MARCH 31, 2016 Meeting Minutes

 

MINUTES
DRYCLEANER ENVIRONMENTAL RESPONSE TRUST FUND
COUNCIL of ILLINOIS

SHERATON LISLE HOTEL
LISLE, ILLINOIS

MARCH 31, 2016

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
Sung Do Kang
Daniel Kim (arrived at 10:06 a.m.)
Young B. Kim
Paul Kwak (arrived at 10:05 a.m.)
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

Mr. Kang informed the Council his attorney, Mr. Mark Sargis, would be seated behind him during the meeting to confer with and assist him in understanding Council discussion of agenda items.

The minutes from the February 10, 2016 Council meeting were reviewed. A general discussion of the minutes ensued with Mr. Kang stating they do not accurately reflect all of the discussion under “Public Comment Period” regarding his email to the Council on NDI and related compliance program issues. On a motion by Mr. Lewicki and a second by Mr. Bredenkamp, the minutes were approved by a vote of 6-1, with Mr. Kang voting in opposition.
  OPERATIONAL ISSUES
  A. Draft Compliance Program Rules
 

Mr. Eriksen provided background information on the draft compliance program rules. The draft rules were developed from the Council’s approved Compliance Program Policies and Procedures.

He noted Mr. Kang and Mr. Henry Parker of S&ECC provided comments on the draft rules. Their comments were included in the Council packet.

Mr. Bredenkamp and Mr. Polak asked Mr. Kang numerous questions regarding comments and questions Mr. Kang listed in his memo on the draft rules. Mr. Kang was unable to answer their questions. Mr. Bredenkamp asked Mr. Kang if he wrote the memo or did his attorney write the memo? Mr. Sargis responded Mr. Kang drafted the memo and he edited it on behalf of Mr. Kang.  Mr. Sargis made numerous comments and suggestions on the rules based on his experience in commenting on other draft environmental rules.

After general discussion by the Council and Mr. Sargis on the draft rules, Mr. Eriksen stated he would solicit comments on the draft rules directly from the compliance programs and industry associations that had not previously provided comments.

On a motion by Mr. Bredenkamp and second by Mr. Lewicki, the Council voted 7-0 to table further discussion on the draft rules until additional comments are received from the compliance programs and industry associations.
  B. Updated Financial Projections for the Period of July 1, 2015 to January 1, 2020
 

Mr. Eriksen reviewed updated financial projections for the period of July 1, 2015 through January 1, 2020.  He referenced the changes in projection assumptions as compared to the projections reviewed at the August 27, 2015 Council meeting. Net effect of the changes is a $93,000 reduction in the projected deficit. The projected deficit as of January 1, 2020 is $16.7 million.

  C. Legislative Update
 

Mr. Eriksen stated appropriation bills for the Fund for FY17 have been introduced in both the House and Senate. The Council still does not have an approved appropriation for FY16.

 

D.

ESM Compliance Program Issues

 

Mr. Eriksen reviewed with the Council his memo and related correspondence with ESM that was included in the Council packet. He noted ESM completed only 1 of 7 required site inspections in calendar year 2015.  Subsequent to the issuance of the Council packet, ESM submitted the remaining 6 site inspection reports to the Administrator’s office and provided the resume of a proposed new site inspector.

Mr. Richard Kim, owner of the ESM Compliance Program, addressed the Council and confirmed he conducted only 1 site inspection in 2015. He said his failure to timely complete the inspections was due to personal and work related issues he experienced in 2015. He was working as a manager for another company in 2015 which limited his available time to conduct site inspections. Mr. Kim stated he now has sufficient manpower to handle all site inspection issues on a timely basis.

