BOARD MEETING STATE OF CALIFORNIA AIR RESOURCES BOARD JOE SERNA, JR. BUILDING CALIFORNIA ENVIRONMENTAL PROTECTION AGENCY CENTRAL VALLEY AUDITORIUM, SECOND FLOOR 1001 I STREET SACRAMENTO, CALIFORNIA THURSDAY, FEBRUARY 23, 2006 9:00 A.M. TIFFANY C. KRAFT, CSR, RPR CERTIFIED SHORTHAND REPORTER LICENSE NUMBER 12277 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 ii APPEARANCES BOARD MEMBERS Dr. Robert Sawyer, Chairperson Ms. Dorene D'Adamo Supervisor Mark DeSaulnier Ms. Lydia H. Kennard Mr. Ronald O. Loveridge Supervisor Barbara Patrick Mr. Ron Roberts STAFF Mr. Tom Cackette, Chief Deputy Executive Officer Mr. Tom Jennings, Acting General Counsel Mr. Michael Scheible, Deputy Executive Officer Ms. Lynn Terry, Deputy Executive Officer Ms. Kathleen Tschogl, Ombudsman Ms. Catherine Witherspoon, Executive Officer Ms. Lori Andreoni, Board Secretary Mr. Carl Brown, Manager, Stationary Source Enforcement Section Ms. Cynthia Garcia, Population Studies Section, RD Mr. Jack Kitowski, Chief, On-Road Controls Branch, MSCD Ms. Renee Marshall, Manager, Planning & Reg Development Section, MSCD Ms. Cherie Rainforth, Air Resources Engineer, Planning and Regulatory Development Section, MSCD PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 iii APPEARANCES CONTINUED ALSO PRESENT Mr. John Dunlap, Engine Control Systems Mr. Mike Eaves, California Natural Gas Vehicle Coalition Ms. Bonnie Holmes-Gen, American Lung Association Mr. Kirk Hunter, Southwest Agency Mr. Julian Imes, Donaldson, Donaldson Filtrations Solutions Mr. Lance King, Community Solutions Ms. Gretchen Knudsen, International Truck and Engine Corp. Mr. Marty Lassen, Johnson Matthey Catalysts Mr. Roger McCoy, San Joaquin Valley Air Pollution Control District Mr. Juan Orellado, Bay Area Air Quality Management District Mr. Stephen Rhoads, School Transportation Coalition PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 iv INDEX PAGE Pledge of Allegiance 1 Item Chairperson Sawyer 2 Executive Officer Witherspoon 3 Staff Presentation 3 Q&A 13 Item 6-2-2 Chairperson Sawyer 19 Executive Officer Witherspoon 20 Staff Presentation 21 Q&A 35 Mr. Hunter 48 Ms. Knudsen 51 Mr. McCoy 52 Ms. Holmes-Gen 61 Mr. Imes 64 Mr. Lassen 69 Mr. Dunlap 73 Mr. Rhoades 76 Mr. Ortellado 80 Mr. Eaves 82 Q&A 84 Motion 94 Vote 94 Public Comment Mr. King 95 Closed Session 106 Adjournment 106 Reporter's Certificate 107 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 1 1 PROCEEDINGS 2 CHAIRPERSON SAWYER: Good morning. The February 3 23rd, 2006, meeting of the Air Resources Board will now 4 come to order. 5 Will you please join me in the Pledge of 6 Allegiance? 7 (Thereupon the Pledge of Allegiance was 8 recited in unison.) 9 CHAIRPERSON SAWYER: Will the Clerk please call 10 the roll? 11 SECRETARY ANDREONI: Ms. Berg? 12 Ms. D'Adamo? 13 BOARD MEMBER D'ADAMO: Here. 14 SECRETARY ANDREONI: Supervisor DeSaulnier? 15 Dr. Gong? 16 Ms. Kennard? 17 BOARD MEMBER KENNARD: Here. 18 SECRETARY ANDREONI: Mayor Loveridge? 19 BOARD MEMBER LOVERIDGE: Here. 20 SECRETARY ANDREONI: Supervisor Patrick? 21 SUPERVISOR PATRICK: Here. 22 SECRETARY ANDREONI: Ms. Pineda? 23 Supervisor Roberts? 24 SUPERVISOR ROBERTS: Here. 25 Mrs. Riordan? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 2 1 Dr. Sawyer? 2 CHAIRPERSON SAWYER: Here. 3 We have a quorum. I would like to make a couple 4 of remarks at the beginning. First, I would like to note 5 that this is the end of the month of February, or almost, 6 and this is the time when Dr. Lloyd will be leaving 7 service as the Secretary of CalEPA. I want to personally 8 thank him for his encouragement for me to take this 9 position and for all of his service which he has given to 10 clean air in the state of California and many different 11 roles over his career. And we look forward to working 12 with him in his next career as well. 13 I would like to especially thank Supervisor 14 Patrick for the kind remarks she made in introducing me at 15 the San Joaquin Valley Air Quality Management District 16 last week as part of my visit there. 17 And I would also like to thank the six of you who 18 are here and assure our quorum. I'm constantly worried we 19 won't have a quorum, and I'm particularly looking ahead to 20 times when we have substantial recusals coming up, and I 21 think this is going to be the April meeting when the 22 issues will prevent some of you from participating. So I 23 want to thank you, and I also want to remind you and your 24 colleagues who are not here that we really need you to 25 come. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 3 1 At this time, I would like to inform all the 2 witnesses signing up to speak today, please be aware the 3 Board will be imposing a three-minute time limit so that 4 everyone gets a chance to speak. I would also like to ask 5 that each speaker put his or her testimony in your own 6 words. You won't have to read testimony that has been 7 submitted to us. We have that already for the record. 8 It's much more effective and easier for the Board to 9 follow you if you go straight to the main points you want 10 to make. 11 I would like now everyone in the room to please 12 note the emergency exits to your right of the hearing room 13 as well as to the rear through the main entrance. If 14 exiting to the rear of the hearing room, please follow the 15 exit signs to the left past the rest rooms. In the event 16 of a fire alarm, we're required to evacuate this room 17 immediately. Evacuees will exit down the stairways and 18 possibly to a relocation site across the street. When the 19 all-clear signal is given, we'll return to the hearing 20 room and resume the hearing. 21 We will now take Agenda Item 6-2-1, our health 22 update. Catherine. 23 EXECUTIVE OFFICER WITHERSPOON: Thank you, Dr. 24 Sawyer. And good morning, members of the Board. The 25 study being presented today is especially valuable because PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 4 1 it took place in California and shows an association 2 between traffic-related pollution and asthma in children 3 from ten different communities within the Los Angeles 4 area. Ms. Cynthia Garcia will make today's presentation. 5 (Thereupon an overhead presentation was 6 presented as follows.) 7 MS. GARCIA: Thank you, Ms. Witherspoon. Good 8 morning, Dr. Sawyer and members of the Board. 9 Today's update will discuss a study on childhood 10 asthma and exposure to traffic. This study was designed 11 to explore the association between asthma and exposure to 12 traffic-related air pollutants among children living in 13 Southern California. 14 --o0o-- 15 MS. GARCIA: The growing body of literature is 16 emerging which links exposure to traffic-related air 17 pollution and health effects. We have brought health 18 updates before the Board highlighting studies which show 19 an association between traffic pollution and health 20 impacts, including mortality, prenatal, cardiovascular, 21 and respiratory effects. Staff highlighted a Dutch study 22 by Hoek and Brunekreef on the link between traffic and 23 premature mortality. The study examined effects of 24 long-term exposure to traffic-related air pollutants on 25 people living near roads and found a doubling of the risk PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 5 1 of death from heart or lung disease compared with those 2 who live in less traffic areas. 3 Staff also highlighted a Los Angeles study on the 4 prenatal effects from traffic by Wilhelm and Ritz. This 5 study found that infants born to women living near high 6 traffic areas showed an increasing risk of premature birth 7 and low birth weight. 8 Another investigation presented to the Board was 9 a North Carolina study on the cardiovascular effects from 10 particulate matter exposure in cars on highway patrol 11 troopers by Riediker. This study found that in young 12 healthy non-smoking males that in-vehicle exposure to 13 PM2.5 may cause changes that involve inflammation, 14 coagulation, and cardiac rhythm. 15 Staff also highlighted the East Bay Children's 16 Respiratory Study by Kim, et al. Although pollutants' 17 concentrations in this study were relatively low, the 18 investigators were able to observe an increase in asthma 19 and bronchitis symptoms in children that attended schools 20 near by freeways versus those from a distance or upwind 21 from freeways and major roads. The results of the study 22 helped support the passage of a school siting bill 23 authored by Senator Martha Escutia in 2003. This bill 24 amends the Education Code to ensure that new school sites 25 are prohibited within 500 feet from the edge of the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 6 1 closest traffic lane on the freeway or other busy traffic 2 corridors. 3 --o0o-- 4 MS. GARCIA: Although there are a significant 5 number of studies investigating traffic, air pollution 6 exposure, and its relationship to asthma, many of these 7 studies have been done in Europe. How well these studies 8 can be extrapolated to the U.S. is of concern since 9 factors such as the relative proportion of diesel to 10 gasoline-powered vehicles may differ. 11 Recently, a number of studies have been completed 12 in the U.S. and in California. Even though this link of 13 auto traffic air pollution and asthma symptoms in children 14 has been studied, the results are not consistent. The 15 reason for the inconsistency could be the use of different 16 indicators for traffic, such as centralized ambient 17 monitoring, residential proximity, traffic volume, 18 monitoring of homes, and modeling. Therefore, there is a 19 need to understand how representative these traffic 20 surrogates are and to compare and validate these different 21 estimates of traffic against measured pollution for the 22 same study subjects. 23 The study presented to you today evaluates asthma 24 impacts from several indicators of traffic exposure and 25 compares them to the outside measures of NO2 for the same PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 7 1 study subjects within California. 2 --o0o-- 3 MS. GARCIA: Investigators studied the pollution 4 asthma link in 208 children selected at random from ten 5 Southern California communities. Fifteen percent of these 6 children had asthma. The communities studied include the 7 city of Alpine, Atascadero, Lake Elsinore, Lancaster, Long 8 Beach, Mira Loma, Riverside, San Dimas, Santa Maria, and 9 Upland. These communities have different mixtures of 10 traffic air pollution sources and concentrations. 11 The children in the study are part of the 12 University of Southern California Children's Health Study 13 which has been funded by the Air Resources Board. The 14 Children's Health Study is the longest U.S. investigation 15 into air pollution in children's health. The study has 16 tracked the children's respiratory health since 1993 and 17 is currently being funded by National Institute of 18 Environmental Health Science. 19 --o0o-- 20 MS. GARCIA: In order to study the association 21 between asthma and traffic, the investigators determined 22 the distance from the nearest local freeway to each 23 child's home as well as how many vehicles traveled within 24 150 meters of the child's residence. They placed air 25 samplers outside the homes to measure nitrogen dioxide PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 8 1 levels. They estimated traffic related air pollution 2 levels using models that include weather condition, 3 vehicle count, and other important factors. The model 4 base estimates were done for traffic pollution from 5 freeways and for pollution from non-freeway roads. 6 The investigators also tested for all of the 7 potential confounders that are known to significantly 8 effect respiratory health outcomes, including gas stoves, 9 maternal smoking, and environmental tobacco smoke. The 10 study investigated the effects of traffic pollution on 11 asthma prevalence, recent wheeze, and medication use by 12 examining association with different traffic indicators. 13 --o0o-- 14 MS. GARCIA: Asthma prevalence in the study was 15 defined as a report of doctor diagnosis of asthma during 16 the child's lifetime. Recent wheeze and medication use 17 were determined by asking whether the child had wheezed or 18 used medication within the last twelve months. The 19 investigators found an association between asthma 20 prevalence and three indicators of traffic pollution: 21 Outdoor NO2 measurements at the home, proximity to a 22 freeway, and model freeway pollutant exposure. Asthma 23 prevalence was not associated with traffic volume within 24 150 meters of homes or with model pollutant exposures from 25 non-freeway roads. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 9 1 The investigators also found robust associations 2 between the same three traffic indicators and recent 3 wheeze and medication use. Again, traffic volumes within 4 150 meters of the home and modeled non-freeway exposures 5 did not show these associations. Traffic volumes within 6 150 meters of homes were primarily comprised of traffic 7 from smaller streets. 8 --o0o-- 9 MS. GARCIA: The study found that NO2 levels 10 could be used as a traffic indicator. The investigators 11 evaluated the different traffic metrics by correlating 12 these to the measured NO2 levels at homes. The 13 investigators found that at each community the measured 14 NO2 concentrations was more strongly correlated with 15 estimates of freeway related pollution than with 16 non-freeway road pollution, as you can observe from the 17 graph, the model freeway metric, and the highest 18 correlation of .57. 19 In addition, as the distance from the home to the 20 freeway increases, the level of NO2 decreases, just as one 21 would expect, resulting in a correlation of .54. A weaker 22 correlation was seen between measured NO2 and the 23 non-freeway roads and the traffic volume within 150 24 meters. NO2 is a product of pollutants emitted from 25 combustion engines such as those in cars and trucks. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 10 1 --o0o-- 2 MS. GARCIA: In summary, Dr. Gauderman and his 3 co-investigators found the closer the child lived to a 4 freeway, the higher the child's asthma prevalence. 5 Children who live 400 meters from the freeway had an 89 6 percent higher risk of asthma than children living 1,600 7 meters away from the freeway. The proximity to freeways 8 was linked to increased wheezing and current asthma 9 medication use as well as with increased measurement of 10 NO2 levels. 11 The researchers determined air pollution from 12 freeway traffic influenced NO2 concentrations at homes 13 more strongly than pollution from other types of roads. 14 The investigators caution that researchers do not know 15 that NO2 is associated with asthma. NO2 travels together 16 with other airborne traffic pollutants, such as 17 particulate matter and other toxics. So NO2 may be an 18 indicator for other asthma impacting pollutants. 19 --o0o-- 20 MS. GARCIA: It is becoming clearer the closer 21 children live to the freeway, the higher the traffic 22 pollution levels are inside their homes. The affect of 23 traffic pollution on children's health is a research 24 priority for the Air Resources Board. The ARB also 25 recognizes there is a need to study children who live in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 11 1 economically disadvantaged neighborhoods since they may be 2 more susceptible to adverse health impacts from air 3 pollution exposure. Therefore, ARB is currently funding 4 four studies that will add to the growing body of 5 literature on the effects of traffic on health. 6 The first two studies will investigate the 7 effects of traffic on childhood asthma at the community 8 level, mostly in economically disadvantaged neighborhoods. 9 The other study will examine cardiovascular impacts from 10 traffic in the elderly. 11 The first study is researching the association 12 between childhood asthma and traffic-related air 13 pollution. The study's objective is to investigate the 14 effects of exposure to traffic-related pollutants on lung 15 function and asthma by using geostatistical models. The 16 study taps into the Los Angeles Family and Neighborhood 17 Survey. Most of the children participating in this survey 18 live in economically disadvantaged and high-traffic 19 density neighborhoods in Los Angeles County, California. 20 The second study is a refinement of the East Bay 21 Children's Respiratory Health Study. The study will 22 examine the association between traffic pollution and 23 respiratory health among children living and attending 24 schools at varying distance from highway traffic roads in 25 Alameda County, California. This study will address PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 12 1 issues of environmental justice for sub-populations who 2 are often highly exposed to traffic. This study will also 3 investigate how well differing traffic indicators 4 correlate and will determine which indicator is more 5 representative of traffic pollution. 6 The last two studies examine the effects of 7 traffic exposure on cardiovascular function in elderly 8 subjects during freeway travel and the effects of 9 long-term exposure from air pollution, including traffic 10 pollution in the development of cardiovascular and 11 cardiopulmonary disease and mortality in a cohort of 12 elderly teachers. We hope to bring the findings of these 13 studies to the Board in the near future. 14 --o0o-- 15 MS. GARCIA: In conclusion, today's study 16 strengthens an emerging body of evidence that traffic air 17 pollution is associated with childhood asthma and that a 18 freeway is a major source of air pollution within a 19 community. The Air Resources Board will continue to 20 investigate the impact of traffic pollution on children, 21 one of our sensitive populations. 22 This concludes our presentation. We will be 23 happy to answer any questions. Thank you very much. 24 CHAIRPERSON SAWYER: Thank you, Ms. Garcia, for 25 the very clear presentation. I think it's important that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 13 1 we be kept up to date on the latest health studies just to 2 remind ourselves why it is that we do what we do. 3 Are there any questions from the staff? 