $4 motor vehicle registration fee to fund the implementation of programs exclusively to reduce air pollution from motor vehicles. AB 2766 provides that 30 percent of the annual $4 vehicle registration fee subvened to the AQMD be placed into an account to be allocated pursuant to a work program developed and adopted by the MSRC and approved by the Board.

Alternative Fuel School Bus Incentive Program

As part of the FY 2007-08 Work Program, the MSRC allocated a total of $1.42 million for the Alternative Fuel School Bus Incentive Program to provide buydown incentives for school districts. To implement the Program, the MSRC awarded contracts to A-Z Bus Sales and BusWest, with each qualified vendor initially awarded $300,000; subsequently, A-Z Bus Sales’ contract value has been increased due to sales performance. At its June 30, 2008 meeting, the MSRC considered a request from A-Z Bus Sales for an additional $360,000 for bus deliveries to three school districts; further details are provided below in the Proposals section.

Alternative Fuel Heavy-Duty Engines for On-Road Vehicles

As part of the FY 2007-08 Work Program, the MSRC released a $1.5 million Program Announcement #PA2008-04 for the purchase or repower of heavy-duty on-road vehicles with advanced low-emission natural gas engines certified by CARB at or below a 0.2 g/bhp-hr NOx emissions level. Maximum “per engine” funding under the Program was capped at $30,000. The Program included a geographic minimum of $200,000 per county and funds would be awarded on a first-come, first-served basis. Applications received the first day would be considered equal and funding would be pro-rated if first-day applications exceed the funding target. If each county did not request their full geographic minimum by the closing date, the funds could be used for applications from other counties on a first-come, first-served basis. The total award to any entity was not to exceed 40% of the total available funding, with this restriction able to be waived by the MSRC in the event that the MSRC did not receive meritorious applications from other bidders that met or exceeded 60% of the total available funds, or if the MSRC allocated additional funds to the Program. The application acceptance period commenced January 3, 2008, and closed February 15, 2008. At its April 17, 2008 meeting, the MSRC approved nine funding awards using the original $1.5 million allocated for the Program as part of the FY 2007-08 Work Program, and the remaining eligible requests were placed on a backup list. The Board approved the original awards on May 2, 2008. At its June 30, 2008 meeting, the MSRC considered the projects on the backup list; details are provided in the Proposals section.

Local Government Match Program

Also as part of the FY 2007-08 Work Program, the MSRC released a $3 million Local Government Match Program Announcement #PA2008-02. Eligible categories include the traditional funding providing a dollar-for-dollar match, up to $25,000 per vehicle for heavy-duty alternative fuel vehicles and up to $400,000 for alternative fuel infrastructure. However, the Local Government Match Program also includes a new category to support the installation of vehicle management systems which perform remote performance monitoring, including monitoring and diagnostics of vehicle emission control system performance. The maximum award per entity is $75,000 with a maximum total funding level of $500,000 for the category. Funding for all eligible categories will be distributed on a first-come, first-served basis with a geographic minimum per county of $375,000. The Program Announcement included an open application period commencing January 15, 2008 and closing March 28, 2008. At its May 15, 2008 and June 30, 2008 meetings, the MSRC considered requests for funding from 30 applications under this Program; details are provided in the Proposals section.

