GOVERNING BOARD AGENDA
MEETING, March 5, 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

Recognition of Former Board Member Leonard Paulitz

• Burke

Report on the State of Air Quality (No Written Material)
At the recent Governing Board Retreat, the Chairman requested that the AQMD staff invite ARB staff to make a presentation on the progress made in improving ozone and particulate matter air quality in California, with the focus on the South Coast Air Basin, and the recent air quality trend. The report will also include a discussion of the 8-Hour Ozone and PM2.5 air quality standards, and remaining challenges.

• CARB Staff

Note: Consent Calendar items held for discussion will be moved to Item No. 23.

1. Minutes of January 29-30, 2004 Board Retreat
Wallerstein (909) 396-3131
(bwallerstein@aqmd.gov)

2. Minutes of February 6, 2004 Board Meeting
McDaniel (909) 396-2500
(smcdaniel@aqmd.gov)

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

(A) Adopt Proposed Rule 1470 - Requirements for Stationary Diesel-fueled Internal Combustion and Other Compression Ignition Engines
Chang (909) 396-3186
(echang@aqmd.gov)

Proposed Rule 1470 will adopt the Air Toxics Control Measure (ATCM) for stationary compression ignition engines, as adopted by the ARB Governing Board in February 2004. Proposed Rule 1470 includes more stringent requirements than the ATCM for engines located on school grounds or 100 meters or less from existing schools. (Review: Stationary Source Committee, February 27, 2004)

(B) Amend Rules 403 - Fugitive Dust, 1186 - PM10 Emission Reductions from Paved and Unpaved Roads and Livestock Operations, and 403.1 - Supplemental Fugitive Dust Control Requirements for Coachella Valley Sources
Tisopulos (909) 396-3123
(ltisopulos@aqmd.gov)

In response to PM10 SIP requirements, new fugitive dust control measures were included in the 2003 AQMP and the 2002 Coachella Valley PM10 SIP (CVSIP) to increase the stringency of current Best Available Control Measures (BACM) rules and rule amendments adopted in 1997. The new measures were based on analysis of subsequent BACM implementation in other areas and in response to comments by U.S. EPA. The proposed amendments will implement 2003 AQMP control measure BCM-07 and the AQMD rulemaking portion of the 2002 CVSIP. These amendments incrementally reduce fugitive dust PM10 emissions from previously-controlled fugitive dust sources including construction, road, and Coachella Valley agricultural sources and backstop reductions achieved by local Coachella Valley programs. The amendments will also enhance the clarity and enforceability of the fugitive dust rules. (Review: Stationary Source Committee, January 23, 2004 and February 27, 2004.)

Budget/Fiscal Impact

4. Execute Contract to Develop and Demonstrate Variable Gaseous Fueled Engine
Liu (909) 396-2105
cliu@aqmd.gov

The Board has previously approved projects to develop transit buses that operate on hydrogen-CNG fuel mixtures, which have demonstrated significantly lower emissions than buses operating on CNG only. This action requests approval and award to develop a variable gaseous fueled engine for future hydrogen-natural gas blend technologies, at an AQMD cost not to exceed $30,000 from the Clean Fuels Fund. The total project cost is estimated to be $178,786. (Review: Technology Committee, February 27, 2004)

5. Execute Contracts for AQIP Proposals Received During First Three Quarters of 2003 and Issue RFP
Liu (909) 396-2105
cliu@aqmd.gov

Rule 2202 - On-Road Motor Vehicle Mitigation Options was adopted on December 8, 1995 and amended on February 6, 2004. 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 first three quarters of 2003 and recommends projects for funding. In addition, staff is recommending awarding contracts to conduct the Lawn Mower Exchange Program. The amount available for this period is $3,292,021. Lastly, staff is recommending that a new RFP be released to solicit projects to meet Rule 2202 emission reduction targets projected for Calendar Year 2004. (Review: Mobile Source Committee, February 27, 2004)

