GOVERNING BOARD AGENDA
MEETING, May 3, 2002

Pledge of Allegiance

Opening Comments:

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

Proclamation Designating May as "American Lung Association of Orange County Clean Air Month"

• Glover

Permit Application Backlog Reduction (oral presentation)

• Nazemi

CONSENT CALENDAR (Items 1 through 20)

Note: Consent Calendar items held for discussion will be moved to Item No. 21.

1. Minutes of April 5, 2002 Board Meeting
Dix (909) 396-2500
(jdix@aqmd.gov)

2. Set Public Hearings June 7, 2002 to Consider Amendments and/or Adoption to AQMD Rules and Regulations:
Wallerstein (909) 396-3131
(bwallerstein@aqmd.gov)

(A). Amend Rule 1168 - Adhesive and Sealant Applications
Tisopulos (909) 396-3123
(ltisopulos@aqmd.gov)

The proposed amendments to Rule 1168 address the VOC limits and compliance dates for adhesives used in the automotive and marine top and trim industry; the adhesives used for shoe and handbag repairs; plastic pipe cements, and the associated primers. The amendments also addresses the use of methylene chloride and other toxic compounds in adhesives and sealants. (Review: Stationary Source Committee, March 22 and April 26, 2002)

(B). Amend Rule 1193 - Clean On-Road Residential and Commercial Waste Collection Vehicles
Hogo (909) 396-3184
hhogo@aqmd.gov

Staff is proposing to remove the sunset date of June 30, 2002 to allow the acquisition of dual-fueled heavy-duty engines for use in waste collection vehicles after that date. The proposed amendment is in recent submittals by dual-fuel engine manufacturers certifying that dual-fuel engines that operate primarily on an alternative-fuel will continue to do so in a "stop-and-go" refuse collection duty cycle.(Review: Mobile Source Committee, April 26, 2002)

Budget/Fiscal Impact

3. Issue RFP for Development of Hydrogen Fueling Station Template
Liu (909) 396-2105
cliu@aqmd.gov

At its October 2001 Meeting, the Board authorized the Executive Officer to issue an RFP for the development of a hydrogen fueling station template. The RFP solicits cost-shared proposals for templates including equipment specifications, layout, construction guidance and an optimization study for a future hydrogen fueling network within the District. Project funding will not exceed $75,000. (Review: Technology Committee, March 22, 2002)

4. Execute Contracts for Technical Assistance for Advanced,
Low- and Zero-Emission Mobile and Stationary Source Pollution Control Technologies
Liu (909) 396-2105
cliu@aqmd.gov

On December 2001, the Board approved the release of an RFP to solicit proposals to provide technical and public outreach support assistance for advanced, low- and zero-emission mobile and stationary source pollution control technologies. Fourteen proposals were received. Submittals have been reviewed. Staff recommends executing contracts with seven technical experts to provide consultation services at a total cost not to exceed $185,000 to be funded from the Clean Fuels Program. (Review: Technology Committee, April 26, 2002)

5. Execute Contract for Maintenance and Management Services for Fast Fill Compressed Natural Gas Fueling Station at AQMD Headquarters
Liu (909) 396-2105
cliu@aqmd.gov

AQMD is in the process of upgrading its natural gas fueling station to accommodate the growing alternative fuel vehicle fleet. The station will require periodic preventive maintenance and service in the event of equipment failure or breakdown. Pinnacle CNG Company, the vendor installing the new natural gas equipment, is recommended to provide CNG maintenance and management services in an amount not to exceed $175,000 for a period of five years. (Reviewed: Administrative Committee, April 12, 2002)

6. Execute Contract to Cosponsor Development and Demonstration of Aftertreatment Technologies for PM Emissions Control of CNG-Fueled Heavy-Duty Engines
Liu (909) 396-2105
cliu@aqmd.gov

