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Administrative Committee

SYNOPSIS: 

The Administrative Committee met Friday, February 11, 2000, and reviewed the proposed agenda for the March 17, 2000 Board meeting. The Committee also discussed various issues detailed in the Committee report. The next Administrative Committee meeting is Friday, March 10, 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, Committee Members Beatrice LaPisto-Kirtley and, via videoconference, Roy Wilson. Absent were Members Hal Bernson, Cynthia Coad, and Mee Hae Lee. Committee Chair Glover appointed Board Chairman William Burke, who participated via videoconference, as an ad hoc Administrative Committee member for the meeting of February 11, 2000.

DISCUSSION ITEMS:

1. Chairman’s Report of Approved Travel: Barry Wallerstein, Executive Officer, reported that, in addition to the travel listed in the report, Chairman Burke had approved Norma Glover's and Beatrice LaPisto-Kirtley’s travel to Washington, DC on March 20-22. As discussed at the Legislative Committee meeting earlier that morning, they will meet with U.S. EPA representatives, congressional staff and members of Congress regarding additional funding for the South Coast air basin.
   
   Ms. LaPisto-Kirtley inquired about reimbursement for airfare and accommodations associated with her recent trip to Sacramento when she met with Assembly and Senate representatives regarding the 2000 Legislative Session on behalf of AQMD. Dr. Wallerstein responded that staff would review the records to determine that the appropriate paperwork had been completed.
   
   Moved (Burke), seconded (Wilson) and unanimously recommended for approval.
   
   (Subsequent to the meeting, staff determined that the Chairman had preapproved expenses related to Ms. LaPisto-Kirtley’s trip to Sacramento.)
   
   
2. Approval of Compensation for Board Member Assistant(s): The Committee considered the proposed compensation for Chairman Burke’s Consultant, Sarah Ewell, and Board Member Michael Antonovich’s Consultant, Peter Whittingham, as consultants-independent contractor status for Fiscal Year 1999-00.
   
   Dr. Wallerstein explained that Chairman Burke had requested that the balance of his FY 99-00 discretionary funds be divided between his current consultant, María Barragán, and Ms. Ewell. Dr. Wallerstein noted that Ms. Ewell has a business and accounting background and is familiar with the film and motion picture industry. Her experience will prove beneficial with respect to socio-economic issues and matters pertaining to Rule 1402 – Control of Toxic Air Contaminants from Existing Sources, as they will affect the film industry.
   
   Ms. LaPisto-Kirtley made a motion to approve both proposals, seconded (Burke) and unanimously recommended for approval.
   
   
3. Out-of-Country Travel: None
   
   
4. Local Government and Small Business Advisory Group Report: Lupe Valdez, Deputy Executive Officer of Public Affairs and Transportation Programs, reported that at the Group’s last meeting there was considerable discussion regarding the Air Toxics Control Plan. Industry and small business representatives were concerned with the pace of the plan and LaRonda Bowen, Public Advisor, added that the members had asked questions regarding the meaning of the risk numbers and what the actual health risk is. Dr. Wallerstein mentioned that a Public Consultation meeting on the proposed Plan was scheduled for Monday, February 14, which will provide another opportunity for public input and staff response. Following the Public Consultation meeting, final refinements will be incorporated into the Plan before it is submitted to the Governing Board.
   
   
5. Authorize AQMD Membership in California Fuel Cell Partnership as a Full Partner: Dr. Wallerstein reminded Committee members that this item was also under further review by the Technology Committee but, given the nature of the issues that had been raised at a previous Technology Committee meeting and the Governing Board meeting, the item was brought to the Administrative Committee for review and consideration.
   
   Chung Liu, Deputy Executive Officer of Science and Technology, briefed the Committee on the responses to the issues that were addressed in the handout he provided:
   
       • Expectations of the Partnership regarding AQMD participation;
   
       • Financial Obligation of the AQMD upon accepting membership into 
          the Partnership;
   
       • Items covered by the common budget;
   
       • Future financial obligations of the AQMD;
   
       • Financial obligation should the AQMD decide to terminate its membership in 
          the Partnership;
   
       • Reason for the delay in inviting the AQMD to join the Partnership; and
   
       • Intent to broaden the Partnership.
   
   Committee Chair Glover asked if the District is in agreement philosophically with the goals of the Partnership and Dr. Liu responded affirmatively, adding that by becoming a member, AQMD would have a seat at the table and the opportunity to influence the progress and participation of the Partnership. He added that AQMD is very interested in further developing fuel cell technology and has already spent $9.2 million in the last ten years toward its development. The California Air Resources Board (ARB) has also worked with AQMD on fuel cell projects in recent years; therefore, staff believes it would be beneficial if those involved joined forces in the Partnership.
   
