March 18, 2004 Meeting Minutes

	MINUTES
	DRYCLEANER ENVIRONMENTAL RESPONSE TRUST FUND COUNCIL of ILLINOIS HOLIDAY INN SELECT NAPERVILLE, ILLINOIS MARCH 18, 2004
	John Polak, Chairperson, called the Drycleaner Environmental Response Trust Fund Council of Illinois meeting to order at 10:11 a.m. A quorum was present. Roll call was taken with the following members present:
	John Bredenkamp Augustine Chung (via telephonic conference) Dr. Andrew Chweh David Gibson Young B. Kim Jerry Lewicki John Polak Also present were: H. Patrick Eriksen, Program Administrator's Office John McCarthy, Program Counsel C. Michael Perkins, Program Administrator's Office Juho So, Program Administrator's Office
	PRELIMINARY BUSINESS
	The minutes from the February 3, 2004 Council meeting were reviewed. On a motion by Mr. Bredenkamp and a second by Dr. Chweh, the minutes were approved by a vote of 7-0.
	APPEAL OF LICENSE TRANSFER
	Mr. Eriksen reviewed with the Council background information on the appeal hearing scheduled for facility #0001727, Finesse Cleaners of Chicago, IL. Mr. Eriksen noted Finesse Cleaners is a drycleaning facility that has been in operation since 1987 and has been licensed since 1998 by former operator Mr. Dong J. Sin. In March 2003, Mr. Sin sold Finesse Cleaners to Mr. Yong S. Park. In August 2003, the Administrator became aware that Mr. Sin had sold the facility to Mr. Park in the first quarter of calendar year 2003. The Administrator's office informed Mr. Park of the procedures to transfer the 2003 license at the facility from Mr. Sin to Mr. Park. The Administrator's office received the transfer papers in early November 2003 but did not receive the original 2003 license from either Mr. Park or Mr. Sin. In accordance with Council policy, Mr. Park was informed that he needed to pay $1,000 for the calendar year 2003 license in as much as we could not transfer the license from Mr. Sin to Mr. Park because we did not receive the original 2003 license issued to Mr. Sin. In January 2004, we received a certificate for this facility that was represented as being the original license issued for the facility for calendar year 2003. This document was not an original and was not accepted as such by the Administrator. On March 2, 2004, the Administrator received a letter from Gina Park, daughter of Mr. Park, appealing the Council's requirement to pay the additional $1,000 license fee for the facility. Ms. Park indicated that the original document was accidentally sent to the Department of Revenue, who was unable to return the documents to the Parks. Mr. Eriksen noted that Ms. Gina Park was in attendance at the meeting to present the appeal on behalf of her father. Ms. Park represented to the Council that the issue of not being able to return the original license was her error. She had been given the documents by her father and was told to send them to the Fund and inadvertently sent them to the Department of Revenue, who was not able to locate the documents and return them to her. She is asking the Council for leniency in assessing another $1,000 license fee on this facility in as much as it was her error. Dr. Chweh asked if Mr. Sin had purchased a new facility. The Administrator replied that he had and that a separate license had been issued for that facility. On further discussion by the Council, on a motion by Mr. Lewicki and a second by Dr. Chweh, the Council voted 7-0 to waive the requirement for an additional $1,000 license fee for Mr. Park for this facility for calendar year 2003.
