June 9, 2005 Meeting Minutes

	MINUTES
	DRYCLEANER ENVIRONMENTAL RESPONSE TRUST FUND COUNCIL of ILLINOIS WYNDHAM GARDEN HOTEL WOODDALE, ILLINOIS JUNE 9, 2005
	John Polak, Chairperson, called the Drycleaner Environmental Response Trust Fund Council of Illinois meeting to order at 11:02 a.m. A quorum was present. Roll call was taken with the following members present:
	John Bredenkamp Augustine Chung (via telephonic conference) David Gibson Young B. Kim (arrived at 11:09 am) Charles Kwon (arrived at 11:15 am) 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 April 26, 2005 Council meeting were reviewed. On a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the minutes were approved by a vote of 5-0.
	OPERATIONAL ISSUES
	A.	Amendment to the Fund's Administrative Rules:
		Mr. Eriksen reviewed with the Council two (2) proposed amendments to the Fund's administrative rules. The first was listing of CO 2 and Propylene Glycol Ether DPnB as green solvents. These would be listed as a new section under Section 1500.55 – Drycleaning Solvent Tax. The second modification would be adding a new paragraph to the prioritization rules under Section 1500.40 of the Drycleaner Remedial Account. The proposed amendment would state that if the claimant does not obtain and submit to the Council cost proposals for beginning the remedial action process within 90 days of being notified that his/her remedial claim has been prioritized for funding, the claim will be removed from the prioritization list and the next highest ranked claim will be added to the list. Any claim removed from the prioritization list due to non-timely remedial action by the claimant will be included in the next prioritization pool. Mr. Eriksen noted this draft rule was based on the discussion at the previous meeting regarding how to deal with drycleaners who choose not to move ahead on a timely basis with cleaning up their contamination. Discussion focused on whether the 90 days was too soon to anticipate the drycleaner would solicit proposals for the next phase of work and have them submitted to the Administrator for review and action. After addition discussion, it was a consensus by the Council that the 90 days should be changed to 120 days. Mr. Young B. Kim joined the meeting at 11:09 a.m. Mr. Lewicki made a motion that the administrative rule amendments as proposed by the Administrator be accepted with the prioritization rules action timeframe changed from 90 to 120 days. Mr. Bredenkamp seconded the motion and it passed by a vote of 6-0.
	B.	Legislative Update:
		Mr. Eriksen updated the Council that during the past several weeks, agreement was finally reached with the Attorney General's Office, the Department of Revenue, and the Administrator's office on the final wording for draft legislation to strengthen the enforcement mechanisms available to the Council. Unfortunately, the agreement on the draft legislation came too late in this session to be considered for passage. Hopefully, it can be addressed during the fall veto session. Mr. Eriksen noted that as part of the state budgeting process, SB661 was introduced late in the session and amended on Monday, May 30, 2005, which transfers funds from Special Use Funds to the General Revenue Fund to assist in balancing the State's budget for fiscal year 2006. The bill provides for quarterly transfers from each of the Special Use Funds listed to the General Revenue Fund on an as-needed basis. In addition, there is a mechanism that would allow for the transfer back from the General Revenue Fund to the Special Use Fund, any monies that are needed to meet the Special Use Fund's outstanding expenditure obligations. The Drycleaner Trust Fund was one of the Special Use Funds listed and a maximum of $1,137,391 may be transferred out of the Fund under this bill in fiscal year 2006. The Administrator has received verbal commitments from several legislators to participate in discussion of the financial impact of such transfers with the Governor's Office and the Office of Management and Budget. Mr. Kwon joined the meeting at 11:15 a.m. Mr. Eriksen noted that he is looking at the Council meeting in the following week with the Governor's Office and the Office of Management and Budget to discuss the financial impact on the Trust Fund if such transfers occur. He noted it appears that approximately 20% of the Fund balance would be transferred out via SB661. Based on these potential fund transfers, Mr. Eriksen presented to the Council updated preliminary cash flow projections which showed a further reduction in monies available for additional site investigations and remediations for fiscal year 2006. If the transfer as outlined in SB661 becomes a reality, it may be necessary for the Council to begin the prioritization process by September 1 st of this year. In addition, he noted the legislature will be meeting in a veto session from October 25 th through the 27 th and November 2 nd through the 4 th of this year. This would provide an opportunity for the Council to try to legislatively address the Fund transfer if meetings with the Governor's Office and the Office of Management and Budget are not successful. Mr. Eriksen recommended that the Council pend all remedial action for claims that have not yet begun the remedial process until it is determined if these transfers will occur. The Council unanimously agreed to this recommendation. A general discussion ensued among the Council members and members from the general public on the implications and impact of such a transfer on the Fund. It was the consensus of the Council that as many members as possible would try to meet with the Governor's Office and the Office of Management and Budget in June and based on the results of that meeting, determine what the next step would be in addressing the Special Use Fund transfer.
