September 6, 2006 minutes

September 6 , 2006 Meeting Minutes

MINUTES

DRYCLEANER ENVIRONMENTAL RESPONSE TRUST FUND
COUNCIL of ILLINOIS

WEAVER RIDGE GOLF CLUB
PEORIA, ILLINOIS

SEPTEMBER 6 , 2006

John Polak, Chairperson, called the Drycleaner Environmental Response Trust Fund Council of Illinois meeting to order at 12:12 p.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 May 31, 2006 telephonic Council meeting were reviewed. On a motion by Mr. Lewicki and a second by Mr. Bredenkamp, the minutes were approved by a vote of 5-0.

The minutes from the June 9, 2006 Council meeting were reviewed. On a motion by Mr. Lewicki and a second by Mr. Bredenkamp, the minutes were approved by a vote of 5-0.

APPEAL OF CANCELLATION OF INSURANCE COVERAGE

Mr. Eriksen stated that there was one (1) appeal to be heard and involves the cancellation of insurance coverage for North Suburban Cleaners located at 7620 Dempster St in Morton Grove , IL . Mr. Eriksen noted that Ms. Maria Bougas is the owner and operator of North Suburban Cleaners and would be participating in the appeal via conference call.

Mr. Eriksen reviewed for the Council his memorandum included in the Council packet providing background information on this appeal. Ms. Bougas did not obtain any CEU credits for calendar year 2004. Therefore, in 2005 she was required to obtain eight (8) continuing education credits in order to maintain her Fund issued insurance coverage. In 2005, Ms. Bougas obtained the four (4) necessary CEU compliance credits for 2004 and her insurance was not cancelled because she met the Council's one-time exemption. She was notified by the Fund via certified letter on November 29, 2005 that she still must have four (4) CEUs for calendar year 2005 plus an annual site inspection in order to maintain her insurance coverage with the Fund.

On December 8, 2005 and December 15, 2005, she attended National Drycleaner Institute (NDI) CEU seminars. The December 8 th seminar covered Third Party Inspections, Drycleaning Machine Operations and Maintenance, and SRP Questions and Answers. The December 15 th seminar covered only Third Party Inspections, and Drycleaning Machine Operations and Maintenance. Since these two (2) seminars were substantially identical, the Administrator disallowed two (2) CEUs for the December 15, 2005 seminar. This left Ms. Bougas with only two (2) CEUs for calendar year 2005. Since she had used her one-time exemption to meet her 2004 CEU requirements, her insurance coverage cancelled in 2006.

Ms. Bougas is appealing the disallowance because the NDI representative told her the seminars were different, not the same. Sung Do Kang, administrator of the NDI Compliance Programs stated NDI represented to the participants that the two (2) seminars were the same and only two (2) CEUs would be given for attending either one or both of the seminars.

Ms. Bougas addressed the Council and stated NDI said they were different classes and that is the reason she failed to get the necessary CEUs. Mr. Polak asked if the material covered in the seminar didn't sound identical. Ms. Bougas stated that both seminars were presented in Korean. The first time it was translated into English. The second time it was not translated and since she does not understand Korean, she was not able to determine if the content was different.

The Council discussed at length the issue the meeting was not translated into English. It was noted that Korean drycleaners have attended Council meetings and received CEUs but it is unknown whether they understand English and the topics being discussed.

On a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council voted 5-0 to give Ms. Bougas one (1) additional exemption for 2005. She must complete six (6) CEUs in additional to an annual compliance site inspection by December 31, 2006.

STRATEGIC PLANNING SESSION

Mr. Polak noted the meeting would last the balance of the day, with the majority of the focus of the meeting on the Council's annual strategic planning session.

I. Review of Program Status and Evaluation of Past Goals :

A. Review of Policies and Procedures

Mr. Eriksen reviewed with the Council each of the policy changes the Council adopted since the July 20, 2005 Strategic Planning meeting as to remedial and insurance claims, licensing and underwriting policies and procedures. In addition, he included all of the compliance program requirements that have been adopted by the Council since February 2004.

