June 19, 2013 Meeting Minutes

  MINUTES
 

DRYCLEANER ENVIRONMENTAL RESPONSE TRUST FUND
COUNCIL of ILLINOIS

CHICAGO MARRIOTT/NAPERVILLE
NAPERVILLE, ILLINOIS

JUNE 19, 2013

John Polak, Chairperson, called the Drycleaner Environmental Response Trust Fund Council of Illinois meeting to order at 10:00 a.m. A quorum was present. Roll call was taken with the following members present:

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

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

PRELIMINARY BUSINESS

The minutes from the May 8, 2013 Council meeting were reviewed. On a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the minutes were approved by a vote of 5-0.

  APPEALS
  A.

Appeal of Cancellation of Insurance Coverage and Loss of Remedial Benefits – Drycleaning by Cele, Hazelcrest, IL; Site #0002154:

   

Mr. Chi H Song is the owner/operator of Drycleaning by Cele located at 3410 W. 183rd Street in Hazelcrest, IL. At his request, Dr. Juho So translated his comments.

Mr. Eriksen reviewed background information with the Council noting the most recent policy period was June 14, 2012 to June 14, 2013. The retroactive date of the policy is June 14, 2001. The $550 semi-annual installment insurance premium was due on December 14, 2012. The premium was not received by that date and a 10-day cancellation notice was sent via certified mail indicating the premium must be paid by December 27, 2012 or the insurance would cancel. The Fund did not receive the $550 installment payment and the insurance cancelled on December 27, 2012.  On January 8, 2013, the Administrator sent a letter to Mr. Song stating his insurance had cancelled and the Fund expected him to pay the $550 installment premium immediately. On January 11, 2013, the Fund received the $550 insurance premium installment and a request that the insurance coverage be reinstated along with his remedial benefits.

Mr. Song addressed the Council and stated he did not have the $550 available to pay the insurance premium when it was due in December 2012. He was able to pay in early January and is requesting the insurance coverage be reinstated along with his remedial benefits.

After discussion by the Council members, on a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council voted 5-0 to reinstate Mr. Song’s insurance coverage back to December 22, 2012 with no loss of remedial program benefits.

  B. Appeal of License Late Payment Fees – Vogue Cleaners, Woodstock, IL; Site #0002561:
   

Ms. Jae H Ahn, operator of Vogue Cleaners located at 727 S. Eastwood Drive in Woodstock, IL was in attendance at the meeting and asked Ms. Heidi Park to translate on her behalf.

Mr. Eriksen reviewed background information with the Council noting that Mr. Ahn did not pay the 2012 license fee until July 25, 2012, incurring license late payment penalty fees of $820. Mr. Ahn sent a letter to the Fund, dated September 6, 2012, requesting the late fees be waived because the facility’s business had not been increasing as hoped for and he did not have the money to pay the license fee on time. Mr. Eriksen reviewed subsequent communication between the Fund and Mr. Ahn.

Ms. Ahn noted that in 2012 business was slow and they paid the license fee late. She stated for the past 15 years they paid the license fee on time. Their site had no contamination, it had tested clean and she feels they should not be penalized the $820 in license late payment fees.

Mr. Eriksen confirmed the Ahns have paid their license fees on a timely basis and this is the first time they had requested of the Council a reduction in the license late payment fees.

After discussion by the Council members, on a motion by Mr. Lewicki and a second by Mr. Dae Kim, the Council voted 5-0 to waive the $820 in license late payment fees.

  APPROVAL OF PROGRAM BILLINGS
 

Mr. Polak noted the Council would move off the agenda and address issues that required a Council vote inasmuch as one (1) of the Council members had to leave early which may result in the lack of a quorum.

Mr. Eriksen noted there were two (2) invoices before the Council for their review and approval. He noted the bills were as follows:

  1. Williams & Company Consulting, Inc. $51,506.00
    Standard flat fee billing for May 2013, licensing, underwriting, claims processing and site inspections.  
  2. John J. McCarthy  $1,365.00
   

Professional legal services for the period of April 30, 2013 through June 7, 2013.

 

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

 

CLAIM PAYMENTS IN EXCESS OF $75,000

 

A.