In December 2001, the Board authorized the release of an RFP to chemically characterize exhaust emissions from CNG engines, and based on this characterization, develop and demonstrate aftertreatment technologies capable of further reducing PM, NOx, CO, and hydrocarbon emissions from CNG engines. Two proposals were received from West Virginia University (WVU) and Cummins Westport. Staff recommends that one contract be awarded to WVU at this time. Cost to the AQMD for this proposed $550,000 project shall not exceed $450,000. West Virginia University and its part-ners will provide $100,000 in direct cash contribution. Staff is working with the proposed team of the second proposal and may recommend Board consideration of funding for that proposal, as well, in the future. (Review: Technology Committee, March 22, 2002)

7. Execute Contract to Cost Share Pilot Demonstration of Residential Fuel Cells
Liu (909) 396-2105
cliu@aqmd.gov

Fuel cells are energy efficient and clean sources of electrical energy. On March 16, 2001, the Board adopted a resolution providing $350,000 funding from the AES Settlement Fund for a residential fuel cell demonstration project. On July 20, 2001, the Board approved the issuance of a RFP to solicit proposals for pilot demonstration of residential fuel cells. Staff is proposing to award a contract to Fuel Cell Technologies Ltd. in an amount not to exceed $366,149. Funding is proposed as follows: $350,000 from AES Settlement Fund and $16,149 from Clean Fuels Fund. The total project cost is $982,300 and involves the use of solid oxide fuel cell technology. (Review: Technology Committee, March 22, 2002)

8. Recognize Funds from CARB for Retrofitting Additional Particulate Trap Filters on Diesel School Buses and Execute Contract for New Lower-Emitting Diesel School Bus
Liu (909) 396-2105
cliu@aqmd.gov

CARB has re-allocated $1.5 million to retrofit additional school buses in the Basin with particulate trap filters. These funds are redirected by CARB from other air districts that were unable to retrofit school buses with particulate traps. The amount will supplement the existing $1.77 million allocated for retrofitting diesel trap filters on school buses for FY 2001-02. Staff recommends the Board recognize $1.5 million from CARB. On March 1, 2002, the Board had awarded a new school diesel bus to Cucamonga School District. The school was unable to produce a valid CHP certificate for the old bus being replaced. Staff further recommends the Board award Redlands Unified School District with a new lower-emission diesel bus in place of Cucamonga School District in an amount not to exceed $86,020. (Review: Technology Committee, April 26, 2002)

9. Recognize Revenues from U.S. Department of Energy to Augment AES Settlement Funds to Assist in Purchase of Natural Gas Passenger Cars for Taxicab Services
Hogo (909) 396-3184
hhogo@aqmd.gov

In March 2001, the Board set aside $500,000 to assist in the purchase of Rule 1194-compliant natural gas passenger vehicles for taxicab operators authorized to operate at airports. Recently, the Gas Company requested the U.S. Department of Energy (DOE) to redirect $48,000 of the Gas Company's original grant towards the purchase of natural gas passenger cars for taxicab services. Staff recommends that the Board recognize $48,000 from U.S. DOE and continue to provide funding assistance at a cost not to exceed $299,000 (including U.S. DOE funds) to individual taxicab operators, on a first-come basis, in purchasing natural gas passenger cars as required under Rule 1194. In addition, staff recommends executing a contract with SunLine Services Group in an amount not to exceed $102,000 to provide funding assistance to taxicab operators in the Coachella Valley as required under Rule 1194.

