BOARD MEETING DATE: November 7, 2008
AGENDA NO. 4

PROPOSAL:

Execute Contracts for FY 2007-08 “Year Ten” Carl Moyer Program and Surplus Off-Road Opt-In for NOx Provision and Issue Program Announcement for Cleaner Off-Road Diesel Vehicles

SYNOPSIS:

This action is to execute contracts under the Carl Moyer Program in an amount not to exceed $485,068, and the Surplus Off-Road Opt-In for NOx (SOON) provision of the state in-use off-road vehicle regulation in an amount not to exceed $597,516, both from the Carl Moyer Program AB 923 Fund. In addition, this action is to release a Program Announcement to provide funding assistance for additional NOx reductions from off-road equipment that may be subject to the SOON Provision.

COMMITTEE:

Technology, October 17, 2008, Recommended for Approval

RECOMMENDED ACTIONS:

A.  Authorize the Chairman to execute contracts under the Carl Moyer Program from the Carl Moyer Program AB 923 Fund (80) with the following entities:

1. Oglebay Norton Industrial, Inc. DBA Carmeuse Industrial Sands for the repower of 1 scraper in an amount not to exceed $115,453; and
2. West Coast Welding, Inc. for the repower and retrofit of 3 off-road cranes in an amount not to exceed $369,615.

B.  Authorize the Chairman to execute contracts under the SOON Provision of the state in-use off-road vehicle regulation from the Carl Moyer Program AB 923 Fund (80) with the following entities:

1. Oglebay Norton Industrials, Inc. DBA Carmeuse Industrial Sands for the repower of 2 scrapers in an amount not to exceed $206,009; and
2. Mr. Crane, Inc. for the repower of 7 off-road cranes in an amount not to exceed $391,507.

C. Approve issuance of Program Announcement PA #2009-03 to solicit projects for off-road vehicles and equipment subject to the SOON provision of the CARB In-Use Off-Road Diesel Vehicle Regulation.
 

Barry R. Wallerstein, D.Env.
Executive Officer

Background

The Carl Moyer Program

The Carl Moyer Memorial Air Quality Standards Attainment Program (CMP) provides funding on an incentive basis for the incremental cost of purchasing cleaner than required engines and equipment. This is the tenth year of the CMP and is the fourth year of the program with a long-term source of funding generated under SB 1107 and AB 923.

The SOON Provision

CARB adopted the in-use off-road diesel vehicle regulation in July 2007. The regulation includes the SOON Provision which allows districts (which elect to opt-into this provision) to use incentive funds to achieve additional NOx reductions based on the more stringent SOON fleet average NOx targets. The SOON provision applies to large fleets with a total maximum power greater than 20,000 horsepower on a statewide level consisting of more than 40% Tier 0 and Tier 1 vehicles and operating in their respective air districts. On November 2, 2007 the AQMD issued its Program Announcement #PA2008-01 for $30 million under the SOON Provision and opted into this provision of the state regulation at its May 2, 2008 Board meeting. The program announcement was undersubscribed, and all the qualified projects were recommended for funding on July 11, 2008. A new Program Announcement was re-issued on May 2, 2008 with the remaining balance of the available funds. The Program Announcement closed on November 7, 2008. To provide continued access to the SOON funding and allow affected fleets sufficient time to apply, staff is recommending that a new Program Announcement be issued.
 

Proposal

Carl Moyer Program

This action is to approve recommended projects as outlined in Table 1, under the Carl Moyer Program in an amount not to exceed $485,068 from the Carl Moyer Program AB 923 Fund. Total NOx and PM reductions from the recommended projects are approximately 7.8 tons/year and 0.28 tons/year, respectively.

SOON Provision

This action is to approve the recommended off-road repower projects as outlined in Table 2, under the SOON provision of the state in-use off-road vehicle regulation in an amount not to exceed $597,516, from the Carl Moyer Program AB 923 Fund. Total NOx reductions from the recommended projects are approximately 6.1 tons/year.

