BOARD MEETING DATE: April 7, 2006
AGENDA NO. 10

Set-Aside Funds for Air Quality Improvement Projects Under Rule 1173 Mitigation Fee Program

SYNOPSIS:

On July 8, 2005, the Board approved issuance of a Program Announcement for air quality improvement projects to be funded by Rule 1173 mitigation fees.  A total of four proposals were received.  However, none of the proposals met the evaluation criteria specified in the Program Announcement for various reasons.  Based on the proposals received in recent months and in discussions with community and facilities representatives, staff proposes that a pilot demonstration of classroom air purifier systems at three elementary schools and a fenceline monitoring project be funded with the mitigation funds.  This action is to set-aside $1,400,000 in mitigation funds for proposed projects under the Rule 1173 Mitigation Fee Program.

COMMITTEE:

Technology, March 31, 2006, Recommended for Approval

RECOMMENDED ACTIONS:

1. Set-aside $1,050,000 from the Rule 1173 Mitigation Fees Special Revenue Fund for projects to pilot test classroom air purifier systems at Del Amo, Dominguez, and Hudson Elementary Schools.
2. Set-aside up to $350,000 from the Rule 1173 Mitigation Fees Special Revenue Fund to implement a fenceline monitoring project in the Rule 1173 project area.
3. Direct staff to prepare RFPs for the above projects for the Board’s consideration.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

In December 2002, the Board approved amendments to Rule 1173 – Control of VOC Leaks and Releases from Components at Petroleum Facilities and Chemical Plants, which include an alternative compliance provision allowing the payment of a mitigation fee provision.  In lieu of connecting pressure relief devices (PRDs) to a vapor recovery/control system, facilities subject to Rule 1173 may pay a mitigation fee of $350,000 for each release of VOC from any PRD exceeding the thresholds specified in the rule.  In September 2003, the Board created a special revenue fund to account for the Rule 1173 mitigation fees collected and track projects funded through these fees.

To date, approximately $1.4 million in mitigation fees has been collected as a result of four release events that occurred at two refineries:  Shell Oil Products in Wilmington and BP West Coast Products in Carson.  Shell Oil Products has paid $1,050,000 for three releases, and BP West Coast Products has paid $350,000 for one release.  A Program Announcement (#PA2006-03) was issued on July 8, 2005 soliciting air quality improvement projects at the refineries or within a 10-mile radius of the refineries where the releases occurred, to reduce public exposure associated with the releases.  A total of four proposals were received.  Upon review, staff believes that none of the four proposals are deemed qualified for funding under #PA2006-03.  Two of the proposals are not emission reduction projects, and therefore do not qualify for funding under the Program Announcement.  These include: 1) a monitoring project involving infrared optical imaging and 2) a project involving monitoring at local schools, community education and preparation of an action plan.  A third proposal does not qualify for funding since the projects are not located within a 10-mile radius of the refineries.  The fourth proposal involves an old-vehicle scrapping project and does not meet the cost-effectiveness criteria specified in the Program Announcement.

At the time Rule 1173 was amended by the Board in December 2002, the adopting resolution directed staff to develop air quality improvement projects.  However, the resolution did not specify the types of projects to be funded.  Through prior discussions with community and facilities representatives and the formal solicitation of projects, staff understands there is a strong community need to address the air quality impacts to children attending elementary schools in the project area.  Specifically, there is a need for fenceline monitoring at the refineries as a means of alerting local schools of high air pollution levels, and HEPA filters and other clean room technologies at the local schools to better safeguard children from refinery emissions.  This need for fenceline monitoring and classroom air purifier systems at local schools was also evident in the proposals received under the AQMD BP/ARCO Settlement.  Staff is seeking Board approval to set-aside mitigation funds for these projects which are expected to provide or lead to air quality improvements at the refinery sites and at local schools. 

Proposal

Staff is requesting the Board’s approval to set-aside Rule 1173 mitigation funds and prepare RFPs for the following projects.  Bid submittals will be assessed and proposed contract awards will come before the Board in accordance with the AQMD’s standard procurement procedures.

1. Set-Aside up to $1,050,000 for a Pilot Demonstration of Classroom Air Purifier Systems at Three Local Schools

This pilot demonstration program would consider the feasibility of using a clean room system in elementary school application, and evaluate the associated benefits and costs.  An area at each of the Del Amo, Dominiquez, and Hudson elementary schools would be designated for the “clean room” system.  The purpose of the clean room is to safeguard children attending the elementary school from high air pollution levels.  The project would entail design and installation of the clean room system, and ambient air testing before and after the installation to determine the air quality levels in the room.  AQMD will work with local refineries and school administrators on a notification system to alert teachers and children of any substantial release event or high air pollution levels.  The clean room can be used by children with asthma and respiratory problems during episodes of high air pollution levels. 

1. Set-Aside up to $350,000 to Demonstrate the Feasibility of Using Fenceline Monitoring to Enhance Public Notification

This project will involve the installation of a fence line monitoring unit and wind system at one of the refineries (Shell in Wilmington or BP in Carson).  The purpose of this project is to determine the effectiveness of using fence line monitoring as a means to alert the public of significant levels of VOC in the ambient air.  The monitoring study will hopefully occur over a one-year period depending upon the availability of funds.  The project is expected to identify any substantial VOC emission levels.  Staff will work with the refinery to identify the potential source of emissions, and make recommendations for control actions to mitigate or prevent future emissions.  Staff will also work with local schools to establish an alert system for notifying schools of high air pollution levels.

Benefits to AQMD

The successful implementation of the above program will meet a community need to address air quality impacts at local schools and provide mitigation for excess VOC releases from PRDs subject to Rule 1173. 

Resource Impacts

The total cost of the proposed program shall not exceed $1.4 million.  Sufficient funds are available from the Rule 1173 Mitigation Fees Special Revenue Fund.