August 21, 2013 Meeting Minutes

  MINUTES
 

DRYCLEANER ENVIRONMENTAL RESPONSE TRUST FUND
COUNCIL of ILLINOIS

CHICAGO MARRIOTT NAPERVILLE
NAPERVILLE, ILLINOIS

AUGUST 21, 2013

John Polak, Chairperson, called the Drycleaner Environmental Response Trust Fund Council of Illinois meeting to order at 9:30 a.m. A quorum was present. Roll call was taken with the following members present:

John Bredenkamp
Sung Do Kang
Daniel Kim
Young B. Kim
Paul Kwak
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 19, 2013 Council meeting were reviewed. On a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the minutes were approved by a vote of 7-0.

The minutes from the July 26, 2013 Council meeting were reviewed. On a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the minutes were approved by a vote of 7-0.

  APPROVAL OF PROGRAM BILLINGS
  Mr. Eriksen noted there were two (2) bills before the Council for their review and approval. They were:
  1. Williams & Company Consulting, Inc         $67,627.00
Standard flat fee billing for July 2013, licensing, underwriting, claims processing and site inspections.
  2. John J. McCarthy                                      $2,380.00
Professional legal services to the Council for the period of July 1, 2013through August 6, 2013.
 

On a motion by Mr. Lewicki and a second by Mr. Young Kim, the bills were approved by a vote of 7-0.

  CLAIM PAYMENTS IN EXCESS OF $75,000
 

Mr. Eriksen noted there were two (2) claim payment requests in excess of $75,000 requiring Council review and action.

  1. Biltmore Cleaners, Chicago, ILClaim #50501, Site #0001908;
   

Dr. So reviewed background information noting active remediation commenced at the facility in February 2013. Recent interim confirmatory site investigation results indicate the degree of contamination seems to be much more severe than originally thought and the presence of multiple sewer lines recently discovered in the parking lot has complicated the remedial effort. Additional injections of chemical oxidant are necessary. The estimated costs, including contingency and confirmatory site investigation costs, are $80,000.

On a motion by Mr. Young Kim and a second by Mr. Lewicki, the Council approved the Administrator’s request of $80,000 in additional budget costs by a vote of 7-0.

  2.

Shin's Pride Cleaners, Chicago, ILClaim #50374, Site #0001626:

   

Dr. So reviewed background information on the facility noting active remediation is necessary due to the high level of PCE discovered in the soil. According to the preliminary remedial action plan (RAP), the contamination plume that exceeds the soil saturation limit seems to be limited to the interior of the facility. Illinois EPA (IEPA) has been informed that active remediation will be conducted at the facility. The proposed remedial action plan (RAP) is chemical oxidation via soil mixing and gravity feeding via chemical oxidant retention ponds (CORPs). The Administrator estimates the construction costs, chemical injections and various O & M costs will total $148,000. Confirmatory site investigation costs are expected to total $20,000 and the Administrator is requesting an additional $20,000 in contingency costs, for a total of $188,000.

The Administrator is also requesting waiver of the two (2) bid requirement for environmental consulting services and waiver of the IEPA site investigation report and RAP approval because the extent of the contamination of the plume of the hot spot area is well defined and the proposed remedial costs seem reasonable. Dr. So noted this facility has not been released for full funding by the Council.

On a motion by Mr. Lewicki and a second by Mr. Bredenkamp, the Council approved the budget request of $188,000 and waiver of the two (2) bid requirement by a vote of 7-0.
  REVIEW OF FISCAL YEAR 2012 AUDIT
 

Mr. Eriksen reviewed the State of Illinois Office of the Auditor General’s audit report of the Drycleaner Environmental Response Trust Fund Council for the year ended June 30, 2012. As noted in the report, there was one (1) audit finding which is identical to the prior year. The finding noted the appointed terms had been expired for 4-6 years for all seven (7) of the Council members. The finding recommended the Council continue to work with the Governor’s Office to obtain current appointments as soon as possible.

