GOVERNING BOARD AGENDA
MEETING, August 6, 2004

A meeting of the South Coast Air Quality Management District Board will be held at 9:00 a.m., in the Auditorium at AQMD Headquarters, 21865 Copley Drive, Diamond Bar, California. The Governing Board Letters and their attachments (if any) for this month in Microsoft Word can be downloaded (self extracting compressed) from within the individual Board letter (click on "Attachment" at the end of the letter).

The agenda and documents in the agenda packet will be made available upon request in appropriate alternative formats to assist persons with a disability. Disability-related accommodations will also be made available to allow participation in the Board meeting. Any accommodations must be requested as soon as practicable. Requests will be accommodated to the extent feasible. Please telephone the Clerk of the Boards Office at (909) 396-2500 from 7:00 a.m. to 5:30 p.m. Tuesday through Friday.

Pledge of Allegiance

Opening Comments:

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

Presentation of Retirement Award to John Higuchi

• Burke

Note: Consent Calendar items held for discussion will be moved to Item No. 24.

1. Minutes of July 9, 2004 Board Meeting
McDaniel (909) 396-2500
(smcdaniel@aqmd.gov)

2. Set Public Hearings September 3, 2004 to Consider Amendments and/or Adoption to AQMD Rules and Regulations
Wallerstein (909) 396-3131
(bwallerstein@aqmd.gov)

(A) Amend Rule 1121 - Control of Nitrogen Oxides from Residential Type, Natural Gas-Fired Water Heaters
Chang (909) 396-3186
(echang@aqmd.gov)

Rule 1121 was amended in December 1999 to lower the emission limits for water heaters. Manufacturers submitted an interim report relative to their progress in meeting the final emission limit and staff provided a summary of this information and recommendations at the January 9, 2004 Board Meeting. In order for equipment manufacturers to address other national regulatory requirements and technical and manufacturing issues, staff is proposing to delay implementation of the final rule limit one to three years depending upon the size and type of the water heater and to modify the mitigation fee program. This item also serves as a notice of intent to make infeasibility findings, as required in the settlement agreement for the 1999 AQMP amendment. (Review: Stationary Source Committee, July 23, 2004)

(B) Amend Rule 2007 - Trading Requirements
Chang (909) 396-3186
(echang@aqmd.gov)

The current version of Rule 2007 removes power producing facility trading restrictions after September 1, 2004. To address CARB concerns regarding reintroducing power plants to the trading market, this proposal contains a provision to lift the trading restrictions, contingent upon other RECLAIM rule amendments (currently scheduled for November 2004) that will decrease allocations to implement the 2003 AQMP Control Measure CMB-10 and to reflect best available retrofit control technology(BARCT). (Review: Stationary Source Committee, June 25, 2004 and July 23, 2004)

(C) Set Informational Hearing September 3, 2004 for Proposed Amendments to RECLAIM
Chang (909) 396-3186
(echang@aqmd.gov)

An informational hearing will be held in September on the proposed amendments to RECLAIM rules, highlighting BARCT determinations, cost-effectiveness, and options for achieving reductions from the program. (Review: Stationary Source Committee, July 23, 2004)

Budget/Fiscal Impact

3. Execute Contract for Security Guard Services at Diamond Bar Headquarters
Tharp (909) 396-3018
etharp@aqmd.gov

The current contract for Diamond Bar headquarters security guard services expires September 9, 2004. On April 2, 2004, the Board approved release of an RFP to solicit proposals from firms interested in providing these services for the next three-year period. This action is to execute a three-year contract with Contact Security, Inc., for a total amount not to exceed $1,100,015. Funding has been included in the FY 2004-05 Budget and will be requested in successive fiscal years. (Review: Administrative Committee, July 16, 2004)

4. Revise AQMD Policy on Military Leave Pay and Sign Statement of Support for Reservist Employment Rights
Tharp (909) 396-3018
etharp@aqmd.gov