Merit Cleaners, Deerfield, IL; Claim #50215, Site #0002258:

   

Mr. Jackson reviewed background information with the Council noting substantial site investigation activities have been conducted at the facility since November 2004 and the site is now prepared to move forward with active remediation. The proposed remediation is over-excavation of the contaminated soil for an estimated cost, including contingency, of $130,000. The proposal included the rental cost of an air pump and carbon filter to purify the air from beneath the building slab. Since some of the vapors appear to be petroleum vapors unrelated to the drycleaning operation, the Fund will only reimburse for one-half of the cost for mitigating vapors during the excavation.

In addition, Mr. Jackson stated the Administrator is requesting the Council waive the two (2) bid requirement inasmuch as the current consultant has conducted extensive site investigation at the site and is familiar with the site specific conditions which are important to the successful implementation of the remedial activities.

After discussion by the Council, on a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council voted 5-0 to approve remediation costs in the amount of $130,000 and waive the two (2) bid requirement for consulting services.

  B.

One Hour Cleaners, Decatur, IL; Claim #50019, Site #0001925:

   

Mr. Jackson reviewed background information noting the Administrator is requesting $4,155 in costs to close the existing monitoring wells at the facility. Remediation has been completed and the Illinois EPA issued a No Further Remediation (NFR) letter on July 11, 2012.

On a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council approved the budget request of $4,155 by a vote of 5-0.

  C.

North Shore Cleaners, Glencoe, IL; Claim #50217, Site #0002228:

    Mr. Jackson reviewed background information stating the Administrator is requesting budget approval of $12,770 for additional site investigation costs. There are three (3) contiguous remediation areas that have been separated based upon a legal agreement and defined as Areas A, B and C. The consultant has suggested that Area C can obtain a NFR letter prior to the implementation of the new TACO rules potentially reducing remediation costs to address that area of the site. Further delineation of the horizontal and vertical extent of PCE Csat exceedance is necessary in order to develop costs to complete an over-excavation at the facility. The budget request is to collect that data. The claim has been prioritized and the budget being requested will not be reimbursed until such time as funding is available from the Fund.After additional discussion by the Council, on a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council voted 5-0 to approve the $12,770 budget request.
  D.

Market Square Cleaners, Schaumburg, IL; Claim #50481, Site #0001336:

   

Mr. Jackson reviewed background information stating the Administrator is requesting budget approval for $227,500 related to implementation of remedial action at the facility. Mr. Jackson reviewed the detailed information noting that over-excavation is the selected method of remediation based on the site specific conditions. He believes the total remedial cost to obtain a No Further Remediation (NFR) letter for the facility will be less than the $300,000 remedial program benefit. In addition, the Administrator is requesting the Council waive the two (2) bid requirement for consulting services inasmuch as the current consultant has conducted extensive site investigation activities at the site and is familiar with the site-specific conditions.

After discussion by the Council, on a motion by Mr. Lewicki and a second by Mr. Bredenkamp, the Council approved the $227,500 budget and waiver of the (2) bid requirement vote of 5-0.

  OPERATIONAL ISSUES
  A.

Legislation Update:

   

Mr. Eriksen reviewed with the Council legislation that was passed by Illinois General Assembly during their session that adjourned on May 31, 2013:

HB3349, which was sponsored by Rep. Tryon, was subsequently passed by the House on an 88-0 vote and moved to the Senate. In the Senate, the bill was amended to remove the initial provisions of the bill and replaced with the following:

1.

Provides that if an insured 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. Currently, the Fund’s grace period is 10 days.

2.

Requires if the insured terminates an owner/operator’s coverage under this Act and sends written notice to the owner/operator to inform him or her of the termination of coverage, the notice must include instructions on how to seek reinstatement of coverage as well as any information concerning any premiums or penalties that may be due. In essence, it requires the Council to send a copy of their appeals procedures to anyone whose insurance coverage is cancelled.

3.

Establishes the Environmental Response Trust Fund Task Force. The task force is charged to study the resource challenges and implementation issues that the Fund faces and make recommendations for adequately funding the Fund and for refining and improving the goals and implementation of the Fund. The task force shall be composed of eight (8) members appointed by legislative leaders, seven (7) members appointed by the Governor to represent the drycleaning industry, one (1) individual to represent the Drycleaner Environmental Response Trust Fund Council, and the director of the Illinois Environmental Protection Agency or his or her designee. The task force must hold at least three (3) public meetings in three (3) separate metropolitan areas of the state and must submit a report of its findings and recommendations which shall include proposed legislation to the Governor and the General Assembly by no later than December 31, 2014. This section would be repealed on January 1, 2016.

