GOVERNING BOARD AGENDA
MEETING, June 6, 2003

Pledge of Allegiance

Opening Comments:

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

Note: Consent Calendar items held for discussion will be moved to Item No. 26.

1. Minutes of May 2, 2003 Board Meeting
McDaniel (909) 396-2500
(smcdaniel@aqmd.gov)

2. Set Public Hearings July 11, 2003 to Consider Amendments and/or Adoption to AQMD Rules and Regulations to:
Wallerstein (909) 396-3131
(bwallerstein@aqmd.gov)

(A) Amend Rule 219 - Equipment Not Requiring a Written Permit Pursuant to Regulation II
Tisopulos (909) 396-3123
(ltisopulos@aqmd.gov)

Proposed amendments to Rule 219 will exempt several types of equipment with limited potential for emissions from permitting requirements; substitute a VOC emission limit for the vapor pressure exemption for lubricants; and clarify fee obligations for previously exempt equipment. The proposal also reorganizes the rule and adds an index to make it easier to locate and understand the exemptions. (Review: Stationary Source Committee, June 27, 2003)

(B) Amend Rule 1162 - Polyester Resin Operations
Tisopulos (909) 396-3123
(ltisopulos@aqmd.gov)

The proposed amendment will postpone the effective date for the non-atomized application of gel coats from July 1, 2003 to July 1, 2004. The amendment is necessary to allow for the completion of testing, evaluation by staff and purchase and installation of compliant equipment by industry. (Review: Stationary Source Committee, June 27, 2003)

Budget/Fiscal Impact

3. Execute Contracts to Develop and Demonstrate Phase II Hydrogen Fueling Infrastructure Technologies, Fuel Cell Vehicle Demonstrations and Support Maintenance Facilities in South Coast Air Basin
Liu (909) 396-2105
cliu@aqmd.gov

At the September 13, 2002 Board meeting, an initial network (Phase I) of compressed-hydrogen fueling stations was approved to accelerate the introduction of fuel cell demonstration vehicles expected to be introduced by major auto manufacturers. To carry out Phase II of this effort, staff recommends executing contracts with Air Products and Chemicals, Stuart Energy, California State University at Los Angeles, Energy Conversion Devices, Inc. and Daimler Chrysler to develop and install hydrogen refueling infrastructure, to demonstrate hydrogen fuel cell vehicles and technologies and develop maintenance support facilities at various locations in the South Coast Air Basin in an amount not to exceed $1,885,280. (Review: Technology Committee, May 23, 2003)

4. Execute Contract to Cosponsor Development and Demonstration of Hydrogen-Internal Combustion Engine Hybrid-Electric Bus
Liu (909) 396-2105
cliu@aqmd.gov

Gasoline and CNG-powered hybrid-electric vehicles (HEVs) have been proven in their ability to reduce emissions and increase fuel economy. However, the final goal is to achieve zero emissions with increased efficiency. AQMD, in conjunction with California Energy Commission, SunLine Transit, Natural Resources Canada, Province of Manitoba, ISE Research, and CARB will develop and demonstrate a hydrogen-powered internal combustion engine (ICE), hybrid-electric transit bus. The use of HEVs powered with a hydrogen-ICE on a commercial scale may lead to substantial reduction in air pollutants and toxic emissions from on-road heavy-duty vehicles. Staff recommends AQMD’s participation in this contract with co-funding of $210,000. Total funding for this project is $1,075,000. (Review: Technology Committee, May 23, 2003)

5. Execute Contract to Cosponsor Development, Demonstration, and Evaluation of Plug-In Hybrid Electric Vans in Fleet Use
Liu (909) 396-2105
cliu@aqmd.gov

AQMD continues to participate in evaluations led by EPRI with CARB on the potential for plug-in hybrid electric vehicles and demonstrations of prototypes with ZEV range. In this project, Daimler Chrysler will produce two new gasoline-fueled plug-in hy-brid electric Sprinter vans and place them in fleet use for demonstration and evaluation by Southern California Edison and AQMD. EPRI will coordinate project participants to evaluate design goals including performance, emissions, fuel economy, and ZEV range. Total project cost is $1,525,000 including AQMD cost not to exceed $475,000. Clean Fuel funds are available in the Technology Advancement Plan updated March 2002 in category CFM6-3. (Review Technology Committee, May 23, 2003)