The Council responded that Council members have applied for reappointment directly and online. The Council has and will continue to make contacts with the Governor’s Office to secure reappointments for the terms that have expired. Beyond making these contacts, the appointments are out of the Council’s control.

The Auditor General’s report noted this was a compliance audit and they found no deficiencies or issues of concern.

Mr. Polak commented the majority of the remainder of the meeting would be spent on the Council’s annual Strategic Planning Session.

  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 August 30, 2012 Strategic Planning meeting as to the remedial and insurance claims, licensing, underwriting, compliance programs and receivables and collection policies and procedures.

      i. Modifications to Underwriting Policies and Procedures:
       
a. Modifications to Underwriting Policies and Procedures:
Governor Quinn signed HB3349 on August 13, 2013. HB3349 requires the following modifications to the policies and procedures:
 

1.

Modify the insurance policy and the related underwriting policies and procedures to reflect that upon non-payment of the insurance pr+emium or non-renewal of the policy, a 30-day cancellation notice be issued. This replaces the current 10-day cancellation notice.
  2. Add a new underwriting policy and procedure which states “If the Fund issued pollution insurance coverage is either cancelled for failure to meet the underwriting requirements or to pay the insurance premium, a copy of the Council’s appeal procedures will be included as part of that cancellation/expiration notification.”
On a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the modifications required per HB3349 were approved by a vote of 7-0.
b.

Currently, the policies and procedures state “Renewal applications and the billing notice shall be mailed together approximately 90 days prior to the expiration of the insurance coverage.”

For the past several years, the Administrator’s staff has noticed that more and more insured drycleaners have misplaced their renewal application and billing notice that are sent approximately 90 days prior to the expiration date of the policy. Since the majority of the insured drycleaners wait until right before the insurance policy will expire or cancel to pay the appropriate premium, we assume many of these renewal applications and related billing notices are being misplaced during that 90-day timeframe.

Since HB3349 provides an additional 20 days for the drycleaner to renew their insurance coverage and pay their insurance premium, it is the Administrator’s recommendation that the Council modify the 90-day timeframe for mailing the renewal application and shorten it to approximately 45 days. This should help mitigate insureds misplacing their renewal application and related billing notices.

Mr. Bredenkamp recommended that the billing notice be sent out approximately 30 days in advance, that way it is not set aside and lost. Mr. Polak stated that possibly two (2) notices should be sent out, one (1) at approximately 90 days and a second at a later timeframe. Mr. Daniel Kim commented 45 days was an appropriate timeframe as did Mr. Kwak.

After additional discussion by the Council, Mr. Bredenkamp made a motion to shorten the timeframe for sending out the renewal application and billing notice from 90 days to 30 days. The motion was seconded by Mr. Young Kim and was passed by the Council on a vote of 7-0.
      ii. Compliance Program Policies and Procedures Modifications:
       

At the June 19, 2013 Council meeting, an in-depth discussion was held regarding the need to modify the compliance program requirements. Discussion focused on the benefits of the continuing education (CEU) requirements and the site inspection requirement. Currently each insured drycleaner must complete four (4) CEUs annually and have a compliance program site inspection at least once every two (2) years.

Mr. Eriksen noted that based on the June 19th discussions and input received from Council members, staff and drycleaners the Administrator is proposing the Council adopt the following modifications to the compliance program policies and procedures:

a.

Eliminate the annual four (4) CEU requirement. Completion of Illinois EPA’s Perc Operator Training Course/Refresher Course every four (4) years should be more relevant and beneficial. This would eliminate the annual tracking and reporting for both the drycleaner and the compliance program.

The Administrator recommends this change be implemented immediately. Mr. Eriksen stated this revision had been discussed with the representative of IEPA who has been working with the Administrator in developing the perc operator training course and this individual was supportive of this recommendation.

