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
Supervisor Michael D. Antonovich (arrived at 10:15 a.m.)
County of Los Angeles
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 (left at approximately 12:10 p.m.)
County of Orange
Councilmember Nell Soto
Cities of Los Angeles County - Eastern Region
Supervisor S. Roy Wilson, Ed.D.
County of Riverside
Members Absent:
Ms. Mee H. Lee
Senate Rules Committee Appointee
Chairman Burke called the meeting to order at 9:35 a.m.
Chairman Burke presented a retirement award to Mr. Bope in recognition of his more than 35 years of District service.
Agenda Items No. 37 and No. 38 were taken out of order at the Chairman�s direction.
PUBLIC HEARINGS
37. Amend Regulation III - Fees
The public hearing was opened, and the Board heard testimony from the following individuals:
GENE BECK, Small Business Coalition
Expressed opposition to three of the proposed fee increases. 1) Raising from 15 to 50 percent the surcharge for constructing equipment without first obtaining a District Permit to Construct. Believe that, particularly for new businesses, first-time violators and small businesses, the Board should adopt a policy such as EPA�s whereby if the business that is in violation comes into compliance within the time frame suggested that the penalties be waived. 2) Assess a per-nozzle compliance fee for gasoline dispensing facilities. Believe only those facilities that are violating District rules should be penalized. 3) Change the Title V permit fee from a fixed $786.50 to a "time and materials" fee based on actual time spent. Believe the Board should defer this issue until after the Permit Streamlining Task Force has presented its recommendations. (Submitted Written Comments, including copy of U.S. EPA Interim Policy on Compliance Incentives for Small Business.)
JOHN BILLHEIMER, Reality Group
Given staff�s proposed modification to the resolution, suggested that two additional items be reviewed again and brought back to the Board in November 1998: (i) Raising from 15 to 50 percent the surcharge for constructing equipment without first obtaining a District Permit to Construct (P/C); and (ii) Assess full fees for each device installed and operated in series. Believe the surcharge for operating equipment without obtaining a permit to construct might be reasonable for large companies, but it is not practical for trivial things such as spray booths or minor equipment modifications. With regard to devices operated in series, believe devices which are interdependent, such as absorbers and thermal oxidizers installed on spray booths, should be considered as "integrated" rather than operated in series.
DANNY LENTZ, Danny�s 76 Service
Expressed opposition to the per-nozzle fee proposed by staff, and belief that gross violators are the ones that should have to pay the fees.
BOB NICKSIN, Southern California Gas Company, Chair/Title V Ad Hoc Committee
Expressed the Committee�s belief that the proposed fee increase for Title V permits should be delayed until the Permit Streamlining Task Force has made its recommendations. Urged the Board to direct staff to prepare a list of ideas for simplifying Title V permit processing, and for the Task Force to adopt as a target a 50 percent reduction in the total cost of processing permits. If it becomes necessary to increase Title V fees, future Title V fee proposals should be based on set fees, with incentives to speed permit approval.
GREG ADAMS, Los Angeles County Sanitation Districts
Commented that, as a member of both the Title V Ad Hoc Committee and the Permit Streamlining Task Force, believe it is inappropriate for the Title V permit fees to be increased prior to review and recommendations by the Permit Streamlining Task Force.
Dr. Wallerstein responded that the District has spent approximately $3 million in staff time processing the Title V permits, for which it did not recover the costs. In addition to that, the District spent approximately $1.5 million in up-front costs. What staff is proposing to the Board, as outlined on the errata sheet, is to set the fee at 50 percent of the level that would recover District costs; that staff work with the Permit Streamlining Task Force and report back to the Board at its November 1998 meeting in terms of how much time staff is spending on Title V permit processing and permit streamlining improvements that have been made and future improvements under consideration; and, if in fact the 50 percent fee is too high, staff will recommend at that time that the fee be adjusted downward. Staff believes that would be consistent with statutory requirements relative to the District setting its fees this month.
LEE WALLACE, Pacific Enterprises and Southern California Gas Company
Expressed support for the staff proposal, and also the comments and recommendation of the Ad Hoc Title V Committee presented by Mr. Nicksin. Recommended two additional changes: 1) to delete the words "of the same make and model" from the definition of identical equipment, Subparagraph (b)(16) of PAR 301, and develop guidelines for staff to use for applying the definition; and 2) to require that any new proposals by staff for Title V fee increases must also provide incentives for the District to complete permitting action more quickly. Requested that the Board instruct staff to enter into arrangements such as milestones and periodic status or consultation meetings when processing Title V applications so that applicants can track the progress and the billing.