	C.	License Fee Calculation Issue:
		Mr. Eriksen reviewed with the Council that there is an issue involving the calculation of the annual license fee due to discrepancies involving the quantity of solvent purchased per the invoices prepared by the solvent distributors. He noted for perc purchases, solvent distributors have listed on the invoice the volume of one (1) drum of perc as either 20 gallons or 19.2 gallons. The Fund has accepted either number for use in calculating annual purchases for determining the license fee. In renewing licenses for calendar year 2005, the Administrator's staff noted one (1) solvent distributor represented on their invoices that one (1) drum of perc (weighing 260 lbs) was 19 gallons rather than 19.2 or 20 gallons. The invoice reflected the pounds of perc sold. Dividing the invoice weight by the weight per gallon of perc per the manufacturer's MSDS sheet, the correct volume should have been 19.2 gallons. This misstatement of the actual volume of drycleaning solvent sold has created a licensing problem for one (1) drycleaner. The drycleaner purchased 21 drums of perc from this solvent distributor and listed the gallons purchased as 399 gallons, based on 19 gallons per drum as reflected on the solvent distributor's invoice. Applying the correct gallonage, the total gallons purchased was 403.2 gallons, which results in the drycleaner owing an additional $500 in license fees for calendar year 2005. The Administrator has reviewed the calculation issue with the drycleaner who stated he would not have purchased the additional drum for his facility if he had known that it would put him into a higher license fee category, as he did not need the additional solvent to operate his drycleaning operations through December 31 st of last year. Mr. Eriksen stated the issue before the Council is do they wish to assess the drycleaner the additional $500 license fee or is the Council willing to waive the additional $500 license fee for calendar year 2005? Mr. Eriksen stated when he became aware of the issue he reviewed it with the solvent distributor and issued a letter stating all further invoices must reflect 19.2 gallons of solvent sold if the solvent weight is 260 lbs. The Council discussed the issue and the facts surrounding the case and on a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council voted 7-0 to waive the drycleaner paying the additional $500 of license fee, based on the error made by the solvent distributor on inaccurately listing the solvent gallonage on the invoices.
	D.	Compliance Program CEU Requirement :
		Mr. Eriksen reviewed with the Council that the Fund's compliance program requirements require all Fund insured drycleaners to obtain four (4) CEUs per calendar year. This information was communicated directly from the Fund to all insured drycleaners via direct mailings and newsletters. In addition, the compliance program administrators also informed their members of this requirement. To date, the Administrator has received all of the CEU information from the compliance programs and has determined 151 out of the 869 currently insured drycleaners did not provide CEU information to their compliance programs for calendar year 2004. The Administrator requested each of the compliance programs contact these members to see if they have met the requisite CEU requirement but failed to submit their CEU certificates to the compliance program. This process is ongoing as of today's date. Several drycleaners and administrators of the various compliance programs have inquired as to what will happen to a drycleaner who failed to get four (4) CEUs in 2004. Will their insurance be cancelled or will they be given some other opportunity to “make up” the CEUs that they did not obtain for 2004? Mr. Eriksen noted this was not an issue that needed a decision today and he does not have a recommendation for the Council, but outlined some possible options in lieu of outright cancellation of the Fund insurance. Mr. Eriksen reviewed the four (4) options with the Council. Mr. John Lee, administrator of the AASBA Compliance Program, addressed the Council stating he has nine (9) members of his program who did not complete the requisite four (4) CEUs for calendar year 2004 and 14 other drycleaners who cannot confirm that they have attended other seminars, as attendance certificates were not available. He suggested a supplemental opportunity to somehow allow the drycleaners to make up the CEUs to avoid any legal issues that may result if their insurance is cancelled and they are no longer eligible for remedial benefits. He noted it may be necessary for the Fund to offer seminars at the end of the year to give people a chance to acquire the necessary CEUs. Mr. Lee went on to further state it may be necessary for individual compliance programs to only recognize CEUs obtained via attending seminars sponsored by the compliance program. Ms. Barbara Boden of the Illinois State Fabricare Association/STAR Program stated they have implemented a process to track who attends the various seminars. They issue two (2) copies of a seminar certificate, one that can be retained by the drycleaner and one that can be submitted to their compliance program. She stated the STAR Program believes they have several members who did not obtain the necessary four (4) CEUs in 2004. The Council conducted a general discussion of the issues and potential options. Mr. Polak stated that he would like to discuss the issues in more detail at the Strategic Planning Session, including the process by which the compliance programs are compiling and checking their CEU information. .
	E.	Update on State Coalition for the Remediation of Drycleaners (SCRD) Meeting:
		Mr. Eriksen updated the Council that Dr. So and he attended the SCRD meeting in early May in Raleigh , NC . From the administrative perspective, he stated funding is still a concern for most of the programs. Compliance with “better management” practices continues to be a key item of concern. Recyclers of solvent waste are complaining about the minimal amount of perc they are recycling from waste received from states with a solvent tax and indoor area issues continue to gain a lot of attention nationally. A representative from the State of New York gave an example where they were required to do indoor air sampling at over 400 homes/businesses located above a plume of drycleaning solvent. The indoor air sampling cost was approximately $185,000. Many states are just beginning to focus on the long term planning process in terms of how far their financial resources will go and how long it will take to clean up their contaminated sites based on current funding levels. Mr. So addressed the Council stating there was not a lot of new information available in terms of remedial technology. A number of the case studies that were reviewed focused on bioremediation involving contamination in both soil and groundwater.
