July 6, 2011 Meeting Minutes

  MINUTES
 

DRYCLEANER ENVIRONMENTAL RESPONSE TRUST FUND
COUNCIL of ILLINOIS

WYNDHAM HOTEL LISLE/CHICAGO
LISLE, ILLINOIS

JULY 6, 2011

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

John Bredenkamp (via telephonic conference)
Young B. Kim
Paul Kwak
Jerry Lewicki
Charles Kwon
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 June 1, 2011 Council meeting were reviewed. On a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the minutes were approved by a vote of 6-0.

  APPEAL OF LICENSE LATE PAYMENT FEES
  A.

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

   

Mr. Eriksen reviewed background information with the Council noting Ms. Nan Su Kelly, owner/operator of A+ Rose Laundry & Dry Cleaners had paid $1,500 for her 2011 license fee on December 30, 2010, assuming she had purchased 50 gallons or less of drycleaning solvent. Ms. Kelly had actually purchased 60 gallons and therefore owed another $750 in license fees, which she paid on February 8, 2011, incurring license late payment fees of $185. Mr. Eriksen noted all previous years’ license fees were paid timely, except for 2010, when the license fee was not paid until March 1, 2010. The Administrator waived the late fees for 2010 as her certified check, which was dated prior to December 31, 2009, had been sent to the Illinois Department of Revenue and was never received.

Mr. Eriksen noted Ms. Kelly was to participate via telephonic conference but she was not on the line. The Council determined they would act on her appeal request at this time.

On a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council voted 6-0 to waive the license late payment fees for 2011 in the amount of $185.

  B

Site #0001842 – Maggi's Cleaners, 554 East Devon Ave, Suite A in Elk Grove Village, IL

   

Mr. Eriksen reviewed background information with the Council noting that Mr. Silo P. Maggi has owned and operated Maggi’s Cleaners since 1998. He paid his 2011 license fee on April 12, 2011, thereby incurring license late payment penalty fees of $505. Mr. Maggi is requesting waiver of the $505 license late payment fees due to the poor drycleaning economy. All previous years’ license fees were timely paid except for calendar year 2001 and 2003, at which time he paid the late fees due.

Mr. Eriksen noted that Mr. Maggi was to be in attendance at the meeting but currently is not. The Council determined they would proceed and act on the appeal.

After discussion by the Council, on a motion by Mr. Kim and a second by Mr. Lewicki, the Council denied Mr. Maggi’s request to waive or reduce the $505 in license late payment fees for calendar year 2011 by a vote of 6-0.

Mr. Maggi subsequently arrived at the Council meeting and made a request to the Council to present his appeal to them. Mr. McCarthy stated that would be possible but the Council would have to rescind their previous motion. On a motion by Mr. Kwak and a second by Mr. Kim, the Council voted 6-0 to rescind their denial of the license late payment fees and allow Mr. Maggi to present his appeal.

Mr. Maggi addressed the Council stating that business has been very bad and businesses are leaving the shopping mall where he is currently located. He is down to one (1) part-time employee plus himself. He noted he has been a resident of this country for over 40 years. He is currently 75 years old and has no money to pay the $505 in license late payment fees and is asking the Council to waive the $505 in late fees.

After additional discussion by the Council, on a motion by Mr. Lewicki and a second by Mr. Kwak, the Council agreed to reduce the $505 in license late payment fees to $100. The motion passed by a vote of 6-0.

  APPEAL OF CANCELLATION OF INSURANCE POLICY
  A.

Site #0002002– Mark of Excellence Cleaners, 614 East Golf Rd in Arlington, IL

   

Mr. Eriksen reviewed background information with the Council noting Mr. Ashok Patel has been the owner/operator of Mark of Excellence Cleaners since January 2011. Mr. Patel paid his 2011 license fee on January 8, 2011, thereby incurring $35 of license late payment fees. A 60-day Cancellation Notice for his Fund issued pollution liability policy was sent to Mr. Patel, noting that coverage would cancel at the end of the 60-day period if the license late payment fees were not paid. On March 7, 2011, Fund staff talked to Dhaval Gosalia, the previous owner/operator who was assisting Mr. Patel in transitioning into the drycleaning business. Mr. Gosalia was informed of what was needed in order to keep the insurance policy in effect and stated he would pass the information on to Mr. Patel. A follow-up telephone call was made to Mr. Patel on March 14, 2011, reminding him of the need to pay the $35 in license late payment fees. The license late payment fees were not received and the insurance cancelled on March 28, 2011. On April 15, 2011, staff received a telephone call from Mr. Gosalia, who wanted to know why the insurance had cancelled because he had mailed all of the required information to our office. He was advised the late fees were never received. Mr. Gosalia reviewed all the mail at the drycleaning facility and found that the documents he had sent to the Fund were returned to the drycleaning facility because he had sent the late fees to the Fund’s old Post Office box number that was no longer valid. On May 19, 2011, the Fund received the $35 in license late payment fees. Mr. Eriksen noted that due to cancellation of the insurance coverage, the remedial program benefits were lost and does the Council wish to reinstate insurance coverage back to March 28, 2011 and reinstate the remedial program benefits for this drycleaning facility? 