Mr. Eriksen noted there are three (3) policy issues requiring Council review and action. The first is:

i. Testing Requirements for Drycleaning Facilities That Let Their Fund Insurance Coverage Lapse and Reapply for Insurance Coverage

Mr. Eriksen reviewed background information on the testing requirements with the Council noting recently the Fund received a new insurance application for a drycleaning facility for which their insurance cancelled on January 7, 2006 for non-payment of the second $700 installment premium payment. Intrusive testing was completed at the facility in June 2005. At that time it was determined the facility did not have contamination.

The issue for Council consideration is since the facility had a lapse of insurance coverage from January 7, 2006 until application for new coverage on May 23, 2006, does additional intrusive testing need to be conducted at the facility prior to issuance of the coverage?

The Administrator offers the following options for review and discussion:

1) Require the facility to conduct intrusive testing to substantiate the facility is still clean prior to issuing a new policy; or
2) Issue a new policy with the new retroactive date of May 2006 without requiring intrusive testing.

The Administrator recommends that the Council adopt Option #2, wherein intrusive testing is not required. As a general policy, he recommended the Council not require intrusive testing for a lapse of coverage for up to one (1) year provided a site inspection conducted by the Fund finds the drycleaning facility in compliance with all the applicable regulations and pollution prevention requirements.

The Council conducted a general discussion of the topic. Focus of the discussion was on how much additional exposure was the Fund subject to if intrusive testing was not required. Mr. Eriksen noted there would probably be a minimal number of facilities that let their coverage lapse and then subsequently reapply for coverage. The additional risk of exposure to the Fund would be minimal provided the Fund inspection shows the facility is in compliance with the regulations and the lapsed period does not exceed one (1) year.

On a motion by Mr. Bredenkamp and a second by Mr. Kim, the Council voted 5-0 to adopt option #2 whereby a new policy with a new retroactive date can be issued without intrusive testing, provided the lapsed period does not exceed one (1) year and the Fund conducts a site inspection which finds the drycleaning facility in compliance with all applicable regulations and pollution prevention requirements.

ii. Testing Requirements for Drycleaning Facilities Requesting Initial Fund Insurance Coverage After July 1, 2006

Mr. Eriksen noted this policy issue is similar to the previous one except it involves whether the Council wants to provide any exceptions from the required intrusive site investigations for active drycleaning facilities which apply for insurance coverage after June 30, 2006. Previously, the Council incorporated into their policies and procedures exemptions from the focused site investigation for active drycleaning facilities which applied for insurance coverage prior to June 30, 2006. Those exemptions are as follows:

A) Allow sites that have been in operation since July 1, 1999 to forego intrusive testing provided that they meet the following criteria:

1) The facility was built on virgin soil, i.e., property has not been exposed to any drycleaning solvents or any other potential contaminants.
2) The facility was in full compliance with all federal and state operating regulations and had the appropriate secondary containment in place on the date the facility began drycleaning operations;
3) The facility must complete a Phase I site assessment. If the Phase I indicates concerns of potential contamination, intrusive testing would be required.

B) Exempt from intrusive testing a drycleaning facility that had previously discovered contamination, remediated the contamination and received an NFR letter from IEPA, provided that the owner/operator of the drycleaning facility can provide the following:

1) Documentation that the facility operated in compliance with Federal and State regulations and best management practices since the receipt of the NFR letter from IEPA.
2) Documentation that indicates the level of contamination, if any, remaining at the facility at the time the NFR letter was issued.
3) Document that the drycleaning facility installed pollution prevention equipment such as secondary containment pans around the drycleaning machine and waste storage areas since the date the NFR letter was issued.

Issue :
Does the Council wish to apply these two (2) exceptions to drycleaning facilities which apply for initial insurance coverage subsequent to June 30, 2006?

