GOVERNING BOARD AGENDA
MEETING, September 3, 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. 21.

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

2. Set Public Hearing October 1, 2004 to Amend Rule 1122 – Solvent Degreasers
Tisopulos (909) 396-3123
(ltisopulos@aqmd.gov)

Rule 1122 currently provides a limited exemption that allows the use of high-VOC solvents for small-sized degreasers that are used in certain types of cleaning applications. This exemption will expire after January 1, 2005. The proposed amendment to Rule 1122 will allow a permanent, conditional exemption for certain specialized cleaning categories. Minor clarifications are also being proposed. (Review: Stationary Source Committee, August 27, 2004)

Budget/Fiscal Impact

3. Execute Sole-Source Contract for Three-Year Maintenance and Service Agreement for AQMD Headquarters' Energy Management System
Tharp (909) 396-3018
etharp@aqmd.gov

The previous service agreement with Siemens Building Technologies, Inc., to maintain AQMD headquarters’ energy management system, consisting of software and hardware to operate the building’s heating, ventilation, and air conditioning, ended June 30, 2004. This action is to enter into a new three-year agreement. A sole-source contract is needed as Siemens is the original equipment manufacturer, both software and hardware are proprietary, and Siemens maintains control of service. Funding has been included in the FY 2004-05 Budget and will be requested in successive fiscal years. (Review: Administrative Committee, August 13, 2004)

4. Authorize Final Payments on Completed Contracts with Closed Accounts
Liu (909) 396-2105
cliu@aqmd.gov

The AQMD’s Clean Fuels Program sponsors the development and demonstration of clean-fuel vehicles and technologies. At any one time, Technology Advancement has about 85 contracts active. At times, the final reports and final invoices are delayed for various reasons, and these contracts expire. Such contracts now require Board approval of payment for their completed work. (Review: Technology Committee, August 27, 2004)

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

The RFP will solicit statements of qualifications from individuals and organizations potentially capable of providing expert technical consultation in a variety of specialized areas to support AQMD technology advancement activities. It is anticipated that multiple awards for level-of-effort contracts will be made from this solicitation. Sufficient funds are available from the Clean Fuels Fund to support this work in an amount not to exceed $300,000. (Review: Technology Committee, August 27, 2004)

6. Issue Program Announcement & Application for New CNG School Buses with Funding from State’s Proposition 40, EPA and Chairman’s Modified School Bus Initiative and Installation of Oxidation Catalysts with Funding from U.S. EPA (Continued from the August 6, 2004 Board Meeting)
Liu (909) 396-2105
cliu@aqmd.gov

This action is to approve issuance of a new program announcement with funding of $9,725,000, consisting of (a) up to $2,030,000 in Proposition 40 funds, (b) up to $7,200,000 from AQMD Chairman’s Initiative Program, (c) up to $245,000 in U.S. EPA funds to replace pre-1987 school buses; and (d) up to $250,000 from U.S. EPA funds to retrofit school buses with diesel oxidation catalysts. (Review: Technology Committee, August 27, 2004)

7. Approve Expenditures for Activities and Projects Selected by California Natural Gas Vehicle Partnership During FYs 2004-05 and 2005-06, and Recognize Funding from Participating Members
Liu (909) 396-2105
cliu@aqmd.gov

On April 5, 2002, the Board approved the establishment of a Natural Gas Vehicle Partnership Fund and authorized the Executive Officer to approve expenditures in FY 2002-03 for projects selected by the Partnership up to $50,000 for individual expenditures, for a total amount not to exceed $200,000. On April 4, 2004, the Board authorized the Executive Officer to approve expenditures in FY 2003-04. The participating members pay two-year membership fees to fund program administration, specific projects, and activities to achieve the goals of the partnership. This action is to: (1) recognize funding from participating members of the Natural Gas Vehicle Partnership; (2) transfer $25,000 from the Clean Fuels Fund as AQMD’s contribution; (3) authorize the Executive Officer to approve up to $50,000 for individual expenditures selected by the Partnership in FY 2004-05 and 2005-06, for a total amount not to exceed $275,000 for each fiscal year; and (4) authorize the Executive Officer to approve modification to the CALSTART contract in the amount of $16,300. (Review: Technology Committee, August 27, 2004)

8. Recognize Funds from Other California Air Pollution Control Districts and Air Quality Management Districts for Current Upgrade to URBEMIS2002 Model and Appropriate Funds to FY 2004-05 Budget
Chang (909) 396-3186
(echang@aqmd.gov)