4 Mayor Loveridge. 5 BOARD MEMBER LOVERIDGE: Just one question. The 6 question is, when is a freeway a freeway? That is, what 7 do we call a freeway? Is it volume? We have corridors in 8 our city that 35,000, 40,000, 45,000 cars a day go through 9 them. They're not seen as freeways. They're clearly 10 heavily traveled corridors. And there are other streets 11 that carry large volumes that are not freeways. When is a 12 freeway a freeway, is the question? 13 MS. GARCIA: In this study, the investigators 14 narrowed down. They looked at major interstates, 15 freeways, and major roads. And I would have to look to 16 see which is actually their cutoff if they had a volume. 17 But usually major roads that are feeders to major freeways 18 are normally included in the studies as part of the -- 19 when we talk about freeways. 20 BOARD MEMBER LOVERIDGE: And a major road is -- 21 how would we define a major road? 22 MS. GARCIA: Like I mention, I would probably 23 have to get back to you with an actual number. I think 24 this varies. For Los Angeles, of course, some of these 25 major arterials are much more densely populated than some PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 14 1 of the freeways as you mentioned as you go up north in 2 California. 3 EXECUTIVE OFFICER WITHERSPOON: Mayor Loveridge, 4 the research staff will look that up and get the answer to 5 you before the hearing ends today. 6 HEALTH AND EXPOSURE ASSESSMENT BRANCH CHIEF BODE: 7 I can actually give you -- this is Richard Bode -- a 8 little bit of information. In their paper, they actually 9 said they looked at roadways in terms of freeways where 10 the traffic volumes was 50,000 to like 275,000 cars a day. 11 They're looking at some of the major traffic roadways in 12 Southern California. 13 BOARD MEMBER LOVERIDGE: 50,000 was the smallest? 14 HEALTH AND EXPOSURE ASSESSMENT BRANCH CHIEF BODE: 15 50,000 was the base. 16 CHAIRPERSON SAWYER: Yes, please. 17 SUPERVISOR ROBERTS: Do we have enough 18 information to start to draw conclusions on distance from 19 roads or conditions? At this point is there just a 20 correlation between the road and housing and proximity of 21 some distance X? 22 EXECUTIVE OFFICER WITHERSPOON: Supervisor 23 Roberts, based on freeway studies we examined before, we 24 put out land use guidance documents that said within a 25 thousand feet of a freeway, the pollution falls off to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 15 1 background levels. We didn't parse down within a thousand 2 feet exactly where the delineation comes. Some of the 3 modeling exercises we've seen shows it's between 300 and 4 500 feet. But we felt comfortable using the thousand foot 5 boundary that you should pull back that far. We 6 recommended buffer zones for sensitive sources, that they 7 not be placed within that thousand foot boundary of major 8 freeways -- it was 500 feet. Lynn corrected me. That we 9 put the chart in showing the background level dropping off 10 at a thousand, and we recommended a 500-foot buffer. 11 Because we were urged by low income housing advocates not 12 to be too conservative, because the land is so scares, but 13 be protective. So we went with the 500-foot 14 recommendation. 15 SUPERVISOR ROBERTS: That's what's showing in the 16 recommendations now, is a 500-foot zone? 17 EXECUTIVE OFFICER WITHERSPOON: In the land use 18 document, yes. We were asked questions does it matter if 19 the housing was elevated, depressed, if the ventilation is 20 on the rear of the building versus on the front, if the 21 height is such. And we don't know the answer to any of 22 those questions. 23 SUPERVISOR ROBERTS: That's what I'm wondering. 24 Even the microclimatic conditions in these areas might -- 25 EXECUTIVE OFFICER WITHERSPOON: Tree lines, sound PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 16 1 barriers, if anything disrupted the distribution pattern 2 of the pollutants and we didn't know the answer to any of 3 those questions, that would be the subject of further 4 research. 5 SUPERVISOR ROBERTS: I guess that's what I'm 6 asking. It seems like we're not at a point to draw some 7 of those conclusions with any certainty. And while you're 8 being cautious, it sounds like there's a lot of work to do 9 yet in this area of research. 10 EXECUTIVE OFFICER WITHERSPOON: There's a timing 11 issue too, because some of the housing advocates and land 12 use advocates were angry. "The problem is the freeway, 13 fix the freeway." And we said, "We're working on it." 14 And in the next 20 years, it will be substantially better. 15 But we urge you now not to put apartment buildings, 16 schools, hospitals, day care centers in this zone. Think 17 of a transitional planning scheme where you can come back 18 and fill in later and use it for light industrial, green 19 belts, something else. 20 SUPERVISOR ROBERTS: That's okay if they're 21 starting from scratch. But with cities, it's a little 22 different world. And, of course, we've heard the same 23 thing about cows in the valley, that, you know, they're 24 causing the problems. So that's why I think we definitely 25 need to have significant additional information there. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 17 1 CHAIRPERSON SAWYER: Let me make an observation, 2 and that is the association between a number of adverse 3 health effects and traffic seems to be quite strong. 4 However, we don't know exactly what it is. The guess 5 certainly is that it's the particulate that's the problem. 6 But we don't know what it is about the particulate. And 7 I'm pleased to see one of the studies is apparently 8 including some measurement of particulate exposure; is 9 that correct? 10 POPULATION STUDIES SECTION MANAGER WELLER: Yes. 11 We have, as you saw, there were four new studies. And one 12 of the things that a lot of these studies are doing is 13 looking at different measures of particulates. Some of 14 the studies will actually be looking at ultra fine as 15 well, which again is one of the components that may be 16 associated with some of the traffic effects that we have 17 seen. 18 CHAIRPERSON SAWYER: Does this extend beyond just 19 the mass or number of the particulate to the likely source 20 of the particulate? 21 POPULATION STUDIES SECTION MANAGER WELLER: A 22 number of our studies -- we have four different studies 23 there. And a number of them are looking at different 24 levels of the components. Some of them are a little more 25 fine tuned than others. But, yes, the components and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 18 1 trying to get some of that is something that we're really 2 trying to look at in our traffic studies instead of just 3 looking at traffic, per se. But a number of the 4 measurements that we have are a little more coarse and 5 they're going to be looking at more distance to freeways 6 and traffic volume. So it varies within the four studies 7 that you have looking at in the future. 8 EXECUTIVE OFFICER WITHERSPOON: Dr. Sawyer, when 9 you say source, are you pointing at the difference between 10 cars versus trucks or whether it's a lube oil phenomenon 11 as opposed to an exhaust phenomenon, those kinds of 12 questions? 13 CHAIRPERSON SAWYER: Yes, all of those. As you 14 know, I'm particularly concerned about reentrained road 15 dust and especially since we really don't have a good way 16 of dealing with that as a problem. If it is a problem, 17 indeed, we should certainly know that. And I was thinking 18 about that when you were saying that eventually we'll 19 clean up the freeways. Well, if it turns out reentrained 20 road dust is part of the cause of the adverse health 21 effects, that's going to be a really difficult one to deal 22 with. So dealing with not locating children next to 23 freeways I think will remain an important strategy for a 24 long time. But we need to know those answers. We don't 25 know them now. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 19 1 Are there any other questions or comments from 2 the Board members? Does staff have any additional 3 comments they'd like to make on this issue? 4 I don't believe there are any comments from the 5 public, am I correct that's the case? That being the 6 case, since this is not a regulatory item, it's not 7 necessary to officially close the record. And I'd like to 8 thank the staff for bringing this presentation to us. 9 The second agenda item is 6-2-2, the revised 10 guidelines for the Lower-Emissions School Bus Program. I 11 think it's wonderful that the State Legislature and the 12 people of California and our Governor continue to 13 recognize the crucial importance of protecting our 14 youngest citizens from harmful diesel pollution by funding 15 the Clean School Bus Program year after year. The $76 16 million spent to date and the $25 million we are 17 allocating today will go a long way to addressing the 18 problem of old dirty school buses. We want our children 19 to be safe from harm at all times. That absolutely 20 includes while they're on the school bus each morning and 21 every afternoon on their way to and from school. 22 Ms. Witherspoon, will you please introduce this 23 item and begin the staff presentation? 24 EXECUTIVE OFFICER WITHERSPOON: Yes, I will. 25 Thank you, Dr. Sawyer. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 20 1 As you said, this program is all about protecting 2 the health and safety of California school children. The 3 program funding this year will put 90 new safer school 4 buses on the road and retrofit about 1,000 in-use diesel 5 buses, reducing their particulate levels by at least 85 6 percent. 7 In the past, both replacement and retrofit funds 8 have been disbursed on a per capita basis. There is a 9 slight change this year. Retrofit money will still be 10 distributed on a per capita basis, but this year's bus 11 replacement funds are aimed at replacing the oldest bus in 12 California first, wherever they may be. 13 As a related change, staff is also proposing to 14 suspend the two-thirds/one-third natural/gas diesel 15 funding split for new school buses which the Board 16 establishes as a matter of policy for prior funding years 17 because the buses are where they are and the school 18 districts are or are not capable of accepting a natural 19 gas bus. So we will purchase them, the kind of bus they 20 want, and pay the full costs, whether it's natural gas or 21 diesel. But we don't believe we'll be able to meet a 22 two-thirds/one-third split in this particular funding 23 year. We'll talk more about that in the staff 24 presentation. 25 One of the consequences of the different funding PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 21 1 formula is that districts that previously received funds 2 for school bus replacement like the South Coast won't be 3 eligible for funding this year, because they've already 4 gotten rid of all their pre-1977 school buses. That's 5 true in the Bay Area as well. 6 I will now turn the presentation over to Cherie 7 Rainforth of the Mobile Source Control Division who will 8 describe the proposed revisions to the School Bus 9 Guidelines and allocations for this fiscal year. 10 (Thereupon an overhead presentation was 11 presented as follows.) 12 AIR RESOURCES ENGINEER RAINFORTH: Thank you, 13 Ms. Witherspoon. And good morning, Dr. Sawyer and members 14 of the Board. I will now present the staff's revisions to 15 the Lower-Emission School Bus Program Guidelines and the 16 proposed funding allocations for this fiscal year. 17 --o0o-- 18 AIR RESOURCES ENGINEER RAINFORTH: In today's 19 presentation, I will be giving a short introduction to the 20 program and a brief history of previous years' funding. I 21 will then address current years' funding in our proposed 22 allocations. To carry out this year's program, we need to 23 revise ARB's existing guidelines, so I'll talk about that 24 next. Then I will address the outstanding issues related 25 to the Lower-Emission School Bus Program. Finally, I will PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 22 1 present the emission benefits estimated for the school bus 2 retrofits and bus replacements using this year's funding, 3 ending with staff's recommendation. 4 --o0o-- 5 AIR RESOURCES ENGINEER RAINFORTH: The goal of 6 the Lower-Emission School Bus Program is to reduce school 7 children's exposure to toxic and cancer causing 8 particulate matter, or PM, and smog-forming oxides of 9 nitrogen, or NOx. These goals are accomplished through 10 two components: New school bus purchases to replace older 11 high-emitting school buses, and retrofit of in-use diesel 12 buses with emission controls. 13 --o0o-- 14 AIR RESOURCES ENGINEER RAINFORTH: One reason 15 this program is so important is the concern over 16 self-pollution. As presented to the Board in November 17 2003, an ARB sponsored study has shown that children are 18 exposed to diesel pollutants during school bus commutes 19 due to the intrusion of the school bus's exhaust into the 20 school bus cabin. This self-pollution problem was found 21 to be worse for older or pre-1987 buses and significantly 22 less for natural gas fueled buses and buses equipped with 23 diesel particulate filters. 24 --o0o-- 25 AIR RESOURCES ENGINEER RAINFORTH: The PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 23 1 Lower-Emission School Bus Program has received funding in 2 four out of the past five fiscal years totaling $76 3 million since 2001. $60 million funded the replacement of 4 approximately 500 pre-1987 model year school buses. And 5 about 16.5 million has funded the retrofit of about 3,000 6 in-use diesel school buses. 7 The program targets the replacement of pre-1987 8 school buses. Pre-1987 buses are high emitting because 9 particulate matter controls were not in place until 1987. 10 However, the replacement of pre-1977 school buses are 11 given highest priority because these buses are not only 12 high emitters, but also do not include standard safety 13 features required by Federal Motor Vehicle Safety 14 Standards which came into effect starting April 1st, 1977. 15 Staff estimates there are currently about 4,000 16 pre-1987 model year school buses in the California public 17 school bus fleet, of which about 300 are pre-1977 school 18 buses. There are about 10,000 buses eligible for 19 retrofits that have not yet been retrofitted. This year's 20 funding will enable air districts to replace about 90 21 pre-77 school buses and to retrofit nearly a thousand 22 in-use buses. 23 --o0o-- 24 AIR RESOURCES ENGINEER RAINFORTH: Although state 25 funding has been and continues to be a major source of air PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 24 1 quality incentive funding to replace school buses in most 2 air districts, there are other sources of funding 3 potentially available. The two primary sources of local 4 funding available are both derived from a motor vehicle 5 registration free surcharge. Assembly Bill 2766 adopted 6 in 1990 authorized the collection of a $4 motor vehicle 7 registration free surcharge for use to reduce air 8 pollution. Revenues from this surcharge have been used to 9 fund school bus replacement. 10 Assembly Bill 923 passed in 2004 authorized air 11 districts to increase the motor vehicle registration 12 surcharge by $2 which can also be spent on new school 13 buses and other projects. About 14 of the 35 air 14 districts have adopted this surcharge. 15 In addition, other possible sources of funding 16 include the Carl Moyer Program and the U.S. Environmental 17 Protection Agency's Clean School Bus USA Program. 18 Currently, the Carl Moyer Program is evaluating whether 19 their Fleet Modernization Program could be a possible 20 source of funding for school bus replacement. I will 21 discuss that more later in my presentation. 22 A few California school buses have been funded 23 through the U.S. Environmental Protection Agency's Clean 24 USA Program. However, this is a very competitive program 25 that is typically oversubscribed, and there is only $7 1/2 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 25 1 million available nationwide this year. 2 --o0o-- 3 AIR RESOURCES ENGINEER RAINFORTH: And while bus 4 replacements are important especially for pre-1977 school 5 buses, the retrofit of in-use diesel buses with 6 particulate filters is actually the most cost effective 7 use of school bus funding. Retrofits provide an immediate 8 85 percent reduction in diesel PM for about one-tenth the 9 cost of a new school bus or a cost on the order of 10 $14,000. 11 --o0o-- 12 AIR RESOURCES ENGINEER RAINFORTH: I will now 13 discuss the school bus funding for the current fiscal 14 year. 15 --o0o-- 16 AIR RESOURCES ENGINEER RAINFORTH: The State 17 Legislature appropriated $25 million for the 18 Lower-Emission School Bus Program for the current fiscal 19 year. Half of these funds, 12 1/2 million, is for new 20 school bus purchases specifically designated to replace 21 pre-77 school buses. The other half of the funds is for 22 the retrofit of in-use diesel school buses with 23 technologies providing the highest level of particulate 24 matter reduction, Level 3, which requires at least an 85 25 percent reduction in diesel PM. Additionally, the budget PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 26 1 language specifies that the funding should be used for PM 2 reduction devices that produce the lowest nitrogen dioxide 3 or NO2 across the device. I will discuss this last 4 requirement in more detail when I discuss guideline 5 changes. 6 --o0o-- 7 AIR RESOURCES ENGINEER RAINFORTH: The 8 Legislature has requested via a letter signed by 27 9 legislators representing a wide spectrum of regions to use 10 the new bus purchase funds to replace the oldest school 11 buses in California first. That is a departure from past 12 practice where per capita was the basis. The reason for 13 that is that there is a general consensus that poorer 14 school districts have the oldest buses and need the most 15 assistance at this time. The retrofit funds which will 16 pay for nearly a thousand retrofits are being disbursed on 17 a per capita basis consistent with past practice. 