6. Execute Contracts to Develop and Demonstrate Hydrogen Internal Combustion Engine Vehicles
Liu (909) 396-2105
cliu@aqmd.gov

On July 11, 2003, the Board approved the release of an RFP to design and demonstrate a fleet of hydrogen internal combustion engine (ICE) vehicles with corresponding hydrogen fueling stations at five cities within the South Coast Air Basin. Three proposals for the vehicles and nine proposals for the fueling stations were received, subsequently reviewed, and scored by two separate panels of outside experts. This action requests award of the contract to develop and demonstrate the hydrogen-ICE vehicles. A separate request on fueling stations will be forwarded for consideration in a future Board meeting. Staff recommends $2,280,000 funding from AQMD to develop and demonstrate 30 hydrogen-ICE vehicles or $2,030,000 if Department of Defense, National Automotive Center provides $500,000 co-funding for engineering costs and an additional five vehicles, for a total of 35 vehicles. (Review: Technology Committee, February 27, 2004)

7. Execute Contracts for FY 2002–03 Carl Moyer Memorial Air Quality Standards Attainment Program Using Carl Moyer and Clean Fuels Funds
Liu (909) 396-2105
cliu@aqmd.gov

On October 10, 2003, proposals were received in response to an RFP for the Carl Moyer Memorial Air Quality Standards Attainment Program. A total of $19,552,575 is available for awards. This amount is comprised of $8,148,088 allocated to the AQMD under Proposition 40, and $11,404,487 in returned and rollover funds resulting from returns of all previous Carl Moyer awards. The $11,404,487 is comprised of $9,071,372 in Carl Moyer funds and $2,333,115 from the Clean Fuels Fund originally designated as local match to the Moyer Program. Staff recommends Carl Moyer awards in the amount of $18,927,986. Staff also recommends $201,774 for a project from funds allocated by CARB to the AQMD Carl Moyer Fund as an inter-district project fund. In addition, staff recommends an amendment to an existing contract. (Review: Technology Committee, February 27, 2004)

8. Issue RFP to Purchase 84-Passenger CNG School Bus for School Bus Loaner Program and Authorize Staff to Transfer Ownership of Ford E450 Demonstration Bus to Transportation Foundation of Los Angeles
Liu (909) 396-2105
cliu@aqmd.gov

Staff proposes to issue an RFP to purchase an 84-passenger CNG school bus and to initiate a school bus loaner program to facilitate the introduction of CNG fuel to school bus fleets. This demonstration will provide an opportunity for entities to experience alternative fueled school buses in actual fleet operations. Staff also proposes the donation of AQMD’s natural gas-powered Ford E450 Demonstration Bus to Transportation Foundation of Los Angeles as in-kind participation in a joint study with the City of Hope on incidences of cancer and mortality rate in the south coast region. (Review: Technology Committee, February 27, 2004)

9. Approve Changes to Microturbine Program Funded by Rule 1309.1 - Priority Reserve Mitigation Fees
Liu (909) 396-2105
cliu@aqmd.gov

The Board previously authorized the Executive Officer to purchase and install sixty-three microturbines using Rule 1309.1 - Priority Reserve mitigation fees. Forty-two were to be installed in Los Angeles County and seven were to be installed in each of the counties of Orange, Riverside and San Bernardino. This proposal would: 1) allow the Executive Officer to locate more microturbines in any of the four counties for worthwhile projects; and 2) return $1,000,000 back to the Rule 1309.1 - Priority Reserve Fund. (Review: Technology Committee, February 27, 2004)

10. Execute Contract to Purchase Two Carbon Analyzers and Reallocate Remaining Funds Under PM2.5 Program
Hogo (909) 396-3184
hhogo@aqmd.gov