	OPERATIONAL ISSUES
	A.	Enforcement Action Against Unlicensed Drycleaning Facilities:
		Mr. Eriksen reviewed with the Council that since the inception of the Fund, the Council has attempted to work closely with the Illinois Department of Revenue (IDOR) in identifying unlicensed drycleaners that are actively operating a retail drycleaning facility in the state and also identifying the solvent suppliers that are providing drycleaning solvent to these unlicensed drycleaners. As the Council has identified these unlicensed facilities and solvent distributors, their names have been referred to the Illinois Department of Revenue for audits. The Administrator has had recent discussions with IDOR regarding possible causes of actions to bring against unlicensed drycleaners and solvent suppliers selling to unlicensed drycleaners. IDOR has verbally represented that they will have their audit division more aggressively pursue solvent suppliers who are reported to sell solvent to unlicensed drycleaners. In addition, their legal counsel suggested the Council ask the Attorney General's assistance in seeking enforcement action against unlicensed drycleaning facilities. Mr. Eriksen had a recent conversation with the Attorney General's office regarding their possible assistance on enforcement action against unlicensed drycleaning facilities. The initial response was favorable. He requested the Council's approval to move ahead and pursue with the Attorney General's office what causes of action they could assist the Council in, such as a cease and desist order, which would result in the filing of a lawsuit against the drycleaner or physically shutting down their facility until the drycleaner operator comes into compliance with the Act. It was the consensus of the Council that everyone who is required to by law should be licensed and paying the required fee so one drycleaner does not have an unfair economic advantage over another drycleaner. On a motion by Mr. Bredenkamp and a second by Dr. Chweh, by a vote of 7-0, the Council authorized the Administrator to continue discussions with the Attorney General's office in looking at options at how they may assist the Council in enforcement actions against unlicensed drycleaners.
	B.	Policy Issue - Determination of Facility Status for Determining Level of Remedial Claim Benefits:
		Mr. Eriksen reviewed with the Council that the Act states under Section 40 (h) Remedial Action Account: "A drycleaning facility will be classified as active or inactive for purposes of determining benefits under this section, based on the status of the facility on the date a claim is filed." Mr. Eriksen reviewed an example with the Council and noted that their office had received a claim form in December 2003 on a drycleaning facility that was licensed as an active drycleaning facility and had Fund insurance coverage in effect. In January 2004, during the licensing process for this facility, we received a letter stating they last operated the drycleaning machine on September 29, 2003. A telephone conversation between the Administrator's staff and the facility manager indicated that the machine has not been used at all since September 2003 because the drycleaning machine seemed not to be operating properly. The facility manager indicated that they had been taking their customer's clothes to another drycleaning facility for cleaning but it is their intention to fix the machine and/or replace it as soon as they have enough money. Subsequently, the Fund received another letter from the facility manager stating that prior to September 29, 2003, the drycleaning machine was operated daily. The letter stated "However, during the months of October, November and December, the machine was only run about once per week because it is quite old and causing problems to operate properly. The perc is not recovered or recycled properly. In addition, the filter does not drain as it should." The issue before the Council is do they wish to treat a remedial claim filed during the time period when a facility is actively licensed and has current insurance coverage as an active drycleaning facility remedial claim even though the machine is not operating and the operator cannot give a definitive timeframe for repairing or replacing the machine? The Administrator offered the following options for Council consideration: 1. Accept the claim as an active remedial claim because the facility was licensed and insured on the date the facility filed the claim and because the machine is only temporarily "out of service" and will be placed back in service as soon as it is repaired; or 2. Classify the claim as an inactive remedial claim based on the initial representation by the drycleaning facility manager that the facility has not been conducting drycleaning at the facility since September 29, 2003, which is prior to the filing date of the claim; or 3. Classify the claim as an active remedial claim because the facility was licensed and insured but give the facility owner/operator a set timeframe to repair and/or replace the machine and begin active operations at the facility or else the claim will be classified as an inactive remedial claim. The Council then conducted a lengthy session regarding the definition of an active facility. Several Council members indicated that it would be their interpretation that if a facility was licensed as being active, had insurance coverage in place at the time, operated a drycleaning machine at any time during that period and subsequently filed a claim during that calendar year, that the claim be considered an active claim for remedial benefits. Mr. Polak expressed that this may be an issue that the Administrator should bring to the Council on a case-by-case basis for their review of the facts and determination. After additional discussion by the Council, on a motion by Mr. Lewicki and a second by Mr. Chung, the Council, by a vote of 4-2, authorized the Administrator to bring these individual determinations to the Council for their review and guidance. In addition, Mr. Polak asked that Mr. Eriksen and Mr. McCarthy develop a set of criteria for defining active facilities for review by the Council at a future meeting.
