August 30, 2012 Meeting Minutes

  MINUTES
 

DRYCLEANER ENVIRONMENTAL RESPONSE TRUST FUND
COUNCIL of ILLINOIS

CHICAGO MARRIOTT NAPERVILLE
NAPERVILLE, ILLINOIS

AUGUST 30, 2012

John Polak, Chairperson, called the Drycleaner Environmental Response Trust Fund Council of Illinois meeting to order at 9:45 a.m. A quorum was present. Roll call was taken with the following members present:

John Bredenkamp
Young B. Kim
Paul Kwak (arrived at 10:03 a.m.)
Jerry Lewicki

John Polak

Also present were:
H. Patrick Eriksen, Program Administrator's Office
John McCarthy, Program Counsel
Juho So, Program Administrator's Office

Yong Kim, Program Administrator's Office

PRELIMINARY BUSINESS

The minutes from the June 7, 2012 Council meeting were reviewed. On a motion by Mr. Lewicki and a second by Mr. Kim, the minutes were approved by a vote of 4-0.

  APPEAL OF FINANCIAL RESPONSIBILITY REQUIREMENT IN ORDER TO RECEIVE 2012 LICENSE
  A.

Oak Cleaners, 4822 West 148th St, Midlothian, IL-Site #0001354:

   

Mr. Eriksen reviewed background information with the Council noting the Illinois Drycleaner Environmental Response Trust Fund Act was amended effective January 1, 2012 requiring any active drycleaning facility that has previously received or is currently receiving reimbursement for the costs of a remedial action, as defined in this Act, to maintain continuous financial assurance for environmental liability coverage in the amount of at least $500,000 until the earlier of (i) January 1, 2020 or (ii) the date the Council determines the drycleaning facility is an inactive drycleaning facility. Failure to comply with this requirement will result in the revocation of the drycleaning facility's existing license and in the inability of the drycleaning facility to obtain or renew a license under Section 60 of this Act.

Oak Cleaners, located in Midlothian, IL, filed a remedial claim with the Fund on September 2, 2005. Mr. Sang Jun, the then current owner/operator was the named claimant. The facility received a No Further Remediation (NFR) letter from the Illinois Environmental Protection Agency (IEPA) on February 1, 2007 and the Fund reimbursed the claimant $23,963.18 in eligible remedial action costs. Mr. Jun operated the facility until the latter part of 2008. Per a telephone call to the real estate owner in December 2008, the Fund was informed that Mr. Jun had vacated the facility in October 2008.

In January 2010, the Fund received a telephone call from Mr. Kil Ye Lee (appellant) stating he was operating the facility as a drop store. He licensed the facility effective January 2010 and renewed the facility license for 2011. The facility has not been licensed for 2012 as Mr. Lee believes he should not be required to obtain the financial responsibility coverage for this facility. Mr. Eriksen noted there were two (2) issues for Council discussion. The first was can the Council waive the financial assurance requirement as outlined in the Trust Fund Act? Mr. Eriksen asked Mr. McCarthy to address this issue. The second issue is if the Council has the authority to waive the financial assurance requirement, do they wish to do so for Mr. Lee?

Mr. Lee addressed the Council with assistance from his brother, Mr. Chang Lee, who translated on his behalf. Mr. Lee believes he is not subject to the requirements as the previous owner filed bankruptcy and he established a brand new entity, which in his mind is a new facility. The facility that received the remedial benefits is gone and therefore the business he established should not be subject to the financial assurance requirement. Mr. Lee believes “site” encompasses the physical real estate of the property where “facility” encompasses only the operations and not the physical property. Mr. Lee stated the revisions to the Trust Fund Act requiring this coverage were not in effect when he purchased the facility and he believes it is unfair for the legislature to subsequently enact legislation that would financially penalize him as the owner of the drycleaning facility.

 

Mr. Kwak arrived at 10:03 a.m.

   

Mr. McCarthy addressed the issue of “facility” versus “operating entity”, noting the Trust Fund statute clearly defines the “facility” is different than an “operating entity”. Mr. Lee continued to argue that no regulation was in effect when he purchased the business and he cannot afford the insurance coverage and should not be subject to it.

