1.

Minutes of November 9, 2001 Board Meeting

2.

3.

Execute Contracts for Development of LNG Refueling Stations in South Coast Air Basin

4.

Execute Additional Contracts to Generate Emission Credits Under State Emissions Mitigation Program

5.

Issue RFP to Solicit Projects for FY 2000-01 Remaining Funds and FY 2002-02 Carl Moyer Memorial Air Quality Standards Attainment Program Funding

6.

Issue RFP for Development and Demonstration of Aftertreatment Technologies for PM Emissions Control of CNG-Fueled Heavy-Duty Engines

7.

Issue RFP for Technical Assistance for Advanced, Low- and Zero-Emission Mobile and Stationary Source Pollution Control Technologies

8.

Recognize Funding from EPA and Appropriate Funds for International Conference on Urban Air Pollution Technologies and Solutions

9.

Approve Issuance of Program Announcement and Application for FY 2001-02 Lower-Emission School Bus Replacement Program Funding

10.

Authorize Submittal of Application to Receive Incentive Funds to Assist Agricultural Biomass-to-Energy Conversion in Basin

11.

Execute Contract for Classification and Compensation Services

12.

Execute Contract for Legislative Representation in Washington, D.C.

13.

Establish List of Prequalified Vendors and Issue Purchase Orders for Purchase of Compressed Pure Gases and Cryogenic Liquids

14.

Appropriate $100,000 from Undesignated Fund Balance and Establish List of Prequalified Legal Counsel to Represent AQMD in General Liability Matters

15.

Establish Board Meeting Schedule for Calendar Year 2002

16.

Public Affairs Report

17.

Rule 2202 – On-Road Motor Vehicle Mitigation Options Program Status Report

18.

Hearing Board Report

19.

Civil Filing and Civil Penalties Report

20.

Lead Agency Projects and Environmental Documents Received by the AQMD

21.

Rule and Control Measure Forecast

22.

Report on Air Quality Evaluation to Determine Relative Contribution of Internal Combustion Engines Used for Manufacture of Snow or Operation of Ski Lifts to Potential PM 2.5 Violations

23.

Status Report on Major Projects for Information Management Scheduled to Start During First Six Months of FY 2001-02

24.

Strategic Plan for Information Management

25.

Best Available Control Technology Guidelines Report

ON MOTION OF MS. GLOVER, SECONDED BY
MS. CARNEY, AND UNANIMOUSLY CARRIED, THE BOARD APPROVED AGENDA ITEMS 1 THROUGH 25 AND ADOPTED RESOLUTIONS NO. 01-32, AUTHORIZING THE SUBMISSION OF APPLICATION, DELEGATION OF AUTHORITY AND MAKING CERTAIN FINDINGS IN CONNECTION TO AGRICULTURAL BIOMASS-T0-ENERGY INCENTIVE GRANT PROGRAM, AND NO. 01-33, ADOPTING THE BOARD MEETING SCHEDULE FOR YEAR 2002, AS RECOMMENDED BY STAFF.

27.

Administrative Committee

28.

Legislative Committee

29.

Mobile Source Committee

30.

Stationary Source Committee

31.

Technology Committee

32.

California Air Resources Board Monthly Report

Note: The Summary Minutes for CARB’s monthly meetings were not available. Full transcripts of the July, September, October, and November 2001 meetings are available at CARB’s web site, www.arb.ca.gov.

ON MOTION OF MS. GLOVER, SECONDED BY
DR. WILSON, AND UNANIMOUSLY CARRIED, THE BOARD RECEIVED AND FILED AGENDA ITEMS 27 THROUGH 31 AND APPROVED THE FOLLOWING STATE LEGISLATIVE CONCEPTS FOR 2002, AS RECOMMENDED:

Legislative Concept #1 -- Funding to Assist Fleet Rules Compliance

Legislative Concept #2 -- Sustain Air District Subventions

Legislative Concept #3 -- Diesel Fuel Tax

Legislative Concept #4 -- Diesel Retrofit Requirements

Legislative Concept #5 -- Hearing Board

33.

Adopt Proposed Rule 1178 -- Further Reductions of VOC Emissions from Storage Tanks at Petroleum Facilities

     Laki Tisopulos, Asst. DEO/Planning, Rule Development & Area Sources, gave the staff report, and noted that in response to EPA comments on PR 1178, staff prepared an errata sheet revising Subparagraph (i)(4) of the proposed rule to include EPA approval of the test methods and procedures. Copies of the errata sheet were distributed to Board members and made available to the public.

