GOVERNING BOARD AGENDA
MEETING, July 11, 2003

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 the month of July 2003 in Microsoft Word can be downloaded (self extracting compressed) from within the individual Board letter (click on "Attachment" at the end of the letter).

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. 23.

1. Minutes of June 6, 2003 Board Meeting
McDaniel (909) 396-2500
(smcdaniel@aqmd.gov)

2. Set Public Hearings August 1, 2003 to:
Wallerstein (909) 396-3131
(bwallerstein@aqmd.gov)

(A) Adopt 2003 Air Quality Management Plan for South Coast Air Quality Management District
Chang (909) 396-3186
(echang@aqmd.gov)

On February 25, 2003, staff released the draft 2003 Air Quality Management Plan (AQMP) to satisfy both federal and state Clean Air Act requirements, address the attainment demonstration requirements of the federal Clean Air Act for ozone, PM10, and carbon monoxide, and establish transportation emission budgets based on the latest approved motor vehicle emissions model and planning assumptions. The proposed modifications to the draft 2003 AQMP were also released on June 6, 2003 to incorporate additional revisions to the emissions inventory, modeling, and transportation budgets. Regional public hearings will be held on July 21 and 23, 2003 throughout the four counties to receive public testimony on the 2003 AQMP, followed by the final public hearing on the adoption of the 2003 AQMP on August 1, 2003. (Review: Mobile Source & Stationary Source Committees, June 27, 2003)

(B) Adopt 2003 Coachella Valley PM10 State Implementation Plan
Tisopulos (909) 396-3123
(ltisopulos@aqmd.gov)

On June 21, 2002, the AQMD adopted the 2002 Coachella Valley PM10 SIP (2002 CVSIP) which included a request for extension of the PM10 deadline and met all applicable federal CAA requirements, including a Most Stringent Measures analysis, control measures, and attainment demonstration. U.S. EPA approved the 2002 CVSIP on April 18, 2003. At the time of the 2002 CVSIP adoption, the AQMD committed to revising the emissions inventories, emission budgets, and attainment modeling with the latest approved mobile source emissions estimates and planning assumptions, when they became available. The 2003 Coachella Valley PM10 SIP (2003 CVSIP) updates those elements of the 2002 CVSIP; the control strategies and control measure commitments have not been revised and remain the same as in the 2002 CVSIP. (Review: Mobile Source Committee, June 27, 2003)

Budget/Fiscal Impact

3. Execute Contract to Co-Fund Demonstration of Fuel Cell Water Taxi in Newport Harbor
Liu (909) 396-2105
cliu@aqmd.gov

Fuel cells are a near-zero emissions technology that can be used to displace dirty power generation in a variety of mobile applications. Water taxis, used as harbor marine vessels, are one such application where fuel cells could replace diesel generators currently used to charge on-board batteries for the electric motor. The Center for Commercial Deployment of Transportation Technologies, Seaworthy Systems, Millennium Cell, and Duffy Boats are partnering to demonstrate a fuel cell water taxi in Newport Harbor for total project costs of $781,000. Staff recommends co-funding with these partners to extend the demonstration for two years in an amount not to exceed $101,000 from the Clean Fuels Fund. (Review: Technology Committee, June 27, 2003)

4. Execute Contract to Cosponsor Demonstration Program to Convert Ten Gasoline-Fueled, Sport Utility Vehicles to CNG-Fueled, ULEVs
Liu (909) 396-2105
cliu@aqmd.gov

As part of the overall efforts to expand the deployment of alternative fueled vehicles in the South Coast Air Basin, the AQMD has supported the demonstration and deployment of alternative fueled engines technologies for various vehicle applications. The sport utility vehicle (SUV) is one vehicle type where alternative fueled engine technology has not been widely applied. AQMD staff is proposing to demonstrate the viability of converting gasoline-fueled SUVs to run on natural gas. Evo Transportation, Inc. with funding assistance from the AQMD and buy-down incentives from General Motors will develop a highly visible, small-scale chartered limousine fleet of ten SUVs converted to run on CNG. Staff recommends AQMD’s participation in this contract, with cofunding of $100,000. Total cost of this project is estimated at $450,000. (Review: Technology Committee, June 27, 2003)

5. Issue RFP for Demonstration of Low Emission, Alternative Fuel Heavy-Duty Vehicles Within South Coast Air Basin and Public Awareness Program
Liu (909) 396-2105
cliu@aqmd.gov

