SUMMARY

MINUTES OF THE BOARD OF THE

SOUTH COAST AIR QUALITY MANAGEMENT DISTRICT

JACKIE DIX, CLERK OF THE BOARD

FRIDAY, MARCH 10, 1995

Notice having been duly given, the regular meeting of the South Coast Air Quality Management District Board was held at District Headquarters, 21865 E. Copley Drive, Diamond Bar, California. Members present:

Supervisor Jon D. Mikels, Chairman
County of San Bernardino

Dr. William Burke, Vice Chairman
Speaker of the Assembly Appointee

Mr. Stephen Albright
Governor's Appointee

Supervisor Michael D. Antonovich
County of Los Angeles

Councilman Marvin Braude
Cities of Los Angeles County - Western Region

Councilwoman Candace Haggard (arrived at 10:10 a.m.)
Cities of Orange County

Ms. Mee H. Lee
Senate Rules Committee Appointee

Mayor Ronald O. Loveridge (arrived at 11:30 a.m.)
Cities of Riverside County

Councilman Leonard Paulitz
Cities of San Bernardino County

Supervisor James W. Silva
County of Orange

Councilwoman Nell Soto

Cities of Los Angeles County - Eastern Region

Members Absent:

Supervisor S. Roy Wilson, Ed.D.
County of Riverside

The meeting was called to order at 9:45 a.m. by Chairman Mikels.

2. Presentation of Resolution to the Honorable Robert Presley

On behalf of the Governing Board, Chairman Mikels presented a resolution to Senator Robert Presley in recognition and appreciation of his efforts which have made the State of California a model in balancing a healthy economy with healthful air quality.

CONSENT CALENDAR

3. Minutes of February 10, 1995 Board Meeting

4. Report of the Public Advisor, Small Business Assistance, and Economic
Development Offices

5. AQMD Advisor, March 1995

Set Public Hearings to Consider Amendments to the AQMD's Rules and
Regulations, and to Adopt Any Necessary California Environmental Quality
Act Documentation as Follows:

On April 14, 1995:

6. Adopt Proposed Rule 1501.1 - Alternatives to Work Trip Reduction
Plans

7. Amend Rule 1501 - Work Trip Reduction Plans

On May 12, 1995:

8. Amend Rule 1171 - Solvent Cleaning Operations

9. Report of Civil Actions Filed

10. Report Regarding Administrative Policy Pertaining to the Purchase of
Non-Consultant Services and Supplies

11. Report on the Study of the AQMD's Fee Structure and Authority

12. Recommendation to Recognize Revenue and Appropriate Funds to be Received
from the Southern California Association of Governments and Amend the
Contract with the University and Community College System of Nevada for a
Program for the Use of Remote Sensing Devices to Detect High-Emitting Vehicles

13. Recommendation to Amend a Contract for the Evaluation of PM10 Emissions
from Vehicles in Southern California

14. Recommendation to Amend a Contract for the Demonstration of Compressed
Natural Gas Engines in Heavy-Duty Trucks

15. Recommendation to Cosponsor Durability Testing for a Natural Gas Retrofit
Kit for Medium- and Heavy-Duty Engines

16. Status Report on AQMD Listing of Environmental Documents and Lead Agency
Projects Received by the AQMD for Review and Comment

17. Rule Forecast Report

18. Report on RECLAIM Allocation Adjustments Due to Permit Appeals to the
Hearing Board

19. Recommendation to Award Bid for the Management of the Diamond Bar
Headquarters Child Care Center

20. Recommendation Regarding Request for Quotations for Security Guard Services
at the Diamond Bar Headquarters

20(A) Recommendation to Approve Executive Officer's Goals/Objectives for 1996

Agenda Items 3, 6, 8, 11, 18, and 20 were held for discussion.

ON MOTION OF MR. ALBRIGHT, SECONDED BY MR. PAULITZ, THE BOARD APPROVED AGENDA ITEMS 4, 5, 7, 9, 10, 12 THROUGH 17 AND 20(A) AS RECOMMENDED BY STAFF; AND CONTINUED AGENDA ITEM NO. 19 TO THE APRIL 14, 1995 BOARD MEETING, BY UNANIMOUS CONSENT OF THE BOARD MEMBERS PRESENT. (Absent: Haggard, Loveridge and Wilson.)