Alternative Fuel Infrastructure Program

Also as an element of the FY 2007-08 Work Program, the MSRC released a $2.5 million Alternative Fuel Infrastructure Funding Opportunities RFP #P2008-12. The proposal acceptance period was December 7, 2007 through March 28, 2008. The RFP provides funds for new as well as upgraded or expanded alternative fuel stations as well as maintenance facility modifications. New stations are eligible for a maximum incentive of 50% of the cost of station capital equipment, not to exceed $400,000. “Capital costs” were defined as direct costs of station hardware, installation, and directional signage only. Projects for the upgrade or expansion of existing refueling facilities are eligible for a maximum incentive of 50% of the capital costs not to exceed $200,000, and maintenance facility modification projects are capped at 50% of the capital costs not to exceed $50,000. In all cases, infrastructure components must be new and the reuse of equipment from existing stations is prohibited. The maximum total funding award to any entity under the RFP could not exceed 60% of the total available funding, with the MSRC able to waive this requirement in the event that the MSRC allocates additional funding to the Program. The RFP established three criteria against which proposals were evaluated: 1) Strategic Location/Gap Closure (10 points); Potential for Multiple Users (20 points); and Fuel Throughput/Cost Effectiveness (70 points). At its June 30, 2008 meeting and July 3, 2008 Special meeting, the MSRC considered requests for funding from 29 proposals under this Program; details are provided in the Proposals section.

CNG Taxicabs

The City of Long Beach has been proactive in promoting alternative fuel vehicles. The City has been discussing the use of such vehicles with their permitted taxicab service company, Administrative Services Co-Op/Long Beach Yellow Cab. There is an opportunity for Administrative Services Co-Op/Long Beach Yellow Cab to place 15 CNG taxicab vehicles into service. Due to the cost of converting the vehicles to operate on dedicated CNG, the taxicab service asked the MSRC to consider funding assistance for this project. At its June 30, 2008 meeting, the MSRC considered the request for funding from Administrative Services Co-Op/Long Beach Yellow Cab; details are provided in the Proposals section.

FY 2008-09 Administrative Budget

Administrative Costs for the AB 2766 Discretionary Program are limited to five percent annually per statute. Every year the MSRC adopts an Administrative Budget for the upcoming fiscal year to ensure costs remain within this limitation. For FY 2008-09, the MSRC adopted an Administrative Budget in the amount of $672,821, which is more than $65,000 below the cap. While the Administrative Budget is adopted annually by the MSRC, staffing expenditures are not directly drawn from the MSRC fund account, but are paid from AQMD’s budget and subsequently reimbursed from the MSRC fund account. The AQMD FY 2008-09 Budget does not have sufficient funds to cover the MSRC Miscellaneous Direct and Travel Costs administrative expenditures. To address this concern, AQMD staff proposed the MSRC approve a fund transfer to the AQMD’s budget. The MSRC considered this fund transfer at its June 30, 2008 meeting. Further details are provided in the Proposals section.

Also as part of the FY 2008-09 Administrative Budget, the MSRC identified a need for additional staff assistance. The MSRC is currently implementing the Off-Road Diesel Construction Equipment Retrofit “Showcase” Program in partnership with CARB and AQMD. The Showcase Program has 17 fleets and over 200 vehicles participating, and the current downturn in the construction industry has resulted in an even greater than usual level of requests for vehicle substitutions as fleets sell off equipment, requiring intensive MSRC staff attention and coordination with the partner agencies. Additionally, the MSRC has seen an unprecedented interest in its FY 2007-08 funding opportunities. This letter alone includes 72 recommended awards or augmentations for which contracts will need to be prepared and administered. The MSRC approved adding $15,000 to its Administrative Budget to provide further staff assistance via a subcontractor to the technical consulting contract with Raymond J. Gorski. Further details are provided in the Proposals section.

Outreach

In accordance with AQMD’s Procurement Policy and Procedure, public notices advertising these three solicitations and inviting bids were 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 solicitations 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 where it could 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 was also available on AQMD’s bidder’s 24-hour telephone message line (909) 396-2724. Further, the solicitations were posted on the MSRC’s website at http://www.cleantransportationfunding.org and electronic notifications were sent to those subscribing to this website’s notification service.

Proposal Evaluation and Panel Composition

Applications received in response to the Program Announcements and Request for Proposals (further outlined under the Proposals section) were evaluated by members of the MSRC’s Technical Advisory Committee (MSRC-TAC), a diverse group of individuals appointed by participating members as prescribed in the Health & Safety Code.

