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:
Councilmember Norma J. Glover, Vice Chairman
Cities of Orange County
Councilmember Richard Alarcón (left at 9:52 a.m.)
Cities of Los Angeles County - Western Region
Supervisor Michael D. Antonovich (left during closed session)
County of Los Angeles
Ms. Mee H. Lee
Senate Rules Committee Appointee
Mayor Ronald O. Loveridge
Cities of Riverside County
Supervisor Jon D. Mikels
County of San Bernardino
Wayne H. Nastri
Governor’s Appointee
Councilmember Leonard Paulitz
Cities of San Bernardino County
Supervisor James W. Silva
County of Orange
Councilmember Nell Soto
Cities of Los Angeles County - Eastern Region
Members Absent:
The meeting was called to order at 9:40 a.m. by Chairman Burke.
CONSENT CALENDAR
Agenda Items 1, 5, 6, 30 and 31 were held for discussion.
Commenting that he had to leave to attend funeral services for a Los Angeles Police Department Officer who was recently killed in the line of duty, Mr. Alarcón requested that Agenda Items 5 and 6 be taken out of order.
Mr. Alarcón reported that staff brought recommendations for legislative representation to the Legislative Committee at its January 8, 1998 meeting. Staff pointed out to the Committee that they had not had the benefit of interviews for either program, and also had not contacted all of the references for the top-ranked firms. At that time, Mr. Alarcón expressed concern also that the RFP was broad in nature and did not enable sufficient consideration for two key issues, a focus on appropriations and the environmental justice issues, which, theoretically, would be edified in interviews. Nevertheless, staff made recommendations based on the information they had, and the Committee acted to approve staff’s recommendation, by a 4-to-2 vote for the federal program and a unanimous vote for the state program. As one of those who voted against the staff recommendation for the federal program, Mr. Alarcón directed staff to obtain any additional information possible prior to the January 9 Board meeting.
At Mr. Alarcón’s request, Lupe Valdez, DEO/Public Affairs and Local Government Assistance, reported briefly on these two items. The recommendations brought forth to the Committee and, with the Committee’s approval, to the Board were not only staff’s recommendations, but also the recommendations of an evaluation panel which included two outside individuals. The panel also technically rated the six proposals submitted for Sacramento and the nine proposals for Washington, D.C. In addition to that, staff received information subsequent to the Committee meeting from Washington, D.C. on one of the firms.
At Chairman Burke’s suggestion, Mr. Alarcón and Mr. Silva--Chair and Vice Chair, respectively, of the Legislative Committee--agreed to table Agenda Items 5 and 6 until the February 13, 1998 Board meeting. In the event the interviews and reference checks are completed and the items are ready for Board action prior to the February 13 Board meeting, a special meeting of the Board may be held on January 23, 1998 for the Board to consider the two legislative representation items.
(Mr. Alarcón left at 9:52 a.m.)
• Swearing in of Reappointed Board Member Dr. William Burke
Mr. Antonovich administered the oath of office to Dr. Burke, who was reappointed by Assemblyman Cruz Bustamante, Speaker of the Assembly, as his representative on the Governing Board for a term ending January 15, 2002.
• Opening Comments
Ms. Soto. Referring to an article in the San Bernardino County Sun wherein it was reported that 10 percent of the West Coast’s air pollution comes from Asia, commented that she finds it ironic that we are trying to clean up the air here in Southern California, and at the same time facilities such as the Los Angeles Export Terminal (LAXT) coal handling facility are exporting to Asia materials that result in dirty air making its way back to America. She asked that staff consult with EPA and CARB and report back to the Board on this issue at a later date.
Chairman Burke added that this issue might also be of interest to the Board’s Ad Hoc Committee on Airport and Marine Port Operations.
Mr. Steve Lerner, Attorney, addressed the Board on behalf of the International Longshore and Warehouse Union (ILWU) regarding the statement on page 8 of the Minutes that the ILWU was satisfied with LAXT’s Rule 1158 Petroleum Coke Storage Plan. He clarified that the ILWU is not satisfied with the Plan, and asked that the Minutes reflect that correction.
Ms. Soto noted that the discussion on Item No. 11 on pages 5 and 6 of the Minutes failed to include the clearest justification for selection of Burbank for an air monitoring site, which is, the Burbank location is near the existing CARB monitoring site, thus allowing for comparison and calibration of the two stations.