After discussion by the Council, on a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council approved the recommendation to eliminate the annual four (4) CEU requirement by a vote of 6-0, with Mr. Kang abstaining.
b. The second proposed modification is to change the bi-annual site inspection to once every four (4) years and require the compliance programs to inspect 25% of the facilities each year. The compliance program must submit the complete inspection report to the Council within 90 days of the inspection. In conjunction with this modification, the Administrator proposed the following:
  1.

The compliance programs meet with the Administrator and staff by November 1, 2013 to modify the current inspection form to make it more relevant, and

  2.

Allow site inspections and all supporting documentation to be submitted electronically to the Council, and

  3. Require completion of a current facility diagram and require specific photos be taken of the facility and drycleaning equipment (i.e. drycleaning machine, hazardous waste containers, waste water misters, floor drains, outside dumpsters, etc.). This information will help document current operational practices and provide a benchmark for future inspections to determine if progress is being made in implementing best management practices.
  4.

Allow the Administrator to inspect up to 25% of insured sites annually. Percentage inspected will be determined based on review of current compliance program inspections, underwriting file reviews, and licensing issues.

The Administrator is recommending this change be implemented effective January 1, 2014.

Mr. Richard Kim, representing the ESM compliance program, made general comments noting the basic inspection requirements should not change but for example, if waste haulers change the drum from 15 gallons to 30 gallons without notifying the drycleaner, this puts the drycleaner in violation of the secondary containment requirements and reflects poorly on the compliance program. To avoid some of these ongoing issues, it would be his recommendation that the Fund assume administration of the compliance program requirements.

Ms. Heidi Park, administrator of the NDI compliance program, suggested the Council wait 90 days before making any changes to the compliance programs, meet with all the compliance programs and get their input into what further modifications need to be made regarding the site inspection and other requirements. Mr. Polak replied that all of the compliance programs were requested to submit their recommended changes to the Council prior to the June 19, 2013 Council meeting. Mr. Richard Kim was the only compliance program that submitted comments for the Council’s review and consideration at that time. Mr. Richard Kim addressed the Council again stating that the Fund should assume administration of the compliance programs, therefore any monetary charges for compliance program services would not be borne directly by the drycleaner but would be borne by the Fund. He believes this would be more acceptable to the drycleaners insured with the Fund.

Mr. Yong Kang, representing the Korean-American Drycleaners Association of Illinois (KADA), stated the number one issue for compliance programs should be to assist the drycleaners in reducing contamination. The focus of KADA is to assist the drycleaners in reducing their costs. He disagreed with Mr. Richard Kim’s suggestion to move the compliance program responsibilities to the Fund as that would increase administrative costs for the Council. He suggested the compliance programs meet with the Administrator to discuss how they can reduce contamination and hold the costs in check. Mr. Eriksen stated it is his intent to try to meet with the compliance programs and representative associations prior to the next Council meeting, which is tentatively scheduled for October 16, 2013.

After additional discussion by the Council, on a motion by Mr. Young Kim and a second by Mr. Lewicki, the Council voted 6-0, with Mr. Sung Do Kang abstaining, to change the biannual site inspection requirement to once every four (4) years and require the compliance programs to inspect 25% of the facilities each year and adopt the four (4) site inspection items outlined in the Administrator’s memo to the Council.

 

Mr. Kang excused himself from the meeting at 10:40 a.m.

       

Mr. Eriksen stated he would recommend deferral on the Administrator’s suggested compliance program modifications numbers 3 and 4 until such time as the compliance programs, the Administrator, and the drycleaner associations can meet again to discuss the site inspection process and related forms. The items requested to be deferred involve requiring the compliance program certificate be issued for a four (4) year period that would expire on September 30th and when ownership of a drycleaning facility changes, the new owner must complete the Perc Operator Training by April 30th of the year subsequent to the ownership change.  Failure to complete the training would result in issuance of a 60 day cancellation notice by the Administrator.

