February 23, 2011 Meeting Minutes

  MINUTES
 

DRYCLEANER ENVIRONMENTAL RESPONSE TRUST FUND
COUNCIL of ILLINOIS

WYNDHAM HOTEL LISLE/CHICAGO
LISLE, ILLINOIS

FEBRUARY 23, 2011

John Polak, Chairperson, called the Drycleaner Environmental Response Trust Fund Council of Illinois meeting to order at 10:02 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

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

PRELIMINARY BUSINESS

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

  APPEAL REQUESTING TRANSFER OF REMEDIAL PROGRAM BENEFITS
  Site #0002095-New Sun Cleaners, 3839 N Broadway, Chicago, IL
 

Mr. Eriksen reviewed background information with the Council regarding New Sun Cleaners located at 3839 North Broadway in Chicago, IL. Mr. Jae Man Lee is the current owner of the drycleaning facility since February 27, 2004. The previous owner, Mr. Myung Ryul Lee, has an eligible claim for remedial program benefits with the Fund.

Mr. Eriksen noted in April 2004, Mr. Jae Man Lee was contacted by the Fund to see if he wished to have the remedial program benefits transferred to him from Mr. Myung Ryul Lee. Mr. Jae Man Lee replied he did not wish to be responsible for the contamination and declined transfer of the remedial program benefits. On December 30, 2010, the Fund received a letter from Mr. Jae Man Lee requesting the remedial program benefits be transferred from the previous owner to himself without Mr. Myung Ryul Lee’s authorization. He stated in his letter that when he purchased the facility, he thought the previous owner had transferred all documents into his name. He has tried contacting the previous owner but Mr. Myung Ryul Lee has moved to Korea and cannot be located.

Mr. Lee addressed the Council noting that when he took over the business in 2004, he had no experience in operating a drycleaning facility. He stated that as part of the purchase agreement, Mr. Myung Ryul Lee had agreed to teach him the drycleaning business for a period of approximately one (1) month. Instead, he only provided direction and instructions for two (2) weeks and said he was moving back to Korea but promised he would contact Mr. Jae Man Lee once he had settled in Korea. Mr. Myung Ryul Lee never contacted Mr. Jae Man Lee and subsequent attempts to locate him were unsuccessful.

The Council discussed the issue and asked legal counsel if they had dealt with this issue before. Mr. McCarthy replied no and that this is a unique situation. Mr. Polak inquired if this would present any legal issues for the Council inasmuch could Mr. Myung Ryul Lee ever come back against the Council for allowing transfer of remedial program benefits without his approval? After discussion by the Council, they concurred that that likelihood was extremely remote.

On a motion by Mr. Kwak and a second by Mr. Kim, the Council voted 6-0 to allow for the transfer of remedial program benefits from Mr. Myung Ryul Lee to Mr. Jae Man Lee without Mr. Myung Ryul Lee’s written or verbal authorization.

  OPERATIONAL ISSUES
  A.

Legislative Update:

   

Mr. Eriksen reported the Illinois Environmental Protection Agency (EPA) has introduced legislation (SB1617) amending the Environmental Protection Act, which will prohibit the installation or operation of drycleaning machines that use perchloroethylene after January 1, 2030. He briefly reviewed key components of the bill and clarified a question raised by the Council at their January Council meeting. The bill will allow a drycleaner to sell a complete drycleaning operation with a third generation perc machine to another individual who can continue to operate the third generation perc machine. The bill does prohibit the physical transfer of a third generation perc machine to a new location.

The Council discussed the requirement that an initial environmental training course be approved by the Council in consultation with Illinois EPA and must address best management practices including but not limited to reducing air emissions, reducing solvent spills and leaks, protecting groundwater, and promoting efficient use of solvents. Development of this training course would not require substantial work by the Council inasmuch as much of the material has been developed over the past decade and has been distributed to the drycleaning industry as part of the Council’s focus on pollution prevention and best management practices.

The Council’s legislation to allow the annual license fees to be paid by credit card and the proposed requirement that drycleaners who have received remedial program benefits must continue to maintain environmental pollution liability insurance coverage effective January 1, 2012 through the sunset date of the program or through the last day that they are operating as an active drycleaning facility will be attached by Rep. Holbrook to a shell bill. In addition, Rep. Cross and Rep. Tryon are co-sponsoring two (2) House shell bills involving the Drycleaner Trust Fund. The intent of these bills is unknown at this time.

  B. Fund Solvency:
   

Mr. Eriksen reviewed updated semi-annual financial projections and related assumptions with the Council for the period of July 1, 2010 through January 1, 2020. There has been no change in the projected Fund deficit, which is $11.4 million. If the Council’s proposed legislation is successfully passed, it is possible the requirement that all active drycleaning plants that received remedial program benefits maintain environmental pollution liability insurance coverage through the sunset date of the Fund could generate approximately an additional $660,000 of revenue for the Fund.