18 --o0o-- 19 AIR RESOURCES ENGINEER RAINFORTH: In order to 20 determine the oldest school buses in California, it was 21 necessary for ARB staff to update our database of 22 California public school buses. We obtained a database of 23 California school buses that have been safety certified 24 from the California Highway Patrol. ARB staff called 25 school districts with 1974 model year and older in their PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 27 1 fleets to determine if the buses were still safety 2 certified and in use either daily or as a backup bus. 3 Based on this verified database, staff generated a list of 4 oldest public school buses, of which the oldest 90 were 5 1972 model year and older. 6 In order to firm up our estimate of all pre-77 7 buses, we also asked the surveyed school districts for 8 information on all their pre-77 school buses. Based on 9 this information, staff estimates that there are about 300 10 pre-77 buses in public school bus fleets. 11 --o0o-- 12 AIR RESOURCES ENGINEER RAINFORTH: This table 13 shows the funding allocation to the five air districts 14 that have requested to administer their own School Bus 15 Replacement Program. The California Energy Commission 16 will administer the program for all other air districts. 17 The allocations were based on a list of oldest 18 school buses to be replaced and a nominal bus price of 19 $140,000, which assumes a mix of alternative fueled and 20 diesel fueled school buses. Should an air district choose 21 to fund only alternative fueled buses, which are more 22 expensive, the funding allocation may not fund the number 23 of buses shown. In this case, the air district may choose 24 to supply additional funding themselves or to fund fewer 25 buses. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 28 1 In January, staff posted a verified list of 2 oldest buses in California on our website. The buses on 3 this list are the ones to be replaced. I'd like to point 4 out that we just recently made a correction to this list. 5 We added a bus that was missed in the San Joaquin Valley 6 Air Pollution Control District, and moved funding to cover 7 this additional bus from the CEC pool. 8 As you can see, with 31 buses to be replaced, the 9 San Joaquin Valley District has the largest funding 10 allocation. The South Coast has the next largest 11 allocation with 15 of the buses to be replaced. San Diego 12 and Sacramento Metropolitan Air Districts do not receive 13 any funding since they do not have any 1974 or older buses 14 in their public fleet. 15 --o0o-- 16 AIR RESOURCES ENGINEER RAINFORTH: This table 17 shows the retrofit funding allocations for the larger air 18 districts based on population. Each air district will 19 administer its own program. The larger air districts have 20 participated in the program in the past. The retrofit 21 funding agreements for these air districts have been sent 22 out to them. The smaller air districts will receive 23 between 42,000 and $145,000, depending on how many air 24 districts decide to participate. 25 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 29 1 AIR RESOURCES ENGINEER RAINFORTH: I will now 2 present the most significant revisions to the guidelines. 3 --o0o-- 4 AIR RESOURCES ENGINEER RAINFORTH: A number of 5 the proposed revisions to the guidelines specifically 6 applied to the 2005-2006 fiscal year state budget 7 appropriated funds. These revisions include the 8 replacement of only pre-1977 school buses on an oldest bus 9 first priority. Regarding the state budget appropriated 10 retrofit funds, only Level 3 verified devices may be 11 funded, requiring a particulate matter reduction of at 12 least 85 percent and the funding of devices with the 13 lowest NO2 production. New program timetables are also 14 included in the proposed revisions. 15 --o0o-- 16 AIR RESOURCES ENGINEER RAINFORTH: The budget 17 language for this year's retrofit funding requires that 18 the funded Level 3 devices produce the lowest NO2 19 possible. Catalyzed diesel particulate filters produce 20 differing levels of NO2. However, uncatalyzed filters do 21 not produce NO2. There is only one uncatalyzed active 22 filter, diesel particulate filter, currently verified for 23 on-road engines. This filter must be periodically plugged 24 into a 220-volt outlet in order to burn off the soot 25 collected in the filter. To comply with the budget PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 30 1 language, staff is proposing that projects that use the 2 uncatalyzed active filter be given first priority for this 3 funding. 4 --o0o-- 5 AIR RESOURCES ENGINEER RAINFORTH: The following 6 changes are applicable to all new bus purchases. One 7 necessary technical change is the inclusion of emission 8 criteria for 2006 and 2007 to 2009 model year school bus 9 purchases. No school district match will be required for 10 the replacement of pre-1977 school buses. Since the 11 current state budget funding is targeting specific oldest 12 buses to be replaced, it is important that school 13 districts not be excluded due to a lack of match funding. 14 Similarly, the statewide goal to use two-thirds of the new 15 bus purchase funding for alternative fueled buses has been 16 eliminated so that these school districts replacing oldest 17 buses may be given the choice of either an alternative 18 fueled or diesel fueled bus subject to local district 19 rules. I will discuss this further when I address the 20 issues. 21 Additionally, ARB staff understands there is a 22 need to fund the replacement of natural gas school bus 23 fuel tanks. The Department of Transportation requires 24 these fuel tanks be replaced after the manufacturer's 25 recommended service length, which is typically 15 years. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 31 1 Staff is proposing in the guidelines that air districts 2 fund these tank replacements with AB 2766 vehicle 3 registration funds. 4 --o0o-- 5 AIR RESOURCES ENGINEER RAINFORTH: I will now 6 address the three outstanding issues previously mentioned 7 in my presentation. 8 --o0o-- 9 AIR RESOURCES ENGINEER RAINFORTH: Previously, a 10 two-thirds/one-third funding split for alternative fueled 11 and diesel fueled new school bus purchases was provided as 12 a statewide goal for the Lower-Emission School Bus 13 Program. Staff is proposing to eliminate this goal and 14 give school districts the choice of either diesel fueled 15 or alternative fueled buses to replace their oldest bus. 16 This will facilitate the replacement of these buses since 17 many are in all-diesel fleets without access to 18 alternative fuel infrastructure. Some environmental 19 groups and natural gas industry have expressed concern 20 about changing ARB's natural gas goal for a one-year 21 funding cycle. The Board may want to consider suspending 22 the goal for only one year. 23 --o0o-- 24 AIR RESOURCES ENGINEER RAINFORTH: Despite five 25 years of clean school bus funding, there are still too PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 32 1 many older dirty unsafe school buses on the road. Staff 2 estimates that approximately another $30 million will be 3 necessary to replace the remaining pre-77 public school 4 buses in California. About 500 million will be necessary 5 to replace the approximately 4,000 pre-87 school buses in 6 the public school bus fleet and an additional 100 million 7 to retrofit the remaining eligible fleet. A combination 8 of local and state funding will be necessary to accomplish 9 these goals. This need has caused some stakeholders to 10 consider if the Carl Moyer Fleet Modernization Program 11 could be another possible source of school bus replacement 12 funding, which brings us to our final issue. 13 --o0o-- 14 AIR RESOURCES ENGINEER RAINFORTH: The Carl Moyer 15 Program has funded some school buses. However, it has not 16 been a practical source of funding for school bus 17 replacement because of the $14,300 per ton cost 18 effectiveness cap. The typical low yearly mileage of 19 school buses results in only a small fraction of the 20 school bus purchase cost being eligible for funding. 21 At the November 2005 Board meeting, you directed 22 staff to convene a working group to discuss whether using 23 school bus specific emission factors would provide greater 24 funding opportunities for school busses within the Carl 25 Moyer Program. These slides are presented today as an PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 33 1 update to the Board on our progress. The working group 2 has been looking at three main issues: School bus 3 emission factors, the remaining useful life of the school 4 bus being replaced, and modification of the particulate 5 matter weighting factor to account for diesel PM exposure. 6 I'll provide an update on these three issues in the next 7 slide. 8 --o0o-- 9 AIR RESOURCES ENGINEER RAINFORTH: We've held 10 three working group meetings to date. Based on these 11 discussions, we can report the following. First, 12 preliminary data indicate that a change to the emission 13 factor does not appear to be warranted, though discussions 14 are still progressing. Second, it appears that data 15 supports lengthening the remaining life to approximately 16 ten years. Again, this position is still being evaluated. 17 Finally, data is available to justify an increase in 18 particulate matter weighting factor due to exposure. 19 However, if an increase in PM weighting factor due to 20 exposure is applied for school buses, exposure would need 21 to be considered in determining weighting factors for all 22 Carl Moyer projects. This is a significant policy shift 23 that would require additional outreach and analysis. We 24 are committed to continuing our discussion on these issues 25 and will bring you Carl Moyer changes as soon as we can. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 34 1 --o0o-- 2 AIR RESOURCES ENGINEER RAINFORTH: I will now 3 briefly discuss the emission benefits estimated for the 4 bus replacements and retrofits funded this year. 5 --o0o-- 6 AIR RESOURCES ENGINEER RAINFORTH: The retrofit 7 of nearly a thousand in-use diesel school buses is 8 expected to result in 45 to 60 tons of particulate matter 9 reduction over the 11-year life of the retrofits. Staff 10 has estimated the near-term emission benefit of replacing 11 90 buses to be 135 pounds per day of NOx and five pounds 12 per day of particulate matter. The longevity of this 13 benefit is dependant on how long the pre-77 bus would have 14 remained on the road without grant funding to replace it. 15 This is one of the issues being discussed as part of the 16 Carl Moyer fleet modernization assessment. 17 --o0o-- 18 AIR RESOURCES ENGINEER RAINFORTH: Staff 19 recommends that the Board approve the proposed changes to 20 the Lower-Emission School Bus Guidelines and the proposed 21 funding allocation for this fiscal year. 22 Thank you. This concludes my presentation. 23 CHAIRPERSON SAWYER: Thank you very much, 24 Ms. Rainforth. 25 Are there questions from the Board members? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 35 1 I've come to this issue a little bit late. 2 Question about the public school bus fleet. Are these 3 buses that service public schools, or are they buses that 4 are owned by public agencies? 5 AIR RESOURCES ENGINEER RAINFORTH: Yes. They're 6 buses that service the public schools. But to be 7 replaced, they must be owned by the schools or the joint 8 powers of authorities that are a group of school districts 9 that have gotten together for the transportation. 10 CHAIRPERSON SAWYER: That leads to the next 11 question. That is, what fraction of the school buses are 12 owned privately and therefore not covered by these 13 programs? 14 AIR RESOURCES ENGINEER RAINFORTH: About 16,000 15 of the 27,000 school buses are public school buses I 16 believe. So that would be a fraction of a little over 17 half. 18 PLANNING & REG DEVELOPMENT SECTION MANAGER 19 MARSHALL: Dr. Sawyer, there's three categories of buses 20 when we're looking at the funding issue. And the first is 21 the ones that are directly owned by the public schools, 22 and that's around 16,000 buses. And of the remaining 23 27,000 buses, the great majority of those that are 24 privately owned are operated by private contractors to 25 public schools. So that's a second category. And then PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 36 1 the truly privately owned ones that are not under contract 2 to public schools, for example, religious schools, or you 3 know private institutions, that's a pretty small fraction. 4 I think about one percent of the private schools. 5 The public school buses tend to be older. And as 6 Cherie mentioned, we do allow funding for replacement of 7 public schools that own the buses. But private companies, 8 even the ones that contract to public schools, are not 9 eligible for the new bus money. They are eligible for the 10 retrofit money. 11 CHAIRPERSON SAWYER: Got it. And does this 12 partially covered fleet, is that a problem? Do we have a 13 way of dealing with it? 14 PLANNING & REG DEVELOPMENT SECTION MANAGER 15 MARSHALL: The private contractors tend to have newer 16 buses. They're operating as a business. So we don't see 17 that as a big problem. 18 CHAIRPERSON SAWYER: Thank you. 19 Ms. Kennard. 20 BOARD MEMBER KENNARD: I have a question 21 regarding the match. And you had suggested there's a 22 two-thirds/one-third match. Does that correlate to the -- 23 EXECUTIVE OFFICER WITHERSPOON: No. Actually, 24 the two-thirds/one-third was the split we were previously 25 trying to accomplish with natural gas versus diesel new PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 37 1 bus placement. In prior years, the match was $10,000, a 2 nominal match, required the school district to make the 3 money go further. When we switched to the oldest bus 4 first scenario, literally, the oldest by days accumulated, 5 they're in the hands of the poorest school districts, and 6 they do not have the match. Before, we said anyone with a 7 pre-87 that has 10,000 can play. And if you didn't have 8 10,000, you sat it out. 9 BOARD MEMBER KENNARD: So there's no leveraging 10 any more of school district funds with our funds? 11 EXECUTIVE OFFICER WITHERSPOON: No. Not for this 12 12.5 million this fiscal year. 13 BOARD MEMBER KENNARD: And that's really to 14 enable the poor districts to be able to fully replace 15 their -- 16 EXECUTIVE OFFICER WITHERSPOON: That's right. 17 BOARD MEMBER KENNARD: What about more wealthy 18 school districts? Can they leverage their money 19 obviously? 20 EXECUTIVE OFFICER WITHERSPOON: I don't think a 21 wealthy school district owns a pre-77 school bus. 22 BOARD MEMBER KENNARD: Maybe that's true. I 23 don't know. 24 PLANNING & REG DEVELOPMENT SECTION MANAGER 25 MARSHALL: But under the local sources of funding, they PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 38 1 don't have the same restriction, no match. So it is 2 possible that the air district could fund them the match 3 requirement. 4 BOARD MEMBER KENNARD: Thank you. 5 BOARD MEMBER D'ADAMO: I'm trying to put slide 6 number 21 in perspective with the discussion about the 7 split two-thirds/one-third. This is regarding the unmet 8 funding needs: 30 million to replace remaining pre-77, 9 and 500 for pre-87. Those figures are based on what 10 formula, the two-thirds/one-third split or -- 11 EXECUTIVE OFFICER WITHERSPOON: That's based on 12 140,000 per bus, the same multiplier we used in this 13 year's allocation. 14 PLANNING & REG DEVELOPMENT SECTION MANAGER 15 MARSHALL: Which does assume a mix of natural gas and 16 alternative fuel and diesel bus. 17 BOARD MEMBER D'ADAMO: And then piggybacking onto 18 Ms. Kennard's question to any matching funds, does this 19 assume there would be matching funds for the pre-87 and 20 for the retrofit? 21 AIR RESOURCES ENGINEER RAINFORTH: That estimate 22 was made without a match assumption. So that was not 23 assuming a match. But the match is probably a smaller 24 percentage than the unknown of how much the total fleet 25 is. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 39 1 EXECUTIVE OFFICER WITHERSPOON: This is just the 2 direct cost of replacement. And you could accomplish it 3 with a 100 percent subsidy or with a combination of 4 subsidies and match. And since you asked the question 5 also what will happen in the future with diesel natural 6 gas splits, remember that the South Coast District still 7 has as a regulation a requirement that any new school bus 8 in its jurisdiction be natural gas. And so that is 9 roughly 30 percent of the school bus fleet, although I'm 10 not sure how the public/private split works in South 11 Coast. But essentially you'll still have that much at a 12 minimum going to natural gas and then some other school 13 districts including in the valley have moved natural gas 14 where it's readily available for fueling. And those I 15 think will stay natural gas. 16 BOARD MEMBER D'ADAMO: And then I know that the 17 amounts fluctuate from year to year, and of course we 18 don't have any solid commitment from the Legislature 19 because it just depends on the annual budgets. But if we 20 looked at the history of the amount of funds that the 21 Legislature set aside for this purpose, how long would it 22 take to meet these unmet needs? 23 EXECUTIVE OFFICER WITHERSPOON: What they've 24 given us so far is on the order of 25 to 50 million a 25 year. So you can divide by that ratio. However, this PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 40 1 year with the bond discussion pending, many legislators 2 and many stakeholders have already suggested that school 3 buses be added to the mix of infrastructure bonds, whether 4 they come in the education portion or the goods movement 5 portion. And so I think we'll know more as this session 6 unfolds whether there's going to be a large infusion of 7 funds or sort of study stay appropriation. 