Proposals

At its May 15, June 30, and July 3, 2008 meetings, the MSRC considered recommendations from its MSRC-TAC and unanimously approved the following:

FY 2007-08 Work Program

As mentioned in the Background section, A-Z Bus Sales is one of the qualified vendors under the MSRC’s Alternative Fuel School Bus Incentives Program for school districts. A-Z Bus Sales delivered a total of six CNG buses to the Desert Sands, Coachella Valley, and Fontana Unified School Districts with the intention of obtaining reimbursement for the buydown incentives under their FY 2006-07 contract #MS07001. However, these bus deliveries occurred after that contract’s termination date of February 29, 2008. A-Z Bus Sales already has purchase orders against the $300,000 currently in their FY 2007-08 contract #MS08003 as well as the additional $820,000 the Board authorized at their June 6, 2008 meeting. Therefore, A-Z Bus Sales requested an additional $360,000 be added to contract #MS08003 to cover the buydown incentives for these six bus deliveries. The MSRC awarded A-Z Bus Sales $360,000 from unallocated funds as part of the FY 2007-08 Work Program in order to provide full incentives for the CNG buses.

FYs 2007-08 and 2008-09 Work Programs

At its June 30 and July 3, 2008 meetings, the MSRC approved contract awards and thereby established the elements and funding levels for its Partial FY 2008-09 AB 2766 Discretionary Fund Work Program, as follows:

1. Incentives for Alternative Fuel Heavy-Duty Engines for On-Road Vehicles totaling $4,861,627;
2. Local Government Match Program projects totaling $1,189,435;
3. Alternative Fuel Infrastructure Funding Opportunities totaling $5,186,600; and
4. Conversion of Taxicabs to Dedicated CNG totaling $225,000;

The contract awards for the Partial FY 2008-09 Work Program are delineated below for the AQMD Board’s consideration. It is anticipated that the remaining elements of the FY 2008-09 Work Program will be considered by the MSRC at its next meeting and brought to the AQMD Board for consideration in September 2008.

Alternative Fuel Heavy-Duty Engines for On-Road Vehicles

As stated in the Background section, under the FY 2007-08 Work Program, the MSRC released a $1.5 million Program Announcement #PA2008-04 for the purchase or repower of heavy-duty on-road vehicles with advanced low-emission natural gas engines certified by CARB at or below a 0.2 g/bhp-hr NOx emissions level. A total of 21 applications, requesting a total of $12,191,625 for the purchase of 411 vehicles equipped with qualifying natural gas engines, were received by the closing date of February 15, 2008. The MSRC previously approved nine funding awards totaling $1.5 million and placed the remaining eligible requests on the backup list. At its June 30, 2008 meeting, the MSRC considered the projects on the backup list. The MSRC unanimously approved augmentations totaling $1,460,002 for six of the previously approved awards, as well as the award of six additional contracts totaling $3,401,625, under the Alternative Fuel Heavy-Duty Engines for On-Road Vehicles Program as part of the FY 2008-09 Work Program, as follows:

1. Augmentation of award to the City of San Bernardino in an amount not to exceed $206,304 as part of the FY 2008-09 Work Program, which together with $183,696 previously awarded as part of the FY 2007-08 Work Program, will result in a combined award amount of $390,000 for the purchase of up to 13 heavy-duty, low-emission natural gas vehicles;
2. Augmentation of award to Burrtec Waste Industries in an amount not to exceed $238,044 as part of the FY 2008-09 Work Program, which together with $211,956 previously awarded as part of the FY 2007-08 Work Program, will result in a combined award amount of $450,000 for the purchase of up to 15 heavy-duty, low-emission natural gas vehicles for their Azusa location;
3. Augmentation of award to Burrtec Waste Industries in an amount not to exceed $238,044 as part of the FY 2008-09 Work Program, which together with $211,956 previously awarded as part of the FY 2007-08 Work Program, will result in a combined award amount of $450,000 for the purchase of up to 15 heavy-duty, low-emission natural gas vehicles for their Saugus location;
4. Augmentation of award to United Parcel Service in an amount not to exceed $158,696 as part of the FY 2008-09 Work Program, which together with $141,304 previously awarded as part of the FY 2007-08 Work Program, will result in a combined award amount of $300,000 for the purchase of up to 10 heavy-duty, low-emission natural gas vehicles;
5. Augmentation of award to Diversified Truck Rental in an amount not to exceed $158,696 as part of the FY 2008-09 Work Program, which together with $141,304 previously awarded as part of the FY 2007-08 Work Program, will result in a combined award amount of $300,000 for the purchase of up to 10 heavy-duty, low-emission natural gas vehicles;
6. Augmentation of award to Los Angeles World Airports (City of Los Angeles) in an amount not to exceed $460,218 as part of the FY 2008-09 Work Program, which together with $409,782 previously awarded as part of the FY 2007-08 Work Program, will result in a combined award amount of $870,000 for the purchase of up to 29 heavy-duty, low-emission natural gas vehicles;
7. A contract with Omnitrans in an amount not to exceed $900,000 for the purchase of up to 30 heavy-duty, low-emission natural gas vehicles;
8. A contract with the County of Los Angeles, Department of Public Works, in an amount not to exceed $90,000 for the purchase of up to 3 heavy-duty, low-emission natural gas vehicles;
9. A contract with Enterprise Rent-A-Car in an amount not to exceed $300,000 for the purchase of up to 10 heavy-duty, low-emission natural gas vehicles;
10. A contract with Ware Disposal Company in an amount not to exceed $900,000 for the purchase of up to 30 heavy-duty, low-emission natural gas vehicles;
11. A contract with CalMet Services in an amount not to exceed $900,000 for the purchase of up to 30 heavy-duty, low-emission natural gas vehicles;
12. A contract with Sunline Transit Agency in an amount not to exceed $311,625 for the purchase of up to 15 heavy-duty, low-emission natural gas vehicles.

Local Government Match Program

As mentioned in the Background section, as an element of their FY 2007-08 Work Program, the MSRC released a $3 million Local Government Match Program Announcement #PA2008-02. Eligible categories include the traditional funding providing a dollar-for-dollar match for heavy-duty alternative fuel vehicles and alternative fuel infrastructure, as well as a new category to support the installation of vehicle management systems which perform remote diagnostics. At their May 15, 2008 meeting, the MSRC considered requests for funding from 30 applications under this Program. One project, for the installation of a new LNG/CNG station by the City of Los Angeles Bureau of Sanitation, was also submitted under the MSRC’s Alternative Fuel Infrastructure Funding Opportunities Program. As the City of Los Angeles project was recommended for funding under that Program by the MSRC-TAC, and the MSRC was scheduled to consider Infrastructure awards the following month, the MSRC elected not to award the project funding under the Local Government Match Program. On June 30, 2008, the MSRC unanimously approved funding totaling $4,189,435 for 29 applications, using the $3 million originally allocated to the Local Government Match Program from the FY 2007-08 Work Program plus $1,189,435 from the FY 2008-09 Work Program, as follows:

1. A contract with the City of Villa Park in an amount not to exceed $6,500 for the upgrade of their existing natural gas refueling facility ($4,998 as part of the FY 2007-08 Work Program and $1,502 as part of the FY 2008-09 Work Program);
2. A contract with the City of Anaheim in an amount not to exceed $550,000 for the purchase of up to 22 liquefied petroleum gas (LPG) heavy-duty vehicles ($422,882 as part of the FY 2007-08 Work Program and $127,118 as part of the FY 2008-09 Work Program);
3. A contract with the County of Los Angeles, Department of Public Works, in an amount not to exceed $75,000 for remote vehicle diagnostics for up to 150 vehicles ($52,807 as part of the FY 2007-08 Work Program and $22,193 as part of the FY 2008-09 Work Program);
4. A contract with the County of Los Angeles, Department of Public Works, in an amount not to exceed $275,000 for the purchase of up to 11 LPG heavy-duty vehicles ($211,441 as part of the FY 2007-08 Work Program and $63,559 as part of the FY 2008-09 Work Program);
5. A contract with the County of Los Angeles, Department of Public Works, in an amount not to exceed $6,901 for remote vehicle diagnostics for up to 34 vehicles ($4,859 as part of the FY 2007-08 Work Program and $2,042 as part of the FY 2008-09 Work Program);
6. A contract with the City of Santa Monica in an amount not to exceed $600,000 for the purchase of up to 24 natural gas heavy-duty vehicles ($461,326 as part of the FY 2007-08 Work Program and $138,674 as part of the FY 2008-09 Work Program);
7. A contract with the City of Gardena in an amount not to exceed $25,000 for the purchase of one LPG heavy-duty vehicle ($19,222 as part of the FY 2007-08 Work Program and $5,778 as part of the FY 2008-09 Work Program);
8. A contract with the City of Azusa in an amount not to exceed $25,000 for the purchase of one LPG heavy-duty vehicle ($19,222 as part of the FY 2007-08 Work Program and $5,778 as part of the FY 2008-09 Work Program);
9. A contract with the City of Claremont in an amount not to exceed $72,500 for the expansion of their existing natural gas refueling facility ($55,744 as part of the FY 2007-08 Work Program and $16,756 as part of the FY 2008-09 Work Program);
10. A contract with the City of Irvine in an amount not to exceed $9,000 for remote vehicle diagnostics for up to 36 vehicles ($6,920 as part of the FY 2007-08 Work Program and $2,080 as part of the FY 2008-09 Work Program);
11. A contract with the County of San Bernardino, Department of Public Works, in an amount not to exceed $14,875 for remote vehicle diagnostics for up to 70 vehicles as part of the FY 2007-08 Work Program;
12. A contract with the County of San Bernardino, Department of Public Works, in an amount not to exceed $200,000 for the purchase of up to eight natural gas heavy-duty vehicles as part of the FY 2007-08 Work Program;
13. A contract with the City of La Verne in an amount not to exceed $11,925 for remote vehicle diagnostics for up to 53 vehicles ($9,169 as part of the FY 2007-08 Work Program and $2,756 as part of the FY 2008-09 Work Program);
14. A contract with the City of South Pasadena in an amount not to exceed $169,421 for the construction of a new CNG refueling station ($130,264 as part of the FY 2007-08 Work Program and $39,157 as part of the FY 2008-09 Work Program);
15. A contract with the City of Glendale in an amount not to exceed $325,000 for the purchase of up to 13 natural gas heavy-duty vehicles ($249,885 as part of the FY 2007-08 Work Program and $75,115 as part of the FY 2008-09 Work Program);
16. A contract with the City of Los Angeles, Department of Water and Power, in an amount not to exceed $1,050,000 for the purchase of up to 42 natural gas heavy-duty vehicles ($807,320 as part of the FY 2007-08 Work Program and $242,680 as part of the FY 2008-09 Work Program);
17. A contract with the City of Rancho Palos Verdes in an amount not to exceed $50,000 for the purchase of up to two LPG heavy-duty vehicles ($38,444 as part of the FY 2007-08 Work Program and $11,556 as part of the FY 2008-09 Work Program);
18. A contract with the City of Riverside in an amount not to exceed $105,500 for the expansion of their existing natural gas refueling facility and modifications to their maintenance facility as part of the FY 2007-08 Work Program;
19. A contract with the City of Los Angeles, Department of Transportation, in an amount not to exceed $14,600 for remote vehicle diagnostics for up to 73 vehicles as part of the FY 2008-09 Work Program;
20. A contract with the City of Ontario in an amount not to exceed $175,000 for the purchase of up to seven natural gas heavy-duty vehicles ($160,125 as part of the FY 2007-08 Work Program and $14,875 as part of the FY 2008-09 Work Program);
21. A contract with the City of Desert Hot Springs in an amount not to exceed $25,000 for the purchase of one natural gas heavy-duty vehicle as part of the FY 2007-08 Work Program;
22. A contract with the City of Chino in an amount not to exceed $25,000 for the purchase of one natural gas heavy-duty vehicle as part of the FY 2008-09 Work Program);
23. A contract with the City of Santa Clarita in an amount not to exceed $3,213 for remote vehicle diagnostics for up to 14 vehicles as part of the FY 2008-09 Work Program;
24. A contract with the City of Paramount in an amount not to exceed $25,000 for the purchase of one natural gas heavy-duty vehicle as part of the FY 2008-09 Work Program;
25. A contract with the City of Culver City in an amount not to exceed $150,000 for the purchase of up to six natural gas heavy-duty vehicles as part of the FY 2008-09 Work Program;
26. A contract with the City of Santa Clarita in an amount not to exceed $25,000 for the purchase of one natural gas heavy-duty vehicle as part of the FY 2008-09 Work Program;
27. A contract with the City of Cerritos in an amount not to exceed $25,000 for the purchase of one natural gas heavy-duty vehicle as part of the FY 2008-09 Work Program;
28. A contract with the City of Laguna Beach in an amount not to exceed $75,000 for the purchase of up to three LPG heavy-duty vehicles as part of the FY 2008-09 Work Program; and
29. A contract with the City of Colton in an amount not to exceed $75,000 for the purchase of up to three natural gas heavy-duty vehicles as part of the FY 2008-09 Work Program).