Mr. Kwak expressed concern about future insurance claims as the Fund continues to mature. Mr. Eriksen noted that only a handful of insurance claims have been filed to date and payments have only been made on one (1) claim. He reviewed the criteria for filing an insurance claim stating the remedial program, which addresses historical contamination, will probably minimize insurance claims over the remaining life of the Fund. Mr. Polak noted if the Council continues to emphasize keeping environmental insurance coverage in place it does present somewhat of a “Catch-22” situation for the Council because the longer the coverage is in place, there is an increase in the likelihood of environmental insurance claims requiring payment by the Fund.

Mr. Eriksen stated the projections would be updated for the August Strategic Planning Session meeting.

  C. Compliance Program Requirements-NDI Letter:
   

Mr. Eriksen noted that included in the Council packet is a letter received from the NDI Compliance Program at the conclusion of the Council’s January 12, 2011 Council meeting. It outlines NDI’s concerns with the new compliance program reporting requirements the Council adopted at their August 25, 2010 Strategic Planning meeting. Ms. Heidi Kang of NDI addressed the Council commenting that NDI did not understand why the Council would not accept electronic scanning of signatures as acceptable documentation for compliance reporting requirements. She stated NDI moved toward scanning of their compliance program documents because they had seven (7) file cabinets full of paper. Mr. Polak inquired if the electronic signature requirement was the only concern that NDI had with the Council’s requirements. Mr. Chang Lee, representing the Korean American Drycleaners Association (KADA) stated based on the number of insureds, which is approximately 575, how long was it necessary to keep the paper documents and he did not view the Council’s signature requirement as a major paper storage issue. Mr. Polak inquired if any other compliance programs had complained about the modifications, specifically those requiring a drycleaner to sign the continuing education sign-in registration sheet, the compliance program site inspection and the compliance program application. Mr. Eriksen stated no, there has been no feedback from any of the other compliance programs regarding these requirements.

After discussion by the Council, they concurred to reconfirm the signature requirements and compliance program modifications adopted at the August 25, 2010 Council meeting.

  APPROVAL OF PROGRAM BILLINGS
 

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

  1. John J. McCarthy    $2,710.00  
    Professional legal services to the Council for the period of January 5, 2011 through February 11, 2011.
  2.  Williams & Company Consulting, Inc $100,374.00    
    Standard flat fee billing for January 2011, licensing, underwriting, claims processing and site inspections.
 

On a motion by Mr. Kwon and a second by Mr. Lewicki, 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 January 2011 monthly activity report noting that 727 licenses had been issued for 2011 as of January 31, 2011 and as of February 21, 841 facilities are licensed. As of January 31, 2011, 557 facilities have pollution liability insurance coverage with the Fund and 278 remedial claims were open with estimated reserves of $31 million. Mr. Eriksen reviewed the No Further Remediation (NFR) letter report summary Mr. Polak had requested at the last Council meeting, noting that through January 31, 348 RBCA NFR letters and 16 NFR letters involving active remediation, for a total of 364, have been issued. Mr. Polak requested that if the information was available, to go back for previous calendar years and summarize the number of NFR letters issued each year and provide a graphic of the trend.

Mr. Eriksen noted the Fund balance as of January 31, 2011 was $4,183,328; claim payments to date total $1,608,912.

  CLAIM PAYMENTS IN EXCESS OF $75,000
 

Mr. Eriksen noted there were eight (8) claims in excess of $75,000 requiring Council review and approval; seven (7) were included in the Council packet and the eighth was a carry-in inasmuch as the information was not available at the time the packet was mailed to the Council members.

  A. Darian Cleaners, Darien, IL - Claim #50201, Site #0001152:
   

Dr. So reviewed background information with the Council noting that based upon the contamination levels at the facility, active remediation would be required. The Administrator is requesting budget approval for $123,750 for remediation of the facility using chemical oxidation. The Administrator is also requesting Council waive the two (2) bid requirement as the current consultant has conducted an extensive site investigation at the facility and is the most familiar with the site characterization and the IEPA approved remedial efforts.

On a motion by Mr. Kim and a second by Mr. Lewicki, the Council approved the Administrator’s budget request of $123,750 and waiver of the two (2) bid requirement by a vote of 6-0.

  B. Family Pride Cleaners, Cary, IL - Claim #50168, Site #0001191:
   

Dr. So reviewed background information noting initial remediation has been conducted at the facility, resulting in substantially reduced contamination levels in the target areas. However, the adjacent property owners have refused to agree to environmental land use controls (ELUCs) regarding restriction of groundwater use at the properties resulting in the need for additional remediation to complete cleanup at the facility.  The proposed remedial activity is excavation of shallow soils in an adjacent parking lot, followed by an additional chemical oxidation injection into the deeper soils. The amount being requested is $34,240 of additional costs. In addition, the Administrator is requesting the Council release an additional $17,000 for immediate funding to continue this remedial effort.

On a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council, by a vote of 6-0, approved the budget request for $34,240 and release an additional $17,000 in immediate funding for this facility.

  C. Norgetown Cleaners, Arlington Heights, IL - Claim #50332, Site #0001393:
   

Dr. So reviewed background information with the Council noting that a groundwater ordinance will be required for closure of the claim at this facility. A recent water well survey shows that four (4) neighboring properties within the potential impact zone have private water wells and only two (2) of the four (4) properties are hooked up to city water. The Administrator is requesting budget approval up to $90,000 to close the existing wells and connect the remaining two (2) to city water and conduct site investigations at at least two (2) of the four (4) drycleaning facilities.

