MARCH 5, 2019 Meeting Minutes

 

MINUTES
DRYCLEANER ENVIRONMENTAL RESPONSE TRUST FUND
COUNCIL of ILLINOIS

COURTYARD CHICAGO SCHAUMBURG/WOODFIELD MALL HOTEL SCHAUMBURG, ILLINOIS

MARCH 5, 2019

John Polak, Chairperson, called the Drycleaner Environmental Response Trust Fund Council of Illinois meeting to order at 1:14 p.m. A quorum was present. Roll call was taken with the following members present::

Robert Dunham
Jemma Jones
Sung Do Kang
Daniel Kim
Young B. Kim
John Polak (via telephonic conference)

Also present were:

H. Patrick Eriksen, Program Administrator’s Office
Emily Masalski, Legal Counsel
Dr. Juho So, Program Administrator's Office
Yong Kim, Program Administrator's Office

PRELIMINARY BUSINESS

The minutes from the February 12, 2019 Council meeting were reviewed. Mr. Young Kim commented the minutes did not reflect Council approval for Mr. Kang to meet with the drycleaning industry on behalf of the Council to discuss possible legislative changes to the Fund. Mr. Eriksen stated the Council did not give Mr. Kang such authorization. He recently posted to the Council's shared DropBox folder, the November 19, 2018 Council meeting video discussion of this issue. The video reflects no motion was made authorizing Mr. Kang to survey the industry on behalf of the Council. A lengthy discussion ensued regarding this issue. Ms. Jones expressed concern with the minutes reflecting Mr. Steve In's comments regarding Mr. Kang's industry survey. Mr. In should not have been allowed to speak during the Council's discussion of legislative issues. Ms. Jones made a motion to amend the minutes by deleting the following phrase from the third paragraph of page 2 of the draft minutes: "an voiced concern that Mr. Kang's role in surveying the drycleaning industry was inappropriate and a conflict of interest." A lengthy discussion ensued.

Mr. Polak recessed the meeting at 1:42 p.m. The meeting reconvened at 1:49 p.m.

The motion was seconded by Mr. Dunham. The minutes, as amended, passed by a vote of 4-2 with Mr. Dunham, Ms. Jones, Mr. Kang and Mr. Young Kim voting in favor of the motion and Mr. Polak and Mr. Daniel Kim voting against the motion

  APPEAL OF CANCELLATION OF INSURANCE COVERAGE
 

The Spot Cleaners, 1009 West 14th Place, Chicago, IL (site #0003196), requested the Council waive the 60 day notice period to appeal the Administrator's decision to cancel their insurance coverage. Ms. Il Yong Yoo, the owner/operator of the drycleaning facility, was in attendance to discuss her appeal request.

Mr. Sung Kang informed the Council he had assisted Ms. Yoo a long time ago in licensing and insuring her facility but does not remember assisting her with the 2018 insurance issues.

Mr. Eriksen reviewed background information outlined in his Council memo. Ms. Yoo addressed the Council noting her plant manager did not timely follow-up on the licensing requirements which resulted in cancellation of the insurance coverage. She was managing a second drycleaning plant during this time period.

After additional discussion, on a motion by Mr. Dunham and a second by Mr. Young Kim, on a roll call vote, the Council voted 5-0-1 to waive the 60 day notice period to appeal the insurance cancellation. Mr. Kang abstained.

Mr. Young Kim made a motion to reinstate the insurance coverage to July 4, 2018 without a lapse in coverage. The motion was seconded by Mr. Dunham and on a roll call vote, was approved by a vote of 5-0-1. Mr. Kang abstained.

