GOVERNING BOARD AGENDA
MEETING, June 4, 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

Note: Consent Calendar items held for discussion will be moved to Item No. 27.

1. Minutes of May 7, 2004 Board Meeting
McDaniel (909) 396-2500
(smcdaniel@aqmd.gov)

2. Set Public Hearings July 9, 2004 to Consider Amendments and/or Adoption to AQMD Rules and Regulations
Wallerstein (909) 396-3131
(bwallerstein@aqmd.gov)

(A) Amend Rule 1113 - Architectural Coatings
Tisopulos (909) 396-3123
(ltisopulos@aqmd.gov)

The proposed amendment addresses SIP approvability issues identified by the U.S. EPA relative to the alternative compliance option of the rule, the Averaging Compliance Option. (Review: Stationary Source Committee, May 28, 2004)

(B) Amend Rule 1162 - Polyester Resin Operations
Tisopulos (909) 396-3123
(ltisopulos@aqmd.gov)

The proposed amendment changes the final compliance date for requiring the use of nonatomizing spray application of gel coat until July 1, 2005, and revises the definition of nonatomizing application of gel coats. (Review: Stationary Source Committee, April 23, 2004, May 28, 2004)

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

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

Budget/Fiscal Impact

3. Recognize and Appropriate Funds from Environmental Professionals Training Institute of Taiwan Environmental Protection Administration
Chang (909) 396-3186
(echang@aqmd.gov)

The Environmental Professionals Training Institute (EPTI) of Taiwan Environmental Protection Administration has allocated funds to prepare and conduct a comprehensive Integrated Air Quality Control training program for Stationary Sources for 15 EPTI staff members. The funds will be used to cover AQMD staff time to prepare and conduct a 7-day intensive training program in air quality forecasting, developing emission inventories, preparing an air quality management plan, rule development, permitting, and enforcement. In addition, the funds received will cover necessary hotel accommodations, transportation and training materials for EPTI staff.

4. Execute Contract to Purchase 84-Passenger CNG School Bus and Supporting Services for Purpose of Implementing School Bus Demonstration/Loaner Program
Liu (909) 396-2105
cliu@aqmd.gov

On March 5, 2004, the Board approved an RFP to purchase an 84-passenger CNG school bus for the purpose of implementing a school bus demonstration/loaner program. Three proposals were received and evaluated by a panel according to the criteria established in the RFP. Based on this evaluation, staff recommends the contract be awarded to Bus West for an amount not to exceed $145,000. This award will include services to facilitate the demonstration/loaner program. (Review: Technology Committee, May 28, 2004)

5. Execute Contracts to Generate Emission Reduction Credits Under Rule 1121 Mitigation Fee Program
Liu (909) 396-2105
cliu@aqmd.gov

As of October 7, 2003, the AQMD received a total of $804,452 from water heater manufacturers as emission mitigation fees under Rule 1121. The AQMD will collect this mitigation fee until December 2004. In November 2003, a Program Announcement was issued to solicit NOx emission reduction projects. This action is to execute contracts worth approximately $804,197 to fund stationary and mobile source NOx emission reduction projects. (Review: Technology Committee, April 23, 2004)

6. Award Multiple Contracts for Natural Gas Refueling Station Infrastructure and Reissue RFP
Liu (909) 396-2105
cliu@aqmd.gov

On October 3, 2003 the Board approved release of a $1.5 million RFP to solicit proposals for natural gas refueling station infrastructure projects from the Clean Fuels Fund. Twenty-six proposals were received by the RFP deadline of December 16, 2003. Staff believes that 16 of these proposals deserves funding and proposes that funding, in the amount of $1,280,000 reverted back to the AQMD from its AES Settlement Fund and Clean Fuels Fund be used to fund these projects. This action is to de-obligate prior funding commitments, revert funds back to the Clean Fuels Fund, and to approve multiple contract awards from this RFP. Total AQMD funding for these projects shall not exceed $2,742,323. Staff is recommending that the RFP be reissued to solicit additional natural gas fueling infrastructure projects with a budget ranging from $726,046 to $1,726,046. (Review: Technology Committee, April 23, 2004)