After additional discussion by the Council, on a motion by Mr. Bredenkamp and a second by Mr. Young Kim, the Council voted 6-0 to defer action on items 3 and 4 and instructed the Administrator to meet with compliance programs and drycleaner associations to further discuss those modifications and the site inspection process.
 

Mr. Kang rejoined the meeting at 10:58 a.m.

Mr. Polak recessed the meeting at 11:00 a.m. for a brief break. He reconvened the meeting at 11:13 a.m.

    B. Review of Fiscal 2013 Goals and Statistics:
     

Mr. Eriksen reviewed with the Council the status of their goals for fiscal 2013. The goals involve Fund solvency, legislation, pollution prevention and communication.

Regarding Fund solvency, industry consensus to extend the sunset date to June 30, 2030 was reached late in January 2013 but did not provide sufficient time to introduce legislation during the legislative session. Based on current funding levels and the limited number of consultants working on Fund eligible sites, more than 125 sites will not be cleaned up by the January 1, 2020 sunset date.

As of June 30, 2013, 219 active and 3 inactive remedial claims remain eligible for remedial program benefits. The remaining cost to clean up these facilities is estimated to be $25.9 million.

Regarding legislation, HB3349 was passed by the legislature and signed into law on August 13, 2013 by Governor Quinn. It extends the 10-day cancellation notice period to 30 days for non-payment of the insurance premium and requires the Council to provide written notice of how to appeal cancellation of insurance coverage and seek reinstatement of insurance coverage. In addition, it creates a 17-member Drycleaner Fund task force to study Fund solvency, program goals, administration, etc.

Regarding pollution prevention, the Administrator conducted 64 site inspections during the year. Compliance programs conducted an additional 485 inspections. The inspection results indicated a majority of the drycleaners inspected are in substantial compliance with the Fund’s and State’s environmental rules and regulations. The most frequent non-compliance issue continues to be drycleaners not having proper or adequately sized secondary containment around hazardous waste disposal containers or wastewater vaporizer/misters. Several of the compliance program representatives indicated their members state the hazardous waste haulers either leave the wrong size container when they pick up a full one or leave multiple empty containers that were not requested. This creates a problem of not having adequate secondary containment for all empty or partially filled containers. A lengthy discussion ensued on how to try to eliminate or reduce the number of these violations. The Council recommended the drycleaners proactively initiate discussions with their hazardous waste haulers as to the number and the size of the secondary containers that they need for their facility.

Regarding communication, the Council updated the drycleaning 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 including the June and July 2013 monthly activity reports and financial statements. The Fund’s July 31, 2013 financial statements reflect a fund balance of $2,563,333. 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

      ii. Enforcement Efforts:
       

Mr. Eriksen referenced a listing of drycleaners who did not renew their 2013 license. Sixty-five (65) drycleaning facilities that were licensed in 2012 did not renew their license for 2013; 20 of these facilities closed; 20 facilities converted to a “drop store” and staff is working on getting the remaining 25 facilities licensed or determine they are no longer operating as a licensed drycleaning plant. The status of these 25 facilities was reviewed with the Council. In addition, a summary of enforcement actions handled by the Attorney General’s Office was reviewed along with a summary of dollars collected to date via enforcement actions.

    D. Review of Fund Financial Projections for the Period of July 1, 2013 Through January 1, 2020:
     

Mr. Eriksen reviewed financial projections for the period of July 1, 2013 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 March 13, 2013 Council meeting. The net impact of the assumption changes resulted in a net increase in the projected Fund deficit of approximately $328,000. Assuming all of the relevant assumptions remain valid through the sunset date of the program, the Fund is facing a $14,706,000 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, 2013 of $8,508,646. The budget for fiscal year 2014 reflects potential excess revenues over expenditures of $105,000.

      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 until it was determined if the sunset date of the program would be changed or extended. His rationale was the analysis would cost at least $15,000, which would further increase the current projected shortfall 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 7-0 to table an actuarial review until it could be determined if the sunset date of the program would be modified.