This bill was unanimously approved by the Senate and concurred with by the House and will be sent to the Governor sometime in the future for his review and signature.

Mr. Eriksen then reviewed the status of the other bills that were introduced involving the Drycleaner Trust Fund or industry and their current status.

  B.

Strategic Planning Session Topics :

   

Mr. Eriksen reviewed the tentative Strategic Planning topics for the next meeting, which include Fund solvency, discussion of the Fund’s January 1, 2020 sunset date, review of current policies and procedures, review of general program statistics and legislative issues. He noted the Administrator will have a legislative recommendation for Council consideration to streamline the collection of the license fees. Since the program’s inception, license fees have been collected by the Illinois Department of Revenue (IDOR) but it is his opinion that direct payment of those fees to the Administrator’s office could reduce the time and paperwork involved in renewing and/or issuing an initial license for a drycleaning facility.

The Council meeting is tentatively scheduled for Wednesday, August 28, 2013. After a brief discussion by the Council, there were suggestions of having the meeting either the week before (August 21) or the week after (September 4) 2013. Mr. Eriksen will circulate an email in the near future to all Council members asking them which date they prefer.

  C.

Review of Compliance Program Requirements:

   

Mr. Eriksen reviewed his Council packet memo noting the Council had determined at their March 13, 2013 Council meeting to revisit all of the compliance program criteria at their June 2013 Council meeting inasmuch as a detailed review of all compliance program criteria had not been conducted since early 2004. Discussion at the March 13, 2013 meeting also referenced the possibility of tying the required January 1, 2014 perc operator training to the compliance program criteria.

The compliance programs were asked to submit comments and suggestions for modifying the compliance program criteria by May 15, 2013. One response was received from Richard Kim of the ESM Compliance Program and was included in the Council packet. In addition, a letter was submitted by the Korean-American Drycleaners Association suggesting modifications to the compliance program requirements and it was also included in the Council packet. Also included in the Council packet was the February 20, 2013 proposed outline for the initial training course for perchloroethylene drycleaners in Illinois. This draft was developed jointly by the IEPA and the Administrator and discussed in detail with the compliance program and industry representatives on March 14, 2013.

A general discussion of the compliance program requirements was held with initial focus on whether the continuing education requirements are effective and relevant. Mr. Lewicki stated initially the CEU courses were relevant in their promotion of best management practices, but with the number of meetings held over the past 13 years, how much more are the drycleaners going to learn from these seminars? Ms. Heather Kim, representing the Cleanus Compliance Program, stated most drycleaners are not interested in additional seminars as they believe the best management practices have been adequately covered in the past. Mr. Eriksen expressed his opinion the continuing education seminars have lost their effectiveness over the past several years due to the repetition of the best management practices seminars for the past 13 years.

Regarding site inspections, Mr. Lewicki thought an annual inspection might be more effective than any CEUs and provide greater assurances to the Fund that facilities are being operated in compliance with environmental regulations to minimize a future release of drycleaning solvents into the environment. He noted that coupled with the required four (4) year perc operator training course this may be adequate in terms of Council promotion of best management practices.

Mr. Young Kang, representing the Korean-American Drycleaners Association (KADA) commented he believes more data is necessary to evaluate if the compliance program process is working. The Council needs to take the criteria and establish decision points to determine its effectiveness. He raised the question “What are the compliance programs doing to make certain they meet their goals?” Mr. Eriksen responded that the Council has audited the compliance programs several times over the past years and combined with inspections completed by the Administrator this data is used to evaluate compliance program effectiveness.

Mr. Kwak commented that his neighbor had recently received a letter from one of the local governmental agencies noting that based upon a recent inspection, he did not have the appropriate solvent purchase logs, maintenance and repair logs, etc., and was provided a warning letter. He said for the drycleaner to pay for an annual compliance inspection is excessive as there is no cost if a local government entity does such an inspection.