10. Execute Contracts for AQIP Proposals Received During Fourth Quarter of 2001
Abarca (909) 396-3242
(oabarca@aqmd.gov)

Rule 2202 - On-Road Motor Vehicle Mitigation Options was adopted on December 8, 1995. One of the compliance strategies under Rule 2202 allows employers to invest in the AQIP. Monies received are placed in a restricted account to fund programs that result in equivalent emission reductions that would otherwise have been achieved by the participating employers. Staff evaluated the proposals received during the fourth quarter of 2001. This action is to recommend five for funding. The amount available for this quarter is $1,340,626. This action is also to make minor adjustments to the contracts already awarded at the February 1, 2002 meeting to the taxicab organizations. (Review: Mobile Source Committee, March 22, 2002)

11. Execute Contract to Cofund Energy Efficiency Project
Chang (909) 396-3186
(echang@aqmd.gov)

Staff recommends $25,000 funding for a field study at a magnet high school adjacent to the L.A. Zoo to assess effects of using lighter colored roofing materials to improve energy efficiency and to lessen the urban heat island effect. This study is part of a comprehensive project that will be cofunded with the City of L.A., L.A. Department of Water and Power, Lawrence Berkeley Laboratories and the California Energy Commission. Staff recommends using available funds from the AES settlement previously designated for energy efficient programs and are currently in the reserve for fleet rule implementation. (Review: Stationary Source Committee, March 22, 2002)

12. Appropriate Funds for Newspaper Publication of Notices for Issuance of Permits Pursuant to Rule 212(g) Guidelines for Applications Subject to Regulations XXX (Initial and Revised Title V Permits), XIII, and XVII
Nazemi (909) 396-2662
(mnazemi1@aqmd.gov)

As part of the application permit backlog reduction effort, the number of Initial and Revised Title V permits as well as non-Title V permits issued in FY 2001-02 has been higher than originally estimated. This has steadily depleted the monies originally budgeted to cover the cost of newspaper publication of the required Public Notices of permit issuance. The notification expenditure is recovered from the permit applicants after the newspaper bureau invoices the District. This action would authorize appropriation of monies from the Undesignated Fund Balance to the Engineering and Compliance budget to cover the anticipated cost for the newspaper public notifications for the remainder of the fiscal year. (Review: Administrative Committee, April 12, 2002)

13. Approve Contracts Under Local Government Match 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

In July 2001, as part of the FY 2001-02 AB 2766 Discretionary Fund Work Program, the MSRC released a $2 million Local Government Match Program Announcement & Application (PA) to fund alternative fuel vehicles and infrastructure. The PA opened November 1, 2001, and closed on February 28, 2002, at which time fifteen applications totaling $2,526,584 had been received. The MSRC requests approval to fund all applications. The 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

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

This report highlights the March 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.

15. Report to Legislature and CARB on AQMD's Regulatory Activities for Calendar Year 2001
Abarca (909) 396-3242
(oabarca@aqmd.gov)

The AQMD is required by law to submit a report to the Legislature on its regulatory activities for the preceding calendar year. The report is to include a summary of each rule and rule amendment adopted by AQMD, number of permits issued, denied, or cancelled, emission offset transactions, draft budget and forecast, and an update on the Clean Fuels and RECLAIM programs.

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

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

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

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

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

19. 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 February 1, 2002 and February 28, 2002, and those projects for which the AQMD is acting as lead agency pursuant to CEQA. (Review: Mobile Source Committee, March 22, 2002)

20. 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.

21. Items Deferred from Consent Calendar

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

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

24. 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:

AB 2221 (Keeley) - Air Pollution Civil Actions

AB 2312 (Chu) - Environmental Justice Grants

AB 2650 (Lowenthal) - Diesel Pollution at Ports

AB 2682 (Chu) & SB 1994 (Soto) - Petroleum Pollution Cleanup

AB 2718 (Oropeza) - Distributed Generation

SB 1827 (Torlakson) - AB 2766 Funding

CARB Stationary Source Fee

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

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

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

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

29. 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)

30. Emission Reduction Credit System Modernization White Paper
Chang (909) 396-3186
(echang@aqmd.gov)

At the February 1, 2002 Board meeting, the Board approved a series of eight strategic initiatives introduced by Chairman Norma Glover. The objective of Initiative #1 is to improve the current emission reduction credit (ERC) system to help the South Coast region attain clean air while allowing for growth and a strong economy. The AQMD staff has been working with an ERC System Working Group and has developed a White Paper - Emission Reduction Credit System Modernization to assess the availability of ERCs under the AQMD's Regulation XIII - New Source Review program and identify options that would improve the future supply of ERCs necessary for economic growth. (Reviewed: Stationary Source Committee, April 26, 2002)