Ms. Soto commended staff for the improvement in this year’s program goals and objectives statement, and expressed her appreciation for the frank references to key issues such as "overcoming legislative, regulatory and interagency hurdles".
The following individuals addressed the Board to comment on this item:
BETTY-JANE KIRWAN, Attorney, on behalf of 3M Company
Expressed appreciation for staff’s efforts and responsiveness to their request in July 1997 for the Board to open up the Clean Air Solvents (CAS) Certification Program to all environmentally beneficial products, such as 3M’s new hydrofluoroether (HFE) solvent line; and asked that staff continue with its current objective approach to solvents.
JOHN SCHWIND, Safety-Kleen Corporation
Expressed support for the proposed staff action to allow VOC-exempt compounds to be certified as CAS; and commented that to achieve continued air quality benefits in the basin, the AQMD needs to provide a broad array of potential solutions and not limit technological innovation such as HFEs.
BOARD CALENDAR
Dr. Wallerstein reported on the proposed Resolution which involves a number of issues that have arisen relative to the AQMD’s relationship with U.S. EPA.
Ms. Glover commented that the Home Rule Working Group reviewed the proposed Resolution on January 8, 1998, and believes there are still issues that need to be resolved. Therefore, she suggested a one-month continuance of this item.
Ms. Soto commented that she is anxious to work with EPA to resolve these problems, but would, reluctantly, vote for the continuance because she believes it is in the best interest.
In response to Mr. Paulitz, Dr. Wallerstein explained that the Advisory Council membership was being reduced from 31 to 19 because a number of members of the business community and others had expressed to him and Chairman Burke that they felt it might help in terms of consensus building amongst the group to reduce its size.
Dr. Wallerstein also noted that an errata sheet had been distributed to Board members, and copies made available to the public, correcting the heading and content of paragraphs 4 and 5 of the Resolution to include references to the Advisory Council with respect to alternate members.
"ADVISORY GROUP OR ADVISORY COUNCIL ALTERNATE MEMBERS; SMALL BUSINESS REPRESENTATION
4. Persons representing specific organizations may designate one identified alternate to attend meetings and participate in the Advisory Council, or the Advisory Group........
PUBLIC HEARINGS
Chairman Burke recused himself from participating in Board consideration of Agenda Items No. 41 and 42 because of potential conflicts of interests, and Vice Chairman Glover presided over the remainder of the Board meeting.
Jack Broadbent, Assistant DEO/Stationary Source Compliance, gave the staff report.
Expressing her concern regarding the impacts of the proposed rule on businesses, Ms. Soto underscored the need for extensive outreach efforts by staff--well in advance of the compliance dates in the rule--to educate and provide assistance to the affected businesses in order to ensure compliance and mitigate the impacts to those businesses.
Mr. Broadbent responded that staff does plan to have an extensive outreach effort for the proposed rule, which will include: (i) a three-phased implementation study, to be conducted in coordination with industry, the public, and trade associations through the formation of an implementation steering committee, which will be completed approximately 18 months prior to the compliance dates for each of the three categories of units specified in the rule; and (ii) working with other interested parties, including manufacturers and The Gas Company, to identify impacted facilities and provide information and compliance options.
At Ms. Soto’s request, staff agreed to provide annual progress reports to the Board addressing the concerns expressed by Ms. Soto.
The public hearing was opened, and the Board heard testimony from the following individuals:
• Speaking in Support of Proposed Rule 1146.2
LEE WALLACE, Pacific Enterprises and Southern California Gas Company
BOB WOODS, Elmco-Delaney
VANCE MARKLAND, Miura Boiler West, Inc.
ED CANCILLA, Ajax Boiler Inc.
*JOHN BILLHEIMER, Small Business Coalition
*Submitted Written Comments
• Key Issues/Comments
The Gas Company mainly wants to examine, as part of the implementation study, the cost effectiveness for the various classes of user. The proposed rule needs to accommodate an estimated 60,000 small boilers in predominantly smaller scale operations that typically find it difficult to absorb additional costs.
There is a wide selection of low-NOx units that manufacturers have had available for several years which are competitively priced, environmentally friendly and highly efficient. The technology is also available for the coil-type water heater units used in residential apartment buildings.
