March 30, 2005 Meeting Minutes

	MINUTES
	DRYCLEANER ENVIRONMENTAL RESPONSE TRUST FUND COUNCIL of ILLINOIS HOLIDAY INN - BOLINGBROOK BOLINGBROOK, ILLINOIS MARCH 30, 2005
	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 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 23, 2005 Council meeting were reviewed. On a motion by Mr. Bredenkamp and a second by Mr. Gibson, the minutes were approved by a vote of 4-0.
	APPEALS
	A.	Appeal of Cancellation of Insurance Coverage- Olympic Cleaners
		Mr. Eriksen reviewed background information noting that Mr. Chong K Pak is the owner/operator of Olympic Cleaners, located at 10225 West Roosevelt Rd in Westchester , IL . The facility had maintained pollution liability insurance coverage with the Fund since June 23, 2000. Mr. Pak failed to pay the second semi-annual installment premium that was due on December 23, 2004 . The 10-day Cancellation Notice for failure to pay the installment payment of $700 was sent out via Certified Mail on December 27, 2004 and was received by Mr. Pak on December 30, 2004 . In addition, a telephone call was made to Mr. Pak on December 28, 2004 informing him that if the insurance premium was not paid by January 6, 2005, his pollution liability insurance coverage would lapse and his facility would no longer be eligible for remedial program benefits. Mr. Pak failed to pay the insurance premium and the insurance cancelled on January 6, 2005 . Mr. Pak had an open remedial claim with the Fund. The facility is no longer eligible for remedial program benefits and Mr. Pak was informed via a letter that his facility is no longer eligible for remedial benefits. Mr. Pak appealed the decision to cancel his insurance to the Administrator, who reaffirmed the initial cancellation decision. Mr. Pak addressed the Council, stating that he had received the Cancellation Notice letter from the Fund and that he had made mistakes due to personal problems. He noted that his father was 89 years old and in a nursing home and his mother was very ill during the time period the premium was due and since he was the only child, it was his responsibility to take care of his parents. He indicated that it was a very difficult time period due to his parents' illness and that is what caused him to not pay the premium on a timely basis. He would like to continue the insurance policy so his facility would remain eligible for remedial program benefits and asked the Council to give him a second chance. Mr. Polak inquired if Mr. Pak had been timely on his insurance payments. Mr. Eriksen replied that a review of the file indicated that payments had been made on time in the past. Mr. Polak inquired about the timeliness of his license payment fees and Mr. Eriksen replied they had been timely except for the first couple of years in which they were paid late but Mr. Pak paid the appropriate late payment penalty fees. Mr. Polak commented because Mr. Pak had been timely with his payments, this was somewhat a different situation than with Mr. Walt Guller, the only other drycleaner owner/operator who had appealed cancellation of his insurance coverage. Mr. Polak reminded the Council that Mr. Guller had been habitually late on his license fee and insurance payments. Mr. Kim voiced concern regarding cancellation of the insurance because family issues (such as taking care of ill parents) are of great importance within the Korean community. Mr. Bredenkamp stated his concern is where does the Council draw the line when appropriate notice is given? He felt it was difficult to make an exception in such a circumstance. Mr. Pak stated he did not realize that the certified letter was a Cancellation Notice as he was not timely opening his mail during this period. The Administrator's records indicated Mr. Pak received the telephone call and was thus personally aware of the pending payment. Mr. Polak summarized there were three (3) notices given to Mr. Pak: a 60-day Billing Notice, a 10-day Cancellation Notice via Certified Mail, and a telephone call from the Administrator's office. After additional discussion, on a motion by Mr. Gibson and a second by Mr. Bredenkamp, the Council voted 5-0 to deny reinstatement of the insurance coverage without a lapse in coverage as requested by Mr. Pak. Mr. Polak noted Mr. Pak can appeal the Council's decision to an Administrative Hearing Officer within a 60-day period. Mr. Ken Bacus of Envirogen stated there is an issue that he would like discussed at some time where the client was insured, the environmental consultant did the work, the insurance subsequently cancelled and the payment for the work was denied as the insurance was cancelled at the time the bill was submitted. Mr. Polak said he would have the Administrator review the issue and place it on the agenda for discussion at a future meeting.
