GOVERNING BOARD AGENDA
MEETING, April 5, 2002

Pledge of Allegiance

Opening Comments:

• Norma J. Glover, Chair
• Other Board Members
• Barry R. Wallerstein, D. Env., Executive Officer

Swearing In of Reappointed/Newly Appointed Board Members

• Glover

CONSENT CALENDAR (Items 1 through 24)

Note: Consent Calendar items held for discussion will be moved to Item No. 25.

1. Minutes of March 1, 2002 Board Meeting
Dix (909) 396-2500
(jdix@aqmd.gov)

2. Set Public Hearings May 3, 2002¹ to Consider Amendments and/or Adoption to AQMD Rules and Regulations:
Wallerstein (909) 396-3131
(bwallerstein@aqmd.gov)

¹ At its February 1, 2002 meeting, the Board set a public hearing May 3, 2002 to Adopt the FY 2002-03 AQMD Budget and Work Program.

(A). 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
Chang (909) 396-3186
(echang@aqmd.gov)

In November and December 2001, the Scientific Review Panel and the Office of Environmental Health Hazard Assessment, respectively, finalized chronic risk values for 13 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 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 an analysis and report 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 concludes that there will be no significant impacts on existing sources. (Review: Stationary Source Committee, February 22, 2002)

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

Proposed amendments to Regulation III adjust the fees by the cost of living index. An across-the-board 2.5% increase in fees corresponding to the change in the California Consumer Price Index (CPI) for 2001 and other major classifications are being proposed. (Review: Stationary Source Committee, February 22, 2002 and Administrative Committee, April 12, 2002)

(C). Amend 1309.1 - Priority Reserve
Tisopulos (909) 396-3123
(ltisopulos@aqmd.gov)

Technical amendments are proposed to allow a public policy project access to the Priority Reserve for emission credits. This technical amendment will allow a public policy project that primarily generates electricity to pump water to maintain the integrity of a municipality or significant portion thereof access to the Priority Reserve. The project is consistent with the intent of the November 2001 amendments to allow electrical generation facilities access to the Priority Reserve subject to specific criteria and requirements. [Review: Stationary Source Committee, April 26, 2002]

Budget/Fiscal Impact

3. Execute Contract to Cosponsor Development of Outreach Video on Fuel Cell and Hydrogen Fuel Usage
Liu (909) 396-2105
cliu@aqmd.gov

Hydrogen 2000, Inc., a non-profit corporation, has been working on increasing public awareness of the benefits of hydrogen and fuel cell usage. Hydrogen 2000, Inc. is proposing to develop a 26 minute hydrogen safety video entitled Hydrogen Energy: The Safe and Clean Alternative, and a safety booklet to provide information on the latest hydrogen refueling, fuel cell, and safety technologies. Staff recommends that AQMD cosponsor this project in an amount not to exceed $45,000 from the Clean Fuels Fund. The US Department of Energy, Natural Resources Canada, and Energy Advancement Association of Japan will join AQMD in this project. Total project cost is estimated at $240,000. (Reviewed: Technology Committee, February 22, 2002)

4. Execute Contract to Purchase Fuel Cell Curriculum Packages for Distribution to High School Science Programs Throughout District
Liu (909) 396-2105
cliu@aqmd.gov

Staff recommends the purchase of fuel cell curriculum packages, including demonstration kits, for distribution to high school science programs located in the four counties of the District. These school programs are selected and contacted through the state-sponsored California Regional Environmental Education Community Network. Staff recommends funding in an amount not to exceed $20,000 from the Advanced Technology, Outreach and Education Fund. (Review: Technology Committee, February 22, 2002)

5. Execute Contract to Develop Design Outlining Feasibility and Necessary Steps to Convert CNG Fueling Station to Hydrogen Fueling Service
Liu (909) 396-2105
cliu@aqmd.gov

At the Board’s direction and in consultation with staff, SunLine Transit Agency has provided AQMD with a proposed work plan and budget to develop a cost-shared design outlining the feasibility and necessary steps to convert a CNG fueling station, in the future, into a hydrogen fueling service. Under the proposal, the U.S. DOE will provide in-kind services to assist SunLine in the development of the conversion design. Staff recommends that the Board approve the development of the conversion design at a cost not to exceed $51,680. Funding is available from the Clean Fuels Fund. (Review: Technology, February 22, 2002)

6. Execute Contract for Construction and Implementation of Fuel Cell Exhibit at California Science Center and Amend Contract with Children's Museum
Liu (909) 396-2105
cliu@aqmd.gov