It is important that as part of this rule the AQMD allow factory certification, which will ensure that the units will be thoroughly tested.
It was suggested that the Board consider emission credits to manufacturers for them to improve their products and continue the development of low-NOx units at lower levels.
Four points of administrative concern were expressed regarding: (i) updating the estimate of expected emission reductions as the rule is implemented; (ii) the importance of a small business definition with respect to socioeconomic analysis; (iii) operations that are exempt from permit requirements do not have much data for making determinations, and many people have no way of knowing what requirements they are expected to meet; and (iv) there will be difficulties, with recordkeeping and so forth, in a source proving that it is exempt from PR 1146.2 requirements pursuant to the 9,000 therm exemption.
It was suggested that the 3,000-foot altitude exemption which has been included in three other District rules also be included in PR 1146.2, because it is a modeling fact that the emissions that occur above 3,000 feet do not affect the attainment of the basin.
• Speaking in Opposition to Proposed Rule 1146.2
*OTTO VAGO, State Industries, Inc.
*FRANK STANONIK, Gas Appliance Manufacturers Association (GAMA)
DEAN MORRISON, Rheem Manufacturing Company
MICHAEL HUBBARD, Teledyne Laars
*GREG DANENHAUER, Parker Boiler
*LARRY J. ASHTON, Raypak
*Submitted Written Comments
• Key Issues/Comments
Because of the large number of units in the field, there will be a lack of knowledge about PR 1146.2, and the rule will be unenforceable.
The limits that are being proposed are not justified and the effective dates are too soon. Storage water heater manufacturers will need approximately five years to make the design changes, conduct field tests, and submit all the models for recertification to comply with the proposed rule.
The costs would be extremely high to do retrofits on commercial storage water heaters. Believe it would likely exceed the replacement cost of the unit; and it may not be achievable for all currently installed models. The impact on businesses such as small family-owned restaurants, hospitals and nursing homes might be substantial.
The NOx benefit of retrofitting small boilers--particularly less than 1 million Btu--is very low. Requiring retrofit on equipment less than 1 million Btu per hour input is a new concept, and believe the AQMD will be putting people at risk from a safety perspective. Boiler owners often choose the least-costly retrofit alternative, which could lead to safety problems with the burner systems. Further, small businesses are not staffed to handle the increased retrofit complexity and maintenance requirements of the low-NOx products. As a result, product liability exposure to manufacturers is magnified in the smaller size ranges.
In order to comply with the rule and not risk safety, it was suggested that the requirements for new units be phased in over a three-year period starting in 2001; and, after all the new units are in, phase in the retrofit requirements in the years 2004, 2005 and 2006.
It was recommended that the retrofit portion of the proposed rule be established at a level (suggested 100 ppm) that is not overly onerous on the equipment owners and which can be achieved without compromising safety.
Written comments were submitted by GAMA, recommending the following modifications to the proposed rule:
• Delete the Type I and Type II categories based on input and replace them with categories based on the type of appliance.
• Exempt all residential models as defined by the National Appliance Energy Conservation Act of 1987.
• Exempt all pool heaters with inputs of 400,000 Btu/h or less.
• Extend the effective date of the 30 ppm NOx limit for boilers with inputs from 1,000,000 Btu/h to 2,000,000 Btu/h to January 1, 2001.
• Delete the retrofit requirement for units with inputs from 400,000 Btu/h to 1,000,000 Btu/h.
• Amend the NOx limits for units less than 1,000,000 Btu/h to establish intermediate NOx emissions limits with near term effective dates and indicate that lower NOx emission levels will be developed following the completion of the implementation studies.
• Specify the same retrofit requirement for units in the 1,000,000 to 2,000,000 Btu/h range as Ventura County Rule 74.15.1, which provides an exemption for units with total annual energy consumption of no more than 18,000 therms and add an exemption for any unit in this input range manufactured from 1992 to 1999 with NOx emission of no more than 75 ppm.
• Delete the paragraph that indicates that recertification may be required after three years.
• Delete any reference to mobile home water heaters.
• Delete any requirements for display information on the shipping carton.