CURTIS COLEMAN, CMA Southern California Air Quality Alliance
Commented that the Group A permits are nearing completion, which means about one-third of the current Title V facilities will be receiving permits. Believe it is disingenuous for staff to say that the District has received only $786 in permit fees for each of these facilities, when he is personally aware of a number of facilities who have had to pay additional tens of thousands of dollars in permit fees to make corrections and updates to comply with the Title V requirements. Believe it is unfair to the Group B and Group C facilities to be faced with much higher fees than the Group A facilities. Urged the Board not to take action at this time to increase the Title V permit fees, especially not to set the fees on an hourly rate, unless and until protections are put in place to insure that Title V facilities will not have to pay for large amounts of time being spent on unproductive activities.
BRUCE ROBERTS, City of Los Angeles
With respect to PAR 308, asked that the Board consider establishing for multiple site trip reduction plans a discount rate for the annual analysis such as the discount rate established for the triennial program fees.
RON WILKNISS, Western States Petroleum Association (WSPA)
Commented that WSPA is not opposed to the $12-per-nozzle fee that is proposed for Fiscal Year 1998-99 so that the District can reestablish a field presence. Requested, however, that the Board not at this time impose the $12-per-nozzle increase proposed for FY 1999-2000 (making the fee $24-per-nozzle) because there has been no demonstration as to why the second increase is necessary. If for any reason additional fees are needed, that should be explained and justified by District staff next year.
GAIL RUDERMAN FEUER, Natural Resources Defense Council and Coalition for Clean Air
Expressed belief that the full $24-per-nozzle fee increase is warranted by the fact that the Rule 461 self-inspection program is currently a failure and is impacting air quality in Southern California. Urged the Board to increase the Title V permit fees as proposed by staff. The Title V program is complicated and the review of the permits is labor intensive; therefore, believe it is important that the District be able to raise the fees that are necessary to implement the program.
On the issue of the per-nozzle fee, Dr. Wallerstein responded that last year staff discovered a noncompliance rate of approximately 90 percent for service stations. In the interim period, staff has sent out three notices to the facilities and enhanced field inspections, and there is still a noncompliance rate of approximately 85 percent. The industry, as well as staff, believe the District needs to have a regular field enforcement presence, and the $12-per-nozzle fee will make that possible. If, with the inspections, staff is able to bring the compliance rate up to a good level, it would be staff�s intent to come back before the Board next year and propose deletion of the second $12-fee. However, in the event that staff conducts the inspections and there is still a low compliance rate among the service stations, staff believes the $24-per-nozzle fee has been fully justified in the staff report.
In response to comments by Mr. Beck and Mr. Billheimer, Ms. Coy indicated that staff continues to recommend that the 50 percent surcharge be applied to applications for equipment that has been constructed without a District P/C, because there has been a significant increase in this type of permit application; from several applications a year in the mid-1980�s to over 2,000 applications in the last two years. She noted that for small businesses, the 50 percent surcharge is reduced by 50 percent.
Ms. Coy further indicated that staff would be agreeable to removing from PAR 301(b)(16) the phrase "of same make and model" as requested by Mr. Wallace, and would work on an implementation document that sets out how the District would define "identical".
Dr. Wallerstein commented that the District�s "no fault" inspection program mirrors the approach of the EPA policy referenced by Mr. Beck, and that there is a different context to that than what is before the Board concerning the permit processing fee for equipment constructed without a P/C. Ms. Coy clarified that the proposed fee increase is not a penalty for violation of District rules; it is a surcharge for the additional work required in processing this particular type of permit application, which can be much more involved if the equipment has not been optimally designed to comply with District rules. Also, sources that construct and begin operation without a District permit not only avoid the initial payment of permit application processing fees, but are excluded from subsequent assessment and payment of annual renewal fees.
Mr. Silva expressed his belief that the proposed increase of the permit application surcharge from 15 to 50 percent hurts small businesses and new businesses, and that the District should follow EPA�s policy on compliance incentives for small businesses rather than penalize them to achieve compliance. Also, many business owners believe that most of the District�s new rules, fee increases, and many of its programs are more about bringing in additional revenue to the agency than reducing emissions. Furthermore, he does not believe the District will endear itself to the state legislature by raising the fees on businesses. For these reasons, he expressed difficulty in supporting many of the proposed amendments.
MR. MIKELS MOVED TO ADOPT RESOLUTION NO. 98-14, AMENDING REGULATION III, INCLUDING RULES 301, 303, 304, 304.1, 306, 307, 308, 309 AND 311, AND CERTIFYING THE EXEMPTION FROM CEQA REQUIREMENTS, AS RECOMMENDED BY STAFF, INCLUDING THE MODIFICATIONS RECOMMENDED BY STAFF AS SET FORTH IN THE ERRATA SHEET FOR AGENDA ITEM NO. 37. THE MOTION WAS SECONDED BY MR. PAULITZ.