8 BOARD MEMBER D'ADAMO: How about other sources, 9 the AB 2766 and 923 sources? 10 EXECUTIVE OFFICER WITHERSPOON: 2766 I think 11 is -- how many million a year statewide? 12 ON-ROAD CONTROLS BRANCH CHIEF KITOWSKI: That 13 should be over 100 million a year they've had for over 14 ten years. Some districts have utilized that funding for 15 school buses, and others have used it for other purposes. 16 The 923 funds, about $50 million is brand-new. 17 EXECUTIVE OFFICER WITHERSPOON: For those 18 districts who've opted to up their motor vehicle 19 registration surcharge to $6. 20 BOARD MEMBER D'ADAMO: Do we have a sense of the 21 priorities of the districts as to where those funds are 22 going to go? 23 ON-ROAD CONTROLS BRANCH CHIEF KITOWSKI: Many of 24 the districts have indicated school -- I'm sorry. Let me 25 start from the beginning. AB 923, the new $2 fees, can PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 41 1 only be spent in one of four areas, school buses being one 2 of them. And many of the districts have indicated that 3 they want to make school buses one of those priorities. 4 Most of them, in fact, have plans to utilize at least some 5 of that, if not quite a large amount for school buses. 6 BOARD MEMBER D'ADAMO: Thanks. 7 CHAIRPERSON SAWYER: Am I correct that I heard 8 you say there's a single retrofit device that is currently 9 verified that will meet the program requirements? 10 AIR RESOURCES ENGINEER RAINFORTH: Yes. It's a 11 horizing Clearair. It's an active filter, which means 12 that it's not catalyzed. Like I said, you have to -- 13 actually, you have to plug in the bus, you know, 14 periodically to clean out the filters. 15 PLANNING & REG DEVELOPMENT SECTION MANAGER 16 MARSHALL: Dr. Sawyer, Renee Marshall with the Mobile 17 Source Division. There's actually several Level 3 devices 18 that are verified. But the one with the -- there's just 19 one that meets the lowest NO2 criteria. So as project 20 applications come in from school districts, the one that 21 meets the lowest NO2 criteria would have priority for 22 funding. But if not all the funding is obligated, then 23 the remaining funding could be used for other Level 3 24 devices. 25 CHAIRPERSON SAWYER: The way it works is that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 42 1 there will always be a single device that will be used 2 because it would be the one with the lowest NO2? 3 EXECUTIVE OFFICER WITHERSPOON: That is a new 4 feature this fiscal year and came from the Legislature's 5 awareness of a company that has led the pack, Clearair in 6 San Leandro, at the provision of combination NOx and 7 particulate control devices. They also have other kinds 8 of retrofit devices. And they just pioneered an active 9 trap. And the one barrier for school districts to 10 consider the trap is they need to have the 220 wiring out 11 to their bus yards so that they can plug in the device and 12 regenerate it. And we'll pay for that with the funding if 13 they want to run that wiring and don't currently have it. 14 But it's the desire of the Legislature to get NO2 and PM 15 reductions where feasible. And then we've adjusted the 16 guidelines such that where that's not going to work 17 effectively that we'll still use the PM traps that have 18 previously been applied to school buses, whatever the NO2 19 result is. Some increase NO2; they don't reduce it. 20 CHAIRPERSON SAWYER: Okay. One more question. 21 Mayor Loveridge. 22 BOARD MEMBER LOVERIDGE: In the materials there's 23 a letter from Rick Finestein. I would like for the record 24 to get a response to it. They run -- he's the Director of 25 Transportation for the Colton Unified School District, and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 43 1 they have an excellent alternative fuel program, CNG 2 program. But he asks the questions which I just want to 3 know what the official response is to it. He says, "I 4 urge you to permit" -- I assume this could be any 5 district, but he says, "South Coast to allow district 6 trading opportunities for this and any future 7 lower-emission grant programs." His idea for those 8 districts which are unwilling to or unable to search for 9 grant opportunities the ability to trade, and he gives a 10 successful example he's worked with. Because I understand 11 this is permissive now, that there does need to be any 12 statement related to this question, or is it prohibited? 13 EXECUTIVE OFFICER WITHERSPOON: The guidelines 14 we've proposed to you are oldest bus first, which is truly 15 vintage. And South Coast has 15 of those buses. And I 16 think the question you're asking me is with the dollars 17 South Coast is being appropriated to replace 15 buses, can 18 you then modify the distribution within your boundaries 19 or -- 20 BOARD MEMBER LOVERIDGE: I think he's asking a 21 question which may be across any district. It's a 22 question of trading as an interesting concept, but I -- 23 ON-ROAD CONTROLS BRANCH CHIEF KITOWSKI: The 24 phrase I believe they used is trickle down. Just for the 25 other Board members, the way the program is basically set PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 44 1 up is there is an oldest bus, as Ms. Witherspoon said, 2 that is going to get replaced. In general, what should 3 happen, what we want to happen, is a new bus will go to 4 that school district who has the oldest bus. But the 5 trickle down policy the way that would work would be that 6 the new bus would go to a different school district. That 7 school district would take one of their buses that is 8 fairly new but not brand-new and give it to the school 9 district that had the oldest bus. That oldest bus would 10 still get replaced. 11 And, you know, your first instinct might be, why 12 would the school district do that? And they might do that 13 because one school district might be well positioned to 14 incorporate CNG into their fleet and another -- or any 15 alternative fuel and another might not, and they might 16 find it a mutually beneficial process. And in these 17 guidelines, we don't prohibit that practice. We also 18 really don't encourage it. And because there is a 19 sensitivity with the issue, if the oldest -- if the school 20 districts with the oldest buses are in generally the 21 poorest school bus, we don't want to encourage a policy 22 that perpetuates just hand-me-downs. So we are leaving it 23 up to the implementing air district, the South Coast in 24 this case, to analyze the situation, determine are there 25 ways of getting the newest bus into this fleet that has PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 45 1 the oldest bus, maybe more infrastructure funding, maybe 2 some other means. If that can't be accomplished, this is 3 one of the options available to them. 4 EXECUTIVE OFFICER WITHERSPOON: What I would 5 suggest, we did post on our website the list of vintages 6 of buses so there's already out there a settled 7 expectation, "I'm getting a new bus." And probably the 8 way to make the trickle down work is certainly with the 9 consent of all the parties and give them two diesel used 10 buses in exchange for putting the new CNG in a different 11 school district, but sweeten the pot. And the South Coast 12 is in a terrific position to do that. 13 BOARD MEMBER LOVERIDGE: Thank you. 14 CHAIRPERSON SAWYER: Ms. D'Adamo. 15 BOARD MEMBER D'ADAMO: One more question of 16 staff. Do these issues come before us every year? I get 17 a sense that they do, but I don't know that's every year. 18 EXECUTIVE OFFICER WITHERSPOON: Only when there's 19 a change in the guidelines. If money is simply 20 appropriated to us under existing guidelines, we disburse 21 it administratively. But there almost has always been 22 some change that we need to come and tell you about. So I 23 would say, yeah, whenever there's appropriation, there's a 24 slight guideline adjustment. 25 BOARD MEMBER D'ADAMO: In that case then, I think PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 46 1 what would be useful for us -- I remember when we first 2 started grappling with this issue. It just seemed 3 overwhelming that it was going to take forever to do the 4 turnover. And now it looks like we're within striking 5 distance. And the question I had earlier about the 6 funding needs, I'm wondering if next time we could get an 7 analysis of a game plan of what it will take for us to get 8 to the finish line on this, assuming the current 9 guidelines and sort of a historical basis of funding, 10 whether it's through the Legislature or some of these 11 other funding sources AB 2766, AB 923, et cetera. 12 EXECUTIVE OFFICER WITHERSPOON: That's a great 13 idea. And specifically as this legislative session goes 14 forward, because it's being debated right now. 15 CHAIRPERSON SAWYER: Yes. 16 SUPERVISOR ROBERTS: It's clear to me that we're 17 going to old buses first on the replacement. Could you 18 just help me to understand better how we select on the 19 retrofits? What's the policy? What governs how we're 20 going to select the -- 21 EXECUTIVE OFFICER WITHERSPOON: We've been doing 22 retrofits or per capita for five years, and the 23 Legislature did not signal any desire for change on 24 retrofits, so we left it per capita. We did get asked 25 during the budget debates whether or not we could add a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 47 1 mileage factor even to retrofits, such that school 2 districts that travel the longest distance got more 3 retrofit money. And that was just unduly complicated, so 4 we stuck with a per capita formula. 5 SUPERVISOR ROBERTS: So that will be straight -- 6 EXECUTIVE OFFICER WITHERSPOON: That's straight 7 per capita. 8 SUPERVISOR ROBERTS: I'm still a little troubled 9 by this whole thing, as you know. 10 EXECUTIVE OFFICER WITHERSPOON: So was the Bay 11 Area. They got shorted. But Senator Perata signed a 12 letter asking us to do oldest buses first, and they went 13 and talked to him about that. And he stuck with the 14 original request. 15 SUPERVISOR ROBERTS: With all due respect, that 16 doesn't mean I'm in agreement. 17 EXECUTIVE OFFICER WITHERSPOON: I wouldn't expect 18 you to be. 19 CHAIRPERSON SAWYER: Are there any other 20 questions from the Board? 21 If not, let's move into the public testimony. If 22 you have not signed up, please do so. The first three 23 speakers are Kirk Hunter, Gretchen Knudsen, and Roger 24 McCoy. 25 Kirk Hunter, please. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 48 1 MR. HUNTER: Good morning, Dr. Sawyer and members 2 of the Board. My name is Kirk Hunter. I'm CEO of the 3 Southwest Transportation Agency. We operate 100 school 4 buses in Fresno County and 29 natural gas buses, soon to 5 be bringing you a liquefier to the San Joaquin Valley. 6 And my purpose today is to stand here and tell 7 you that I'm excited about this, the staff's 8 recommendation. And I want to the tell the staff thank 9 you very much for listening and for hearing and for seeing 10 the importance of putting kids before politics. It's just 11 absolutely wonderful for the school transportation 12 community. 13 Two areas I'd like to see a minor tweak if 14 possible. On tank replacement, if it could be mandatory 15 the money be spent to replace tanks instead of 16 recommended. Those of us that have ten buses that need 17 ten tank replacements upcoming, it would be much 18 appreciated. And on South Coast, if until pre-77 buses 19 are completely gone in South Coast, that their rule be 20 suspended so that districts could actually choose diesel 21 buses without having to go through some convoluted 22 efforts. And if you want to eliminate the trickle down 23 problem in South Coast, that would be the best way to do 24 it, is just let them buy whatever bus they need to buy. 25 And one last final comment is the fleet PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 49 1 modernization. We would like to -- from the San Joaquin 2 Valley, we would like to thank our air district for 3 bringing that to your attention. And we would love your 4 support in being able to use fleet modernization money for 5 school buses. It would sure make things a lot better for 6 us. And we again appreciate the San Joaquin Air District. 7 Thank you. 8 CHAIRPERSON SAWYER: Thank you. 9 Does staff have any comments on those issues? 10 ON-ROAD CONTROLS BRANCH CHIEF KITOWSKI: Let me 11 comment on the tank replacement issue. We covered it in 12 the presentation fairly quickly. I'll spend one more 13 minute on it. 14 The early CNG school buses are now approaching 15 the time when the tank needs to be replaced or the bus 16 needs to be parked. And we do think that's a critical 17 issue, and we took a look at in what ways could we help 18 fund replacing the tank. And, unfortunately, we, you 19 know, combined our heads and our legal heads and looked at 20 the language and the restrictions for the money we were 21 given. And in this current allocation of 25 million, we 22 do not have that flexibility legislatively to either use 23 the retrofit or the new bus money to replace those tanks. 24 We went and took a look at the AB 923, the new $2 25 DMV registration fee, and that also just does not have the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 50 1 flexibility given the legislative restrictions around how 2 it was structured. We were able to look at the original 3 $4 DMV registration fee, the 2766 fee. That does have 4 much more flexibility. So districts can use that source 5 of funding in order to replace the tanks. But it really 6 is going to be limited for that unless there's other 7 funding that comes available. And I was quickly reminded 8 that the local air districts do have control of that 9 funding so they can allocate that and prioritize that. 10 EXECUTIVE OFFICER WITHERSPOON: We were asked to 11 make -- the witness asked us to mandate it, and it's not 12 appropriate for the Board to mandate because the districts 13 have lead on the distribution of those funds. But I think 14 a recommendation bears a lot of weight. 15 And the same thing with respect to the South 16 Coast Clean Fuel School Bus Rule, we would be in the 17 position to make a recommendation, but certainly not to 18 override the district rule. And what staff is 19 recommending is the funding program and the rule coexist. 20 But the district receives funds because there are pre-77 21 buses in its jurisdiction, and the rule governs what kind 22 of buses are placed. And the rule has language for 23 exceptions where natural gas doesn't work. 24 CHAIRPERSON SAWYER: Thank you. 25 Gretchen Knudsen. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 51 1 MS. KNUDSEN: Good morning. My name is Gretchen 2 Knudsen. I'm the Director of California Government 3 Relations for International Truck and Engine. 4 I'm here to testify today in support of the 5 proposed guidelines, and I'd like to compliment staff on 6 the revisions and the effort involved with this. I know 7 it was a big task. I have just a couple quick points to 8 make. 9 First off, we do support the new funding 10 allocation. In fact, we think it's very important those 11 oldest buses be taken off the road, and we're pleased to 12 see that is in the guidelines. We also think it is 13 consistent with the Legislature's direction, and we worked 14 hard with the Legislature to get the funding. So we'd 15 really like to see the old buses taken off the road. 16 Secondly, we do support the staff recommendation 17 to provide the school districts with the choice of 18 choosing technologies so they can choose a technology that 19 works best for them in their particular situation. 20 And, lastly, as the staff report points out, the 21 ultra-low sulfur diesel fuel is going to become available 22 nationwide later this year. And with the advent of 23 low-emission diesel technology in 2007 because of the EPA 24 and ARB's own 2007 rules, we think this is an exciting 25 time and a terrific opportunity to just see the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 52 1 progression of the technology and to support it. So thank 2 you. 3 CHAIRPERSON SAWYER: Thank you very much. 4 Are there any questions? 5 Next is Roger McCoy, and then Bonnie Holmes-Gen, 6 Julian Imes, and Marty Lassen. 7 MR. MCCOY: Good morning, Mr. Chair and members 8 of the Board. My name is Roger McCoy. I'm the Director 9 of Administrative Services from the San Joaquin Valley Air 10 District. 11 First of all, we'd like to offer our support for 12 staff's recommendations, and we'd like to express our 13 appreciation for the lower-emission school bus funds being 14 allocated to the San Joaquin Valley. 15 We'd like to thank the ARB staff for modifying 16 the guidelines to provide greater flexibility. This 17 flexibility will allow for the participation of some of 18 our rural school districts that previously would not have 19 been able to benefit from this program. Although we are 20 greatful for the lower-emission school bus funds, it is 21 important everyone understand these funds will only make a 22 small dent in the enormous inventory of old polluting 23 school buses in San Joaquin Valley. To give some 24 perspective to our situation, the lower school funds will 25 replace 31 buses. We conservatively estimate there are PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 53 1 between 800 and 900 pre-1987 school buses operating in the 2 San Joaquin Valley with an average age of over 26 years. 3 It would take approximately $100 million to replace all 4 these older buses. 5 The reality is unless a majority of the costs of 6 the new bus can be provided, these old buses will continue 7 to operate. Many of the school districts in the valley 8 simply cannot afford to buy new buses. Their choice are 9 to continue to operate these buses until they can no 10 longer get parts, and at that point they either buy 11 retired buses from more affluent school districts or they 12 decide to discontinue school bus all together -- service 13 all together. 