GOVERNING BOARD AGENDA
MEETING, February 7, 2003

Pledge of Allegiance

Opening Comments:

• William A. Burke, Ed.D., Chair
• Other Board Members
• Barry R. Wallerstein, D. Env., Executive Officer

Swearing In of Reappointed/Newly Appointed Board Members

• Burke

Note: Consent Calendar items held for discussion will be moved to Item No. 17.

1. Minutes of January 10, 2003 Board Meeting
McDaniel (909) 396-2500
(smcdaniel@aqmd.gov)

Budget/Fiscal Impact

2. Execute Contract to Cost Share Small-Scale Natural Gas Liquefaction Plant
Liu (909) 396-2105
cliu@aqmd.gov

At its March 1999 meeting, the Board approved $200,000 in funding for a unique small-scale natural gas liquefaction plant using innovative technology. Due to a contractual technicality and unforeseen factors, the funds were returned. With the facility constructed, the sponsors of this project are requesting the same level of funding from the AQMD as before in order to complete the field installation, calibration, testing and evaluation. Commercialization of the technology is expected to begin in 2003 - 2004. Total project cost is $5.6 million; total AQMD funding will not exceed $200,000. (Review: Technology Committee, January 24, 2003)

3. Execute Contract to Perform Conceptual Design Study for Integrated Demonstration Project at Diamond Bar Facility Utilizing Renewable and Non-renewable Hydrogen Production for Vehicle Fueling and Electricity Generation
Liu (909) 396-2105
cliu@aqmd.gov

AQMD staff requests funding for a study to establish an integrated hydrogen energy demonstration at the AQMD Diamond Bar facility to produce hydrogen for vehicle fueling and electricity generation. Hydrogen will be produced from an electrolyzer, powered by an upgraded photovoltaic array, and a natural gas reformer. Electricity will be generated from a hydrogen internal combustion engine and a fuel cell. Staff recommends that Northern Power Systems conduct the conceptual engineering design for the integrated demonstration facility in an amount not to exceed $45,000. (Review: Technology Committee, January 24, 2003)

4. Execute Contract with FuelMaker Corporation to Upgrade CNG Fueling Stations at Various School Districts and Municipalities
Liu (909) 396-2105
cliu@aqmd.gov

School Districts and Municipalities have received funding awards to purchase natural gas vehicles and install refueling stations. It has been discovered that the natural gas supply in the San Gabriel Valley area has an unusually high water content which can lead to vehicle and refueling equipment breakdowns. To reduce the water content in the natural gas supplied to the vehicles, staff is recommending that high-capacity regenerative gas dryers be installed at sites impacted by this high water content. Total project cost is projected to be approximately $180,000; total AQMD cost will not exceed $90,000 and the Southern California Gas Company will provide matching funding. (Review: Technology Committee, January 24, 2003)

5. Execute Contracts for FY 2001-02 Carl Moyer Memorial Air Quality Standards Attainment Program and Executive Officer's Mitigation Program
Liu (909) 396-2105
cliu@aqmd.gov

On September 10, 2002 proposals were received in response to an RFP for the Carl Moyer Memorial Air Quality Standards Attainment Program. Staff is recommending awards not to exceed $8,995,348 from the Carl Moyer special revenue fund. Staff is also recommending awards not to exceed $2,225,089 from the Executive Officers Mitigation Program Fund. Lastly, staff is recommending no cost modifications of two previous awards, one under the Carl Moyer program and one under the Executive Officer's Mitigation program. (Review: Technology Committee, January 24, 2003)

6. Amend Contract with Ebensteiner Company to Generate Emission Credits Under State Emission Mitigation Program
Liu (909) 396-2105
cliu@aqmd.gov

On March 1, 2002, the Board approved the execution of an $833,172 project with Ebensteiner Company to re-power 12 dozers for a total annual NOx reduction of 40.8 tons under the State Emissions Mitigation Program. Due to business and operational changes, the applicant was unable to execute the contract. Staff proposes to re-power nine scrapers with Ebensteiner Company for $794,178 for a total annual NOx reduction of 46.2 tons. This proposal improves the cost effectiveness of the project from $3,533/ton of NOx to $2,974/ton of NOx. CARB has approved this proposal. (Review: Technology Committee, January 24, 2003)