MS. SOTO MADE A SUBSTITUTE MOTION TO EXEMPT SMALL BUSINESSES THAT HAVE NEVER HAD A DISTRICT PERMIT FROM RULE 301(c)(1)(D). THE MOTION DIED FOR LACK OF A SECOND.
Speaking in support of the main motion, Mr. Loveridge commented that one of the success stories of Southern California is the progress that has been made in air quality. In order for that success to continue, he believes the District needs to: (i) carry out permitting in a timely manner, with certainty, clarity and appropriateness; and (ii) have enforcement that makes the District�s rules more than symbolic. He indicated that he has been persuaded by the need for additional resources so that the District can accomplish both the permitting and the enforcement.
Ms. Glover commented that she had hoped several of the issues involved in this item might be referred to the Permit Streamlining Task Force and brought back to the Board in four months with recommendations that the Board could adopt at that time; and her intent was, to support at this time the fee adjustments consistent with the change in the Consumer Price Index and the per-nozzle fee for service stations only. However, her understanding is that the Board has to vote on all of the proposed fee amendments at this meeting. Therefore, she would not be able to support the motion.
DR. WILSON MOVED TO AMEND THE MAIN MOTION TO REMOVE THE WORDS "of the same make and model" FROM THE DEFINITION OF IDENTICAL EQUIPMENT CONTAINED IN RULE 301 (b)(16). THE MOTION WAS SECONDED BY MR. MIKELS, AND CARRIED UNANIMOUSLY (Absent: Alarcón and Lee).
THE MOTION BY MR. MIKELS, SECONDED BY MR. PAULITZ, TO ADOPT RESOLUTION NO. 98-14, AMENDING REGULATION III, INCLUDING RULES 301, 303, 304, 304.1, 306, 307, 308, 309 AND 311, AND CERTIFYING THE EXEMPTION FROM CEQA REQUIREMENTS, AS RECOMMENDED BY STAFF, INCLUDING THE MODIFICATIONS RECOMMENDED BY STAFF AS SET FORTH IN THE ERRATA SHEET FOR AGENDA ITEM NO. 37 AND REMOVAL OF THE WORDS "of the same make and model" FROM THE DEFINITION OF IDENTICAL EQUIPMENT CONTAINED IN RULE 301 (b)(16), FAILED, FOR A LACK OF SEVEN CONCURRING VOTES, AS FOLLOWS:
AYES: Burke, Loveridge, Mikels, Nastri, Paulitz, and Wilson.
NOES: Antonovich, Glover, Silva and Soto.
ABSENT: Alarcón and Lee.
With respect to the 50 percent surcharge for permit applications for equipment constructed without a District permit to construct, Mr. Nastri expressed concern that companies that unknowingly violate District rules should be given leniency, whereas those that willingly and knowingly violate the rules should have imposed upon them the maximum surcharge of
50 percent.
Dr. Wallerstein suggested that the Board could consider leaving the permit processing surcharge at 15 percent for small businesses only. Ms. Soto indicated that she was supportive of exempting small businesses from having to pay any surcharge at all, unless their failure to obtain a District permit prior to constructing equipment was deliberate.
MR. PAULITZ MOVED FOR RECONSIDERATION OF THE ITEM. THE MOTION WAS SECONDED BY MS. SOTO AND CARRIED UNANIMOUSLY (Absent: Alarcón and Lee).
MS. SOTO MOVED TO ADOPT RESOLUTION NO. 98-14, AMENDING REGULATION III, INCLUDING RULES 301, 303, 304, 304.1, 306, 307, 308, 309 AND 311, AND CERTIFYING THE EXEMPTION FROM CEQA REQUIREMENTS, AS RECOMMENDED BY STAFF, INCLUDING:
1) THE MODIFICATIONS RECOMMENDED BY STAFF AS SET FORTH IN THE ERRATA SHEET FOR AGENDA ITEM
NO. 37;
2) EXEMPTION OF SMALL BUSINESSES THAT HAVE NEVER HAD A DISTRICT PERMIT FROM RULE 301 (c)(1)(D), Higher Fee for Failing to Obtain a Permit; AND
3) REMOVAL OF THE WORDS "of the same make and model" FROM THE DEFINITION OF IDENTICAL EQUIPMENT CONTAINED IN RULE 301 (b)(16).
THE MOTION WAS SECONDED BY MR. PAULITZ.
In response to Ms. Glover, staff indicated that the definition of "small business" in Rule 301(b)(23) references District Rule 102, which defines small business as a business with 10 employees or less and total gross annual receipts of $500,000 or less. Ms. Soto expressed concern that the number of employees in that definition was too low, and suggested that the Board consider raising the number of employees for the small business definition contained in Rule 301(b)(23) of Regulation III.