Since 1998, the AQMD, along with other local air pollution control agencies, has supported and maintained the URBEMIS land use model originally developed by CARB. The AQMD is currently involved in an upgrade to the URBEMIS model through an existing contract (original contract amount of $50,000). Other air pollution control agencies have expressed interest in contributing funds for the current upgrade and have requested that the AQMD administer the funds through the existing AQMD contract. This action is to recognize funds totaling $22,500 from other air pollution control agencies in California, appropriate $22,500 from Undesignated Fund Balance, and amend the contract to add the funds received. The funds will be used for additional tasks recommended by the other air pollution control agencies included as part of the current URBEMIS upgrade project. (Review: Administrative Committee, August 13, 2004)

9. Recognize and Appropriate U.S. EPA Pollution Prevention Grant Funds for Lubricant and Rust Inhibitor Study
Tisopulos (909) 396-3123
(ltisopulos@aqmd.gov)

The U.S. EPA has awarded the AQMD $79,986 in Pollution Prevention Grant funds to characterize the emissions inventory of lubricants and rust inhibitors and to identify, test, and demonstrate alternative low- or non-emitting products. As part of conditions awarding the grant, the AQMD will provide an additional $25,000 in contract dollars and $54,986 of in-kind funding of personnel services to develop the emission inventory, review, print, and distribute the final report, and begin development of a rule, if warranted. This action is to recognize and appropriate $79,986 in grant funds to the FY 2004-05 Planning, Rule Development and Area Sources budget. (Review: Administrative Committee, August 13, 2004)

10. Appropriate Funds from Designation for Litigation & Enforcement to District Counsel’s FY 2004-05 Budget and Amend Contracts to Expend These Funds
Baird (909) 396-2302
(bbaird@aqmd.gov)

AQMD is currently involved in major litigation challenging the architectural coatings rules (2 cases), the refinery FCCU rule (1105.1), a CEQA decision on a permit (2 cases), and the fleet rules (which has been remanded to District Court). This action is to appropriate $350,000 from the Designation for Litigation & Enforcement to District Counsel’s FY 2004-05 Budget, Professional & Special Services Account to carry out this litigation and to amend existing contracts to expend these funds. (Review: Administrative Committee, August 13, 2004)

11. Extend Contracts and Issue RFP for Legislative Representation in Sacramento, California
Abarca (909) 396-3242
(oabarca@aqmd.gov)

The current contracts for Legislative Representation in Sacramento expire November 14, 2004 for Richard Polanco (Tres Es, LLC), and December 31, 2004 for Allan Lind. Direct representation in Sacramento is necessary to further AQMD policy positions at the state level. The current contracts have options for two one-year extensions. This action calls for both the extension of these two existing contracts and the issuance of an RFP for additional legislative consulting services in Sacramento, California for Calendar Year 2005. The RFP will also indicate that the service contract(s) may be extended for up to two additional one-year terms. Total expenditure for the existing contracts and RFP shall not exceed $287,760 for the one-year period. Funding for extension of the contracts after 2005 will be contingent upon Board approval of the Budget for the respective fiscal years in the future. (Review: Legislative and Administrative Committees, August 13, 2004)

12. Issue RFP for Legislative Representation in Washington, D.C.
Abarca (909) 396-3242
(oabarca@aqmd.gov)

The current contract for Legislative representation in Washington, D.C. expires December 31, 2004. Direct representation in the Capitol is necessary to further AQMD policy at the federal level. This action calls for issuance of an RFP for legislative consulting services in Washington, D.C., with the services commencing on January 1, 2005 and expiring on December 31, 2005. The RFP will also indicate that the services contract may be extended for up to two additional one-year terms. Total expenditure for the contract shall not exceed $131,000 for a one year period. Funding for extension of the contract will be contingent upon Board approval of the budget for the respective fiscal years. (Review: Legislative and Administrative Committee, August 13, 2004)

Information Only - Receive and File

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

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

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

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

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

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

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

17. 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.

18. Annual Report on AB 2766 Funds from Motor Vehicle Registration Fees for FY 2002-03
Chang (909) 396-3186
(echang@aqmd.gov)

This report contains a summary of financial and program data from local governments on the AB 2766 Subvention Fund Program during FY 2002-03 for submittal to the CARB. (Review: Mobile Source Committee, August 27, 2004)

19. Summary of Changes to FY 2003-04 Approved Budget
Pearce (909) 396-2828
(rpearce@aqmd.gov)

This is the annual report of budget changes for FY 2003-04.

20. Status Report on Major Projects for Information Management Scheduled to Start During First Six Months of FY 2004-05
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 2004-05.

