BOARD MEETING DATE: September 5, 2008
AGENDA NO. 11

PROPOSAL:

Approve Expenditures for Activities and Projects During FYs 2008-09 and 2009-10, Execute Contracts, and Recognize Funding from Participating Members of California Natural Gas Vehicle Partnership

SYNOPSIS:

On April 5, 2002, the Board approved establishment of a California Natural Gas Vehicle Partnership (CNGVP) Fund and authorized the Executive Officer to approve up to $50,000 for individual expenditures for projects selected by the CNGVP, total amount not to exceed $200,000. The participating members pay two-year membership fees to fund program administration, specific projects, and activities to achieve the goals of the CNGVP. This action is to: (1) recognize funding from participating and future CNGVP members; (2) transfer $25,000 from the Clean Fuels Fund as AQMD’s contribution; (3) execute two contracts with Gladstein, Neandross and Associates for CNGVP web maintenance in an amount not to exceed $70,000 and to organize the Bio-Methane Summit in an amount not to exceed $25,000; and (4) authorize the Executive Officer to approve up to $50,000 for individual expenditures selected by the CNGVP in FYs 2008-09 and 2009-10, total amount not to exceed $250,000 for each fiscal year.

COMMITTEE:

Technology, July 25, 2008, Recommended for Approval

RECOMMENDED ACTIONS:

1. Recognize up to $245,000 in revenue from participating members of the California Natural Gas Vehicle Partnership into the Natural Gas Vehicle Partnership Fund.
2. Authorize the transfer of $25,000 from the Clean Fuels Fund to the Natural Gas Vehicle Partnership Fund as AQMD’s contribution.
3. Authorize the Executive Officer to execute a contract with Gladstein, Neandross and Associates at a cost not to exceed $50,000 with the option to add $20,000 upon CNGVP Steering Committee approval from the Natural Gas Vehicle Partnership Fund to provide CNGVP website maintenance.
4. Authorize the Executive Officer to execute a contract with Gladstein, Neandross and Associates at a cost not to exceed $25,000 to organize a Bio-Methane Educational Outreach Conference for Legislators from the Natural Gas Vehicle Partnership Fund.
5. Authorize the transfer of $332 from the Natural Gas Vehicle Partnership Fund to the General Fund to reimburse the AQMD for the meeting expenses incurred with the April 2008 Steering Committee meeting.
6. Authorize the transfer of $305 from the Natural Gas Vehicle Partnership Fund to the General Fund and appropriate $305 to Science and the Technology Advancement’s FY 2008-09 Budget, Services and Supplies Major Object, Miscellaneous Expenses Account for meeting expenses incurred with the July, 2008 Steering Committee meeting.
7. Allocate $50,000 for development and implementation of the Natural Gas Vehicle Cooperative (NGV Co-op). Upon securing the remaining funding needed to implement the program, authorize the Executive Officer to execute a contract with Calstart-Weststart for the NGV Co-op in an amount not to exceed $50,000 from the Natural Gas Vehicle Partnership Fund.
8. Authorize the Executive Officer to approve expenditures for activities and projects selected by the California Natural Gas Vehicle Partnership for FY 2008-09 and FY 2009-10 in budgeted amounts not to exceed $50,000 for individual expenditures as provided in Table 2 from the Natural Gas Vehicle Partnership Fund, provided there are sufficient funds available. In addition, such projects must be designed to meet the partnership goals as described in this letter.
9. Receive and file the written status report (Attachment 1) on recent activities by the California Natural Gas Vehicle Partnership.

 

Barry R. Wallerstein, D.Env.
Executive Officer

Background

On February 1, 2002, the Board approved the work plan for eight Strategic Alliance Initiatives which were set forth to strengthen and create new partnerships at the local, state, and federal level. One of these initiatives was the creation of the California Natural Gas Vehicle (NGV) Partnership with the objective of accelerating the development of advanced natural gas vehicle technologies to provide a benchmark for lowering emissions from petroleum based engines and to provide a pathway to future fuel cell use in the next two decades.