Dr. Wallerstein indicated that if the Board would like to pursue amending the definition of small business contained in Rule 301, staff could evaluate the impacts of that proposal and bring a recommendation back to the Board at its June 12, 1998 meeting.
MS. SOTO AMENDED HER MOTION, WITH THE AGREEMENT OF MR. PAULITZ, WHO SECONDED THE MOTION, TO INCLUDE A CONTINUANCE OF THE PUBLIC HEARING ON REGULATION III TO THE JUNE 12, 1998 BOARD MEETING, FOR THE SOLE PURPOSE OF CONSIDERING AMENDMENT OF THE DEFINITION OF SMALL BUSINESS IN RULE 301(b)(23). THE MOTION, AS AMENDED, PASSED BY THE FOLLOWING VOTE:
AYES: Burke, Loveridge, Mikels, Nastri, Paulitz, Soto and Wilson.
NOES: Antonovich, Glover and Silva.
ABSENT: Alarcón and Lee.
38. Adopt Executive Officer�s FY 1998-99 AQMD Budget and Work Program
The staff report was given by Rick Pearce, Director of Finance.
Dr. Wilson questioned staff�s recommendation to apply the proceeds from the sale of the El Monte property to the general fund, in view of the memo the Board received recently providing an update on the triennial performance audit. It appeared from that memo that the auditors were recommending that the District apply the proceeds to redeem bonds on the Diamond Bar building.
Mr. Pearce responded that while it was his recommendation that the proceeds be used to redeem bonds, the Board members present at the Budget Workshop on April 23, 1998 decided, as a means of providing greater flexibility to the District, not to recall the bonds, and, instead, add the proceeds to the general fund, to be used to enhance District programs or to make up for any shortfalls that may exist in the future.
The public hearing was opened, and the Board heard testimony from the following individuals:
CURTIS COLEMAN, CMA Southern California Air Quality Alliance
Expressed appreciation to the Board and staff in continuing the effort that began under former Chairman Mikels to open up the budget process, begin it early, and invite participation by all the stakeholders in the District�s programs�the regulated community, the public, and the environmental community. He served on the Budget Advisory Committee, and believes the District is going in the right direction in terms of tailoring its programs to meet its core needs and to meet the needs of the regulated community and the environmental community.TIM CARMICHAEL, Coalition for Clean Air, and Natural Resources Defense Council
Urged the Board not to consider any further cuts in the District�s budget, and to direct staff to move ahead with restructuring proposals and organize staff into teams that will facilitate not only permit processing, but also rule development and enforcement programs. Noted that there has been a dramatic drop off in the number of vehicles that are being registered, and suggested, since a significant percentage of AQMD�s funds come from Department of Motor Vehicle fees collected from registered vehicles, that the Board pay attention to this trend and be aware that it may be necessary to move ahead with legislation that will prevent that trend from continuing.
DR. WILSON MOVED APPROVAL OF AGENDA ITEM NO. 38 AS RECOMMENDED BY STAFF, WITH THE EXCEPTION OF STAFF�S RECOMMENDATION TO APPROVE THE RESOLUTION RESCINDING THE AUTHORITY PREVIOUSLY GRANTED TO REDEEM THE SERIES 1992 BONDS (DIAMOND BAR) WITH PROCEEDS FROM THE SALE OF THE EL MONTE PROPERTY AND AUTHORIZE THE CLOSING OF THE DEBT SERVICE FUND AND TRANSFER OF PROCEEDS TO THE GENERAL FUND, UNDESIGNATED FUND BALANCE. THE MOTION WAS SECONDED BY MR. MIKELS.
Dr. Wilson noted that the original intent when the Diamond Bar building was constructed was basically to underwrite the overhead on the Diamond Bar building with proceeds from the sale of the El Monte property. It is his belief that if the District takes the one-time-only money from the sale of the El Monte property and place it in the general fund, that money will be lost through attrition of operational costs.
Commenting that the District is operating with a deficit of approximately $7 million and has had to take funds out of reserves, Ms. Glover expressed her belief that the $6 million in proceeds from sale of the El Monte property should be placed in reserves and should not be used. She stated that if the District was close to retiring the bond on the Diamond Bar building, she might feel differently; however, the District owes $113 million on the building.
