March 13, 2013 Meeting Minutes

  MINUTES
 

DRYCLEANER ENVIRONMENTAL RESPONSE TRUST FUND
COUNCIL of ILLINOIS

CHICAGO MARRIOTT/NAPERVILLE
NAPERVILLE, ILLINOIS

MARCH 13, 2013

John Polak, Chairperson, called the Drycleaner Environmental Response Trust Fund Council of Illinois meeting to order at 10:09 a.m. A quorum was present. Roll call was taken with the following members present:

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

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

PRELIMINARY BUSINESS

The minutes from the January 23, 2013 Council meeting were reviewed. On a motion by Mr. Lewicki and a second by Mr. Dae Kim, the minutes were approved by a vote of 6-0.

  OPERATIONAL ISSUES
  A.

Review of Semi-Annual Projections:

   

Mr. Eriksen reviewed the December 31, 2012 financial projections. The Fund faces a deficit of approximately $14.4 million as of the January 1, 2020 sunset date of the program, assuming the projection assumptions remain constant over the remaining life of the program.

He highlighted two (2) changes in the projections as compared to those reviewed at the August 30, 2012 Strategic Planning meeting:

1. The number of licensed drycleaners was decreased from 1,000 to 975 for FY13 and from 900 to 875 for FY14. The impact of these changes over the remaining life of the Fund is a $75,000 reduction in revenue.
2. The solvent taxes are based upon the actual solvent receipts for the first three quarters of CY12 and estimated receipts for the 4thquarter. These reductions reflect a net reduction in revenue of $354,500 over the remaining life of the Fund.

The net impact of these changes is an increase in the projected deficit of $414,000.

  B.

Legislative Update:

   

Mr. Eriksen reviewed three (3) bills and one (1) House resolution with the Council.

1. HB2302: This bill is sponsored by Rep. Rich Brauer and specifies that “green” solvents are not drycleaning solvents for purposes of the Act and deletes provisions that provide for taxation and regulation of “green” solvents under the Act. In addition, it provides that the Council cannot reconsider or otherwise change the determination of a “green” solvent on or after the effective date of this bill. Mr. Eriksen noted the bill has been assigned to the Environmental Committee but has not been scheduled for a hearing.

After brief discussion by the Council, on a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council voted 6-0 in opposition of HB2302.

2. HB3348: This bill is sponsored by Rep. Michael Tyron and provides that if an insurer sends a second notice to an owner/operator demanding immediate payment of a past due premium for insurance services provided pursuant to the Act, the demand for payment must offer a grace period of not less than 30 days. The Fund’s grace period is currently 10 days. In addition, the bill states if the insured terminates an owner/operator’s coverage under this Act and sends a written notice to the owner/operator to inform him or her of the termination of the coverage, the notice must include instructions on how to seek reinstatement of coverage as well as information concerning any premiums or penalties that might be due. Mr. Eriksen noted automatic reinstatement of coverage creates significant issues for the Fund. Mr. Polak noted that automatic reinstatement is analogous to letting your home insurance cancel, you subsequently have a fire, reapply for coverage, and wish for the fire loss to be covered by the insurance company. He stated support of such an issue would be bad public policy.

After additional discussion by the Council, on a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council voted 6-0 to oppose HB3348 unless the paragraph eliminating automatic reinstatement is deleted.

3. HB3349: This bill is sponsored by Rep. Michael Tryon and is identical to prior year’s HB4488. It would amend the Act by adding a new paragraph under the insurance account of the Act and would allow an owner/operator who has had their insurance coverage cease for reasons other than submittal of a claim on that account or the existence of an emergency or emergency action to reenroll in the insurance program, provided the owner/operator pays the annual premium calculated using the same risk basis as on the date the owner/operator was last covered on the account. Mr. Eriksen noted this bill is not necessary because the Fund currently allows an operator who had their insurance coverage cease to reapply for coverage. The Council opposed such a bill last year.

After additional discussion by the Council, on a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council voted 6-0 to oppose HB3349 as not being necessary.