On December 5, 2003, the Board recognized revenue from U.S. EPA Section 103 Grant funds for the PM2.5 Program, and approved release of an RFQ to purchase two carbon analyzers to augment PM2.5 speciation in preparation for the next State Implementation Plan planning cycle for PM2.5. This action is to issue a purchase order with Atmoslytic Inc. for an amount not to exceed $94,600, to purchase two carbon analyzers to support the PM2.5 program. Funds for the purchase of this capital outlay are available in the FY 2003-04 Budget for the PM2.5 program. In addition, staff is requesting that the remaining allocated funds of $25,400 be reallocated to the Science and Technology Advancement FY 2003-04 Budget, Services and Supplies Major Object, Laboratory Supplies account, to support the PM2.5 program. This reallocation was discussed with and accepted by U.S. EPA. (Review: Administrative Committee, February 13, 2004)

11. Execute Contracts to Purchase Various Laboratory Equipment for MATES-III and PAMS Programs
Hogo (909) 396-3184
hhogo@aqmd.gov

On February 6, 2004, the Board released RFQs to purchase various laboratory equipment to conduct the MATES-III Program. The Board also redirected funds to purchase equipment for the PAMS Program. This action is to issue purchase orders with various vendors for the purchase of the following fixed assets: Energy Dispersive X-Ray Fluorescence for an amount not to exceed $115,000; High Pressure Liquid Chromatograph for an amount not to exceed $55,959; Ion Chromatograph for an amount not to exceed $71,190; and Gas Chromatograph with Flame Ionization Detector for an amount not to exceed $72,162. Funds for the purchase of these capital outlays are available in the FY 2003-04 Budget for the MATES-III and PAMS 12th year Programs. (Review: Technology Committee, February 27, 2004)

12. Execute Contract for Coachella Valley PM10 Clean Streets Management Program
Hogo (909) 396-3184
hhogo@aqmd.gov

Coachella Valley Association of Governments (CVAG) has been overseeing a PM10 Clean Streets Management Program as part of the Coachella Valley PM10 SIP. CVAG indicated that in order to continue the program, they would need additional funding assistance over the next three years. CVAG is in the process of seeking additional funding that would sustain the program. Meanwhile, CVAG is requesting funding assistance in the short-term. Staff recommends executing a contract with CVAG for funding the Coachella Valley PM10 Clean Streets Management Program at a cost not to exceed $258,075 for a three-year period from the Rule 1309.1 Priority Reserve Fund. (Review: Technology Committee, February 27, 2004)

13. Approve AQMD Annual Investment Policy and Delegation of Authority to Appointed Treasurer to Invest AQMD Funds
Pearce (909) 396-2828
(rpearce@aqmd.gov)

State law requires a local government entity annually to provide a statement of investment policy for consideration at a public meeting, and to renew its delegation of authority to its treasurer to invest or to reinvest funds of the local agency. (Review: Investment Oversight Committee, February 20, 2004)

Action Item – No Fiscal Impact

14. Annual Meeting of Brain Tumor and Air Pollution Foundation
Wallerstein (909) 396-3131
(bwallerstein@aqmd.gov)

This item is to conduct the annual meeting of the Brain Tumor and Air Pollution Foundation. The Foundation staff will present an annual report detailing the research supported by the Foundation over the past year, the Foundation’s plans for the future, and a financial report. In addition, the AQMD Board, as the Foundation’s sole member, must approve changes to the Foundation’s bylaws and articles of incorporation required to receive a recent grant from the AQMD, and possible disposition thereof.

Information Only - Receive and File

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

This report highlights the January 2004 outreach activities of Public Affairs which include: Environmental Justice Update, Community Events/Public Meetings, Business Assistance, and Local Governmental Activity.

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

This reports the actions taken by the Hearing Board during the period of January 1 through January 31, 2004.

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

This reports the monthly penalties from December 1 through December 31, 2003, and legal actions filed by the District Prosecutor during January 1 through January 31, 2004. A glossary explaining the key terms and Index of District Rules are attached with the penalty report.

