November 30, 2011 Meeting Minutes

  MINUTES
 

DRYCLEANER ENVIRONMENTAL RESPONSE TRUST FUND
COUNCIL of ILLINOIS

WYNDHAM HOTEL LISLE/CHICAGO
LISLE, ILLINOIS

NOVEMBER 30, 2011

John Polak, Chairperson, called the Drycleaner Environmental Response Trust Fund Council of Illinois meeting to order at 10:07 a.m. A quorum was present. Roll call was taken with the following members present:

John Bredenkamp
Young B. Kim
Paul Kwak
Charles Kwon
Jerry Lewicki
John Polak
(via telephonic conference)

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

PRELIMINARY BUSINESS

The minutes from the October 12, 2011 Council meeting were reviewed. On a motion by Mr. Bredenkamp and a second by Mr. Kim, the minutes were approved by a vote of 6-0.

  APPEAL OF REQUIREMENT TO PAY SECOND SEMI-ANNUAL INSURANCE PREMIUM INSTALLMENT
  A.

Site #0001905 - Market Square Cleaners, 8203 Janes Ave, Woodridge, IL:

   

Mr. Eriksen reviewed background information with the Council noting Mr. Kook Hwan Kim is the owner/operator of Market Square Cleaners located at 8203 Janes Avenue, in Woodridge, IL. The drycleaning facility had pollution liability insurance coverage with the Fund from May 18, 2000 until October 11, 2011, when the insurance coverage automatically cancelled as the drycleaning facility was closed and vacated on August 11, 2011.

The insurance policy renewed effective May 18, 2011 and Mr. Kim paid the first semi-annual installment of $550 at the time of renewal. Mr. Kim was informed he still owed the $550 second semi-annual premium installment. On September 13, 2011, he sent a letter to the Administrator stating he was unable to pay the balance of $550 as the business was doing badly and he was having problems with the landlord and requested the Council waive the second semi-annual premium installment.

Mr. Kim indicated to the Council that he did not speak very good English. Ms. Heidi Kang of the National Drycleaner Institute (NDI) agreed to translate for Mr. Kim. Mr. Kim explained to the Council that he has owned and operated the drycleaning facility since 1993 and was evicted from the facility in the summer of 2011 by the landlord. He believes he should get a premium refund inasmuch as he did not operate for a full year since his renewal. He referenced automobile policies in which the premium is prorated based upon the number of months of coverage. Mr. Eriksen responded the Trust Fund Act clearly states the premium is fully earned on day one (1) and the policy language is not comparable to typical commercial, auto, and homeowner’s policies. Mr. Kim responded that since July he has had no income source, which is creating great financial hardship.

Mr. Bredenkamp asked Mr. McCarthy if the Council has the authority to overrule the statute. Mr. McCarthy replied “no,” the statute clearly states the insurance premium is fully earned on day one (1) and the Council is not able to waive the second semi-annual installment premium. He noted collection of the $550 may become a separate issue.

After additional discussion, on a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council voted 6-0 to deny waiver of the second semi-annual premium installment of $550.

  OPERATIONAL ISSUES
  A.

Policy Issue - Underwriting Requirements for Facilities Subject to HB1953 Financial Assurance Requirement

   

HB1953 requires all active drycleaning facilities that received remedial program benefits from the Fund to obtain $500,000 of environmental pollution liability coverage as of January 1, 2012. Coverage must be maintained until the earlier of:
1.  The Fund sunset date of January 1, 2020; or
2.  The date the facility is no longer an active drycleaning facility

The Administrator has identified 62 drycleaning facilities that meet this criteria and has notified them of this new requirement and provided them with a Fund insurance application. Approximately 70% of these facilities received a No Further Remediation (NFR) letter from the Illinois Environmental Protection Agency (IEPA).

The Council has previously adopted underwriting requirements which requires drycleaning facilities that apply for insurance coverage after June 30, 2006 to have a focused site investigation completed at the time of the application. The Council has provided exceptions to the requirement in the following cases:
1.  For a drycleaning facility that had insurance coverage with the Fund but let the policy lapse, a new policy with a new retroactive date can be issued without intrusive testing, provided the lapsed period does not exceed one (1) year and the Fund conducts a site inspection which finds the drycleaning facility in compliance with all applicable regulations and pollution prevention requirements.

2.  A drycleaning facility can be exempted from the testing requirements provided they can document they have operated the drycleaning facility in compliance with all applicable regulations and pollution prevention requirements and the application for insurance coverage was made within the first year of drycleaning operations.