Mr. Polak stated he was not sympathetic to Mr. Kim’s 2015 issues. After additional discussion by the Council, Mr. Bredenkamp made a motion to decertify the ESM Compliance Program for failure to comply with the Council’s compliance program requirements. The motion was seconded by Mr. Lewicki.  Mr. Kang, after conferring with Mr. Sargis, suggested postponing a decision until after the Council had met in closed session in as much as the Council’s Compliance Program Policies and Procedures had not been legally adopted by JCAR.  Mr. Daniel Kim called for the question. On a roll call vote, the motion failed by a vote of 3-3-1, with Mr. Bredenkamp, Mr. Lewicki and Mr. Polak voting in favor of the motion and Mr. Daniel Kim, Mr. Young Kim, and Mr. Kwak voting against the motion. Mr. McCarthy noted Mr. Kang cannot vote on this motion due to a conflict of interest.

Mr. Daniel Kim made a motion to place ESM on probation for calendar year 2016. Failure to complete and comply with all Council required compliance program issues for 2015 and 2016 by December 31, 2016 would result in de-certification of the ESM Compliance Program. The motion was seconded by Mr. Kwak. On a roll call vote, the motion failed by a vote of 3-3-1 with Mr. Daniel Kim, Mr. Young Kim, and Mr. Kwak voting in favor of the motion and Mr. Bredenkamp, Mr. Lewicki and Mr. Polak voting against the motion. Mr. Kang abstained.

Mr. Polak commented if the Council cannot agree today on a plan of action, he recommends they wait for the outcome of the litigation with NDI before taking any action.
  APPROVAL OF PROGRAM BILLINGS
 

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

 

1. Williams & Company Consulting, Inc                               $62,621.00
Standard flat fee billing for February 2016, licensing, underwriting, claims processing and site inspections.

  2. John J McCarthy                                                                   $6,580.66
Professional legal services to the Council for the period of February 1, 2016 through March 16, 2016.
  3. Hinshaw & Culbertson                                                          $491.29
Professional Legal Services to the Council for the month of February 2016 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 February 29, 2016 noting 673 licenses were in effect at the end of the month compared to 707 as of February 28, 2015.  Four hundred sixty nine (469) active dry-cleaning facilities had pollution liability insurance coverage with the Fund. Open claims totaled 186, with estimated reserves of $20.5 million.

The February 29, 2016 financial statements reflect a fund balance of $1,622,773. Year-to-date claim reimbursement requests approved for payment total $817,006.
  CLAIM PAYMENTS IN EXCESS OF $75,000
 

Mr. Eriksen noted there were three claim payment requests for Council review and approval.

  1.   Crystal Cleaners, Morton Grove, IL; Claim #50317, Site #0001879:      
   

Dr. So reviewed background information on the facility noting remediation is substantially complete but a small area needs additional chemox injections to complete the cleanup and a building control technology (BCT) needs to be installed to address indoor air inhalation issues. The estimated costs to complete these activities total $27,500 including contingency costs.

On a motion by Mr. Young Kim and a second by Mr. Lewicki, the Council approved the budget request of $27,500 by a vote of 7-0.
     
  2. Shin’s Pride Cleaners, Chicago, IL; Claim #50374, Site #0001626:      
   

Dr. So reviewed background information on the facility noting remediation is substantially complete but additional post remedial confirmatory site investigation is needed. Installation of a BCT is also needed and the existing monitoring wells must be properly abandoned for the facility to receive a NFR letter. The estimated cost to complete these activities totals $14,500 including contingency costs.

On a motion by Mr. Lewicki and a second by Mr. Young Kim, the Council approved the budget request of $14,500 by a vote of 7-0.
     
  3. Village Cleaners, Wheaton, IL; Claim #50432, Site #0002245:      
   

Dr. So reviewed background information on the facility noting remedial activities are complete but a sub-slab depressurization system needs to be installed to address indoor air inhalation issues.  Also, the existing monitoring wells need to be properly abandoned and a remedial action completion report prepared. The estimated cost is $15,000 including contingency costs.

On a motion by Mr. Lewicki and a second by Mr. Young Kim, the Council approved the budget request of $15,000 by a vote of 7-0.
     
  OTHER ISSUES
 

Mr. Eriksen noted the next meeting date is Thursday, May 5, 2016.