After additional discussion by the Council, on the recommendation by Mr. McCarthy, Mr. Bredenkamp made a motion to deny the appeal request on the basis that they do not have the authority to grant the appeal inasmuch as the statute is very clear that such a facility is subject to the requirement. The motion was seconded by Mr. Lewicki and passed on a vote of 5-0.

  APPEAL OF CIVIL PENALTIES FOR DELIVERING SOLVENT TO UNLICENSED DRYCLEANERS
  A.

Tri-State Solvents, Dix, IL:

   

Mr. Eriksen reviewed background information with the Council stating that Tri-State Solvents, headquartered in Dix, IL, was assessed civil penalties of $500 on January 13, 2012 and $5,000 on January 17, 2012 for delivering solvent to unlicensed drycleaners in January 2011, prior to the facilities being licensed. A copy of the assessment of the civil penalties and supporting documentation were included in the Council packet. On February 28, 2012, Tri-State Solvents appealed the civil penalties to the Council.

Mr. Pittman recently contacted Mr. Eriksen stating it was his intention not to be present for the appeal inasmuch as he wanted his appeal heard directly by the Administrative Law Judge. Mr. Eriksen informed him there was a set process that must be followed and the next step in that process was for the Council to hear his appeal. Mr. Eriksen reviewed the correspondence between Tri-State Solvents and the Fund in detail.

After discussion by the Council, on a motion by Mr. Lewicki and a second by Mr. Bredenkamp, the Council voted 3-1-1 to deny waiver of the $5,500 in civil penalties for Tri-State Solvents. Mr. Bredenkamp abstained from voting.

  APPROVAL OF PROGRAM BILLINGS
  Mr. Eriksen noted there were four (4) bills before the Council for their review and approval. They were:
  1. Williams & Company Consulting, Inc         $69,103.00
Standard flat fee billing for June 2012, licensing, underwriting, claims processing and site inspections.
  2. John J. McCarthy                                      $319.26
Professional legal services to the Council for the period of May 18, 2012 through June 30, 2012.
  3. Williams & Company Consulting, Inc           $55,657.00
Standard flat fee billing for July 2012, licensing, underwriting, claims processing and site inspections.
  4. John J. McCarthy                                         $3,150.00
Professional legal services to the Council for the period of July 18, 2012 through August 16, 2012.
 

Mr. Eriksen noted the monthly billing for June 2012 for Williams & Company Consulting, Inc. and John McCarthy were emailed to all Council members and approved for payment prior to the August 30, 2012 meeting.

On a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the bills were approved by a vote of 5-0.
  CLAIM PAYMENTS IN EXCESS OF $75,000
 

Mr. Eriksen noted there were seven (7) claim payment requests in excess of $75,000 requiring Council review and action.

  1. Scot Cleaners, Glenview, ILClaim #50618, Site #0001514;
   

Dr. So reviewed background information noting the Remedial Action Plan (RAP) is to reduce source area contamination in the soil and groundwater to the objectives approved by IEPA. The effort will be conducted in several phases. The first phase will be completed in the source area which involves the injection of chemical oxidant into the contaminated soil. Estimated cost for the initial rounds of sampling, including a contingency, total $80,000. In addition, the Administrator is requesting the Council waive the two (2) bid requirement for the current consultant as they have extensive site investigation experience at the site which is important for successful implementation of the remedial activities.

On a motion by Mr. Kim and a second by Mr. Lewicki, the Council approved the $80,000 funding request and waiver of the (2) two bid requirement for environmental consulting services by a vote of 5-0.
  2.

Tuggles Orchid Cleaners, Belvidere, ILClaim #50224, Site #0002157:

   

Dr. So reviewed background information on the facility noting Tier-3 modeling was done at the facility due to bedrock underlying the site. The modeling did not provide the favorable results anticipated due to the static contaminate levels in the monitoring wells. The Administrator is requesting costs to finalize the necessary groundwater ordinance notification letters, the remedial action completion report, a NFR letter request, and abandon the existing 17 monitoring wells. Projected costs are $12,200.

On a motion by Mr. Lewicki and a second by Mr. Bredenkamp, the Council approved the costs by a vote of 5-0.

  3.

Rockland Cleaners, Libertyville, ILClaim #50431, Site #0001920:

   

Dr. So reviewed background information on the project, noting active remediation has been conducted on the property via chem-ox injections. The consultant is requesting $20,680 in remedial action costs to conduct remediation of contamination that has moved off-site into the IDOT right-of-way.