On a motion by Mr. Kwon and a second by Mr. Lewicki, the Council, by a vote of 6-0, approved the $90,000 requested.

  D. Betty Brite Cleaners, Chicago, IL - Claim #50062, Site #0001056:
   

Dr. So reviewed background information with the Council noting the contamination has been delineated and Illinois EPA is requesting preparation of a Remedial Action Plan (RAP). The Administrator is requesting approval of $6,000 for the RAP.

On a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council voted 6-0 to approve $6,000 for the preparation of a Remedial Action Plan.
  E. Riverside Cleaners, Riverside, IL - Claim #50597, Site #0001498:
   

Dr. So reviewed background information, noting this facility has been in active remediation using chemical oxidation. Recent confirmation sampling showed that the hotspot contamination plume reduction was estimated to be about 86% by area and about 90% by volume. Additional remediation is necessary to close the claim. The Administrator is requesting $80,000 in additional costs for chemical oxidation treatment, confirmatory site investigation and contingency costs.

On a motion by Mr. Kwon and a second by Mr. Lewicki, the Council voted 6-0 to approve the $80,000 for additional remedial activities.

  F. Hutchins Cleaners, New Lenox, IL - Claim #50279, Site #0002339:
   

Dr. So reviewed background information with the Council on this facility, noting active remediation is necessary to obtain a NFR letter for the facility. The Administrator is requesting $130,000 in remedial action costs to do Chemical Oxidant Retention Ponds (CORPs) at the facility and follow-up confirmatory site investigations.

On a motion by Mr. Bredenkamp and a second by Mr. Kwon, the Council voted 6-0 to approve the $130,000 budget request.

  G. Dry Cleaning by Cele, Hazelcrest, IL - Claim #50642, Site #0002154:
   

Dr. So reviewed background information with the Council, noting active remediation is required due to the high level of contamination in soil and groundwater. The Administrator is requesting $125,000 for remedial action and confirmatory site investigation costs.

On a motion by Mr. Lewicki and a second by Mr. Kwon, the Council voted 6-0 to approve the budget request of $125,000.

  H. Classic Cleaners, Decatur, IL - Claim #50045, Site #0001103:
   

Dr. So reviewed background information with the Council, noting additional site investigation work is necessary at the facility based upon a recent request from Illinois EPA. The investigation involves installation of six (6) monitoring wells to confirm the groundwater contamination has been fully delineated.

On a motion by Mr. Kim and a second by Mr. Lewicki, the Council voted 6-0 to approve $34,000 in additional site investigation costs.

  OTHER ISSUES AS PRESENTED
 

Mr. Eriksen referenced that contained in the Council packet was the Ethics Newsletter for February 2011. In addition, he reviewed procurement communications with the Council as mandated by the Procurement Reform Legislation.

The Fund’s Senate appropriation hearing is scheduled for March 9, 2011. The Council is requesting a $5,360,000 appropriation, which is the same as the prior two (2) years.

The next Council meeting is tentatively scheduled for April 6, 2011 and Mr. Eriksen inquired if any of the Council members have a conflict with that date. Everyone responded that at this time, the date would work with their schedules.
  PUBLIC COMMENT PERIOD
 

Mr. Dave Solle inquired what the technology presentation planned for the April 6, 2011 Council meeting would entail. Mr. Eriksen responded it would be an update on the most prominent technologies being used by consultants in Illinois to address contamination at drycleaning facilities.

Mr. Sung Do Kang, representing the National Drycleaners Institute (NDI), addressed the Council noting the Council is using electronic signatures on various documents issued on behalf of the Trust Fund, so why can’t NDI use electronic signatures? Mr. Polak responded that NDI is welcome to store documents electronically and use electronic signatures for internal purposes but the Council is requiring on a limited number of documents, that original signatures be obtained from the drycleaners and provided to the Council.

On a motion by Mr. Bredenkamp and a second by Mr. Kim, the Council voted 6-0 to go into Closed Session at 12:08pm. The Council adjourned from Closed Session at 12:28pm.

On a motion by Mr. Bredenkamp and a second by Mr. Kim, the Council voted to settle 2010 license and late payment fees for Carillion Cleaners for the amount of $1,800, with payments to be made equally over six (6) months.

On a motion by Mr. Lewicki and a second by Mr. Bredenkamp, the Council voted 6-0 to allow Joe’s Cleaners to pay 1998 through 2008 license fees totaling $8,000 at $150 per month and reduce the license late payment fees to $10,700, payable at $150 per month starting upon completion of the payment of the back license fees.

Mr. Lewicki made a motion, seconded by Mr. Kwon, to settle the 2008 license and late payment fees of Jones Cleaners for $1,800, payable at $100 per month. The motion passed by a vote of 6-0.

There being no further business, on a motion by Mr. Kwon and a second by Mr. Kwak, by a vote of 6-0, the Council meeting adjourned at 12:30 p.m.

   
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