This RFP is to solicit and cost-share proposals to provide support for the implementation of low emission, clean fuel and heavy-duty vehicles and supporting infrastructure within the Basin. Low emission, alternative fuel heavy-duty engines produce one-half or less the NOx emissions of their diesel counterparts and a fraction of the particulates. AQMD is specifically seeking both technical and public outreach support for a public-private effort to implement and increase widespread penetration of these technologies in public, commercial and private fleets. Total cost from the AQMD’s Clean Fuels Funds will not exceed $125,000. (Review: Technology Committee, June 27, 2003)

6. Transfer Funds from Clean Fuels Fund to FY 2003-04 General Fund Budget of Science & Technology Advancement, Services and Supplies Major Object, Professional and Special Services Account
Liu (909) 396-2105
cliu@aqmd.gov

Since FY 1999-00, revenues from the state-mandated Clean Fuels Program have been directed to the Clean Fuels Fund. Periodically, funds are transferred from the Clean Fuels Fund to the General Fund to support AQMD activities directly related to the Clean Fuels Program. This action is to transfer $400,000 from the Clean Fuels Fund to supplement the FY 2003-04 General Fund Budget of Science & Technology Advancement, Services and Supplies Major Object, Professional and Special Services Account to support Clean Fuels Program activities. (Review: Technology Committee, June 27, 2003).

7. Issue RFP to Develop and Demonstrate Hydrogen Internal Combustion Engine Vehicles and Five Hydrogen Fueling Stations
Liu (909) 396-2105
cliu@aqmd.gov

The high cost of fuel cell vehicles and their limited availability are restricting the widespread deployment of hydrogen vehicles and infrastructure in the commercial market. Conventional internal combustion engine (ICE) vehicles using compressed natural gas or gasoline can be successfully converted to operate using hydrogen as fuel. This action is to issue a RFP to design, engineer, convert, test, certify, demonstrate, and maintain for 60 months hydrogen ICE vehicles. In support of these hydrogen vehicles, this RFP also includes a component for five hydrogen fueling stations within the South Coast Air Basin, capable of fueling up to 10 vehicles per day and with potential expansion to fueling 20 vehicles per day. (Review: Technology Committee, June 27, 2003)

8. Recognize and Appropriate Funds and Purchase Scientific Modeling Computer for PAMS Program
Tisopulos (909) 396-3123
(ltisopulos@aqmd.gov)

On April 4, 2003, the Board approved the release of an RFQ to select vendors capable of providing a scientific computer for AQMD's air quality modeling. This action is to: 1) recognize and appropriate $132,000 from the Undesignated Fund Balance to the FY 2003-04 Budget for the PAMS Program, and 2) issue a purchase order with Future Computing Solutions Inc. for the purchase of a Hewlett Packard Itanium2 rx2600 computer system. Funds for this capital outlay are allotted under the U.S. EPA Section 105 Grant for the PAMS Program. (Review: Administrative Committee, June 13, 2003)

9. Modify Existing Financial Incentive Program to Assist Dry Cleaners Converting to Non-Perchloroethylene Alternative Cleaning Technologies
Abarca (909) 396-3242
(oabarca@aqmd.gov)

On December 6, 2002, the Board established a $2 million financial incentives grant program to assist dry cleaners converting to non-perchloroethylene alternative garment cleaning technologies, which include carbon dioxide (CO2), wet cleaning, hydrocarbon and silicon-based solvent technologies. The program has been operating successfully since that time. However, in order to offset the high cost of CO2 technology, and in view of a recent study on silicon-based solvents and other operational issues, staff recommends: i) increasing the grant for two CO2 conversions, ii) suspending grants for silicon-based solvent cleaning technologies effective April 4, 2003, and iii) providing partial grants to cleaners under special circumstances, or for specialty wet cleaning systems. (Review: Stationary Source Committee, June 27, 2003)

10. Authorize Purchase of PeopleSoft, Oracle and LibertyNet Software Support
Marlia (909) 396-3148
cmarlia@aqmd.gov

PeopleSoft Integrated Financial/Human Resources System uses Oracle database software. The maintenance support for this system expires August 29, 2003. The AQMD’s Liberty Imaging System provides users access to records maintained in electronic format. Support for this system will expire on July 31, 2003. This action is to obtain approval for the purchase of PeopleSoft, Oracle and LibertyNet software maintenance support for another year. Funds ($259,900) for this expense are included in the FY 2003-04 Budget. (Review: Administrative Committee, June 13, 2003)

11. Recognize and Appropriate Unexpended U.S.EPA Section 105 Grant Funds to FY 2003-04 Budget
Chang (909) 396-3186
(echang@aqmd.gov)