On a motion by Mr. Lewicki and a second by Mr. Kim, the Council approved the $20,680 in remedial action costs by a vote of 5-0.

  4.

Fox Valley Cleaners, St. Charles, ILClaim #50043, Site #0002295:

   

Dr. So reviewed background information stating active remediation has been completed at the facility but cost approval is needed to conduct Tier 2 modeling, finalize the NFR letter and close the 12 monitoring wells on the site. Estimated costs for these activities is $5,000.  

On a motion by Mr. Kim and a second by Mr. Lewicki, the Council, by a vote of 5-0, approved the $5,000 in remedial action costs.
  5. North Shore Cleaners, Glencoe, IL – Claim #50217, Site #0002228:
   

Dr. So reviewed background information noting the site investigation work has substantially been completed but additional work is necessary to assess the vertical extent of the free product in the source area. The consultant is requesting a total of $25,350 to complete the delineation of the existing contamination and complete the RAP design. The Administrator is also requesting waiver of the two (2) bid requirement as the current consultant has conducted extensive site investigations at the facility which is important in implementing remedial activities.

On a motion by Mr. Lewicki and a second by Mr. Kwak, the Council approved the costs of $25,350 and waiver of the two (2) bid requirement by a vote of 5-0.
  6. Christies Cleaners, Oak Lawn, IL – Claim #50135, Site #0001097:
   

Dr. So reviewed background information noting the consultant is requesting $152,000 for active remediation. The remedial action method is chem-ox via gravity feeding. The Administrator is also requesting the Council waive the two (2) bid requirement for the environmental consultant due to his extensive site-specific knowledge of the facility.

On a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council approved $152,000 for remedial activities and waiver of the two (2) bid requirement by a vote of 5-0.

  7. Skokie Valley Cleaners, Highwood, IL – Claim #50053, Site #0001534:
   

Dr. So reviewed background information on the facility noting contamination at the facility has been delineated and active remediation is necessary in order to obtain an NFR letter. The consultant is requesting remedial action costs in the amount of $114,000 to set up a slow feed chem-ox injection system at the facility.

On a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council approved $114,000 in remedial action costs by a vote of 5-0.

  STRATEGIC PLANNING SESSION
  I. Review of Program Status and Evaluation of Past Goals:
    A. Review of Policies and Procedures
     

The Council reviewed each of the policy changes they adopted since the September 1, 2011 Strategic Planning meeting as to the remedial and insurance claims, licensing, underwriting, compliance programs and receivables and collection policies and procedures.

      i. Licensing-Back Dating Financial Assurance Coverage:
       

Recent legislation requires all active drycleaning facilities that are receiving, or have received remedial program benefits from the Fund since the Fund’s inception maintain $500,000 of pollution liability financial assurance coverage until the sunset date of the program or the date the facility ceases to be an operating drycleaning facility, whichever date is earlier. Thirteen (13) facilities have paid their respective license fees but have not provided proof of the $500,000 of financial assurance coverage as of January 1, 2012 and they have not been issued a 2012 license. Recent discussions with the Illinois Attorney General’s Office have resulted in the Attorney General’s Office stating they will seek, on behalf of the Council, enforcement action against unlicensed drycleaners who have failed to obtain the $500,000 of pollution liability insurance coverage.

Issue: The statute allows the drycleaner to obtain pollution liability coverage from either a private insurer or from the Fund but it must be effective as of January 1, 2012. Will the Council backdate any pollution liability insurance coverage to January 1, 2012 in order for the drycleaner to meet this Trust Fund Act requirement regardless of when the application and insurance premium is paid to the Fund? Mr. Eriksen outlined options for Council consideration.

Mr. Polak stated it is problematic to buy back coverage in the private market. In his opinion, since almost eight (8) months has elapsed, the Fund will be the only venue offering to back date such coverage.