	F.	Administrative Hearing Officer Contract :
		Mr. Eriksen reviewed with the Council that in November 2004, they entered into a contract for fiscal year 2005 with Mr. Iain D. Johnston, Senior Counsel with Holland & Knight, LLP in Chicago , to provide Administrative Hearing Officer services to the Council. Mr. Johnston's contracted hourly rate is $265 per hour. The Council's contract with Mr. Johnston expires as of June 30, 2005 and he has presided over two (2) appeals on behalf of the Council. Mr. Eriksen noted that he and Mr. McCarthy were impressed with Mr. Johnston's knowledge of the Trust Fund Act, regulations and insight into the issues presented at the hearings. It is Mr. McCarthy's and his recommendation that the Council enter into a new contract with Mr. Iain Johnston at the same hourly rate for fiscal year 2006. The total amount of the contract shall not exceed $20,000. The Council conducted a brief discussion regarding Mr. Johnston's performance. It was noted that on his most recent bill, he had not referenced the case that he was working on and they requested the Administrator convey that information to him in the future. On a motion by Mr. Bredenkamp and a second by Mr. Kim, the Council voted to enter into a contact for fiscal year 2006 for Administrative Hearing Officer services with Mr. Johnston at the currently hourly rate of $265 per hour, for a total contract not to exceed $20,000. The motion passed by a vote of 7-0.
	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 $ 78,828.00 Standard flat fee billing for April 2005, licensing, underwriting, claims processing and site inspections.
	2. John J. McCarthy $ 1,830.00 Professional legal services to the Council for the period of April 19, 2005 through May 31, 2005.
	3. Williams & Company Consulting, Inc $ 64,116.00 Standard flat fee billing for May 2005, licensing, underwriting, claims processing and site inspections.
	4. Iain D. Johnston, Holland & Knight, LLP $ 1,192.50 Professional services acting as Administrative Hearing Officer for the Han appeal for the period of May 1, 2005 through May 31, 2005.
	On a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the bills were approved by a vote of 7-0.
	REVIEW OF ACTIVITY REPORT AND FINANCIAL STATEMENTS
	Mr. Eriksen reviewed the May 2005 monthly activity report with the Council, noting key highlights that 1,298 drycleaners were currently licensed at the end of May and 856 drycleaners were insured with the Fund. Outstanding budgets for ongoing remedial activities for initial site investigations totaled $4.5 million. The outstanding Fund balance is currently $5.5 million.
	OTHER ISSUES AS PRESENTED
	Mr. Eriksen stated the next Council meeting is tentatively scheduled for Wednesday, July 20, 2005, which is the annual Strategic Planning Meeting. If there are any specific topics the Council members wish to address, please let the Administrator know by July 1, 2005. Mr. Polak has agreed to host the meeting in Peoria , IL . Mr. Eriksen noted there was a possible problem with the Fund's appropriation budget. The Office of Management and Budget made an incorrect reference for the re-appropriation of monies that will be carried over from fiscal year 2005 to 2006. This represents approximately $600,000 in funds that may have to be corrected via a technical correction bill in the veto session.
	PUBLIC COMMENT PERIOD
	Mr. Ken Sink addressed the Council regarding the four (4) annual CEUs required for participation in the compliance program. He noted that in selling his own business the first of the year, it took five (5) months to resolve licensing issues in terms of getting the new owner to comply with what is necessary. He stated it may be good for the Council to put together an orientation packet on basic information that could be sent to the new drycleaner owner when a property transfer occurs. Mr. Bob Soni of Northern Environmental expressed concerns regarding the CEU issues. His concern was that they may be working on a drycleaning facility whose insurance was subsequently cancelled because of failure to meet the CEU requirements. Mr. Eriksen responded that as long as the consultant made certain the insurance had not cancelled or expired prior to beginning the work, they would be reimbursed for that work even if the insurance subsequently cancelled. Mr. John Lee addressed the Council again regarding compliance program issues, stating that asking the drycleaner to do more paperwork can be problematic and create for them more headaches as they are very busy. He stated a simple process would be for each compliance program to sponsor their own seminars and possibly have the Fund relieve some of the paperwork burden for the drycleaners. It may be appropriate to ask for some sort of a penalty to be paid by the drycleaners who fail to get the necessary four (4) CEUs in calendar year 2004. Mr. Ralph Bonk asked a question regarding technologies used recently to remediate contaminated sites. Mr. So replied Fenton's Reagent had been used successfully. There being no further business, on a motion by Mr. Kim and a second by Mr. Lewicki, the Council meeting adjourned at 12:50 p.m.
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