4. HR0107: This bill is sponsored by Rep. Michael Tryon and directs the Auditor General to conduct a performance audit of the Drycleaner Environmental Response Trust Fund Council to ensure that Williams & Company Consulting, Inc. is administering the Council’s programmatic responsibilities in a manner that is consistent with the requirements of the Act. Mr. Eriksen stated the Auditor General currently does the compliance and financial audit of the program and he sees no problem with this resolution. It is scheduled for hearing on March 14th at 4:00 p.m.
  C.

Policy Issue - License Transfer Requirements:

   

Mr. Eriksen reviewed background information outlined in the Council memorandum dealing with how the Council arrived at their initial requirements for transferring a license from one location to another. The issue under review is the need for the original license to be returned to the Fund in order for the transfer to be effective.

Mr. Polak thought the current policy is reasonable. The Council has limited issues involving this issue and he would recommend that it not be modified. Mr. Young B. Kim noted that sometimes situations exist where the license is destroyed or lost which negates the ability to transfer the license.

After additional discussion by the Council, on a motion by Mr. Kwak and a second by Mr. Young B. Kim, the Council voted 5-1, with Mr. Bredenkamp in opposition, removing the requirement that a drycleaner return the original license to the Fund in order to have the license transferred.

  D. Audit of Compliance Programs:
   

Mr. Polak addressed the Council noting over the past 10 years, two (2) or three (3) audits have been done of the compliance programs and the audit results have confirmed there is a wide range in the approach, implementation, uniformity, and quality of the programs. He noted it has been approximately nine (9) years since the compliance program requirements have been reviewed in detail by the Council. He believes it is a good time for the Council to step back and do an in depth review of the compliance program requirements and make needed modifications. Such review could take a substantial amount of time. He recommended that a future meeting be devoted to this topic and suggested the June 19, 2013 meeting.

On a motion by Mr. Bredenkamp and a second by Mr. Kwak, the Council voted 6-0 to review in detail the compliance program requirements at the June 19, 2013 council meeting.

  APPROVAL OF PROGRAM BILLINGS
 

Mr. Eriksen stated there were three (3) invoices before the Council for their review and approval. They were as follows:

  1. Williams & Company Consulting, Inc. $97,553.00
    Standard flat fee billing for January 2013, licensing, underwriting, claims processing and site inspections.  
  2. John J. McCarthy  $2,640.00
   

Professional legal services for the period of January 10, 2013 through February 21, 2013.

 
  3. Williams & Company Consulting, Inc. $71,473.00
    Standard flat fee billing for January 2013, licensing, underwriting, claims processing and site inspections.  

Mr. Eriksen noted that Williams & Company’s January and February 2013 invoice totals were almost identical to 2012. Bills for these months are typically higher than usual due to the number of licenses that are renewed during January and February.

On a motion by Mr. Bredenkamp and a second by Mr. Young B. Kim, the Council approved the bills as presented by a vote of 6-0
  REVIEW OF ACTIVITY REPORT AND FINANCIAL STATEMENTS
 

Mr. Eriksen noted that as of February 28, 2013, there were 770 drycleaners licensed. This compares to 792 from the previous year. Insured drycleaners stand at 529, compared to 528 a year earlier. Remedial claims total 227 with estimated reserves to complete cleanup at these facilities of $26.6 million. Outstanding approved budgets were $2.4 million.

The January 31, 2013 financial statements reflect a Fund balance of $3,688,403. Claim payments year-to-date total $1.1 million.

 

CLAIM PAYMENTS IN EXCESS OF $75,000

 

A.

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

   

Mr. Randy Jackson reviewed this budget request with the Council stating the Administrator is requesting budget approval for $56,500. The facility has been released for immediate funding.

Mr. Jackson reviewed the status of remedial activities at the facility noting that a pilot project had been conducted and has been successful but an additional chemical oxidation injection event and related confirmation sampling is needed to complete remedial activities at the site.

On a motion by Mr. Lewick and a second by Mr. Young B Kim, the Council voted 6-0 to approve the $56,500 budget request.

  B.