Staff has worked with local museums to develop programs to educate children about air pollution and air quality issues. The exhibit at the California Science Center in Los Angeles incorporates a working fuel cell demonstration and a full-size model fuel cell car. The exhibit will explain car components, fuel cell operation and interactive links to fuel cell technology via a computer kiosk. This project will be cofunded by $100,000 from CARB, with AQMD contribution from the Clean Fuels Fund not to exceed $226,000. Staff also requests Board approval to supplement the funds allocated for the Children’s Museum of Los Angeles project by an additional $1,500 available from the Advanced Technology, Outreach and Education Fund to cover administrative costs. (Review: Technology Committee, February 22, 2002)

7. Execute Contract to Cosponsor Development and Demonstration of Fischer-Tropsch Fueled Heavy-Duty Vehicles with Control Technologies for Reduced Diesel Exhaust Emissions
Liu (909) 396-2105
cliu@aqmd.gov

In October 2001, the Board authorized the release of an RFP to develop and demonstrate prototype heavy-duty vehicles fueled by Fischer-Tropsch (F-T) fuel. Two proposals were received, and staff recommends that the contract be awarded to Automotive Testing Laboratories Inc. This project will evaluate the performance and emission reduction potential of an advanced engine design with exhaust gas recirculation systems, F-T fuel, and aftertreatment devices that are optimized using a systems approach. On-road heavy-duty diesel NOx and PM emissions could be reduced by at least 60 and 90%, respectively, as a result of this work. Cost to the AQMD for the proposed project shall not exceed $450,000 of the total project cost of $1,300,000. (Review: Technology Committee, March 22, 2002)

8. Execute Additional Contracts to Generate Emissions Credits Under State Emissions Mitigation Program
Liu (909) 396-2105
cliu@aqmd.gov

At the July 20, 2001 meeting, the Board established the State Emissions Mitigation Fund to recognize up to $30,000,000 in State funds from CARB. This action was in response to the Governor’s state-wide program to mitigate excess emissions from peaker power generation units. The Board has so far approved the expenditure of $26,126,786 on projects approved and recommended by CARB. Staff recommends the expenditure of $566,547 from the State Emission Mitigation Fund, and the reallocation of $339,912 from projects approved by the Board on July 20, 2001, for Arrow Tek and Port of LA that were executed for lesser amounts. The new round of emission reduction projects will be for a total of $906,459. (Review: Technology Committee, March 22, 2002)

9. Recognize Funding from CARB and Execute Contracts for CARB’s Alternative Diesel Fuel Program
Liu (909) 396-2105
cliu@aqmd.gov

Pursuant to Assembly Bill 2061 (Lowenthal), CARB was allocated $500,000 to distribute to local air districts to pay for the incremental cost of alternative diesel fuel used in heavy-duty vehicles and equipment. These diesel-fuel-water emulsions can reduce NOx emissions by at least 10 percent and particulate matter emissions by at least 60 percent. Following a solicitation, CARB awarded AQMD a grant in the amount of $177,100 for three alternative diesel fuel projects. Staff recommends executing contracts with Pacific Harbor Line ($8,100), General Petroleum ($69,000), and Maersk Pacific, Ltd. ($100,000). (Reviewed: Technology Committee, February 22, 2002)

10. Approve Issuance of Program Announcement & Application for Zero Emission Vehicle Incentive Program Funding
Liu (909) 396-2105
cliu@aqmd.gov

The statewide Zero Emission Vehicle Incentive Program resulting from Assembly Bill 2061 (Lowenthal) reduces the cost of new CARB certified ZEVs. The AQMD received $2 million to implement the program locally in 2002, with additional allocations on a first-come, first-served basis. The proposed program announcement and application will provide funding to encourage the purchase or lease of new freeway-capable zero emission passenger vehicles. (Review: Technology Committee, March 22, 2002)

11. Execute Contracts to Fund Marine Vessel Projects under RECLAIM Executive Order Mitigation Program
Liu (909) 396-2105
cliu@aqmd.gov

There is an immediate availability of very cost effective emission reductions from marine vessel projects. These NOx emission reduction credits are required to be generated under the RECLAIM Executive Order Mitigation program. It is recommended that eight engines be funded for re-powering under the RECLAIM Executive Order Mitigation Program in an amount not to exceed $3.1 million, resulting in estimated total NOx reductions of approximately 1,070 tons over four years. It is also recommended that 14 engines be funded for re-manufacturing to new engines under the RECLAIM Executive Order Mitigation Program in an amount not to exceed $4.1 million, resulting in estimated total NOx reductions of approximately 690 tons over four years. (Review: Technology Committee, March 22, 2002)

12. Establish Fund for Natural Gas Vehicle Partnership (Initiative #3), Recognize Funding from Participating Members, and Authorize Executive Officer to Approve Expenditure for Activities and Projects Selected by Partnership During First Year
Liu (909) 396-2105
cliu@aqmd.gov