14 The San Joaquin Valley District is committing 15 significant funding in addition to the Lower-Emission 16 School Bus Funds toward school bus replacement, but we are 17 frustrated that the current Moyer guidelines don't 18 currently allow the flexibility to provide incentive funds 19 in amounts large enough for many of the valley school 20 districts. This matter was discussed at your Board's 21 meeting in November when the Moyer guidelines were 22 adopted. At that time, your Board directed ARB staff to 23 form a work group of interested air districts to see if 24 the Fleet Modernization component of the Moyer Guidelines 25 could be modified to include school buses. We have PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 54 1 participated in that work group and have engaged in a 2 number of meaningful discussions with ARB staff on this 3 important issue. 4 While we have made progress on several minor issues, these 5 changes do not significantly increase the amount of Moyer 6 funds that can be provided to replace the school buses. 7 Our district appreciates ARB staff's willingness 8 to convene the work group to address the more significant 9 issues mentioned in their presentation, with the hope that 10 we can mutually agree on methods for getting the 11 flexibility San Joaquin Valley needs to use Moyer funds to 12 replace school buses. We would also request the work 13 group be expanded to include interested school districts. 14 To wrap it up, I'd like to make the statement 15 that the San Joaquin Valley District wants to make it very 16 clear that we are not asking for a larger share of 17 statewide Lower-Emission School Bus Funds or a larger 18 share of the statewide Moyer funds. We simply want the 19 flexibility and the ability to use a portion of our 20 current allocation of Moyer funds to replace school buses. 21 Thank you for the opportunity to make the comments. 22 CHAIRPERSON SAWYER: Thank you very much. 23 Yes, Mayor Loveridge. 24 BOARD MEMBER LOVERIDGE: Let me just follow up. 25 Not really a question, but the question you raised. On PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 55 1 our presentation you identified the working group, but it 2 was unclear to me the membership of the working group. 3 And I think it would be helpful, actually, if we could 4 understand when there's a working group who makes up that 5 group and I guess where those people come from, whether 6 it's first in line of how does -- what is the working 7 group and how does one become a member of it? 8 EXECUTIVE OFFICER WITHERSPOON: The working group 9 was created by the Board and under the direction of former 10 Interim Chair Barbara Riordan. And she asked Supervisor 11 Mark DeSaulnier to chair it. And she asked at the time 12 that the witnesses at the November meeting who expressed 13 concern and interest be invited to participate. And those 14 were air districts, oil companies, engine manufacturers -- 15 excuse me. 16 SUPERVISOR DeSAULNIER: Go ahead. 17 EXECUTIVE OFFICER WITHERSPOON: Environmental 18 groups. Not schools at the time. San Joaquin Valley Air 19 District was carrying that water for them. 20 And what's been so difficult is Carl Moyer, 21 unlike any of the other funding programs, has a strict 22 cost effectiveness limit. We're going to get the most 23 tons for the money. And school buses are low volume, low 24 mileage vehicles. They just don't produce as many tons. 25 So we've been tinkering with the calculation formulas. Do PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 56 1 they live longer than we thought, which bumps up, you 2 know, how many tons you get. Do they pollute more than we 3 thought? No. Should we count more for the fact that when 4 kids are riding on school buses they self-pollute and 5 breathe more particulate? Yeah, we ought to look at that 6 issue. 7 But if we're going to add particulate exposure 8 weighting, proximity weighting in Carl Moyer, we're 9 opening a huge can of worms, and we need to think about it 10 for all source categories that Carl Moyer funds. And 11 would you have a discount then for sources farther away 12 from population like agricultural sources? How would you 13 deal with rail yards next to residents versus rail yards 14 farther away? So it's a big question. And we think it's 15 very technically compelling. But it's difficult to get 16 our arms around. 17 And one proposal was that we add an 80-to-1 18 weighting for PM exposure on a school bus. So there's a 19 technical question, is that the correct weighting factor 20 for self-exposure, self-polluting exposure, and what might 21 the weighting factors be for other proximity effects near 22 particulate for other source categories? We'd like to at 23 least know where we're going before we say yes to any 24 single proximity weighting. And so it's going to take us 25 several more months to work our way through this. But at PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 57 1 the end of the day, I think Carl Moyer will be more widely 2 available for this source category. 3 ON-ROAD CONTROLS BRANCH CHIEF KITOWSKI: One 4 clarification, please. 5 There's actually two different groups going on, 6 so just to clarify. And the issue of using school bus -- 7 funding school buses through a fleet modern situation has 8 come up in both. And Ms. Witherspoon has described more 9 the high level policy meetings that's being chaired by 10 Supervisor DeSaulnier. And I actually think the witness 11 may have been talking about more the staff level 12 roll-up-your-sleeves technical working group that we have 13 been convening specifically looking at more the technical 14 issues. 15 And with regard to that, I think both of these -- 16 the point is both of these are public meetings. They are 17 open to the public. School districts would be welcome to 18 come. We didn't have a list of any school districts that 19 notified us that they wanted to. But they would be 20 welcome to participate and have their voices heard. And 21 if Mr. McCoy wants to give us the name of any school 22 districts, we'd be happy to contact them. 23 CHAIRPERSON SAWYER: Supervisor DeSaulnier. 24 SUPERVISOR DeSAULNIER: I appreciate the high 25 level versus the rolling up the sleeves and actually doing PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 58 1 the work. 2 We had a meeting I think two weeks ago, Jack and 3 Tom staffed it, of the high level group, and it was very 4 inclusive. I think staff sent out a very wide e-mail in 5 terms of being involved and everybody was included. And 6 we also suggested that we even make sort of a sub-group of 7 that, a further roll-up-the-sleeves. I think the 8 representative from WSPA said for those of you what didn't 9 have as much energy, which I took as related to me, this 10 would be more of a technical group. And I think that 11 group, as Catherine talked about, is more related to the 12 three specific areas, the surplus administration costs and 13 fuel neutrality I think we'll take up a little bit at the 14 Board retreat. But we're prospectively coming back to the 15 Board in two months with a report, two, three months. 16 ON-ROAD CONTROLS BRANCH CHIEF KITOWSKI: You 17 actually said six months. 18 SUPERVISOR DeSAULNIER: Six months, okay. I was 19 just so tired, I figured it would take six months. But 20 just to keep in mind, I think in both cases it's how 21 limited we are in terms of our flexibility under the 22 current statutes. And then prospectively for future 23 statutory changes what we can do to work together. And I 24 think that's a consistent goal both in this instance and 25 the other instance. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 59 1 CHAIRPERSON SAWYER: Supervisor Patrick. 2 SUPERVISOR PATRICK: Thank you. I'd just like to 3 make a brief comment. And that is if we want some school 4 districts to participate -- we do have communication from 5 several valley school districts that are concerned about 6 fleet modernization. My office also had a phone call from 7 Don Fowler from the Kern County Superintendent of Schools 8 Office, and they are making a real effort to change out 9 buses and move to CNG. But all of them are saying, "We 10 need Carl Moyer to be more flexible." 11 And so you know we've talked about the exposure 12 issue -- and I know it can be a double-edged sword, 13 because when we talk about just school bus replacement, I 14 mean, it's millions and millions. And you can go through 15 all the categories, and it's absolutely the same. 16 So my question about, are we truly going to look 17 at PM exposure as part of Carl Moyer moneys? And how long 18 is that going to take? And is this something -- you know, 19 sometimes you just need to keep pandora's box closed, and 20 I understand that. But what's the process going to be to 21 look through that, to look at that? 22 EXECUTIVE OFFICER WITHERSPOON: We really are 23 going to look at -- because although I'm a huge fan of 24 tons, tons, tons, I also think that the health impact is 25 what we mean when we say tons, tons, tons. And proximity PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 60 1 matters. If you are breathing in the diesel exhaust 2 directly, that matters, and we should reflect that. It 3 would be scientifically, intellectually dishonest not to. 4 It's just hard to do and do properly. So we want to be 5 careful as we step into that regime. So I said several 6 months to figure it out. We might be able to do some 7 easier ones first and keep working on the harder ones. 8 But we need to think our way through it as a policy shift. 9 SUPERVISOR PATRICK: So if I understand it, the 10 fleet modernization aspect of the Carl Moyer Program is 11 still a work in progress; is that correct? 12 EXECUTIVE OFFICER WITHERSPOON: That's correct. 13 And proximity weighting can go with fleet modernization or 14 can go separate from fleet modernization. 15 SUPERVISOR PATRICK: And I will say this again 16 later, but we do appreciate all the effort everybody has 17 been putting into working on this. We know that it's been 18 an issue of great concern to a lot of people. But I 19 definitely think we need to have school districts at the 20 table when we're talking about this. And perhaps if the 21 various air districts that have real concern about this 22 one -- and I think this is pretty exclusively at least at 23 this point in time a valid issue. We need to look to the 24 valley air district to get some of these school district 25 people to extend that invitation then to anybody else PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 61 1 that's interested in it as well. Because if we do change 2 the rules, there may be some other districts that have a 3 much higher level of interest in it. 4 CHAIRPERSON SAWYER: Bonnie Holmes-Gen. 5 MS. HOLMES-GEN: Chairman Sawyer and members of 6 the Board, I'm Bonnie Holmes-Gen with the American Lung 7 Association of California. And I wanted to indicate that 8 we are very, very supportive of the Lower-Emission School 9 Bus Program. And we believe this program is extremely 10 important to children's health, and especially with the 11 research that you've heard about this morning and all the 12 new studies showing how particulates contribute to 13 abnormal lung growth in children, in addition to asthma 14 attacks and elevated cancer risk. We think that school 15 bus replacement and upgrading is extremely important. And 16 we think the goal is to get the money out as quickly as 17 possible. And in addition to identify the additional 18 funding, that we need to get all the pre-87 school buses 19 off the road and to do the additional retrofits we need to 20 do. 21 And I would like to second the suggestion of 22 Board Member D'Adamo about the developing a plan. As I 23 understood it, developing a statewide plan to do the 24 statewide fleet modernization for school buses and 25 identifying how much funding exactly is needed and what PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 62 1 the potential sources are. We are one of a number of 2 stakeholders that are strongly advocating at the state 3 level for the addition of school bus funding into whatever 4 transportation or education bond measures move forward at 5 the state level. And we think that could be one source of 6 funding. 7 I did want to make one comment on the CNG or 8 alternative fuels and diesel split in the funding in the 9 guidelines as proposed today. I think the Board members 10 are really aware of the very long struggle that initially 11 led to this agreement to have this two-thirds/one-third 12 split between alternative fuels and diesel in the School 13 Bus Program. And I do think it's a very significant and 14 very hard one agreement that's reflected in the 15 guidelines. And I understand that with regard to 16 replacing the 90 to 100 buses with the 12 1/2 million 17 appropriated by the Legislature that it would be difficult 18 to achieve the split. I understand that. And that 19 there's kind of a unique situation and unique opportunity 20 here. 21 So I don't want to slow down getting this money 22 out and slow down changing over those buses, but it does 23 seem that you could do at least a couple of things. 24 Number one would be to make sure that the Board is sending 25 the signal this is a split or goal that will continue in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 63 1 the future years. Apply the exemption only to the 2 buses -- exemptions from the two-thirds/one-third split 3 only to the buses purchased with the 2005-2006 fiscal year 4 funds appropriated by the Legislature. And I think the 5 way it's in the proposal, the staff proposal, the 6 two-thirds/one-third split would be -- the exemption from 7 that split would be in the guidelines that are the general 8 guidelines applicable to all funds that would go into the 9 School Bus Program during this next year. So it applied 10 to the AB 923 funds in addition to the legislatively 11 appropriated funds. 12 So one thing would be to make that a little 13 narrower. And that only the buses purchased with the 12 14 1/2 million appropriated by the Legislature would not be 15 subject to that two-thirds/one-third split. And then, of 16 course, just to clarify as was mentioned that this 17 exemption is only a one-year exemption. It would be 18 reinstated after 2006. 19 The bulk of our comments are congratulations and 20 making another important step forward and getting older 21 school buses off the road and protecting children's 22 health. But we are concerned we also retain the 23 significant agreement regarding the split in the buses. 24 CHAIRPERSON SAWYER: Thank you. 25 EXECUTIVE OFFICER WITHERSPOON: Dr. Sawyer, if I PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 64 1 might, the two-thirds/one-third was expressed by the Board 2 as a goal. And just for your information, we've been 3 running about 50/50. But we are happy to keep it as a 4 goal in future fiscal years and treat this as a one-year 5 change and to keep reporting to you how we're doing as a 6 matter of goal. It's not a strict matter, shift money 7 around absolutely to achieve it. But we are aiming at 8 natural gas and the school bus sector, if that's 9 agreeable. 10 CHAIRPERSON SAWYER: Julian Imes. 11 (Thereupon an overhead presentation was 12 presented as follows.) 13 MR. IMES: Good morning, Mr. Chairman and other 14 members of the Board. My name is Julian Imes. I'm the 15 Director of Exhaust Emission Technology for Donaldson 16 Company. 17 --o0o-- 18 MR. IMES: Donaldson appreciates the opportunity 19 to provide comments on ARB's proposed revisions to the 20 School Bus Program Guidelines. While we're generally 21 supportive of the guidelines, we are in opposition to 22 certain aspects of the retrofit guidelines, particularly 23 with regard to NO2 control limits, associated ARB staff 24 assessments and guidance, and unclear BACT determination 25 impacts. For improvements, we offer technology PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 65 1 alternatives for cost effective total PM reduction, 2 including tailpipe PM and crank case PM for school buses. 3 Finally, we will provide summary recommendations which 4 would allow greater PM control for California school 5 buses. 6 --o0o-- 7 MR. IMES: This is just a background slide on 8 Donaldson. 9 --o0o-- 10 MR. IMES: Donaldson has actively worked with ARB 11 staff in past years to develop and provide retrofit 12 technology, and we presently have verified with both EPA 13 and ARB DOC Level 1 technology; Level 2 DMF diesel 14 multi-stage filter technology; Level 3 DPF muffler 15 technology; and finally, crank case PM control technology. 16 --o0o-- 17 MR. IMES: This state budget language has already 18 been discussed, and it indicates at least Level 3 19 verification and producing a lowest NO2. 20 --o0o-- 21 MR. IMES: This is just a copy that ARB staff 22 report guidance provides comment on BACT considerations in 23 choosing eligible technology with practical direction to 24 give priority to uncatalyzed active particulate filters 25 and in our view without regard to initial cost in any PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 66 1 necessary infrastructure. This lies at the heart of our 2 concerns. 3 --o0o-- 4 MR. IMES: Our perspective is that ARB staff 5 interpretation of lowest possible NO2 is at odds with 6 ARB's proposed limits for NO2 increase of 30 percent NO2 7 to NOx by 1-1-07 and 20 percent NO2 to NOx by 1-1-09. 8 That's going to come before the Board next month. All 9 existing and future ARB NO2 NOx requirements should be 10 within the framework of ARB verification regulations for 11 NO2/NOx regulation. Lowest possible increase should not 12 be equated to no increase without adequate assessment of 13 practicality. 14 The short time for implementation of the 2005-06 15 fiscal year retrofit program does not allow competitive 16 supplier development and delivery of ARB verified product 17 with no NO2 increase. We've already heard earlier this 18 morning it only applies to one technology provided. 