NOVEMBER 29, 2016 Meeting Minutes

 

MINUTES
DRYCLEANER ENVIRONMENTAL RESPONSE TRUST FUND
COUNCIL of ILLINOIS

CHICAGO MARRIOTT NAPERVILLE
NAPERVILLE, ILLINOIS

NOVEMBER 29, 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
Young B. Kim
Paul Kwak
Jerry Lewicki
John Polak (via telephonic conference)

Also present were:

H. Patrick Eriksen, Program Administratorís Office
John J. McCarthy, Program Counsel
Yong Kim, Program Administratorís Office

  PRELIMINARY BUSINESS
 

The minutes from the October 13, 2016 Council meeting were reviewed. On a motion by Mr. Lewicki and a second by Mr. Bredenkamp, the minutes were approved by a vote of 7-0.

  NDI COMPLIANCE PROGRAM DECERTIFICATION HEARING
 

Mr. Eriksen noted several Council members have requested to view the administratorís videos of the July 23, 2015 and August 27, 2015 meetings. The July 23, 2015 video was reviewed first. At the conclusion of the video, Mr. Kevin Nelson, attorney for NDI, stated he objected to the viewing of the videos as Judge Flynn had ordered a ďfreshĒ hearing. Mr. Christopher Grant, Assistant Attorney General representing the Council in prior legal proceedings involving NDI, disagreed with Mr. Nelsonís interpretation of Judge Flynnís decision. Judge Flynn had asked to replicate the hearing that was held back on August 27, 2015 but with prior notice given to NDI and providing NDI with a chance to tell their story regarding the events leading up to the August 27, 2015 meeting.

After a brief exchange by Mr. Nelson and Mr. Grant, the decision was left to the Council members if they wished to view the August 27, 2015 video. Mr. Kwak stated he would like to see the video since it had been almost 1 Ĺ years since the August 27, 2015 meeting. He commented it is important for everyone in attendance to understand the questions and comments from that meeting. After comments from several other Council members supporting Mr. Kwakís position, the August 27, 2015 video was shown.

Mr. Polak recessed the meeting for a brief break at 11:52 a.m. The meeting reconvened at 11:59 a.m.

Mr. Eriksen reviewed with the Council the written material highlighted in his cover memo to the Council. The Council had no questions regarding the material. Mr. Nelson addressed the Council and said NDIís intention is to answer questions and clarify issues for the Council, and not be argumentative. He apologized on behalf of NDI for being late with the 2014 site inspections. Mr. McCarthy asked Mr. Nelson if he had any questions of the administrator. Mr. Nelson said he did and proceeded to ask Mr. Eriksen numerous questions about the 2014 site inspections. Mr. Nelson commented as to Ms. Heidi Parkís responsibilities with NDI and spoke to the issue of conditionally approved site inspectors.

Regarding management and structure, Mr. Nelson said there was confusion on this issue. He felt questions regarding the management and structure could have been answered if the right questions had been asked. Mr. Nelson referenced Ms. Park had been spending approximately 80 hours a week working for NDI, but since the birth of her first child, was working only 40 hours a week for NDI.

Mr. Grant asked Mr. Eriksen to confirm the dates the 2014 inspections were received by the administratorís office, which Mr. Eriksen did. Mr. Grant subsequently asked if the inspections submitted matched the list NDI provided the Council in early 2014. Mr. Eriksen replied only 34 inspections matched the original list provided by NDI. Mr. Nelson addressed this issue by noting some drycleaners were refusing inspections and the administratorís office was made aware of this issue. He stated NDI then tried to find drycleaners to inspect to meet their 25% requirement.

Mr. McCarthy asked Mr. Nelson to provide copies of the emails he referenced in his questions.

Mr. Grant referenced the videos and letters where Ms. Park stated she did not have time to work for NDI and had not worked for NDI since August of 2014 and yet Mr. Nelson had just commented Ms. Park was working 40 hours per week for NDI. Mr. Nelson responded Ms. Park was doing work for NDI other than compliance program issues and site inspections. Mr. Nelson referenced emails between Ms. Park and the administratorís office during the summer of 2015 to demonstrate Ms. Park was still involved with NDI.

Mr. Kwak asked several questions about NDIís management, including Mr. Namís management role and his ability to communicate Fund information to the compliance program participants. Mr. Bredenkamp made several comments regarding issues he perceived with the NDI Compliance program. Mr. Polak stated if there was no more evidence, he would like to call for the question.