Mr. Eriksen stated he recommends the Council allow drycleaning facilities who are making their initial application for coverage subsequent to June 30, 2006, to be exempt from the focused site investigation and intrusive testing requirements provided they can document and meet the criteria outlined above as Exception A or Exception B with the additional caveats:
1) The facility has made application for insurance coverage from the Fund within the first year of drycleaning operations; and
2) If the Phase I site assessment is more than one (1) year old, it must be updated.

The Council discussion focused on the risk exposure to the Fund in the event that intrusive testing is not done on all facilities that make application after June 30, 2006. It was their concurrence for new facilities making application the risk exposure would be minimal since they were brand new. Mr. Eriksen noted that the Council has always reserved the right to require further testing if the Phase I site investigation indicates the need.

On a motion by Mr. Lewicki and a second by Mr. Gibson, the Council voted 5-0 to adopt the Administrator's recommendation as outlined in the memorandum.

iii. Treatment of Illinois Environmental Protection Agency SRP Fees as an Eligible Remedial Expenditure

Mr. Eriksen outlined for the Council since 1999, they have treated the fees the Illinois Environmental Protection Agency (IEPA) charges to enroll in the voluntary site remediation program and all applicable review fees as eligible remedial action costs that are reimbursable from the Fund. Currently, the Administrator is using $10,350 per remedial claim as the average cost estimate for fees associated with enrolling in the IEPA's voluntary site remediation program and obtaining a No Further Remediation letter from IEPA.

Mr. Kwak requested at the June 9, 2006 Council meeting the Council revisit this issue on whether the Fund should continue reimbursing IEPA fees to remedial program claimants.

Mr. Polak believes it would be difficult at this point in time for the Council to roll back payment of those fees. In essence, it would be the same as increasing the deductible by the estimated $10,350 per claim that the Administrator is using for planning purposes.

After discussion by the Council, on a motion by Mr. Lewicki and a second by Mr. Bredenkamp, the Council voted 5-0 to continue with the present policy whereby the fees charged by IEPA related to the voluntary site remediation program are eligible remedial action costs reimbursable from the Fund.

B. Review of Fiscal 2006 Goals and Statistics:

Mr. Eriksen reviewed with the Council the status of their goals for fiscal 2006. The goals involve Fund solvency, legislation, pollution prevention and communication.

Regarding Fund solvency, the Council has monitored the Fund's cash flow throughout the year and at their June 9, 2006 meeting, voted to increase the licensing fees for all license categories effective January 1, 2007. The minimum license fee was increased to $1,500 per year. In addition, the remedial program action deductible was increased from $10,000 to $15,000 for all facilities who failed to complete and submit their remedial action plan to the IEPA by January 1, 2008.

Regarding legislation, the Council had developed in conjunction with the Attorney General's Office and the Department of Revenue, legislation to strengthen enforcement action against unlicensed drycleaning facilities and solvent distributors who sell to unlicensed drycleaning facilities. Unfortunately, the Council was unsuccessful in getting their proposed legislation introduced in the last legislative session.

Regarding pollution prevention, the Administrator conducted 35 site inspections during the past fiscal year. Representatives of the six (6) Council approved compliance programs were asked to be in attendance at today's meeting or submit a brief summary of issues their programs are encountering in implementing the Council's compliance program requirements. There were nine (9) drycleaning facilities that had Fund issued pollution liability insurance coverage cancelled in 2006 for failing to obtain the necessary four (4) CEUs in 2005. All drycleaning facilities participating in the compliance program must have been inspected by their compliance program by December 31, 2005 or within two (2) years from the date of their last inspection, whichever date is later.

Regarding communication, several mailings were done in English and Korean notifying licensed drycleaners, solvent suppliers and environmental consultants about the legislative mandated June 30, 2006 eligibility deadline for remedial benefits. Ads were placed in the Illinois State Fabricare Association (ISFA) newsletter several times during the year to inform drycleaners of the deadline. The National Drycleaners Institute (NDI) published articles referencing the deadline. During the past fiscal year, the Fund held four (4) informational meetings in the fall of 2005 and four (4) public hearings on the proposed fee increases in the spring of 2006.