THE MOTION BY DR. WILSON, SECONDED BY MR. MIKELS, TO APPROVE AGENDA ITEM NO. 38 AS RECOMMENDED BY STAFF, WITH THE EXCEPTION OF STAFF�S RECOMMENDATION TO APPROVE THE RESOLUTION RESCINDING THE AUTHORITY PREVIOUSLY GRANTED TO REDEEM THE SERIES 1992 BONDS (DIAMOND BAR) WITH PROCEEDS FROM THE SALE OF THE EL MONTE PROPERTY AND AUTHORIZE THE CLOSING OF THE DEBT SERVICE FUND AND TRANSFER OF PROCEEDS TO THE GENERAL FUND, UNDESIGNATED FUND BALANCE, FAILED, FOR A LACK OF SEVEN CONCURRING VOTES, AS FOLLOWS:
AYES: Burke, Loveridge, Mikels, Paulitz and Wilson.
NOES: Antonovich, Glover, Nastri, Silva and Soto.
ABSENT: Alarcón and Lee.
MS. GLOVER MOVED APPROVAL OF AGENDA ITEM NO. 37 AS RECOMMENDED BY STAFF. THE MOTION WAS SECONDED BY MS. SOTO, AND FAILED, FOR A LACK OF SEVEN CONCURRING VOTES, AS FOLLOWS:
AYES: Burke, Glover, Loveridge, Nastri and Soto.
NOES: Antonovich, Mikels, Paulitz, Silva and Wilson.
ABSENT: Alarcón and Lee.
Dr. Wallerstein recommended that the Board adopt the budget, and that the issue regarding use of proceeds from the sale of the El Monte property be brought back to the Board for further discussion.
MR. PAULITZ MOVED FOR RECONSIDERATION OF THE ITEM. THE MOTION WAS DULY SECONDED AND CARRIED UNANIMOUSLY (Absent: Alarcón and Lee).
DR. WILSON MOVED THAT THE BOARD:
1) REMOVE FROM RESERVES AND DESIGNATIONS ALL AMOUNTS ASSOCIATED WITH THE FY 1997-98 BUDGET;
2) APPROVE TOTAL APPROPRIATIONS OF $93,267,390;
3) APPROVE AN UNDESIGNATED FUND BALANCE OF $5,090,079 AND TOTAL RESERVES AND DESIGNATIONS OF $33,523,979, AND TRANSFER OF $1,500,000 TO THE REGIONAL TRANSPORTATION AGENCY COALITION;
4) RECOGNIZE ESTIMATED REVENUES OF $91,453,900; AND
5) CONTINUE TO THE JUNE 12, 1998 BOARD MEETING ACTION ON WHETHER OR NOT TO REDEEM THE SERIES 1992 BONDS WITH THE PROCEEDS FROM THE SALE OF THE EL MONTE PROPERTY OR TRANSFER THE PROCEEDS TO THE GENERAL FUND.
THE MOTION WAS DULY SECONDED, AND PASSED, BY THE FOLLOWING VOTE:
AYES: Burke, Glover, Loveridge, Mikels, Nastri, Paulitz, Soto and Wilson.
NOES: Antonovich and Silva.
ABSENT: Alarcón and Lee.
CONSENT CALENDAR
Agenda Items Nos. 1, 15 and 27 were held for discussion.
ON MOTION OF MR. LOVERIDGE, SECONDED BY MR. MIKELS AND UNANIMOUSLY CARRIED (Absent: Alarcón and Lee), THE BOARD APPROVED AGENDA ITEMS 2 THROUGH 14 AND 16 THROUGH 26 AS RECOMMENDED BY STAFF, INCLUDING THE REVISIONS SET FORTH IN THE ERRATA SHEETS FOR AGENDA ITEMS 4 AND 8.
Referring to her request under Agenda Item No. 16 noted on Page 4 of the Minutes that staff conduct a cost/benefit comparison of the local government projects receiving matching funds under the AB 2766 program, Ms. Soto commented that she looks forward to receiving the comparison because she believes the Board needs to address the cost/benefit issues more openly to increase the effectiveness of AB 2766.
ON MOTION OF MR. MIKELS, SECONDED BY DR. WILSON AND UNANIMOUSLY CARRIED (Absent: Alarcón and Lee), THE BOARD APPROVED AGENDA ITEM NO. 1 AS RECOMMENDED.