• No Position Expressed
*PAUL STEWART, California Apartment Association
As one of the end users included in rule development process, expressed concern that multi-family residential rental housing was considered as a "commercial use" for this study; yet multi-family residential housing was not surveyed as to the actual impact. Also, the retrofit units for multi-family housing have a limited availability, if they exist. The units will be custom made for each relative type that is in an apartment building, at an estimated cost of $6,000 to $12,000, which would likely result in rent increases. Therefore, recommended that multi-family residential rental housing be exempted from the retrofit requirements in the proposed rule.
Vice Chairman Glover announced that the Board would consider the closed session items, and continue with public testimony on Proposed Rule 1146.2 following closed session.
OPEN SESSION
General Counsel Peter Greenwald announced that it was necessary for the Board to recess to closed session, pursuant to Government Code Section 54956.8, to confer with real property negotiator regarding property located at 9150 Flair Drive, El Monte, CA 91731. Negotiating Party: Polycom, Inc. Under Negotiation: Price and Terms of Payment.
CLOSED SESSION
The Board recessed to closed session at 11:03 a.m.,
• Pursuant to Government Code Section 54956.9(a), to confer with counsel regarding pending litigation which has been initiated formally and to which the District is a party. The action is entitled Coalition for Clean Air, et al. v. SCAQMD, U.S. District Court Case No. 97-6916 HLH (SHx).
• Pursuant to Government Code Section 54956.9(b)(1), to confer with counsel because based on existing facts and circumstances there is a significant exposure to litigation against the agency--one case. The facts and circumstances are termination of the DEO of Technical Support Services.
• Pursuant to Government Code Section 54956.8, to confer with real property negotiator regarding property located at 9150 Flair Drive, El Monte, CA 91731. Negotiating Party: Polycom, Inc. Under Negotiation: Price and Terms of Payment.
The Board reconvened at 11:26 a.m., with Mr. Antonovich being absent. There being no action taken in closed session to report, the Board resumed public testimony on Agenda Item No. 41.
PUBLIC HEARINGS (Continued)
Further testimony was presented by the following individuals:
• Speaking in Support of Proposed Rule 1146.2
*TIM CARMICHAEL, Coalition for Clean Air and Natural Resources Defense Council
TOM MOLINEAUX, Glow Core Inc.
DONALD R. PRICE, Ventura County Air Pollution Control District
WAYNE NAJARIAN, Heat Tech Products
*Submitted Written Comments
• Key Issues/Comments
Encouraged the Board to implement the retrofit requirements sooner than 2006, and to lower the 30 ppm standard proposed by staff, given the fact that there are many heaters and boilers that are presently achieving a 20 ppm standard.
There are boilers, such as those manufactured by Glow Core, that operate at an efficiency in excess of 92 percent, thereby achieving NOx emissions ranging from 10.5 to 14.6 ppm. Heat Tech Products has had the technology available since 1987 for the heating hot water boilers it sells that achieve the 30 ppm NOx standard in PR 1146.2.
Ventura County APCD has a rule that requires retrofit for boilers between 1 million and 5 million Btu per hour. Approximately 10 units have been retrofitted; and they are aware of no problems with any of those retrofits.
• Speaking in Opposition to PR 1146.2
SID DANENHAUER, Parker Boiler Company
*ROBERT SHEPHERD, Shepherd Machinery Company
*Submitted Written Comments
• Key Issues/Comments
Recommended that the Board delete the retrofit portion of the rule because: (i) the proposed rule asks the smallest businesses--those least able to afford it--to bear the highest cost; (ii) it does not have the elements to protect the end user from unsafe retrofits, from retrofits requiring costly re-certification source testing, and from retrofits which have potential to void warranty; (iii) it requires premature boiler turnover and imposes tremendous costs on owners of this equipment, generally small businesses.
Suggested that the Board also eliminate the implementation study, because adopting a rule first and then conducting a study later leads to confusion.
There being no further testimony, the public hearing was closed.
Written Comments Submitted by:
The Industrial Council - Chamber of Commerce
California Environmental Protection Agency
Mr. Broadbent summarized staff’s responses to the issues raised in public testimony. With respect to retrofit requirements, staff has proposed a phased implementation schedule. The retrofit requirement for the largest units (1 million to 2 million Btu level), which becomes effective in 2002, is the same level and standard as the rule that has already been adopted and fully implemented in Ventura County. For the smaller units(400,000 to 1 million Btu), the retrofit requirements do not become effective until 2006. Staff expects to have an extensive outreach effort and to ensure that the technology exists and is available.