Mr. Eriksen noted all 62 of these drycleaning facilities have conducted intrusive testing so a baseline level of contamination is known for each facility. In addition, the majority of the facilities that received a NFR letter were able to obtain a NFR letter without doing “active” remediation. Therefore, the contamination plume is well defined at these facilities.

The Administrator recommended these facilities only be subject to a site inspection by the Administrator. If the site inspection reveals the drycleaning facility has not been operating in compliance with federal and state requirements, a request for intrusive testing in the most likely areas of where new contamination may be discovered can be requested by the Administrator.

After discussion by the Council, on a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council voted 6-0 to accept the Administrator’s recommendation that these facilities only be subject to a site inspection by the Administrator.

  B. Potential Meeting Dates for 2012:
   

Mr. Eriksen reviewed a listing of possible meeting dates for calendar year 2012. They are as follows:

January 18th            Wednesday
February 29th          Wednesday
April 4th                  Wednesday
May 16th                 Wednesday
June 27th                Wednesday
August 29th             Wednesday (Strategic Planning)
October 17th            Wednesday
December 5th          Wednesday

The Council members noted that at this time they had no conflicts with the proposed meeting dates.

  C. Update on Industry Meeting to Discuss Fund Solvency:
   

Mr. Eriksen provided the Council with an update on a meeting held Tuesday evening, November 29, 2011, with representatives of the Korean-American Drycleaners Association, the Illinois Professional Launderers and Drycleaners Association and the five (5) Council-approved compliance programs. The focus of the meeting was to initiate discussions regarding the sunset date of the Fund.

The most recent semi-annual financial projections were reviewed by the group as well as draft projections extending the sunset date by five (5) years, ten (10) years and those extending the Fund’s sunset date by ten (10) years with a reduction of the license fees beginning in fiscal year 2014.

A lively discussion was held and it was the consensus of the group that they would like to see some additional projections for discussion at the next meeting. Those requested include what type of fee increase would be necessary to project the Fund to a break even at the program sunset of January 1, 2020, and the license fees needed to make the program break even if the program was extended by three (3) years, five (5) years, or ten (10) years, assuming a material reduction in the number of licensed drycleaners in the next several years.

Mr. Eriksen noted staff will be developing the projections and he will meet again with the industry representatives in the first quarter of 2012.

  APPROVAL OF PROGRAM BILLINGS
 

Mr. Eriksen noted the following bills were before the Council for the Council's review and action.

  1. Williams & Company Consulting, Inc  $43,990.00  
    Standard flat fee billing for October 2011, licensing, underwriting, claims processing and site inspections.  
  2. John J. McCarthy  $3,261.19  
    Professional legal services to the Council for the period of October 4, 2011 through November 17, 2011.  
  3. Johnston, Greene, LLC  $1,219.00  
    Professional legal services provided by Iain Johnston as administrative law judge for October 2011.  
 

On a motion by Mr. Bredenkamp and a second by Mr. Kwon, the Council approved the bills as presented by a vote of 6-0.

  REVIEW OF ACTIVITY REPORT AND FINANCIAL STATEMENTS
 

Mr. Eriksen reviewed with the Council the October 31, 2011 financial statements noting the Fund balance is $1,715,000; year-to-date remedial claim payments total $993,447.

The October 31, 2011 monthly activity report reflected 1,093 licensed drycleaners; 528 drycleaning facilities had pollution liability insurance coverage with the Fund and open remedial claims totaled 258 with $29 million in estimated claim reserves.

  CLAIM PAYMENTS IN EXCESS OF $75,000  
 

Mr. Eriksen noted there were six (6) claim payment requests in excess of $75,000 requiring Council review and approval.

 
  A.

One Hour Cleaners, Mundelein, IL; Claim #50568;
Site #0001424:

 
   

The Administrator is requesting Council review and approval of remedial action funding of $137,000. The facility has been released for full funding.

A pilot study has been conducted using chemical oxidation. The results of the pilot study indicated that chemical oxidation was an effective method of reducing the contamination in the soil and groundwater. Based on the success of the pilot study, the Administrator is requesting Council approval to implement full scale remediation and waiver of the two (2) bid requirement.

On a motion by Mr. Lewicki and a second by Mr. Kwon, the Council voted 6-0 to approve remedial costs totaling $137,000 and waiver of the two (2) bid requirement.

 
  B.

