BOARD MEETING DATE: November 7, 2008
AGENDA NO. 5

PROPOSAL:

Execute Contracts for Rule 2202 Air Quality Investment Program

SYNOPSIS:

At its February 1, 2008 meeting, the Board approved release of an RFP to solicit proposals to meet Rule 2202 Air Quality Investment Program (AQIP) emission reduction targets. Proposals for this funding opportunity have been reviewed. This action is to fund five projects under this AQIP announcement.

COMMITTEE:

Mobile Source, October 17, 2008. Less than a quorum was present during the discussion of this item; the Committee Member present communicated her concurrence and recommendation that this item be forwarded for Board consideration with no approval or disapproval recommendation from the Committee.

RECOMMENDED ACTIONS:

Authorize the Chairman to execute a contract with the following entities for a total amount not to exceed $309,686 from the Rule 2202 AQIP Special Revenue Fund:

1. L. H. Woods & Sons, Inc., to generate emission reductions by repowering one diesel powered crane in an amount not to exceed $18,052;
2. W. W. Equipment, Inc., to generate emission reductions by repowering one diesel powered crane and one excavator in an amount not to exceed $53,078;
3. Nationwide Environmental Services to generate emission reductions by replacing five diesel powered street sweepers with five CNG street sweepers in an amount not to exceed $150,000;
4. Rio Hondo College to generate emission reductions by offering students discounted transit passes in an amount not to exceed $13,556; and
5. Ambuserve, Inc., by purchasing five new CNG vans with extended range tanks for ambulance services in an amount not to exceed $75,000.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

Rule 2202 Air Quality Investment Program (AQIP) allows affected 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 AM to 10:00 AM 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.

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 participation period for the first half of calendar year 2008 ended on June 30, 2008 with 126 employers participating in the AQIP program. The total amount of AQIP funds received during this period was $1,037,890, which includes both annual and triennial participants. An additional amount of $178,382 is available from unused funds from the previous semi annual period. An amount of $400,000 is also available from a previously awarded project that was subsequently declined (see Attachment 1, Table 4). After deducting an administrative fee of $51,895, a total of $1,564,378 is available for funding (see Attachment 1, Table 5). Staff recommends that $309,686 of the available funding be used to purchase emission reductions to satisfy the target for the first semiannual period of 2008.
 

Proposal Evaluation

On February 1, 2008, the Board approved the release of RFP #2008-13 to solicit proposals for the first semiannual period of the 2008 AQIP, eight proposals were received requesting funds ranging from $13,556 to $823,000. Attachment 2 provides a summary of emission reduction targets and the emission reduction credit balance.
 

As summarized in Attachment 3, the proposals were divided into three 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. The proposals were scored according to the procedures described and ranked by total score as shown in Attachment 5.
 

Selection Criteria

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. Despite receiving eight proposals, no combination of projects could meet the emission reduction targets (ERT) for the period. RFP #2008-13 provided that the Executive Officer may select proposals for funding other than the higher ranking proposals, if the Executive Officer determines that the funded proposal will provide the best value to AQMD considering cost and the needs to meet overall emission reduction equivalency. As well, Rule 2202(j)(8)(B) states that AQIP awards will be based on cost-effectiveness and achieving long-term advancement of mobile source technology. Staff recommends five of the proposals for funding and retaining the balance of the funds for the upcoming semiannual solicitation which includes the lawn mower exchange program. The AQIP emissions bank has a surplus balance of credits available to cover the remaining emissions needed to meet the ERT.
 

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

1. L. H. Woods and Sons, Inc. $18,052
    County: All
L. H. Woods and Sons, Inc. proposes to repower a single engine diesel crane with an engine certified to Tier 3 emission levels. The cost-effectiveness of this proposal is $4.30 per pound. This project ranked second in the construction category.
 

2. W & W Equipment Co., Inc. $53,078
    County: All
W & W Equipment Co., Inc. proposes to repower a single engine diesel crane and a single engine diesel excavator with engines certified to Tier 3 emission levels. The cost-effectiveness of this proposal is $2.68 per pound. This project ranked first in the construction category.
 

3. Nationwide Environmental Services $150,000
    County: Los Angeles
Nationwide Environmental Services proposes to reduce emissions by replacing 10 old diesel street sweepers with new natural gas street sweepers. The requested amount per sweeper was $50,000. The cost-effectiveness of this proposal is $3.22 per pound. Funding is recommended for five sweepers at $30,000 per unit; $30,000 amount was chosen to match similar award under Carl Moyer Program; tied for first place in its category. The $30,000 per sweeper brings down the cost-effectiveness to $0.90 per pound.
 

4. Rio Hondo College $13,556
    County: Los Angeles
Rio Hondo College proposes to reduce student commute emissions by offering them discounted transit passes. Their partners include four transit agencies that are making in-kind contributions. Additional funding is coming from L.A. County, City of Pico Rivera and Measure “A” Bond fund. The cost-effectiveness of this proposal is $1.15 per pound. This proposal was the only proposal in the Mobility Enhancing Services category.
 

5. AmbuServe, Inc.  Option 1 $75,000
    County: All
AmbuServe, Inc. proposes to generate emission reductions by purchasing 25 new E-350 Ford CNG vans with extended range tanks for ambulance services. The cost-effectiveness of this proposal is $74.27 per pound. However, the proposed application is an on-road alternative fuel project in a vocation that has not received previous funding. AQMD seeks to foster alternative fuel mobile source technology in emergency operations. Five vehicles are recommended for funding to study the potential of this new category of alternative fuel-driven emergency vehicles and their potential for overall emission reduction equivalency.
 

Benefits to the AQMD

The table below shows AQMD’s emissions benefits.

TABLE 1
Proposals Recommended for Funding
Anticipated Emission Reductions

(Pounds/Year)

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 $309,686 from the Rule 2202 Air Quality Investment Program Special Revenue Fund. Table 2 provides the funding for each project
 

TABLE 2
Proposals Recommended for Funding

Funding Request

Attachments (DOC, 178k)

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