BOARD MEETING DATE: April 21, 2000 AGENDA NO. 21




REPORT: 

Administrative Committee

SYNOPSIS: 

The Administrative Committee met Friday, March 10, 2000, and reviewed the proposed agenda for the April 21, 2000 Board meeting. The Committee also discussed various issues detailed in the Committee report. The next Administrative Committee meeting is Friday, April 14, 2000, at 9:30 a.m., in Conference Room CC-8.

RECOMMENDED ACTION:

Receive and file.

Norma J. Glover, Chair
Administrative Committee

Attendance:
Present were Committee Chair Norma Glover, and Committee Members Beatrice LaPisto-Kirtley and, via videoconference, Roy Wilson. Absent were Members Hal Bernson, Cynthia Coad, and Mee Hae Lee.

DISCUSSION ITEMS:

  1. Chairman’s Report of Approved Travel: None to report.

  2. Approval of Compensation for Board Member Assistant(s): The Committee considered the proposed compensation for Vice Chair Glover’s Consultant, Ruben Gonzalez, as a consultant-independent contractor status for Fiscal Year 1999-00. Dr. Wallerstein said that staff had reviewed the proposal and recommended approval.

    Moved (LaPisto-Kirtley), seconded (Wilson) and unanimously recommended for approval.

  3. Out-of-Country Travel: Dr. Wallerstein reported on the request for Cindy Sullivan, Planning and Rules Manager in Science and Technology, to attend the Windsor Workshop in Toronto, Canada. Ms. Sullivan had been invited to participate on an important panel to be chaired by the Department of Energy. Moved (LaPisto-Kirtley), seconded (Glover) and unanimously recommended for approval.

APRIL AGENDA ITEMS:

  1. Item No. 6 was taken out of order. Execute Contract for Independent Audit Services for FYs Ending June 30, 2000, 2001, and 2002: Rick Pearce, Chief Financial Officer, explained that every three years staff issues an RFP for independent audit services and the selected auditor reports directly to the Board. Based on the evaluation panel’s assessment of the criteria, the top three proposals were recommended to the Administrative Committee for their consideration and recommendation to the full Board. Committee Members interviewed the representatives from the three highest-ranking firms: Sharon Dobbs, Partner, and Joe Muriello, Manager, with Hutchinson & Bloodgood; Grace Wuen, Audit Manager with Simpson & Simpson; and Richard Lopez, Managing Partner, Ruben Jauregui and William Guitierrez, Managers, with Vargas, Lopez, and Co.

    Committee Members asked the representatives from each firm the following questions: 1) Why is your firm the best one to audit AQMD? 2) How would you describe your responsibilities as auditors to the Governing Board? 3) Besides filing an audit opinion on financial statements, what other services does your firm provide that will assure the Governing Board that AQMD is financially well-managed? 4) The contract requires that all reports be issued by November 30. What would you do if you find you are falling behind schedule as far as meeting this deadline? The firms’ representatives responded in detail to each of the four questions and provided background and relevant experience information.

    At the conclusion of the interviews, Supervisor Wilson commented that, although the ranking indicated all three firms were qualified, he recommended selecting the firm of Simpson & Simpson for two reasons. First, he said that there is value in changing firms periodically to get a fresh perspective, and; secondly, Simpson & Simpson proposed the lowest bid.

    Mr. Pearce provided information regarding past auditing practices and advised that the firm of Simpson & Simpson had twice audited the AB2766 Program and had performed a job comparable to audits by other firms.

    Supervisor Wilson made a motion to recommend the firm of Simpson & Simpson to the full Board, seconded (LaPisto-Kirtley) and unanimously recommended for approval.

  2. Set Public Hearing May 19, 2000 to Amend Regulation III – Fees: Dr. Wallerstein reported that there will be a Public Workshop on this issue to solicit additional comments from the public and the final proposal would be presented to the Governing Board on May 19, 2000. He advised that the presentation to the Committee represented staff’s initial proposal.

    Lee Lockie, Director of Area Sources, reported that the fee rules proposed for amendment contain minor adjustments with two exceptions. Because of the decline in recent fee revenues necessary to support AQMD operating programs, an 11% increase in emissions fees, including a 3.0% across-the-board fee increase equivalent to the change in the California Consumer Price Index (CPI), is proposed. Committee Chair Glover asked if there was a restriction on the amount of the increase. Barbara Baird, District Counsel, explained that there is a statutory restriction that the Board may only increase a fee by greater than the California CPI if it provides findings that the increased fee is necessary to support AQMD programs and will result in an equitable allocation of fees. The findings need to be provided as evidence in the staff report, and the increase needs to be phased in over a period of two years.

    The intent of the fee proposal is to make up for declining emission fee revenues (due to the RECLAIM caps kicking in, or declining emissions from RECLAIM facilities). However, the affected facilities will be looking at basically the same bill from AQMD that they paid last year, on average. The findings will be in the resolution and the evidence will be in the staff report. The proposal would represent an annual increase of $1.5 million in revenue.

    Mayor LaPisto-Kirtley wondered if penalties could be increased rather than permit fees, to motivate sources to stay in compliance. Ms. Baird explained that, unlike permit fees, there is no automatic penalty fee. Penalty fees are required to consider factors set forth in the Health & Safety Code, such as the severity and duration of the violation, the company’s ability to pay, and so forth. Penalties are set on a case-by-case basis; therefore, are not a predictable source of revenue. With respect to companies that have allowed their permits to expire, Ms. Baird explained that there is a reinstatement fee and, under the proposal, it will be raised by 3%. To increase the fee further, it would be necessary to find that funds are necessary to support the program and provide a rationale as to why it is equitable to put this burden upon that particular group of fee payers. Ms. LaPisto-Kirtley suggested staff should look into raising the penalty for reinstating expired permits.