Ms. Soto commented that while the MSRC�s debate on this RFP and response to the Board�s concern was a difficult issue for all parties, she remains hopeful that this unusual situation will result in improved communications and coordination between the MSRC and the AQMD Board. The proposed RFP will provide the MSRC and the Board with the assurance of a fair, public process for securing bids, with the hope of cost savings and geographic distribution of the subcontractors that will make and install the signs. One remaining concern she has that is shared by some MSRC members is that the RFP requires a bidder to have "knowledge of" electric vehicles and related charging infrastructure. Keeping in mind that this RFP is simply for the permitting and installation of directional signs, she believes this requirement of electric vehicle knowledge will keep otherwise qualified bidders from submitting proposals. To address this concern and move the RFP forward,
MS. SOTO MOVED THAT THE BOARD APPROVE ISSUANCE OF THE RFP FOR THE EV CHARGING STATION DIRECTIONAL SIGNAGE IMPLEMENTATION PROGRAM AS RECOMMENDED, AND DIRECT STAFF TO PREPARE A BRIEF SUMMARY OF ELECTRIC VEHICLE AND RELATED INFRASTRUCTURE ISSUES, THUS PROVIDING THE BASIC BACKGROUND KNOWLEDGE NEEDED BY PROSPECTIVE BIDDERS, TO BE SENT OUT WITH EACH RFP. THE MOTION WAS SECONDED BY MR. PAULITZ AND CARRIED UNANIMOUSLY (Absent: Alarcón and Lee).
Dr. Anupom Ganguli, Senior Manager/Stationary Source Compliance, noted that staff had distributed to Board members an errata sheet containing two revisions to the amendments proposed by staff: (i) deleting the BACT requirement for the Petroleum Process Valves equipment category; and (ii) deleting the VOC standard proposed for stationary, non-emergency internal combustion engines >2064 bhp. Copies of the errata sheet were also made available to the public.
The following individuals addressed the Board to comment on the proposed amendments to the BACT Guidelines:
KARL LANY, South Coast Environmental Company
Speaking in opposition to the proposed amendment regarding large internal combustion engines, expressed two concerns. 1) The engine that is being used as the foundation for the District�s guideline--a 3,000 bhp engine, permitted by the state of New Jersey with the use of selective catalytic reduction--operates under a permit that does not require source testing, other than a start up source test, nor does it require the use of CEMS, both of which would traditionally be required in the South Coast air district. 2) The marginal benefits that would be achieved through SCR will continue to decline as lean-burn engines are placed on the market. Therefore, do not believe that is an appropriate long-term strategy for engine emissions control. Believe the proposed BACT determination may lock developers of future projects into a strategy that relies upon after-control systems, and it may stifle continued development of emissions reduction technology by manufacturers as long as some marginal benefit of after-control is believed by regulators to exist. (Submitted Written Comments.)
LEE WALLACE, Pacific Enterprises/Southern California Gas Company
Expressed support for the proposed amendments to the BACT Guidelines. Received findings from an engineering firm, which were shared with District staff, and want to make sure that is preserved for the record when the District adjudicates its first permit under the new standard.
JOHN BILLHEIMER, Reality Group
Suggested that the Board consider future BACT/LAER considerations as a public hearing, rather than consent calendar, item; and also include a socioeconomic that can be reviewed in hard copy and discussed.
Dr. Wallerstein responded that it is staff�s intent to have a full public discussion on BACT/LAER items whenever there is significant controversy, as will be the case when staff proposes amendments to the BACT guidelines concerning spray booths at the June 12, 1998 Board meeting.
In response to Ms. Soto, Dr. Ganguli stated that there are dozens of engines around the world operating with SCR such as the engine in New Jersey. That particular engine has been operating since 1996, and staff was informed by the New Jersey Air Pollution Agency that the engine is in compliance with emission limits.
ON MOTION OF MS. SOTO, SECONDED BY MR. PAULITZ AND UNANIMOUSLY CARRIED (Absent: Alarcón, Lee and Wilson) THE BOARD RECEIVED AND FILED THE AMENDMENTS TO THE BACT GUIDELINES, WITH THE REVISIONS NOTED IN THE ERRATA SHEET CONCERNING DELETION OF THE PETROLEUM PROCESS VALVE EQUIPMENT CATEGORY AND DELETION OF THE VOC STANDARD FOR LARGE INTERNAL COMBUSTION ENGINES, AS RECOMMENDED BY STAFF.
BOARD CALENDAR
Mr. Mikels indicated that he would abstain from voting on this item because he received the committee report late and did not have the opportunity to review the legislative items.
MR. NASTRI MOVED TO RECEIVE AND FILE AGENDA ITEMS 29 THROUGH 36 AND ADOPT THE FOLLOWING POSITIONS ON LEGISLATION, AS RECOMMENDED:
AB 1642 (Bowen) � Reformulated Gasoline SUPPORT with AMENDMENTS
AB 2067 (Cunneen) � Hazardous Waste: Clean Air Solvents SUPPORT with AMENDMENTS*
AB 2692 (Kuehl) � Accelerated Depreciation of Ultra-Low and Zero-Emission Vehicles SUPPORT
* Support with Amendments specific sections of AB 2067 dealing with Clean Air Solvents; Neutral on remainder of the bill.
THE MOTION WAS SECONDED BY MR. LOVERIDGE, AND PASSED BY THE FOLLOWING VOTE:
AYES: Antonovich, Burke, Glover, Loveridge, Mikels (except Agenda Item No. 31), Nastri, Paulitz, Silva and Soto.