U.S.EPA has approved the redirection of $89,623 in unspent Section 105 funding for three new projects. The projects include the development of a micro-scale inventory for the Alameda Corridor, hiring a facilitator for cumulative impact work, and a sampling and testing program for perc dry cleaning. This action is to recognize and appropriate $59,623 from the Undesignated Fund Balance to the FY 2003-04 Budget to carry out the remainder of these projects. (Review: Administrative Committee, June 13, 2003)

12. Approve 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 benefits adjustment for management, confidential, and attorney employees for FY 2003-04. At the June meeting, the Board approved a comparable salary adjustment for non-union-represented employees, but directed staff to submit the benefits adjustment recommendation to the Personnel Committee for review. (Review: Personnel Committee, July 9, 2003)

13. This item has been withdrawn by staff.

14. Authorize Transfer of Funds to Brain Tumor & Air Pollution Foundation
Wallerstein (909) 396-3131
(bwallerstein@aqmd.gov)

At the February 2003 meeting, the Board recognized 10 percent of Fiscal Year 2002-03 penalty revenue to fund the Brain Tumor & Air Pollution Foundation. This action is to approve transfer of funds to the Brain Tumor & Air Pollution Foundation.

Action Item/No Fiscal Impact

15. Amend Governing Board Meeting Procedures Regarding Receipt of Public Testimony
Baird (909) 396-2302
(bbaird@aqmd.gov)

Chairman Burke has advised that Board meetings will proceed in a more orderly fashion if members of the public submit speaker cards before the meetings begin. An amendment to make the necessary changes to the Board meeting procedures is therefore proposed.

Information Only - Receive and File

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

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

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

This reports the actions taken by the Hearing Board during the period of May 1 through May 31, 2003.

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

This reports the monthly penalties from April 1 through April 30, 2003, and legal actions filed by the District Prosecutor during May through May 31, 2003. A glossary explaining the key terms and Index of District Rules are attached with the penalty report.

19. Lead Agency Projects and Environmental Documents Received by the AQMD Between May 1, 2003 and May 31, 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 May 1, 2003 and May 31, 2003, and those projects for which the AQMD is acting as lead agency pursuant to CEQA. (Review: Mobile Source Committee, June 27, 2003)

20. 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.

21. Report on Negotiated Rulemaking Pilot Program for Metal Finishing
Chang (909) 396-3186
(echang@aqmd.gov)

In February 2002, the Board adopted a workplan to implement eight Strategic Alliance Initiatives. Initiative #8, Negotiated Rulemaking Pilot Program, calls for a trial negotiated rulemaking process for metal finishing to develop a proposed rule which would also undergo the traditional public comment process and subsequent Board consideration. The negotiated rulemaking process resulted in Proposed Amended Rule 1469 - Hexavalent Chromium Emissions from Chrome Plating and Chromic Acid Anodizing Operations, and Proposed Rule 1426 - Emissions from Metal Finishing Operations, which were considered by the Board in May 2003. Initiative #8 also calls for a formal evaluation of the negotiated rulemaking process for presentation to the Board.

22. Report on Major Projects for Information Management Scheduled to Start During First Six Months of FY 2003-04
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 2003-04. (Review: Administrative Committee, June 13, 2003)

23. Items Deferred from Consent Calendar

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

25. 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:

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

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

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

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

30. 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)

31. Annual Report on Implementation of 2002-03 Environmental Justice Enhancements and Proposed 2003-04 Workplan for Public Review
Wallerstein (909) 396-3131
(bwallerstein@aqmd.gov)

Staff has implemented the 2002-03 Environmental Justice Enhancements as described in the final report. In addition, staff will circulate the draft 2003-04 Proposed Enhancements for a 60-day public comment period and return to the Board with a revised proposal for approval. (Review: Administrative Committee, June 13, 2003)

32. Implement FY 2002-03 Environmental Justice Enhancement III-2 – Develop Expedited CEQA Analysis Process for Any Major Project Which Contains Commitments and Milestone Schedules for Implementation of “Super Clean Air Actions” and Amend AQMD's Green Carpet Program
Chang (909) 396-3186
(echang@aqmd.gov)

On September 13, 2002, the Board approved the implementation of Environmental Justice Program Enhancements for FY 2002-03. Enhancement III-2 included a proposal to expedite the CEQA analysis process for any major project that contains commitments and milestone schedules for implementing “super mitigation” actions. In response to Board direction, staff established a stakeholder working group, held two working group meetings, and developed a proposal to implement Enhancement III-2 for Board consideration. The staff proposal would allow a permit applicant access to the AQMD's Green Carpet Program if the permit applicant implements specific clean technologies (“super clean air actions”). The staff proposal also requires amending the AQMD's Green Carpet Program to add an additional criterion (implementing a super clean air action) to qualify for access to the program. (Review: Mobile Source Committee, June 27, 2003)

33. Overview of Clean Cities Programs within AQMD Boundaries
Liu (909) 396-2105
cliu@aqmd.gov

At its June 6, 2003 meeting, the Board directed staff to report back on the Clean Cities Coalitions in the South Coast District to understand what the coalitions are doing and how AQMD can leverage their participation and their outreach to the communities. Staff was also asked to explore opportunities for enhanced interaction with the U.S. Department of Energy on Clean Cities activities. This letter summarizes the current and recent activities of the local Clean Cities Coalitions. Also discussed is the interaction between the AQMD and the local Clean Cities Coalitions and potential future cooperative efforts.