 

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

  II. Program Goals Fiscal 2014:
   

The Program goals for fiscal year 2014 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 6 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 since the Council has several new members, 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 commented HB3349 created an Illinois Drycleaner Environmental Response Trust Fund Task Force and one of their responsibilities is to review Fund solvency in addition to administration, program goals, etc. This memorandum is a good starting point that outlines the history of the program and the actions the Council has taken to address Fund solvency.

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 $3,677 per year beginning January 1, 2015 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 222 drycleaning sites with open remedial claims, additional environmental consultants would be needed to work on the cleanup of this contamination during the next 6 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. 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 two (2) years, 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 was not reached until late January 2013 on a recommended plan of action. 

Attached as Exhibit 1 was a revenue trend for the program for fiscal years 2007 through 2013. During that time period, the number of licensed drycleaners decreased from 1,239 to 953. Correspondingly the total revenue went from $4,786,000 to $2,723,000, which is a decrease of almost $1,000 in average revenue per drycleaner over that period of time.

The Council conducted a lengthy discussion of Fund solvency. Mr. Bredenkamp stated the Council needs to take action to address the Fund’s solvency and does not have the luxury of waiting for the legislatively created Drycleaner Environmental Response Trust Fund Task Force to study the issue. Their proposed legislative recommendation is to be completed by the end of 2014, but if it goes past that date that gives the Council little time to react to address this solvency issue. Mr. Daniel Kim asked various questions regarding the financial projections prepared by the Administrator. Mr. Eriksen responded to the questions and stated projections have been prepared semi-annually since the early years of the program. In 2008 the Council had taken action to increase license fees effective January 1, 2009. That anticipated increase was tabled when the economy collapsed in the fall of 2008.

After additional discussion by the Council, Mr. Bredenkamp made a motion that the Council seek legislation to extend the sunset date to June 30, 2030 and directed the Administrator provide the legislature all the necessary facts and figures to substantiate this is the most viable option for the Council to meet the program goal of providing cleanup benefits for all of those drycleaners who qualified for them as of June 30, 2006 and not wait for the newly created task force to organize and complete their analysis. The motion was seconded by Mr. Lewicki. On a roll call vote, those voting aye were Mr. Bredenkamp, Mr. Lewicki, Mr. Daniel Kim, Mr. Kwak, Mr. John Polak. Mr. Young Kim voted no and Mr. Kang abstained. The motion passed.

      i. Claims Prioritization Review of Updated Rankings & Statistics
       

Mr. Eriksen reviewed the updated prioritization results with the Council noting that as of June 30, 2013, there were 219 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 141 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, 2013 Cash Flow Analysis:
       

Mr. Eriksen reviewed in detail the worksheet labeled “Cash Flow Analysis – Fiscal Year 2014” 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. 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 2014. Using the projected maximum funding number for released claims, there are up to $1,020,000 in funds available that the Council could earmark for additional cleanup.

Mr. Eriksen stated in taking a realistic look at what monies will be spent on claims that were grandfathered in at the inception of prioritization on April 1, 2006 and those that were released in fiscal years 2008 through 2013, he is recommending that all facilities with a ranking between 78 and 98 (a total of 22 facilities) be released for immediate funding. Reserves on these 22 claims totaled $3,924,664 and 18 of these claims had funding released of $25,000.

After additional discussion by the Council, on a motion by Mr. Lewicki and a second by Mr. Bredenkamp, the Council authorized release of full funding for all facilities with a ranking between 78 and 98, which currently total 22 facilities. The motion passed by a vote of 7-0.
    B. Legislative Issues:
     

Mr. Eriksen noted Governor Quinn had signed HB3349 the previous week. One of the provisions establishes the Drycleaner Environmental Response Trust Fund task force. This task force is charged to study the resource challenge and implementation issues that the Fund faces and make recommendations for adequately funding the Fund and for refining and improving the goals and implementations of the Fund.