    Mr. Pearce explained that the fees were designed in 1977 to support such activities as rulemaking, planning, air monitoring, and regional modeling programs not related to a single source. Emissions have gone down but the costs associated with the various programs have not gone down; for instance, more resources are required to verify emission reductions.

    With respect to the recommendations from last year’s fee study, Mr. Pearce advised that the permit processing fee recommendations were based on the best estimates of engineering staff. When the remainder of the permit streamlining recommendations are implemented and actual time data is available for permit processing, staff will provide the Board with a proposal to correct fees for the different types of equipment.

    Dr. Wallerstein added that staff is trying to obtain a doubling of the subvention funds, which was vetoed by the Governor last year. If approved, it would bring in $3.0 million, which would allow the Agency to balance the budget without significant additional fee increases. He informed Committee members that there had been a 15% across-the-board increase in the Bay Area AQMD fees last year and there is a possibility of a 5-15% increase this year. Staff have delayed fee increases as much as possible, holding the view that a bigger percentage of the problems are related to motor vehicles and consumer habits, which should be borne out principally through subvention funds.

    Dr. Wallerstein advised that staff was not requesting an endorsement of the preliminary proposal at this point since it would be going through the public workshop phase. Supervisor Wilson made a motion to set the public hearing on May 19, 2000 to amend Regulation III, seconded by LaPisto-Kirtley, and unanimously approved.

  3. Approve Purchase of Special Purpose CNG Vans for Servicing Air Monitoring Network: Mel Zeldin, Assistant Deputy Executive Officer of Science and Technology, reported that special vans are required to carry repair and calibration equipment to the field to maintain the monitoring network. Three vans have over 170,000 miles and require frequent repair. Two replacement vans are included in the current budget and EPA agreed to fund a third vehicle under the PAMS program, which was originally approved as a pick-up truck. Staff is requesting that the Board redesignate the funds from pick-up truck to a CNG-fueled cargo van and approve the purchase of the three CNG-fueled cargo vans from the statewide contract for 2000 model year vehicles on a sole-source basis. Moved (LaPisto-Kirtley), seconded (Wilson) and unanimously recommended for approval.

  4. Authorize Purchase of Twenty-nine Vehicles for AQMD Fleet: Mr. Pearce reported that there are 29 high-mileage vehicles that need to be replaced since they are no longer cost effective to maintain and repair. Staff has surveyed the market and tested several models and is recommending the purchase of 29 Toyota Camry dedicated CNG fleet vehicles. Staff is not recommending the purchase of a comparable CNG model from Ford (Crown Victoria) at this time due to a longer delivery time associated with the purchase. Dr. Wallerstein indicated staff would like to recommend the Ford Crown Victoria with the next vehicle purchase. Moved (Wilson) seconded (LaPisto-Kirtley), and unanimously recommended for approval.

  5. Recognize and Appropriate Funds from ARB for Children’s Health Study: Mr. Zeldin reported that AQMD assumed operation of four ARB monitoring sites and enhanced three existing sites as part of the Children’s Health Study. ARB has funded the operation and the last contract extension expired in November 1999. ARB desires to continue the effort through December 2001 and will provide the funds to continue the implementation of this program; therefore, staff is requesting that the Board recognize and appropriate $90,334 from ARB to the FY 1999-00 Budget.

    In response to Committee Chair Glover’s request for additional information regarding the study, Mr. Zeldin reported the study is examining many areas in Southern California, including San Diego and Ventura, and is specifically focused on ozone, particulates, nitrogen dioxide and aerosols to determine the health effects. The areas had been selected because each community may be high in one pollutant and low in others so, statistically, it can be determined which pollutants cause health effects to the children. The findings are at the preliminary stage and the full scientific value of the study will not be known until its completion.

    Moved (LaPisto-Kirtley), seconded (Wilson) and unanimously recommended for approval.

  6. Report of RFPs and RFQs Scheduled for Release in April: Mr. Pearce informed the Committee that staff is requesting the release of an RFP for Ingres Relational Database Management System software, which is used for the implementation of the Central Information Repository Database. Chris Marlia, Assistant Deputy Executive Officer of Information Management, clarified this action is to renew a five-year license that will expire in December 2000. Moved (LaPisto-Kirtley), seconded (Glover) and unanimously recommended for approval.
  1. Review April 21, 2000 Governing Board Agenda: Dr. Wallerstein informed the Committee of the following proposed additions to the agenda:

    ADDITIONS

    Board Calendar

Public Hearing

MARCH AGENDA ITEM

  1. Amend Contracts for Labor and Employment Law: Ms. Baird reported that this action is to increase the contracts for two law firms providing labor and employment law services by the combined amount of $35,000 for FY 1999-00, which is within the amount budgeted for that expenditure. The increase is necessitated by litigation that was not foreseen when the contract amounts were set at $50,000 each three years ago. Ms. Baird advised that AQMD recently obtained, pursuant to AQMD’s insurance policy, a promise to recoup $17,000 of these expenses that have been incurred this fiscal year, which will go into the General Fund. Moved (Wilson), seconded (LaPisto-Kirtley) and unanimously recommended for approval.

    In response to John Billheimer, representing the Small Business Coalition, Dr. Wallerstein explained that Rule 219 – Equipment Not Requiring a Written Permit Pursuant to Regulation II is listed under the Consent Calendar because it is a Set Public Hearing item for a subsequent Hearing.

  2. Other Business: None

  3. Public Comment: None

Committee Chair Glover adjourned the meeting at 11:00 a.m.

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URL: http://www.aqmd.gov/hb/2000/000421a.html