Pool heaters, which operate well below the 9,000 therm exemption in the proposed rule, will not be required to be retrofitted. Therefore, pool heaters will only be affected by the new unit provisions in the rule, of which testimony by several manufacturers indicates that they already make and sell low-NOx pool heaters.
With respect to cost effectiveness concerns raised, the rule represents approximately $5,800 per ton. Because of the removal of certain units as a result of raising the therm exemption from 5,000 to 9,000, that amount has actually decreased.
Since safety concerns have been raised, staff will extensively review that issue as part of the implementation efforts and report back to the Board with proposed changes to the rule, if necessary.
Ms. Soto indicated that her greatest concern is not about availability of the products, but whether the end users, the people that are going to be using the products, will be able to afford the products. Also, as a representative from the cities, she expressed concern about how it will affect the economy at the municipal level. Further, in keeping with the Board’s environmental justice edict, it is her belief that consideration should be given to the concerns raised regarding the costs to apartment renters, who are generally low-income people; as well as the fact that developing the rule and then proposing to conduct an implementation study after the rule is adopted has lead to confusion as to what the requirements are and when those requirements will become effective.
Mr. Broadbent responded that those issues will be highlighted as part of the implementation study effort. All of the work staff has done to date indicates that PR 1146.2 is cost effective, affordable, and the technology exists today. Nevertheless, staff plans, as part of the implementation program, to work extensively in identifying all the types of end users that have not yet been identified, conduct an extensive outreach effort to ensure that the end users know that there are compliant products available, and examine what the actual costs will be to the smaller users.
Staff waived an oral report for this item. The public hearing was opened. There being no requests from the public to speak on this item, the public hearing was closed.
Nancy Covey, Contracts Manager, gave the staff report. Vice Chairman Glover noted that the board letter for this item should be corrected to include in the synopsis that in addition to review by the Ethnic Community Advisory Group, the item was also going to be reviewed by the Small Business & Local Government Committee.
The public hearing was opened. There being no requests from the public to speak on this item, the public hearing was closed.
Mohsen Nazemi, Senior Manager/Stationary Source Compliance, gave the staff report.
The public hearing was opened, and the Board heard testimony from the following individuals:
RON WILKNISS, Western States Petroleum Association (WSPA) and Western Independent Refiners Association (WIRA)
1) Commented that the current version of the proposed rule is acceptable to WSPA and WIRA; and expressed appreciation for the provisions in the rule for alternatives in order to accommodate site specific situations. In the interest of fairness and equity between facilities, expressed their hope for enhanced communication between District permit engineers, and suggested that staff consider having one engineer review all of the flare monitoring plans.
2) Commented that the text of the board letter failed to mention that refinery flares are both safety devices and emission control devices, and expressed appreciation for Dr. Burke calling attention to that fact at the December 12, 1997 Board meeting when this item was set for hearing by the Board.
TIM CARMICHAEL, Coalition for Clean Air, representing Communities for a Better Environment and the Natural Resources Defense Council
JOE McCLUSKEY, Westmark Sales, Inc.
Expressed support for the proposed rule, and urged adoption by the Board.
There being no further testimony, the public hearing was closed.
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 Vice Chairman Glover at 1:15 p.m.
The foregoing is a true statement of the proceedings held by the South Coast Air Quality Management District Board on January 9, 1998.
Respectfully Submitted,
SAUNDRA McDANIEL
Senior Deputy Clerk
Date Minutes Approved: ________________________
____________________________________________
Dr. William Burke, Chairman
ACRONYMS
AB = Assembly Bill
AQIP = Air Quality Investment Program
AQMD = (South Coast) Air Quality Management District
AQMP = Air Quality Management Plan
ARB/CARB = (California) Air Resources Board
CEQA = California Environmental Quality Act
DEO = Deputy Executive Officer
EPA = Environmental Protection Agency
FY = Fiscal Year
MOU = Memorandum of Understanding
PR = Proposed Rule
RFP = Request for Proposals
SIP = State Implementation Plan
VOC = Volatile Organic Compound