C. Update on Program Statistics:

i. General Program Statistics:

Mr. Eriksen reviewed program statistics with the Council. He reviewed in detail the July 31, 2006 monthly activity report noting the number of licenses and insurance policies in effect. 684 drycleaning facilities had tested for and documented contamination and were eligible for remedial program benefits. This equates to over 90% of the drycleaning facilities tested being contaminated and a participation rate of over 60% of all licensed drycleaners. The Fund's July 31, 2006 financial statements reflect a fund balance of $3,470,187. He reviewed with the Council a graph of licensed versus insured drycleaners since the Program's inception, graph of licenses issued since the Program's inception, graph of claim payment dollars paid to date, graph of open remedial claims since inception and a graph of cash balances compared to approved budgets.

ii. Enforcement Efforts - Attorney General's Office:

Mr. Eriksen referenced a listing of active drycleaners who did not renew their 2005 license.

Mr. Eriksen updated the Council on enforcement action against unlicensed drycleaning facilities. He reviewed the activities that have taken place since August 2004, when the Attorney General's Office initially contacted 148 drycleaning facilities who were thought to be active, asking for documentation to determine whether they were required to be licensed by the Fund. Currently, 99 facilities are believed to be active but not licensed. Of these 99, 8 are currently working with the Administrator's staff to become licensed; 29 of the facilities were licensed through 2005 but failed to renew their license for 2006. These facilities have been referred to the Attorney General's Office for enforcement action. Seven (7) facilities that have never been licensed or previously licensed but now refuse to obtain their license, have been turned over to the Attorney General's Office for enforcement action. There are at least 55 facilities that are potentially active but not licensed; 20 of those 55 have never been licensed and drive-by inspections are being scheduled to verify their status. The remaining 35 facilities have previously been licensed but we have not been able to obtain sufficient documentation to determine if they currently are active or inactive. Drive-by inspections will also be scheduled for these facilities. The Fund continues to get reports of unlicensed active drycleaning facilities from other drycleaners. It is important the drycleaners continue to monitor and look for unlicensed drycleaners in their neighborhood and notify us of their existence in order to bring them into compliance.

iii. Statutory Authority to Seek Cost Recovery and/or Cost Sharing from Third Parties-Solvent Distributors/Manufacturers and Insurers of Drycleaning Facilities:

Mr. Polak stated based upon the Fund's solvency concerns and the recent California court decision providing for solvent distributors to pay for cleanups, he asked Mr. McCarthy to research and report to the Council on the Council's statutory authority to seek cost recovery and/or cost sharing from third parties such as solvent distributors, manufacturers and/or insurers of drycleaner owner/operators.

Mr. McCarthy reviewed his memorandum in detail with the Council members, referencing various sections of the statute. He summarized that it was his opinion that the Council does not have the necessary standing to take legal action and seek cost recovery and/or cost sharing against solvent distributors/manufacturers and/or insurers of drycleaning facilities unless the Council and/or eligible program claimant can demonstrate that the source of contamination at the drycleaning facility is directly attributable to the action or actions of a responsible third party. Mr. McCarthy further stated he did not believe that Vulcan and/or Dow's instructions (or lack thereof) on their drums of solvent concerning the handling and use of their solvents would make them a potentially responsible party liable for the clean up of solvent contamination. Likewise, a facility insurer who has provided property and casualty and general liability insurance coverage for the drycleaning facility would not be considered a potentially responsible party liable for a release unless there was some specific action or actions that took place where the insurer caused or contributed to the release of the solvent contamination.

Mr. McCarthy further recommended the Council request that these issues be reviewed and examined by the Attorney General's Office via an “informal opinion”.

