BOARD MEETING DATE: July 9, 2010
AGENDA NO. 18

PROPOSAL:

Approve Contract Modifications and Awards under FYs 2006-07, 2008-09 and 2009-10 AB 2766 Discretionary Fund Work Programs and Fund Transfer for Miscellaneous Costs in FY 2010-11

SYNOPSIS:

The MSRC approved multiple new contracts and modifications under the 2006-07, 2008-09 and 2009-10 Work Programs. These include contracts awarding funds for alternative fuel heavy-duty engines for on-road vehicles, a contract modification providing additional funds for website upgrades, a contract modification to A-Z Bus Sales providing additional funds for alternative fuel school buses, as well as a contract modification substituting vehicles under the Local Government Match Program. Additionally, every year the MSRC adopts an Administrative Budget which includes transference of funds to the AQMD Budget to cover administrative expenses. The MSRC seeks AQMD Board approval of these contract awards and modifications and the fund transfer.

COMMITTEE:

Mobile Source Air Pollution Reduction Review, June 17, 2010, Recommended for Approval

RECOMMENDED ACTIONS:

1. Approve modified contract with the City of Inglewood, Contract #ML07045, substituting two liquefied petroleum gas aerial trucks for two CNG aerial trucks as part of the FY 2006-07 Work Program, as described in this letter;

2. Approve a funding augmentation in an amount not to exceed $80,000 as part of the FY 2008-09 Work Program, to existing contract #MS09002 with A-Z Bus Sales under the Alternative Fuel School Bus Incentives Program, using funds previously allocated to this Program but not yet awarded, as described in this letter;

3. Approve a $4,700 funding augmentation to existing contract #MS05070 with Haaland Internet Productions, for MSRC website development and maintenance, under the FY 2009-10 Work Program, as described in this letter;

4. Approve the award of 21 contracts totaling $2,302,556 for the Heavy-Duty Alternative Fuel Engines for On-Road Vehicles Program as part of the FY 2009-10 Work Program, as described in this letter and as follows:

1. A contract with the City of Sierra Madre in an amount not to exceed $13,555 for the purchase of a heavy-duty natural gas vehicle;

2. A contract with Linde LLC in an amount not to exceed $56,932 for the purchase of up to 6 heavy-duty natural gas vehicles;

3. A contract with Domestic Linen Supply in an amount not to exceed $47,444 for purchase of up to 5 heavy-duty gasoline-electric hybrid vehicles;

4. A contract with Nationwide Environmental Services in an amount not to exceed $94,887 for the purchase of up to 10 heavy-duty natural gas vehicles;

5. A contract with Enterprise Rent-a-Car in an amount not to exceed $18,977 for purchase of up to 2 heavy-duty natural gas vehicles;

6. A contract with Republic Services in an amount not to exceed $123,354 for the purchase of up to 13 heavy-duty natural gas vehicles;

7. A contract with Ware Disposal in an amount not to exceed $123,353 for the purchase of up to 13 heavy-duty natural gas vehicles;

8. A contract with New Bern Transport, a subsidiary of Pepsi Bottling Group, in an amount not to exceed $113,865 for purchase of up to 12 heavy-duty natural gas vehicles;

9. A contract with Foothill Transit in an amount not to exceed $113,865 for the purchase of up to 12 heavy-duty natural gas vehicles;

10. A contract with Foothill Transit in an amount not to exceed $85,399 for the purchase of up to 9 heavy-duty electric vehicles;

11. A contract with the City of San Bernardino in an amount not to exceed $68,834 for the purchase of up to 9 heavy-duty natural gas vehicles;

12. A contract with Serv-Wel Disposal and Recycling in an amount not to exceed $18,977 for the purchase of up to 2 heavy-duty natural gas vehicles;

13. A contract with the County of Los Angeles in an amount not to exceed $37,955 for the purchase of up to 4 heavy-duty natural gas vehicles;

14. A contract with Rio Hondo College in an amount not to exceed $16,077 for the purchase of up to 2 heavy-duty natural gas vehicles;

15. A contract with Ryder Truck Rental in an amount not to exceed $651,382 for the purchase of up to 60 heavy-duty natural gas vehicles;

16. A contract with Shaw Transport in an amount not to exceed $81,332 for the purchase of up to 6 heavy-duty natural gas vehicles;

