FEBRUARY 10, 2016 Meeting Minutes

 

MINUTES
DRYCLEANER ENVIRONMENTAL RESPONSE TRUST FUND
COUNCIL of ILLINOIS

CHICAGO MARRIOTT NAPERVILLE
NAPERVILLE, ILLINOIS

FEBRUARY 10, 2016

John Polak, chairperson, called the Drycleaner Environmental Response Trust Fund Council of Illinois meeting to order at 10:03 a.m. A quorum was present. Roll call was taken with the following members present:

John Bredenkamp (via telephonic conference at 10:05 a.m.)
Sung Do Kang
Daniel Kim
Young B. Kim
Paul Kwak
Jerry Lewicki
John Polak (via telephonic conference)

Also present were:

H. Patrick Eriksen, Program Administrator’s Office
John J. McCarthy, Program Counsel
Dr. Juho So, Program Administrator’s Office

Yong Kim, Program Administrator’s Office
PRELIMINARY BUSINESS

The minutes from the December 3, 2015 Council meeting were reviewed. On a motion by Mr. Lewicki and a second by Mr. Kwak, the minutes were approved by a vote of 6-0.

Mr. Bredenkamp joined the meeting via telephonic conference at 10:05 a.m.
  APPEAL OF LICENSE LATE PAYMENT PENALTY
  A. Snow White Cleaners Depot, 40 West Chicago Avenue, Chicago, IL, Site #0001271
 

Mr. Eriksen reviewed background information with the Council noting Ms. Asia Khan  has owned and operated this drycleaning facility since December of 2007.  The facility has been licensed through 2015. In accordance with Council policy, the Administrator granted Ms. Khan a one-time waiver for late fees of $145 associated with the 2009 license.

For calendar year 2014, Ms. Khan reported perc solvent purchases of 100 gallons and on December 30, 2014, paid $2,250 toward her 2015 license. Based on information provided by her with the renewal application, her 2015 license was issued on January 8, 2015. When staff compared solvent purchases for this facility to the purchases reported by the solvent distributors on their quarterly DS-7 returns, it was determined Ms. Khan underreported her 2014 solvent purchases by 19 gallons. The correct license fee for 2015 is $3,000.

A letter was sent June 11, 2015 informing Ms. Khan of the additional license fee owed. The additional license fee of $750 was paid on August 24, 2015, resulting in late fees of $965.  Mr. Eriksen noted with the exception of the 2009 license late payment (29 days late), Ms. Khan paid 2010 through 2014 license fees on a timely basis. Her license fee for 2016 was paid on December 29, 2015.

Ms. Khan addressed the Council noting she consistently purchases 100 gallons of solvent each year.  In the summer of 2014, while on vacation her mother passed away. This resulted in her vacation away from the drycleaning plant exceeding her planned 5 days, and during this period of extended time away from her plant, an employee purchased additional solvent without her knowledge. She requested the Council waive this late fee due to the extenuating circumstances and her past record of paying the correct license fee on a timely basis.

After discussion by the Council, on a motion by Mr. Lewicki and a second by Mr. Kang, the Council voted 7-0 to waive the license late payment penalty for 2015.
 

PRELIMINARY BUSINESS

  B. Policy Issue - Request to Modify Claim Reimbursement Procedures
 

Mr. Eriksen noted David Kay of Laicon, Inc. had read a prepared statement to the Council during the Public Comment period at the December 3, 2015 Council meeting requesting the Council consider changes to the current Remedial Claim Reimbursement Procedures. The Council agreed by consensus to consider his proposed changes. Mr. Eriksen received a memo via email requesting Council consideration of the following specific changes:

1. Require a co-remedial applicant be named by the primary remedial claim applicant, possibly at the time of the applicant’s license renewal.

2. Change from issuing a two-party reimbursement check to a single party reimbursement check that would be payable directly to the contractor.

Mr. Eriksen noted historically the Council has been presented with limited cases whereby the consultant is unable to obtain the claimant’s signature on remedial claim reimbursement documents. In these limited cases the individual issue has been brought to the Council for their review and action. The Council currently has in place the ability to issue a single party reimbursement check to the contractor in instances where the deductible has been paid and the claimant approves in writing the reimbursement package.

Mr. Kay addressed the Council explaining why he is requesting a co-remedial applicant.  After discussion by the Council, on a motion by Mr. Lewicki and a second by Mr. Young Kim, the Council voted 7-0 to not modify the current Remedial Claim Reimbursement Procedures.