6. Authorize Executive Officer to Reimburse Microturbine Site Owners for Repair Costs
Liu (909) 396-2105
cliu@aqmd.gov

The Board previously approved the purchase and installation of microturbines with portions of the AES Settlement Fund, the LADWP Settlement Fund, and the Rule 1309.1 Mitigation Fee Fund at various locations within AQMD. Staff recommends that the Board authorize the Executive Officer to use previously authorized funds to reimburse owners for repair costs of microturbines at sites where warranties expired. (Review: Technology Committee, May 23, 2003)

7. Establish Classification and Add and Delete Positions
Tharp (909) 396-3018
etharp@aqmd.gov

As part of a restructuring of Public Affairs, staff recommends 1) establishing a new class of Public Affairs Manager, at a salary range of $71,757 - 87,243, to oversee legislative affairs and intergovernmental relations and 2) deleting the vacant Designated Deputy position that had been responsible for this function. This action would not increase the staffing level of Public Affairs and would result in an annual salary savings of approximately $7,368. (Review: Administrative Committee, May 9, 2003)

8. Approve Salary and Benefits Adjustment for Management, Confidential, and Attorney Employees
Tharp (909) 396-3018
etharp@aqmd.gov

The three-year labor contracts approved by the Board in 2002 provide annual salary and benefits adjustments for union-represented employees. This recommendation is to approve a comparable salary and benefits adjustment for management, confidential, and attorney employees for FY 2003-04. (Review: Administrative Committee, May 9, 2003)

9. Approve Salary Adjustments for Executive Officer and District Counsel
Bernson

The Personnel Committee has reviewed Board Member evaluations of Executive Officer and District Counsel performance and recommends each receive a three-percent salary adjustment consistent with the adjustment provided in labor contracts and recommended for all other employees in Agenda item #8. (Review: Personnel Committee, May 23, 2003)

10. Establish List of Prequalified Providers of Temporary Employment Services
Tharp (909) 396-3018
etharp@aqmd.gov

On February 7, 2003, the Board approved release of an RFP to solicit bids from temporary employment services providers interested in being prequalified to provide services to AQMD through the end of June 30, 2005. This recommendation is to obtain Board approval for this prequalification. (Review: Administrative Committee, May 9, 2003)

11. Establish List of Prequalified Vendors to Provide Printing Services
Tharp (909) 396-3018
etharp@aqmd.gov

On December 6, 2002, the Board approved the release of an RFQ for printing services. This item is to establish a list of prequalified vendors that will be used for the next two years to purchase these services. (Review: Administrative Committee, May 9, 2003)

12. Establish List of Prequalified Law Firms for Employee Relations Litigation and Negotiation Services
Tharp (909) 396-3018
etharp@aqmd.gov

On January 10, 2003, the Board approved release of an RFP for employee relations litigation and negotiation services. This item is to establish a list of prequalified law firms that can be used for these services over the next three years. (Review: Administrative Committee, May 9, 2003)

13. Establish List of Prequalified Vendors to Provide Computer, Network, Printer, and Related Services
Marlia (909) 396-3148
cmarlia@aqmd.gov

On March 7, 2003, the Board approved release of an RFQ to prequalify vendors for computer, network, printer, hardware and software, and related services. As a result of successful responses to this RFQ, thirty-five vendors were identified as capable of providing these products and services. This action is to approve these thirty-five vendors to provide these products and services for a two-year period. Funds ($100,000) will be allocated in future fiscal year budgets for these purchases. (Review: Administrative Committee, May 9, 2003)

14. Issue RFP for Legislative Representation in Sacramento, California
Abarca (909) 396-3242
(oabarca@aqmd.gov)

The current contract for Legislative Representation in Sacramento expires December 31, 2003. Direct representation in Sacramento is necessary to further AQMD policy positions at the state level. This action calls for the issuance of an RFP for legislative consulting services in Sacramento, California, with the services commencing on January 1, 2004 and expiring on December 31, 2004. The RFP will also indicate that the services contract may be extended for up to two additional one-year terms. Total expenditure for the contract shall not exceed $137,000.00 for the initial one-year period. Funding for extension of the contract will be contingent upon Board approval of the budget for the respective fiscal years. (Review: Administrative and Legislative Committees, May 9, 2003)

15. Issue RFP for Legislative Representation in Washington, D.C.
Abarca (909) 396-3242
(oabarca@aqmd.gov)

The current contract for legislative representation in Washington, D.C. expires December 31, 2003. Direct representation in the capitol is necessary to further AQMD policy at the federal level. This action calls for the issuance of an RFP for legislative consulting services in Washington, D.C., with the services commencing on January 1, 2004 and expiring on December 31, 2004. The RFP will also indicate that the services contract may be extended for up to two additional one-year terms. Total expenditure for the contract shall not exceed $129,000.00 for a one-year period. Funding for extension of the contract will be contingent upon Board approval of the budget for the respective fiscal years. (Review: Administrative and Legislative Committees, May 9, 2003)