Under this initiative, the AQMD has spearheaded the formation of this strategic alliance (comprised of state and federal air quality, transportation and energy agencies, together with vehicle and engine manufacturers, fuel providers, transit and refuse hauler organizations) to facilitate the advancement of NGV technology and deployment. Under the activities of the Partnership, the AQMD has led the formation of the Partnership’s Steering Committee that meets on a quarterly basis with high-level representation from each participating member. The Steering Committee has adopted five specific goals as outlined below and has set a specific agenda to achieve its goals during the next ten years.

1. Promote research, development, demonstration, and deployment and commercialization efforts in the advancement of natural gas engine and fueling technology.

2. Increase awareness and urge the active participation among local, state, and federal policymakers regarding the use of NGVs and natural gas as a low-emission fuel, and promotion of future advancement in vehicle & fueling technologies to further reduce emissions.

3. Promote availability of financial and non-financial incentives and technical assistance for deployment of natural gas vehicles and infrastructure.

4. Encourage the purchase of dedicated NGVs by conducting public outreach for local, state, and federal purchasing programs.

5. Establish as its goal the deployment of specific numbers and types of light-, medium-, and heavy-duty natural gas vehicles and infrastructure during the next three, five and ten years.

A status report on the NGV Partnership activities is provided in Attachment 1. In addition, quarterly reports on Partnership activities are provided to the Technology Committee.

Proposal

The Partnership Steering Committee is currently comprised of ten members (Attachment 2). In addition, there are 12 Associate Members consisting of public agencies, school districts, and environmental organizations. Each of the private sector Steering Committee members contributes a two-year membership fee of $25,000 (or $10,000 if the entity is an end-user who desires to be on the Steering Committee) to fund specific projects to achieve the goals of the Partnership. In addition, the AQMD has been contributing to the two-year membership fee of $25,000. A special Natural Gas Vehicle Partnership Fund account was approved by the Board to receive the membership fees. The two-year membership is up for renewal and it is expected that current members will be renewing their memberships. If all of the current members renew their memberships, the Natural Gas Vehicle Partnership Fund would be replenished with revenues totaling $195,000. It is also anticipated that other entities may wish to join the Partnership. As such, staff is requesting that the Board recognize an additional $50,000 in potential membership fees over the next two years (until the end of FY 2009-10).

In 2007, a contract was awarded to Gladstein, Neandross & Associates (GNA) to maintain and update the CNGVP website (www.cngvp.org) for $2,500 per month for 12 months. Although the contract terminated on June 30, 2008, all funds were expended in May 2008. At its July meeting, the Partnership Steering Committee approved to award a subsequent website maintenance contract in the amount of $50,000 to GNA to cover the current fiscal year and a portion of FY 2009-10. GNA is continuing to maintain the website until a new contract can be executed. Staff recommends that the Board approve the new contract with GNA for the 20-month period at $2,500 per month. Staff also recommends that the contract with GNA include an option to extend the website maintenance for an additional eight months to cover the remainder of FY 2009-10 and a portion of
FY 2010-11 at a cost not to exceed $20,000. The option would be exercised contingent upon the Partnership Steering Committee approval in the beginning of 2010. Staff believes that providing this option at this time will allow for continuous operation of the website as the Partnership reviews and develops the next two-year cycle budget for the Board’s consideration at in the July – September 2010 timeframe. The total recommended website maintenance contract for FYs 2008-09, 2009-10, and a portion of 2010-11 is $70,000.