Crown Cleaners, Arlington Heights, IL; Site #0001144, Claim #50303:

   

Dr. So stated the Administrator is requesting budget approval of $164,000 to implement remedial action at the facility. The site has been released for immediate funding.

Active remediation is required at the facility due to the high level of contamination in soil and groundwater. The proposed remedial method is In-Situ Chemical Oxidation (ISCO) via gravity feeding using Chemical Oxidant Retention Ponds (CORPs).

Dr. So also requested waiver of the two (2) bid requirement for the environmental consulting services and the IEPA’s approval of the site investigation report and remedial action plan. The extent of contamination of plume and hotspot area is well defined and the current consultant has conducted extensive site investigations at the site and is familiar with the site specific conditions which are important to the successful implementation of the remedial activities.

On a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council approved remedial action costs of $164,000, waiver of the two (2) bid requirement, and IEPA approval of the site investigation report and remedial action plan by a vote of 6-0.
  C.

Joy Cleaners, Chicago, IL; Site #0001958, Claim #50531:

   

Dr. So stated the Administrator is requesting budget approval of $137,100 of remedial action costs. The site has been released for immediate funding.

This request is an addendum to the November 11, 2009 memorandum in which the Council approved remedial costs of $99,716. He noted active remediation has been conducted since September 2006 via In-Situ Chemical Oxidation (ISCO). These remedial attempts did not meet the remedial goal, although the level of volume of contamination has been reduced. The consultant is now requesting to implement Chemical Oxidant Retention Ponds (CORPs) to remediate the remaining hot spot areas. Dr. So also requested waiver of the two (2) bid requirement and IEPA approval of the site investigation report and remedial action plan (RAP).

On a motion by Mr. Lewicki and a second by Mr. Young B. Kim, the Council voted 6-0 to approve remedial action costs totaling $137,100, waiver of the two (2) bid requirement and IEPA approval of the site investigation report and remedial action plan (RAP).

The Administrator does not anticipate at this time total remedial costs will exceed the $300,000 remedial program benefit cap.

  D.

Norgetown Cleaners, Arlington Heights, IL; Claim #50332, Site #0001393:

   

Dr. So stated the Administrator is requesting budget approval of $110,100 for remedial action at the facility. The site has been released for immediate funding.

Active remediation is required at the facility due to the high level of contamination in both soil and groundwater. A limited groundwater ordinance has been passed and the consultant is recommending an In-Situ Chemical Oxidation (ISCO) treatment via gravity feeding with Chemical Oxidant Retention Ponds (CORPs). In addition, Dr. So is requesting waiver of the two (2) bid requirement and IEPA approval of the site investigation report and remedial action plan based on the extensive site investigation work done by the current consultant at the facility.

On a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council voted 6-0 to approve the $110,000 in remediation costs, waiver of the two (2) bid requirement, and IEPA approval of the site investigation report and remedial action plan (RAP). The Administrator does not anticipate at this time that total remedial costs will exceed the $300,000 remedial program benefit cap.
  E. Your Town, Calumet City, IL; Site #0002080, Claim #50757:
   

Dr. So stated the Administrator is requesting budget approval of $88,600 for additional remediation and confirmatory site investigation costs.

Dr. So reviewed that active remediation has been conducted at the facility since September 2001 via In-Situ Chemical Oxidation (ISCO) with gravity feeding. The former hot spot has substantially decreased; however, PCE remains in the soil requiring additional remedial activities that this budget would address.

On a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council voted 6-0 to approve the $88,600 in additional remedial costs. The Administrator does not anticipate at this time that total remedial costs will exceed the $300,000 remedial program benefit cap.

  F.

Princess Cleaners, Chicago, IL; Claim #50404,Site #0001471:

   

Dr. So stated the Administrator is requesting budget approval of $51,000 for confirmatory site investigation activities, surface restoration and well closure and any additional site investigation activities that are required by IEPA.

According to the Remedial Action Completion Report, remedial action at the facility has been completed; however, the Administrator was informed by the consultant that minor soil contamination was recently discovered at the adjacent property and the consultant is trying to include the portion of offsite contamination as part of the remedial site boundary for closure. Based on this, it is likely that IEPA may require further delineation of the contamination plume.