Best Cleaners, Des Plaines, IL; Claim #50366;
Site #0001052:

 
   

The Administrator is requesting budget approval for $30,000 to conduct an additional chemical oxidation injection at the facility. The previous full-scale injection significantly reduced the contamination at the facility except in one (1) isolated area near the center of the building adjacent to the drycleaning machine.

On a motion by Mr. Lewicki and a second by Mr. Kim, the Council voted 6-0 to approve $30,000 of additional remediation costs.

 
  C. Family Pride Cleaners, Cary, IL; Claim #50168;
Site #0001191:
 
   

The Administrator is requesting Council approval for $43,000 for full-scale remedial action costs.

Previously approved remedial action efforts using chemical oxidation have been completed and resulted in a substantial reduction in the contamination of the area of the affected soils; however, one area east of the facility has contamination above the remedial objective. The proposed remediation is to over-excavate the remaining soil contamination at an estimated cost of $43,000.

On a motion by Mr. Kwon and a second by Mr. Lewicki, the Council voted 6-0 to approve the remedial action costs of $43,000.

 
  D. Dry Cleaning by Cele, Hazelcrest, IL; Claim #50642;
Site #0002154:
 
   

The Administrator is requesting Council approval for $30,000 in additional remediation costs, $10,000 in confirmatory site investigation and NFR request process and $35,000 in contingency costs, for a total of $75,000.

Active remediation using chemical oxidation has been conducted at the facility. Although a majority of the contamination plume seems to be remediated without any groundwater pollution, a high level of contamination still remains in a small portion of the soil plume. The proposed scope of work is an additional chemical oxidation injection to address the remaining contamination.

On a motion by Mr. Lewicki and a second by Mr. Kwon, the Council voted 6-0 to approve the $75,000 in additional remediation costs.

 
  E.

Family Pride Cleaners, Itasca, IL; Claim #50669;
Site #000185:

 
   

The Administrator is requesting Council approval for $220,000 for remediation of the drycleaning facility. The site has been released for full funding.

Active remediation is required due to the high level of contamination both in soil and groundwater. The contamination plume is approximately 1,400 sq. ft. with a contamination depth of at least 12 ft. Over-excavation and disposal of contaminated soil appears to be the only viable method to meet the stringent remedial cleanup standards for the facility. The Council asked Mr. Eriksen if the cleanup could be completed within the cap of $300,000. Mr. Eriksen stated he believes that will be possible.

On a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council voted 6-0 to approve remedial action costs of $220,000.
 
  F.

Star Cleaners, Chicago, IL; Claim #50518; Site #0001911:

 
   

The Administrator is requesting Council approval for remedial action activities up to the remedial action cap of $300,000.

Due to the high level of contamination both in soil and groundwater and the proximity of the contamination to a nearby residence, the Council has previously released the facility for full funding, waived the proof of financial ability to pay the cleanup costs over the maximum remedial benefit, and allowed waiver of the bidding requirement to meet IEPA’s cleanup timetable. Proposed remediation method is injection of chemical oxidants inside the facility and soil mixing of chemical oxidants on the contamination located outside of the facility.

On a motion by Mr. Kwon and a second by Mr. Kim, the Council voted 6-0 to approve funding for the facility up to the remedial action cap of $300,000.

 
  OTHER ISSUES AS PRESENTED  
  Mr. Eriksen updated the Council regarding the following:  
  •  The auditors have begun their fieldwork on the fiscal year 2011 audit  
  •  Included in the Council packet was an article from BBC News Health reflecting a study that links Parkinson’s disease to industrial solvents.  
  •  Reported Dr. So and he had recently met with representatives of Pure Environmental, which is a firm that has developed a new bioremediation product, and began discussions for testing the remedial product in the spring of 2012.  
  •  The State of Illinois is now requiring, as of July 1, 2012, that all state expense checks be direct deposited. Mr. Eriksen distributed forms to the Council members to use in authorizing direct deposit of their Trust Fund travel expense check. If a Council member does not elect direct deposit, there will be a service fee for each check issued by the Comptroller’s Office.  
  There were no issues for discussion in Closed Session.
  PUBLIC COMMENT PERIOD
 

Mr. Polak asked if there were any comments from the public. Mr. Patel noted that the Illinois Department of Revenue (IDOR) website was not functional to allow the drycleaner to pay their license fee via credit card.

  ETHICS TRAINING
 

Mr. Eriksen reviewed with the Council in detail the 37-page document regarding Ethics Training for calendar year 2011.

There being no further business, on a motion by Mr. Kim and a second by Mr. Kwon, the Council voted 6-0 to adjourn at 11:15 a.m.
   
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