     Mr. Bernson and Ms. Verdugo-Peralta questioned staff as to the impacts that the retrofitting of the storage tanks would have in regard to storage space, gasoline supply, and costs to consumers.

     Dr. Tisopulos indicated that staff assumes the costs will be passed on to the consumer; however, the cost impact is expected to be minimal -- from .007 to less than .2 of one cent. With respect to the gasoline supply, staff believes a six-year compliance schedule should allow for removal of tanks without any major disruptions. Dr. Wallerstein added that pursuant to the settlement agreement between the AQMD and three environmental organizations, the AQMD is committed to implementing the proposed rule in a feasible manner. Staff believes a six-year schedule is feasible; however, the compliance period can be extended, if the facilities are unable to retrofit the tanks according to schedule.

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

TODD CAMPBELL, Coalition for Clean Air/Natural Resources Defense Council
BAHRAM FAZELI, Communities for a Better Environment
     Presented a graph of the top 10 polluters in the basin in 1993, the majority of which were refineries; and noted that, with refineries currently emitting approximately 2900 tons of VOC per year, that picture has not changed. Expressed concern about the environmental justice aspects of the proposed rule, and emphasized that aggressive emission reductions are needed to support environmental justice. Recommended that all of the tanks at the refineries be covered in order to reduce emissions, and that the exemptions in PR 1178 for certain tanks with low vapor pressure be deleted. Expressed belief that six years is a reasonable time period for retrofitting the tanks, and an extension should only be considered in the event of a state emergency. (Submitted Written Comments)

     Dr. Wallerstein responded that the exemptions for tanks with low vapor pressure were placed in the proposed rule because it would not be cost effective for the small amount of emissions that would be controlled.

ROBERT McELROY, Phillips/Tosco
     Commented that PR 1178 does not provide adequate time to address the work required on the tanks, without risking supply disruption. Also, expressed concern with having to compete with other companies for outside storage tankage, which is already in short supply. Suggested that the applicability threshold of 20 tons/year of VOC emissions be based on a three-year average, because throughput at a facility may be increased temporarily while tanks are being retrofitted to comply with the rule.

     Dr. Tisopulos responded that rather than offering a three-year averaging, which is difficult to enforce, staff is proposed an expanded compliance schedule -- six years from the time the refinery is in full compliance and can define if the triggering of the applicability threshold is temporary or not. If it is not temporary, the facility will have to meet the requirements of the rule. If it is of a temporary nature and the emission inventory goes down once the refinery is in compliance, the facility can obtain a facility cap below the applicability threshold of PR 1178.

GORDON SCHREMP, California Energy Commission
     Made the following recommendations: 1) The Board should not adopt a rule that unduly impacts fuel supply or price, and the compliance schedule should be extended from six years to eight years. 2) Inflexible compliance milestones
(one-third of the tanks in each two-year period) should not be included in the rule; and compliance plan filings by individual companies should be used to ensure timely retrofit schedules. 3) The Board should direct staff to continue the stakeholder process to complete an analysis and reach consensus on a final compliance schedule, an overall strategy to achieve all VOC reductions required by the settlement, and achieving air quality goals while minimizing fuel supply impacts. (Submitted Written Comments)

     In response to questions by Ms. Carney, Dr. Tisopulos indicated that if the Board were to adopt an eight-year rather than six year compliance schedule for the proposed rule, the AQMD would fall short of the one ton/day emission reductions required by 2006 pursuant to the SIP settlement agreement. With a seven-year compliance schedule, the one ton/day goal could be achieved, provided that 75 percent of the tanks are in compliance by the end of 2006. Under an eight-year schedule, the AQMD would fall short by approximately .2 ton of VOC emission reductions.

     Dr. Wallerstein recommended that a mechanism, such as interim milestones, be put in place to ensure that the facilities begin the work so that they are not in a position in five or six years where they have not completed the work and need an extension of time. In response to Ms. Carney, he indicated that staff would not be opposed to a compliance plan, with the overall rule requirements on schedule as the principle criteria.

MICHAEL HOFFMAN, BP/WSPA; CHARLIE MAGUIRE, Exxon Mobil;
GARY YESAYAGE, Chevron; MILES HELLER, Phillips (Tosco); and
JERRY ENGELHARDT, Kinder Morgan Energy Partners
     1) Expressed concern that an adequate cost-effectiveness analysis had not been conducted, and that the costs to industry would be much higher than estimated by staff.