(Written comments submitted by Linda Osborn regarding Agenda Item No. 19.)

3. Minutes of February 10, 1995 Board Meeting

Dr. Burke brought attention to Agenda Item No. 13 on page 6 of the Minutes, wherein he requested from staff a list of all computer purchases by the AQMD for the past three years, justification for those purchases and how the equipment is currently being used. He commented that while the report submitted to him by staff was well done, it did not include all three of the items he requested.

Dr. James M. Lents, Executive Officer, assured Dr. Burke that staff would provide him with a report complete with all of the requested information.

6. Set a Public Hearing on April 14, 1995 to Adopt Proposed Rule 1501.1 - Alternatives to Work Trip Reduction Plans

Ms. Soto asked if the proposed rule could include a commitment from the AQMD to provide training for those communities that do not have adequate technical resources.
Barry Wallerstein, DEO/Planning & Information Management, responded that if the Board adopts the proposed rule, staff plans to conduct training for the communities in order to facilitate use of the rule. Staff could address disadvantaged communities as part of the outreach for the training. Additionally, language could be included in the adopting resolution for the proposed rule which would address the issue of training for disadvantaged communities.

8. Set a Public Hearing on May 12, 1995 to Amend Rule 1171 - Solvent Cleaning Operations

Pat Leyden, DEO/Stationary Source Compliance, noted for the record that errata sheets had been distributed to Board members and made available to the public addressing deletions and clarification of language for Proposed Amended Rule 1171.

In response to a question by Ms. Soto, Ms. Leyden stated that there are five rules for which staff will be recommending Board adoption of amendments as corrections following Environmental Protection Agency identification of deficiencies in the rules. Proposed Amended Rule 1171 is the first of those rules, and staff will bring the other rules to the Board for amendment at a later date.

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Mr. Antonovich brought attention to a letter he received from Renzo Venturo of GM Hughes Electronics regarding Agenda Item No. 6 (Set Hearing on April 14, 1995 to Adopt Proposed Rule 1501.1). He distributed to Board members copies of the letter, in which
Mr. Venturo requested a one-month delay of the public hearing on this item in order to meet with AQMD staff regarding a number of technical issues in the current draft rule language that needed to be resolved by staff with the California Air Resources Board (ARB) and with the regulated community.

Mr. Wallerstein responded that he spoke with Mr. Venturo before the Board meeting regarding the comments in his letter, and assured him that AQMD staff will work diligently with Mr. Venturo's staff to clarify various points and resolve their concerns, to the extent feasible, before the public hearing in April. Mr. Venturo indicated his willingness to have the Board set the public hearing for April 14, with the understanding that if their concerns are not resolved, they will request that the Board delay the public hearing.

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11. Report on the Study of the AQMD's Fee Structure and Authority

Curtis Coleman addressed the Board on behalf of the California Manufacturers' Association Air Quality Alliance. He commented that although the study was useful in allowing the public to gain a better understanding, in a general sense, of what District programs are being implemented, how much those programs cost to implement and how the programs are funded; it was only a small first step. Additional studies need to be made which: (i) evaluate the cost of each of the AQMD's programs versus program effectiveness, in terms of emission reduction or other program goals; (ii) make recommendations regarding operational practices that could be implemented by the AQMD to improve productivity; (iii) evaluate the amount of resources being devoted to stationary source emission reduction programs versus mobile source emission reduction programs; (iv) identify which programs are mandated by federal and state laws and which are authorized, but not required, by those laws; and (v) determine whether any AQMD programs duplicate, overlap or conflict with state or federal air quality regulatory programs.

Mr. Silva expressed his desire that: (i) the AQMD exhaust all reasonable ways of reducing the cost of providing services before considering any of the consultant's recommendations regarding fee increases; (ii) operating fees be based on actual emissions instead of potential emissions; (iii) when the AQMD considers alternative sources of revenue, that mobile sources be considered first; and (iv) that the authority for increased funding be placed with the ARB.

