STATEMENT OF ISSUE
In 2006, the US EPA adopted the Clean Air Interstate Rule (CAIR) and the Florida Department of Environmental Protection (FDEP) has adopted the state implementation program requirements for the implementation of CAIR. The City’s generating units fall under the provisions of CAIR. CAIR requires affected units to submit certain applications, operate with certain reduced emissions limits for oxides of nitrogen (NOx) and sulfur dioxide (SO2). One of the provisions of the CAIR program includes a cap and trade program where owners of affected units must hold sufficient NOx and SO2 allowances for the annual emissions from their affected units. To address the implementation of CAIR, the City, as the owner of the affected units, must designate an Authorized Account Representative (AAR) for each affected facility and may designate Alternative Account Representatives (AAAR) for each facility. The AAR/AAAR represent the City in all dealing with the EPA and FDEP. This agenda item is addressing certain indemnification issues associated with the personal liabilities incurred by the AAR and AAAR.

RECOMMENDED ACTION
Option 1: Adopt Resolution No. 09-R-07

FISCAL IMPACT
Option 1: None

Kevin G. Wailes, General Manager – Electric Utility

Anita Favors Thompson, City Manager

For information, please contact: Rob McGarrah, Manager Power Production, x 5534

SUPPLEMENTAL MATERIAL/ISSUE ANALYSIS
HISTORY/FACTS & ISSUES

1. In 2006, the US EPA adopted the Clean Air Interstate Rule (CAIR) and the Florida Department of Environmental Protection (FDEP) has adopted the state implementation program requirements for the implementation of CAIR. Shortly after the EPA adopted CAIR, a lawsuit (North Carolina vs EPA) was filed raising concerns over various aspects of the new rule. In July of 2008, the US Court of Appeals for the DC Circuit struck down the rule. EPA appealed this ruling and in December of 2008, the same court reinstated the rule and directed EPA to commence rule making to address the areas of concern that the Court’s initial ruling had identified.

2. The City’s generating units fall under the provisions of CAIR. CAIR requires affected units to submit certain applications and to operate with certain reduced emissions limits for oxides of nitrogen (NOx) and sulfur dioxide (SO2). One of the provisions of the CAIR program includes a cap and trade program where owners of affected units must hold sufficient NOx and SO2 allowances for the annual emissions from their affected units.

3. To address the implementation of CAIR, the City, as the owner of the affected units, must designate an Authorized Account Representative (AAR) for each affected facility and may designate Alternative Account Representatives (AAAR) for each facility. The AAR/AAAR represent the City in all dealing with the EPA and FDEP. The AAR and AAAR are similar in nature to the Designated Representative(s) (DR) and Alternative Designated Representative(s) (ADR) appointed to meet requirements under the Acid Rain Program contained in the Clean Air Act Amendments of 1990.

4. For CAIR, the City Manager intends to appoint Rob McGarrah, Manager Power Production, as the AAR for Hopkins and Purdom , Triveni Singh, Hopkins Plant Manager, as the AAAR for Hopkins, and Gordon King, Purdom Plant Manager, as the AAAR for Purdom. These individuals also serve as the DR and ADR for the same facilities under the Acid Rain Program. Each of these employees has a written agreement with the City relating to their current appointments. (DR/ADR Agreements)

5. As the AAR and AAAR, these employees are exposed to certain personal liability for their actions. This personal liability is similar to that incurred as the DR and ADR.

6. During the 1994 session, the Florida Legislature enacted Section 768.28(20), Florida Statutes, which authorizes municipalities to agree to indemnify any employees exposed to personal liability due to action taken within the course and scope of their employment with the City in connection with the Clean Air Act. (See attachment A)

7. Staff, working with the City Attorney’s office and special counsel from Hopping, Green and Sams and Van Ness Feldman, has reviewed CAIR and Section 768.28(20). Based on this review, they have determined that the implementation of the CAIR is in accordance with provisions contained in the 1990 Amendments to the Clean Air Act, and, as such, Section 768.28(20) would provide authority for municipalities to agree to indemnify certain employees exposed to personal liability under CAIR.

8. In August 1994, the City Commission adopted Resolution 94-R-0044 (See attachment B). That resolution authorized the City Manager to appoint the DR and ADRs, enter into agreements with the DR and ADRs, and stated the City’s intent to indemnify, to the fullest extent permitted by Section 768.28(20), the employees serving in those roles.

9. Since Resolution 94-R-0044 is specific to appointment of DRs and ADRS, the City Attorney’s office has recommended that an additional resolution be adopted by the City Commission to affirm the intent for this indemnification to include activities related to CAIR. Resolution No. 09-R-07 has been prepared for this purpose.

OPTIONS

Option 1: Adopt Resolution No. 09-R-07.

Option 2: Do not adopt Resolution No. 09-R-07 and provide staff with direction on how to proceed.

FISCAL IMPACT

Option 1: None

Option 2: Unknown

ATTACHMENTS

A. Section 768.28(20) Florida Statutes
B. Resolution 94-R-0044
C. Resolution No. 09-R-07