After discussion by the Council, on a motion by Mr. Polak and a second by Mr. Bredenkamp, the Council voted 5-0 to request an informal opinion from the Attorney General's Office regarding the statutory authority the Council has to seek cost recovery and/or cost sharing from third parties such as solvent distributors/ manufacturers and insurers of drycleaning facilities.

D. Review of Fund Financial Projections for the Period of July 1, 2006 Through January 1, 2020:

Mr. Eriksen reviewed with the Council the Fund financial projections for the period of July 1, 2006 through the Fund's sunset date of January 1, 2020. He noted several changes have been made in the projection assumptions as compared to the projections reviewed at the June 9, 2006 Council meeting. They are as follows:

1) Annual tax on drycleaning solvents decreased $17,300 based upon updated solvent usage numbers as reported by the Illinois Department of Revenue.
2) The number of inactive remedial claims was reduced from 17 to 8, which is the number of claims filed by the June 30, 2005 deadline.
3) The number of active remedial claims was reduced from 690 to 684; 684 is the number of claims filed by the June 30, 2006 deadline.
4) The average cost per claim increased approximately $3,000. This was a result of a comprehensive review of all claim information via the prioritization ranking process. Currently, it is anticipated that 35% of the remaining facilities will require significant remediation to obtain a No Further Remediation letter ; 10% will require minimal remediation and 55% of the remaining facilities should be able to obtain a No Further Remediation letter via implementation of institutional controls. Assuming all data remains constant, the Fund would be looking at a potential deficit as of the sunset date of $1,138,192. He emphasized that the amount of solvent consumed in the future years which impacts the solvent tax revenue and licensing fee revenues along with the average cost per claim will be the driving factor to determine whether any further adjustments of the licensing fees or solvent taxes or remedial program deductibles are necessary.

i. Segregation of Insurance Program Funds

Mr. Eriksen reviewed with the Council the pro forma financial statements and related assumptions for segregating the insurance program monies from the total Fund monies. If the insurance fund was segregated, it would have a balance as of June 30, 2006 of approximately $3,733,670. The budget for fiscal year 2007 reflects potential excess revenues over expenditures of $641,433.

ii. Actuarial Review:

Mr. Eriksen noted the one and only actuarial review was conducted in December 2002, which established the actuarial determined premium of $1,400. The actuary had to rely heavily on data from private insurance companies in as much as the Fund history had only one (1) insurance claim at that time. Claim history is still limited. The Fund has had only five (5) insurance claims with only one (1) payment made which was for legal defense costs.

Does the Council wish to engage an actuary to determine new insurance premium?

Mr. Polak stated he was not certain the Council would gain much new data from an actuary based upon the limited loss history. He estimated the cost to hire an actuary would be approximately $15,000. The Council discussed at length at what point in time should the insurance premium be reviewed even if there is limited historical data

After additional discussion, on a motion by Mr. Gibson and a second by Mr. Lewicki, the Council voted 5-0 to engage an actuary in calendar year 2007 to determine if the current rate of $1,400 is still actuarially sound. The motion passed by a vote of 5-0.

Mr. Polak recessed the meeting at 3:00 p.m. The meeting reconvened at 3:22 p.m.

II. Program Goals – Fiscal 2007

Mr. Eriksen reviewed with the Council that the Program goals for fiscal year 2007 are a continuation of those that have been set previously by the Council and include a focus on Fund solvency, legislative initiatives, pollution prevention and communication.

A. Fund Solvency:

The Administrator will continue to provide semi-annual financial projections in order for the Council to closely monitor the financial solvency of the Fund. It is anticipated the total claim payments as currently projected, will change over the remaining life of the Fund due to the following:
• Percentage of facilities requiring active remediation versus closure via institutional controls may increase or decrease as additional data is received on the facilities, and
• Average cost of cleanup may increase or decrease due to technology changes, inflation, etc., and
• Facilities may lose their eligibility if they fail to maintain continuous financial responsibility coverage.

