BOARD MEETING DATE: December 4, 2009
AGENDA NO. 10

PROPOSAL:

Recognize Revenue and Execute Sole Source Contracts to Assist in Purchase of CNG Taxicabs and Shuttle Vans

SYNOPSIS:

The AQMD has been informed of a pending award from the U.S. DOE Clean Cities Petroleum Reduction Technologies Projects for the Transportation Sector. This funding opportunity was conducted with the aim of expanding the use of alternative-fueled vehicles and advanced technology vehicles. This action is to recognize $500,000 in revenue from the U.S. DOE and combine with $750,000 previously allocated by the Board to assist in the purchase of CNG taxicabs and shuttles. This action is to enter into sole source contracts with: (1) Yellow Cab Company of Greater Orange County to purchase 45 new CNG-powered passenger class taxicab vehicles, and (2) Prime Time Shuttle to purchase 34 new CNG-powered shuttle vans, to provide commercial airport ground transportation service in the South Coast Air Basin and Coachella Valley.

COMMITTEE:

Technology, November 20, 2009, Recommended for Approval

RECOMMENDED ACTIONS:

 

1. Authorize the Executive Officer to execute an agreement with the U.S. Department of Energy (DOE) and upon receipt, recognize $500,000 in revenue from the DOE and place into the Clean Fuels Program (Fund 31).

2. Authorize the Executive Officer to reimburse the AQMD General Fund up to $14,000 from the Clean Fuels Fund (Fund 31), for administrative costs such as Salaries & Employee Benefits and Indirect Costs necessary to implement the project as approved in the grant award.

3. Terminate commitment from a previous Board approved CNG taxicab buydown program releasing the $750,000 allocated to this program in the Clean Fuels Program (Fund 31).

4. Authorize the Chairman to execute a sole source contract with Yellow Cab of Greater Orange County to purchase 45 CNG taxicabs at a cost not to exceed $675,000 from the Clean Fuels Program (Fund 31).

5. Authorize the Chairman to execute a sole source contract with Prime Time Shuttle to purchase 34 CNG shuttle vans at a cost not to exceed $561,000 from the Clean Fuels Program (Fund 31).

 

Barry R. Wallerstein, D.Env.
Executive Officer

Background

In May 2009, the AQMD submitted an application under a solicitation by the U.S. Department of Energy’s (DOE) Clean Cities FY09 Petroleum Reduction Technologies Projects for the Transportation Sector. The project proposed to the DOE was to continue implementation of the AQMD’s natural gas taxicab buydown program and seek cofunding from the DOE to assist in covering the incremental cost of dedicated CNG-powered vehicles. These vehicles would provide ground transportation service to the six major commercial airports (Los Angeles International Airport, Orange County Airport, Burbank, Ontario, Long Beach, and Palm Springs) in the AQMD jurisdictional area, to help reduce VOC and NOx, air toxic contaminants, and greenhouse gases in the region. An application was submitted to DOE to conduct a buydown program for up to 126 CNG-powered taxicabs and shuttle vans at a total request of $1,105,335.

In September 2009, U.S. DOE informed the AQMD that this project was conditionally selected for award and would receive $500,000 in DOE funds with a minimum recipient cost share of 50 percent towards the cost of converting gasoline-powered vehicles to dedicated CNG-powered vehicles. The incremental cost for converting a 2009 model year Ford Crown Victoria is $15,000 and a 2009 model year Ford E-350 van is $16,500.

On September 5, 2008, the Board approved $750,000 from the Clean Fuels Program (Fund 31) for an incentive buydown program to assist in the purchase of natural gas vehicles for taxicab services, offering up to $10,000 per vehicle on a first-come basis. To date, there has not been any expenditure for CNG vehicle buydowns. Taxicab operators indicated that they did not have sufficient funding to cover the remaining cost of the vehicle. As such, they indicated their support on the U.S. DOE solicitation.

Proposal

This action is to execute an agreement with the U.S. DOE to receive $500,000 from the DOE Clean Cities Petroleum Reduction Technologies Project for the Transportation Sector to assist in the purchase of new dedicated CNG-powered taxicabs and shuttle vans. Upon receipt, staff is proposing that the DOE funds be placed into the Clean Fuels Program (Fund 31) with a set aside of 2.8 percent ($14,000) administrative fee for program implementation.

Staff proposes that $750,000 available from the September 2008 Board allocation be used as cost share to the DOE funds. As such, staff is requesting the Board to terminate its previous action for a CNG taxicab buydown incentive program, and revert these funds back to the Clean Fuels Program (Fund 31).

Since the announcement of the pending DOE awards, two companies have expressed interest in moving forward with the buydown program with sufficient funding to cover the remaining cost of the vehicle. As such, staff proposes to execute two sole source contracts with: (1) Yellow Cab Company of Greater Orange County for the purchase and conversion of 45 new dedicated CNG Ford Crown Victoria taxicabs, in an amount not to exceed $675,000, and (2) Prime Time Shuttle, a dba of Rideshare Port Management, LLC, for the purchase and conversion of 34 new dedicated CNG shuttle vans, in an amount not to exceed $561,000, with funding from the Clean Fuels Program (Fund 31). The two contracts will specify these vehicles be used to provide airport ground transportation services to commercial airports within the AQMD jurisdictional area. The tables below list costs per unit borne by each participant in this program.