7. Amend Contract to Fund Hydrogen Internal Combustion Engine Generator
Liu (909) 396-2105
cliu@aqmd.gov

On June 6, 2003, the Board approved a contract with Stuart Energy to install an electrolyzer to produce hydrogen for vehicle fueling and demonstrate a hydrogen internal combustion engine (ICE) generator. As part of that award, the California Energy Commission (CEC) had agreed to co-fund $100,000 for the ICE generator. The CEC currently cannot fulfill this obligation. This action is to fund the ICE generator through the Clean Fuels Fund in an amount not to exceed $100,000. (Review: Technology Committee, April 23, 2004)

8. This item was withdrawn by staff.

9. Enter into MOU with SCAG Regarding Participation in Clean Cities Program
Liu (909) 396-2105
cliu@aqmd.gov

SCAG has requested that AQMD enter into an MOU to participate in the SCAG Clean Cities Program. The Clean Cities Program is administered by the federal Department of Energy and implemented at the local level by Clean Cities Coalitions. Participation is voluntary. (Review: Technology Committee, May 28, 2004)

10. Issue RFP for Evaporative Emission Testing of Gasoline Heavy-Duty Hybrid-Electric Bus
Liu (909) 396-2105
cliu@aqmd.gov

Gasoline heavy-duty vehicles undergo emission certification of both their engine and their fuel system. Engine exhaust emissions are directly measured in a laboratory. However, unlike light-duty cars and trucks, the heavy-duty fuel evaporative control system is not directly tested because of the large size of these vehicles; these systems are certified through a technical evaluation. Because of this indirect method of evaporative certification and the lack of in-use evaluations, gasoline heavy-duty vehicles may have higher hydrocarbon emissions than expected. On March 5, 2004, the Board authorized the use of returned Carl Moyer Program funds for emission testing of gasoline hybrid-electric buses and marine vessels. This action is to issue an RFP to conduct the evaporative emission testing of a gasoline hybrid-electric bus. (Review: Technology Committee, May 28, 2004)

11. Issue Program Announcement and Establish $1 Million Special Fund for PM10 or NOx Reduction Projects in Disproportionately Impacted Areas
Liu (909) 396-2105
cliu@aqmd.gov

Under Rule 1309.1, power plants have paid the AQMD mitigation fees for the privilege of obtaining PM10 credits from AQMD's Priority Reserve. These fees are to be used for PM10 reduction projects. By settlement agreement in CBE; OCE v. SCAQMD, U.S. District Court Case No. 03-06985 WMB (CTx), the AQMD agreed to allocate $1 million of these funds to emission reduction projects in disproportionately impacted areas and to establish a special fund for such projects. This action is to take $1 million from the 1309.1 Priority Reserve Fund and create a special fund for PM10 and/or NOx Reduction Projects in disproportionately impacted areas, and to release a Program Announcement to solicit such emission reduction projects for funding. (Review: Technology Committee, May 28, 2004)

12. Execute Contract to Purchase Ozone Analyzers for Ambient Air Monitoring Network
Hogo (909) 396-3184
hhogo@aqmd.gov

On April 2, 2004, the Board approved release of an RFQ to purchase sixteen (16) ozone analyzers to replace high maintenance units in the ambient monitoring network, as part of a two-year replacement program to replace thirty-two (32) analyzers. The $120,000 allocated to this purchase is sufficient to purchase eight (8) additional ozone analyzers now, rather than waiting until next year’s PAMS allocation. This action is to increase the number of ozone analyzers to be purchased from sixteen (16) to twenty-four (24) and execute a contract with Teledyne/Advanced Pollution Instrumentation for an amount not to exceed $118,000 to purchase twenty-four (24) continuous ozone analyzers. Funds for this capital outlay are allocated under a U.S. EPA 105 Grant for the PAMS program. (Review: Administrative Committee, May 14, 2004)