	B.	Appeal of License Late Payment Penalty Fees - Baby-Brite Cleaner
		Mr. Eriksen reviewed with the Council that Baby-Brite Cleaner in Chicago , IL is owned and operated by Arturo Rivero. The facility began drycleaning operations on August 6, 2002 and was licensed by the Fund from August 6, 2002 through December 31, 2002. Mr. Rivero failed to timely license the facility for calendar years 2003 and 2004. Mr. Eriksen reviewed a listing of the dates that renewal information was sent to Mr. Rivero. He indicated the license renewal application was received in the Administrator's office on October 8, 2004. Mr. Rivero paid the license fees for calendar year 2003 and 2004 on September 30, 2004 and incurred late payments as follows: Calendar year 2003   $3,190 Calendar year 2004   $1,365   Total   $4,555 Mr. Rivero addressed the Council stating the main reason that he did not timely pay the 2003 and 2004 license fee was because his drycleaning business was really bad. He stated he had told the Fund in 2003 that he did not have the money to pay the license fee and was trying to sell the business or else he would be closing it down. He did acknowledge that he operated the facility without a license and agreed that some sort of late payment penalty would be appropriate but would request a waiver of some of the penalties. He stated payment of the full amount of the penalties would substantially hurt his business. Discussion was held regarding what should be the appropriate amount of the penalty. Mr. Rivero reiterated that he was trying to sell his business during 2003. Mr. Lewicki inquired if Mr. Rivero could pay the penalties in installments. Mr. Eriksen replied yes, the Council's policy is that any penalties in excess of $1,000 can be paid over 12 months in equal monthly installments. After additional discussion by the Council, Mr. Bredenkamp made a motion to assess one-half of the late payment penalties, which would be $2,277.50. The motion was seconded by Mr. Lewicki. On a roll call vote, the motion passed by a vote of 3-2, with Mr. Gibson and Mr. Polak voting against the motion. Mr. Polak sympathized with Mr. Rivero's situation but has a concern that the Council is on a very slippery slope if they set a penalty based on the willingness and ability to pay, which he believes is inconsistent with the Council's charge.
	OPERATIONAL ISSUES
	A.	Illinois Environmental Protection Agency Presentation and Discussion of TACO Requirements:
		Mr. Larry Eastep and Mr. Greg Dunn, of the Illinois Environmental Protection Agency, were in attendance and conducted a presentation and led discussion on a variety of issues related to the Tiered Approach to Corrective Action Objectives (TACO). Mr. Dunn reviewed the various TACO requirements, in particular focusing on the requirements for the delineation of soil and groundwater contamination plumes; the evaluation of exposure pathways in soil, groundwater and air; institutional controls and how they are utilized; and what information IEPA reviews in determining whether contaminated soil and groundwater must be removed or could be left in place at the facility. Mr. Dunn addressed a number of questions that had been submitted to him in advance by the Administrator. These questions had been compiled from questions submitted to the Administrator by various consultants. Mr. Polak thanked Mr. Eastep and Mr. Dunn for the presentation and the time they spent answering questions. He felt it was a great opportunity to clarify various issues the Council and public had in regards to testing requirements and determining what contaminated soil must be removed and what can be left in place.
	B.	Statistical Review of Site Investigation Costs:
		Mr. Polak stated he had requested the Administrator pull some additional detail statistics on site investigation costs based on questions raised at the January 2005 Council meeting. Mr. Eriksen reported the Administrator had selected a representative sample consisting of 20 drycleaning facilities. Ten (10) of the facilities have completed the site investigation phase and are currently in the remediation phase. The remaining 10 facilities received a No Further Remediation Letter (NFR) using the Tiered Approach to Corrective Action Objectives (TACO) to obtain the NFR without any active form of remediation. He noted the costs were broken down for comparative purposes between direct and field labor, reporting costs, access and correspondence costs, drilling costs, lab analysis costs and miscellaneous costs. The costs were then analyzed and displayed in an average cost per soil boring/monitoring well. For the 10 drycleaning facilities requiring remediation, the average cost per soil boring/monitoring well was $1,815. For the 10 drycleaners that received an NFR letter with site investigation only, the average cost was $1,661, which is a 9.3% cost differential. This differential was primarily the result of additional lab analysis that was required on those sites requiring additional remediation. He further noted there was a substantial difference in the overall site investigation cost. For those sites requiring remediation, the average cost was $51,965. For those that were able to receive a NFR letter through the utilization of institutional controls, the average cost was $26,191, almost half the cost of those sites going into active remediation. This cost differential is because the level of contamination at the sites requiring remediation was higher and also that a more definitive identification of the contamination plume was needed in order to design an effective remedial action plan.