Dr. Lents commented that the recommendations in the report are from the firm that conducted the study, and not from AQMD staff; nor do they represent the opinion of the Board. Also, any fee increases would have to be discussed in a public meeting and adopted by the Board.

18. Report on RECLAIM Allocation Adjustments Due to Permit Appeals to the Hearing Board

In response to a question by Dr. Burke, Ms. Leyden indicated that 4 of the 49 facilities removed from RECLAIM were the result of operations going out of business.

20. Recommendation Regarding Request for Quotations for Security Guard Services at the Diamond Bar Headquarters

Ms. Soto questioned why the AQMD needed so much security ($644,000/three-year period). Dr. Lents responded that the AQMD has historically had problems with unauthorized persons entering the premises and removing data from files, and therefore contracted for security services. During 1994, disruptions at two Board meetings and the disappearance of equipment worth thousands of dollars from the AQMD necessitated an increase in security services.

(Ms. Haggard arrived at 10:10 a.m.)

In response to a question by Mr. Silva concerning cost comparison with security services for the private sector , Nick Nikkila, Assistant DEO/Technical Support Services, explained that the competitive nature of the bidding process tends to eliminate very high bids and the bid is typically awarded to the company providing the best service at the lowest possible cost.

ON MOTION OF MR. PAULITZ, DULY SECONDED, THE BOARD APPROVED AGENDA ITEMS 3, 6, 8 (Including Errata sheets), 11, 18 AND 20 BY UNANIMOUS CONSENT OF THE BOARD MEMBERS PRESENT. (Absent: Braude, Loveridge and Wilson.)

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In response to Mr. Albright's question as to why Agenda Item No. 19 was being continued to April, Mr. Nikkila stated that receipt of additional information from the company recommended by staff for award of the bid made it necessary for staff to enter into further negotiations with them before making a recommendation to the Board.

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With regard to Agenda Item No. 20(A), Mr. Antonovich complimented staff on the revised goals and objectives, which recognize that a strong economy and clean air are not mutually exclusive.

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BOARD CALENDAR

21. Administrative Committee Report

21(A) Legislative Committee Report

Dr. Burke indicated that the report on the Legislative Committee's March 10, 1995 meeting will be provided at the April 14, 1995 Board meeting.

22. Mobile Source Committee Report

23. Stationary Source Committee Report

24. Technology Committee Report

25. Air Resources Board Monthly Meeting Report

Chairman Mikels indicated that the Report had not yet been received by Board members, and would therefore be received and filed at the April 14 Board meeting.

26. Interagency AQMP Implementation Committee Meeting Report

27. Mobile Source Air Pollution Reduction Review Committee Report and Recommendation to Amend the Fiscal Year 1993-94 AB 2766 Discretionary Work Program

28. Advisory Council Minutes of December 19, 1994 Meeting

Expressing his support for the addition of this item to the Board's monthly meeting agenda, Mr. Paulitz commented that when he was on the Advisory Council he recommended that the Board be made aware of the Council's actions.

29. Report Regarding Status of Board Member Assistance Funds

ON MOTION OF MR. ALBRIGHT, SECONDED BY MR. PAULITZ, AGENDA ITEMS 21 THROUGH 29 WERE APPROVED AS RECOMMENDED BY UNANIMOUS CONSENT OF THE BOARD MEMBERS PRESENT. (Absent: Braude, Loveridge and Wilson.)

30. Report on the Performance Audit of the AQMD for the Fiscal Year Ending June 30, 1994

Julia Kirwan and Susan Foreman of KPMG Peat Marwick LLP (KPMG) gave a brief slide presentation reviewing the state mandate, highlighting the key points of the audit report and discussing KPMG's findings and recommendations.

In response to Ms. Soto's request for postponement of this item to allow sufficient time to review the report, Dr. Lents stated that the AQMD was required to submit the report to the State Legislature by April 1, 1995. Ms. Soto stated that she received the report just two days before the Board meeting, and she asked that in the future staff allow her more time to review such comprehensive reports as this one.