13. Recognize, Appropriate, and Reallocate Funds from U.S. Department of Defense to Conduct Feasibility Demonstration to Measure Low-Level Pollutant Concentrations and Issue RFQs
Hogo (909) 396-3184
hhogo@aqmd.gov

In August 2003, the Board authorized the execution of a contract with the U.S. Department of Defense (DOD) to demonstrate the feasibility to measure low-level pollutant concentrations. At that time, staff proposed a budget to conduct the work including acquisition of several measurement equipment. Subsequent discussions with U.S. DOD staff have identified specific fixed assets and supplies required for the project. This action is to reallocate funds in the FY 2003-04 to the FY 2004-05 Budget upon Board approval of the FY 2004-05 Budget, based on discussions with U.S. DOD to accommodate these changes, and approve release of four RFQs to purchase various equipment. (Review: Administrative Committee, April 9 and May 14, 2004)

14. Execute Contract for Occupational Health Services
Tharp (909) 396-3018
etharp@aqmd.gov

The current contract for occupational health services expires on June 30, 2004. On February 6, 2004, the Board approved release of an RFP to solicit proposals from firms interested in providing these services for the next three-year period. This action is to execute a contract with the Center for Occupational and Environmental Health at the University of California, Irvine, through June 30, 2007, for an amount not to exceed $10,000 per year. Funding for this contract has been included in the FY 2004-05 Budget request and will be requested in successive fiscal years. (Review: Administrative Committee, May 14, 2004)

15. Execute Contract for Student Co-op Program
Pearce (909) 396-2828
(rpearce@aqmd.gov)

Since August 1995, the AQMD has contracted with the Cal Poly Pomona Foundation for the services of student interns in Finance. These interns perform such tasks as assisting in the fixed asset inventory, financial report reconciliation, and miscellaneous payroll and accounting tasks. Over the past three years, a total of $72,000 has been expended. It is estimated that $24,000 of student intern services will be needed in FY 2004-05. Funds for this item have been included in the FY 2004-05 Budget. (Review: Administrative Committee, May 14, 2004)

16. Issue RFP to Conduct Survey and Prepare Guidance Document for Appropriate School Site Selection
Ganguli (909) 396-3185
(aganguli@aqmd.gov)

AQMD has faced many issues arising from incompatible school site selection, with school children being impacted by air pollution and toxic emissions. There is a need for a school site selection guidance document that can be used effectively by local school districts. This RFP will solicit proposals to survey the school districts within AQMD jurisdiction regarding their future plans, develop a guidance document for use by the school districts, conduct a Focus Group of 12 or more school officials, and finalize the guidance document incorporating comments received. This RFP will not exceed $75,000 and will follow an expedited timeline. Staff expects to recommend contract award(s) at the August 6, 2004 Board Meeting, with project completion no later than December 2004. (Administrative Committee: May 14, 2004)

17. Approve Additional Contract Awards as Part of MSRC’s FY 2003-04 AB 2766 Discretionary Fund Work Program; Allocate Funds for Technical Advisor Services for FY 2004-05; Grant MSRC Authority to Adjust Project Costs Up to Five Percent; and Authorize Board Chairman to Execute Agreements
LaPisto-Kirtley

The MSRC developed a $14.5 million FY 2003-04 Work Program and subsequently released seven solicitations. On May 7, 2004, the AQMD Board approved several awards recommended by the MSRC under three program solicitations. At its May 27, 2004 meeting, the MSRC recommended multiple contract awards from proposals received under two more solicitations and decided not to fund any proposals received under a sixth solicitation. Additionally, they recommended funding projects from three eligible backup lists using turn-back funds. The MSRC requests the AQMD Board’s approval of these awards as part of the FY 2003-04 Work Program. Proposals received under the last solicitation, the Diesel Exhaust After-Treatment Retrofit Program, will be considered by the MSRC next month and will be subsequently presented for AQMD Board approval. The MSRC further recommends allocating funds as part of the FY 2004-05 Work Program to continue Technical Advisor services through June 30, 2005. Last, the MSRC requests authority to adjust contracts up to five percent and authority for the Board Chairman to execute agreements. (Review: Mobile Source Air Pollution Reduction Review Committee, May 27, 2004)

18. Amend Contract for Litigation Services
Wiese (909) 396-3460
(kwiese@aqmd.gov)

This action is to authorize the Executive Officer to amend a contract with the law firm of Shute, Mihaly & Weinberger for an additional $30,000.