 

OPERATIONAL BUSINESS

  A. Legisltative Update
 

Mr. Eriksen reviewed his Council memo noting two bills have been introduced to extend the Fund's sunset date. SB171 introduced by Senator Martinez extends the license fees and solvent taxes sunset date and the remedial program financial responsibility requirement to January 1, 2030. The bill exempts the Fund from sweeps, administrative charge-backs, and any other fiscal maneuver that would transfer money out of the Fund to any other state fund. Senator Murphy's SB1247 appears to be identical to SB171. The Senate Environment and Conservation committee has scheduled SB171 for hearing on Thursday, March 7, 2019 at 11 a.m.

Representative Tim Butler filed HB2423, which is a "shell" bill on February 13, 2019. The bill currently resides in the Rules committee.

The Council packet included responses received from the three associations regarding their position on SB171, SB1247 and suggested additional legislative changes. In addition, emails were received on February 28, 2019 from Mr. Ted Jung, Illinois Drycleaners Association, and Mr. Kang. Both emails had been sent to the Council members.

Mr. Kang's email included his summary of updated industry data he compiled from informational meetings he held with individual drycleaners and the Illinois Drycleaners Association (IDA). Mr. Eriksen referenced financial projections he prepared using the financial information from the four (4) scenarios prepared by Mr. Kang.

Mr. Kang reviewed his 4 scenarios. Mr. Polak and Mr. Eriksen asked Mr. Kang how he arrived at his cleanup numbers. Mr. Kang requested some additional time to re-review his cleanup projections. The Council suspended further discussion of this issue until Mr. Kang was prepared to continue discussion of his projections.

  APPROVAL OF PROGRAM BILLINGS
 

There were two (2) bills before the Council for their review and approval::

1. Hunter Masalski LLC $ 1,970.00*

Professional legal services for the period of February 1, 2019 through February 28, 2019.

2. Williams & Company Consulting, Inc. $ 65,366.00*

Standard flat fee billing for February 2019, licensing, underwriting, claims processing and site inspections

On a motion by Mr. Young Kim and a second by Mr. Dunham, the bills were approved by a vote of 6-0.

  REVIEW OF MONTHLY ACTIVITY REPORTS AND FINANCIAL STATEMENTS
 

Mr. Eriksen reviewed the monthly activity report for February 28, 2019 noting 549 licenses were in effect at the end of the month compared to 609 licenses as of February 29, 2018. Three hundred sixty eight (368) active dry-cleaning facilities have pollution liability insurance coverage with the Fund. Open claims totaled 148 with estimated reserves of $15.9 million.

  OTHER ISSUES
 

The next Council meeting is scheduled for Friday, May 10, 2019 beginning at 1 p.m.

In response to a question Mr. Young Kim had asked at the February 12, 2019 meeting regarding whether Bethel Cleaners was required to conduct additional intrusive testing in order to reapply for insurance coverage, Mr. Eriksen reported additional testing was not required.

Ms. Masalski addressed the Council reminding them they needed to complete training on the Open Meetings Act and the Freedom of Information Act. She requested Council members notify her when they have completed the training.

  OPERATIONAL ISSUES
  A. Legisltative Update (Continued)
 

Mr. Kang stated he needed more time to research the differences in the cleanup numbers for his 4 scenarios. Mr. Polak commented the Council should not share Mr. Kang's information with the legislature until he completes his research on the cost differences. Mr. Kang disagreed, stating he wished to share his information with the legislature. The Council conducted a lengthy discussion of what information to present to the legislature.

Ms. Sue Kratz, Executive Director of the Illinois Professional Drycleaners and Launderers Association, stated she has been a party to legislative discussions for the past 2 years regarding the Fund and the primary message from legislators has been to extend the sunset date for 10 years to keep it alive, and then seek changes to address the long term solvency. She also referenced the proposed language to address fund sweeps.

Mr. Polak recommended drafting a letter under his name to forward the three association responses to the senators who introduced the legislation. Ms. Jones suggested one or two of the Council members go to Springfield with the responses and discuss them with the legislators. Mr. Dunham suggested meeting with legislators requesting the extension but informing them of the problem of declining drycleaners and revenue. Mr. Polak commented that approach may result in the legislature declining to take any action and letting the Fund die.

