June 1, 2011 Meeting Minutes

  MINUTES
 

DRYCLEANER ENVIRONMENTAL RESPONSE TRUST FUND
COUNCIL of ILLINOIS

WYNDHAM HOTEL LISLE/CHICAGO
LISLE, ILLINOIS

JUNE 1, 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
Jerry Lewicki
John Polak
(via telephonic conference)

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

PRELIMINARY BUSINESS

The minutes from the April 6, 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 5-0.

Mr. Polak indicated there were several appeals to be heard. The first is with a drycleaner who is to be participating at 10:15 a.m. via telephone. Since it was not yet 10:15, he suggested they move off the agenda and address the Operational Issues.

  OPERATIONAL ISSUES
  A.

Legislative Update:

   

Mr. Eriksen reviewed with the Council that their proposed legislation (HB1953), which was sponsored by Rep. Tom Holbrook in the House and Sen. Heather Stearns in the Senate, has passed both the House and the Senate and will be sent to Governor Quinn for his signature. The bill was passed by a vote of 110- 0 in the House and 53-0 in the Senate.

Illinois Environmental Protection Agency’s (IEPA) SB1617, which would prohibit the installation and/or operation of the drycleaning machines that use perchloroethylene after January 1, 2030, passed the Senate by a 52-0 vote on March 31, 2011, but failed to advance out of the Environmental Energy Committee by a vote of 7-11-1 on May 4, 2011. The bill is effectively dead for the remainder of this legislative session.

HB2777, sponsored by Rep. Mike Tryon, allows for the payment of the annual license fee by either credit card or business check and provides a 31-day grace period (i.e., the month of January) before the license late payment penalty can be assessed and reduces the license late payment penalty for the next 30 days from $5 per day to $3 per day. The bill was passed by the House and Senate and will be forwarded to the Governor for his signature.

Mr. Eriksen noted once the two (2) bills are signed by the Governor, he will draft revisions to the Council’s administrative regulations to implement the legislative changes.

  B. Legal Representation:
   

Mr. McCarthy’s fiscal year 2011 contract with the Council for the provision of legal services expires June 30, 2011. His contract was a one (1) year contract for total costs not to exceed $19,999. To date, the Council has paid Mr. McCarthy $ 11,428.78.

Mr. McCarthy’ currently charges the Fund $155 per hour for professional services and $90 per hour for travel time. These rates have not been adjusted for the past four (4) years and he is requesting his rates be increased to $170 per hour for professional services and $100 per hour for travel time. This requested increase reflects an approximate 2% annual increase.

After discussion by the Council, on a motion by Mr. Lewicki and a second by Mr. Kim, the Council voted 5-0 to enter into a one (1) year contract for fiscal year 2012 with Mr. McCarthy to provide legal services to the Council for a cost not to exceed $19,999. The rates will be $170 per hour for professional services and $100 per hour for travel time.

  C.

Administrative Hearing Officer Contract:

   

Mr. Iain D. Johnston’s fiscal year 2011 contract to provide Administrative Hearing Officer services to the Council expires June 30, 2011. His contracted hourly rate is $265 per hour. His contract was a one (1) year contract for total costs not to exceed $19,999. To date, the Council has paid Mr. Johnston $2,120. He is recommending the Council enter into a new contract with Mr. Johnston at the same hourly rate of $265 for fiscal year 2012. The total amount of the contract shall not exceed $19,999.

After discussion by the Council, on a motion by Mr. Lewicki and a second by Mr. Bredenkamp, the Council voted 5-0 to enter into a new one (1) year contract for fiscal year 2012 with Mr. Johnston for a $265 per hour rate for a total amount not to exceed $19,999.
  D.

Identity Protection Policy:

   

Mr. McCarthy reviewed with the Council that Public Act 96-874 requires each local and state government agency to draft, approve and implement an Identity-Protection Policy. Mr. McCarthy has drafted a proposed Identity-Protection Policy, which he reviewed with the Council.