After additional discussion by the Council, on a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council voted 5-0 to allow any drycleaners that will be referred to the Attorney General’s Office for enforcement action to purchase financial assurance coverage back to January 1, 2012 as part of the consent order reached on the enforcement action.

      ii. Compliance Program Policies and Procedures Modifications:
       

Mr. Eriksen summarized the results of the draft April 5, 2012 compliance program audit report. Two (2) of the five (5) compliance programs had substantially more non-compliance issues than the other three (3) programs. These two (2) programs were the National Drycleaner Institute program (NDI) and the Asian-American Small Business Association Environmental and Safety program (AASBA). The Administrator recommends these two (2) programs be audited in the first quarter of calendar year 2013 to determine their ongoing compliance with the Council’s requirements. In addition, the Administrator’s office specifically recommends the Council adopt the following for immediate implementation:

1. All previous site inspection issues should be resolved timely or the compliance program should revoke their certificate;
2. All photographs should be date stamped using the camera’s date stamp feature.

After additional discussion by the Council, on a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council voted 5-0 to implement the two (2) recommendations outlined by the Administrator and audit NDI and AASBA programs in the first quarter of calendar year 2013.

      iii. Modification to the Accounts Receivable Policies and Procedures:
       

The Council’s current policies and procedures outline in detail the collection efforts and steps the Administrator must follow in order to collect monies due the Fund such as license fees, license late payment fees, insurance installments, civil penalties, etc. As part of the current collection procedures, the Illinois State Collection Act of 1986 (30 ILCS 210/5) requires that all debt that exceeds $1,000 and are more than 90 days past due shall be placed in the Comptroller’s offset system.

Public Act 97-0759, that went in to effect as of July 6, 2012, now requires that all debts that equal or exceed $250 and are more than 90 days past due shall be placed in the Comptroller’s offset system and requires the involuntary withholding transactions be submitted electronically. The Administrator is requesting Council approval to modify the accounts receivable policies and procedures to allow for the filing of involuntary withholding requests for any amounts due the Fund that equal or exceed $250 and are more than 90 days past due.

On a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council approved the recommended change by a vote of 5-0.

      iv. Remediation without Illinois EPA’s Approval of Site Investigation Report  and Remedial Action Plan:
       

Mr. Eriksen reviewed with the Council that it has been a general practice of the Council to obtain approval of the Site Investigation Report (SIR) and Remedial Action Report (RAP) from the Illinois Environmental Protection Agency (IEPA) before proceeding to active remediation. Recent experience reflects that this practice provides limited benefit to the actual remedial results due to a variety of factors of which the most significant is most remedial activities are being conducted by the same consultant who conducted the site investigation at the drycleaning facility.

The Administrator is requesting Council approval to initiate the remedial process without IEPA approval of the SIR and the RAP depending upon the site specific conditions.

On a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council voted 5-0 to approve the Administrator’s recommendation regarding the ability to initiate remedial process without IEPA approval of the SIR and RAP.

    B. Review of Fiscal 2012 Goals and Statistics:
     

Mr. Eriksen reviewed with the Council the status of their goals for fiscal 2012. The goals involve Fund solvency, legislation, pollution prevention and communication.

Regarding Fund solvency, the Administrator had three (3) industry meetings in the past nine (9) months to explore options/solutions to address the Fund’s projected deficit. A consensus was not reached with industry representatives but substantial time was spent discussing extending the Fund’s sunset date by 10 ½ years, to June 30, 2030.

As of June 30, 2012, 239 active and three (3) inactive remedial claims remain eligible for remedial program benefits. The remaining cost to clean up these facilities is estimated to be $27.7 million.

Regarding legislation, HB4526 (sponsored by the IEPA) was passed by the legislature and signed into law on August 24, 2012 by Governor Quinn. The bill limits the transfer of third generation perc machines and requires all perc operators to have approved operator training by January 1, 2014. Perc drycleaners must annually certify they are properly disposing and storing their hazardous waste.

Regarding pollution prevention, the Administrator conducted 83 site inspections during the year. Compliance programs conducted an additional 555 inspections. The results of the inspections indicated a majority of the drycleaners are in substantial compliance with the Fund’s and State’s environmental rules and regulations.

Regarding communication, the Council updated the industry on Fund solvency and the requirements of HB4526 via their newsletter.