The Board, at its February 1, 2002 meeting, approved the Workplan to implement the eight Strategic Alliance Initiatives set forth by Chairman Norma Glover. One of the initiatives is the creation of a Natural Gas Vehicle Partnership to facilitate the advancement of natural gas vehicle technology and deployment. The participating members will pay two-year membership fees to fund program administration, specific projects, and activities to achieve the goals of the partnership. Staff recommends establishing a Natural Gas Vehicle Partnership Fund to receive contributions from participating members and transferring $25,000 to the fund from the Clean Fuels Fund as AQMD's contribution, and authorizing the Executive Officer to approve expenditures for projects selected by the partnership up to $50,000 for individual expenditures and for a total amount not exceeding $200,000, during the first year of its activity. (Review: Technology Committee, March 22, 2002)

13. Amend Contracts with Applied Knowledge, Inc., and R Systems, Inc. to Provide Short- and Long-Term Systems Development and Support Services
Marlia (909) 396-3148
cmarlia@aqmd.gov

The AQMD currently has contracts with four companies for short- and long-term systems development services. These contracts are periodically amended to add budgeted funds as additional needs are defined. This action is to amend contracts with two of the four companies approved by the Board to add additional funding for needed development work. Funds are available in the Information Management FY 2001-02 Budget for this purpose. (Review: Administrative Committee, March 8, 2002)

14. Authorize Purchase of Desktop Standard Office Software
Marlia (909) 396-3148
cmarlia@aqmd.gov

Currently, AQMD desktop personal computers use Microsoft Office 97 for the suite of standard desktop applications (word processing, spreadsheets, graphics, presentation, and desktop database management). This action is to authorize purchase of Microsoft Office XP Upgrade Advantage to provide the latest version of the application suite and rights to any new version released prior to January 1, 2003 for all AQMD desktop computers. Funds for this purchase ($200,000) are included in the FY 2001-02 Budget. (Review: Administrative Committee, March 8, 2002)

15. Authorize Purchase of Frequency Filter Modification for Ontario Radar Wind Profiler
Tisopulos (909) 396-3123
(ltisopulos@aqmd.gov)

Due to radio frequency interference from the Automatic Vehicle Identification System at Ontario International Airport, the AQMD radar wind profiler at this location is not able to obtain accurate wind measurements. The Airport worked with staff to adjust their operating frequencies as much as is feasible, but this has not eliminated the problem. Vaisala, Inc., the profiler manufacturer, has developed a modification that will filter the interfering signals. The total cost for this modification is approximately $6,500, requiring Board approval as a capital outlay. Funding for this new fixed asset is available in the FY 2001-02 Budget from the EPA Section 105 Grant supplement for the PAMS Program. (Review: Administrative Committee, March 8, 2002)

16. Approve Contracts under Rideshare to Rails Program as Part of FY 2001-02 AB 2766 Discretionary Fund Work Program; Grant MSRC Authority to Adjust Project Costs Up to 5%; and Authorize Board Chairman to Execute Agreements
Kleindienst

As part of the FY 2001-02 AB 2766 Discretionary Fund Work Program, the Board approved release of a Request for Proposals for a $300,000 Rideshare to Rails Program. The RFP included a $75,000 geographic county minimum. When the RFP closed, only one proposal from Riverside County was funded for $96,982. Consequently, the MSRC re-released the RFP to allow the other three counties additional time to submit proposals. On November 9, 2001, the Board approved the re-released RFP in the amount of $225,000. When the RFP closed, two additional San Bernardino County proposals had been received. At this time the MSRC requests approval to fund these two proposals totaling $48,000. The MSRC also requests authority to adjust contracts up five percent and authority for the Board Chairman to execute agreements.

Information Only - Receive and File

17. Public Affairs Report
Solomon (909) 396-3780
(msolomon@aqmd.gov)

This report highlights the February 2002 activities of the Public Affairs Office which includes the following: Environmental Justice Update, Community Events/Public Meetings, Business Assistance, Legislative Office, Intergovernmental Affairs, Media Communications, and Transportation Programs.

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

This reports the actions taken by the Hearing Board during the period of February 1 through February 28, 2002.

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

This reports the monthly penalties from January 1 through January 31, 2002, and legal actions filed by the District Prosecutor during the period February 1 through February 28, 2002. A glossary explaining the key terms and Index of District's Rules are attached with the penalty report.

20. Lead Agency Projects and Environmental Documents Received by the 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 January 1, 2002 and January 31, 2001, and those projects for which the AQMD is acting as lead agency pursuant to CEQA. (Review: Mobile Source Committee, February 22, 2002)

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

22. Status Report on Major Projects for Information Management Scheduled to Start During Last Six Months of FY 2001-02
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 last six months of FY 2001-02.

23. Report of RFPs and RFQs Scheduled for Release in April
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 April. (Review: Administrative Committee, March 8, 2002.)