After discussion by the Council, on a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council voted 5-0 to adopt the proposed Identity-Protection Policy drafted by Mr. McCarthy.

 

Mr. Polak returned to the published agenda order, with the first issue being the appeal of license late payment fees.

  APPEAL OF LICENSE LATE PAYMENT FEES
  A.

Site #0001957 – A+ Rose Laundry & Dry Cleaners, 3567 Grand Avenue, Gurnee, IL

   

Mr. Eriksen noted Ms. Nan Su Kelly was to participate via telephonic conference. Inasmuch as she did not, on a motion by Mr. Lewicki and a second by Mr. Kim, the Council voted 5-0 to defer the appeal to the next Council meeting. Mr. Eriksen stated he would notify Ms. Kelly of the Council’s decision and the next Council meeting date.

  B

Site #0002728 – Advantage Cleaners, 351 East Dundee Road in Palatine, IL

   

Mr. Eriksen reviewed background information with the Council noting that the 2011 license fee was paid on March 15, 2011, incurring license late payment penalty fees of $365. The Administrator’s staff received a telephone call from the owner of the drycleaning facility on March 10, 2011, wondering why the facility did not have a license. He indicated to staff that he owned three (3) other drycleaning facilities and their licenses had all been renewed. Staff explained to the owner that no license fees had been paid and none of the required renewal documentation had been received by the Fund. The drycleaner owner, upon investigation, found the check had been issued, however the bookkeeper that had been employed at the time of writing the check had left employment with the drycleaner and never mailed it to the Illinois Department of Revenue. Once the error was discovered, the check was mailed and the license fee was paid as of March 15, 2011.

Mr. Ahmed Ilyas, manager of the drycleaning facility, was in attendance and addressed the Council. He reiterated that the bookkeeper had failed to mail the license fee to the Illinois Department of Revenue. He indicated it was a human error on the bookkeeper’s part and noted the drycleaner has been prompt in paying prior year license fees. Mr. Eriksen concurred with that representation.

After discussion by the Council, on a motion by Mr. Lewicki and a second by Mr. Bredenkamp, the Council agreed to waive the $365 in license late payment fees by a vote of 5-0.

  APPEAL OF CIVIL PENALTY FOR DELIVERING SOLVENT TO AN UNLICENSED DRYCLEANER
  A.

Komro Supply Company, Inc., St. Louis, MO:

   

Mr. Gary Thuro, President of Komro Supply, Inc. participated via telephonic conference.

Mr. Eriksen reviewed background information with the Council noting the mailings and webinar information were provided to Komro Supply, informing them that effective January 1, 2010, the Council had the authority to assess a civil penalty not to exceed $500 for the first violation and a civil penalty not to exceed $5,000 for a second or subsequent violation against any person or entity who sells or transfers drycleaning solvent to an operator of a drycleaning facility that is not licensed by the Council. Komro Supply Company was assessed a civil penalty of $500 on March 29, 2011 by the Administrator for delivering solvent to an unlicensed drycleaner. The solvent was delivered on March 8, 2010 and the drycleaning facility was not licensed until July 7, 2010.

Mr. Thuro thanked the Council for the opportunity to present his appeal to them. He reviewed background information regarding his business and noted he was not as familiar with the Fund regulations as he should have been. He stated he is now up to speed on all Fund regulations and requirements and he has been consistently collecting the appropriate solvent taxes and is now checking to make certain that all drycleaners are licensed prior to delivery of any solvent. He requested the Council set aside this initial violation.

The Council asked several general questions of Mr. Thuro and after additional discussion, on a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council voted 5-0 to deny Komro Supply Company, Inc.’s request that the $500 civil penalty for delivery of drycleaning solvent to an unlicensed drycleaner be waived. Mr. Eriksen informed Mr. Thuro he would receive written confirmation of the Council’s denial of his appeal request and he can appeal the Council’s decision to an Administrative Law Judge.
  B.