18. 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 January 1, 2004, and January 31, 2004, and those projects for which the AQMD is acting as lead agency pursuant to CEQA. (Review: Mobile Source Committee, February 27, 2004)

19. 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.

20. Status Report on Major Projects for Information Management Scheduled to Start During Last 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 provide the monthly status report on major automation contracts and projects to be initiated by Information Management during the last six months of FY 2003-04.

21. FY 2003-04 Contract Activity
Pearce (909) 396-2828
(rpearce@aqmd.gov)

The attached report lists the number of contracts let during the first six months of FY 2003-04, their respective dollar amounts, award type, and the authorized contract signatory for the AQMD.

22. Report on Small Business Roundtable
Ganguli (909) 396-3185
(aganguli@aqmd.gov)

A Small Business Roundtable was convened on January 16, 2004 at AQMD Headquarters, comprised of representatives from AQMD Governing Board and key government organizations that provide small business loans and financial assistance. The purpose of the meeting was to build strategic partnerships with organizations primarily involved in business development, business retention and business assistance. As a result of the meeting, several action items are being pursued to work closely with participating organizations and assist the small business community to address their concerns. (Review: Administrative Committee, February 13, 2004)

23. Items Deferred from Consent Calendar

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

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

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

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)
Chair: Burke
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 February 3-4, 2004. (Review: Technology Committee, February 27, 2004)

33. Amend Charter for Ethnic Community Advisory Group
Ganguli (909) 396-3185
(aganguli@aqmd.gov)

The Ethnic Community Advisory Group (ECAG) serves the Board with specialized expertise on the impact of air quality issues on the ethnic communities in the South Coast basin. ECAG's current membership criteria allows for up to 30 representatives from the Latino, African-American, Asian Pacific Islander and Native American communities. There is no requirement regarding representation by county in the membership criteria. This action will amend the charter to ensure that the membership reflects the geographic diversity of the four counties. (Review: Administrative Committee, February 13, 2004)

PUBLIC HEARINGS

34. Adopt Rule 1148.1 - Oil and Gas Production Operations and Amend Rule 222 - Filing Requirements for Specific Emission Sources Not Requiring a Written Permit Pursuant to Regulation II (Continued from the January 9, 2004 Board Meeting)
Tisopulos (909) 396-3123
(ltisopulos@aqmd.gov)

Proposed Rule 1148.1 will implement Control Measure FUG-05 of the 2003 AQMP by reducing VOC emissions from well cellars and wellheads at oil and gas production operations through increased inspection and maintenance, and control of produced gas emissions. Proposed Amended Rule 222 will include well cellars and wellheads at oil and gas production facilities subject to Proposed Rule 1148.1 in the filing program in lieu of conventional permitting. Currently, this equipment is exempt from written permit. (Review: Stationary Source Committee, November 21, 2003, January 23, 2004 and February 27, 2004)

35. Amend Rule 1132 - Further Control of VOC Emissions From High-Emitting Spray Booth Facilities
Tisopulos (909) 396-3123
(ltisopulos@aqmd.gov)

Proposed Amended Rule 1132 corrects a SIP deficiency regarding Executive Officer discretion in the Alternative Compliance Plan Section of the rule and clarifies and improves compliance determination. (Review: Stationary Source Committee, January 23, 2004)

36. Annual RECLAIM Audit Report for 2002 Compliance Year
Coy (909) 396-2434
(ccoy@aqmd.gov)

The annual report on the NOx and SOx RECLAIM program is prepared in accordance with Rule 2015 - Backstop Provisions. The report assesses emission reductions, average annual price and availability of RECLAIM Trading Credits (RTCs), job impacts, compliance issues, and other measures of performance for the ninth year of this program. This report also contains the program review as required under Rule 2020 - RECLAIM Reserve, regarding generation and use of emission reductions, and participation in the RECLAIM AQIP and Mitigation Fee Program. (Review: Stationary Source Committee, January 23, 2004)