    C. Update on Program Statistics:
      i. General Program Statistics:
       

Mr. Eriksen reviewed various program statistics with the Council, including the May, June and July 2012 monthly activity reports and financial statements. The Fund’s July 31, 2012 financial statements reflect a fund balance of $2,240,536. The following graphs were reviewed with the Council:
> 
Licensed versus insured drycleaners since the program’s inception
>  Licenses issued since the program’s inception
>  Claim payment dollars paid to date
>  Cash balances compared to approved budgets
 >  Listing of licenses by license category for hydrocarbon and chlorine-based solvents
>  Solvent usage over the period from 2003 through 2011
>
  Number of NFR letters issued since 2004

      ii. Enforcement Efforts:
       

Mr. Eriksen referenced a listing of drycleaners who did not renew their 2012 license. One hundred ten (110) drycleaning facilities that were licensed in 2011 did not renew their license for 2012; 40 of these facilities closed; 26 facilities converted to a “drop store” and staff is continuing to work on getting the remaining 44 facilities licensed or determine they are no longer operating as an active drycleaning plant. The status of these 44 facilities was reviewed with the Council. In addition, a summary of enforcement actions handled by the Attorney General’s Office was listed along with a summary of dollars collected to date via enforcement actions.

    D. Review of Fund Financial Projections for the Period of July 1, 2012 Through January 1, 2020:
     

Mr. Eriksen reviewed financial projections for the period of July 1, 2012 through the Fund’s sunset date of January 1, 2020. He outlined changes made in the projection assumptions as compared to the projections reviewed at the January 18, 2012 Council meeting. The net impact of the assumption changes resulted in a net increase in the projected Fund deficit of approximately $3,086,000. Assuming all of the relevant assumptions remain valid through the sunset date of the program, the Fund is facing a $13,964,000 deficit as of January 1, 2020. The Council noted they would continue to closely monitor Fund solvency.

      i. Segregation of Insurance Program Funds:
       

The Council reviewed the pro forma financial statements and related assumptions for segregating the insurance program monies from the total Fund monies. If the insurance fund were segregated, it would have a balance as of June 30, 2012 of approximately $8,105,402. The budget for fiscal year 2013 reflects potential excess revenues over expenditures of $300,000.

      ii. Actuarial Review:
       

The Fund has had two (2) actuarial reviews with the last review conducted in January 2009, which reduced the initial actuarial determined premium of $1,400 to $1,100 per year. The actuary had to rely heavily on data from private insurance companies inasmuch as the Fund insurance claim history was limited.

Issue: Does the Council wish to engage in a new actuarial review of the insurance premium or update the existing actuarial study?

Mr. Polak stated since there was not much new data to go on, it would be his recommendation the study be tabled for at least an additional year as the cost of performing the analysis would be at least $15,000 and most likely would not result in an adjustment of the insurance premium.

On a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council voted 5-0 to table an actuarial review for one (1) more year.

 

Mr. Polak recessed the meeting at 12:25 p.m. for lunch. The meeting reconvened at 1:45 p.m.

  II. Program Goals Fiscal 2013:
   

The Program goals for fiscal year 2013 are a continuation of those that have been set previously by the Council and include a focus on Fund solvency, legislative initiatives, pollution prevention and communication.

    A. Fund Solvency:
     

Mr. Eriksen reviewed that since the sunset date of the program is only 7 ½ years away, it is important the Council finalize a plan of action to address the fund solvency issue and accomplish the legislative intent of the Illinois Drycleaner Environmental Response Trust Fund Act. Legislative intent is best summarized by Section 75 of the Trust Fund Act (415 ILCS 135/75):

Adjustment of fees and taxes. Beginning January 1, 2000, and annually after that date, the Council shall adjust the copayment obligation of subsection (e) of Section 40, the drycleaning solvent taxes of Section 65, the license fees of Section 60, or any combination of adjustment of each, after notice and opportunity for public comment, in a manner determined necessary and appropriate to ensure viability of the Fund and to encourage the owner or operator of a drycleaning facility to use green solvents. Viability of the Fund shall consider the settlement of all current claims subject to prioritization of benefits under subsection (c) of Section 25, consistent with the purposes of this Act.

He noted to effectively do this planning, it is necessary to look back and review the history of the program, its financial components, major legislative changes and external factors. Mr. Eriksen reviewed in detail each of these items.