7. Authorize Purchase and Installation of Integrated Video Badging and Facility Access Control System
Tharp (909) 396-3018
(etharp@aqmd.gov)

On September 13, 2002, the Board approved release of an RFQ for the purchase of an integrated video badging and facility access control system. Based on evaluation of bids received, staff recommends the purchase of a Lenel OnGuard System from Security Solutions at a cost not to exceed $59,378, including installation. Funds for this purchase are included in the FY 2002-03 Budget. (Review: Administrative Committee, January 17, 2003)

8. Authorize Increase in Annual Expenditures for Outside Environmental Counsel and Transfer from Designation for Litigation/Enforcement to District Prosecutor's FY 2002-03 Budget
Mieras (909) 396-3400
(pmieras@aqmd.gov)

On September 13, 2002, the Board approved a list of pre-qualified outside counsel having expertise in the California Environmental Quality Act, AQMD rulemaking and planning procedures, administrative law and related issues for both AQMD and AQMD Hearing Board. The Board also authorized up to $350,000 annually for outside counsel. The District Prosecutor's Office is undertaking two sensitive enforcement matters that will require the assistance of outside counsel and will require additional fees of up to $150,000. Consequently, staff is recommending that the Board (1) authorize an increase in the annual contract amount for environmental litigation counsel from $350,000 to $500,000; (2) authorize the District Prosecutor to enter into a contract with the law firm of Woodruff, Spradlin and Smart in the amount of $150,000 for legal services; and (3) appropriate $150,000 from the General Fund, Designation for Litigation/Enforcement to District Prosecutor's FY 2002-03 Budget, Professional and Special Services Account. (Review: Administrative Committee, January 17, 2003)

9. Approve Contract Awards and Release of Outreach Coordinator RFP as Part of MSRC's FY 2002-03 AB 2766 Discretionary Fund Work Program; Grant MSRC Authority to Adjust Project Costs Up to Five Percent; and Authorize Board Chairman to Execute Agreements
Kleindienst

The MSRC requests the following: 1) Approval to fund ten applications totaling $933,300 received in response to the Local Government Match Program Announcement & Application; 2) Approval to fund ten applications totaling $670,413.69 received in response to the Coachella Valley PM10 Reduction Program PA; 3) Approval to release a $45,000 RFP for Programmatic Outreach Services; 4) Authorization to enter into negotiations for a sole source contract, not to exceed $35,000, with HiP Design for Website hosting and maintenance services; and 5) Authorization to enter contracts with three qualified school bus vendors, in an amount not to exceed $2,000,000 total, to provide incentives for compressed natural gas school buses. MSRC also requests authority to adjust contracts up to five percent and authority for the Board Chairman to execute agreements.

Information Only - Receive and File

10. Public Affairs Report
Abarca (909) 396-3242
(oabarca@aqmd.gov)

This report highlights the December 2002 outreach activities of Public Affairs which includes: Environmental Justice Update, Community Events/Public Meetings, Business Assistance, and Local Governmental Activity.

11. Hearing Board Report
Camarena (909) 396-2500
(ecamarena@aqmd.gov)

This reports the actions taken by the Hearing Board during the period of December 1 through December 31, 2002.

12. Civil Filing and Civil Penalties Report
Mieras (909) 396-3400
(pmieras@aqmd.gov)

This reports the monthly penalties from November 1 through November 30, 2002, and legal actions filed by the District Prosecutor during December 1 through December 31, 2002. (Please note, there were three cases filed in November which did not appear on the January 2002 Board letter.) A glossary explaining the key terms and Index of District Rules are attached with the penalty report.

13. Lead Agency Projects and Environmental Documents Received by AQMD Between November 1, 2002 and November 30, 2002
Chang (909) 396-3186
(echang@aqmd.gov)

This report provides, for the Board's consideration, a listing of CEQA documents received by the AQMD between December 1, 2002 and December 31, 2002, and those projects for which the AQMD is acting as lead agency pursuant to CEQA. (Review: Mobile Source Committee, January 24, 2002)

14. Rule and Control Measure Forecast
Chang (909) 396-3186
(echang@aqmd.gov)

This report highlights AQMD rulemaking activity and public workshops potentially scheduled for the year 2003.