17. A contract with Edco Disposal in an amount not to exceed $379,549 for the purchase of up to 40 heavy-duty natural gas vehicles;

18. A contract with American Reclamation, a subsidiary of Gasparian, in an amount not to exceed $18,977 for the purchase of up to 2 heavy-duty natural gas vehicles;

19. A contract with the City of Glendora in an amount not to exceed $9,489 for the purchase of a heavy-duty natural gas vehicle;

20. A contract with Los Angeles World Airports in an amount not to exceed $123,353 for the purchase of up to 13 heavy-duty natural gas vehicles; and

21. A contract with Dix Leasing in an amount not to exceed $105,000 for the purchase of up to 3 heavy-duty natural gas vehicles.

5. Transfer $58,880 from the AB 2766 Discretionary Fund, Special Fund 23, to the FY 2010-11 Budget of Science and Technology Advancement, Services and Supplies Major Object, as provided in Table 1 of this letter to facilitate the payment of MSRC Miscellaneous Direct and Travel Costs;

6. Authorize MSRC the authority to adjust contract awards up to five percent, as necessary and previously granted in prior work programs; and

7. Authorize the Chairman of the Board to execute new and modified contracts under FYs 2006-07, 2008-09, and 2009-10 AB 2766 Discretionary Fund Work Programs, as described above and within this letter.

Greg Winterbottom
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.

FY 2006-07 Work Program

As an element of the FY 2006-07 Work Program, the City of Inglewood was awarded a contract under the MSRC’s Local Government Match Program for $75,000 towards the purchase of three heavy-duty CNG vehicles. Subsequently, the City requested to substitute two liquefied petroleum gas aerial trucks for the two CNG aerial trucks specified in the contract. At their June 17, 2010 meeting, the MSRC considered the City’s contract modification request. Further details are provided below in the Proposals section.

FY 2008-09 Work Program

As part of the FY 2008-09 Work Program, the MSRC has allocated a total of $3,000,000 for the Alternative Fuel School Bus Incentives Program to provide buydown incentives for school districts. $2,260,000 of this funding was previously awarded to A-Z Bus Sales and $240,000 to BusWest, leaving an available balance of $500,000. At its June 17, 2010 meeting, the MSRC considered a request from A-Z Bus Sales for an additional $80,000 for an order from the Inglewood Unified School District; further details are provided below in the Proposals section.

FY 2009-10 Work Program

Upgrades to MSRC Website

The MSRC maintains a website www.CleanTransportationFunding.org for outreach and assistance to contractors, proposers and others interested in clean transportation. Development of the website was done several years ago by Haaland Internet Productions (HiP Design), and HiP Design continues to provide maintenance and hosting services to the MSRC. The MSRC-TAC’s Administrative Subcommittee monitors the website and periodically evaluates or develops ideas for potential improvements. At its June 17, 2010 meeting, the MSRC considered recommendations from its MSRC-TAC for four areas of improvement for the website, as well as establishment of a budget for future time-sensitive modifications, and the funding required to implement these concepts. Further details are provided in the Proposals section.

Heavy-Duty Alternative Fuel Engines for On-Road Vehicles

As part of the FY 2009-10 Work Program, the MSRC released a $2.35 million Heavy-Duty Alternative Fuel Engines for On-Road Vehicles Program Announcement #PA2010-05. Eligible projects included the purchase or repower of heavy-duty on-road vehicles with alternative fuel 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 $35,000 for engines with displacements less than 10 liters, and $50,000 for engines with displacements of 10 liters or greater. The Program included a geographic minimum of $300,000 per county and funds would be awarded on a first-come, first-served basis. Applications received on 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 20% 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 80% of the total available funds, or if the MSRC allocated additional funds to the Program. The application acceptance period commenced January 19, 2010 and closed February 9, ,2010. At its June 17, 2010 meeting, the MSRC considered requests for funding from 21 applications under this Program; details are provided in the Proposals section.

FY 2010-11 Administrative Budget

Administrative costs for the AB 2766 Discretionary Program are limited by statute to five percent annually. Every year the MSRC adopts an Administrative Budget for the upcoming fiscal year to ensure costs remain within this limitation. For FY 2010-11, the MSRC adopted an Administrative Budget in the amount of $648,101, which is more than $46,000 below the five percent cap. While the Administrative Budget is adopted annually by the MSRC, staffing and administrative 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 2010-11 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 17, 2010 meeting. Further details are provided below in the Proposals section.