NOES: None.
ABSTAIN: Mikels (on Agenda Item No. 31 only).
ABSENT: Alarcón, Lee and Wilson.
PUBLIC HEARINGS (Continued)
39. RECLAIM Program Three-Year Audit and Progress Report
The public hearing was opened, and the Board heard testimony from the following individuals:
GAIL RUDERMAN FEUER, Natural Resources Defense Council and Coalition for Clean Air
Expressed support and agreement with the technical analysis in the report, but disagree with some of conclusions of the report. RECLAIM has not achieved the emissions reductions that many people had hoped it would during the period of 1994 through 1996. Believe that is mainly attributable to the high allocations that facilities were given at the beginning of the program, and believe there should be an analysis done to determine whether the allocations should be reduced to force the program so that companies actually have to reduce their emissions instead of just buying RTCs. Believe it is important that credits from other programs not be allowed into the RECLAIM program because that will further inflate the allocations and further decrease the price of credits so that companies never have to comply. With regard to the CEMS issue, hope the Board will fix any problems companies are having with CEMS, but not eliminate that requirement, which is essential for enforcement of the program.
JOSH MARGOLIS, Cantor Fitzgerald
Presented the comments and recommendations of the Trading Subcommittee of the RECLAIM Advisory Committee, which included: (i) making the Bulletin Board system more user-friendly, and having the data in the system made accessible over the Internet; (ii) issuing RTC trading reports weekly, either in hard copy or electronically; (iii) the District accepting RTC transfer forms with the seller�s signature only, rather than requiring the signature of both the buyer and seller, and the District, with authorization from the traders, making minor corrections necessary to process transfer forms; (iv) simplifying the forms and/or modifying the District�s review process such that RTC trades are routinely processed in two days; (v) accommodating the electronic filing of certain categories of trades; and (vi) the District moving forward with the adoption of an intercredit trading program.
DEANNA HAINES, Southern California Gas Company
Presented three recommendations from The Gas Company:
Presented two recommendations from the Socioeconomic Subcommittee:
CHARLES AARNI, Chevron Products Company
Expressed support and agreement with the conclusion in the report that, overall, RECLAIM is achieving its objectives. Most facilities demonstrated compliance with their annual caps; and of those that did not, most were due to the use of missing data, which is not necessarily accurate. Support the District�s conclusion that it needs to perform an analysis of the cost of CEMS and identify appropriate opportunities for ACEMS. Also, support The Gas Company�s recommendation that a process be established for interpreting and issuing formal interpretations of RECLAIM regulations.
CURTIS COLEMAN, CMA Southern California Air Quality Alliance and California Aerospace Environmental Association
Expressed support for the audit report. Believe the single most consistent complaint with the RECLAIM program was the problems with electronic reporting of data to the District and the need for daily reporting, and look forward to working with staff to work out these glitches. Noted that a number of the NOx reduction projects have long lead times, so, believe the future is bright for further emission reductions under RECLAIM.
There being no further testimony, the public hearing was closed.
(Mr. Silva left during public testimony)
ON MOTION OF MR. MIKELS, SECONDED BY MS. GLOVER AND UNANIMOUSLY CARRIED (Absent: Alarcón, Lee and Silva), THE BOARD APPROVED THE RECLAIM PROGRAM THREE-YEAR AUDIT AND PROGRESS REPORT, INCLUDING THE REVISIONS TO CHAPTER 3, CHAPTER 7 AND APPENDIX L OF THE REPORT SET FORTH IN THE ERRATA SHEET FOR AGENDA ITEM NO. 39, AS RECOMMENDED BY STAFF.
OTHER BUSINESS
40. Discussion of SB 432 (Lewis) to Reach Consensus on Board Position
If SB 432 passes, staff has determined that there are sufficient excess credits in the District�s Rule 2202 Air Quality Investment Fund, generated primarily by old vehicle scrapping, to make up the emission reduction shortfall for 1997. There is no requirement to make up that shortfall, but staff believes that is the appropriate action. Staff would need to survey the employers to determine the emission reduction shortfall for 1998 and beyond with the permanent exemption of the 2,800 work sites, and would organize a task force to develop a long-term alternative to replace those emission reductions as required by the Clean Air Act. Staff would work in conjunction with the ARB, considering mobile and stationary source measures, and would report back to the Board in 90 days with recommendations.
If SB 432 does not pass, those exempt work sites would come back under Rule 2202 by no later than June 1, 1998. Staff would re-implement the rule for those exempt work sites, giving employers at least a 90-day notice. The employers would be given their prior plan submittal dates so that it would be staggered throughout the year. Staff would hold focus groups to identify and address employer concerns; and then hold implementation workshops for the employee transportation coordinators.