i. Claims Prioritization – Summary and Associated Issues

Mr. Eriksen reviewed at length the prioritization summary memo noting that 588 facilities were ranked for prioritization. Numerical values ranged from a low of 0 points in which case an NFR or draft NFR letter had been issued by IEPA up to a high of 158 points which recognized the drycleaning facility was granted funding due to emergency conditions at the April 2006 Council meeting. There were approximately 165 claims in which the Fund did not have enough information to determine if they were able to get a risk based closure under the TACO regulations or if actual remediation would be required. These facilities were ranked and most had a low score due to the lack of available data. He referenced an attached worksheet labeled “Cash Flow Analysis – Fiscal Year 2007” which noted there is approximately $2.3 million of funds available to release to prioritized sites for fiscal year 2007. The prioritization process is going to be a learning process and there will be numerous issues requiring Council discussion and action. The initial ranking process brought to light three (3) issues that he would like for the Council to discuss and take action on:

• Issue A – Treatment of Eligible Remedial Claims That had Completed Their Remedial Action Plan (RAP) by April 1, 2006

Currently there are 14 facilities in the process of remediation that were grandfathered in and were not subject to the prioritization process. He noted as of April 1, 2006, there were 10 facilities that obtained budget approval to develop a RAP. Of those 10, eight (8) facilities have completed a RAP as of April 1, 2006 and are ready to move on to the next phase of the cleanup process which is the actual remediation of the contaminated soil and/or groundwater. These eight (8) facilities have a prioritization ranking ranging from a low of 48 to a high of 106. It is estimated that it would take approximately $1,237,000 based upon the current reserves to fund these eight (8) facilities through the cleanup process.

The issue for Council consideration is do they wish to grandfather these eight (8) drycleaning facilities and exclude them from the prioritization process or do they wish to treat them like a prioritized claim?

The Council discussed at length that these eight (8) facilities had demonstrated that they are continuing to move towards cleanup and are ready to move into the next phase and should not be penalized by the prioritization.

On a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council voted 5-0 to grandfather these eight (8) drycleaning facilities and exclude them from the prioritization process.

• Issue B – Funding Low Risk Facilities to Obtain a NFR

The Administrator's staff estimates there are, at a minimum, 150 facilities to a maximum of 250 facilities that could receive a NFR letter through risk-based closure under IEPA's TACO regulations if additional funding is made available to complete the focused site investigation report and pay for the remaining IEPA SRP review and filing fees. It is estimated that on average, $10,000 per facility would provide enough funding to complete the focused site investigation report and receive an NFR letter from IEPA.

Does the Council wish to allocate funding for the next two or three fiscal years to provide funding to complete the focused site investigation on these 150 to 250 facilities so that they may get an NFR letter and the claim be closed rather than waiting 10+ years for funding? This would require an amendment to the Council's prioritization regulations.

Mr. Eriksen reviewed at length with the Council that if these facilities fail to move ahead with the final site investigations that are needed for an NFR letter, some of the initial data would have to be redone as typically the IEPA discounts any data that is over three (3) years old. Funding these now would avoid paying additional costs down the road which would drive up the overall cost of the program. The downside of providing funding for these facilities is that it does take away monies from sites that are ranked as a higher risk at this point in time. During the Council discussion it was noted that at this time, the Fund was not aware of any of the prioritized eligible claims that were deemed to be in an emergency situation requiring immediate cleanup.

On a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council voted 5-0 for the Administrator to file an amendment to the prioritization rules with the Joint Committee on Administrative Rules, allowing for up to $800,000 per year for the next three (3) years be applied to facilities that receive an NFR letter through risk based closures by completing focused site investigations for a minimal cost.

• Issue C – Reserve For Emergency Investigations

The Council's prioritization regulations do not provide a source of funding to allow for emergency site investigation of lower ranked facilities that encounter a situation that results in the facility becoming a high priority facility. He gave a representative example in which this could happen.

After discussion by the Council, if the current dollars set aside each year for prioritized claims is not spent, the balance could be used to create a reserve for such emergency investigations. The motion was made by Mr. Bredenkamp and seconded by Mr. Lewicki and passed by a vote of 5-0.