Expressing his displeasure that the AQMD was singled out by the State Legislature for these performance audits, Mr. Albright questioned the usefulness of the audit and pointed out the redundancy of having a consultant conduct a study to conclude that the South Coast region has the worst air quality. Doubtful that the majority of legislators who voted for the performance audit actually review it, he added that the AQMD's legislative consultant in Sacramento should offer to brief those legislators on the audit by KPMG.

Speaking in support of the performance audit, Mr. Paulitz expressed his belief that the audit does what the legislature intended; and that is to list each AQMD program and explain what is being done in each program. Referring to Finding No. 6 of the audit report, he expressed disappointment that funding for the Cut Smog and Smoking Vehicle programs have been greatly reduced. Since there is no mandatory requirement, he believed the State Legislature should be encouraged to make it mandatory to repair smoking vehicles. Referring to Finding No. 10, which indicates that the AQMD continues to rely on a diminishing source of revenue, he commented that revenue from other sources will have to be increased because even when the minimum clean air standards are met, there will still be a need for the AQMD to insure maintenance of those standards.

Mr. Braude agreed with Mr. Albright's remarks concerning redundancy and the purpose of the audit. He suggested that the audit be referred to the Administrative Committee for review and discussion concerning advocacy of constructive changes in the state mandate.

At Chairman Mikels' request, Intergovernmental Affairs Officer Catherine Witherspoon clarified that traditionally reports due to the Legislature are submitted to the clerks on both Houses, to the author of the bill, and to the committees which overheard the matter. In this instance, copies of the report could also be sent to those members who have expressed interest in the AQMD's financial affairs, so that they too could be offered the briefing.

Curtis Coleman addressed the Board and commented that the performance audit report was not the type of report which he was referring to in his earlier comments on Agenda Item
No. 11. During those comments, one of the issues he asked to be addressed was federal and state mandates versus permissive programs. While he had not yet had the opportunity to fully review the audit report, he noticed that there was a matrix table in Appendix B of the report purporting to identify AQMD programs implemented pursuant to state and federal mandates--which he believed was not entirely correct. He suggested that for the upcoming fiscal year, the AQMD conduct a study which would list AQMD's programs, describing each program in an understandable manner, and provide an evaluation of the cost and actual benefit or impact of each program.

Chairman Mikels added that after reviewing the audit report fully, Mr. Coleman, as well as Ms. Soto and anyone else, could submit comments to the Administrative Committee. Mr. Silva added his concurrence with Ms. Soto's comments with respect to there not being sufficient time allowed for review of the audit report.

MR. ALBRIGHT MOVED TO RECEIVE AND FILE THE PERFORMANCE AUDIT REPORT, TRANSMIT THE REPORT TO THE STATE LEGISLATURE, AND REFER THE MATTER TO THE ADMINISTRATIVE COMMITTEE FOR REVIEW AND DISCUSSION REGARDING ADVOCACY OF CONSTRUCTIVE CHANGES IN LEGISLATION REQUIRING PERFORMANCE AUDITS OF THE SCAQMD. THE MOTION WAS SECONDED BY MR. PAULITZ, AND PASSED BY A UNANIMOUS VOTE OF THE BOARD MEMBERS PRESENT. (Absent: Loveridge and Wilson.)

31. Recommendation to Direct Executive Officer to Develop Guiding Principles for, and an Action Plan to Streamline, District Operations

Chairman Mikels commented that this recommendation stemmed from his concern that while the AQMD has made significant progress in terms of streamlining operations, reducing red tape and making compliance with AQMD rules and regulations less onerous to the regulated community, much more should be done.

MS. SOTO MOVED TO DIRECT THE EXECUTIVE OFFICER TO DEVELOP A SET OF GUIDING PRINCIPLES TO GOVERN DISTRICT OPERATIONS AND AN ACTION PLAN FOR REDUCING RED TAPE AND MAKING COMPLIANCE LESS ONEROUS, AND PRESENT A DRAFT AT THE MARCH 23, 1995 ADMINISTRATIVE COMMITTEE MEETING FOR REVIEW AND SUBSEQUENT SUBMITTAL TO THE FULL BOARD. THE MOTION WAS SECONDED BY MS. HAGGARD AND PASSED BY A UNANIMOUS VOTE OF THE BOARD MEMBERS PRESENT. (Absent: Loveridge and Wilson.)