The following individuals addressed the Board to speak on this item:
TIM CARMICHAEL, Coalition for Clean Air and Natural Resources Defense Council
Urged the Board to take an "oppose" position on SB 432, not only because of the emission reductions that would be sacrificed, but also, believe the bill would eliminate an effective medium for educating the public about ridesharing.
BRIAN THIELE, Association for Commuter Transportation
Requested that, if SB 432 passes, the District allow a time window for compliance with Rule 2202 that would not create undue burdens on the affected employers. Asked that the District re-evaluate the implementation costs and operational burdens of the program, with input from all the stakeholders; and that compromises, as necessary, be integrated into the rule that accomplish the need for better air quality, while realizing the economic balance necessary in that effort. Also, many companies have already established fiscal budgets for 1998-99, and believe it would be appropriate to allow employers to effectively plan any costs associated with Rule 2202 compliance into their budgets for FY 1999 and beyond.
CURTIS COLEMAN, CMA Southern California Air Quality Alliance and California Aerospace Environmental Association
Urged the Board to support SB 432, especially if the District can get the $1.5 million provided to RTAC put back in its budget. Believe there has to be better and more cost-effective ways to achieve the required emission reductions than to force employers back into a program that is burdensome, not cost-effective, and provides little, if any, air quality benefit.
BRUCE ROBERTS, City of Los Angeles
Recommended that the Board: 1) oppose SB 432 as written; 2) appoint a committee or task force to look at streamlining the re-regulation of the smaller work sites; and 3) seek amendment of SB 836 to use the annual $1.5 million RTAC money for an aggressive educational campaign.
Mr. Paulitz expressed concern that SB 432 does not provide any contingency for making up the shortfall in emission reductions. With respect to getting the $1.5 million put back in the District�s budget, his belief is the money should never have been taken out.
Dr. Wilson suggested that if the Board moves forward with supporting SB 432, their support should be conditioned on two items: 1) elimination of the requirement in SB 836 for the District to provide $1.5 million annually to the RTAC; and 2) getting support from Senator Lewis for AB 2194 (Washington), which would reauthorize the clean fuels program administered by AQMD�s Technology Advancement office. While staff has indicated that the old vehicle scrapping program might be able to make up for some of the emission reduction shortfall that will result if SB 432 passes, the scrapping program is currently under review and attack. He believes it is essential that the District have an alternative, and the clean fuels program is the only other way, through new technologies, to address those emission reductions.
DR. WILSON MOVED THAT THE BOARD SUPPORT SB 432, IF SENATOR LEWIS IS AGREEABLE TO: 1) SUPPORTING THE REAUTHORIZATION OF AQMD�S CLEAN FUELS PROGRAM
(AB 2194); AND 2) ELIMINATING THE REQUIREMENT IN SB 836 THAT AQMD PROVIDE $1.5 MILLION A YEAR TO THE REGIONAL TRANSPORTATION AGENCIES COALITION. THE MOTION WAS SECONDED BY MS. SOTO, AND CARRIED UNANIMOUSLY (Absent: Alarcón, Antonovich, Lee and Silva).
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Dr. Wilson commended Chairman Burke for moving the budget hearings up on the agenda; and suggested that the Administrative Committee discuss the possibility of having public hearings first on the Board�s meeting agenda, followed by consent calendar items.
Chairman Burke added that the Board might also want to consider forgoing staff presentations at the public hearings of information already provided in the written staff report.
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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.
CLOSED SESSION/ADJOURNMENT
The Board adjourned to closed session at 12:35 p.m.,
The foregoing is a true statement of the proceedings held by the South Coast Air Quality Management District Board on May 8, 1998.
Respectfully Submitted,
SAUNDRA McDANIEL
Senior Deputy Clerk
Date Minutes Approved: ________________________
____________________________________________
Dr. William Burke, Chairman
ACRONYMS
AB = Assembly Bill
AQMD = (South Coast) Air Quality Management District
AQMP = Air Quality Management Plan
ARB/CARB = (California) Air Resources Board
BACT = Best Available Control Technology
CEQA = California Environmental Quality Act
CMA = California Manufacturers Association
DEO = Deputy Executive Officer
EPA = Environmental Protection Agency
FY = Fiscal Year
LAER = Lowest Achievable Emissions Reduction
NOx = Oxides of Nitrogen
PAR = Proposed Amended Rule
PM2.5 = Particulate Matter < 2.5 microns
RFP = Request for Proposals
RFQ = Request for Quotations
SB = Senate Bill
SCR = Selective Catalytic Reduction
VOC = Volatile Organic Compound