15. Report of RFPs and RFQs Scheduled for Release in February
Pearce (909) 396-2828
(rpearce@aqmd.gov)

This report summarizes the RFPs and RFQs for budgeted services over $50,000 scheduled to be released for advertisement for the month of February. (Review: Administrative Committee, 1/17/03)

16. Status Report on Major Projects for Information Management Scheduled to Start During Last Six Months of FY 2002-03
Marlia (909) 396-3148
cmarlia@aqmd.gov

Information Management is responsible for data systems management services in support of all AQMD operations. This action is to provide the monthly status report on major automation contracts and projects to be initiated by Information Management during the last six months of FY 2002-03.

17. Items Deferred from Consent Calendar

18. Administrative Committee
Chair: Bernson
Wallerstein (909) 396-3131
(bwallerstein@aqmd.gov)

19. Legislative Committee
Chair: LaPisto-Kirtley
Abarca (909) 396-3242
(oabarca@aqmd.gov)

20. Mobile Source Committee
Chair:  Wilson
Chang (909) 396-3186
(echang@aqmd.gov)

21. Stationary Source Committee
Chair:  Loveridge
Coy (909) 396-2434
(ccoy@aqmd.gov)

22. Technology Committee
Chair: Paulitz
Liu (909) 396-2105
cliu@aqmd.gov

23. California Air Resources Board Monthly Report
(No Written Material - Transcripts of the meetings are available at CARB's web site, www.arb.ca.gov)
Board Rep: Burke
McDaniel (909) 396-2821
(smcdaniel@aqmd.gov)

24. Approve Workplan to Implement Initiatives Proposed by Chairman William A. Burke and Establish the Asthma and Brain Cancer Research Fund
Wallerstein (909) 396-3131
(bwallerstein@aqmd.gov)

At the January 2003 Board Meeting, Chairman Burke proposed initiatives to increase funding for clean school buses, to establish an asthma and outdoor air quality consortium, and to support research on the potential link between air pollution and brain cancer. This action is to approve a workplan to implement Chairman Burke's proposed initiatives.

25. Report on Executive Officer's Intent to Execute MOU between AQMD and Valero Wilmington Refinery to Replace the Use of Concentrated Hydrogen Fluoride with Modified Hydrogen Fluoride
Coy (909) 396-2434
(ccoy@aqmd.gov)

Valero Wilmington Refinery proposes to modify the alkylation process at its refinery in Wilmington to eliminate the use of hydrogen fluoride (HF), an acutely hazardous material, in this process and replace it with modified hydrogen fluoride (MHF). MHF contains additives that reduce volatility and aerosol formation properties of HF. In addition, the refinery plans to upgrade the existing mitigation system that includes leak detection, process isolation, water spray and the HF deinventory facility. The use of MHF in combination with the mitigation system will significantly reduce the quantity of airborne HF in the event of an emergency release. Parties to this MOU would agree to expedite the construction of equipment required for conversion to MHF by dedicating sufficient resources for timely submittal, preparation and review of both CEQA documents and permit applications, as well as the actual design, procurement and construction, accordingly.

26. Status Report on Contract Execution for Public EV Charging Equipment and Signage Replacement to Help Coordinate Public Charging with Vehicle Technology; and Maintain a Limited Network of Compatible Public Charging
Liu (909) 396-2105
cliu@aqmd.gov

Subsequent to the January 2003 Board meeting, an automaker announced significant reduction of EVs to be placed in 2003. Some EVs will be sold and have been sold, and the EVs on the road today are expected to remain on the road in southern California for several years. After carefully reviewing the expected EV usage in the next few years, the availability of charging stations, and the desire to promote plug-in hybrid electric vehicles in the future, staff proposes to move forward with the acquisition and installation of 25 small paddle inductive chargers as approved by the Board on January 10, 2003. (Review: Technology Committee, January 24, 2003)

PUBLIC HEARINGS

27. Amend Rule 1401 - New Source Review of Toxic Air Contaminants, and Report on Impacts Relative to Sources Subject to Rule 1402 - Control of Toxic Air Contaminants from Existing Sources (Continued from January 10, 2003 Board Meeting)
Chang (909) 396-3186
(echang@aqmd.gov)