Mr. Kay is also requesting Council action on two issues related to Ravinia Vogue Cleaners, 565 Rogers Avenue, Highland Park, IL (Claim #50312; Site #0002257). 

1. The first issue involves the issuance by the Comptroller’s Office of a $12,250 warrant on April 13, 2015 made jointly payable to Mr. Hung Lee, remedial program claimant and Laicon, Inc.  The warrant was sent to Mr. Lee who represented to Mr. Kay he never received the warrant. Mr. Kay contacted the Administrator’s office and was provided the affidavit Mr. Lee needed to sign requesting reissuance of the warrant. Mr. Lee died prior to Mr. Kay obtaining his signature on the affidavit requesting reissuance of the warrant. The Comptroller’s Office indicated the executor of the estate could sign the affidavit but Mr. Kay has been unsuccessful in determining if an executor exists for Mr. Lee’s estate.

Mr. Kay is requesting issuance of a single-party check to Laicon for the original Trust Fund approved amount of $12,250.

Mr. Eriksen explained if the Council approved Mr. Kay’s request to issue a single party check before April 13, 2016, the Fund would be charged again for the $12,250 and could not get the original warrant amount credited back into the fund account until after April 13, 2016. If the Council approved this request, the Comptroller could not issue a new warrant because the Council does not have an approved appropriation for FY16.

After discussion by the Council, on a motion by Mr. Kwak and a second by Mr. Lewicki, the Council voted 7-0 not to request a new warrant be issued until after April 13, 2016.

2. Mr. Kay’s second request is asking Council approval of Laicon’s final invoice in the amount of $2,773, which completes the cleanup at this drycleaning facility.

Mr. Eriksen noted all relevant reports and invoices have been received from Laicon and the work was completed. On a motion by Mr. Lewicki and a second by Mr. Bredenkamp, the Council approved the issuance of a single party warrant to Laicon, Inc. for the $2,773, which is the final invoice for this cleanup.

  B. Draft Compliance Program Rules
 

Mr. Eriksen noted included in the Council packet was the initial draft of the compliance program rules. The draft rules were developed from the Council’s approved Compliance Program Policies and Procedures.

Mr. Kang stated he had just received the draft rules and had not had time to review them in detail and requested more time to review them.

On a motion by Mr. Bredenkamp and second by Mr. Kang, the Council voted 7-0 to defer discussion on the draft rules until the next Council meeting. Mr. Eriksen requested the Council members email comments on the proposed rules to him approximately 2 weeks before the next Council meeting so he could incorporate their comments in the draft rules.
 

C.

Legislative Update

 

Mr. Eriksen stated there was no new information to report on legislative issues. The Council still does not have an approved appropriation for FY16. Mr. Kang asked if the Council was still on record supporting a 10 ½ year extension of the Fund’s sunset date.  Mr. Eriksen replied yes, the Council approved the request at the August 2014 Council meeting and legislation was introduced in January of 2015 to extend the sunset date to June 30, 2030.  Mr. Kang replied he thought the Council repealed this request at the August 27, 2015 Council meeting. Mr. Eriksen replied no, he did not believe they did but would review the August 27, 2015 minutes to confirm what action, if any, the Council took on extending the sunset date.

  APPROVAL OF PROGRAM BILLINGS
 

Mr. Eriksen noted that there were six (6) bills before the Council for their review and approval. They were as follows:

 

1. Williams & Company Consulting, Inc                               $9,447.00
Standard flat fee billing for December 1-7, 2015, licensing, underwriting, claims processing and site inspections.

  2.Williams & Company Consulting, Inc                               $42,646.00
Standard flat fee billing for December 8-31, 2015, licensing, underwriting, claims processing and site inspections.
  3. John J McCarthy                                                                   $5,600.00
Professional legal services to the Council for the period of November 18, 2015 through January 31, 2016.
  4. Williams & Company Consulting, Inc                               $85,768.00
Standard flat fee billing for January 2016, licensing, underwriting, claims processing and site inspections.
  5. Hinshaw & Culbertson                                                          $1,412.49
Professional Legal Services to the Countil for the month of November 2015 regarding the NDI appeal.
  6. Hinshaw & Culbertson                                                       $ 1,032.49
Professional Legal Services to the Council for the month of December 2015 regarding the NDI appeal.
 

