BOARD MEETING DATE: December 5, 2008
AGENDA NO. 18

REPORT:

Administrative Committee

SYNOPSIS:

The Administrative Committee met Friday, November 14, 2008, and reviewed the proposed agenda for the December 5, 2008 Board meeting. The Committee also discussed various issues detailed in the Committee report. The next Administrative Committee meeting is scheduled for Friday, December 12, 2008, at 9:00 a.m. in Conference Room CC-8.

RECOMMENDED ACTIONS:

Receive and file.
 

Dr. William A. Burke, Chair
Administrative Committee

Attendance: Chair William Burke attended via videoconference. Present at AQMD were Committee Members Jane Carney and Dennis Yates. Mayor Loveridge was absent due to his attendance at the National League of Cities Annual Conference in Orlando, FL; and Supervisor Wilson was attending the State Golden Guardian Event at March Air Reserve Base as part of the Great Southern California Shakeout exercise.
 

ACTION/DISCUSSION ITEMS:

1. Board Members’ Concerns: Dr. Wallerstein stated that three items were raised at the November 7, 2008, Board meeting: (1) Dr. Lyou requested that future sole-source contracts include a description of the contractor’s task orders and enhance other information, and Dr. Wallerstein responded that an attachment will henceforth be included with future Board letters to address this issue; (2) Dr. Wallerstein stated that Dr. Lyou requested that communities be availed of an official public comment process with the Prosecutor’s Office regarding proposed major settlements of violation notices, which would entail a major policy revision. Dr. Wallerstein explained that when AQMD was involved with Gregg Industries in major settlement discussion, he was requested by Mayor Yates to speak to community members requesting their suggestions, which staff took into consideration. Dr. Burke recommended a new Policy Committee be initiated to review fines and major settlement actions taken against companies, with Dr. Wallerstein and Kurt Wiese, General Counsel, as he felt the Administrative Committee meeting is not the correct forum to discuss these issues; and (3) Dr. Wallerstein stated that Councilmember Reyes Uranga has raised an issue several times regarding allocation of settlement monies in the community closest to the affected facility. She also desires closer coordination of the BP settlement monies and other potentially available funds. Ms. Carney asked whether Councilmember Reyes Uranga is seeking a policy regarding the types of projects implemented or to prioritize the projects. Dr. Wallerstein stated that the best example is the Valero penalty monies which were spent in the community near the refinery, because it dealt with acutely hazardous material released at the refinery. Ms. Carney recommended that this item not be revisited as it relates to the geographic areas involved.
    
2. Chairman’s Report of Approved Travel: None.
    
3. Approval of Compensation for Board Member Assistant(s)/Consultant(s): None.
    
4. Report of Approved Out-of-Country Travel: None.
    
5. Procedures for Notifying Board Members of Upcoming AQMD Events:
   Dr. Wallerstein stated that Mayor Loveridge raised the issue that Board Members should be notified of upcoming meetings, such as the one that took place in San Bernardino where CARB scheduled a community meeting to discuss the Union Pacific’s initial draft of the ICTF and Dolores Railyard diesel PM mitigation plan. He continued that staff provides the Board Members with a weekly Calendar of Events from our website, and also notifies each of them when town hall or other meetings are scheduled. Dr. Wallerstein requested the Committee’s guidance on other meetings about which Board Members should be notified. Dr. Burke and Mayor Yates stated they are always being noticed and that, in fact, there have been a lot of additional e-mails lately, including the Calendar of Events, sent to their Board Assistants.
   
   
   DECEMBER AGENDA ITEMS:
    
6. Issue RFP for Potential Intermediation Services for GHG Certified Emission Reductions: Ms. Carney asked for a one-month delay on this item to allow the Southern California Climate Exchange issue to be discussed at the December 5, 2008 Board meeting.
   
   Ms. Carney left the conference room at 9:18 a.m. as she was abstaining from item number seven due to a potential conflict of interest.
    
7. Adopt Proposed Rule 317 – Clean Air Act Non-Attainment Fees: Laki Tisopulos, Assistant DEO/Planning, Rule Development & Area Sources, stated that staff is recommending to implement the Clean Air Act Non-Attainment Fee program, which is applicable to major sources of NOx or VOC. The fees would apply to the portion of their emissions in excess of 80% of their 2010 emissions beginning in 2011. The Clean Air Act sets the fee at $5,000 per ton and requires the fee to be adjusted annually based on the CPI. Dr. Tisopulos added that the Board may hear comments from impacted facilities; specifically, that they would like to see more flexibility in determining the baseline emissions and how the fee revenues will be used. Dr. Tisopulos stated that the baseline suggestions received would complicate the program implementation and its approvability by EPA but staff was open to suggestions regarding using a portion of the fees within the facilities for pollution control efforts. Staff will develop implementation guidelines for the disbursement of the fees with input from stakeholders and will bring these guidelines to the Board for approval. Dr. Tisopulos stated that PR 317 is modeled after the rule that was adopted by Sacramento, which is the only such rule to be SIP approved. San Joaquin Valley APCD has adopted a rule that provides some flexibility in determining baseline emissions but it has not yet been SIP approved. He explained that if AQMD goes with the suggested baseline options, we could be criticized for providing a mechanism to reduce the fees. Dr. Wallerstein explained that the flexibility that industry is advocating means of changing the calculation in a manner that reduces the amount of fees paid by the facilities. He continued that a safer approach would be to go a more rigorous way, especially since the RECLAIM program has been severely criticized for how baselines were established; and staff is proposing Board resolution language directing staff to develop an expenditure protocol that would allow a certain amount of money to be spent within the fence line. Mayor Yates asked if any of the facilities have BACT, and Dr. Tisopulos responded that the new facilities have BACT, and emission levels will be 100% offset. The rule provides such facilities with some level of flexibility by allowing them to establish their baseline emissions at the permitted, fully offset level. However, existing sources that install BACT would not be entitled to the same flexibility. Mayor Yates asked if AQMD can reduce the fees or is EPA aggressive about this issue, and Dr. Tisopulos stated that there is little flexibility on the issue provided by the very specific Clean Air Act language.
   