On a motion by Mr. Young B. Kim and a second by Mr. Lewicki, the Council approved additional remedial costs in the amount of $51,000 by a vote of 6-0.

  G.

Choi Cleaners, Brookfield, IL; Site #0001093, Claim #50654:

   

Dr. So stated the Administrator is requesting $39,800 in additional remedial action costs. The site has been released for immediate funding and active remediation has been conducted since September 2011, which has resulted in a significant reduction in the former hot spot. The PCE level at the edge of the contamination plume boundary still requires additional remediation.

On a motion by Mr. Lewicki and a second by Mr. Young B. Kim, the Council approved the $39,800 in additional remediation costs by a vote of 6-0. The Administrator does not anticipate at this time that total remedial costs will exceed the $300,000 remedial program benefit cap.
  H.

Hutchins Cleaners, New Lenox, IL; Site #0002339; Claim #50279:

   

Dr. So stated the Administrator is requesting $38,710 in confirmatory site investigation costs and surface restoration and well closure costs.

Active remediation has been conducted at the facility since July 2007 through various remedial methods. The recent site status report indicates that remedial action at the facility has been completed.

On a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council voted 6-0 to approve the $38,710 in confirmatory site investigation costs. The Administrator does not anticipate at this time that total remedial costs will exceed the $300,000 remedial program benefit cap.

  I. Miller Cleaners, Arlington Heights, IL; Claim #50508, Site #0001966:
   

Dr. So reviewed with the Council previous site investigation activities at the facility noting that active remediation will be required but that additional hot spot delineation is needed for revision of the remedial objectives and design of a detailed remedial action plan.

On a motion by Mr. Young B Kim and a second by Mr. Lewicki, the Council voted 6-0 to approve the $17,580 budget request.

  J.

Lake Cleaners, Lake Villa, IL; Claim #50405, Site #000199:

   

Dr. So stated the Administrator is requesting budget approval for $62,080 and immediate release of funding to do additional site investigation and preliminary action to mitigate the high level of contamination at the facility.

Dr. So reviewed in detail the sampling activities that have taken place at the facility since 2006 and noted that recent groundwater sampling in January 2013, as requested by the Lake County Health Department, indicated the groundwater contamination is increasing and is moving toward the nearby active water well. Per telephone discussions with Mr. Greg Dunn of the IEPA regarding this issue, Mr. Dunn suggested that immediate active remedial activities may be required to prevent further migration of groundwater contamination to the nearby active well.

Dr. So reviewed in detail the remedial options for the facility, concluding that the additional site investigation activities followed by installation of an air stripping system would be the most effective in stopping the contamination migration at this time.

On a motion by Mr. Young B Kim and a second by Mr. Dae Kim, the Council voted 6-0 to approve a budget of $62,080 for additional site investigation and remedial action, waiver of the two (2) bid requirement, and IEPA approval of the site investigation report and remedial action plan (RAP). The motion also included approval of immediate funding for this cleanup.

  OTHER ISSUES AS PRESENTED
 

Mr. Eriksen noted the next Council meeting is tentatively scheduled for Wednesday, April 24, 2013. Mr. Polak is unavailable on that date and he suggested moving it to Thursday, April 25, 2013. The other Council members in attendance stated Thursday, April 25, 2013 would work for them.

Mr. Eriksen commented the Council’s appropriation hearings before the Senate and House would be held at the end of March and the first week of April.

Mr. John McCarthy addressed the Council noting that Mr. Iain Johnston, the Council’s Administrative Law Judge, was recently appointed as a Federal Appellate Judge and after the end of April, would no longer be able to serve as the Councils’ Administrative Law Judge. He is currently in the process of looking for a replacement.

  PUBLIC COMMENT PERIOD
 

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

  CLOSED SESSION
 

Mr. Eriksen noted there was nothing slated for discussion by the Council in Closed Session.

There being no further business, on a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council voted 6-0 to adjourn the meeting at 11:10 a.m.

   
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