     2) Expressed their belief that it will take eight years to achieve one ton per day of VOC emission reductions, while minimizing market disruptions. Emphasized the need for flexibility in the compliance schedule, rather than requiring removal of a certain percentage of tanks from service each year or every other year.

     3) Recommended that tanks above 95 feet in diameter be excluded from the doming requirement because of the high cost. Expressed belief that the one ton per day of VOC emissions reduction can be achieved with doming the tanks below 95 feet, plus all of the riveted tanks.

     4) Noted that according to the rule language, a tank is subject to the doming requirement if it was listed in the annual emissions report for year 2000 as containing an organic liquid having a true vapor pressure equal to or greater than 3 psia. However, their understanding is that enforcement will be based on an instantaneous vapor pressure, i.e., through a single grab sample. Because of this inconsistency, they believe, industry will need to install domes on an additional 25 more tanks than the AQMD has recognized. Urged the AQMD to enforce the rule on an annual average basis, consistent with the dome applicability criteria. (Submitted Written Comments)

     Dr. Tisopulos responded that the costs under PR 1178 are comparable to that for two recently-adopted rules for spray booths and architectural coatings. Further, staff believes the petroleum industry is better able to budget for and afford the capital costs and has a better ability in terms of spreading those costs across the fabric of Southern California and to the other states. In comparing the WSPA proposal to staff’s proposal in terms of SIP credible emissions by 2006, the WSPA proposal will achieve .6 ton, whereas more than 1 ton will be achieved through the AQMD staff proposal. Also, the recommendation for enforcement based on annual averaging would be extremely difficult to enforce because it is impossible to take samples each month and try to average them and determine a year later whether the tank is applicable to the rule or not. Therefore, staff developed a compromise solution whereby the facility is allowed to take a monthly average for those tanks that have wide fluctuations in vapor pressure. They will have to commit themselves to a certain sample frequency, and the AQMD will be committed to the same sampling frequency to determine and verify compliance.

JOHN DeWITT, J.E. DeWitt, Inc.
JAY McKEEMAN, California Independent Oil Marketers Association
MARY NASCHKE, WSPA Southern California Associates
     Requested that the Board consider extending the compliance schedule for PR 1178 so that the refiners can keep supplying at a steady pace without any price spikes, glitches or disruption.

JOHN BILLHEIMER, Enviro-Reality
     Commented that while there are three levels of vapor pressure in the rule --
3 psi, 1 psi, and .1 psi -- there had been no discussion of the .1 psi. Crude oil tanks have been exempted because the emissions are so low that it is not practical to control, yet the .1 psi remains in the rule. He suggested removal from the rule of all references to .1 psi. (Submitted Written Comments)

     Dr. Tisopulos clarified that the crude oil tanks are exempt from the doming requirements, but are still subject to the remaining requirements of the rule. While it is true that the uncertainty increases as the vapor pressures get lower, staff has worked with industry and developed surrogate test methods that are acceptable to both sides.

RODGER PAIGE and JESSE MARQUEZ, Wilmington Coalition for Safe Environment
     Expressed support of PR 1178, with following two exceptions:
(i) recommended a four-year implementation schedule, as was originally proposed by staff; and (ii) recommended that all external floating roof tanks be domed, with no exceptions, exemptions, or waivers. Expressed concern that there are many major petroleum refineries in Wilmington, San Pedro and Carson, all of which have significant fugitive VOC emissions. Commented that Wilmington is over 95% minority and low income, as are the cities of Carson and Compton and most of the communities in the Harbor/South Bay area. Requested that environmental justice be incorporated into Rule 1178. (Submitted Written Comments)

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

Written Comments Submitted by:
Tom A. Gipe, Ultramar Inc.

ON MOTION OF MR. BERNSON, SECONDED BY
DR. WILSON, AND UNANIMOUSLY CARRIED, THE BOARD:

1) ADOPTED RESOLUTION NO. 01-34, ADOPTING RULE 1178 AND CERTIFYING THE FINAL ENVIRONMENTAL ASSESSMENT, AS RECOMMENDED BY STAFF, WITH THE FOLLOWING MODIFICATIONS:

The following language was added to Subparagraph (d)(2)(A):

"(iv) As an alternative to clauses (i) and (iii) above, an operator may submit a compliance plan demonstrating that 75% of the tanks subject to this provision have domes installed by December 31, 2006, and 100% of such tanks shall have domes installed by December 31, 2008.