As mentioned in the Background section, the MSRC allocated $2.5 million for alternative fuel infrastructure as part of the FY 2007-08 Work Program. Eligible projects included new as well as expanded alternative refueling stations as well as maintenance facility modifications. Proposals were evaluated with respect to Strategic Location/Gap Closure, Potential for Multiple Users, and Fuel Throughput/Cost Effectiveness as well as compliance with RFP provisions and MSRC policies. One proposal was withdrawn by the applicant. At its June 30, 2008, as there were not enough members to make up a quorum for this item, the MSRC acted as a Committee of the Whole to recommend approval of this item at the next MSRC meeting. On July 3, 2008, the MSRC held a Special meeting, at which the MSRC unanimously approved funding for the remaining 28 proposals. The 28 awards total $7,686,600 (using the $2.5 million originally allocated in the FY 2007-08 Work Program plus $5,186,600 from the FY 2008-09 Work Program) and are as follows:

1. A contract with Burrtec Waste Industries in an amount not to exceed $100,000 for the construction of a new CNG refueling station in Fontana as part of the FY 2007-08 Work Program;
2. A contract with the City of Los Angeles, Bureau of Sanitation, in an amount not to exceed $400,000 for the construction of a new CNG fueling station at their North Central Yard as part of the FY 2007-08 Work Program;
3. A contract with Clean Energy in an amount not to exceed $400,000 for the construction of a new LNG refueling station in Fontana as part of the FY 2007-08 Work Program;
4. A contract with Clean Energy in an amount not to exceed $400,000 for the construction of a new LNG refueling station at the Port of Long Beach at Pier S and New Dock Street as part of the FY 2007-08 Work Program;
5. A contract with Clean Energy in an amount not to exceed $400,000 for the construction of a new LNG refueling station at the Port of Long Beach at Anaheim and I Streets as part of the FY 2007-08 Work Program;
6. A contract with Orange County Transportation Authority (OCTA) in an amount not to exceed $400,000 for the construction of a new CNG refueling station in Garden Grove as part of the FY 2007-08 Work Program;
7. A contract with Clean Energy in an amount not to exceed $400,000 for the construction of a new CNG refueling station at Ontario National Airport ($300,000 as part of the FY 2007-08 Work Program and $100,000 as part of the FY 2008-09 Work Program);
8. A contract with Burrtec Waste Industries in an amount not to exceed $100,000 for the construction of a new CNG refueling station in San Bernardino as part of the FY 2007-08 Work Program;
9. A contract with Burrtec Waste Industries in an amount not to exceed $100,000 for the construction of a new CNG refueling station in Azusa as part of the FY 2008-09 Work Program;
10. A contract with Clean Energy in an amount not to exceed $400,000 for the construction of a new CNG refueling station in Los Angeles as part of the FY 2008-09 Work Program;
11. A contract with Go Natural Gas Inc. in an amount not to exceed $400,000 for the construction of a new CNG refueling station in Rialto as part of the FY 2008-09 Work Program;
12. A contract with Go Natural Gas Inc. in an amount not to exceed $400,000 for the construction of a new CNG refueling station in Moreno Valley as part of the FY 2008-09 Work Program;
13. A contract with Hemet Unified School District in an amount not to exceed $75,000 for the expansion of their existing CNG refueling station as part of the FY 2008-09 Work Program;