Mr. McCarthy asked Mr. Nelson if he had any additional information to add, i.e. documents, witnesses, etc. Mr. Nelson apologized again for the site inspections being late and stated NDI wants to work with the Council and believes they can meet the Councilís requirements going forward.

Mr. McCarthy commented he wanted to make certain NDI, and Mr. Nelson, had the opportunity to present all information they wanted to the Council prior to the Council making a decision on the decertification issue. Mr. Nelson indicated they had.

Mr. Grant summarized for the Council the issues of the late inspections and the lack of management structure/organization during 2014 and 2015 and the fact NDI never reapplied for recertification. Mr. Nelson disagreed with Mr. Grantís position on their recertification issue.

Mr. McCarthy again asked if NDI had any additional evidence they wished to present to the Council. Ms. Park addressed the Council noting a variety of personal issues impacted her ability to effectively manage the 2014 site inspection process and the events leading up to the Councilís decertification decision at the August 27, 2015 meeting.

Mr. Daniel Kim commented on Judge Flynnís decision and asked for further insight into the judgeís decision. Mr. Grant responded to the question.

Mr. Bredenkamp made a motion to decertify the NDI compliance program for failure to have approved site inspectors timely complete the 2014 site inspections and demonstrate existence of a management and organizational structure capable of effectively managing and administering a compliance program in accordance with Council requirements. Mr. Lewicki seconded the motion. Mr. Nelson said NDI is requesting a chance to show they can meet the compliance requirements. On a roll call vote, the motion passed by a vote of 5-1-1, with Mr. Bredenkamp, Mr. Daniel Kim, Mr. Kwak, Mr. Lewicki, and Mr. Polak voting yes; Mr. Young Kim voted no; Mr. Kang abstained due to a conflict of interest.

  OPERATIONAL ISSUES
  A. Solvent Classification Ė KTEX Cleaning Solvent
 

Mr. Eriksen referenced his memo included in the Council packet regarding Council classification of a new drycleaning solvent. The new solvent is labeled KTEX Cleaning Solvent and according to the solventís MSDS sheet, the main substance is hydrocarbons which composes in excess of 90% of the total ingredient weight.

On a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council voted 7-0 to classify KTEX Cleaning Solvent as a hydrocarbon solvent for licensing and solvent tax purposes.

  B. Fund Solvency Update
 

Mr. Eriksen reviewed with the Council the direct mail survey results received from licensed drycleaners.  As of November 18th, 156 responses (18% response rate) had been received. Ninety nine (99) responses indicated they did not own/operate a drop store; did not provide wholesale drycleaning services; and did not have any drop stores in the vicinity of their plant.

Fifty seven (57) responses reported:

  1. 16  active plants own/operate 27 drop stores.
  2. 16  active plants providing wholesale drycleaning services to 24 drop stores.
  3. 77  drop stores identified in the vicinity of an operating drycleaning plant.

An additional 40 responses had been received as of November 28, 2016.

Mr. Eriksen reported IDOR does not have a business activity code for drop stores. A review of the City of Chicago business licenses reflected 393 locations had a business license designated “Dry Cleaning – Drop Off Location” and 41 had a business license designated “Dry Cleaning – Drop Off Location/Clothing Alterations”.  Only 18 locations were designated as “Dry Cleaning – Plant on Premises”, which is substantially less than the 130 drycleaning plants the Council has licensed in Chicago.

Mr. Lewicki commented it will be difficult to pass legislation requiring the licensing/registration of drop stores.  Mr. Bredenkamp stated an extension of the Fund’s sunset date is required no matter if the Council pursues legislation to license drop stores because of the Fund’s January 1, 2020 sunset on the license fee and solvent taxes.

After additional discussion, Mr. Eriksen noted he would present several financial projections to the Council at the January 12, 2017 meeting for review and discussion along with updated survey results.

  C. Potential Meeting Dates for Calendar Year 2017
 

Mr. Eriksen suggested the following meeting dates for 2017:

  January 12thThursday
  March 16thThursday
  May 4thThursday
  June 22ndThursday
  August 24thThursday (Strategic Planning)
  October 12thThursday
  December 7thThursday

It was a consensus of the Council the dates are ok as presented and will be posted to the Fund’s website.