PUBLIC HEARINGS

32. Amend Rule 2002 - Allocations for Oxides of Nitrogen and Oxides of Sulfur

The staff report was given by Anupom Ganguli, Senior Manager/Stationary Source Compliance. Dr. Ganguli noted that the Statement of Overriding Considerations and Mitigation Monitoring (Attachment 1 to Proposed Amended Rule 2002) had been revised to include language inadvertently omitted by staff. Revised copies were distributed to Board members and made available to the public.

The public hearing was opened, and the Board heard testimony from Pat Fitzgibbon of ARCO's CQC Kiln facility, the only petroleum coke calciner in the South Coast Air Basin. Speaking in support of the proposed amendment, Mr. Fitzgibbon commended staff for conducting a thorough technical assessment of their facility and agreed with staff that, while ambitious, a
30 percent emission reduction is possible with urea injection technology.

There being no further testimony, the public hearing was closed.

MS. LEE MOVED ADOPTION OF RESOLUTION NO. 95-3, CERTIFYING THE FINAL SUPPLEMENTAL ENVIRONMENTAL ASSESSMENT AND AMENDING RULE 2002, INCLUDING THE REVISED STATEMENT OF OVERRIDING CONSIDERATIONS AND MITIGATION MONITORING, AS RECOMMENDED BY STAFF. THE MOTION WAS SECONDED BY
MR. PAULITZ AND PASSED BY UNANIMOUS CONSENT OF THE BOARD MEMBERS PRESENT. (Absent: Antonovich, Loveridge and Wilson.)

33. Amend RECLAIM Rule 2011, Appendix A - Protocol Monitoring, Reporting, and Recordkeeping for Oxides of Sulfur (SOx); and Amend RECLAIM Rule 2012, Appendix A - Protocol Monitoring, Reporting, and Recordkeeping for Oxides of Nitrogen (NOx)

The staff report was given by Ms. Leyden. In response to questions and concerns raised by Dr. Burke, she clarified that requiring monitoring and reporting of emissions from standby equipment would not result in replication of emissions reporting. Ms. Leyden emphasized that the emissions monitoring and reporting requirement is the basic enforcement part of the RECLAIM trading program; and that simply "tagging" standby equipment would not provide AQMD staff a way of verifying that the equipment is not emitting NOx or SOx into the atmosphere.

(Mr. Loveridge arrived at 11:30 a.m.)

The public hearing was opened, and the Board heard testimony from the following individuals:

JENNIFER COSTANZA, Texaco

ANDREW BRACKER, Western Independent Refiners Association

GLENN LINGLE, Paramount Petroleum

LEE WALLACE, The Gas Company

STAN HOLM, Mobil Oil

RICK ZBUR, Regulatory Flexibility Group

Unanimous support was expressed for the proposed amendments regarding missing data procedures and extending the continuous emissions monitoring system (CEMS) requirement six months for Cycle 1 major sources. The following issues and concerns were raised; not to request Board action, but to make Board members aware that certain implementation problems exist which may, in the future, require further amendment of RECLAIM Rules:

Because intermittently-operated units ("standby equipment") are needed on short notice, a facility cannot cut off fuel supplies or otherwise render the equipment inoperable. At the same time, it seems unfair to require emissions reporting as if those units were operating at 100 percent capacity, 24 hours per day, when the units are actually shut down.

Facilities interested in using Alternative CEMS (ACEMS), which may potentially be much less expensive than CEMS, may also need more time. Currently, the guidance on ACEMS from the AQMD's pilot program is scheduled to be issued on April 15. However, ACEMS are very complicated systems and the pilot program is the first of its kind. Therefore, there is some concern that this deadline may not be met.

It was suggested that facility operators be given an additional option of either red-tagging standby equipment or having permit conditions that would require the facility to give the AQMD notice before ever operating that equipment. During those periods of time, missing data provisions would apply, thereby resulting in a more conservative reporting than the CEMS.

With respect to non-operating equipment that have CEMS, it was suggested that facility operators be given the option of having the CEMS send a signal to the AQMD indicating that the equipment is not operating, rather than the more costly requirement of having the CEMS operating and reporting zero emissions.