On a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council voted 6-0 to allow reinstatement of the insurance policy back to March 28, 2011 and reinstatement of the remedial program benefits.

  B.

Site #0001026– APS Cleaners, 4200 West 6th Street in Chicago, IL

   

Mr. Eriksen stated prior to today’s meeting he had a telephone call from Mr. Joung Suk Kim, the owner/operator of APS Cleaners. Mr. Kim is out of the country and had just received notice of the appeal hearing set for today. Mr. Eriksen informed Mr. Kim his hearing would be deferred until the next Council meeting.

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

Monaghan Corporation, Des Moines, IA:

   

Mr. Eriksen reviewed background information with the Council noting that effective January 1, 2010, legislative changes to the Drycleaner Environmental Response Trust Fund Act provides the Council with 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 who sells or transfers drycleaning solvent to an operator of a drycleaning facility that is not licensed by the Council (reference 415 ILCS 135/69). He reviewed notifications provided to the solvent distributors regarding this change in legislation and the Council’s policy and administrative rules stating that any person who sells or transfers drycleaning solvent to an unlicensed drycleaning facility will be subject to a civil penalty of $500 for the first violation and a civil penalty of $5,000 for the second and subsequent violation.

Monaghan Corporation, headquartered in Des Moines, IA, was assessed civil penalties totaling $5,500 on March 8, 2011 by the Administrator for delivering solvent to two (2) unlicensed drycleaners in January 2010, prior to the facilities being licensed. On March 23, 2011, another civil penalty of $5,000 was assessed for delivering solvent to an unlicensed drycleaner in February 2010. On April 11, 2011, yet another civil penalty of $5,000 was assessed for delivering solvent to an unlicensed drycleaner in January 2010. On March 17, 2011, Monaghan Corporation appealed the civil penalties to the Council. In their appeal, they raise the issue that the Drycleaner Environmental Response Trust Fund Act states that a license issued pursuant to 415 ILCS 135/60 would be valid for one (1) year from the date of issuance and that the two (2) civil penalties assessed in the March 8, 2011 billing by the Administrator are invalid because in both instances, 12 months had not passed from the time the 2009 license was issued for each of these facilities and the January 2010 solvent deliveries were made. Monaghan Corporation stated that although the Council clarified in their administrative rules that the license period was January 1st through December 31st of each year, Monaghan Corporation believes this is in direct conflict with the statute and when a conflict exists, the statute takes precedence over the administrative rule.

Mr. Eriksen noted the third civil penalty assessed on March 23, 2011 involves a drycleaner who was initially licensed on January 7, 2009 but subsequently did not renew their 2010 license until March 17, 2010. Monaghan Corporation delivered solvent to this drycleaner on February 10, 2010, which was over 13 months since the issuance date of the 2009 license. Mr. Eriksen noted Monaghan Corporation’s argument presented regarding the March 8, 2011 assessment is not valid in respect to this civil penalty assessment. A fourth civil penalty assessed on April 11, 2011 involves a drycleaner who renewed their 2009 license on June 16, 2009 and their 2010 license on May 27, 2010. Monaghan Corporation delivered solvent to this drycleaner on January 7, 2010.

Mr. Eriksen stated from a practical perspective, a solvent distributor can only determine if the drycleaner has a valid license via two (2) means. The first is to actually observe the license at the drycleaning facility. The second verification process is for the solvent distributor to go to the Fund’s web site and check to see if the drycleaner is listed on the web site as having a current license. Mr. Eriksen referenced that in 1999, 2002 and 2003, the Administrator’s office did a mailing to solvent distributors informing them on the license expiration date and instructing them how to check if the drycleaner has a valid license.

Ms. Cathy Anderson, representing Monaghan Corporation, addressed the Council. She indicated to the Council she is not a lawyer but the appeal letter had been prepared by one, which she had signed. She distributed handout information to the Council members, including a copy of the licenses related to the civil penalty assessments. Ms. Anderson stated that regarding the third civil penalty assessment, Monaghan Corporation deserved the penalty as the solvent delivery was made 13 months since the issuance date of the 2009 license. However, the other three (3) penalties should be waived as the administrative rule established by the Council conflicts with the Trust Fund statute.