Mr. Chang Lee, chairman of the Korean-American Drycleaners Association, addressed the Council commenting there is a problem because currently all drycleaners pay the solvent taxes and license fee but if they do not have insurance with the Fund, they receive no cleanup benefits. He stated the insurance provides the most administrative problems and costs for the drycleaners and should be eliminated. Belonging to a compliance program requires a membership fee, there is typically a fee to attend a continuing education seminar and last, there is usually a charge for a third party inspection which costs $100-$200, even if nothing has changed since the last inspection. Drycleaners do not understand why they must pay extra money for the insurance. He stated most drycleaners feel there is no benefit from the CEU programs and the owners do not have time to attend such seminars when they are trying to survive and keep their business operating. KADA’s resolution to this problem is to recommend to the Drycleaner Trust Fund Task Force to eliminate the insurance requirement and have drycleaning facilities inspected by the Administrator. He said for perc operators, training every four (4) years is adequate and everyone should get cleanup benefits when they need it. Consideration should be given to extending the life of the Fund based upon the number of claims and the dollar demand on the Fund. Mr. Lee suggested reviewing the status of the Fund by 2028 and then making a determination if and when the program should sunset. He stated that initially the program was to sunset in 2010, now 2020, and it is being proposed to extend it to at least 2030. He believes the Trust Fund law guarantees those who meet the eligibility requirements should be guaranteed cleanup of their site and if the drycleaners need training, the Fund should hire the people to help train them.

Mr. Bredenkamp commented the required perc operator training should be the only required CEU needed on a going forward basis. Mr. Patel, a drycleaner from the public asked, “Why isn’t the insurance coverage structured like worker’s compensation and have the private market provide the necessary coverage?” Mr. Polak responded that not all insurance carriers offer special coverage, which pollution liability insurance is. In addition, the Fund’s product is actually priced cheaper as it does not include a profit component and one always has to be mindful of cost shifting in pricing insurance products. Mr. Kwak stated he agreed with Mr. Polak and the cost should not be shifted to another segment of the industry.

Ms. Sue Kratz, representing the S&ECC program, stated she agrees with Mr. Lewicki’s comments to get rid of the CEU classes but require an annual site inspection. She commented it is imperative that they touch base at least once per year with the drycleaners to make certain that they are complying with the paperwork and best management practices and in a number of cases twice a year would be preferential. She concurred the inspection form currently utilized by the compliance programs and the Administrator should be “tweaked” to make it more user friendly.

Mr. Young Kang interjected that he does not want to see additional inspections required but wants to see action items to evaluate the effectiveness of the inspection programs. Ms. Heather Kim, representing the Cleanus Compliance Program suggested three (3) possible modifications: (1) eliminate the compliance programs altogether; (2) the Fund would need to conduct the inspections themselves, collect fees, etc., to avoid the issue where fees are paid and the inspection isn’t getting done; and (3) eliminate the CEU seminars as they are not necessary.

Mr. Eriksen asked Ms. Heidi Park of NDI what compliance program requirements NDI believes should be modified. Ms. Park replied that she agrees the CEUs are an issue. Half of the people appreciate them; the other half feel they are a waste of time. Some drycleaners need refresher courses from time to time and new generations of drycleaners need additional training. She was not certain that she would be in favor of getting rid of the CEUs entirely.

Mr. Dae Kim stated he would like to see more inspections of the machine itself, at least annually, where the inspectors or the drycleaners are forced to inspect their machine in detail. He annually hires an individual to come out and inspect his machine to make certain there are no maintenance issues that can result in a loss of solvent. Mr. Chang Lee replied that drycleaners are currently inspecting their machines very closely as perchlorethylene is very expensive and no one wants to waste any of it. Mr. Kwak agreed, stating he is always checking and listening for strange sounds or smells coming from his drycleaning machine. What he does not feel is beneficial is the need to complete additional paperwork.

Mr. Polak directed the Administrator to put together some procedural modifications for further discussion at the August Strategic Planning meeting.

  REVIEW OF ACTIVITY REPORT AND FINANCIAL STATEMENTS
 

Mr. Eriksen noted that as of May 31, 2013 there were 941 licensed drycleaners compared to 971 in the previous year, 526 insured versus 530, and 224 open claims versus 243.

The Fund balance as of May 31, 2013 reflected a balance of $2,928,754. Year-to-date claim payments total $1,993,537.

Mr. Dae Kim excused himself from the meeting at 11:40 a.m.

  OTHER ISSUES AS PRESENTED
 

Mr. Eriksen stated that the audit report for fiscal year 2012 should be released shortly.

  PUBLIC COMMENT PERIOD
 

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

There being no further business, on a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council voted 4-0 to adjourn the meeting at 11:45 a.m.

   
  Back to Top