Mr. Eriksen noted that the initial Administrative Law Judge hearing on the 106 drycleaner appeals of the decertification of the NDI Compliance Program scheduled for April 1, 2016 will need to be rescheduled.  The Attorney General’s office informed him early this morning that Mr. McCarthy must be formally appointed as a Special Assistant Attorney General for this contested case hearing. The Attorney General needs a formal written request from the Council to make this appointment. Since this issue was not on today’s meeting agenda, the Council cannot act on this issue until the next regularly scheduled Council meeting or a special Council meeting.  Mr. Eriksen reported the Attorney General’s Office stated this request does not affect Mr. McCarthy’s representation of the Council in day-to-day issues. On a motion by Mr. Bredenkamp and a second by Mr. Young Kim, the Council voted 7-0 to list this issue on the Council’s next meeting agenda.

Mr. Eriksen reported all but 11 insured drycleaners have moved from NDI’s Compliance Program to one of the other 4 approved programs.

Mr.  Eriksen noted the Fund’s FY15 audit report has just been released by the Auditor General’s Office and will be on the May 5, 2016 meeting agenda for review and discussion.
  PUBLIC COMMENT PERIOD
 

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

Ms. Shin, owner/operator of Oakton Cleaners and former owner/operator of North Park Cleaners addressed the Council regarding legislative issues.  She commented she was opposed to HB209 to extend the Fund’s sunset date by 10 ½ years and would like the Council to support HB3146, which extends the deadline for creating the Drycleaner Trust Fund Task Force.

Mr. Kim, owner/operator of Oswego Cleaners, asked why the compliance site inspection report must include the photo inspection date. Mr. Polak responded it was necessary to discourage the compliance programs from making a copy of the previous inspection report instead of completing a new inspection. Mr. Kim also questioned the need for employee training; expressed his concerns the Council was not supporting the drycleaners, and expressed his support for NDI.

Mr. Richard Kim of ESM Compliance Program briefly commented again on why he failed to complete the required 7 site inspections in 2015.

Ms. Heidi Park, Executive Director of NDI, stated NDI continues to do a lot of administrative paperwork for drycleaners. She commented that the Administrator is now responding to all of her information requests via a letter which she believes is delaying the licensing process for the drycleaner she is assisting. Ms. Park commented the Assistant Attorney General representing the Council in the NDI litigation had mentioned NDI could reapply for certification as a compliance program but no one has contacted her regarding this reapplication process.

Mr. In Han Kim, owner/operator of Green Cleaners, asked who he appeals to when the Administrator (i.e. Williams & Company Consulting, Inc.) makes an error? His question was in reference to an enforcement action brought by the Attorney General’s Office on behalf of the Council.  Mr. Green stated he believes some of his late fees were attributed to the Administrator’s staff not timely providing him with a registration number so he could pay his license fee.  Mr. Eriksen responded in this instance if the drycleaner felt the Administrator made an error, he could present his case directly to the Assistant Attorney General handling his enforcement action.

Mr. Tae Jung, Fox Valley Cleaners, complained the licensing renewal process takes too long to complete and requires too much paperwork. In addition, he noted the licensing process is always changing which creates problems. He stated the Council needs to simplify the process.  Mr. Daniel Kim asked him what recent licensing changes he was referring to.  Mr. Jung did not respond to the question. Mr. Eriksen noted the only licensing change in the past 3 or 4 years involved asking for a copy of hazardous waste manifests for the previous year at license renewal.

Mr. Sargis thanked the Council for allowing him to express his comments on the draft compliance program rules and assist Mr. Kang. He commented the Council should actively solicit comments from the drycleaning industry and hold an informal meeting to discuss the proposed rules.
  CLOSED SESSION
 

Mr. Eriksen noted there were issues for discussion in closed session.

On a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council voted 7-0 to go into closed session at 12:34 p.m. to discuss matters of potential litigation. Mr. Polak excused himself from the meeting at 12:36 p.m. The Council adjourned from closed session at 1:02 p.m. 

There being no further business, on a motion by Mr. Bredenkamp and a second by Mr. Young Kim, the Council meeting adjourned at 1:05 p.m.

Respectfully submitted,

H Patrick Eriksen

Program Administrator
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