	C.	Policy Issue - Reimbursement of Remedial Action Costs at Facilities Eligible to Obtain a No Further Remediation Via Institutional Controls:
		Mr. Eriksen reviewed with the Council that they previously established the program's remedial claim policies and procedures and administrative rules based on the premise that the Fund would reimburse drycleaners for preapproved eligible claim expenses that are determined to be the most cost effective in obtaining a No Further Remediation (NFR) letter at the drycleaning facility. Page 5 of the claim kit states "Cost to evaluate the extent of the contamination, or to clean it up, must be approved by the Fund in advance, except in emergency situations. It is your responsibility to demonstrate that the cleanup costs you incur are or were necessary in order to achieve cleanup of the property as required by the Illinois EPA and the Fund. Costs to clean up the property beyond what is required by the Illinois EPA and the Fund will not be recognized." This statement summarizes the Council's intent only to reimburse for the most cost effective cleanup to obtain an NFR letter for the facility. Mr. Eriksen noted that he just became aware of a situation in which an active drycleaning facility will probably be able to obtain an NFR letter from the Illinois EPA utilizing an institutional control instead of actively remediating the contaminated soil and groundwater. The remedial objectives report for this facility is in the process of being completed but has not yet been submitted to Illinois EPA for their review and comments. The owner of the facility is in the process of completing plans to raze the drycleaning facility and construct a new facility at the same location. Razing of the old facility and construction of the new will result in the contaminated soil being disturbed and in accordance with IEPA regulations, to be remediated. For this particular claim, the estimated quantity of soil that would require mediation is approximately 50 tons. The excavation and disposal of contaminated soil at a hazardous waste landfill is approximately $25,000. All remediation costs are subject to a second deductible of $10,000 that is payable by the claimant. The issue before the Council is do they wish to reimburse an eligible claimant for remedial action costs incurred in the razing/major renovation of the drycleaning facility in the normal course of business if the drycleaning facility could obtain an NFR letter through the implementation of institutional controls? The Administrator identified the following options for the Council's review and discussion: 1. Reimburse the minimal costs necessary to obtain an NFR letter. In this example, it would probably be those costs necessary to implement institutional controls (assuming IEPA approves of the use of institutional controls); or 2. Reimburse remedial action costs incurred at the facility if the reason for the incurrence of the remedial action costs was due to a razing/substantial renovation of the facility in the normal course of business. The costs would only be eligible for reimbursement if they were incurred at the time that the claimant was developing their remedial action objectives report for the purpose of obtaining an NFR. Major razing/renovation would consist of a complete and/or partial demolition/remodeling of the facility in which concrete or the sub-surface structure of the facility must be modified (or removed) in such a manner that disturbs the contaminated soil at the drycleaning facility. Examples would be the complete demolition and reconstruction of the drycleaning facility or the removal of existing concrete and the placement of new footings to support general renovation of the drycleaning facility. Mr. Eriksen noted if the Council adopts option #2, it would be his recommendation that each claim meeting this criteria be brought to the Council for their review of remedial action costs as outlined in a memorandum prepared by the Administrator. The Council conducted a discussion of the issue with Mr. Bredenkamp noting that the intent of the Fund is to pay for the remediation of contamination at a drycleaning facility. It was his opinion that if contamination was encountered and must be addressed during the major renovation or razing of a facility prior to the issuance of an NFR letter, that the Fund should pay for those costs necessary to accommodate the razing/renovation, provided that the total costs are less than the maximum benefits allowed under the law. Mr. Lewicki concurred with Mr. Bredenkamp's comments, stating that many drycleaners will be facing this situation in the future and only reimbursement of costs necessary to obtain an institutional control will leave many drycleaners paying substantial costs that should be Fund eligible. After additional discussion, on a motion by Mr. Lewicki and a second by Mr. Bredenkamp, the Council voted 6-0 to adopt the Administrator's option #2 whereby remediation costs incurred during a razing/major renovation project would be eligible for reimbursement on a case-by-case basis. Mr. Gibson abstained as he had a conflict of interest.