   In response to Committee Chair Glover’s question, Dr. Liu and Dr. Wallerstein confirmed that joining the Partnership did not imply that AQMD is in concurrence with ARB’s transit bus rule.
   
   Dr. Wallerstein said that from a policy point of view, the partnership’s fleet demonstration is going to be the largest anywhere and the key project for fuel cell technology for passenger cars and transit buses. The issue is whether AQMD wants to have a voice at the table and participate as a partner or stay separate and work with the Partnership on certain aspects, but not its total program.
   
   Dr. Burke asked what has been achieved as a result of AQMD’s investment in fuel cell technology development and Dr. Liu responded that AQMD has demonstrated that: 1) the fuel cell can be used in a heavy duty vehicle and passenger car setting; 2) a reduction in the cost of fuel cells has also been realized.
   
   Dr. Burke expressed concern regarding this expenditure since it appears to be underwriting the fuel cell research of private enterprises such as Mercedes Benz, Chrysler, and Ballard Power Systems. Since other groups and partnerships are focused on this technology, he questioned how it would be determined which one to join. He also expressed concern that the budget was targeted for a public relations campaign and suggested negotiating a lesser role in the Partnership.
   
   Dr. Wallerstein said he shared many of the same concerns that had been raised and noted that ARB had similar concerns and negotiated an arrangement where they could target, within the common budget, where their dollars would be invested. If the Board concurs, AQMD could specify on which budget items its share would be invested.
   
   Dr. Liu mentioned that there is considerable local activity with respect to fuel cell research; for example, Allied Signal is involved in the fuel cell cost-reduction programs and dbb Fuel Cell Engines Corp. is working on the Transportation Integration Program. He added that AQMD’s focus is to assist the local transit companies and school districts in their potential participation in project funding of the Partnership.
   
   Dr. Wallerstein recommended that staff provide the Board with an annual review regarding whether AQMD would continue to participate in this Partnership, where the expenditures had been invested in the previous year, and the specific results from the efforts for the South Coast Air Basin. Dr. Burke agreed and asked which other air districts are participating in the California Fuel Cell Partnership and the amount of their investment. Dr. Liu replied that three governmental agencies are full members: ARB, California Energy Commission and the Department of Energy, and that no other air district had been invited to participate, adding that AQMD had been invited because of its history, experience and resources.
   
   Supervisor Wilson expressed his support for AQMD’s membership in the Partnership stating that the Agency is recognized worldwide as the only air district with an outstanding technology advancement division that is committed to developing new technology. He added that the fuel cell vehicle is probably the most promising of the zero-emission vehicles on the horizon and AQMD should be at the table. He agreed with Dr. Wallerstein’s recommendation regarding an annual review, with careful analysis of where the money is being invested. Supervisor Wilson said that AQMD should be a major voice in seeing that this development moves into the marketplace and that AQMD has the first opportunity for the fuel cell buses as they start entering the marketplace.
   
   Ms. LaPisto-Kirtley raised a concern with respect to membership in the Partnership potentially being a duplication of effort and resources since she represents AQMD on the local Fuel Cell Buyers Consortium that meets quarterly. Dr. Liu advised that the original intent was to concentrate on both Sunline Transit and MTA. ARB and the other major players have already decided on Sunline Transit’s participation; however, MTA has not been included and a major effort would be to provide more resources toward a bus demonstration there. Dr. Wallerstein explained that once AQMD is participating at the Partnership’s table, staff would work toward integrating MTA into the process. The purpose of the Partnership is to prepare the marketplace, complete the final stages of perfecting the technology, and put a fleet of transit buses into service. Since AQMD has not been participating, the tentative decision is to send the buses to San Francisco and Sunline Transit. He advised that Sunline Transit has the appropriate philosophy and the will to make the new technology work.
   
   Regarding the possibility of pro-rating the $84,000 cost since AQMD did not join at the beginning of the fiscal year, Dr. Liu said staff would negotiate and also target local- and technology-related areas for the AQMD expenditure. Cindy Sullivan, Planning and Rules Manager, reported that ARB’s participation in the Partnership is $212,000, which is committed for the current fiscal year for the common expenses. Dr. Liu explained that the funding for AQMD’s membership would come from the budgeted fuel cell technology item in the Science and Technology budget.
   
   In response to Committee Chair Glover’s concern regarding meeting ARB’s fuel cell deadline and the possible increase in AQMD’s financial commitment as the deadline approaches, Dr. Wallerstein explained that if the fuel cell demonstration did not perform as expected, ARB would have to modify its transit bus regulation.
   