Manor Chemical Company, Afton, MO:

   

Mr. Eriksen reviewed background information with the Council noting that Manor Chemical Company, headquartered in Afton, MO, was assessed a civil penalty of $500 on March 3, 2011 by the Administrator for delivering solvent on January 9, 2010 to a drycleaning facility that was not licensed until February 24, 2010. Ms. Connie Jestis of Manor Chemical Company, verbally appealed the civil penalty to the Council. Her appeal request was confirmed via email correspondence.

Ms. Jestis addressed the Council noting she was the purchasing agent and also scheduled solvent deliveries for Manor Chemical Company. She stated their office operations consist of herself and another lady and they handle all of the administrative paperwork for the office. She noted it is difficult for her to catch everything and she requested of her boss to make changes to their operational policy to ensure no solvent is delivered to an Illinois drycleaner without her review. This new policy was implemented in March 2011.

Mr. Bredenkamp inquired how long Manor Chemical Company had been delivering solvent in Illinois. Ms. Jestis replied for approximately 40 years.

After additional discussion by the Council, on a motion by Mr. Bredenkamp and a second by Mr. Kwak, the Council denied Manor Chemical Company’s appeal to waive and set aside the $500 civil penalty by a vote of 5-0. Mr. Eriksen informed Ms. Jestis that Manor Chemical Company would be notified of the Council’s decision in writing and Manor Chemical Company can appeal the Council’s decision to an Administrative Law Judge.

  C.

Cleaner’s Depot, South Bend, IN:

   

Mr. Eriksen noted that Cleaner’s Depot, headquartered in South Bend, IN, was assessed civil penalties totaling $10,500 on April 13, 2011 for delivering solvent on March 26, 2010, July 9, 2010, and August 7, 2010, to a drycleaning facility that was not licensed by the Fund until September 13, 2010.

Mr. Philip Magaldi, Jr., President of Cleaner’s Depot, noted he has ten (10) customers in Illinois who purchase solvent from him. Due to the difficult economic times, he had gone on the road to generate additional business and hired an individual to process solvent deliveries. This individual worked for him until October 2010 and failed to check the Illinois Drycleaner Trust Fund website to see if the drycleaning facility was licensed prior to authorizing delivery of solvent.

After discussion by the Council, on a motion by Mr. Bredenkamp and a second by Mr. Kim, the Council voted 5-0 to deny waiver or reduction of the $10,500 civil penalties assessed Cleaner’s Depot. Mr. Eriksen informed Mr. Magaldi that he would be notified of the Council’s decision in writing and could appeal the Council’s decision to an Administrative Law Judge.

  D.

Master Supply Corp,  Buffalo Grove, IL:

   

Mr. Eriksen noted that Master Supply Corp. headquartered in Buffalo Grove, IL, was assessed civil penalties totaling $500 for delivering solvent on February 4, 2010 to a drycleaning facility that was not licensed until March 10, 2010.

Mr. Scott Lee, President of Master Supply Corp., addressed the Council noting he has been selling hydro-carbon solvent to this particular drycleaner for the past several years. The drycleaner indicated he had a license from the Fund at the point in time the solvent delivery was made in February 2010. Mr. Lee indicated it was his fault that he did not check the Fund’s website to confirm the drycleaner was licensed. He said it was the first time he failed to check the website to verify licensure.

After discussion by the Council, on a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council voted 5-0 to deny waiver of the $500 civil penalty assessed Master Supply Corp. Mr. Eriksen informed Mr. Lee that he would be notified of the Council’s decision in writing and that he could appeal the Council’s decision to an Administrative Law Judge.
  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    $2,400.00  
    Professional legal services to the Council for the period of March 26, 2011 through May 16, 2011.  
  2. Williams & Company Consulting, Inc $68,357.00  
    Standard flat fee billing for April 2011, licensing, underwriting, claims processing and site inspections.  
  3. Johnston, Greene LLC  $1,192.50  
    Professional legal services as the Administrative Hearing Officer for the month of March 2011.  
  In addition, Mr. Eriksen stated he had one (1) carry in bill for the Council’s review:  
  4. Williams & Company Consulting, Inc $49,573.00  
    Standard flat fee billing for May 2011, licensing, underwriting, claims processing and site inspections.  
 