Public testimony indicated the willingness of the regulated community to continue to work with AQMD staff to arrive at mutually-agreeable resolution of the issues raised; and, if necessary, for AQMD staff to report back to the Board at a later date with recommendations.

There being no further testimony, the public hearing was closed.

Mr. Braude commented that when the RECLAIM Rules were adopted, it was understood that a certain amount of fine-tuning would be necessary. He believed the additional six months recommended by staff was reasonable. As to the other concerns raised, he hoped that the regulated community would be able to work with staff to achieve the most effective monitoring at the lowest possible cost. He was sympathetic and supportive of exploration of the suggestions made, but believed the spirit of enforcement must be retained if the AQMD is to fulfill its responsibility of insuring reduction in emissions.

MR. BRAUDE MOVED ADOPTION OF RESOLUTION NO. 95-5, CERTIFYING THE NOTICE OF EXEMPTION AND AMENDING RECLAIM RULES 2011 AND 2012, AS RECOMMENDED BY STAFF. THE MOTION WAS DULY SECONDED.

In response to Ms. Haggard, Ms. Leyden commented that while staff does meet with refineries on a monthly basis regarding implementation issues and has met individually with each of the applicants involved regarding various appeals; there is not presently a formal, standing working group. However, there has been discussion on formation of a working group, which staff intends to initiate. The refinery issues, staff believes, are unique to refineries and are probably best handled in the existing manner, where staff meets with the independent refiners as a group and meets with Western States Petroleum Association as a group.

Ms. Haggard was supportive of a working group which involved more than just the refineries in order to insure that the issues raised are resolved before the July 1, 1995 deadline for RECLAIM-certified CEMS.

THE MOTION BY MR. BRAUDE TO ADOPT RESOLUTION NO. 95-4, CERTIFYING THE NOTICE OF EXEMPTION AND AMENDING RECLAIM RULES 2011 AND 2012, AS RECOMMENDED BY STAFF PASSED BY UNANIMOUS CONSENT OF THE BOARD MEMBERS PRESENT.
(Absent: Wilson.)

34. Amend Rule 1121 - Control of Nitrogen Oxides from Residential Type Natural Gas-Fired Water Heaters

The staff report was given by Pang Mueller, Senior Manager/Stationary Source Compliance. After receiving public comments at the February 10, 1995 public hearing on the proposed amendments to Rule 1121, the Board continued the hearing to March 10 and directed staff to conduct further evaluation of the issues and recommendations raised in the public comments. Staff reviewed the concerns expressed by the public, and recommended that: (i) Subparagraph (d)(1) be changed to specify emission testing of a single sample of one randomly-selected unit of each model, instead of testing of three samples of each model; and (ii) Subparagraph (d)(6) be added to the rule, providing an alternative option to recertification every three years.

There being no public testimony, the public hearing was closed.

MS. LEE MOVED ADOPTION OF RESOLUTION NO. 95-5, CERTIFYING THE EXEMPTION FROM CALIFORNIA ENVIRONMENTAL QUALITY ACT REQUIREMENTS AND AMENDING RULE 1121 AS RECOMMENDED BY STAFF. THE MOTION WAS SECONDED BY MS. SOTO, AND PASSED BY UNANIMOUS CONSENT OF THE BOARD MEMBERS PRESENT. (Absent: Wilson.)

CLOSED SESSION

35. Recommendation Regarding a Closed Session to Consider Pending or Potential Litigation and Personnel Matters

The Board did not recess to closed session.

PUBLIC COMMENT PERIOD - (Public Comment on Non-Agenda Items,
Pursuant to Government Code Section 54954.3)

There was no public comment on non-agenda items.

ADJOURNMENT

The meeting was adjourned by Chairman Mikels at 1:00 p.m.

The foregoing is a true statement of the proceedings held by the South Coast Air Quality Management District Board on March 10, 1995.

Respectfully Submitted,

SAUNDRA MCDANIEL

Senior Deputy Clerk

Date Minutes Approved: _______________________________

__________________________________________________

Jon D. Mikels, Chairman