19 --o0o-- 20 CHAIRPERSON SAWYER: I would ask you to note the 21 three-minute limit and conclude your remarks, please. 22 --o0o-- 23 --o0o-- 24 MR. IMES: I'm going to have to skip through. 25 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 67 1 MR. IMES: We wanted to talk about BACT 2 determination and how that needs improved guidance. 3 --o0o-- 4 MR. IMES: We wanted to talk about technology 5 alternatives which includes tailpipe and crank case 6 control. 7 -o0o-- 8 MR. IMES: As a suggestion, we have a Level 2 9 device that provides over 7 percent PM reduction -- 10 --o0o-- 11 MR. IMES: -- and meets 20 percent NOx. We have 12 a verified technology for crank case filtration systems. 13 --o0o-- 14 MR. IMES: This shows the overview of the 15 benefits provided and the costs associated with it. 16 --o0o-- 17 MR. IMES: Crank case PM measurements are well 18 validated in terms of the need. They need to be accounted 19 for in '07. There's specific measurement protocol 20 associated with it. 21 --o0o-- 22 MR. IMES: This is how crank case PM roles out. 23 While you have decreasing tailpipe PM requirements and 24 levels, actually crank case PM remains at a .01 to .04 to 25 an average of .025. As you get to very low levels, crank PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 68 1 case PM becomes very important. 2 --o0o-- 3 MR. IMES: We believe as an example of this 4 technology option for '94 to '06, .1 tailpipe and .025 5 crank case, if you just take 85 percent of .1, you get .85 6 grams break horsepower reduced. If you use Level 2 at 70 7 percent as we're suggesting, we can actually get greater 8 programs per break horsepower reduced and the DFP 9 technology, and we believe this ought to be considered as 10 part of ARB's technology assessment. 11 --o0o-- 12 MR. IMES: These are the summary conclusions. 13 Donaldson is opposed to present ARB staff conclusions and 14 guidance. ARB Board has requested to delay final approval 15 of the guidelines and to direct ARB staff to provide 16 additional assessments and recommendation for alternatives 17 along with the resulting BACT impacts. And, finally, the 18 ARB Board is requested to direct ARB staff to provide an 19 assessment and recommendations of the impact and benefit 20 of crank case PM control measurement, both alone and in 21 combination with other tailpipe aftertreatment control 22 measures. Crank case PM is being well controlled and well 23 utilized in EPA retrofit programs, and we believe it ought 24 to be utilized in California. Thank you. 25 CHAIRPERSON SAWYER: Thank you. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 69 1 Would staff comment on the issue of crank case PM 2 versus tailpipe PM and the equivalency or lack of 3 equivalency? 4 ON-ROAD CONTROLS BRANCH CHIEF KITOWSKI: I don't 5 think we're disputing the benefits of controlling crank 6 case PM. That is, it is something that that technology 7 could be funded, for example, in the Carl Moyer Program if 8 it met the criteria in terms of the cost effectiveness 9 cap. 10 What we're dealing with in this program was very 11 explicit budget language which talked about retrofit 12 systems at Level 3 and specific requirements on low NO2 13 across the device. And we thought we came up with the 14 best balance we could in terms of responding to the 15 Legislature's direction and giving us the funding and then 16 still providing an out if, in fact, that device did not 17 meet the market demand. 18 CHAIRPERSON SAWYER: Thank you. 19 Next is Marty Lassen. And then we will have John 20 Dunlap, Stephen Rhoads, and Juan Ortellado. 21 MR. LASSEN: Good morning, Mr. Chairman and 22 members of the Board. My name is Marty Lassen, and I'm 23 the Commercial Development Manager for Johnson Matthey's 24 heavy-duty diesel business in North America. We 25 appreciate the opportunity to provide comments today. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 70 1 Johnson Matthey is a technology company that's 2 been providing advanced catalytic solutions to reduce 3 emissions for over 30 years. We worked with both ARB and 4 EPA to develop and provide these ever-increasing advanced 5 technology solutions to reduce emissions from both mobile 6 and stationary sources. Johnson Matthey fully supports 7 the goals of ARB in reducing diesel particulate. JM has 8 been involved with the Diesel Risk Reduction Program since 9 its inception. We provide a technology, our expertise in 10 applying this technology along with a willingness to 11 demonstrate the effectiveness of our technology as a 12 partner with ARB. JM has committed considerable resources 13 to this program over the last six years. We fully concur 14 that replacement of older school buses and retrofit of 15 newer school buses is a critical element in providing a 16 clean and safe environment for the children of California. 17 CHAIRPERSON SAWYER: Again, excuse me for 18 interrupting. I would encourage you to put as much of 19 this in your own words and emphasize the main points, 20 because we have the written statement. 21 MR. LASSEN: All right. Essentially, the budget 22 language requires that certain provisions for the filters 23 be considered. We don't disagree with most of them. We 24 do have a concern about the lowest NO2 value being used. 25 Essentially, you have -- the Legislature has eliminated PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 71 1 the ability for competition to exist at this current time. 2 When the Legislature process occurred, there were no zero 3 NO2 devices verified. Within several weeks after 4 legislation passed and was signed by the Governor, a zero 5 NO2 slip filter was verified. A coincidence? Maybe. 6 Maybe not. 7 We believe that NO2 -- low NO2 is a worthy goal. 8 We're working very hard to get to that. But it's taken a 9 lot longer to develop the technology, and I believe it's 10 in ARB's best interest to try to maintain a competitive 11 atmosphere in the marketplace here in California. 12 The ARB's own analysis shows a 20 percent NO2 13 increase, has minimal impact on ozone or nitric acid 14 formation and, you know, higher levels of either minimal 15 or no impact as well. An uncatalyzed filter will not 16 reduce hydrocarbons or CO. And it may increase 17 hydrocarbon. And there may be an impact on ozone from 18 this increased hydrocarbon. 19 We've always indicated that filter technology, 20 any single one is not a panacea for all applications. And 21 we would suggest that this is also true with the active 22 filters. Since there's only a single vendor that can 23 supply verified technology, we're skeptical that the cost 24 of the active system will be equivalent or even close to 25 that of passive filters. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 72 1 The active system requires an off-board air pump 2 or generation control panel which will also require 3 infrastructure and in the form of 240 volt electric 4 supply, and there's an ongoing cost of that electricity as 5 they have to plug it in possibly every day for five to 6 eight hours. If in fact they do have to plug it in, every 7 filter will have to have a regeneration panel. 8 Our analysis of the marketplace says that users 9 do not want, do not like, and most likely will struggle 10 with active filter systems that require them to plug them 11 in every day. We have an active system that we make 12 commercially available in Europe for the off-road, and we 13 have experienced those problems. And the active system 14 does require the same type of BACT control. 15 CHAIRPERSON SAWYER: I would ask you to conclude. 16 MR. LASSEN: In closing, we're committed to 17 cleaning up emissions from diesel engines in many 18 applications with school buses at the top. We cannot in 19 good conscious support the restrictive language in the 20 proposed revisions. 21 We would ask the Board to delay any discussion on 22 these revisions until such time the JM or other interested 23 parties have had a chance to appeal to the Legislature to 24 reconsider its language. Thank you. 25 CHAIRPERSON SAWYER: Thank you. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 73 1 Are there any comments from staff? 2 EXECUTIVE OFFICER WITHERSPOON: We agree with a 3 lot of the comments that Donaldson and Johnson Matthey 4 have made on a technical level. The difficulty is the 5 budget language was explicit. We're doing what the 6 Legislature instructed us to do. There's a tension here 7 of biting the hand that feeds you. We do want continuing 8 appropriations. I think we need to engage the Legislature 9 in future budget bills so they understand the consequences 10 of these language restrictions and restore a broader 11 competition, which we do think is appropriate. 12 You will be considering diesel verification 13 technology regulations at your March Board meeting where 14 we will be talking about the NO2 limit and the whole NO2 15 issue. But just as a preview, we do think that 16 particulate traps with some NO2 are still a good thing for 17 California on balance. And it's too bad they don't get to 18 participate to the same degree as the active filter will 19 in this $12.5 million round. 20 CHAIRPERSON SAWYER: John Dunlap. 21 MR. DUNLAP: Mr. Chairman, good morning. Your 22 colleagues on the Board, good to see many of them again. 23 Had a chance to serve with some a few years back, and I 24 miss the work of the Board. This is my maiden commentary 25 to you today, and I will take to heart your request to be PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 74 1 focused on key points. 2 We submitted a four- or five-page packet to you 3 on behalf of -- my client is Engine Control Systems, who 4 their COE and President has accompanied me here today. 5 They've been around for about 25 years. They, to use the 6 words of your Executive Officer, have led the pack in many 7 areas. They have probably the most verified technologies 8 by CARB and U.S. EPA in the retrofit area. They 9 manufacture exhaust retrofit systems designed to reduce 10 dangerous toxic particulates from diesel burning engines 11 including and focusing specifically in many respects on 12 older-year model school buses. 13 And we come to you today not to oppose but to 14 look for ways to broaden going forward language that would 15 include a technology that they have that's very cost 16 effective. And you'll see in our packet we provided some 17 comparative data. I want to point out the chart that we 18 have there which illustrates very clearly and verified by 19 your own staff that the ECS diesel oxidization catalyst 20 reduces diesel PM emissions between 25 and 45 percent and 21 costs only about $2,000 per bus. This provides a very 22 cost effective way to reduce these dangerous emissions 23 while still allowing vehicles to remain on the road. Most 24 importantly, our children will immediately benefit from 25 these emission reductions. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 75 1 And this technology is precluded from qualifying 2 the way the language is currently written and the way this 3 program will go forward for '05 and '06. We've been 4 meeting with your staff, with Ms. Witherspoon's 5 legislative staff, and the technical staff. We've had 6 some good meetings. And it's your hope that we can get 7 some language revisions that broaden the applicability of 8 this program to include the product that my client makes 9 and can put on these school buses to make them cleaner. 10 The language we're looking for is that cleaner 11 school bus allocations must be spent on verified diesel 12 emission control devices that achieve the maximum amount 13 of PM reductions for a specific bus model year. If that 14 language were in place today, it would have allowed many 15 of these disadvantaged school districts that have been 16 discussed today so openly and accurately to take advantage 17 of this program. 18 In concluding, the Level 3 technology does not 19 exist today for buses manufactured prior to '94, and these 20 are the dirtiest buses in the greatest need of retrofits. 21 And they're not in this program. And you've heard much 22 about economically disadvantaged areas. I want to 23 emphasize that point one last time. And also mention to 24 you that we're committed to working with your staff going 25 forward to try to broaden the applicability of these PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 76 1 resources to apply to what ECS manufactures and can put on 2 its buses. 3 With that, I'll conclude. And be happy to answer 4 any questions. Also we have Ed Richards, our CEO, here, 5 and he can answer any questions you may have. 6 CHAIRPERSON SAWYER: Any questions from the 7 Board? Steven Rhoades. 8 MR. RHOADES: I'm Stephen Rhoades. I represent 9 the School Transportation Coalition. First, I want to 10 make it very, very clear we are supportive of the staff's 11 recommendations and appreciate the work they've done. 12 I also want to call attention to the fact that 13 some Board members today are probably going to be voting 14 on a proposal that doesn't benefit their districts. And 15 we recognize that and commend you for doing that. 16 SUPERVISOR DeSAULNIER: Some of us are used to 17 it. 18 MR. RHOADES: I do think when we take a look at 19 the pre-87 school buses and the distribution of those 20 buses that it will come around and it will benefit other 21 areas of the state. And so I think what you're doing is 22 the right decision, and we appreciate the sacrifice that 23 you're making. 24 SUPERVISOR ROBERTS: We haven't made any 25 sacrifice yet. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 77 1 MR. RHOADES: We're always optimistic. 2 I do have two major complaints with some 3 recommendations for the next round, okay. Not any changes 4 for this from the staff's recommendations. 5 And the first one is one that I always harp on, 6 is try to make this process as simple as possible. The 7 language that was in the budget for this allocation said 8 the oldest school bus first. The easiest way is do that 9 is to select one agency or one air quality district and 10 have them allocate the money. 11 But the biggest problem we have is the time line. 12 These buses are not going to get out on the road until 13 August of 2007. And we think that's extremely 14 unfortunate. We think if -- and I'll recommend some 15 changes -- that they should have been out on the road for 16 the opening of the 2006 school year. 17 You are kind of given two responsibilities: The 18 air quality of the children riding these buses because 19 these are pre-1977 buses that are spewing pollutants 20 inside the bus as well as outside; and also the safety of 21 these children, because these buses do not meet the new 22 Federal Highway Safety Standards. And we want these buses 23 replaced as quickly as possible. And we want them 24 destroyed. 25 And the three recommendations that we would make PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 78 1 is as soon as legislation or a bond measure -- and we're 2 working hard on those measures -- becomes available, to 3 have the district, the ARB staff work as quickly as 4 possible and to move as quickly as possible. The second 5 is to make it as easy, simple process as possible. Our 6 preference is one agency. And the third is once you 7 decide on who those agencies are going to be, to nudge 8 them to make some condition approvals with the school 9 districts conditioned upon the ARB Board making its final 10 decision. 11 For example, the agencies, Energy Commission, the 12 various air quality agencies could have already gone out 13 with the solicitation to school districts and had selected 14 the school districts that would be getting these buses 15 contingent upon your action today. And that would have 16 probably ensured if that would have been done that we 17 would have had the buses on the road come fall of 2006. 18 And I do know that, you know, I'm sure the 19 Governor's Office would be very happy to kind of nudge the 20 statewide agencies. Many of the Board members that 21 represent air quality districts would have probably nudged 22 the air quality district to make those contingent awards, 23 and we would get the buses out quicker and get them off 24 the road quicker and not have to have them run for another 25 year. Thank you very much. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 79 1 CHAIRPERSON SAWYER: Thank you. 2 Would staff like to comment on the timing issue? 3 PLANNING & REG DEVELOPMENT SECTION MANAGER 4 MARSHALL: Yes, Dr. Sawyer. 5 In terms of the bus delivery date, our drop-dead 6 date for bus delivery is in 2007, but there are school 7 buses on the lots at distributors now. And if school 8 districts want those buses, that you know the school 9 districts that have these 90 to 100 oldest buses, if 10 that's what they want, that's what they can buy and 11 they're ready now. If they, however, want to order a bus 12 with certain equipment that meets the needs in their 13 school district, it takes nine months to build a bus. It 14 just depends on what the school district wants. If 15 they're wanting to order a bus, it will take a while to 16 get built. 17 EXECUTIVE OFFICER WITHERSPOON: One of the other 18 time lines that occurred here was researching the oldest 19 buses. Mr. Rhoades did have a list of pre-77 vintage 20 buses at the time the budget language was being developed, 21 but we found as we went through the list some of those had 22 already been retired. Others were not on there. For 23 example, there were none in South Coast, and we found 15. 24 So we might have made conditional awards we would have to 25 rescind and put people in difficult positions. So we PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 80 1 wanted to be sure we had the right list of 99/100 oldest 2 buses before we told them the money is yours. So we go as 3 fast as we can, and we, too, want the buses out there as 4 fast as possible. But this was as quick as we could get 5 it done. 6 CHAIRPERSON SAWYER: Any questions from Board 7 members? 8 Thank you very much. 9 Juan Ortellado. 10 MR. ORTELLADO: Good morning, Dr. Sawyer and 11 members of the Board. My name is Juan Ortellado, and I 12 work for the Bay Area Air Quality Management District. 