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

It was noted since the Council does not have an approved appropriation budget for FY16, these bills could not be paid at this time.
  REVIEW OF MONTHLY ACTIVITY REPORTS AND FINANCIAL STATEMENTS
 

Mr. Eriksen reviewed the monthly activity report for January 31, 2016 noting 491 licenses were in effect at the end of the month compared to 514 as of January 31, 2015.  Four hundred seventy (470) active dry-cleaning facilities had pollution liability insurance coverage with the Fund. Open claims totaled 186, with estimated reserves of $20.5 million.

The January 31, 2016 financial statements reflect a fund balance of $1,564,937. Year-to-date claim reimbursement requests approved for payment total $798,911.

  CLAIM PAYMENTS IN EXCESS OF $75,000
 

Mr. Eriksen noted there were no claim payment requests for Council review and approval.

  OTHER ISSUES
 

Mr. Eriksen noted the next meeting date is Thursday, March 31, 2016.

Mr. McCarthy informed the Council that NDI’s Request for Emergency Stay regarding the decertification of the NDI Compliance Program by the Council was denied. Mr. Eriksen noted letters are being mailed today to all Fund insureds who are using NDI to meet their compliance program requirement informing them they must provide a new compliance program certificate issued by 1 of the 4 Council approved compliance programs to the Council by March 11th.

Mr. McCarthy informed the Council 106 individuals appealed the Council’s decertification of the NDI Compliance Program. He stated an initial review indicated a significant number of these individuals were either not an active drycleaner, or did not have Fund issued insurance coverage or belonged to one of the other 4 compliance programs.  He will be in contact with the Administrative Law Judge in the near future to set an initial hearing date.

Mr. Kwak expressed his concern with the costs the Council was incurring in dealing with the litigation and appeals tied to the NDI Compliance Program decertification.  

Mr. Kang asked why these 106 appeals are being referred to the Administrative Law Judge for hearing and not the Council?  Mr. Eriksen explained since the Council made the decision to decertify the NDI Compliance program, the Council’s regulations state an appeal of a Council decision is to be heard by an Administrative Law Judge. This differs from cancellation of insurance coverage by the Administrator, which if appealed by the drycleaner, the appeal goes to the Council for hearing.

Mr. Charles Kwon addressed the Council noting concern as to the validity of the appeal letters. He provided one example where a member of his compliance program was unaware he had signed an appeal letter.  Mr. Steve Inn expressed concern about the costs the Council was incurring in defending its position on the NDI decertification.
  PUBLIC COMMENT PERIOD
 

Mr. Polak asked if there were any comments from the public.

Mr. Richard Kim addressed the Council seeking clarification on the recent litigation and appeal events. Mr. McCarthy reviewed the recent events noting no final decision has been made by the Cook County judge regarding NDI’s appeal of the Administrative Law Judge’s decision.

Mr. Dae Kim expressed his opinion that NDI members needed more time than 30 days to join a new compliance program.

Ms. Shin, operator of Granville Cleaners and former owner/operator of North Park Cleaners addressed the Council regarding licensing issues with the Granville Cleaners location. Mr. Eriksen noted the Attorney General’s Office has been handling this licensing issue as the facility was referred for enforcement action due to non-compliance with the Trust Fund Act.  Mr. Kang interjected he had attended a meeting with the Executive Director of JCAR in January and Ms. Shin was also in attendance at that meeting. He requested the Council listen to her comments which they agreed to do. Ms. Shin shared her comments regarding licensing issues with Granville Cleaners. Mr. Eriksen stated he would bring the Granville licensing file to the next Council meeting and review in closed session steps taken to bring this facility into compliance with the Trust Fund Act. Ms. Shin also shared comments regarding the cancellation of insurance coverage and loss of remedial benefits for North Park Cleaners.

Mr. John Yu addressed the Council expressing his opinion the Council unfairly decertified the NDI Compliance Program.

Mr. Kang addressed the Council expressing his frustration that no one responded to his recent email regarding NDI and related compliance program issues. He stated Vicki Thomas, Executive Director of JCAR, informed him twice during a January 2016 meeting that he did not have a conflict of interest regarding NDI.  Mr. McCarthy disagreed and cited an example from the December 2015 ethics training. Mr. Polak directed Mr. Eriksen to contact the Ethics Commission and seek a written response as to whether Mr. Kang has a conflict of interest regarding NDI and compliance program issues.
  CLOSED SESSION
 

Mr. Eriksen noted there were no issues for discussion in closed session.

There being no further business, on a motion by Mr. Lewicki and a second by Mr. Bredenkamp, the Council meeting adjourned at 12:03 p.m.

Respectfully submitted,

H Patrick Eriksen

Program Administrator
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