Mr. Polak asked Ms. Anderson how does Monaghan Corporation determine they were licensed when they deliver the solvent. Ms. Anderson replied that they would look at the Fund’s web site to see if the drycleaner is listed as licensed. In two (2) of the instances she stated their solvent was delivered but the solvent delivery driver did not pump the solvent into the machines. She stated their invoice should be modified to reflect whether the solvent has been delivered or just pumped. She asked how does the Council interpret that for licensing purposes the difference between solvent delivered and solvent pumped. Mr. McCarthy stated the delivery date is the key date, as the Council has no idea or means of determining when the solvent is pumped into the drycleaning machine. Ms. Anderson commented that now Monaghan Corporation does get copies of the license prior to solvent delivery. Mr. Bredenkamp noted the date on the license Ms. Anderson has referred to on the license does not state “date of issuance.” Ms. Anderson replied that Monaghan Corporation assumed it was the issuance date and her assumption was confirmed with the Administrator’s staff.

After addition discussion by the Council, on a motion by Mr. Bredenkamp and a second by Mr. Kim, the Council voted 6-0 to deny waiver of the $15,500 in civil penalties for Monaghan Corporation for delivery of drycleaning solvent to unlicensed drycleaners. Mr. Eriksen informed Ms. Anderson she would receive written confirmation of the Council’s denial of the appeal request and Monaghan Corporation can 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    $1,780.00  
    Professional legal services to the Council for the period of May 17, 2011 through June 30, 2011.  
  2. Williams & Company Consulting, Inc $66,245.00  
    Standard flat fee billing for June 2011, licensing, underwriting, claims processing and site inspections.  
 

Mr. Eriksen hand delivered Williams & Company’s bill to the Council members this morning.

On a motion by Mr. Lewicki and a second by Mr. Bredenkamp, 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 May 31, 2011, 1,024 drycleaners were licensed. As of June 30, 2011, that number is 1,064; insured sites as of May 31, 2011 total 548. Total open remedial claims are 265 with estimated reserves to complete cleanup of $29.6 million.

The Fund balance as of May 31, 2011 was $2,384,813. Year-to-date claim payments total $2,607,080.

  CLAIM PAYMENTS IN EXCESS OF $75,000
 

Mr. Eriksen noted there were two (2) claims in excess of $75,000 requiring Council review and approval..

  A. Iverness Cleaners, Palatine, IL - Claim #50498, Site #0001825:
   

The Administrator is requesting budget approval for $133,558 in remedial action plan implementation costs and waiver of the two bid rule. He noted the site has been fully released for funding. A review of background information indicates the contamination has been fully delineated at the facility and a pilot study for chemical oxidation was conducted which was successful in reducing the chemicals of concern. The proposed budget of $133,558 is for full scale remediation at the facility which includes BIOX injection event followed by post injection soil sampling and groundwater sampling.

On a motion by Mr. Lewicki and a second by Mr. Kwon, the Council voted 6-0 to approve the budget request and waiver of the two (2) bid requirement.
  B. Art Cleaners, Tinley Park, IL - Claim #50282, Site #0001706:
   

Mr. Eriksen noted there are three (3) separate issues associated with this claim for Council review and action. They are:
1)  Budget approval for $64,729 in remedial action costs and waiver of the two (2) bid rule;
2)  Immediate release of funding for the proposed $64,729 in remedial action costs; and
3)  Release of funding to reimburse the environmental consultant for $6,524.70 of approved remedial activities that exceeded the $25,000 of partial funding the Council released on March 5, 2009.

Mr. Eriksen reviewed background information on the facility noting that the consultant was initially hopeful to obtain a NFR letter for the facility without active remediation; however, modeling indicated that contamination may move off site to an adjacent property. The adjacent property owner refused to provide an environmental land use covenant, thus requiring remediation to eliminate the possibility of off-site migration of the contamination via groundwater.

Regarding issue #1, on a motion by Mr. Lewicki and a second by Mr. Kim, the Council voted 6-0 to approve the budget request in the amount of $64,729 to do additional remediation to eliminate the possibility of the groundwater contamination moving off site.

Regarding issue #2, on a motion by Mr. Lewicki and a second by Mr. Kwon, the Council voted 6-0 to provide immediate funding for the $64,729 budget approved.

Regarding issue #3, on a motion by Mr. Lewicki and a second by Mr. Kim, the Council voted 6-0 to release $6,524.70 in additional funding so the environmental consultant could be paid for cleanup work already performed at the facility.

  OTHER ISSUES AS PRESENTED
 

Mr. Eriksen noted the next Council meeting is tentatively scheduled for Wednesday, August 24, 2011. This is the day-long Strategic Planning meeting. Mr. Kwak requested the meeting not start before 10:00 a.m.

Mr. Eriksen indicated the Governor has not yet signed the Council’s legislation (HB1953) or HB2777, which also modifies the Drycleaner Environmental Response Trust Fund Act.
  PUBLIC COMMENT PERIOD
 

Mr. David Kay of Laicon publically thanked the Council for providing immediate funding for Art’s Cleaners at Tinley Park.

There being no further business, on a motion by Mr. Bredenkamp and a second by Mr. Lewicki, by a vote of 6-0, the Council meeting adjourned at 11:04 a.m.

   
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