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STATEMENT
OF PROCEEDINGS Meeting was called to order at 9:10 a.m. Present: Members Bill Horn, Chairman; Ron Roberts, Vice Chairman; Greg Cox; Dianne Jacob; Pam Slater; also Thomas J. Pastuszka, Clerk. Approval of Air Pollution Control Board Statement of Proceedings/Minutes for meetings of November 14, 2001 ACTION: ON MOTION of Member Roberts, seconded by Member Jacob, the Air Pollution Control Board approved the Statement of Proceedings/Minutes for the meeting of November 14, 2001 AYES: Cox, Jacob, Slater, Roberts, Horn Air Pollution Control Board Agenda Items
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APCB1. |
SUBJECT: |
COMBINED FUNDS EMISSION REDUCTION PROPOSAL (DISTRICT: ALL) |
| OVERVIEW: | ||
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On May 23, 2001 (APCB #3), your Board allocated $713,451 in Vehicle Registration funds for school bus emission reduction projects not funded by the State’s Lower Emission School Bus Program (State School Bus Program). Your Board also adopted a District recommendation to modify the Vehicle Registration Fund Evaluation Criteria (Criteria) to include particulates for evaluating mitigation fund and Vehicle Registration fund school bus projects. That was done by adding 50 points for particulate matter (PM) emission reduction cost-effectiveness to allow PM filter retrofit projects to become more competitive (PM filters reduce 85% of PM emissions from existing diesel school buses). To date, the District has received $3,897,973 in mitigation fees from local power generators which, according to variance agreements, must be used in specific areas, and 92% ($3,571,715) of those fees, from the Encina power plant, must be used for projects in North County. The Criteria The modified Criteria were tested by comparing actual school bus projects submitted in the FY 2000-01 State School Bus Program and heavy-duty diesel projects (transit buses and trash haulers) from the FY 2000-01 Vehicle Registration Fund allocation. These projects were compared to show how well school bus projects compete against typical heavy-duty Vehicle Registration Fund projects. Table 1 ranks projects using the existing Criteria, and Table 2 ranks those same projects using the modified Criteria. Matching Funds were not considered to avoid skewing the results. Using the existing criteria, Table 1 shows the transit bus and diesel to lower emission diesel school bus projects rank highest. Lower emission diesel buses reduce 25% of NOx emissions produced by standard diesel school buses, and 85% of PM emissions. The City of San Diego trash hauler project ranked next, then diesel to CNG school buses, with retrofit projects ranking last. Using the modified criteria, Table 2 shows transit bus and diesel to lower emission diesel school bus replacement projects still rank highest, with retrofit projects for large school districts (those with high average annual miles per bus) next. The San Diego City trash hauler project ranks next, with a mix of the diesel to CNG replacement bus and retrofit projects ranking last. CNG buses provide the greatest emission reductions (both NOx and toxic PM), although, based on cost-effectiveness, they rank low because of their high incremental cost. Transit bus and trash hauler projects score high in both rankings because they operate year round and more hours each day than school buses. Although the modified criteria gives PM reduction projects a higher ranking and a better chance for funding, other factors make it a less-than-optimal mechanism for funding school bus projects. Specifically, the emphasis on cost-effectiveness creates a bias against smaller school districts because their buses drive fewer annual miles, making their projects (retrofit or CNG) less cost-effective. When matching funds are added into the ranking, there is a bias against less affluent districts because those with larger budgets can provide matching funds, increasing the cost-effectiveness of their projects. CNG bus projects rank lowest due to their high incremental cost, even though they are the most health protective choice. Finally, the emphasis on cost-effectiveness ignores the significant commitment to clean air made by some school districts (e.g., Chula Vista, Sweetwater, Oceanside, Poway, and Lemon Grove) in converting to CNG fleets and infrastructure and penalizes them for the higher cost of that commitment. Accordingly, it is recommended that cost-effectiveness-based criteria not be used to allocate Vehicle Registration and mitigation fee funds for school bus projects. The Cabrillo (Encina plant) mitigation agreements restrict funding to North County projects eligible under the State School Bus Program, the Carl Moyer Program (cost-effective, heavy-duty diesel emission reduction projects), or Vehicle Registration Program. In order to insure funding for school bus projects and cost-effective heavy-duty diesel projects in North County, it is recommended that mitigation funds be divided into two equal parts, with half identified for school bus projects, and the other half open to any heavy-duty project. It