Information Only - Receive and File

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

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

20. Report to Legislature and CARB on AQMD's Regulatory Activities for Calendar Year 2003
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.

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

This reports the actions taken by the Hearing Board during the period of April 1 through April 30, 2004.

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

This reports the monthly penalties from March 1 through March 31, 2004, and legal actions filed by the District Prosecutor during April 1 through April 30, 2004. A glossary explaining the key terms and Index of District Rules are attached with the penalty report.

23. 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 April 1, 2004, and April 30, 2004, and those projects for which the AQMD is acting as lead agency pursuant to CEQA. (Review: Mobile Source Committee, May 28, 2004)

24. 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.

25. Report of RFPs and RFQs Scheduled for Release in June
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 June. (Review: Administrative Committee, May 14, 2004)

26. 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.

27. Items Deferred from Consent Calendar

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

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

30. 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:

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

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

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

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

35. 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)

36. 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 April 20-21, 2004. (Review: Technology Committee, May 28, 2004)

37. Adopt Resolution to Issue Bonds to Retire Unfunded Liability for Employees Participating in San Bernardino County Employees' Retirement System
Pearce (909) 396-2828
(rpearce@aqmd.gov)

The Board, at its April 2, 2004 meeting, authorized the preparation of legal and disclosure documents necessary to permit AQMD to issue Pension Obligation Bonds to retire the Unfunded Actuarial Accrued Liability due to the San Bernardino County Employees' Retirement Association. This action is to adopt a resolution authorizing the necessary actions required to issue the 2004 AQMD Pension Obligation Bonds. (Review: Administrative Committee, May 14, 2004)

38. Request California Air Resources Board to Submit Fleet Rules to United States Environmental Protection Agency for Waiver of Preemption Under Clean Air Act Section 209
Baird (909) 396-2302
(bbaird@aqmd.gov)

In 2000 and 2001 the Board adopted a series of clean fleet rules requiring public and certain private fleets to acquire vehicles using clean alternative fuels when adding to or replacing vehicles in their fleets. The United States Supreme Court on April 28, 2004, held that the fleet rules are preempted by the federal Clean Air Act and therefore may not be enforced, at least as far as they regulate privately-owned fleets. This action is to request CARB to submit the fleet rules to U.S. EPA for waiver of preemption under section 209 of the Clean Air Act, which would allow the rules to again be enforced. (Review: Mobile Source Committee, May 28, 2004)

PUBLIC HEARINGS

39. Adopt Executive Officer's FY 2004-05 AQMD Budget and Work Program
Pearce (909) 396-2828
(rpearce@aqmd.gov)

The Executive Officer's Budget for FY 2004-05 represents the input over the past several months from Board members, staff, and the public. This year's process included meetings of the Budget Advisory Committee; a public hearing on February 6, 2004 to receive input on the AQMD's Program Goals and Objectives; and four budget workshops, two for the public held on April 22 and May 25, 2004 and two for the Board held on April 30 and May 7, 2004. This submittal transmits the required appropriations and reserves necessary to adopt the proposed budget. (Review: Administrative Committee, May 14, 2004)

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

Staff has prepared two amendment proposals for Regulation III – Fees for Board consideration. Option A consists of a Consumer Price Index (CPI) adjustment of 1.6 percent and has additional proposals to better align select program revenue and expenses. To partially address the shortfall between revenue and expenditures for FY 2004-05 that resulted primarily from legally mandated funding requirements, staff has prepared an alternative proposal, Option B. Option B is identical to Option A except that fees are increased by 12 percent over two years. In FY 2004-05, the fees are increased across the board by 6 percent; and additionally in FY 2005-06, they are increased by another 6 percent. The Board may reconsider the increase in FY 2005-06 based on their assessment of the fiscal need at that time.