   Moved (Wilson), seconded (Burke) and unanimously recommended for approval.

MARCH AGENDA ITEMS:

1. Execute Contract to Purchase Gas Chromatograph System for Speciation and Measurement of Ambient Volatile Organic Compounds: Mel Zeldin, Assistant Deputy Executive Officer of Science and Technology, reported that staff is recommending a contract be executed with Thermo-Quest/Finnigan for the purchase of a gas chromatograph system for the PAMS program. The system is a replacement instrument, since the current instrument is 15 years old and parts are no long available for maintenance and repair. The replacement system will continue the function of analyzing ambient samples from the PAMS sites for organic compounds. The funds for this purchase will come from the federal Section 105 Grant, specifically earmarked for PAMS. Moved (LaPisto-Kirtley), seconded (Glover) and unanimously recommended for approval.
   
   
2. Recognize and Appropriate Funds for PM2.5 Program: Mr. Zeldin explained this item is to recognize the receipt of EPA funds in the amount of $483,665 from Section 103 Grant funds to continue the PM2.5 network program during the Calendar Year 2000. This particular segment is for the base program and additional funding is expected later this year for the speciation program. Mr. Zeldin added that, to this point, EPA has kept its commitment to completely fund the program and Committee Chair Glover requested that she be informed if EPA should fail to meet its commitment. Moved (LaPisto-Kirtley), seconded (Glover) and unanimously recommended for approval.
   
   
3. Award Contract to Purchase Transportable Continuous Emissions Monitoring System: Mr. Zeldin reported that staff is recommending authorization to execute a contract with Horiba Instruments for the purchase of a transportable continuous emission monitoring system to assist RECLAIM facilities in their efforts to develop and validate alternative CEMS monitoring approaches, and to provide a valuable tool to augment field inspection and compliance efforts. Moved (Wilson), seconded (LaPisto-Kirtley) and unanimously recommended for approval.
   
   
4. Amend Contract with Ecotek for Privatization of Portions of the Annual Emissions Report Program: Elaine Chang, Assistant Deputy Executive Officer of Planning, Rule Development and Area Sources, advised that staff is requesting approval to exercise the third-year renewal option in Ecotek’s contract in an amount not to exceed $250,000. Ecotek has been under contract for the previous two years assisting the District in an effort to privatize portions of the Annual Emissions Report Program and Dr. Chang briefly described the tasks performed. Ecotek’s assistance had enabled internal staff to focus on engineering auditing that has resulted in AQMD billing up to $2 million of underpayment funds and processing $250,000 of refunds due to corrections made during auditing. Dr. Chang added that staff has started the design work to incorporate Recordkeeping Task Force recommendations. Moved (Wilson), seconded (Glover) and unanimously recommended for approval.
   
   
5. Approve Receipt and Donation of Eight Air Quality Exhibits to a Non-Profit Educational Group: Public Advisor LaRonda Bowen informed the Committee that staff is requesting the transfer of the exhibits currently housed in the Clean Air Solutions Center, which needs to be vacated for leasing purposes, to the Lewis Center for Educational Research in Apple Valley, CA. The Lewis Center request was received subsequent to staff’s initial evaluation of interested parties. Of the initial three locations that were interested in the exhibits, one requested them for only three months; the second requested that AQMD build a facility to house the exhibits; and, because of the distance from the South Coast basin, the Harvard School of Public Policy was not selected. Committee Chair Glover cautioned that reasonable offers from out-of-state parties should not automatically be discounted since exhibitions could enhance the District’s national reputation. Ms. Bowen explained that Harvard was only interested in one part of the exhibit and staff was attempting to keep the eight exhibits together.
   
   Rick Piercy, President and Chief Executive Officer for the Lewis Center for Educational Research, was introduced and briefed the Committee on the background and future goals of the Center and the plans for the donated exhibits. Upon completion of Mr. Piercy’s presentation, Supervisor Wilson said that even though the exhibits would be outside the South Coast, they would be put to good use if donated to the Lewis Center since they would be accessible to young people in an environmental and scientific setting. Moved (Wilson), seconded (Burke) and unanimously recommended for approval.
   