	C.	Compliance Program Issues-Internet and Video Seminar CEUs:
		Mr. Eriksen noted the Council had requested he review the issue as to whether it was possible to allow continuing education courses for someone viewing a video seminar or participating in an Internet-based seminar and report back to the Council with a recommendation on how to effectively administer such courses. After careful review, the Administrator is making the following recommendations that all video and/or Internet-based seminars must meet the following requirements in order to be approved by the Administrator as being eligible for a compliance program continuing education credit: •  Seminar topic and presentation outline must be reviewed and approved by the Administrator. •  The presenter or author of the seminar material must submit their credentials to the Administrator for review and approval. •  Video seminar length or estimated time to read, review and complete the Internet-based seminar must be at least 50 minutes in length. •  The Internet-based seminar must be presented in both English and Korean. •  The video seminar must be the tape of an actual Council-approved compliance program seminar. The quality of the video and associated audio must allow for the viewer to clearly see and hear the content being covered in the seminar. The acceptability of the video and audio clarity will be determined by the Administrator. This must be done before the video seminar is approved for a CEU. The video must capture the complete seminar from the very beginning through the question and answer session. If the presentation included a translation from English into Korean, the video must include such translation. If the entire presentation was made in English, a translation into Korean or any other language is not necessary. •  The seminar author must develop a list of at least 20 questions relating to the content of the seminar. These questions must be submitted to the Administrator. No more than 10 (50%) of the 20 questions can be designed to be a multiple choice question. At least 10 of the questions must be designed in essay form requiring the participant to write-out the answer in his or her own handwriting. •  The Administrator will send a questionnaire (containing a minimum of 10 questions randomly selected from the list of questions prepared by the seminar author) to each drycleaner at the time they register the video and/or Internet seminar. It is the responsibility of the drycleaner to inform the Administrator he/she has registered for a video or Internet seminar. The seminar questions must be completed and returned to the Administrator upon completion of watching the video and/or viewing the Internet-based presentation. A passing score of 80% must be received in order to receive the one (1) hour CEU. The Administrator will oversee the scoring of all exams. •  The completed course questionnaire must be signed and dated by the individual drycleaner who completed the questionnaire and the drycleaner's signature notarized by a duly authorized Notary Public. Mr. Gibson expressed concern with the subjectiveness that may be associated with at least 50% of the questions being answered by the drycleaner owner/operator in their own handwriting. Mr. Eriksen replied yes, there will be some subjectiveness but the questions should be designed so they are not long essay-type questions, but more that they require the participant to write out the answers, such as what type of operating information is required to be maintained on a weekly basis. Mr. Eriksen further stated he would do the initial review, not only of the questions, but of the grading of the participant's response and felt if there were substantial problems in completing these questions, he would bring the issues to the Council for their review and consideration. Mr. Peter Valessares, representing the Illinois State Fabricare Association (ISFA), stated their organization has recently merged with the Land of Lincoln organization and they have concerns with some of the formats if these are strict requirements. He stated he would prefer the Council view the eight (8) criteria list as guidelines that would allow the individual programs to work with the Administrator in making certain that the seminar as presented, was acceptable. After additional discussion by the Council, on a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council voted 5-0 to accept the Administrator's eight (8) points as guidelines for issuing CEUs for video and/or Internet-based seminars with the evaluation of this program at the end of 12 months.
	D.	Legislative Update:
		Mr. Eriksen reviewed with the Council that he had recently met with the Illinois Department of Revenue (IDOR) and he has drafted new language that they are reviewing which would allow for a credit for the solvent distributors who collect the solvent tax. In addition, he is working with the Attorney General's Office on wording that would strengthen the civil penalties and allow for quicker enforcement of the sale of solvent to unlicensed drycleaners by solvent distributors. Mr. Eriksen provided the Council an update as to the March 16 th Senate appropriation hearing. Questions were raised regarding the license fee structure and fund sweeps. He noted the House appropriation hearing would be held at the end of April. On March 29, 2005, he had met during the day with the Attorney General's Office as they had scheduled seven (7) pre-filing meetings to take action against unlicensed drycleaners who failed to come into compliance with the Trust Fund Act. Three (3) parties attended the pre-filing hearings and have two (2) weeks to provide the Council with additional information. For the four (4) who failed to show up for the pre-filing hearings, the Attorney General's Office is moving ahead with the filing of a complaint (lawsuit) against the drycleaners who did not attend the meetings. Mr. Eriksen noted there is no new legislation pending at this time. .
	E.	Solvent Classification:
		Mr. Eriksen noted the Administrator's office has become aware of three (3) new drycleaning solvents that are being used in Illinois that have not previously been classified as either a chlorine-based or hydrocarbon-based solvent for solvent taxing purposes. The new solvents are as follows: •  Hydroclene •  105 ° Solvent (Crystal Soltex) •  Hydrite 142 Solvent Mr. Eriksen commented that Mr. Bredenkamp had indicated to him prior to today's meeting that he believed that Hydroclene and the 105 ° Solvent were possibly detergents and not actual solvents. Mr. Bredenkamp addressed this issue stating Crystal Soltex only contains approximately 25% hydrocarbons. It is a Laid Law product that would be quite expensive to be used as a primary solvent. He also thought Hydroclene was possibly a detergent but would need to see additional information before making that determination. Mr. Eriksen stated that based on Mr. Bredenkamp's comments, he would request the Council table any further action on the Hydroclene or 105 ° Solvent until the Administrator could get more definitive information as to the composition of the product and its use. Mr. Eriksen did request for the Council to classify Hydrite 142 Solvent as a hydrocarbon solvent. On a motion by Mr. Bredenkamp and a second by Mr. Kim, the Council, by a vote of 5-0, voted to approve Hydrite 142 Solvent as a hydrocarbon solvent for taxing and licensing purposes.