14. A contract with Pupil Transportation Cooperative in an amount not to exceed $10,500 for the expansion of their existing CNG refueling station as part of the FY 2008-09 Work Program;
15. A contract with Clean Energy in an amount not to exceed $400,000 for the construction of a new CNG refueling station at Palm Springs Airport;
16. A contract with Trillium USA in an amount not to exceed $334,100 for the construction of a new CNG refueling station as part of the FY 2008-09 Work Program;
17. A contract with the Regents of the University of California in an amount not to exceed $400,000 for the construction of a new hydrogen refueling station as part of the FY 2008-09 Work Program;
18. A contract with Perris Union High School District in an amount not to exceed $225,000 for the construction of a new CNG refueling station as part of the FY 2008-09 Work Program;
19. A contract with Clean Energy in an amount not to exceed $400,000 for the construction of a new CNG refueling station in Paramount as part of the FY 2008-09 Work Program;
20. A contract with ABC Unified School District in an amount not to exceed $63,000 for the construction of a new CNG refueling station as part of the FY 2008-09 Work Program;
21. A contract with Clean Energy in an amount not to exceed $400,000 for the construction of a new CNG refueling station in Burbank as part of the FY 2008-09 Work Program;
22. A contract with Clean Energy in an amount not to exceed $400,000 for the construction of a new CNG refueling station in Norwalk as part of the FY 2008-09 Work Program;
23. A contract with the Fontana Unified School District in an amount not to exceed $323,500 for expansion of their existing CNG refueling station as part of the FY 2008-09 Work Program;
24. A contract with Disneyland in an amount not to exceed $200,000 for expansion of their existing CNG refueling station as part of the FY 2008-09 Work Program;
25. A contract with Hythane Company in an amount not to exceed $144,000 for the expansion of the existing Los Angeles World Airports’ LNG/LCNG refueling station through the addition of Hythane fueling capability as part of the FY 2008-09 Work Program;
26. A contract with Azusa Unified School district in an amount not to exceed $172,500 for construction of a new CNG refueling station and maintenance facility modifications as part of the FY 2008-09 Work Program;
27. A contract with Sunline Transit Agency in an amount not to exceed $189,000 for expansion of their existing CNG refueling station as part of the FY 2008-09 Work Program; and
28. A contract with ABC Unified School District in an amount not to exceed $50,000 for maintenance facility modifications.

FY 2008-09 Work Program

CNG Taxicabs

As mentioned in the Background section, there is an opportunity for Administrative Services Co-Op/Long Beach Yellow Cab to place 15 taxicab vehicles into service which have been converted to dedicated CNG. Administrative Services Co-Op/Long Beach Yellow Cab is the only company permitted to operate cabs in the Long Beach Area. At its June 30, 2008 meeting, the MSRC considered Administrative Services Co-Op/Long Beach Yellow Cab’s request for funding assistance and unanimously approved a sole-source contract with Administrative Services Co-Op/Long Beach Yellow Cab, in an amount not to exceed $225,000, to purchase and enter 15 CNG taxicabs into service as an element of their FY 2008-09 Work Program. The sole-source justification is provided below.