On a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council approved the bills as presented by a vote of 5-0.

  REVIEW OF ACTIVITY REPORT AND FINANCIAL STATEMENTS
 

Mr. Eriksen noted that as of April 30, 2011, the Council had licensed 1,024 drycleaners for calendar year 2011. The total as of May 30th was 1,045; 549 drycleaning facilities are currently insured by the Fund with 267 open remedial claims with outstanding reserves of approximately $30 million.

To date 366 No Further Remediation (NFR) letters have been issued on drycleaning facilities that had participated in the remedial cleanup program. The April 30, 2011 financial statements reflect a Fund balance of $2,691,337. Year-to-date claim payments total $2,251,704.
  CLAIM PAYMENTS IN EXCESS OF $75,000
 

Mr. Eriksen noted there were four (4) claims in excess of $75,000 requiring Council review and approval. These claim requests would be reviewed with the Council by Dr. Juho So and Mr. Randy Jackson.

  A. Russell's Dry Cleaners, Bradley, IL - Claim #50155, Site #0002072:
   

Mr. Eriksen reviewed background information with the Council noting that extensive site investigation activities have been completed at the facility. The proposed Remedial Action Plan (RAP) for the facility is the use of chemical oxidation to treat soils exceeding the Csat limit. The proposed cost of such treatment including a contingency was $130,000. In addition, the Administrator is requesting waiver of the two (2) bid requirement due to the extensive knowledge the current consultant has at the facility.

On a motion by Mr. Lewicki and a second by Mr. Bredenkamp, the Council voted 5-0 to approve implementation of the Remedial Action Plan for an amount not to exceed $130,000 and waive the two (2) bid requirement.

  B. Concord Custom Cleaners #082, Springfield, IL - Claim #50631, Site #0001122:
   

Mr. Eriksen reviewed background information with the Council noting that remediation has been conducted at the facility but some additional monitoring of the groundwater is necessary at the site to move towards the issuance of a No Further Remediation (NFR) letter. The Administrator is requesting budget approval of $6,800 for the groundwater monitoring event and approval of the Remedial Action Completion Report and a draft NFR letter.

On a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council approved the request of $10,500 for the additional groundwater monitoring event and the drafting of the final Remedial Action Completion Report and a draft NFR letter.
  OTHER ISSUES AS PRESENTED
 

The next Council meeting is tentatively scheduled for June 29, 2011. The meeting focus will be on appeals and claim payment requests. Mr. Polak stated he had a potential conflict. The Council tentatively selected June 22, 2011 as the next meeting date.

Mr. Eriksen noted the Council’s appropriation bill was approved by the legislature on Monday, May 30, 2011.
  PUBLIC COMMENT PERIOD
 

Mr. Polak asked if there were any comments from the public. Mr. Patel had a general question regarding the status of licensed drycleaners.

  CLOSED SESSION
 

There being no further business, on a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council voted 5-0 at 11:10 a.m. to enter into Closed Session to discuss matters of potential litigation. The Council adjourned from Closed Session at 11:15 p.m. and went back in to Open Session.

On a motion by Mr. Lewicki and a second by Mr. Kim, the Council voted 5-0 to settle the 2010 license late payment fees for Hannas Cleaners for $1,200, the amount to be paid via a single payment.

There being no further business, on a motion by Mr. Bredenkamp and a second by Mr. Lewicki, by a vote of 5-0, the Council meeting adjourned at 11:25 a.m.

   
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