Current policy concerning pay for employees temporarily called to active military duty provides up to 30 days of full pay followed by up to an additional 150 days of the difference between AQMD pay and military pay. As a result of lengthened active duty assignments, it is recommended that the period for receiving the difference between AQMD and military pay be extended to 690 days, for a total supplemental pay period of 720 days. Additionally, it is recommended that AQMD sign a statement in support of military reservist employment rights provided by the National Committee for Employer Support of the Guard and Reserve. Both of these actions have been recommended by Board Member Antonovich. (Review: Administrative Committee, July 16, 2004)

5. Adopt Resolution Amending Hearing Board Compensation (Continued from the July 9, 2004 Board Meeting)
Tharp (909) 396-3018
etharp@aqmd.gov

Hearing Board members have not had a cost-of-living pay adjustment since 1992. To retain and attract qualified members, the Personnel Committee recommends that, effective July 1, 2004, Hearing Board members and their alternates receive a seven-percent pay adjustment. This adjustment is intended to recognize cost-of-living increases since 1992, doing so within current budgetary constraints. The cost of these adjustments for FY 2004-05 is approximately $18,815. (Review: Personnel Committee, June 1, 2004; Administrative Committee, June 18, 2004)

6. Approve Salary Adjustment for District Counsel
Tharp (909) 396-3018
etharp@aqmd.gov

The Personnel Committee has reviewed Board Member evaluations of District Counsel performance and recommends the same two-percent salary adjustment provided in labor contracts and approved in July for all other employees. (Review: Personnel Committee, July 13, 2004)

7. Execute Contract to Cosponsor Demonstration of Advanced Diesel Emission Control System in Diesel-Fueled Heavy-Duty Engines to Meet 2010 Heavy-Duty Emissions Standards
Liu (909) 396-2105
cliu@aqmd.gov

In September 2003, the Board authorized the release of an RFP to demonstrate and evaluate the performance, durability, and emission-reduction potential of advanced emission control systems for diesel-fueled engines that would meet 2010 emissions standards. Three proposals were received to demonstrate two different control technologies. This action is to award two contracts to Cummins Inc. and West Virginia University, respectively, at a cost not to exceed $1,000,000 from the Clean Fuels Fund. U.S. DOE and CARB will provide $700,000 and $100,000 in cofunding, respectively, with the remainder of the $5,156,000 total project costs to be covered by the proponents. (Review: Technology Committee, July 23, 2004)

8. Execute Contracts to Demonstrate Hydrogen Fueling Stations
Liu (909) 396-2105
cliu@aqmd.gov

On July 11, 2003, the Board approved the release of an RFP to install and demonstrate hydrogen fueling stations in tandem with a fleet of hydrogen internal combustion engine vehicles. The vehicle conversion portion of the RFP was awarded by the Board in March 2004. An outside panel of experts reviewed and scored the nine proposals received for the hydrogen fueling stations. Based on the results of the panel evaluation, this action is to fund two different bidders in an amount not to exceed $2,311,000 from the Clean Fuels Fund to install the hydrogen fueling stations.(Review: Technology Committee, July 23, 2004)

9. Amend Seven Contracts and Execute Contract for FY 2002-03 Carl Moyer Memorial Air Quality Standards Attainment Program and Issue an RFP for 2004 Carl Moyer Memorial Air Quality Standards Attainment Program Funding
Liu (909) 396-2105
cliu@aqmd.gov

This action is to revise seven prior project awards, and approve additional awards not to exceed the total returned funds of $786,893 for the FY 2002-03 Carl Moyer Memorial Air Quality Standards Program. Additionally, this action is to approve release of an RFP to provide incentives for low emission on- and off-road vehicles and equipment for the 2004 Carl Moyer Air Quality Standards Program. The state FY 2003-04 Budget contains $18 million from Proposition 40 funds, and AQMD expects to receive approximately $7.4 million. The local match requirement is $3.7 million. (Review: Technology Committee, July 23, 2004)

10. Approve Grants to Retrofit Diesel School Buses with Particulate Traps and Issue Program Announcement and Application for New School Buses with Funding from State’s Proposition 40 and Chairman’s Modified School Bus Initiative and Installation of Oxidation Catalysts with Funding from U.S. EPA
Liu (909) 396-2105
cliu@aqmd.gov