PUBLIC HEARINGS

34. 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)

35. 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; 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)

36. Implement FY 2002-03 Environmental Justice Enhancement I-4 – Continue to Develop Localized Significance Thresholds for Subregions of Air District As Another Indicator of CEQA Significance
Chang (909) 396-3186
(echang@aqmd.gov)

On September 13, 2002, the Board approved the implementation of Environmental Justice Program Enhancements for FY 2002-03. Enhancement I-4 directed staff to continue developing localized significance thresholds through a stakeholder working group. Staff has met with the stakeholder working group three times and developed a proposal to implement Enhancement I-4. The proposal consists of the methodology used to develop subregional localized significance thresholds, as well as the look-up tables by subregion. Look-up tables may be used for projects smaller than or equal to five acres. Project-specific modeling is recommended for projects larger than five acres. (Review: Mobile Source Committee, June 27, 2003)

OTHER BUSINESS

37. Reappropriate Funds to Execute Contract with Port of Long Beach
Liu (909) 396-2105
cliu@aqmd.gov

On April 4, 2003, the Board approved execution of a contract with the Port of Long Beach to retrofit yard equipment with diesel oxidation catalysts. The contract with the Port of Long Beach could not be executed in FY 2002-03 due to delays in identifying a marine terminal tenant to participate in the retrofit program. The Port of Long Beach has recently identified a tenant and provided the equipment list. This action is to reappropriate the funds approved by the Board on April 4, 2003 to FY 2003-04 Budget to allow execution of contract with the Port of Long Beach.

38. Recognize Federal Grant Funds to Implement Green Airport Initiative and Delegate Authority to Executive Officer to Approve and Execute Contracts with Caltrans, Clean Airport Partnership, and EV Rental Cars to Conduct Green Airport Initiative Demonstration at Los Angeles International Airport
Liu (909) 396-2105
cliu@aqmd.gov

The Board approved the recognition of funds to implement the federal Green Airport Initiative in July 2002. However, due to delays in receiving federal grant authorization from the U.S. Department of Transportation Federal Highway Authority (FHWA) and discussions with Caltrans regarding the implementation of the project at Los Angeles International Airport, contracts with Caltrans (to receive federal funds) and Clean Airport Partnership and EV Rental Cars (the implementing organizations) were not executed in FY 2002-03. Staff is recommending that the Board recognize the federal grant funds for $1,982,615 and delegate authority to the Executive Officer to approve and execute agreements with Caltrans (to receive funds) and with Clean Airport Partnership and EV Rental Cars (to implement the program). The total project funding is $3,967,615 which includes matching funds from EV Rental Cars of $1,985,000.

39. Appropriate Funds from Designation for Litigation/Enforcement to District Counsel’s FY 2003-04 Budget and Execute Contract Modification for Continual Legal Representation in Fleet Rules Litigation
Baird (909) 396-2302
(bbaird@aqmd.gov)

On June 9, 2003, the United States Supreme Court agreed to hear the case challenging AQMD’s fleet rules, Engine Manufacturers Association v. South Coast AQMD. This action is to appropriate $187,500 from the Designation for Litigation/Enforcement to District Counsel’s FY 2003-04 Budget, Professional and Special Services account, and to authorize the modification of the contract with Wilmer, Cutler & Pickering for an additional $137,000 (a total amount not to exceed $187,500) to represent AQMD in the Supreme Court. The Executive Officer will allocate the remaining $50,000 to either Wilmer, Cutler & Pickering or Shute, Mihaly & Weinberger, or both if needed.

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); Engine Manufacturers Association, et al. v. SCAQMD, et al., United States Court of Appeals Case Nos. 01-56685 and 01-56688; and People of the State of California ex rel South Coast Air Quality Management District v. BP West Coast Products, LLC, et al., Los Angeles Superior Court Case No. BC291876. It is also necessary for the Board to recess to closed session pursuant to Government Code section 54956.9(b) to confer with its counsel regarding significant exposure to litigation (one case).

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
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