Administrative Budget

As mentioned in the Background section, every year the MSRC adopts an Administrative Budget for the upcoming fiscal year to ensure costs remain within the five percent legislative cap for administrative expenses. For FY 2008-09, the MSRC adopted an Administrative Budget in the amount of $672,821. At its June 30, 2008 meeting, the MSRC unanimously approved a fund transfer of $58,876 to the AQMD Science & Technology Advancement FY 2008-09 Budget to facilitate the payment of MSRC Miscellaneous Direct and Travel Costs included in the MSRC’s FY 2008-09 Administrative Budget as shown in Table 1. Staff will track expenses throughout the year, report to the MSRC on actual expenses, and any unused monies will be transferred back to the MSRC’s discretionary fund account (Fund 23) at the end of the fiscal year. The MSRC requests AQMD Board approval of this fund transfer of $58,876 for FY 2008-09 as provided in Table 1.

Table 1. Estimated FY 2008-09 MSRC Miscellaneous and Direct Expenditures Proposed to be Allocated to AQMD Science and Technology Advancement FY 2008-09 Budget

Also mentioned in the Background section, the MSRC identified a need for additional staff assistance as part of the FY 2008-09 Administrative Budget. At its June 30, 2008 meeting, the MSRC unanimously approved a contract modification to its Technical Advisor Services contract with Raymond J. Gorski to add $15,000 as part of the FY 2008-09 Administrative Budget. The modification will allow the MSRC to continue to obtain assistance via a subcontractor who has unique qualifications as the former MSRC Contracts Administrator. A portion of Mr. Gorski’s contract is paid out of the Administrative Budget.

At this time the MSRC requests the AQMD Board approve the Partial FY 2008-09 AB 2766 Discretionary Work Program as outlined above. The MSRC also requests the Board authorize the AQMD Chairman of the Board the authority to execute all agreements described in this letter under the FYs 2007-08 and 2008-09 Work Programs, including an augmentation in the amount of $15,000 to the Technical Advisor’s contract as part of the FY 2008-09 Administrative Budget. The MSRC further requests authority to adjust the funds allocated to each project specified in this Board letter by up to five percent of the project’s recommended funding. The Board has granted this authority to the MSRC for all past work programs. Finally, the MSRC requests the AQMD Board authorize a fund transfer of $58,876 from Fund 23 to Science & Technology Advancement’s Budget.

Sole-Source Justification

As discussed in Proposals above, the MSRC identified an opportunity to facilitate the use of lower-emission, dedicated CNG taxicabs within the City of Long Beach. While the MSRC and AQMD strive to retain technical services and award contracts through a competitive bid basis, the AQMD’s Procurement Policy recognizes that at times circumstances exist which make a competitive bid process invalid. Administrative Services Co-Op/Long Beach Yellow Cab is the only company permitted to operate cabs in the Long Beach area. Therefore, the request for a sole-source award is made under Section VIII.B.2.c.(1): The unique experience and capabilities of the proposed contractor or contractor team. Furthermore, Subsection B.2.d. of Section VIII allows for “other circumstances” which in the determination of the Executive Officer require waiving the competitive bidding process in the best interests of the South Coast AQMD. Administrative Services Co-Op/Long Beach Yellow Cab is also seeking funding from the City of Long Beach, and their request for MSRC funding is interrelated to their request for City funding. Thus provision B.2.d.(1) applies: “Projects involving cost sharing by multiple sponsors.”

Resource Impacts

The AQMD acts as fiscal administrator for the AB 2766 Discretionary Fund Program (Health & Safety Code Section 44243). Money received for this program is recorded in a special revenue fund (Fund 23) and the contracts will be drawn from this fund. These contracts will have no fiscal impact on the AQMD’s operational budget.