  D. Revised Draft Compliance Program Rules
 

Mr. Eriksen reviewed with the Council the revised draft compliance program rules. Changes were made to incorporate the Councilís modifications to the compliance program policies and procedures were highlighted in ďredĒ. There were no comments or suggested revisions from the Council. Once approved by the Council, they will be submitted to the Governorís Office for review and comment. Hopefully they can be filed with the Secretary of Stateís Office and JCAR prior to December 31, 2016. If this is not possible, Mr. Eriksen will file a new regulatory agenda for January 2017 to include this proposed rulemaking.

On a motion by Mr. Bredenkamp and a second by Mr. Young Kim, the draft rules were approved as presented by a vote of 6-1, with Mr. Kang voting ďnoĒ.

APPROVAL OF PROGRAM BILLINGS
 

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

1. Williams & Company Consulting, Inc.    $48,286.00

Standard flat fee billing for October 2016, licensing, underwriting, claims processing and site inspections.

2. John J. McCarthy                             $ 3,272.50

Professional legal services to the Council for the period of October 1, 2016 through November 16, 2016.

On a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the bills were approved by a vote of 7-0.

  REVIEW OF MONTHLY ACTIVITY REPORTS AND FINANCIAL STATEMENTS
 

Mr. Eriksen reviewed the monthly activity report for October 31, 2016 noting 852 licenses were in effect at the end of the month compared to 896 as of October 31, 2015. Four hundred fifty three (453) active dry-cleaning facilities had pollution liability insurance coverage with the Fund. Open claims totaled 175, with estimated reserves of $19 million.

The October 31, 2016 financial statements reflect a fund balance of $1,326,045. Year-to-date claim reimbursement requests approved for payment total $310,948.

  CLAIM PAYMENTS IN EXCESS OF $75,000
 

Mr. Eriksen noted there were three claim payment requests in excess of $75,000 requiring Council review and action.

1. Fox Valley Cleaners, St. Charles, IL; Claim #50043, Site #0002295:

Mr. Eriksen reviewed background information on the facility noting the only remaining work at this facility is removal and closure of 13 monitoring wells and repair of the street and concrete gutters. St. Charles has very strict codes defining how street and gutter repairs are to be made, which has added to the cost of this project. The additional cost to complete these activities is $7,535, including contingency costs.

On a motion by Mr. Lewicki and a second by Mr. Bredenkamp, the Council approved the Administratorís budget request of $7,535 by a vote of 7-0.

2. P&J Cleaners, Oak Park, IL; Claim #50377, Site #0001436:

Mr. Eriksen reviewed background information on the facility noting active remediation is required to address the onsite and offsite contamination. The consultant is proposing 3 chemical oxidant injections with follow-up soil and groundwater confirmation sampling. The projected cost is $185,000, including contingency. The administrator believes at this time the remediation can be completed within the remedial cap of $300,000. The administrator is also requesting waiver of the two bid requirement as the consultant has substantial knowledge of the site conditions.

On a motion by Mr. Lewicki and a second by Mr. Bredenkamp, the Council approved the Administratorís budget request of $185,000 and waiver of the two bid requirement by a vote of 7-0.

3. Best Cleaners, Aurora, IL; Claim #50087, Site #0002587:

Mr. Eriksen reviewed background information on the facility noting active remediation is required to address the contamination. The consultant is proposing using chemical oxidants in conjunction with bioremediation to remediate the facility. The projected cost is $139,100 including contingency. The administrator believes at this time the remediation can be completed within the remedial cap of $300,000. The administrator is also requesting waiver of the two-bid requirement as the consultant has substantial knowledge of the site conditions.

On a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council approved the Administratorís budget request of $139,100 and waiver of the two bid requirement by a vote of 7-0.

  OTHER ISSUES
 

Mr. Eriksen noted the next meeting date is tentatively scheduled for Thursday, January 12, 2017. In addition, the state auditors have completed their field work associated with the FY16 Fund audit.

  PUBLIC COMMENT PERIOD
 

Mr. Polak asked for public comment. There was none.

  CLOSED SESSION
 

Mr. Eriksen noted there were no issues for discussion in Closed Session.

There being no further business, on a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council meeting adjourned at 1:50 p.m.

Respectfully submitted,

H Patrick Eriksen
Administrator

  Back to Top