In conducting the study of the Trust Fund program, the task force shall consider appropriate changes to the existing programs including but not limited to the following: administration of the program, program eligibility, program goals, fee structures, administrative expenses, licensing requirements, benefits for participation, compliance assurance and continuing education standards, and sunset date.

The task force shall be composed of eight (8) members appointed by legislative leaders, seven (7) members appointed by the Governor to represent the drycleaning industry, and one (1) individual to represent the Drycleaner Environmental Response Trust Fund Council and the director of the Illinois Environmental Protection Agency or her designee. The task force must hold at least three (3) public meetings in three (3) separate metropolitan areas of the state and must submit a report of its findings and recommendations which shall include proposed legislation to the Governor and the General Assembly by no later than December 31, 2014. This section would be repealed on January 1, 2016.

Mr. Eriksen noted the Council already had voted to go ahead and seek extension of the sunset date to June 30, 2030.

Regarding licensing fee payments, Mr. Eriksen stated since the program’s inception, license fees have been paid by the drycleaner to the Illinois Department of Revenue (IDOR). For processing these license receipts, IDOR receives 4% of the gross license fee paid to cover their administrative costs. In FY13, this administrative fee totaled $68,223.

Currently the drycleaner must submit a completed DS-3 Form along with their license fee payment to IDOR.  IDOR validates the DS-3 Form and returns it to the drycleaner who then submits the validated form along with the license application, solvent log and solvent purchase invoices to the Fund for processing and issuance of a current year license. The current licensing process involving payment of the license fee to IDOR has proved to be cumbersome at best. Often the licensing process is delayed because the drycleaner has lost the validated DS-3 Form or IDOR has not coded the license fee payment to the correct drycleaner.

Having the drycleaner submit their license fee payment directly to the Fund eliminates the delay and the need to send the form to two (2) different state agencies and eliminates trying to identify data entry errors made by IDOR.  This would eliminate the 4% administrative payment to IDOR with a minimal or no increase in the administrative fee paid to the third party administrator to issue the drycleaning license. The licensing timeframe would be shortened by at least one week, which is crucial for many drycleaners who need to purchase solvent in January.

The Council discussed at length why the initial legislation had the fee being paid to IDOR and logistic issues that have arisen since the inception of the program. After discussion, on a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council voted 7-0 to authorize the Administrator to seek legislation requiring the license fee payment be submitted to the Drycleaner Trust Fund and not to IDOR. Mr. Eriksen also stated that the Administrator would continue to seek legislative changes to the Trust Fund Act involving the definition of the annual license period and the definition of knowing selling or transferring drycleaning solvent. These proposed amendments had been previously approved by the Council.

Mr. Eriksen stated the Administrator will draft rule amendments to implement the legislative changes per HB3349 and present them at a future Council meeting for review and action.

    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.

He stated that the Administrator and IEPA continue to work on developing perc operator training. It is the intent to combine that course into the compliance program requirements.

The Council took action earlier in the meeting to adopt some additional compliance program procedures. The Administrator will be meeting with the compliance programs and the related industry associations to further discuss needed modifications and site inspection issues.  

    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 16, 2013. The Council members in attendance stated that date did not present a conflict for them.

  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. Bredenkamp and a second by Mr. Lewicki, the Council went in to Closed Session at 2:30 p.m. to discuss matters of potential litigation. The Council adjourned from Closed Session at 2:40 p.m.

On a motion by Mr. Young Kim and a second by Mr. Bredenkamp, the Council voted to settle outstanding license and late fees with Archer Drycleaners for a total of $601. The motion passed by a vote of 7-0.

On a motion by Mr. Young Kim and a second by Mr. Lewicki, the Council voted to settle outstanding license and late fees with Mr. Bill Stratikis of Prairie Cleaners, for a total of $500. The motion passed by a vote of 7-0.

There being no further business, on a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council meeting adjourned at 2:41 p.m.

   
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