Table 1. CNG Taxicab Cost and Cost Share per Vehicle

Table 2. CNG Shuttle Van Cost and Cost Share per Vehicle

Yellow Cab Company of Greater Orange County currently operates 300 taxicabs in Southern California of which 200 are currently natural gas powered. Yellow Cab has secured new franchise agreements to provide CNG-fueled taxicab service for Ontario Airport and Palm Springs Airport with 45 new 2009 model year Ford Crown Victorias certified by CARB to meet SULEV (super ultra-low emission vehicle) standards. Yellow Cab Company of Greater Orange County’s contribution to this project includes the vehicle’s base costs, sales tax, and vehicle registration fees, estimated to total $32,309 per vehicle, and an overall total of $1,453,905.

Prime Time Shuttle currently operates shuttle vans at all of the major commercial airports in Southern California including Los Angeles International Airport, Burbank Airport, and Orange County Airport. Prime Time Shuttle has expressed its intent to purchase 34 new 2009 model year Ford E-350 vans certified by CARB to meet SULEV standards. Prime Time Shuttle has also stated their intent to begin removing gasoline fueled shuttle vans from service as the CNG vehicles become established in their fleet. The 34 shuttle vans will provide airport ground transportation service at major commercial airports within the AQMD. Prime Time Shuttle’s financial contribution to this project include each vehicle’s base cost, sales tax, and vehicle registration fees, estimated to total $33,016 per vehicle, and an overall total of $1,122,544.

Benefits to the AQMD

The primary objective of the proposed project is to increase the use of alternative-fueled vehicles through the deployment of natural gas fueled vehicles in two niche applications in the Southern California region: specifically, taxicabs and passenger shuttle vans. Taxicabs and passenger shuttle vans servicing the six major commercial airports in the AQMD jurisdictional area use significant amounts of gasoline due to the high annual miles accrued on these vehicles. In addition, the emissions from these vehicles contribute to the air quality problem in the region; contribute to greenhouse gas emissions; and use of petroleum based fuels.

Taxicabs and shuttle van fleets serving commercial airports within the AQMD jurisdictional area are one of the highest accumulated mileage fleets operating in the region, totaling hundreds of thousand miles on its vehicles. It is estimated that, on average, an individual taxicab or van may accrue as much as 80,000 miles per year. Considering the high annual mileage, these vehicles contribute significantly to the ozone air quality problem in the South Coast Air Basin.

A buydown program for natural gas taxicabs and shuttle vans serving commercial airports in the South Coast Air Basin and Coachella Valley will ensure that the pollution contribution from these fleets will be kept to a minimum while concurrently displacing petroleum use.

Sole Source Justification

Section VIII.B.2 of the Procurement Policy and Procedure identifies four major provisions under which a sole source award may be justified. This request for a sole source award is made under provision B.2.d.: Other circumstances exist which in the determination of the Executive Officer require such waiver in the best interest of the AQMD. Specifically, these circumstances are: B.2.d. (1) Projects involving cost sharing by multiple sponsors.

The AQMD proposes to contract with: (1) Yellow Cab Company of Greater Orange County and (2) Prime Time Shuttle based in Los Angeles, California. Both companies have provided statements of support and commitment to participate in a CNG taxicab and shuttle van program for natural gas powered vehicles serving commercial airports in the Southern California region and will provide cost share to this project from the purchase of new base vehicles for conversion from gasoline to dedicated CNG-powered vehicles.  

Resource Impacts

The U.S. DOE has awarded the AQMD with $500,000 towards a buydown program for CNG taxicabs and shuttle vans servicing commercial airports in the AQMD. The DOE funds are conditioned with a minimum recipient cost share of 50%. The AQMD proposes to meet DOE cost share requirements by using up to $750,000 apportioned and approved by the Board in September 2008 for the AQMD’s CNG taxicab buydown program to meet and exceed the DOE funds of $500,000 to implement this project.

The proposed buydown program will contract with two local companies Yellow Cab of Greater Orange County and Prime Time Shuttle. These companies will provide funding towards the purchase of the gasoline-powered vehicles, and DOE and AQMD monies will support the incremental cost to convert these vehicles to dedicated CNG-powered vehicles.

The overall cost of the CNG taxicab and CNG shuttle van purchase assistance program, including administrative costs, is estimated at $3,826,449. Proposed AQMD funding of up to $750,000 represents 19.6% of the estimated total project cost. Tables 3 and 4 provide the total costs and cost shares for taxicab and shuttle van purchases and conversions, including estimated sales tax and registration fees.

Table 3. CNG Taxicabs – Total Costs and Cost Shares

Table 4. CNG Shuttle Vans – Total Costs and Cost Shares

The source of AQMD funds proposed for this program were approved by the Board on September 5, 2008 to assist in the purchase of dedicated CNG-powered passenger vehicles for use at commercial airports. Funds for the previously approved purchase assistance program are from the Clean Fuels Program (Fund 31).

The Clean Fuels Program (Fund 31) is a special revenue fund resulting from the state-mandated Cleans Fuels Program. The Clean Fuels Program, under Health and Safety Code Sections 40448.5 and 40512 and Vehicle Code Section 9250.11, establishes mechanisms to collect revenues from mobile sources to support projects to increase the utilization of clean fuels, including the development of the necessary advanced enabling technologies. Funds collected from motor vehicles are restricted, by statute, to be used for projects and program activities related to mobile sources that support the objectives of the Clean Fuels Program.