31. Merits of a Centralized Market for RECLAIM
Chang (909) 396-3186
(echang@aqmd.gov)

In May 2001, Regulation XX - RECLAIM was amended to help stabilize RTC prices and address California energy issues. The resolution for the amendments included direction to staff to work with economists and interested parties to evaluate the merits of a centralized trading market. This report summarizes progress in the evaluation and staff's recommendations. (Review: Stationary Source Committee, February 22 and March 22, 2002)

PUBLIC HEARINGS

32. Adopt Executive Officer's FY 2002-03 AQMD Budget and Work Program
Pearce (909) 396-2828
(rpearce@aqmd.gov)

The Executive Officer's Budget for FY 2002-03 represents the input over the past several months from staff, Board members, and the public. This year's process included meetings of the Budget Advisory Committee; a public hearing on February 1, 2002 to receive input on the AQMD's Program Goals and Priorities; and two budget workshops, one for the public on April 17, 2002 and one for the Board on April 19, 2002. This submittal transmits the required appropriations and reserves necessary to adopt the proposed budget. (Review: Administrative Committee, April 12, 2002)

33. 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, adjustment of selected special processing fees to better reflect actual costs and other minor language clarifications are being proposed. (Review: Stationary Source Committee, March 22 and April 26, 2002 and Administrative Committee, April 12, 2002)

34. 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)

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

Technical amendments are proposed to allow a critical public works project access to the Priority Reserve for emission credits. This technical amendment will allow a critical public works project that primarily generates electricity to pump water to maintain the integrity of a municipality or significant portion thereof access to the Priority Reserve. This project was specifically listed in the staff report for the November 2001 amendments allowing electrical generation facilities access to the Priority Reserve subject to specific criteria and requirements. (Review: Stationary Source Committee, April 26, 2002)

36. Adopt Ordinance Approving Addendum No.3 to Installment Purchase Agreement Relating to Diamond Bar Headquarters Facilities
Pearce (909) 396-2828
(rpearce@aqmd.gov)

On June 3, 1988, the Board authorized the Chairman to execute an Installment Purchase Agreement with the SCAQMD Building Corporation for the Diamond Bar Headquarters. This Agreement was amended on July 8, 1988, to identify the Diamond Bar site as the property to be purchased. A second amendment was approved on October 1, 1992, to refund a portion of the Series A and Series B Bonds, by issuance of the Building Corporation’s Installment Sale Revenue Refunding Bonds, Series 1992. This action is to adopt an Ordinance approving amendment number three for the purpose of refinancing the callable portions of the debt outstanding relating to the Diamond Bar Facility. (Review: Finance Committee, April 19, 2002)

37. Adopt Resolution Approving Third Supplemental Trust Agreement, Escrow Agreement, and Preliminary Official Statement for SCAQMD Building Corporation Bonds Relating to Diamond Bar Headquarters Facilities
Pearce (909) 396-2828
(rpearce@aqmd.gov)

This item, in conjunction with the agenda item regarding the adoption of an Ordinance and approval of an Addendum to our Installment Purchase Agreement with the SCAQMD Building Corporation, is required to complete the refunding of the Building Corporation’s Installment Sale Revenue Refunding Bonds, Series 1992. Current bond market interest rates make a refinancing of the callable 1992 Series Bonds attractive at this time with an estimated annual savings of $70,000. This action is to adopt a Resolution approving the documents required to complete the refinancing. (Review: Finance Committee, April 19, 2002)

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 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. It is also necessary for the Board to recess to closed session pursuant to Government Code section 54956.9(c) to confer with its counsel to decide, based on existing facts and circumstances, whether to initiate litigation (one case).

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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