21. Items Deferred from Consent Calendar

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

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

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

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

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

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

28. 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: Loveridge
McDaniel (909) 396-2821
(smcdaniel@aqmd.gov)

29. Approve Grants to Retrofit Diesel School Buses with Particulate Traps, Purchase Cleaning Equipment Systems and Install Insulation Blankets; Issue New Program Announcement and Application for Retrofit of School Buses with Particulate Traps and Insulation Blankets; and Consider Changes to Implementation Procedures of Chairman's Initiative on Lower-Emission School Bus Program to Allow Transfer of Funds from School Bus Replacement Component to School Bus Retrofit Component (Continued from the August 6, 2004 Board Meeting)
Liu (909) 396-2105
cliu@aqmd.gov

On February 6, 2004, the Board released a Program Announcement to retrofit existing diesel school buses with particulate filter traps. The retrofit program was oversubscribed (beyond the $4.8 million budget). In addition, school bus operators indicated the desire for AQMD to fund PM trap cleaning equipment and insulation blankets. Staff recommends the following awards: 1) approve awards to four school districts to retrofit 48 buses with PM traps and insulation blankets not to exceed $348,000; 2) approve a purchase of up to 21 PM trap cleaning equipment systems not exceeding $168,000; and 3) approve the purchase/installation of 1,272 thermal blankets at $250 each for buses retrofitted with prior AQMD grants in an amount not to exceed $318,000. With remaining funds in the Chairman’s School Bus Initiative for PM traps, totaling $3,966,000, staff is presenting two options for Board’s consideration: 1) to fully fund 76.2% of all requests of PM traps with insulation blankets as applied for by five private operators; or 2) to re-issue the Program Announcement with additional conditions, including cost sharing which potentially can provide additional PM traps. In addition, at the August 27, 2004, Technology Committee meeting, a third option was suggested by a member of the public to allow transfer of $1,239,500 from the School Bus Replacement Program to the School Bus Retrofit Program of the Chairman’s Initiative such that all 718 PM traps requested by the private operators could be funded at full cost. This option requires the Board to make a policy change of the implementation procedures of the Chairman’s Initiative on the Lower-Emission School Bus Program (Review: Technology Committee, August 27, 2004)

PUBLIC HEARINGS

30. Amend Rule 1121 - Control of Nitrogen Oxides from Residential Type, Natural Gas-Fired Water Heaters
Chang (909) 396-3186
(echang@aqmd.gov)

Rule 1121 was amended in December 1999 to lower the emission limits for water heaters. Manufacturers submitted an interim report relative to their progress in meeting the final emission limit and staff provided a summary of this information and recommendations at the January 9, 2004 Board Meeting. In order for equipment manufacturers to address other national regulatory requirements and technical and manufacturing issues, staff is proposing to delay implementation of the final rule limit one to three years depending upon the size of the water heater and to modify the mitigation fee program. This item also serves as a notice of intent to make infeasibility findings, as required in the settlement agreement for the 1999 AQMP amendment. (Review: Stationary Source Committee, July 23, 2004)

31. Amend Rule 2007 - Trading Requirements
Chang (909) 396-3186
(echang@aqmd.gov)

The current version of Rule 2007 removes power producing facility trading restrictions after September 1, 2004. To address CARB concerns regarding reintroducing power plants to the trading market, this proposal delays removal of trading restrictions until other RECLAIM rules amendments (currently scheduled for November 2004) decrease allocations to implement the 2003 AQMP Control Measure CMB-10 and to reflect best available retrofit control technology (BARCT). (Review: Stationary Source Committee, June 25, 2004 and July 23, 2004)

32. Informational Hearing and White Paper for Proposed Amendments to RECLAIM
Chang (909) 396-3186
(echang@aqmd.gov)

Staff recommends that this item be continued to the October 1, 2004 Board meeting.

An informational hearing will be held in September on the proposed amendments to RECLAIM rules. In conjuction with this hearing, staff will provide a White Paper which highlights BARCT determinations, cost-effectiveness, and options for achieving reductions from the program. The White Paper and the informational hearing are intended to provide the Board with a status update on the rule development process, identify key issues and viewpoints, give the public an opportunity to raise their concerns. (Review: Stationary Source Committee, July 23, 2004)

33. Receive Evaluation Report on Emissions from Flaring Operations at Refineries and Direct Staff to Initiate Amendment to Rule 1118
Coy (909) 396-2434
(ccoy@aqmd.gov)

As part of the February 13, 1998 Rule 1118 adoption resolution, the Board directed staff to evaluate all the information and data collected and submitted to the AQMD by the affected facilities subject to Rule 1118 – Emissions from Refinery Flares. The report provides an analysis of the information obtained in the first four years from the start of monitoring and recording of flaring operations to determine whether or not emissions from flaring operations are significant, and makes recommendations for the Board’s consideration on any changes to Rule 1118. (Review: Stationary Source Committee, August 27, 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: 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 v. SCAQMD, et al., ConocoPhillips Company, Los Angeles Superior Court Case No. BS091275; Carlos Valdez, et al. v. SCAQMD, et al., ConocoPhillips Company, Los Angeles Superior Court Case No. BS091276; and In Re Hayes Lemmerz International, Inc., et al.; HLI Creditor Trust v. SCAQMD, United States Bankruptcy Case No. 01-11490 (MFW), Adversary Proceeding No. 03-57292.

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
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