16. Approve Contract Awards 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

On October 4, 2002, the Board approved the FY 2002-03 AB2766 Discretionary Fund Work Program in Concept totaling $14.95 million. Subsequently, on May 22, 2003, the MSRC approved several contract awards. Therefore, as part of its Final FY 2002-03 Work Program, the MSRC requests approval of: 1) Four proposals received in response to RFP 2003-27: Freeway Service Patrols; 2) Four applications under the Local Government Match Program; 3) One application under the Coachella Valley PM10 Reduction Program; 4) Two proposals submitted in response to RFP 2003-05: On/Off-Road Heavy-Duty Vehicle Program; and 5) Augment awards to A-Z Bus Sales, California Bus Sales and Southern California Thomas Bus Sales under CNG School Bus Program. The MSRC also requests authority to adjust project costs up five percent and to substitute vehicles and/or fuel type provided emissions reductions and cost-effectiveness are not adversely impacted. Last, the MSRC requests authority for the Board Chairman to execute agreements. (Review: Mobile Source Air Pollution Reduction Review Committee, May 22, 2003)

Information Only - Receive and File

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

This report highlights the April 2003 outreach activities of Public Affairs which includes: Environmental Justice Update, Community Events/Public Meetings, Business Assistance, and Local Governmental Activity.

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

This reports the actions taken by the Hearing Board during the period of April 1 through April 30, 2003.

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

This reports the monthly penalties from March 1 through March 31, 2003, and legal actions filed by the District Prosecutor during the period April 1 through April 30, 2003. (Please note March filings included in this report.) A glossary explaining the key terms and Index of District's Rules are attached with the penalty report.

20. 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.

21. Lead Agency Projects and Environmental Documents Received by the AQMD Between April 1, 2003 and April 30, 2003
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 April 1, 2003 and April 30, 2003, and those projects for which the AQMD is acting as lead agency pursuant to CEQA.

22. 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.

23. Annual Audit Report for Area Source Credit Rule 2506
Tisopulos (909) 396-3123
(ltisopulos@aqmd.gov)

Rule 2506 - Area Source Credits for NOx and SOx requires staff to present an annual audit report to the Board describing area source credit activity for the preceding year. During this reporting period, there have been no new area source credit applications received by the AQMD and no new activities with regard to trading and use of area source credits issued to Southern California Edison.

24. Update Minor Source BACT Guidelines for Emergency Diesel Engines
Liu (909) 396-2105
cliu@aqmd.gov

This proposal is to update AQMD minor source BACT guidelines for emergency diesel engines to: a) be consistent with U.S. EPA Tier 2 nonroad emission standards; b) reflect Rule 431.2, which requires that fuels purchased on or after June 1, 2004 for use in most diesel engines be ultra low-sulfur (<.0015 wt. %); and c) prohibit the use of emergency diesel generators that are subject to BACT for interruptible electric service programs. (Review: Stationary Source Committee, April 25, 2003)

25. Best Available Control Technology Guidelines Report
Liu (909) 396-2105
cliu@aqmd.gov

This report provides new listings added to Part B, LAER/BACT Determinations for Major Polluting Facilities, of the BACT Guidelines in the last six months. (Review: Stationary Source Committee, April 25, 2003)

26. Items Deferred from Consent Calendar

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

28. Investment Oversight Committee
Chair: Antonovich
Pearce (909) 396-2828
(rpearce@aqmd.gov)

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

The Legislative Committee considered agenda items including the following legislation for which the Board will consider approving a position:

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

31. Mobile Source Air Pollution Reduction Review Committee
Board Liaison: Antonovich
Hogo (909) 396-3184
hhogo@aqmd.gov

32. 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)

33. California Fuel Cell Partnership Steering Team Meeting
Liu (909) 396-2105
cliu@aqmd.gov

This report summarizes the California Fuel Cell Partnership Steering Team meeting held April 22-23, 2003. (Review: Technology Committee, May 23, 2003)

PUBLIC HEARINGS

34. Adopt Executive Officer's FY 2003-04 AQMD Budget and Work Program
Wallerstein (909) 396-3131
(bwallerstein@aqmd.gov)

The Executive Officer's Budget for FY 2003-04 represents the input over the past several months from Board members, staff, and the public. This year's process included meetings of the Budget Advisory Committee; a public hearing on February 7, 2003 to receive input on the AQMD's Program Goals and Objectives; and four budget workshops, two for the public held on April 22 and May 28, 2003 and two for the Board held on April 25 and May 23, 2003. This submittal transmits the required appropriations and reserves necessary to adopt the proposed budget. (Review: Administrative Committee, May 9, 2003)