is also recommended that all school bus funding (mitigation funds, Vehicle Registration funds) generally follow the State School Bus Program guidelines, which direct 50% of funds to projects replacing diesel buses with CNG buses and 25% to retrofit existing diesel buses with PM filters. Under the guidelines, the remaining 25% would be directed to replacing older diesel buses with lower emission diesel buses. However, because mitigation and Vehicle Registration fees are not required to follow state guidelines, the District requests flexibility to evaluate diesel-to-diesel proposals on a case-by-case basis. Only school districts with no CNG access, buses too old to retrofit, or similar circumstances would be eligible for diesel to lower emission diesel replacement buses. The Duke Energy mitigation agreement limits use of its mitigation funds ($310,643) to four South Bay school districts (Sweetwater Union High, San Ysidro Elementary, Chula Vista Elementary, and South Bay Union Elementary), and the Cabrillo agreement (for 17 peaker plants) allows its funds ($13,415) to be used for projects County-wide. The Duke agreement is specifically limited to school districts, and because the fees from the peaker plant agreement are so small, it is recommended that 100% of funds from these two agreements be identified for school bus projects and allocated as described above. Defining “North County” for Mitigation Fee Eligibility The Cabrillo (Encina plant) mitigation agreements are silent as to the definition of “North County,” and there is no formal County definition. Two definitions of North County have been suggested, including all of Supervisorial District 5, plus Escondido; and the area north of Sorrento Valley, including all of District 5, plus the Ramona, Poway, and Escondido school districts. For purposes of allocating power generator mitigation funds, it is recommended your Board adopt the second definition of North County: the area north of Sorrento Valley, including all of Supervisorial District 5, extending eastward and incorporating the Poway, Ramona, and Escondido school districts. This definition maximizes the area and number of children that can benefit from eligible projects and adheres to the intent of the agreement. State School Bus Program Matching Funds The state FY 2001-02 budget includes $16 million for the FY 2001-02 Lower Emission School Bus Program (State School Bus Program) funding, with $1,360,000 for San Diego, with $340,000 (25%) for retrofitting existing buses with PM filters (reducing PM by 85%) and $1,020,000 (75%) for new bus replacements. A 10% local match is required to receive replacement bus funding. It is recommended that $102,000 be allocated from Vehicle Registration Funds for this purpose. If $102,000 in local funds is added to state school bus replacement funds, $748,000 will be allocated for CNG replacement buses (about six buses) and $374,000 for lower emission diesel buses (about four buses). |
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| FISCAL IMPACT: | ||
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Funds for this request are not budgeted. The funding source is the Air Quality Trust fund balance. If approved, the appropriation of $102,000 will result in $1,122,000 for replacement school buses. This request will require no additional staff. |
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BUSINESS IMPACT STATEMENT: |
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This proposal will have no impact on business customers. However, approval of these recommendations would provide North County businesses and public entities an opportunity to submit emission reduction projects that improve air quality. |
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RECOMMENDATION: |
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AIR POLLUTION CONTROL OFFICER 1. Appropriate $102,000 from Vehicle Registration funds for the required 10% match for FY 2001-02 State School Bus Program replacement bus funding, based on fund balance in the Air Quality Trust Fund. (4 VOTES) 2. For the purposes of allocating power generator mitigation fees, define North County as the area North of Sorrento Valley, including all of District 5 and the Poway, Ramona, and Escondido school districts. 3. Direct the Air Pollution Control Officer to recommend an allocation of FY 2001-02 State School Bus Program funds, South Bay and Countywide mitigation fees, and 50% of North County Mitigation fees for school bus projects, and return with the proposed allocation in the first quarter of 2002. 4. Authorize the Air Pollution Control Officer to issue an RFP for heavy-duty-diesel projects funded with 50% of North County mitigation funds, evaluate submitted projects based on the modified Criteria, and return with a recommended allocation in the second quarter of 2002. |
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| ACTION: | ||
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ON MOTION of Member Roberts, seconded by Member Jacob, the Members of the Air Pollution Control Board took action as recommended, on Consent. AYES: Cox, Jacob, Slater, Roberts, Horn |