	D.	Legislative Updates:
		Mr. Eriksen briefly updated the Council on several pieces of legislation that may impact the Fund. He noted Senators Sullivan and Watson co-sponsored a piece of legislation in the November 2003 veto session designated as SB2105, which would modify the Act as follows: 1. Eliminates the solvent tax on green solvents; 2. Defines green solvents to include trademark products such as Rynex, Green Earth, DF2000 and EcoSol. It also defines the latest generation of hydrocarbon solvents as green solvents; 3. Creates new licensing categories for users of green solvents that elect not to make a claim against the Fund. HB2735 included the technical correction to the Fund's fiscal 2004 appropriation. It was passed by the legislature and sent to the Governor on February 13th for his signature. The Governor signed the bill into law on March 5, 2004. Mr. Eriksen reported the Fund has requested an appropriation of $8 million for fiscal year 2005. Mr. Polak and he testified before the Senate Appropriations Committee in February as to the need of additional funds for fiscal year 2005. The budget request appeared to be favorably received. Mr. Ken Sink distributed to the Council a letter on behalf of the Alternative Solvents Coalition regarding SB2105.
	E.	Status of Program Administrative Rule Amendments:
		Mr. Eriksen updated the Council that the Secretary of State published notice of the Council's proposed amendments to the program's general administrative rules on February 13, 2004. The public has until March 29, 2004 to submit comments, questions and requests for copies of the proposed rules. To date, only one request for information has been received by the Administrator. The Joint Committee on Administrative Rules (JCAR) has submitted questions for clarification regarding the proposed rules. The Administrator has reviewed and responded to JCAR's questions and these responses are currently under review by JCAR. The Administrator expects that the revisions to the administrative rules will go into effect some time during the summer.
	Mr. Polak recessed the Council meeting at 11:22 a.m. and reconvened at 11:35 a.m.
	APPROVAL OF PROGRAM BILLINGS
	Mr. Eriksen noted that there were two (2) bills before the Council for their review and action. The bills for Council review are as follows:
	1. Williams & Company Consulting, Inc $ 78,955.00 Standard flat fee billing for February 2004, licensing, underwriting, claims processing and site inspections.
	2. John J. McCarthy $ 1,425.00 Professional legal services to the Council for the period of January 22, 2004 through March 5, 2004.
	On a motion by Mr. Bredenkamp and a second by Mr. Gibson, the bills were approved by a vote of 7-0.
	REVIEW OF ACTIVITY REPORT AND FINANCIAL STATEMENTS
	Mr. Eriksen reviewed with the Council that as of February 29, 2004, there were 1,024 drycleaners that had renewed their license for calendar year 2004. There were 880 insured facilities and claim reserves exceeded $15 million for the first time since the start of the Fund program. Regarding financial statements, he noted that the unreserved Fund balance totaled $6,881,093 and that remedial payments for fiscal year 2004 totaled $1.3 million.
	CLAIM PAYMENTS IN EXCESS OF $75,000
	Master Craft Cleaners - Highland Park, IL Dr. So reviewed with the Council that this facility is one that has been in active remediation, using chemical oxidation as the remediation method. On September 17, 2003, the Council authorized the Administrator to approve up to $59,200 for remediation. Subsequent to the implementation of the system, unexpected (i.e. not pre-approved) costs were incurred to meet the additional requirements requested by the Illinois EPA. The unexpected additional work included a casing material change for the chemical oxidation injection wells from PVC to steel casing. Additional lab costs were needed to further detail metal species, analysis, permitting, soil cutting disposal cost and additional consulting time. Dr. So stated he is requesting the Council to approve additional budget authority in the amount of $21,234.15, which would bring the total approved to date on this facility of $139,448.62. Dr. So indicated that the treatments have been successful and is expected that this facility would receive a No Further Remediation (NFR) letter from the Illinois EPA within the next few months. On a motion by Mr. Lewicki and a second by Mr. Gibson, the Council approved the additional budget authority for work completed at the facility in the amount of $21,234.15 by a vote of 7-0. Norman Laundry & Drycleaning - Decatur, IL Dr. So reviewed the background of this facility with the Council, noting that active remediation will be required for an NFR letter at this facility. He indicated although the remedial cost estimate is yet to be completed, it is expected to be near the remedial cap of $300,000. He reviewed with the Council that to date $87,200 in costs