35. Amend Regulation III - Fees
Tisopulos (909) 396-3123
(ltisopulos@aqmd.gov)

Staff prepared two amendment proposals for Regulation III – Fees for Board consideration. Proposal A is the Set Hearing proposal of April 4, 2002, that reflects the increase in the Consumer Price Index of three percent and other minor administrative and regulatory enhancements. Proposal B has been prepared in response to the unforeseen requirement for additional funding of 5.9 million dollars for FY 2003-04 by the employee retirement association and includes additional proposals for Board consideration. These additional proposals seek to better recover program costs, such as expedited permit processing; notification and inspection costs for lead, asbestos and area sources; laboratory costs for non-compliant material; RECLAIM/Title V inspection; and certify and align fees for administrative and change of conditions. (Review: Stationary Source Committee, March 28 and April 25, 2003)

36. Adopt Proposed Rule 1105.1 - Reduction of PM10 and Ammonia Emissions from Fluid Catalytic Cracking Units
Tisopulos (909) 396-3123
(ltisopulos@aqmd.gov)

Staff recommends that this item be continued to the September 5, 2003 Board Meeting.

Proposed Rule 1105.1 will reduce PM10, PM10 precursors, and ammonia emissions from fluid catalytic cracking units in refineries and will implement Control Measure CMB-09 of the AQMP. The proposed rule sets emission limits for filterable PM10 and ammonia and requires periodic source testing to ensure compliance. The proposal also requires monitoring, reporting and recordkeeping of PM10 and ammonia emissions as well as equipment operating parameters. (Review: Stationary Source Committee, February 28 and April 25, 2003)

37. Amend Rule 1131 - Food Product Manufacturing and Processing Operations
Tisopulos (909) 396-3123
(ltisopulos@aqmd.gov)

The proposed amendment will correct a SIP deficiency identified by U.S. EPA by removing the alternative compliance plan option for food product manufacturing and processing operations. The compliance date for existing sources was October 2, 2002 and no source selected the alternative compliance plan option. The proposal also clarifies that tablet or capsule form food supplement manufacturing and processing operations are not subject to Rule 1131. (Review: Stationary Source Committee, April 25, 2003)

38. Amend Rule 1193 - Clean On-Road Residential and Commercial Waste Collection Vehicles, and Authorize Execution of Contracts for Emission Testing and Analysis of Dedicated Natural Gas and Diesel Solid Waste Collection Vehicles
Hogo (909) 396-3184
hhogo@aqmd.gov

Staff is proposing to amend the requirements for dual-fuel heavy-duty engines used in curbside waste collection vehicles. Rule 1193 currently provides a sunset date of July 1, 2003 for dual-fuel heavy-duty engines used to power waste collection vehicles. The proposed amendment is in response to recent in-use emissions testing of dual-fuel engines compared to dedicated diesel-fueled engines. Staff also proposes executing a contract with West Virginia University for emission testing of natural gas and diesel solid waste collection vehicles in an amount not to exceed $260,000, and with Engine, Fuels and Emissions Engineering for prescreening, transportation and analysis of natural gas and diesel solid waste collection vehicles in an amount not to exceed $50,000. (Review: Mobile Source Committee, April 25, 2003)

39. Recommendations Regarding Reentry of Power Producing Facilities into RECLAIM Program
Chang (909) 396-3186
(echang@aqmd.gov)

At the May 11, 2001 Board meeting, power producing facilities were separated from the rest of the RECLAIM market. This measure was taken to assure adequate power supply at a reasonable cost in a deregulated electric utility market. Pursuant to Rule 2015(b)(7), these facilities would rejoin the full RECLAIM program in the 2004 compliance year, only if it is determined by the Board in a public hearing prior to July 2003 that their reentry will not result in any negative impact on the remainder of the RECLAIM facilities or on California's energy security needs. This item presents staff's recommendations regarding reentry of power producing facilities into the RECLAIM program.

OTHER BUSINESS

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., United States District Court Case No. CV-03-1656HLH (JWJx); National Paint & Coatings Association, Inc. v. South Coast Air Quality Management District, United States District Court Case No. CV-03-1578HLH (JWJx); and Engine Manufacturers Association, et al. v. SCAQMD, et al., United States Court of Appeals Case Nos. 01-56685 and 01-56688.

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
EJ = Environmental Justice
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
PM2.5 = 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