   
6. Review March 17, 2000 Governing Board Agenda: Dr. Wallerstein informed the Committee of the following recommended changes to the agenda:
   
   MOVE ITEMS ON THE AGENDA

• Item #2403 – Multiple Air Toxics Exposure Study-II Final Report, from the Consent Calendar to the Board Calendar
• Item #2365 – Draft Air Toxics Control Plan, from Public Hearing to Board Calendar

ADDITIONS

Board Calendar

• Best Available Control Technology Guidelines Report
• Recommendations from Millennium Retreat

DELETION

• Item #2407 – Proposal for In-House Training of Rule 2202 Employee Transportation Coordinators (moved to February 18, 2000 Board Meeting)

Following Committee Chair Glover’s review of the March 2000 agenda, Dr. Wallerstein suggested that, to avoid confusion in the future, when staff has amendments to the Governing Board agenda, a new agenda, in underline and strikeout format, be provided at the Administrative Committee meeting. Committee Chair Glover concurred.

Dr. Burke requested guidance regarding his request at the last Investment Oversight Committee (IOC) meeting whereby an item was pulled that would have reappointed the Los Angeles County Treasurer as treasurer thereby authorizing the County to invest and reinvest AQMD money. He expressed his concern that AQMD is not receiving the maximum safe return on its investment, adding that this was not a reflection on Rick Pearce, Chief Financial Officer; however, with the demands placed on the Agency, staff should be examining other investment opportunities.

Dr. Burke suggested seeking internationally recognized outside counsel to review AQMD’s investment program.

Committee Chair Glover reported that she had also been present at the IOC meeting Dr. Burke referred to when the Committee delayed making a decision until its next meeting, scheduled for Monday, March 13. Following discussion regarding the process of bringing Dr. Burke’s suggestion to the full Board, he expressed his concern that the decision was time-sensitive. Dr. Wallerstein referred the Committee to the draft March Board Agenda, which included a place-holder item, Item # 2404 – Approve AQMD Annual Investment Policy and Delegation of Authority to Los Angeles County Treasurer to Invest AQMD Funds. He explained that a Treasurer must be appointed, or reappointed, by the end of March, 2000; therefore, there was ample time to discuss it further at the IOC and Governing Board meetings in March.

Dr. Burke added that, unless the Agency is statutorily prohibited, it has the fiduciary responsibility to get the maximum return possible. Barbara Baird, District Counsel, advised that there are specific criteria for investments and outside counsel has been asked to examine those and make recommendations; however, counsel was not asked to specifically make recommendations with respect to increasing the rate of return. Staff will make that request.

Mr. Pearce referred to the State law regarding the investment objectives of public entities that emphasize: safety of principal, liquidity, and market rate of return, in that order. The Agency is limited by the Government Code on the types of investments that can be made. Ms. Baird pointed out that the California Constitution prohibits public entities from investing in stocks. Mr. Pearce continued by briefing the Committee on the AQMD’s investment policy and indicated there were areas where the overall return could be increased by being more aggressive in making longer-term investments.

Dr. Burke commented that representatives from Wells Fargo Bank had indicated they had been discouraged from submitting a proposal to enhance AQMD’s earnings and Mr. Pearce advised that he had responded to their questions and referred them to AQMD’s independent investment consultant, Sperry Capital, Inc.

Committee Chair Glover suggested that the Administrative Committee direct Mr. Pearce to contact several entities to review AQMD’s investment program and follow up with presentations. She also requested that Dr. Wallerstein investigate what his discretionary abilities are in this matter and obtain two or three opinions regarding the AQMD investment program prior to the March 13 IOC meeting.

FEBRUARY AGENDA ITEM

1. Classification and Compensation Recommendations: Eudora Tharp, Acting Director of Administrative and Human Resources Services, advised that this item is another installment of recommendations with respect to the ongoing classification study. Based on results of the study that included review of internal pay relationships and external labor market comparison, a salary adjustment of three percent was recommended for the Secretary classification and for the Senior Deputy District Counsel classification. The recommendation for the secretaries had been discussed with their union representative, and they agreed with the recommendation. Dr. Wallerstein advised that the agreement was voted on and passed by a narrow margin: 13 to 12. Moved (LaPisto-Kirtley), seconded (Wilson) and unanimously recommended for approval.
   
   
2. Other Business: Committee Chair Glover referred to March Board Item #2372 – Proposed Rule 1190 – Clean On-road Vehicles for Government and Airport Operations, and Dr. Wallerstein explained that, based on discussions with Chairman Burke and other Board Members, Proposed Rule 1190 will be broken down into a series of rules. A listing of the individual rules and the timetable of when they will be brought before the Board will be provided at the February 18 Governing Board meeting. Two components that will be ready for Public Hearing in April are:
   
       1) Light- and medium-duty vehicles, including small and mid-size trucks and passenger cars. The proposal has been modified so there will be no hardship on local government and will reflect a policy currently in place in Los Angeles County; and
   
       2) The transit bus issue, which staff has analyzed for several years. ARB will likely render a decision prior to the March meeting.
   
   
3. Public Comment: None

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

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