   Ms. Carney returned to the meeting at 9:24 a.m.
    
8. Amend Proposed Rule 314 – Fees for Architectural Coatings: Dr. Tisopulos stated the Board adopted this rule a few months ago to recover the costs of implementing the architectural coatings program, but there are two outstanding issues: (1) to make sure that paint products sold through “big box” outlets are included in the rule; and (2) not to double-charge recycled paints. Dr. Tisopulos explained that many “big box” stores do monitor what is being shipped and sold, through their stores and are willing to provide such information to the manufacturers. Staff initiated a rule amendment to address these two issues and will bring the proposal to the Board in January. Dr. Wallerstein added that at the time the Board approved this regulation, there were issues raised by the industries as to whether or not AQMD needed the proposed stated level of staffing for the laboratory and field. Dr. Tisopulos mentioned that AQMD conducted a “blue skies” type of operation for two weeks in July with six inspectors. More than 180 stores were visited, and staff identified non-compliant products in approximately 40% of the stores.
   
   
9. Execute Contract for Maintenance and Management Services of Fast Fill CNG Fueling Station at AQMD Headquarters and Issue Purchase Orders for CNG Station Enhancements: Dr. Matt Miyasato, Asst. DEO/Technology Advancement Office, stated that staff is requesting to execute a contract to continue maintenance and management of AQMD headquarters, fast fill CNG station, and to install a security camera and automated gate to provide 24-hour public access. With the security camera, the security guards will be able to see the vehicles pulling in so they may open the automated gate and observe the individuals while they are fueling. Mayor Yates asked if there was any sign posting on the 57/60 Grand Avenue exit or nearby roads indicating directions to the AQMD CNG station. Dr. Miyasato responded that currently there are no signs, but staff would look into implementing this suggestion.
   Moved by Yates; seconded by Carney; and unanimously approved.
    
10. Authorize Purchase of Phone Switch Upgrades: Chris Marlia, Asst. DEO/Information Management, stated that this item is to execute a contract to upgrade AQMD’s phone switch system. The hardware was updated in October 2007, but now the software is required to be upgraded as support of the software will not be available.
    Moved by Carney; seconded by Yates; and unanimously approved.
    
    
11. Issue RFP for Diamond Bar Headquarters Audio-Visual Upgrade: Mr. Marlia stated that staff is requesting the release of an RFP to obtain costs of the equipment to upgrade the audio-visual equipment in the auditorium, conference center, and Hearing Board. He explained that a small contract went out to determine the specific requirements, and detailed drawings and specifications were provided for separate components.
    Motion by Yates; seconded by Carney; and unanimously approved.
    
    
12. Annual Report on 457 Deferred Compensation Plan: Eudora Tharp, Asst. DEO/Administrative & Human Resources, noted that Rick Pearce was absent due to a death in the family, and stated that in May 2008, the Board approved a charter for the employee Deferred Compensation Plan Committee. She continued that this action is to receive and file the FY 2007-08 report, which is based on an independent third-party consultant’s analysis that shows plan earnings and costs compare favorably with industry averages. Ms. Carney stated that she would like a better understanding of what Board Members’ fiduciary responsibilities are with respect to this plan. Dr. Wallerstein suggested this item be delayed for a month so Mr. Pearce can have an outside expert available to discuss the plan and answer questions.
     
13. Local Government & Small Business Advisory Group Minutes for September 12, 2008 meeting: Attached for information only is the Local Government & Small Business Advisory Group minutes for the September 12, 2008 meeting.
     
14. Review December 5, 2008 Governing Board Agenda: Dr. Wallerstein stated that the upcoming December agenda is quite lengthy due to the several rules being heard, with possibly a lot of testimony received. He added that two items are being requested for addition to the agenda: (1) to initiate a Phase II of the HEROS Program to be reviewed at the 11/21 Technology Committee meeting; and (2) for staff to request Board approval of the interim CEQA guidance on greenhouse gas significance threshold for stationary sources, to include EIR, rulemaking and permitting purposes, except for land use projects.
     
15. Other Business: None.
     
16. Public Comment: Steve Schuyler, WSPA, introduced himself and explained that he wanted to clarify WSPA’s comments regarding the baseline issue on Rule 317. He continued that flexibility on the baseline potentially could lower fees, but there is also a built-in penalty if there is no baseline flexibility. Mr. Schuyler continued that if in 2010 the economy is irregular for the refineries, the baseline could be inordinately set low so that fees will have a built-in 20% penalty. He provided an example, such as a facility running at 100 tons per year, but in 2010 the facility runs at 80 tons, which would have the baseline set off of that with fees paid on 80%. Dr. Wallerstein stated that this issue will need to be resolved by the Board. Staff has reviewed arguments from members of WSPA could conceivably delay projects to keep their emissions up in order to later reduce the fees to be paid. He stated that staff feels the way this item is proposed is the fairest way and most consistent with what Sacramento has done, and will likely obtain U.S. EPA approval. Dr. Wallerstein stated that staff has approached WSPA with a provision to give flexibility on how the money can be spent, including using it in their own facility.
     

Meeting adjourned at 9:44 a.m.
 

Attachment (DOC, 59k)

Local Government & Small Business Assistance Advisory Group Minutes for September 12, 2008