Mr. Eriksen noted as defined in Section 75 of the Trust Fund Act, the Council has the authority to adjust the license fees, solvent taxes, remedial program deductibles, or any combination of each, in order to ensure viability of the Fund. Viability of the Fund is defined to consider the settlement of all current claims.

Council options not requiring legislation are:
1. Increase the license fee. All license fees would need to increase by $2,327 per year beginning January 1, 2014 in order to eliminate the projected fund deficit by January 1, 2020.
2. Increase the solvent taxes.
3. Increase the remedial action deductible.

All other options would require legislative action. Revenue enhancement options previously discussed by the drycleaning industry and the Council (starting with the least onerous) include:

1. Extension of the Fund’s sunset date
2. Licensing of drop stores
3. Assessment of fees on solvent distributors and solvent manufacturers
4. Implementation of a gross receipts tax
5. Implementation of a sales tax on all drycleaning services
6. Require drycleaners who received cleanup benefits and subsequently sold their drycleaning facility to pay the Fund any gain realized on the sale less the total amount paid into the Fund (i.e. license fees, solvent taxes, and insurance premiums), up to the total amount of cleanup benefits received from the Fund.
7. Any drycleaner receiving cleanup benefits from the Fund must continue to pay into the Fund (i.e. license fees, solvent taxes, and insurance premiums) until the sunset date of the Fund.

Mr. Eriksen noted there are other factors to consider:

1. Time remaining to initiate and complete all cleanups by January 1, 2020 – Active remediation (from start to finish) takes approximately 4 years. This suggests all remaining cleanups must begin by January 1, 2016.
2. Limited number of environmental consultants working on Fund eligible claims - If unlimited funding was available to address the contamination remaining at the 242 drycleaning sites with open remedial claims, additional environmental consultants would be needed to work on the cleanup of this contamination during the next 7 ½ years. This would result in increased cleanup cost inasmuch as the larger regional and national environmental firms have chosen not to participate in the remediation of Fund eligible claims due to the rates reimbursed by the Fund.
3. The Council has no control over the regulatory requirements of the Illinois Environmental Protection Agency (IEPA) or of the Federal Environmental Protection Agency. Proposed changes in regulations (such as the new proposed air inhalation regulations by IEPA) can potentially add tens of thousands of dollars to the cleanup costs of an existing claim.

He noted in the industry meetings held over the past nine (9) months, all of the issues and factors listed in this memo were discussed. Significant time was spent discussing extension of the Fund’s sunset date to June 30, 2030. Unfortunately consensus could not be reached on a recommended plan of action. 

The Council conducted a lengthy discussion of methods to address the Fund solvency issue. Mr. Bredenkamp stated that items 1 through 3 that Mr. Eriksen reviewed of what Council could do, such as increasing the license fee, solvent taxes, and remedial action deductible, were not viable in his opinion. He was supportive of extending the Fund’s sunset date and believes the other enhancement options that would require legislation are all questionable if they could be successful. He is supportive of extending the Fund’s sunset date for the additional 10 ½ years inasmuch as a current drycleaner today has already factored in the licensing fees and the solvent taxes as a cost of doing business and extending the license fee and solvent taxes would not impact their business model. Mr. Polak agreed with Mr. Bredenkamp and stated the Council is morally obligated to make certain there are funds available to settle all of the eligible claims.

After lengthy discussion by the Council, on a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council voted 5-0 to seek legislative action to extend the sunset date of the Fund program by 10 ½ years, to June 30, 2030. They directed Mr. Eriksen to begin discussions with the legislature at the earliest possible date.

 

Mr. Polak recessed the meeting at 3:00 p.m. The meeting reconvened at 3:05 p.m.

      i. Claims Prioritization Review of Updated Rankings & Statistics
       

Mr. Eriksen reviewed the updated prioritization results with the Council noting that as of June 30, 2012, there were 239 open, eligible, active remedial claims receiving program benefits from the Fund and three (3) inactive, open, eligible remedial claims. He reviewed the current status of those claims that have been released for full funding.