13 First, I'd like to thank ARB staff for the work 14 they've done to facilitate implementation of the 15 Lower-Emission School Bus Program in California. We 16 appreciate the work. The cleanup of the school buses is a 17 high priority for the Bay Area Air Quality Management 18 District, and our staff has been working diligently with 19 the local school districts to clean up their fleets. And 20 for that purpose, we've used not only Lower-Emission 21 School Bus Funds, but other funding sources such as our 22 own local DMV fees. 23 The Bay Area Air District supports the additional 24 flexibility proposed by staff for the Lower-Emission 25 School Bus Program, such as the no-match requirement for PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 81 1 the school districts and the funding for maintenance and 2 data logging related to retrofit devices. However, the 3 air district staff would like to suggest that in the 4 future the distribution of the Lower-Emission School Bus 5 Program be made strictly on population basis and that the 6 decision on how to allocate funds be left to the 7 discretion of the local air districts, because air 8 districts know what is needed in their jurisdictions. 9 In the case of the Bay Area, for example, there's 10 generally more interest right now in the replacement 11 rather than in retrofitting in older school buses. And 12 yet we only received $560,000 for which is just to fund 13 four new school buses in the Bay Area for these current 14 funding cycles. That's based on the current distribution 15 of Lower-Emission School Bus Program Fund. So in a way, 16 we think the Bay Area is being penalized for proactively 17 replacing the older school buses through the years, and 18 we're getting only a little funding. That's one 19 recommendation we bring to you for the next funding cycle. 20 In general, again, we're supportive of the goal 21 of the program, which is we would like to see more 22 flexibility allowed to the local air districts. Thank you 23 for the opportunity to provide comments. 24 CHAIRPERSON SAWYER: Thank you very much. 25 Are there any questions or comments from the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 82 1 staff? 2 The split in the money, that was in the bill? 3 EXECUTIVE OFFICER WITHERSPOON: That's the oldest 4 bus first. The Bay Area has a low number of pre-77 or no 5 pre-77s. 6 CHAIRPERSON SAWYER: The final speaker I have is 7 Mike Eaves. 8 MR. EAVES: Good morning, Dr. Sawyer and members 9 of the Board. I'm Mike Eaves from the California NGV 10 Coalition. 11 The natural gas vehicle industry supports the 12 2006 School Bus Program guidelines with a couple of 13 proposed changes. One, as mentioned previously, we would 14 like to see the split of two-thirds/one-third 15 reestablished in 2007. We recognize the need given the 16 budget language for this one-year suspension of that goal, 17 but we think that it should be reinstated in 2007. 18 We're also requesting that staff and the Board 19 change the guidelines to include -- that would permit 20 repowers of natural gas engines under the retrofit 21 program. In January, EPA approved a 0.8 gram NOx 0.01 22 gram PM certification for Emissions Solutions, Inc., for a 23 natural gas version of a very common bus used in the 24 school bus market, the DT 466 engine. Several weeks ago, 25 CARB approved the same certification. This is an PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 83 1 important development, because this engine is one of the 2 most popular engines in school buses in North America, and 3 the engine is essentially a drop-in engine replacement for 4 the existing diesel engine. 5 Repowers with this engine can reduce NOx 80 to 6 90 percent depending upon the vintage of the older engine. 7 PM reductions will equal or exceed the best Level 3 device 8 and avoid the NO2 problems common with a number of diesel 9 particulate filters. For these reasons, we would like to 10 see the guidelines changed to include natural gas repowers 11 in this category of retrofits, and certain number of the 12 districts like South Coast and everything are anxious to 13 implement this under the School Bus Program. Thank you 14 very much. 15 CHAIRPERSON SAWYER: Thank you. 16 Could somebody comment on the retrofit? 17 ON-ROAD CONTROLS BRANCH CHIEF KITOWSKI: Yeah. 18 We have not had a chance to get a legal interpretation of 19 this. But our sort of first blush look at how this meshes 20 with the budget language is again that the flexibility 21 isn't there. We will pursue it further and make sure we 22 look at every opportunity we can. But we just haven't had 23 a chance to do that since this issue came up. 24 CHAIRPERSON SAWYER: Supervisor. 25 SUPERVISOR ROBERTS: Just a couple of things. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 84 1 First of all, you were quiet and silent after Mr. Dunlap 2 finished his testimony. And I'm wondering, you know, 3 based on the testimony maybe you could respond. 4 EXECUTIVE OFFICER WITHERSPOON: Mr. Dunlap's 5 testimony was similar to Johnson Matthey's and Donaldson, 6 so I meant to include him in my remarks. Maybe I could 7 have just said that, that he's got a device. His company 8 has a device that does a terrific job of reducing 9 particulate but doesn't have the NO2 performance of the 10 active plug-in filter. That's the dilemma we're in, that 11 the Legislature told us to go after the single lowest NO2 12 device. There's one device that Clearair manufactures. 13 And so we've written the guidance such that that would be 14 the first priority. And where it was not practical, you 15 could buy another PM filter, in which case all of the 16 filters would be eligible that achieve 85 percent 17 particulate control. 18 SUPERVISOR ROBERTS: Second question, while I'm 19 pondering that. Would you help me, is there an incentive 20 for the districts that will receive this funding to maybe 21 pull together and consolidate their purchasing? I sit on 22 a Transit Board. We rarely go to the market for small 23 numbers of buses, because you pay a real premium. You 24 talk about buying them on a lot. But you're going to pay 25 a premium. And at the end of the day, the public sector PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 85 1 will have a lot more money in for a lot fewer buses. And 2 I'm wondering if there is a way to, you know, create 3 almost an incentive so if they can save some money that 4 it's their money they're saving or something so we don't 5 just parcel this out in a lot of little pieces that's 6 being proposed and see people buying and ordering in real 7 small numbers. Small buses, you know, you can probably 8 customize them in a million different ways, but basically 9 school buses are school buses. And there should be a way 10 to purchase them in a much bigger order and save an awful 11 lot of money here. And that concerns me. If there's any 12 thought being given to that. 13 PLANNING & REG DEVELOPMENT SECTION MANAGER 14 MARSHALL: Supervisor Roberts, typically what happens 15 under the School Bus Program they piggyback off one of the 16 existing big, big, big bids. So there is usually a couple 17 of large bids that the school districts look at for their 18 purchasing. 19 SUPERVISOR ROBERTS: So there'll be some 20 coalition and purchasing power that will be combined here? 21 PLANNING & REG DEVELOPMENT SECTION MANAGER 22 MARSHALL: Yeah. 23 SUPERVISOR ROBERTS: They're paying some portion 24 of the costs of these buses? 25 PLANNING & REG DEVELOPMENT SECTION MANAGER PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 86 1 MARSHALL: Not under this round. 2 SUPERVISOR ROBERTS: None whatsoever? 3 PLANNING & REG DEVELOPMENT SECTION MANAGER 4 MARSHALL: Right. 5 SUPERVISOR ROBERTS: That concerns me. I wish 6 there was never a program where they didn't pay some part 7 of the cost, because who cares if you save money if 8 somebody's paying 100 percent? 9 PLANNING & REG DEVELOPMENT SECTION MANAGER 10 MARSHALL: I guess our concern was that for this round 11 we're targeting specific school districts and specific 12 buses, and they would not have had the chance to budget 13 the match funds. 14 SUPERVISOR ROBERTS: Well, you just answered. 15 Why bother going to a coalition? 16 EXECUTIVE OFFICER WITHERSPOON: We haven't 17 experienced -- one reason as to why bother to go to the 18 coalition is if the per bus price goes up, the total 19 number that you can buy in a single air district goes 20 down. And so somebody gets shorted. Because we make an 21 allocation, a nominal allocation, on 140k a bus, and the 22 district spends that and buys as many buses as they can 23 for as many school districts. And staff pointed out, if 24 they picked CNG 100 percent, there will be a smaller 25 number of buses. If they pick all diesel, they'll have PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 87 1 enough money to get another diesel on top of that 2 allocation. SUPERVISOR ROBERTS: So they get a 3 fixed amount of money -- 4 EXECUTIVE OFFICER WITHERSPOON: Well, the 5 district get a fixed amount of money. The air district 6 gets a fixed amount of 140 nominally. And the school 7 district gets what it needs to support a new school bus 8 whether it's a CNG bus, diesel bus, or an active filter. 9 We haven't had a Cadillac problem yet in the School Bus 10 Program where they tricked it out so much it was, you 11 know, a $200,000 school bus. We haven't seen that. 12 SUPERVISOR ROBERTS: Okay. 13 CHAIRPERSON SAWYER: Any other comments from 14 Board members? 15 SUPERVISOR DeSAULNIER: I don't know whether I 16 just like the idea of Ron's idea that in some way even 17 though the cost is fixed that there's somebody -- and I 18 don't know who, but let's just say Laidlaw because they 19 build a lot of school buses, if they're incentivized to 20 give a lower price just on the volume, there's that many 21 more buses out there, and that doesn't cost us anything. 22 So to the degree we could put language into the Resolution 23 or part of the recommendation to have staff work with the 24 purchasing of the general services departments of the 25 larger school districts to do that, I think that would be PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 88 1 a good thing. I think that's where you were going, Ron. 2 Can we do that in the 15-day rules, some kind of 3 language -- 4 EXECUTIVE OFFICER WITHERSPOON: I think you 5 absolutely can do that in your direction to us. I wanted 6 to buy them myself and hand them out, have the Air Board 7 buy them. And I was told we can't do that. We can't have 8 the liability of owning the bus ourselves and transferring 9 it. They have to purchase it. Because I wanted to 10 accelerate the timetable. But, yes, we will do that. 11 SUPERVISOR DeSAULNIER: And then secondly I sort 12 of don't want to -- but Ron already started -- of ignoring 13 our former Chairs. Is that basically -- I always wanted 14 to ask this of you. What would you have us do, 15 Mr. Dunlap? Is that generally the language? For those of 16 us who remember John, he always used the socratic rule of 17 when we couldn't get out of something with a difficult 18 lobbyist, he said, "What would you have us do?" 19 MR. DUNLAP: If I may just add a point -- thank 20 you for that. What my client would like to do is find an 21 avenue where the older buses could have the system they 22 manufacture -- there are others in the market -- it's not 23 a monopoly -- have access in the market. This package 24 because of the language limitation in the budget trailer 25 bill eliminated their ability to have access. So we come PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 89 1 here today. They're the ones that deal with the '73 to 2 '95 approximately year -- or '85 buses. What they want to 3 do is have access to it. This program it talks about new 4 buses and getting rid of the old buses. But there are 5 some areas of the state where that can't happen. So what 6 we want to be able to do is find a mechanism to do that. 7 So we'd like to have your awareness of this issue 8 and instruct the staff that when they work with the 9 Legislature -- and the Administration and the Legislature 10 work together, that provides a way for companies like ECS 11 to get access to the marketplace. 12 SUPERVISOR DeSAULNIER: What I heard Catherine 13 say is they tried to do that or you did do that in this 14 rule. 15 EXECUTIVE OFFICER WITHERSPOON: I misspoke a bit, 16 and Tom pointed it out to me. What Mr. Dunlap is talking 17 about is devices that get less than 85 percent control but 18 apply to a wider range of model years. So you get 25 or 19 50 percent emissions control. And the Legislature not 20 only told us we had to have NO2, but we had to get 85 21 percent PM. We had to go to Level 3. That's why Level 1 22 and Level 2 devices aren't eligible. And so he's asking 23 as we look forward in the future year funding that we keep 24 the entire range of control technologies on the table in 25 case that's the only option that exists for certain model PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 90 1 year school buses. 2 MR. DUNLAP: Gross emissions for the older buses 3 can be dramatically -- you get greater emissions reduction 4 for your dollar with the older buses than you will with 5 the newer buses. 6 SUPERVISOR DeSAULNIER: The question is, can we 7 accomplish that under the current statute or is there -- 8 EXECUTIVE OFFICER WITHERSPOON: Not under the 9 statute. He might be eligible as we continue to work the 10 Carl Moyer fleet modernization and proximity weight 11 factors to come back in that way. Because we're not 12 restricted in Carl Moyer to Level 3. 13 MR. DUNLAP: I believe the only technology that's 14 available now for Level 3 is an ineligible under Carl 15 Moyer; is that correct? 16 EXECUTIVE OFFICER WITHERSPOON: It doesn't meet 17 the cost effectiveness threshold of 14,300 per ton. 18 SUPERVISOR DeSAULNIER: So I guess the point in 19 this regard is it's something that prospectively we will 20 continue to discuss. 21 EXECUTIVE OFFICER WITHERSPOON: Oh, yes. 22 SUPERVISOR DeSAULNIER: And, lastly, I was 23 surprised Ron wasn't more demonstrative, but I can 24 remember at least eight or ten years ago when the Bay Area 25 started a very aggressive program, as Juan mentioned, to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 91 1 get rid of our older buses. And I realize the valley has 2 a different situation. I take it San Diego, you did the 3 same thing, Ron. So to the degree no good deed goes 4 unpunished, there's a little bit of a lot of that for me, 5 too. 6 But what I take from this is the good will we're 7 going to work together with the Legislature, and that was 8 part of what came out of the discussion with the Bay 9 Area's delegation, including the pro tem, that in the 10 future that would be corrected, but acknowledging that was 11 a priority to take care of the buses particularly in the 12 valley. 13 SUPERVISOR ROBERTS: I was being quiet on that. 14 And I'm acknowledging there's a lot of need out there this 15 year, but I'm expecting our staff will perhaps after this 16 year or in any future conversations will treat this a 17 little different, because I don't think you should 18 penalize those who for whatever reasons -- and it isn't 19 just because they're wealthy districts, I'll assure you 20 that, have taken this to heart and have made those changes 21 and those financial sacrifices. 22 SUPERVISOR DeSAULNIER: Ditto. 23 Thank you, Mr. Chairman. 24 CHAIRPERSON SAWYER: Ms. D'Adamo. Excuse me. 25 Supervisor Patrick. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 92 1 SUPERVISOR PATRICK: I just want to acknowledge 2 that the valley, we realize that other people have made 3 this a top priority. It's a priority for us as well. And 4 so I would be remiss if I did not acknowledge that other 5 air districts, you know, are biting the bullet, if you 6 will, so that the really poor districts that are in the 7 San Joaquin Valley and other places as well can begin to 8 replace these school buses. 9 And I would be remiss if I did not thank you for 10 your support of this, because it is critically important. 11 And I know that's one of the reasons why we're so adamant 12 about this fleet modernization through the Carl Moyer 13 Program, because we want to replace more school buses, and 14 again not changing the allocation of the Carl Moyer Funds. 15 But if there's any possibility that we can use those 16 moneys. And, you know, as other moneys become available, 17 we want to do this as well. And I think it's a great idea 18 to have the districts and ARB work together to say, how 19 are we going to, you know -- the need is massive, but what 20 is our battle plan for coming forward and getting these 21 school buses replaced? 22 So I very much appreciate what everybody has said 23 today, because it is something where it's kind of hard to 24 vote yes on something when you know you're not getting a 25 whole lot out of it. So we appreciate those districts who PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 93 1 are on -- the receiving end appreciate the donor districts 2 if you will. I think that's how they do it in the federal 3 government. 4 CHAIRPERSON SAWYER: Since all testimony, written 5 submissions, and staff comments for the item have been 6 entered into the record and the Board has not granted an 7 extension of the comment period, I'm officially closing 8 the record on this portion of the Agenda Item Number 9 6-2-2. Written or oral comments received after the 10 comment period has closed will not be accepted as part of 11 the official record on this agenda item. 12 And now we move into our ex parte statement. 13 SUPERVISOR DeSAULNIER: I have none. 14 BOARD MEMBER KENNARD: None. 15 BOARD MEMBER LOVERIDGE: I did have a 16 conversation with Rick Feinstein. It was exactly what was 17 in our packet material. 