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APCB2. |
SUBJECT: |
NOTICED PUBLIC HEARING ADOPTION OF AMENDED RULE 67.0 – ARCHITECTURAL COATINGS (DISTRICT: ALL) |
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Rule 67.0 was first adopted in 1977 to regulate volatile organic compounds (VOC) emissions from architectural coatings. The rule applies to the manufacture, sale, and use of architectural coating, which include a variety of residential, commercial, and industrial paints, stains, varnishes, and other coatings. In an effort to develop an architectural coatings rule that could be implemented by all air districts in the state, a Suggested Control Measure (SCM) was developed by the districts, through the California Air Pollution Control Officers Association (CAPCOA), and the Air Resources Board (ARB) staff over a two-year period. The ARB adopted the SCM in June 2000. The SCM is based on work related to a similar rule adopted by the South Coast Air Quality Management District. The proposed amendments also implement a state-mandated requirement for all feasible control measures, necessary because the District is not yet in attainment of the state ambient air quality standard for ozone. The 2001 Regional Air Quality Strategy Update adopted by the Air Pollution Control Board on August 8, 2001 (APCB #1), includes a commitment to adopt these revisions. As part of this effort, the District utilized many of the analyses and documents prepared by ARB in support of the SCM after finding that these materials were applicable to San Diego. The proposed changes are consistent with the SCM provisions to provide for: consistent definitions and VOC limits to facilitate coating manufacturers’ ability to comply, an optional, statewide VOC emissions averaging program, and avoiding possible litigation that might be brought by certain industry groups opposed to more stringent rules. Similar rules have been adopted by other California air pollution control districts, including South Coast, Sacramento, Bay Area, Ventura, Santa Barbara, and the San Joaquin Valley. South Coast was sued over its more stringent rule. South Coast prevailed in the trial court, but the case is still on appeal. Sacramento, the first air district to adopt ARB’s SCM in May of this year, was not sued over its rule. Coating manufacturer representatives will likely attend the Rule 67.0 hearing to comment on the proposed amendments. Nineteen (19) new coating categories have been added; the allowable VOC content limits for 18 coating categories decrease on January 1, 2003, and one coating category on January 1, 2004; container labeling specifications (e.g. date of manufacture code, VOC content, thinning recommendations) and manufacturer reporting requirements for selected coating categories have been added; and various definitions and test methods updated. Manufacturers may use a temporary emissions averaging program, operated statewide by the ARB, to comply with the new VOC content limits from January 2003 through 2005. The amendments will reduce VOC emissions by approximately 1.5 tons per day (approximately 500 tons per year) when fully implemented in 2005. The estimated cost-effectiveness of the rule is $3.28 per pound of VOC emissions reduced, comparable to the cost-effectiveness of other District VOC regulations and control measures identified in the Regional Air Quality Strategy. Overall, adopting the amended rule is not expected to pose significant economic impacts on affected industry in San Diego County. Neither of two local architectural coating manufacturers objected to the amendments. Pursuant to the California Environmental Quality Act (CEQA), an Environmental Impact Report (EIR) was prepared evaluating the potential environmental consequences resulting from the proposed amendments. No significant adverse environmental effects were identified. The Board must review and consider the information in the EIR and certify that the EIR reflects the Board’s independent judgment and analysis of potential environmental consequences resulting from adopting the proposed amendments. A public workshop was held on September 6, 2001. The workshop report is provided in Attachment VIII. Issues Two primary issues were raised by industry. Several manufacturers requested that the 2005 sunset provision contained in the VOC averaging program be deleted to ensure availability of the averaging provisions if coating technology does not evolve in time to allow the future VOC limits to be met. They also expressed concern that EPA might disapprove a future repeal or extension of the sunset date as a relaxation of the federal SIP. The averaging provisions must sunset in 2005 to ensure that certain air districts (not San Diego) meet their 2005 SIP commitments. Since the averaging program will be a statewide program, implemented by ARB, consistency among the California air districts is important. Consequently, it is not recommended that the sunset date for the averaging provision be extended at this time. In San Diego, evolving technology can be addressed in two ways. First, ARB intends to reassess coating technologies prior to the