In September 2002, the state Office of Environmental Health Hazard Assessment finalized chronic risk values for two compounds. Rule 1401(e)(2) and (e)(3) require an analysis and report to the Board before new and updated risk factors, respectively, are used for air toxics new source review. Proposed amendments to Rule 1401 will update the list of compounds and effective dates in Table I. In addition, Rule 1402(j)(4) requires analysis of the potential impacts on sources subject to Rule 1402 prior to use of new or updated risk factors for facility-wide health risk assessments. Staff's analysis indicates that there will be no significant impacts on existing sources. (Review: Stationary Source Committee, November 22, 2002)

28. Receive Public Input on Executive Officer's Proposed Program Goals/Objectives for FY 2003-04
Wallerstein (909) 396-3131
(bwallerstein@aqmd.gov)

A set of Program Goals/Objectives for FY 2003-04 has been developed. The Executive Officer wishes to receive public and Board member input on these proposed Program Goals/Objectives as they will serve as the foundation for the AQMD's FY 2003-04 Budget and Work Program.

OTHER BUSINESS

29. Authorize the Executive Officer to Seek Equivalency from U.S. EPA Regarding Recent Revised Regulations Governing Prevention of Significant Deterioration; and If Not Granted, Terminate PSD Delegation Agreement
Nazemi (909) 396-2662
(mnazemi1@aqmd.gov)

On December 31, 2002, U.S. EPA published final revised regulations governing the NSR programs mandated by Part C and D of Title I of the Clean Air Act for attainment and non-attainment areas, respectively. AQMD has a deadline of March 3, 2003 to receive new delegation from U.S. EPA to implement the revised regulations for Prevention of Significant Deterioration (PSD) for attainment pollutants, namely NO2 and SO2. This action proposes to authorize the Executive Officer to request from U.S. EPA to recognize AQMD's Regulation XVII - PSD to be as stringent as, and therefore equivalent to, the U.S. EPA's revised regulations. This action also proposes that in case U.S. EPA does not find AQMD's Regulation XVII - PSD equivalent to their revised PSD regulations, to authorize the Executive Officer to not request any further delegation and allow U.S. EPA to terminate AQMD's PSD delegation agreement and become the permitting agency for PSD sources in the South Coast district.

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

CLOSED SESSION – (No Written Material)
Baird (909) 396-2302
(bbaird@aqmd.gov)

It is necessary for the Board to recess to closed session pursuant to Government Code section 54956.9(a) to confer with its counsel regarding pending litigation which has been initiated formally and to which the District is a party-the actions are California Paint Alliance, et al. v. South Coast Air Quality Management District, et al., Orange County Superior Court Case No. 03CC01247, and National Paint & Coatings Association, Inc. v. South Coast Air Quality Management District, Orange County Superior Court Case No. 03CC00007.

ACRONYMS

AQIP = Air Quality Investment Program
AVR = Average Vehicle Ridership
Cal/EPA = California Environmental Protection Agency
CARB = California Air Resources Board
CEMS = Continuous Emissions Monitoring Systems
CEQA = California Environmental Quality Act
CE-CERT = College of Engineering-Center for Environmental Research and Technology
CNG = Compressed Natural Gas
CO = Carbon Monoxide
CTG = Control Techniques Guideline
EPA = Environmental Protection Agency
EV = Electric Vehicle
FY = Fiscal Year
HRA = Health Risk Assessment
IAIC = Interagency AQMP Implementation Committee
IGA = Intergovernmental Affairs
LAER = Lowest Achievable Emissions Rate
LEV = Low Emission Vehicle
LNG = Liquefied Natural Gas
MOU = Memorandum of Understanding
MSERCs = Mobile Source Emission Reduction Credits
MSRC = Mobile Source (Air Pollution Reduction) Review Committee
NESHAPS = National Emission Standards for Hazardous Air Pollutants
NGV = Natural Gas Vehicle
NOx = Oxides of Nitrogen
NSPS = New Source Performance Standards
NSR = New Source Review
PAMS = Photochemical Assessment Monitoring Stations
PAR = Proposed Amended Rule
PM₁₀ = Particulate Matter  < 10 microns
PM_2.5 = Particulate Matter < 2.5 microns
PR = Proposed Rule
RFP = Request for Proposals
RFQ = Request for Quotations
SCAG = Southern California Association of Governments
SIP = State Implementation Plan
SOx = Oxides of Sulfur
TCM = Transportation Control Measure
ULEV = Ultra Low Emission Vehicle
VMT = Vehicle Miles Traveled
VOC = Volatile Organic Compound
ZEV = Zero Emission Vehicle