18 CHAIRPERSON SAWYER: Thank you. 19 SUPERVISOR PATRICK: The only conversations I 20 have had have been with air district officials. And 21 someone did call one of my staff members, this gentleman 22 from the Kern County Superintendent of Schools, and she 23 relayed to me the extent of that conversation. 24 CHAIRPERSON SAWYER: And I've had no 25 conversations on the subject. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 94 1 At this point, we should review the Resolution 2 which is before us. We'll take time now to read through 3 that before considering action on it. 4 BOARD MEMBER LOVERIDGE: I move approval. 5 SUPERVISOR PATRICK: Second. 6 BOARD MEMBER LOVERIDGE: With the change 7 indicated by the Executive Director. 8 CHAIRPERSON SAWYER: That is with respect to 9 two-thirds/one-third remaining as our goal? 10 EXECUTIVE OFFICER WITHERSPOON: We suggested that 11 goal be reinstituted in the following year and the change 12 to seek leveraged purchasing and to return to the Board at 13 the appropriate time with a battle plan for how to address 14 the remaining pre-87 school buses. 15 CHAIRPERSON SAWYER: Does this require a formal 16 modification, or is that just a statement of policy? 17 Fine. 18 Do I have a motion to approve the Resolution? 19 BOARD MEMBER LOVERIDGE: Yes. 20 CHAIRPERSON SAWYER: And a second? 21 SUPERVISOR PATRICK: Second. 22 CHAIRPERSON SAWYER: All those in favor indicate 23 by saying aye. 24 (Ayes) 25 CHAIRPERSON SAWYER: Opposed? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 95 1 The Resolution is carried. 2 SUPERVISOR PATRICK: Mr. Chairman, if I could, I 3 really would like to thank Jack and all of the folks that 4 have been working on this. I know there have been many 5 discussions that have gone on on this issue. And I know 6 they will continue. But we really appreciate the fact 7 that you all are listening to what our concerns are and 8 that they are framed in the context of us doing whatever 9 we can to replace more school buses. So we appreciate 10 that. Thanks. 11 CHAIRPERSON SAWYER: At this time we have our 12 open comment period, and we, indeed, have somebody who 13 would like to speak. Mr. King. 14 MR. King: Mr. Chairman, I'd appreciate a 15 clarification on the timing. My name is Lance King. I 16 flew out from Washington, D.C. for this. I was under the 17 impression there would be five minutes allotted, and so I 18 just need to know whether we're talking three minutes or 19 five minutes. 20 CHAIRPERSON SAWYER: Since we have so few 21 comments in our public comment period, I'm intrigued by 22 this. Yes, you may have five minutes. 23 MR. KING: Thank you, very much Mr. Chairman. 24 Members of the Board, staff, my name is Lance 25 King. I am a private consultant primarily to nonprofit PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 96 1 environmental advocacy organizations. But I'm here today 2 in a different capacity as Chairman of an organization I 3 formed several years ago, Community Solutions, which is a 4 national research and education organization that's been 5 involved in a two-year investigation of health and 6 environmental issues associated with the Santa Cruz Harbor 7 dredging operations that are conducted annually to keep 8 the entrance channel open, and particularly the hydrogen 9 sulfide pollution problem, which is the most serious issue 10 that has arisen there over a period of decades. 11 And I don't know how many of you may have ever 12 visited Santa Cruz and the Boardwalk and know where the 13 harbor is, just south of that, but in a couple of words, 14 Santa Cruz Harbor was built 42 years ago. It was built in 15 a location that isn't a natural harbor. And one of the 16 consequences of the construction decisions then is that 17 annually you have hundreds of thousands of cubic yards of 18 sand carried into the entrance channel, and with it, 19 organic material, kelp and other organic material that 20 when it's covered by the sand breaks down in an anaerobic 21 environment. And a major byproduct of that is hydrogen 22 sulfide, an extremely hazardous substance that's been 23 recognized as such for decades and can cause death within 24 15 or 20 minutes at high concentrations. 25 Over the last ten years, the public health PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 97 1 community, the United States Environmental Protection 2 Agency, the Justice Department have all come to recognize 3 that exposure to relatively low concentrations of hydrogen 4 sulfide cause a variety of adverse health effects that 5 previously were just thought to be a passing nuisance, the 6 worst of which appear to be permanent neurological 7 problems. And in Santa Cruz in the recent past, in 8 October of last year, it was disclosed that four out of 9 five people tested by Dr. K. Kilborn, who's a professor of 10 medicine and a neurologist at the University of Southern 11 California, were identified as having permanent 12 neurological difficulties, and three of the five also had 13 cardiopulmonary problems. 14 So the reason that I'm here today is to ask the 15 California Air Resources Board to immediately open an 16 investigation into adverse health effects from hydrogen 17 sulfide released by Santa Cruz Port District during annual 18 maintenance dredging operations. Since January of last 19 year, there have been at least nine occasions on which the 20 Port District emissions have significantly exceeded 21 California's health-based ambient air quality standard for 22 hydrogen sulfide. The problem is getting worse. And this 23 is under both non-emergency and emergency conditions. As 24 a result of an apparent violation of an emergency variance 25 last month issued by the Monterey Air District, there is PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 98 1 Notice of Violation and a prosecution that's been 2 initiated. 3 But the reason that I'm turning to you to ask for 4 help is that this situation involves permits from the 5 Monterey Air Board, the Regional Water Quality Board, the 6 Coastal Commission, the Marine Sanctuary, the Army Corps, 7 EPA. And somehow through all of it, citizens there have 8 been adversely affected for decades. And despite four 9 Notices of Violation over the past nine years, there's not 10 been a permanent solution achieved. And people basically 11 know what the permanent solution is, put the pipe in the 12 water at a sufficient depth so that you have the hydrogen 13 sulfide breakdown naturally. 14 Now, without trying to exceed your patience too 15 much in this regard, what's developed over the last three 16 years under a novel protocol adopted by the Monterey Air 17 Board that first they managed to significantly reduce 18 emissions when they were off-shore 90 percent of the time 19 a couple of years ago. But ironically complaints 20 increased. And the reason they increased is that when you 21 put the pipe off-shore, you have it create an artificial 22 wave that surfers love and they come from all over the 23 U.S. and world to surf this. As the sand creates a mound 24 and the pipe in more shallow water, then you get back to 25 your sulfide problem. So there's more complaints from PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 99 1 surfers, from swimmers, from beach goers goes as well as 2 the residents. The number of complaints has gone down, 3 but the level of pollution has gone up in the past 4 two years. 5 And I see my time has expired. So I would be 6 happy to talk with staff either today or tomorrow while 7 I'm here in Sacramento. But there's a need for testing 8 here of a larger number of people than Dr. Kilborn has 9 tested. He may be the leading expert in the nation. The 10 Department of Justice relied upon him in 2000 when they 11 prosecuted Iowa Beef Processors, the largest beef packer 12 company in a situation where the facts were very similar. 13 And it was the first time that EPA and Justice have 14 recognized these dangers of the low levels of emissions. 15 Santa Cruz is actually exceeding the levels of emissions 16 in this historic prosecution in 2000. 17 Thank you for your time. And I look forward to 18 following up as appropriate. I have talked to the general 19 counsel briefly last month and will be providing 20 additional documentation as follow up. 21 CHAIRPERSON SAWYER: Thank you very much. 22 Would staff like to comment on what is going on 23 now? I know this is an issue which we are aware of. 24 EXECUTIVE OFFICER WITHERSPOON: We're very aware 25 of it. I'd like to call upon our enforcement staff, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 100 1 specifically Carl Brown, to talk about our assessment of 2 the situation. We have been treating it as an enforcement 3 issue first and foremost and had not realized the request 4 for a broader health inspection. But I'll let Carl talk 5 first, and then go from there. 6 STATIONARY SOURCE ENFORCEMENT SECTION MANAGE 7 BROWN: I can tell you what we've done from the 8 enforcement side. We have interviewed the Port Authority 9 and the district and citizens. We are in the process of 10 working with the district to try to resolve that 11 complaints the citizens are having. And we have some 12 things in place now that we are trying to carry out. And 13 we have sent staff down to the Monterey District, and 14 we've come up with a plan to try to address these 15 complaints. And so that's where we are with it right now. 16 We have heard of Dr. Kilborn, but we haven't 17 talked to him yet. That is part of what we've been 18 thinking about doing. But we are formulating a plan to do 19 that. But that's where we are. 20 CHAIRPERSON SAWYER: Ms. Witherspoon. 21 EXECUTIVE OFFICER WITHERSPOON: I have a question 22 for Carl, because I haven't had a chance to talk to 23 enforcement staff about this. I've been reading the 24 e-mail traffic as it's come in and been aware enforcement 25 is involved now. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 101 1 Carl, do you agree with the representation of 2 Mr. King that it's an issue of where the pipe is placed, 3 and that if the district went back to the prior solution, 4 that would be a fix, or that there's yet a new resolution 5 that's needed for the problem? 6 STATIONARY SOURCE ENFORCEMENT SECTION MANAGE 7 BROWN: Well, I think there may be a need for another 8 resolution. Because what I understand about the pipe is 9 that they are unable to use the pipe if there's a storm 10 that comes up and causes the port to be filled with the 11 sand again and would cause the dredging. The pipe can't 12 be used. And so that's why they put the dredge on the 13 beach. 14 And that is when the district protocol comes into 15 play, is they have a protocol to try to set limits on how 16 much hydrogen sulfide can be emitted when they do bring it 17 up on the beach. But there's a problem with the pipe 18 going out and them constantly using it. It depends on the 19 weather, and it depends on a few things. And if it is 20 used, then it basically works. But I don't know if that's 21 the total solution to that. 22 EXECUTIVE OFFICER WITHERSPOON: With respect to 23 their request to do additional health monitoring, that's 24 not typically part of ARB investigations or district 25 investigations when you look at things like a toxic PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 102 1 cluster or physical effects on people subjected to air 2 pollution. We involve the Department of Health Services 3 and their epidemiologists and experts to help us determine 4 if the effect is present, you know, if the cluster is 5 present, and to diagnose the sources of it. 6 I mean, I'm a banana slug, just so you know. 7 Obviously, people don't want to abandon the Santa Cruz 8 Harbor and will continue to dredge. And as Mr. King 9 pointed out, there are multiple agencies involved here. 10 But I think what we should do is take him up on 11 his offer to talk to staff while he's here and then bring 12 some of our other divisions in to help analyze the problem 13 and what the remedial steps ought to be. I'd like to get 14 the Research Division involved with their knowledge of 15 hydrogen sulfide and their relationship with DHS and see 16 if we need to run that aspect of the investigation. 17 CHAIRPERSON SAWYER: Well, I think there's a 18 suggestion here that our air quality standard for hydrogen 19 sulfide may not be set at the right level, which would set 20 a whole new -- 21 EXECUTIVE OFFICER WITHERSPOON: I think it's set 22 at the level of odor detection for a sensitive nose. So 23 if that's not good enough, I don't know what is. Because 24 you wouldn't know if it were exceeded below that level. 25 There are detection limit issues with hydrogen sulfide PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 103 1 monitors. 2 CHAIRPERSON SAWYER: Perhaps that was not the 3 point that was being made. 4 EXECUTIVE OFFICER WITHERSPOON: Were you talking 5 about the standard being applied by the district to the 6 dredging? 7 MR. KING: First in terms of the standard which 8 goes back decades here in California, 30 parts per billion 9 is one-hour average to be protective. It was found 10 subsequently, and the state health folks and OEHHA have 11 acknowledged this, is that you can have by smelling at 12 much lower levels, eight parts per billion, for instance. 13 And the Santa Cruz County Environmental Health Department 14 did a preliminary risk assessment in 2004 when emission 15 levels were below the nuisance standard established by the 16 Monterey Board, and they concluded that hydrogen sulfide 17 was, in fact, the likely source of the health complaints 18 and excluded many other toxic substances. 19 There is a question of whether it's worth 20 revisiting the standard. This is an issue that comes up 21 in many parts of the state. The monitoring equipment 22 which has been used for several years there does track 23 much lower levels of emissions. But what we're seeing 24 last year and this year is that emissions are 10 to 60 25 times the average level of a couple of years ago when they PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 104 1 were off shore. 2 If I can just address Mr. Brown's point very 3 briefly, and then I'd be happy to save it for staff. I 4 first have a long association with the harbor, learning to 5 sail there, fishing, swimming. I lived in the community 6 when I grew up. I went to UCS, like the Executive 7 Director apparently did. And I recognize the need for 8 dredging. 9 One reason to put material on the beach is for 10 beach nourishment. Another reason is the emergency 11 variance was to try to protect the road and the sewer from 12 being damaged during the storms. However, what we've seen 13 is a pattern of the port district not being able to manage 14 their operations well. Last year they had the monitoring 15 results that showed when they were for hours at a time 16 exceeding the state health standard and there were 17 complaints, and they never stopped the disposal. They 18 found a loophole in the air district's protocol. So six 19 months was spent revising that and tightening it up. Now 20 they get an emergency variance. On the very day of the 21 emergency variance, they exceed the thousand parts per 22 billion standard. They were supposed to shut down for the 23 day. They restarted. They exceeded it again. They kept 24 dredging. That's why they were cited. 25 But this is not an isolated incident, and this PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 105 1 problem goes back decades. And so there is a need to do 2 maintenance dredging. There is a way to avoid some of 3 this problem. One of the technical options is putting a 4 pipe that goes much further off shore so that you don't 5 have this problem with the storm conditions. But again, I 6 don't want to presume on your time too much, and I'd be 7 happy to meet with staff either later today or tomorrow to 8 discuss the matter further. 9 EXECUTIVE OFFICER WITHERSPOON: Thank you very 10 much. We'd like to take you up on that. 11 MR. King: Should I stick around to find out? 12 EXECUTIVE OFFICER WITHERSPOON: Yes, please. 13 CHAIRPERSON SAWYER: Thank you, Mr. King. 14 MR. KING: Thank you. 15 CHAIRPERSON SAWYER: We will now adjourn and 16 reconvene in a closed session of the Board as indicated on 17 the public notice for today's meeting. The purpose of the 18 closed session is for the Board members to confer with or 19 receive advice from its legal counsel regarding pending 20 litigation listed on today's public agenda. After the 21 conclusion of the closed session, we will reconvene in 22 open session to officially adjourn today's meeting. We 23 expect to reconvene -- 24 EXECUTIVE OFFICER WITHERSPOON: In about half an 25 hour. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 106 1 CHAIRPERSON SAWYER: In about half an hour. 2 Thank you for your patience. 3 (Thereupon the Board adjourned into closed 4 session.) 5 CHAIRPERSON SAWYER: The closed session of 6 California Air Resources Board has concluded. The Board 7 met in closed session to confer with legal counsel, and we 8 were advised by legal counsel regarding the pending 9 litigation listed on today's public agenda. No action was 10 taken by the Board. 11 That concludes the February 23rd, 2006, meeting 12 of the Air Resources Board. Thank you. 13 (Thereupon the California Air Resources Board 14 adjourned at 12:44 p.m.) 15 16 17 18 19 20 21 22 23 24 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 107 1 CERTIFICATE OF REPORTER 2 I, TIFFANY C. KRAFT, a Certified Shorthand 3 Reporter of the State of California, and Registered 4 Professional Reporter, do hereby certify: 5 That I am a disinterested person herein; that the 6 foregoing hearing was reported in shorthand by me, 7 Tiffany C. Kraft, a Certified Shorthand Reporter of the 8 State of California, and thereafter transcribed into 9 typewriting. 10 I further certify that I am not of counsel or 11 attorney for any of the parties to said hearing nor in any 12 way interested in the outcome of said hearing. 13 IN WITNESS WHEREOF, I have hereunto set my hand 14 this 7th day of March, 2006. 15 16 17 18 19 20 21 22 23 TIFFANY C. KRAFT, CSR, RPR 24 Certified Shorthand Reporter 25 License No. 12277 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345