effective dates of the future limits. ARB and the South Coast Air Quality Management District will be working jointly to identify any problems industry may have in meeting the proposed limits, which become effective in South Coast six months earlier than the effective date in Rule 67.0. The District will follow these efforts and, if necessary, recommend appropriate changes prior to the effective date of the future standards. Second, there is the flexibility to make future amendments because EPA will not be able to disapprove any such changes since the amended rule will not be submitted to EPA as part of the SIP. The amended rule reflects more stringent emission standards than required by federal regulations, and is not needed to attain the one-hour federal ozone standard. Were the amended rule included in the SIP, EPA could object to any necessary future rule changes. Also, several coating manufacturers requested that EPA’s National Architectural Coating Rule limits be used as the ceiling (upper) limits for the proposed VOC averaging program. This proposal is unacceptable because it would relax VOC content limits that have been in effect in California for over ten years. |
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| FISCAL IMPACT: | ||
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The recommended action will have no fiscal impact on the District. |
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RECOMMENDATION: |
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AIR POLLUTION CONTROL OFFICER 1. Consider the Final Environmental Impact Report (EIR) and adopt the associated Resolution: (a) finding that the Final EIR has been completed in compliance with the California Environmental Quality Act and that the Report reflects the independent judgment and analysis of the Board; and (b) certifying the Final EIR as a true and complete statement of environmental impacts of adopting the proposed amendments to Rule 67.0 and making findings that there is no substantial evidence in the entire record before the Board that the proposed amendments will have a significant adverse effect on the environment; and (c) finding that there is no evidence that adopting the proposed amendments will have potential for an adverse effect on wildlife resources or the habitat on which the wildlife depends, and, on the basis of substantial evidence, that the presumption of adverse effect in California Code of Regulations, Title 14, Section 753.5(d) has been rebutted. 2. Approve the Certificate of Fee Exemption for De Minimis Impact Finding exempting the District from payment of fees to the California Department of Fish and Game. (ii) that an analysis of existing requirements applicable to the source or category is not required by Section 40727.2 of the Health and Safety Code because the proposed amendments do not impose new or more stringent requirements; 3. After adopting the Resolution approving the Final Environmental Impact Report and Certificate of Fee Exemption, adopt the resolution adopting amended Rule 67.0 into the District Rules and Regulations and make appropriate findings: (i) of necessity, authority, clarity, consistency, non-duplication and reference as required by Section 40727 of the State Health and Safety Code; (ii) that adopting amended Rule 67.0 will alleviate a problem and will promote attainment of ambient air quality standards (Section 40001 of the State Health and Safety Code); (iii) that an assessment of the socioeconomic impacts of the proposed amendments has been prepared and that the socioeconomic impacts of the proposed new rule have been actively considered and the District has made a good faith effort to minimize adverse socioeconomic impacts; and (iv) that an analysis of the effectiveness of the proposed amended rule, including an analysis of the cost-effectiveness of the potential control options, has been prepared pursuant to Health and Safety Code Section 40920.6, and that the proposed rule emission limits represent cost-effective options. |
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| ACTION: | ||
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ON MOTION of Member Roberts, seconded by Member Cox, the Members of the Air Pollution Control Board closed the hearing and took action as recommended, adopting Findings as presented by County Counsel, and pursuant to Section 40727 of the Health and Safety Code, adopting Resolutions No. 01-358, entitled: RESOLUTION CERTIFYING THE FINAL ENVIRONMENTAL IMPACT REPORT FOR PROPOSED AMENDMENTS TO RULE 67.0, ARCHITECTURAL COATINGS-, and No. 01-359, entitled:. RESOLUTION AMENDING RULE 67.0 OF REGULATION IV OF THE RULES AND REGULATIONS OF THE SAN DIEGO COUNTY AIR POLLUTION CONTROL DISTRICT AYES: Cox, Jacob, Slater, Roberts, Horn |
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There being no further business, the Board adjourned at 11:25 a.m. THOMAS J.
PASTUSZKA Notes by: Lampley NOTE: This Statement of Proceedings sets forth all actions taken by the San Diego County Air Pollution Control Board on the matters stated, but not necessarily the chronological sequence in which the matters were taken up. |