Ms. Masalski confirmed with Mr. Polak he was requesting Council approval for him to send a letter to Senator Martinez and Senator Murphy communicating the Council's support of their bills to extend the Fund's sunset date and attaching the three association responses.

Mr. Polak made a motion to send a letter under his signature to the two senate sponsors. The letter would include the Council's survey request and the three association responses to the survey.

Mr. Kang requested the Council send his summary information. He is concerned that almost half of the sites getting cleanup benefits are no longer required to pay into the Fund.

Ms. Masalski summarized Mr. Polak's request. Mr. Daniel Kim seconded the motion. Additional discussion ensued. On a roll call vote, the motion passed by a vote of 4-2 with Mr. Dunham, Ms. Jones, Mr. Daniel Kim and Mr. Polak voting in favor. Mr. Kang and Mr. Young Kim voted against the motion.

Mr. Polak said the letter could reference the Council has additional information that might be helpful as a resource if the senators would like to have it. This would give Mr. Kang additional time to clarify his financial projections to address the questions from Council members, Mr. Polak and Mr. Daniel Kim. Mr. Polak expressed concern that disjointed or inaccurate information provided by the Council could be detrimental to getting the Fund's sunset date extended.

Mr. Dunham made a motion to include as an addendum to Mr. Polak's letter Mr. Kang's two page summary of his survey information. Mr. Young Kim seconded the motion. Ms. Masalski noted a disconnect exists between Mr. Dunham's motion and Mr. Polak's comments. Mr. Dunham has just made a motion to include Mr. Kang's summary information in the letter but Mr. Polak has stated he would include a paragraph in his letter indicating additional survey information is available. Mr. Dunham amended his motion to delete submittal of Mr. Kang's survey information from the letter but instead include a reference to the availability of additional survey information. The amended motion was seconded by Mr. Young Kim. On a roll call vote, the motion passed by a vote of 6-0.

Ms. Jones made a motion that if the Fund's sunset date is extended, the Council shall meet and determine a plan of action to complete all current cleanups within ten years. The motion was seconded by Mr. Dunham. The motion passed by a vote of 6-0.

Mr. Kang made a motion that if the Fund's sunset date is extended, the Council re-review existing rules and determine if they need revision or if new rules are needed. Mr. Dunham seconded the motion and it passed by a vote of 6-0.

  OTHER ISSUES (Continued)
 

Mr. Polak shared that Council member John Bredenkamp passed away a few days ago. Mr. Bredenkamp was a person of high integrity who contributed greatly to the Council and the drycleaning industry and will be missed. Mr. Polak will send a letter of thanks and a plaque to Mr.

Bredenkamp's family in recognition of his service to the Council and the drycleaning industry.

  PUBLIC COMMENT PERIOD
 

Mr. Polak asked for public comment. Sue Kratz requested when the Council does meet to develop a plan to address the financial shortfall, that the industry associations and compliance programs be invited to participate as they have a wealth of industry knowledge and experience to contribute to this discussion.

  ETHICS TRAINING
 

Mr. Eriksen reviewed with the council the 2019 Ethics Training material for Appointees to State of Illinois Boards. Special emphasis was placed on the topics of:

  • Conflicts of Prohibited Political Activities
  • Prohibited Offer or Promise
  • Ban on Gifts from Prohibited Sources
  • Official Misconduct, Bribery and Solicitation Misconduct
  • Registered Lobbyist
  • Reporting Violations
  • State Agency Policies
Ms. Masalski requested Council members contact her for guidance on communications such as group emails to avoid any ethical concerns.

  CLOSED SESSION
 

There were no issues for Closed Session

There being no further business, on a motion by Mr. Dunham and a second by Mr. Daniel Kim, the Council meeting adjourned at 3:44 p.m

Respectfully submitted,

H Patrick Eriksen

Program Administrator
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