At its July 1, 2008 meeting, the Partnership Steering Committee approved a co-sponsorship of an NGV Purchasing Cooperative Website that provides public and private fleet managers the most cost effective light-, medium-, and heavy-duty natural gas vehicles to purchase, infrastructure locations, and NGV certified vehicle repair sites. The NGV Purchasing Cooperative is a forum for end-users to readily access information regarding NGVs. The program would cover Nevada and Arizona in addition to California. The program would be developed by CALSTART at a total cost of $150,000. Sempra Energy Utilities is providing $25,000 in seed funding for the program. The Partnership Steering Committee believes that such a program would enable greater deployment of natural gas vehicles. As such, the Committee approved a co-funding of $50,000 to the program. However, since additional funding needs to be secured to start the program, the Committee recommended that a contract be executed only after sufficient funding has been secured. Staff recommends that the Board allocate $50,000 from the Natural Gas Vehicle Partnership Fund and upon the Partnership Steering Committee approval to proceed, authorize the Executive Officer to execute a contract with CALSTART to develop and implement the NGV Purchasing Cooperative.

In addition, at its April 5, 2002 meeting, the Board authorized the Executive Officer to approve individual expenditures up to $50,000 for projects selected by the Partnership during the first year of its activity. This authorization was extended by the Board at its April 4, 2004 meeting for FY 2003-04, on September 3, 2004 for FY 2004-05 and 2005-06, and on February 2, 2007 for FY 2006-07 and FY 2008-09. Staff is recommending that the Board extend this authorization for FY 2008-09 and 2009-10 to coincide with the two-year membership term. This will continue to expedite the project selection and implementation process, and will help the Partnership Steering Committee to function effectively. Projects selected by the Partnership will be limited to those that will meet Partnership goals as outlined above.

Expenditures to date are provided in Table 1. Outreach activities included educational outreach meetings with legislators and their staff, conference exhibits, and monthly E-newsletters to key environmental groups, legislators and their staff, and other interested parties. Expenditures incurred at the April 3, 2008 meeting of $332 were inadvertently charged to the AQMD FY 2007-08 Budget. As such, $332 should be reimbursed from the California Natural Gas Vehicle Partnership Fund to the AQMD General Fund.

Table 1. California NGV Partnership Expenditures

The proposed FY 2008-09 (July 1, 2008 to June 30, 2009) and FY 2009-10 (July 1, 2009 to June 30, 2010) Budget is outlined in Table 2.

Table 2. FY 2008-09 & 2009-10 Proposed Budget

The Partnership Steering Committee held its last meeting on July 1, 2008. Expenditures of $305 were incurred and were covered out of the Science and Technology Advancement FY 2008-09 Budget since there is currently no Board approved budget. As such, included in Table 2 is a request for the Board to approve transference of $305 from the Natural Gas Vehicle Partnership Fund to the Science and Technology Advancement FY 2008-09 Budget, Miscellaneous Expenses Major Object.

The proposed budget provided in Table 2 reflects the actions taken by the Steering Committee as discussed above. If for some reason there is a need to modify the budget by the Partnership’s Steering Committee during FY 2008-09 or FY 2009-10, the Executive Officer will report back to the Board to seek approval for the modified budget.

Benefits to AQMD

The implementation of this initiative has brought public and private stakeholders together to assist in the development and deployment of advanced natural gas vehicles and refueling infrastructure expansion. The Partnership will continue its leadership role over the next five to ten years to work with OEMs, government, and the public towards the advancement of natural gas vehicles in the marketplace. This will, in turn, increase the natural gas role as a low emission displacement or augmentation to petroleum fuel where economically feasible.

Resource Impact

The current fund balance plus the expected membership fees of $195,000 is sufficient to cover the anticipated expenditures of the Partnership for the next two years. The sources of funds are from the Partnership’s membership dues for a two-year period. The AQMD has provided $25,000 from the Clean Fuel Fund to cover membership dues in the Partnership and has provided in-kind support to administer the Partnership activities. There are no other fiscal impacts associated with the recommended action.

Attachments (ZIP, 56k)

1. Recent Activities of the California Natural Gas Vehicle Partnership
2. California Natural Gas Vehicle Partnership Members List