On February 6, 2004, AQMD issued a program announcement under the AQMD Chairman’s Initiative offering $12 million for school bus replacements and retrofits. Four public school districts applied for seven CNG school buses, and four public school districts and five private operators applied for 1,174 PM traps. This action is to approve awards to retrofit up to 766 diesel school buses with PM traps in an amount not to exceed $4,297,000; to purchase up to 21 PM trap cleaning equipment in an amount not to exceed $168,000; and to set aside up to $318,250 for the purchase and installation of insulation blankets on 1,273 school buses already retrofitted through AQMD funding. In addition, this action is to approve issuance of a new program announcement for up to $2,030,000 from Proposition 40 funds, up to $245,000 from U.S. EPA funds, and up to $7,216,750 from unspent funds available in the AQMD Chairman’s Initiative Program to replace pre-1987 school buses; and up to $250,000 from U.S. EPA funds to retrofit school buses with diesel oxidation catalysts. (Review: Technology Committee, July 23, 2004)

11A. De-Obligate Prior Funding Commitments and Reissue RFP (Continued from the July 9, 2004 Board Meeting)
Liu (909) 396-2105
cliu@aqmd.gov

On October 3, 2003, the Board approved release of a $1.5 million RFP to solicit proposals for natural gas refueling station infrastructure projects. Staff believes that sixteen of the twenty-six proposals received deserve funding and proposes that $1,242,323 from de-obligated funding commitments be used to fund some of these projects. This action is to de-obligate prior funding commitments with Pinnacle CNG, CALSTART, Clean Energy, SunLine Services, CryoEquipment Services, Gas Research Institute and Praxair and revert funds back to the Clean Fuels Fund and AES Settlement Fund. Staff is recommending that the RFP be reissued to solicit additional natural gas fueling infrastructure projects with a budget ranging from $726,046 to $1,726,046. (Review: Technology Committee, April 23, 2004)

11B. Award Contract for Liquefied Natural Gas Refueling Station Infrastructure to SYSCO Food Services (Continued from the July 9, 2004 Board Meeting)
Liu (909) 396-2105
cliu@aqmd.gov

On October 3, 2003, the Board approved release of a $1.5 million RFP to solicit proposals for natural gas refueling station infrastructure projects from the Clean Fuels Fund. Twenty-six proposals were received by the RFP deadline of December 16, 2003. This action is to approve a contract award from this RFP to SYSCO Food Services. Total AQMD funding for this project shall not exceed $250,000 from the Clean Fuels Fund. (Review: Technology Committee, April 23, 2004)

11C. Award Contract for Liquefied Natural Gas Refueling Station Infrastructure to Burrtec, Inc. (Continued from the July 9, 2004 Board Meeting)
Liu (909) 396-2105
cliu@aqmd.gov

On October 3, 2003, the Board approved release of a $1.5 million RFP to solicit proposals for natural gas refueling station infrastructure projects from the Clean Fuels Fund. Twenty-six proposals were received by the RFP deadline of December 16, 2003. This action is to approve a contract award from this RFP to Burrtec, Inc. Total AQMD funding for this project shall not exceed $188,000 from the Clean Fuels Fund. (Review: Technology Committee, April 23, 2004)

11D. Award Multiple Contracts for Natural Gas Refueling Station Infrastructure to Clean Energy, Inc. (Continued from the July 9, 2004 Board Meeting)
Liu (909) 396-2105
cliu@aqmd.gov

On October 3, 2003, the Board approved release of a $1.5 million RFP to solicit proposals for natural gas refueling station infrastructure projects from the Clean Fuels Fund. Twenty-six proposals were received by the RFP deadline of December 16, 2003. This action is to approve five contract awards from this RFP to Clean Energy, Inc. Total AQMD funding for these projects shall not exceed $924,000 from the Clean Fuels Fund. (Review: Technology Committee, April 23, 2004)

11E. Award Multiple Contracts for Natural Gas Refueling Station Infrastructure (Continued from the July 9, 2004 Board Meeting)
Liu (909) 396-2105
cliu@aqmd.gov