The applications have been evaluated according to CARB’s Carl Moyer Program guidelines released on April 22, 2008. The maximum allowable cost effectiveness limit in the evaluation of the applications has been raised to $16,000 per ton NOx.

SOON Program Announcement

Staff is recommending that the Board release Program Announcement PA #2009-03 to provide funding assistance for off-road diesel vehicle projects to achieve additional NOx emission reductions under the SOON Program. The Board’s Administrative Committee has given its initial approval recommending to set aside $120 million ($30 million each year for four years) to fund the SOON projects. Funding will be set aside from the Carl Moyer Program Fund AB 932 and SB 1107 accounts and will be subject to the Carl Moyer Program guidelines. Staff is proposing to issue the Program Announcement with $30 million of Year 11 SB 1107 and AB 923 funds and with any remaining Year 10 funds. Changes in criteria for this solicitation as compared to the most recent Program Announcement #2008-09 issued in May, 2008 include mandatory participation by SOON eligible fleets and a shorter minimum contract life of at least 5 years.

Disproportionate Impact (DI) Point Ranking

The requirements of AB 1390 for projects located in disproportionately impacted areas are implemented according to the following criteria.

1. All projects must qualify for the Carl Moyer program by meeting the cost effectiveness limits established in the program announcement.
2. All projects were evaluated according to the following criteria to qualify for funding under DI requirements:
   1. Poverty Level: All projects in areas where at least 10% of the population falls below the Federal poverty level based on the year 2000 census data, are eligible to be included in this category, and
   2. PM Exposure: All projects in areas with the highest 15% of PM concentration will be eligible to be ranked in this category. The highest 15% of PM concentration level is 46 micrograms per cubic meter and above, on an annual average, or
   3. Air Toxics Exposure: All projects in areas with a cancer risk of 1,000 in a million and above (based on MATES II estimates) will be eligible to be ranked in this category.

Approximately 25% of the proposed projects are in disproportionately impacted areas. While this is below the AQMD’s goal of 50%, close to 80% of the “Year Ten” Carl Moyer Program funded projects for $22.3 million (which would include these proposed projects) are in disproportionately impacted areas. Historically, the AQMD Carl Moyer Program has exceeded the 50% goal.

Outreach

In accordance with AQMD’s Procurement Policy and Procedure, public notices advertising the RFP/RFQs for both the SOON provision and the Carl Moyer Program 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. Notices of the RFP/RFQs were 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.
 

Benefits to AQMD

Carl Moyer Program and SOON Provision

The successful implementation of the Carl Moyer Program and the SOON provision will provide direct emissions reductions for both NOx and PM as required by the programs. The vehicles and equipment funded under these program announcements will operate many years and will provide long-term emissions reductions.

SOON Program Announcement

The SOON provision of the state rule was initiated by AQMD staff and developed jointly with CARB staff with input from industry. The program was designed to achieve an additional 12 TPD of NOx reductions beyond the reductions which would be obtained from the base rule. These reductions are critical to meeting the PM2.5 ambient air quality standard in the South Coast Air Basin by 2015, and implementation of the SOON program will ensure that AQMD meets its mandated air quality goals.

Resource Impacts

Carl Moyer Program and SOON Provision

Funding for Year Ten of the Carl Moyer Program projects shall not exceed $485,068 from the Carl Moyer Program, AB 923 Fund. Funding for the SOON Provision projects shall not exceed $597,516 from the Carl Moyer Program, AB 923 Fund.

SOON Program Announcement

There are no additional resource impacts as the same funding amount as described in the original Program Announcement PA #2008-01 are proposed ($120 million - $30 million per year). No additional funding is required.

Attachments (ZIP, 682k)

1. Table 1 – Recommended Carl Moyer Program Awards
2. Table 2 – Recommended SOON Provision Awards
3. Program Announcement #PA2009-03: SOON