41. Amend Rule 2015 - Backstop Measures
Chang (909) 396-3186
(echang@aqmd.gov)

The proposed amendment to Rule 2015 will address an EPA SIP approvability issue regarding breakdown emissions. The proposed changes would establish a procedure to monitor breakdown emissions and to mitigate any emissions not covered by RTCs. (Review: Stationary Source Committee, April 23, 2004 and May 28, 2004)

42. Amend Rules 1186.1 - Less-Polluting Sweepers and 1196 - Clean On-Road Heavy-Duty Public Fleet Vehicles
Hogo (909) 396-3184
hhogo@aqmd.gov

Proposed amendments to Rules 1186.1 and 1196 will extend sunset dates to allow the acquisition of non-rule compliant vehicles where an approved Technical Infeasibility Certification has been issued based on the unavailability of an alternative-fuel refueling station within five miles of the vehicle storage or maintenance yards. The proposed amendments are in response to near-term public fleet heavy-duty vehicle acquisitions that are located in service areas where alternative fuel refueling stations do not yet exist. The proposed amendment for Rule 1186.1 would also allow approved Technical Infeasibility Certifications to be issued where alternative-fuel sweeper models do not exist for specific applications. (Review: Mobile Source Committee, May 28, 2004)

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: National Paint & Coatings Association v. South Coast Air Quality Management District, Orange County Superior Court Case No. 03CC00007/Federal Case No. CV 03-1578 HLH (JWJx), reassigned as Coast No. CV 03-1578 SJO (JWJx); California Paint Alliance, et al. v. South Coast Air Quality Management District, et al., Orange County Superior Court Case No. 03CC01247/Federal Case No. CV 03-1656 HLH (JWJx), reassigned as CV 03-1695 SJO (JWJx); People of the State of California ex rel SCAQMD v. BP West Coast Products, LLC, et al., LASC Case No. BC291876; Monica Viaz, Ruby Yvonne Hernandez, and Monica Viaz as Guardian Ad Litem for Anthony Edward Mena v. David Steed and South Coast Air Quality Management District, LASC Case No. LC062706; and Engine Manufacturers Association, et al. v. SCAQMD, et al., U.S. Supreme Court Case No. 02-1343. 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 regarding determining whether to initiate litigation (1 case).

ACRONYMS

AQIP = Air Quality Investment Program
ARB/CARB = California Air Resources Board
AVR = Average Vehicle Ridership
Cal/EPA = California Environmental Protection Agency
CEMS = Continuous Emissions Monitoring Systems
CEQA = California Environmental Quality Act
CE-CERT = College of Engineering-Center for Environmental Research and Technology
CNG = Compressed Natural Gas
CO = Carbon Monoxide
CTG = Control Techniques Guideline
EPA = Environmental Protection Agency
EV = Electric Vehicle
FY = Fiscal Year
HRA = Health Risk Assessment
IAIC = Interagency AQMP Implementation Committee
IGA = Intergovernmental Affairs
LEV = Low Emission Vehicle
LNG = Liquefied Natural Gas
MOU = Memorandum of Understanding
MSERCs = Mobile Source Emission Reduction Credits
MSRC = Mobile Source (Air Pollution Reduction) Review Committee
NESHAPS = National Emission Standards for Hazardous Air Pollutants
NGV = Natural Gas Vehicle
NOx = Oxides of Nitrogen
NSPS = New Source Performance Standards
NSR = New Source Review
PAMS = Photochemical Assessment Monitoring Stations
PAR = Proposed Amended Rule
PM₁₀ = Particulate Matter < 10 microns
PM_2.5 = Particulate Matter < 2.5 microns
PR = Proposed Rule
RFP = Request for Proposals
RFQ = Request for Quotations
SCAG = Southern California Association of Governments
SIP = State Implementation Plan
SOx = Oxides of Sulfur
TCM = Transportation Control Measure
ULEV = Ultra Low Emission Vehicle
VMT = Vehicle Miles Traveled
VOC = Volatile Organic Compound
ZEV = Zero Emission Vehicle