On October 3, 2003, the Board approved release of a $1.5 million RFP to solicit proposals for natural gas refueling station infrastructure projects from the Clean Fuels Fund. Staff believes that sixteen of the twenty-six proposals received deserve funding in the amount of $2,742,323. Staff proposes using the remaining RFP funds and de-obligated funding commitments for these additional projects. This action is to approve contract awards to RF Dickson Co., Inc., Downs Commercial Fueling, the Orange County Sanitation District, Consolidated Disposal Service, the City of La Verne and four contracts with Gas Equipment Systems. Total AQMD funding for these projects shall not exceed $1,033,523 from the Clean Fuels Fund and $346,800 from the AES Settlement Fund. (Review: Technology Committee, April 23, 2004)

12. Reissue RFP for Demonstration of Natural Gas, Stationary Fuel Cells in South Coast Air Basin
Liu (909) 396-2105
cliu@aqmd.gov

In April 2003, the Board awarded two contracts to install stationary fuel cells. Unfortunately, both awardees are unable to conduct the projects as originally proposed. Staff still believes that stationary fuel cells are an important, clean technology and should be demonstrated in the South Coast Air Basin. This action is to reissue RFP to solicit proposals for installing and operating stationary fuel cells at a cost not to exceed $1,000,000 from Clean Fuel Fund. (Review: Technology Committee, July 23, 2004)

13. Execute Purchase Orders for Portable Low-Level Pollutant Analytical Instruments to Demonstrate Feasibility to Measure Low-Level Pollutant Concentrations
Hogo (909) 396-3184
hhogo@aqmd.gov

On June 4, 2004 the Board recognized funds from U.S. Department of Defense and approved the release of RFQs to purchase various instruments to demonstrate the feasibility to measure low-level pollutant concentrations. This action is to execute purchase orders for two portable gas chromatograph/mass spectrometers and two portable Automatic Chemical Agent Detection and Alarm systems to conduct the demonstration. Funds for these purchases are available in the FY 2004-05 Budget. (Review: Administrative Committee, July 16, 2004)

14. Fiscal Year 2004-05 Budget Transfer Relating to Series 2004 Pension Obligation Bonds Debt Service
Pearce (909) 396-2828
(rpearce@aqmd.gov)

The Board, at its June 4, 2004 meeting, authorized the issuance and sale of taxable pension obligation bonds to retire the Unfunded Actuarial Accrued Liability due to the San Bernardino County Employees’ Retirement Association. The issuance and sale of $47,030,000 in bonds was completed on June 29, 2004, resulting in $11.7 million in net present value savings. The first year savings equals $1,895,097. It is now necessary to transfer $1,509,355 from the Salaries and Benefits Major Object, Retirement Account, to the Services and Supplies Major Object, Interest Expense Account, to cover the first year of debt service. This transfer moves moneys to the appropriate expenditure account and does not require an additional appropriation. (Review: Administrative Committee, July 16, 2004)

15. Appropriate Funds from General Fund, Undesignated Fund Balance, to District Prosecutor's FY 2004-05 Budget
Mieras (909) 396-3400
(pmieras@aqmd.gov)

The District Prosecutor's office continues to be involved in a litigation enforcement case against BP West Coast Products, et al. ("BP ARCO"). In February 2004, the District Prosecutor's FY 2003-04 Budget was increased to cover a portion of the litigation support costs associated with this case. Not all of the funds were spent by the end of fiscal year, and staff proposes to carryover the remaining FY 2003-04 Budget to cover litigation support costs. (Review: Administrative Committee, July 16, 2004)

16. Approve in Concept FY 2004-05 $15.3 Million AB 2766 Discretionary Fund Work Program, Release of Six Solicitations, Two Sole-Source Contracts, and Commitments for Three Additional Elements
LaPisto-Kirtley

For FY 2004-05 the MSRC has proposed a $15.3 million Work Program consisting of 11 program elements. The MSRC requests Board approval of the $15.3 Million FY 2003-04 Conceptual Work Program, release of six solicitations providing up to $10.5 million, two sole-source contracts totaling $1.06 million, and commitment of $3.75 million for three additional elements. The MSRC also requests authority to adjust contracts up to 5 percent. (Review: Mobile Source Air Pollution Reduction Review Committee, June 24 and July 22, 2004)

Information Only - Receive and File

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

This report highlights the June 2004 outreach activities of Public Affairs which include: 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 June 1 through June 30, 2004.