	APPROVAL OF PROGRAM BILLINGS
	Mr. Eriksen noted that the following bills were before the Council for their review and action:
	1. Williams & Company Consulting, Inc $ 85,216.00 Standard flat fee billing for February 2005, licensing, underwriting, claims processing and site inspections.
	2. John J. McCarthy $ 4,064.54 Professional legal services to the Council for the period of February 16, 2005 through March 17, 2005.
	3. Iain D. Johnston, Holland & Knight, LLP $ 2,288.35 Professional services acting as Administrative Hearing Officer for Koch and Plaza Cleaner appeals for the period of February 1, 2005 through February 28, 2005.
	On a motion by Mr. Bredenkamp and a second by Mr. Gibson, the bills were approved by a vote of 5-0.
	REVIEW OF ACTIVITY REPORT AND FINANCIAL STATEMENTS
	Mr. Eriksen stated as of March 25, 2005, 1,185 drycleaners had been licensed and the Administrator's office had received renewal information on 1,256 of the facilities. Currently, there are 872 insureds and there are 88 60-day Cancellation Notices outstanding on these insured facilities for failure to timely license their drycleaning facility. Currently, there are 371 active remedial claims, 36 have been closed to date, 302 currently have submitted requests for budget approvals and 40 of those have initially been closed. Therefore, approximately 749 facilities out of 850-900 potentially eligible facilities have either tested for contamination or have received budget approval for testing. This leaves another 100-150 facilities that may be eligible for remedial benefits but must provide notice to the Trust Fund by June 30, 2005 of their intent to do testing during the next fiscal year. Mr. Eriksen noted the Administrator would be doing a mailing in the near future to those drycleaners, reminding them of the June 30, 2005 deadline. He reported total budget approvals exceed $4.1 million. Solvent tax revenues are down almost 45% from the estimate of two (2) years ago. Some of the decrease is due to more efficient use of the drycleaning solvent and less usage due to the overall business climate. However, it is his opinion the decrease is due in part because drycleaners are buying solvent from distributors who are not collecting the solvent tax. Mr. Polak stated that he would like to begin, at the next meeting, discussions on the prioritization process and continue those over the next 60-90 days so that everyone has a chance to be informed and aware that the Council may have to implement prioritization in the near future. In addition, he asked the Administrator to try to quantify the maximum dollars that the Fund may receive from more strict enforcement of the licensing process and the solvent tax collections.
	REVIEW OF CLAIM BUDGETS IN EXCESS OF $75,000
	Mr. Eriksen noted that there was one (1) claim requiring Council review and action. It is for One-Hour Cleaners in Palatine , Illinois . Mr. Mike Perkins reviewed with the Council the background information on the facility. He stated this facility has been before the Council in the past. The Administrator is requesting funding for implementation of the remedial action plan. The proposed remedial action involves the pumping of approximately 72,000 gallons of water from the basement, removal of equipment and rerouting of existing utilities located in the basement, sealing existing doors for backfill support and place crushed, recycled concrete near the existing floor drain, install or reinforce concrete floor with welded wire and rebar doweled into the existing concrete and submit a prepared comprehensive remedial action completion report to IEPA in accordance with TACO. He commented that in effect the basement was going to be closed and sealed off to eliminate the groundwater issue and therefore that exposure pathway. The total request is $128,000, which includes $40,000 of contingency costs of which half relates to the possible removal of additional water from the basement. Mr. Perkins indicated the water level in the basement has fluctuated between 2 and 4 ft, depending on the time of the year. He noted if the Council approves the requested remediation budget, the total revised budget for this facility will be $191,491. On a motion by Mr. Gibson and a second by Mr. Lewicki, the Council approved the additional budget request of $128,000 by a vote of 5-0.
	OTHER ISSUES AS PRESENTED
	The Council discussed the next meeting date. Mr. Eriksen noted he had a conflict with the tentative date of April 27, 2005, as he was scheduled to be at an appropriation hearing in Springfield on that day. The Council determined the next Council meeting would be tentatively scheduled for April 26, 2005. Mr. Eriksen commented he is still having a problem with getting final lists from the compliance programs of which participants successfully received their four (4) CEUs for the prior year. He would keep the Council updated as to the status. In addition, he noted that a letter had recently been received that the Legislative Audit Committee had accepted the Fund's fiscal year 2004 audit.
	PUBLIC COMMENT PERIOD
	Mr. Polak asked if there were any comments from members of the public in attendance. There were none. There being no further business, the Council meeting adjourned at 1:18 p.m.
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