24. First Annual Program Review for Rule 2020 - RECLAIM Reserve
Chang (909) 396-3186
(echang@aqmd.gov)

Rule 2020 - RECLAIM Reserve, requires an annual report to the Board on several implementation aspects of the rule. The report includes specifics on projects under the Pilot Credit Generation Rules that provide emission reductions for the RECLAIM AQIP and Mitigation Fee Program. It also includes an evaluation of the Rule 2020 participation fee and information on credits received and used for the RECLAIM AQIP, Mitigation Fee Program, and State Emission Reduction Credit Bank. This report, in conjunction with the Status Report on Mobile Source Credit Generation Rules and Chapter 3 of the Annual RECLAIM Audit Report for 2000 Compliance Year presented to the Board on March 1, 2002, fully satisfies the requirements of Rule 2020. (Review: Stationary Source and Mobile Source Committees, March 22, 2002)

25. Items Deferred from Consent Calendar

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

27. Finance Committee
Chair: Glover
Pearce (909) 396-2828
(rpearce@aqmd.gov)

28. Legislative Committee
Chair: LaPisto-Kirtley
Solomon (909) 396-3780
(msolomon@aqmd.gov)

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

AB 1058 (Pavley) - Vehicle Emissions

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

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

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

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

33. 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
Dix (909) 396-2827
(jdix@aqmd.gov)

PUBLIC HEARINGS

34. Prehearing and Status Report on Controlling Volatile Organic Compound and Ammonia Emissions from Composting and Related Operations
(Continued from March 1, 2002 Board Meeting)
Chang (909) 396-3186
(echang@aqmd.gov)

As part of the development of Proposed Rule 1133 (Control Measure WST-02), staff has been evaluating methods to control emissions from composting operations. The 1999 amendment to the 1997 AQMP requires staff to report to the Board, at a public meeting, when cost-effectiveness for a draft rule may exceed $13,500 per ton of VOC reduced. The report must be presented at least 90 days prior to rule adoption and include viable control alternatives within the industry source categories to be regulated. This report fulfills this obligation and provides an update on source tests, potential control technologies, cost-effectiveness and potential industry impacts, with recommended actions to reduce emissions from composting operations. The report and staff recommendations also fulfill the commitments of WST-02. (Review: Stationary Source Committee, December 7, 2001 and January 25, 2002)

35. Amend Regulation IX - Standards of Performance for New Stationary Sources
Chang (909) 396-3186
(echang@aqmd.gov)

Local air districts are authorized by EPA to implement federal standards set in 40 Code of Federal Regulations (CFR) Part 60, Standards of Performance for New Stationary Sources (NSPS) and Part 61, National Emission Standards for Hazardous Air Pollutants (NESHAPs). Periodic amendments to Regulations IX and X incorporate new or amended standards by reference. Eight actions regarding NSPS are proposed for incorporation into Regulation IX. There were no actions regarding NESHAP, Part 61 which is reflected in Regulation X. The NSPS changes include clarifications and corrections, administrative changes, and changes to test methods and monitoring. Affected industries include: commercial and industrial solid waste incineration units; electric utility steam generating units; industrial-commercial-institutional steam generating units; and large municipal waste combustors. (Review: Stationary Source Committee February 22, 2002)

OTHER BUSINESS – (No Written Material)

Baird (909) 396-2302
(bbaird@aqmd.gov)

Pursuant to Government Code Section 54956.8, to consider leasing of real properties. Properties are a portion of the District Headquarters at 21835 E. Copley Drive, Suite 1114, and 21845 E. Copley Drive, Suite 1137, Diamond Bar, California 91765. The negotiator is Sylvia Oroz. The parties to the negotiations are: General Services Administration for the Department of Treasury (Savings Bond Marketing Unit) and the Franchise Business Activity - West, respectively.

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 sections 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 Communities for a Better Environment v. Cenco Refining Company, et al., United States District Court Case No. 00-05665 AHM (AIJx) and MacDougall v. Thomas, AQMD, Los Angeles Superior Court Case No. GC027653; and 54956.9(c) to confer with counsel to decide, based on existing facts and circumstances, whether to initiate litigation (9 cases). It is also necessary for the Board to recess to closed session pursuant to Government Code section 54956.8 to provide direction to its negotiator regarding the price and terms for a lease of real property and the extension of a lease of real property. The properties are a portion of the District Headquarters at 21835 E. Copley Drive, Suite 1114, and 21845 E. Copley Drive, Suite 1137, Diamond Bar, California 91765. The negotiator is Sylvia Oroz. The parties to the negotiations are: General Services Administration for the Department of Treasury (Savings Bond Marketing Unit) and the Franchise Business Activity - West, respectively.

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
NO_x = 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
SO_x = Oxides of Sulfur
TCM = Transportation Control Measure
ULEV = Ultra Low Emission Vehicle
VMT = Vehicle Miles Traveled
VOC = Volatile Organic Compound
ZEV = Zero Emission Vehicle

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