Subparagraph (i)(4) was revised as follows:

(i)     Test Methods and Procedures
        "(4) Organic liquids with a true vapor pressure of greater than or equal to 3 psia shall be determined by ASTM Method D-323 for Reid vapor pressure and converted to true vapor pressure using applicable nomographs in EPA AP-42, or District and EPA approved nomographs. The actual …"

2) DIRECTED STAFF TO MONITOR THE AVAILABILITY OF STORAGE SPACE AND, IF NECESSARY, RETURN TO THE BOARD WITH A PROPOSED AMENDMENT TO THE RULE.

34.

Amend Rule 518.2 – Federal Alternative Operating Conditions

     In the interest of time, staff waived a formal staff report on this item, and the two individuals who had submitted requests to comment in support of the proposed rule waived their comments.

     Written Comments Submitted by:
     Jack P. Broadbent, Air Division Director, U.S. EPA

ON MOTION OF MR. MIKELS, DULY SECONDED, AND UNANIMOUSLY CARRIED, THE BOARD ADOPTED RESOLUTION NO. 01-35, AMENDING RULE 518.2 AND CERTIFYING THE EXEMPTION FROM CEQA REQUIREMENTS, AS RECOMMENDED BY STAFF.

35.

Amend Rule 444 – Open Burning and Proposed Permit and
Amend Rule 208 – Permit and Burn Authorization for Open Burning

     In the interest of time, staff waived a formal staff report on this item. The public hearing was opened, and the Board heard testimony from the following individual.

SHARON RUBALCAVA, Attorney at Law, on behalf of Alliance of Motion Picture & Television Producers
     Requested an exemption from the requirements of Rule 444 for motion picture and television special effects.

     In response, staff drafted the following language to be added to Subparagraph (f)(5) of PAR 444:

"(H)      the use of pyrotechnics, detonation of explosives, or fire effects for creation of special effects during theatrical productions, filming of motion pictures, videotaping of television programs or other commercial filming or video production activities. Fire effects shall be no more than 30 minutes in duration and the fuel shall be exclusively pipeline quality natural gas, liquefied petroleum gas, mapp gas, or a petroleum liquid having an API gravity of at least 30."

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

ON MOTION OF MS. LaPISTO-KIRTLEY, SECONDED BY
MR. PAULITZ, AND UNANIMOUSLY CARRIED, THE BOARD ADOPTED RESOLUTION NO. 01-36, AMENDING RULES 444 AND 208 AND CERTIFYING THE EXEMPTION FROM CEQA REQUIREMENTS, AS RECOMMENDED BY STAFF, WITH THE FINAL MODIFICATION TO RULE 444:

Add the following language to Subparagraph (f)(5):

     "(H)      the use of pyrotechnics, detonation of explosives, or fire effects for creation of special effects during theatrical productions, filming of motion pictures, videotaping of television programs or other commercial filming or video production activities. Fire effects shall be no more than 30 minutes in duration and the fuel shall be exclusively pipeline quality natural gas, liquefied petroleum gas, mapp gas, or a petroleum liquid having an API gravity of at least 30."

36.

Approve Initial Task Orders for Ethnic Community Outreach

     Ms. LaPisto-Kirtley commented that from her experience, schools are reluctant to let nursing personnel leave the school to attend health conferences because they do not have that many nurses on staff. She suggested that the AQMD would have a greater impact on the schools and the communities by going directly to the school districts and addressing the nursing staffs at their regular meetings.

     Noting that there were different amounts of money budgeted for each of the task orders, Chairman Burke commented that he would prefer, in the future, that the amounts budgeted for proposed task orders be the same for each consultant because he does not want any single community to feel that they have been neglected.

ON MOTION OF MS. GLOVER, DULY SECONDED, AND UNANIMOUSLY CARRIED (Absent: Antonovich and Loveridge), THE BOARD APPROVED AGENDA ITEM NO. 36 AS RECOMMENDED BY STAFF, WITH THE MODIFICATION THAT IN ADDITION TO THE PROPOSED HEALTH CONFERENCES, STAFF ADDRESS SCHOOL NURSING STAFF AT THE SCHOOL DISTRICTS’ REGULAR STAFF MEETINGS.