Outreach

In accordance with AQMD’s Procurement Policy and Procedure, a public notice advertising the Heavy-Duty Alternative Fuel Engines for On-Road Vehicles Program Announcement 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 Program Announcement was mailed to the Black and Latino Legislative Caucuses and various minority chambers of commerce and business associations, and placed on the Internet at AQMD’s website (http://www.aqmd.gov). Information was also available on AQMD’s bidder’s 24-hour telephone message line (909) 396-2724. Further, the solicitation was 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 Heavy-Duty Alternative Fuel Engines for On-Road Vehicles Program Announcement 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 June 17, 2010 meeting, the MSRC considered recommendations from its MSRC-TAC and unanimously approved the following:

FY 2006-07 Work Program

As mentioned in the Background section, the City of Inglewood revised their vehicle purchase plans and requests substitution of two LPG aerial trucks for the two CNG aerial trucks specified in their contract. The FY 2006-07 Local Government Match Program offered funding for both LPG and CNG vehicles, and the emissions of the LPG vehicles would be comparable. The MSRC considered and approved the City’s requested contract modification.

FY 2008-09 Work Program

As mentioned in the Background section, the MSRC previously awarded a total of $2,500,000 of the $3 million allocated for this Program to A-Z Bus Sales and another qualified vendor to continue the implementation of the Alternative Fuels. School Bus Incentives Program, based on their pending orders. This $2,500,000 has already been expending or has purchase orders issued against it. A-Z Bus Sales has received an order from Inglewood Unified School District for two LPG buses, for which the total incentive would be $80,000. A-Z Bus Sales requests an additional $80,000 to cover the buydown incentives for these buses. The MSRC has a balance of $500,000 remaining in this FY 2008-09 Alternative Fuel School Bus Incentives Program. The MSRC considered recommendations from its MSRC-TAC and awarded $80,000 out of this allocation to A-Z Bus Sales in order to provide the full incentives for the buses on order for Inglewood Unified School District.

FY 2009-10 Work Program

Upgrades to MSRC Website

As discussed in the Background section, the MSRC maintains a website www.CleanTransportationFunding.org which was designed and is still maintained and hosted by HiP Design on behalf of the MSRC. Four areas for improvement of the website have been identified: 1) add a Facebook link on the home page; 2) send Facebook announcement to all website subscribers; add capability to display video footage; and 4) add link to guidelines for Final Reports under the Local Government Match Program. HiP Design provided an estimate to perform these improvements under its existing contract, with an upper cost limit of $3,500. The MSRC-TAC recommended approval of the proposed upgrades. Additionally, the MSRC-TAC recommended establishment of a $1,200 budget for minor modifications with time sensitivity. Any unused balance would revert to the AB 2766 Discretionary Fund at the close of the contract. At its June 17, 2010 meeting, as part of the FY 2009-10 Work Program, the MSRC considered the recommendations from its MSRC-TAC and approved an additional $4,700 for this work.

Heavy-Duty Alternative Fuel Engines for On-Road Vehicles Program

As mentioned in the Background section, as an element of their FY 2009-10 Work Program, the MSRC released a $2.35 million Heavy-Duty Alternative Fuel Engines for On-Road Vehicles Program Announcement #PA2010-05. A total of 27 applications were received by the closing date of February 9, 2010. 2 applications were withdrawn during the evaluation period, leaving 25 applications requesting a total of $13,690,069.

First-day funding requests totaled $8,180,069 for 227 vehicles; thus, the program was oversubscribed on the first day and pro-rating of funding awards was required. The geographic minimum for Riverside County was not met on the first day applications were accepted; therefore, the one application for vehicles to be based in Riverside County is eligible to receive full funding. All other first-day vehicles were deemed eligible to receive a pro-rated funding incentive. Because uniform pro-rating would have resulted in the geographic minimum for San Bernardino County not being met, a specific pro-rating factor was established for San Bernardino County-based vehicles so that the awards for those vehicles totaled $300,000. Applicants offered a pro-rated award would be offered the option to reduce the number of vehicles, but in no case would funding exceed the per-engine maximums specified in the Program Announcement. The MSRC did not consider one application, from Frito Lay, because the applicant’s Campaign Contribution Disclosure was not received in time; that application will be considered at a future MSRC meeting. The MSRC approved funding totaling $2,302,556 to fund 21 applications, as follows:

1. A contract with the City of Sierra Madre in an amount not to exceed $13,555 for the purchase of a heavy-duty natural gas vehicle;

2. A contract with Linde LLC in an amount not to exceed $56,932 for the purchase of up to 6 heavy-duty natural gas vehicles;

3. A contract with Domestic Linen Supply in an amount not to exceed $47,444 for purchase of up to 5 heavy-duty gasoline-electric hybrid vehicles;

4. A contract with Nationwide Environmental Services in an amount not to exceed $94,887 for the purchase of up to 10 heavy-duty natural gas vehicles;

5. A contract with Enterprise Rent-a-Car in an amount not to exceed $18,977 for purchase of up to 2 heavy-duty natural gas vehicles;

6. A contract with Republic Services in an amount not to exceed $123,354 for the purchase of up to 13 heavy-duty natural gas vehicles;

7. A contract with Ware Disposal in an amount not to exceed $123,353 for the purchase of up to 13 heavy-duty natural gas vehicles;

8. A contract with New Bern Transport, a subsidiary of Pepsi Bottling Group, in an amount not to exceed $113,865 for purchase of up to 12 heavy-duty natural gas vehicles;

9. A contract with Foothill Transit in an amount not to exceed $113,865 for the purchase of up to 12 heavy-duty natural gas vehicles;

10. A contract with Foothill Transit in an amount not to exceed $85,399 for the purchase of up to 9 heavy-duty electric vehicles;

11. A contract with the City of San Bernardino in an amount not to exceed $68,834 for the purchase of up to 9 heavy-duty natural gas vehicles;

12. A contract with Serv-Wel Disposal and Recycling in an amount not to exceed $18,977 for the purchase of up to 2 heavy-duty natural gas vehicles;

13. A contract with the County of Los Angeles in an amount not to exceed $37,955 for the purchase of up to 4 heavy-duty natural gas vehicles;

14. A contract with Rio Hondo College in an amount not to exceed $16,077 for the purchase of up to 2 heavy-duty natural gas vehicles;

15. A contract with Ryder Truck Rental in an amount not to exceed $651,382 for the purchase of up to 60 heavy-duty natural gas vehicles;

16. A contract with Shaw Transport in an amount not to exceed $81,332 for the purchase of up to 6 heavy-duty natural gas vehicles;

17. A contract with Edco Disposal in an amount not to exceed $379,549 for the purchase of up to 40 heavy-duty natural gas vehicles;

18. A contract with American Reclamation, a subsidiary of Gasparian, in an amount not to exceed $18,977 for the purchase of up to 2 heavy-duty natural gas vehicles;

19. A contract with the City of Glendora in an amount not to exceed $9,489 for the purchase of a heavy-duty natural gas vehicle;

20. A contract with Los Angeles World Airports in an amount not to exceed $123,353 for the purchase of up to 13 heavy-duty natural gas vehicles; and

21. A contract with Dix Leasing in an amount not to exceed $105,000 for the purchase of up to 3 heavy-duty natural gas vehicles.

FY 2009-10 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 legislatively-mandated five percent cap for administrative expenses. For FY 2010-11, the MSRC adopted an Administrative Budget in the amount of $648,101. The MSRC unanimously approved a fund transfer of $58,880 to the AQMD Science and Technology Advancement FY 2010-11 Budget to facilitate the payment of MSRC Miscellaneous Direct and Travel Costs included in the MSRC’s FY 2010-11 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 $58,880 for FY 2010-11 as provided in Table 1.

Table 1. Estimated FY 2010-11 MSRC Miscellaneous and Direct Expenditures Proposed to be Allocated to AQMD Science and Technology Advancement FY 2010-11 Budget

At this time the MSRC requests the AQMD Board to approve the contract modifications and awards under the FYs 2006-07, 2008-09 and 2009-10 Work Programs as outlined above. The MSRC also requests the Board to authorize the AQMD Chairman of the Board the authority to execute all agreements described in this letter. 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 to authorize a fund transfer of $58,880 from Fund 23 to Science & Technology Advancement’s Budget.

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.