has been approved by the Council. The Administrator is asking for an additional $10,000 in budget authority for additional consulting costs for correspondence with IEPA regarding establishment of a groundwater ordinance and disposal costs to remove contaminated soil. On a motion by Mr. Kim and a second by Mr. Lewicki, the additional $10,000 budget was approved by a vote of 7-0. One-Hour Cleaners - Palatine, IL Mr. Eriksen noted that the Administrator is requesting waiver of the three bid process to prepare the remedial action plan. Mr. Perkins reviewed the history of the site with the Council, noting that there is an immediate health and safety issue at the facility as the city of Palatine forced the drycleaner to turn off a sump pump in the basement of the facility as the water being pumped out of the basement contained higher than acceptable levels of PCE and TCE. The impacted water accumulating in the basement has generated a health and safety issue and the property owner has raised the issue of litigation because they cannot rent the space over the part of the basement that contains the PCE tainted water. Mr. Perkins noted it has been the policy of the Council to require that three bids be obtained for preparation of remedial action plan; however, in an effort to expedite the process and potentially remove the health and safety issue and mitigate the litigation issue, the Administrator is requesting that the Council approve a variance to the three bid policy and allow the current consultant to prepare a RAP without waiting for additional bids. The estimate to prepare the RAP will be approximately $6,000 and would address filling the basement with concrete to a level that is above the highest seasonal groundwater elevation. This would successfully eliminate the exposure to solvent vapors trapped in the basement and the possible ingestion of impacted water. After discussion by the Council, on a motion by Mr. Lewicki and a second by Mr. Kim, the Council approved waiving the three bid process for this specific cleaner, by a vote of 6-1.
	OTHER ISSUES AS PRESENTED
	Mr. Kim commented on the Council's policy to waive the three bid requirement. He inquired what back-up data the Administrator maintains that should allow the drycleaner to get only one bid for site investigation costs versus three bids. Mr. Eriksen stated that it was the Council's determination not to require three bids on site investigations unless the costs were inappropriate. The Administrator has a good feel for the appropriateness of site investigation costs and periodically updated an internal document on those costs. Mr. Kim would like the Administrator to present at the next meeting any backup data supporting why only one bid should be reviewed. Discussion focused on the review of the appropriate remedial technologies. Mr. Ken Bacus and Mr. Bob Soni, environmental consultants, noted that Illinois EPA is becoming more stringent with information requests and feels that requiring more than one bid on the site investigation costs would be not cost effective. Mr. Kim stated that he would like the Council to review and approve three bids for each cost approval phase of a claim. Mr. Bredenkamp stated that this issue had been reviewed several months ago by the Council and it was determined that that was not appropriate, as the Council did not have the expertise nor the time to timely review the bids. Mr. Gibson noted that bid review is one of the things that the Council is paying the Administrator to do. Mr. Polak stated that he would ask the Administrator to begin tracking on future remedial projects, at least for the next 20 or so sites, the three bid costs that were submitted for remedial action including the proposed technology so that the Council could review and determine if further review on their part was warranted.
	PUBLIC COMMENT PERIOD
	Mr. Bob Soni of Northern Environmental stated that he did not believe it was necessary to have three bids for site investigations because the environmental consultant feels the guidelines are already established. He noted in the past in terms of expediency, it was difficult for drycleaners to get three bids. If the Council reverts back to the three bid process on site investigations, it may be harder for consultants to work in the industry as it would ultimately increase their costs and would delay the site investigation process. Mr. Harry Cho commented on maintaining insurance coverage to be eligible for remedial benefits. Mr. Ken Sink commented on the license transfer appeal then stated that he believed the Council should review all of the costs on a site by site basis that are approved. In addition, he related an incident in which he felt that the Administrator's staff was unfairly bureaucratic in the handling of the license renewal at his facility. There being no further business, the Council adjourned at 12:37 p.m.
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