37.

Allocate Rule 2202 AQIP Funds to Assist in Purchase of Natural Gas Vehicles for Taxicab Services

ON MOTION OF MR. BERNSON, SECONDED BY
MS. LaPISTO-KIRTLEY, AND UNANIMOUSLY CARRIED (Absent: Antonovich and Loveridge), THE BOARD AUTHORIZED THE EXECUTIVE OFFICER TO EXECUTE CONTRACTS WITH SIX TAXICAB ORGANIZATIONS TO ASSIST IN THE PURCHASE OF NATURAL GAS VEHICLES FOR TAXICAB SERVICES AND TO CONDUCT A CLEAN AIR ADVERTISEMENT PROGRAM, IN AN AMOUNT NOT TO EXCEED $2,948,787, FROM THE CY 2001 THIRD QUARTER RULE 2202 AQIP, AS RECOMMENDED BY STAFF.

38.

Closed Session

The Board recessed to closed session at 12: 35 p.m. pursuant to Government Code Sections 54957, to discuss the public employee performance evaluations of the Executive Officer and District Counsel; and 54957.6(a), to meet with labor negotiators regarding unrepresented employees (Agency designated representatives: Eudora Tharp and Arlene Prater; Unrepresented employees: Executive Officer, District Counsel, and Designated Deputies).

39.

Possible Action Following Discussion in Closed Session Concerning Executive Officer, District Counsel and Designated Deputies

     The Board reconvened at 1:10 p.m. Chairman Burke indicated that performance evaluations of the Executive Officer and District Counsel were discussed in closed session, and the Board indicated it is pleased with their performance. Chairman Burke opened discussion on the terms of their employment agreements, including salary and benefits.

CHAIRMAN BURKE MOVED TO AUTHORIZE THE BOARD CHAIR TO EXECUTE AN EMPLOYMENT AGREEMENT WITH THE EXECUTIVE OFFICER, WITH THE FOLLOWING MODIFICATIONS:

1. Executive Officer to serve at-will, with no end date to the appointment specified.
   
   
2. Provisions awarding pay-for-performance, granting the same salary increases given to management employees, and permitting the earning of overtime all to be eliminated from the agreement.
   
   
3. Salary to be adjusted, based on consideration of performance and compensation survey information, from $150,182 to $175,000, effective the first pay period following Board action, with future salary adjustments to be considered, based on performance evaluation, as part of the annual budget process.
   
   
4. An additional $700,000 of term life insurance to be added.
   
   
5. The agency’s deferred compensation match to be increased from 75% to 100%, as provided to the previous Executive Officer.
   
   
6. Mileage reimbursement provision to be replaced with assignment of a District-provided ultra-low emission vehicle for the Executive Officer’s use.

THE MOTION WAS SECONDED BY MS. GLOVER, AND PASSED BY THE FOLLOWING VOTE:

AYES: Bernson, Burke, Carney, Glover, LaPisto-Kirtley,
Mikels, Paulitz, Silva, and Wilson.

NOES: Verdugo-Peralta.

ABSENT: Antonovich and Loveridge.

     Mr. Bernson noted for the record that the raise in the Executive Officer’s salary was based upon his salary for last year plus overtime that he was entitled to, but did not receive.

CHAIRMAN BURKE MOVED TO AUTHORIZE THE BOARD CHAIR TO EXECUTE AN EMPLOYMENT AGREEMENT WITH THE DISTRICT COUNSEL, WITH THE FOLLOWING MODIFICATIONS:

1. District Counsel to serve at-will, with no end date to the appointment specified.
   
   
2. Provisions awarding pay-for-performance and granting the same salary increases given to management employees both to be eliminated from the agreement.
   
   
3. Salary to be adjusted from $120,822 to $131,696, based on consideration of performance and compensation survey information, effective the first pay period following Board action, with future salary adjustments to be considered, based on performance evaluation, as part of the annual budget process.
   
   
4. The ability to sell back accrued compensatory time under the overtime provision to be increased from 40 to 60 hours annually.

THE MOTION WAS SECONDED BY MS. GLOVER, AND PASSED BY THE FOLLOWING VOTE:

AYES: Bernson, Burke, Carney, Glover, LaPisto-Kirtley,
Mikels, Paulitz, Silva, and Wilson.

NOES: Verdugo-Peralta.

ABSENT: Antonovich and Loveridge.

There was no public comment on non-agenda items.