During the past year, the prioritization ranking changed for a number of facilities based on new site investigation information received during the year. Mr. Eriksen reviewed in detail the updated prioritization rankings for 152 facilities. There are still approximately 36 claims in which the Fund does not have enough information to determine if they would be able to get a risk based closure under the IEPA TACO regulations or if actual remediation would be required. These facilities have a very low score due to the lack of available data.

      ii. June 30, 2012 Cash Flow Analysis:
       

Mr. Eriksen reviewed in detail the worksheet labeled “Cash Flow Analysis – Fiscal Year 2013” which outlined the anticipated revenue sources less current funds committed for outstanding budgets and grandfathered/released remedial claims. The estimated dollars remaining are available for the first prioritization pool. He noted this is currently a negative number. For discussion purposes, he included a second column which is the Administrator’s analysis of the maximum dollar amount that would most likely be spent for each category in fiscal year 2013. Using the projected maximum funding number for released claims, there are limited funds available that the Council could earmark for additional cleanup and Mr. Eriksen is not recommending that any additional claims be released for funding at this time.

      iii. Results Summary of RBCA Closure Funding:
       

Mr. Eriksen provided the Council with a summary report on RBCA closure funding for years 2007 through 2012.  Since October of 2006, approximately 270 NFR letters have been issued for RBCA closure. The potential cost savings from these early RBCA closures are at a minimum $4,550,000 and could be as high as $13,500,000. He reviewed with the Council the components of those potential cost savings.

    B. Legislative Issues:
     

Mr. Eriksen noted the Council had just approved seeking legislation to extend the program’s sunset date by 10 ½ years, which would require legislation. In addition, based upon recent appeals of solvent distributor civil penalty, staff suggests the Council consider seeking legislative changes to the Trust Fund Act to address the following:

  • Amend 415 ILCS 135/60, paragraph (d) to define that the annual license period is January 1st through December 31st. This would resolve any inconsistency between the Council’s administrative rules and the current Trust Fund Act.
  • Amend 415 ILCS 135/65, paragraph (h), which reads “On and/or after January 1, 1998, no person shall knowingly sell or transfer drycleaning solvent to an operator of a drycleaning facility that is not licensed by the Council under Section 60.” It is recommended the legislation be changed to strike the word “knowingly” to avoid arguments that solvent distributors selling drycleaning solvent in Illinois have no knowledge of the requirement that the drycleaner must be licensed with the Fund in order to purchase drycleaning solvent.

On a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council voted to seek legislation to make the two (2) changes outlined above by the Administrator. The motion passed by a vote of 5-0.

The Administrator’s office has been in discussion with IEPA in developing any required administrative rules to address the training process for perc drycleaners as required in HB4526. If it is determined that administrative rules are necessary, they will be drafted and presented to the Council for their review and approval before submission to JCAR.

    C.

Pollution Prevention:

     

Mr. Eriksen reviewed updated site inspection information with the Council, noting site inspections are one of two separate mechanisms promoting pollution prevention. The second is participation in a Council approved compliance program.

The Council took action earlier in the meeting to adopt some additional compliance program procedures. These will be communicated to the compliance programs in the near future.  

    D. Communication:
     

The Council continues to emphasize the need to communicate with the drycleaning industry. Mr. Eriksen summarized communication efforts that have taken place during the past fiscal year.

    E. Other Issues:
     

The next Council meeting is tentatively scheduled for Wednesday, October 17, 2012. The Council members in attendance stated that date did not present a conflict for them.

In addition, Mr. Eriksen referenced an article included in the Council packet regarding illegal perc dumping by a Louisiana drycleaner.

  PUBLIC COMMENT PERIOD
 

Mr. Polak asked if there were any comments from the public. There were none.

  CLOSED SESSION
 

Mr. Eriksen noted there were various issues for discussion in Closed Session. On a motion by Mr. Lewicki and a second by Mr. Bredenkamp, the Council went in to Closed Session at 3:30 p.m. to discuss matters of potential litigation. The Council adjourned from Closed Session at 4:00p.m.

On a motion by Mr. Kwak and a second by Mr. Lewicki, the Council voted to settle outstanding license and late fees with Robert Iskander for a total of $3,300. The motion passed by a vote of 5-0.

On a motion by Mr. Kim and a second by Mr. Lewicki, the Council voted to reduce the late fees for Mr. Jose Hernandez of Brite Cleaners, Inc., to a total of $1,350, payable at $150 per month. The motion passed by a vote of 5-0.

There being no further business, on a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council meeting adjourned at 4:05 p.m.

   
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