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

This reports the monthly penalties from May 1 through May 31, 2004, and legal actions filed by the District Prosecutor during June 1 through June 30, 2004. A glossary explaining the key terms and Index of District Rules are attached with the penalty report. (Review: Stationary Source Committee, June 25, 2004)

20. Lead Agency Projects and Environmental Documents Received by AQMD
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 June 1, 2004, and June 30, 2004, and those projects for which the AQMD is acting as lead agency pursuant to CEQA. (Review: Mobile Source Committee, July 23, 2004)

21. 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 2004.

22. Report of RFPs and RFQs Scheduled for Release in August
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 August. (Review: Administrative Committee, July 16, 2004)

23. Status Report on Major Projects for Information Management Scheduled to Start During First Six Months of FY 2004-05
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 report on major automation contracts and projects to be initiated by Information Management during the first six months of FY 2004-05.

24. Items Deferred from Consent Calendar

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

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

The Legislative Committee met on July 16, 2004 and reviewed agenda items including the following legislation for which the Board will consider approving a position:

AB 1009 (Pavley)	–	Air Pollution: Heavy-Duty Vehicles: Emissions	Support
AB 1394 (Levine & Montanez)	–	Air Pollution: Carl Moyer Memorial Air Quality Standards Attainment Program: Particulate Matter	Support With Amendments
AB 2353 (Leslie)	–	Neighborhood Electric Vehicles	Support
SB 429 (Torlakson)	–	Energy Resources: Petroleum Infrastructure Permits: Projects	Support

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

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

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

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

31. 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: Vacant
McDaniel (909) 396-2821
(smcdaniel@aqmd.gov)

32. 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 July 13-14, 2004. (Review: Technology Committee, July 23, 2004)

PUBLIC HEARINGS

33. Adopt Proposed Rule 1127 - Emission Reductions from Livestock Waste
Tisopulos (909) 396-3123
(ltisopulos@aqmd.gov)

Proposed Rule 1127 would implement AQMP control measure WST-01 and certain Senate Bill (SB) 700 requirements for dairy operations. Its purpose is to reduce ammonia, VOC and PM10 emissions from dairy manure. Proposed Rule 1127 would affect dairy and related operations such as heifer and calf ranches, as well as manure processing operations such as composters and digesters. It establishes on-farm best management practices, manure disposal requirements, and approval requirements for manure processors. (Review: Stationary Source Committee, January 23, February 27, and April 23, 2004)

OTHER BUSINESS

34. Petitions by Communities for a Better Environment and Carlos Valdez, Southern California Pipe Trades District Council 16, and United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada, Local 250 for Regulation XII Hearing on ConocoPhillips Company's Permit Application for Los Angeles Refinery Ultra Low Sulfur Diesel Project
McDaniel (909) 396-2821
(smcdaniel@aqmd.gov)

Petitioners seek to appeal the issuance of a negative declaration under CEQA by the Executive Officer and seek to have a hearing before the Board regarding the issuance of a permit to ConocoPhillips. The holding of the hearing is discretionary with the Board pursuant to Rule 1201. The decision at the August 6, 2004 meeting will be whether to hold the hearing. If a hearing is held, it will be at a later date.

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: Engine Manufacturers Association, et al. v. SCAQMD, et al., U.S. Supreme Court Case No. 02-1343; People of the State of California ex rel SCAQMD v. BP West Coast Products, LLC, et al., Los Angeles Superior Court Case No. BC291876; Communities for a Better Environment v. SCAQMD, et al., ConocoPhillips Company, Los Angeles Superior Court Case No. BS091275; and Carlos Valdez, et al. v. SCAQMD, et al., ConocoPhillips Company, Los Angeles Superior Court Case No. BS091276.

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
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