37. Approve and Adopt Technology Advancement Clean Fuels Program Annual Report and Plan Update
Liu (909) 396-2105
cliu@aqmd.gov

As a requirement of the Clean Fuels Program funding, the Technology Advancement Office must submit to the Legislative Analyst by March 31 of each year an approved Annual Report for the past year and Plan Update for the current calendar year. Staff has reviewed the Clean Fuel Program with the Clean Fuels Advisory Group, the Technology Advancement Advisory Group, and other technical experts at a two-day retreat on January 15 and 16, 2004. The suggestions from the Advisory Groups and participants are included in the Plan Update. Staff is submitting the Technology Advancement Clean Fuels Program Annual Report and Plan Update for Board approval. (Review: Technology Committee, February 27, 2004)

OTHER BUSINESS

38. Approve Expenditure of Clean Fuel Funds for Testing Gasoline-Hybrid Transit Buses and Retrofits of Oceangoing Vessels
Liu (909) 396-2105
cliu@aqmd.gov

As a result of returned funds from the Carl Moyer Program, staff has identified $2,333,115 from the Clean Fuels Fund originally allocated as local match to the Moyer Program. Staff recommends that $600,000 of these returned funds be allocated for evaporative emissions testing of gasoline-hybrid transit buses and for testing retrofits of oceangoing vessels which are eligible equipment under the Moyer Program. (Review: Technology Committee, February 27, 2004)

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. SCAQMD, et al., U.S. District Court Case No. CV-03-1656HLH (JWJx); National Paint & Coatings Association, Inc. v. SCAQMD, U.S. District Court Case No. CV-03-1578HLH (JWJx); 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 and Our Children's Earth v. SCAQMD, U.S. District Court Case No. 03-CV-6985; South Coast Air Quality Management District v. National Pediatric Support Services, Inc., Los Angeles Superior Court Case No. KC043521G; and United States Department of Transportation, et al. v. Public Citizen, et al., United States Supreme Court Case No. 03-358.

ACRONYMS

AQIP = Air Quality Investment Program
ARB/CARB = California Air Resources Board
AVR = Average Vehicle Ridership
Cal/EPA = California Environmental Protection Agency
CARB = California Air Resources Board
CEMS = Continuous Emissions Monitoring Systems
CEQA = California Environmental Quality Act
CE-CERT = College of Engineering-Center for Environmental Research and Technology
CNG = Compressed Natural Gas
CO = Carbon Monoxide
CTG = Control Techniques Guideline
EJ = Environmental Justice
EPA = Environmental Protection Agency
EV = Electric Vehicle
FY = Fiscal Year
HRA = Health Risk Assessment
IAIC = Interagency AQMP Implementation Committee
IGA = Intergovernmental Affairs
LAER = Lowest Achievable Emissions Rate
LEV = Low Emission Vehicle
LNG = Liquefied Natural Gas
MOU = Memorandum of Understanding
MSERCs = Mobile Source Emission Reduction Credits
MSRC = Mobile Source (Air Pollution Reduction) Review Committee
NESHAPS = National Emission Standards for Hazardous Air Pollutants
NGV = Natural Gas Vehicle
NOx = Oxides of Nitrogen
NSPS = New Source Performance Standards
NSR = New Source Review
PAMS = Photochemical Assessment Monitoring Stations
PAR = Proposed Amended Rule
PM10 = Particulate Matter < 10 microns
PM2.5 = Particulate Matter < 2.5 microns
PR = Proposed Rule
RFP = Request for Proposals
RFQ = Request for Quotations
SCAG = Southern California Association of Governments
SIP = State Implementation Plan
SOx = Oxides of Sulfur
TCM = Transportation Control Measure
ULEV = Ultra Low Emission Vehicle
VMT = Vehicle Miles Traveled
VOC = Volatile Organic Compound
ZEV = Zero Emission Vehicle