B. Legislative Issues:

The legislation the Council developed in conjunction with the Attorney General's Office and the Department of Revenue was not able to be introduced during the 2006 legislative session. Hopefully, it can be addressed during the 2007 legislative session.

Discussion focused on whether the Council should seek a reduction in the revenue percentage the Illinois Department of Revenue (IDOR) receives for collecting the license fees and solvent taxes. Mr. Eriksen noted the current 4% fee was based upon anticipated collections of approximately $3.3 million per year from 1,800 drycleaners versus the approximately $4 million per year that will be collected from 1,400 drycleaners when the new license fee rates go into effect on January 1, 2007. Any change in the current 4% fee would require legislation. The Council discussed at length the pros and cons of requesting such a reduction. It was the consensus of the Council members in attendance that seeking such a reduction would be counter-productive to IDOR working with the Fund to pass legislation strengthening their collection efforts.

Mr. Eriksen noted at several of the Council meetings during the past year, the issue of whether drop stores should be licensed was discussed. The Council conducted a brief discussion on this topic noting that there are multiple variables that would require lengthy consideration and debate. Chairman Polak asked that this issue be put on the agenda for discussion at a future Council meeting. The Council members concurred with the Chairman's request.

Rule Amendments

There are two (2) topics that require amending the existing drycleaning regulations. One would be the addition of Green Earth drycleaning solvent as a “green” solvent. IEPA has completed their review of Green Earth and determined it should be designated as a “green” solvent. The second would be a technical correction in the prioritization ranking formula. Previously, we had transposed wording in the reference example used in defining the “S6” ranking criteria. The Class I and Class II numbers were inadvertently switched in the rule making process. This transposition did not impact the ranking scores.

On a motion by Mr. Kim and a second by Mr. Bredenkamp, the two (2) proposed rule amendments were approved by a vote of 5-0.

C.
Pollution Prevention:

Members of the six (6) compliance programs were invited to update the Council as to the status of their compliance programs with particular emphasis on operational issues they have encountered in implementing the Council's revised compliance program requirements.

Mr. Eriksen stated that he had received responses from Sue Kratz of the STAR Program and Henry Parker of S&ECC and those responses were distributed to the Council at today's meeting for their review. He had not heard from the remaining four (4) programs as to issues they are encountering in administrating the compliance programs.

Mr. Eriksen reviewed with the Council results of the site inspections that the Administrator's staff had conducted for fiscal year 2006 noting that adequate secondary containment remains one of the areas that needs to be improved upon by the drycleaners.

Audit of Compliance Programs

Mr. Eriksen reviewed with the Council that in the summer of 2003, the Council engaged the Administrator to conduct a special audit of the various compliance programs. Based on the results of the audit, the Council made substantial revisions to the compliance program requirements in February 2004 and took a more active role in defining deadlines and approving continuing education requirements. Since it has been 2½ years since the implementation of the revised compliance, would the Council like to have an audit of the compliance programs to determine if they are following the Council's guidelines? Mr. Eriksen stated the audit could be completed for a cost not to exceed $5,434.

The Council discussed the need for the audit and the lack of turnout by the compliance programs at the meeting or their failure to submit a written report on their program status.

After general discussion by the Council, it was suggested the Council request the compliance programs bring their records to a Council meeting for the purpose of auditing the compliance programs. The Council members would then get a firsthand look at the quality and organization of the compliance program records.

Mr. Polak directed the Administrator to prepare an outline of the audit process for discussion at the next meeting with the audit to be conducted by the Council members.

D. Communication:

Mr. Eriksen noted the Council continues to emphasize the need to continue and expand communication with the drycleaning community. He reviewed the specific mailings that were done during the past year, noting that unfortunately, attendance at the informational meetings in the fall of 2005 and the public meetings in the spring of 2006 had limited attendance. The Administrator will continue to work with the drycleaner associations and the compliance program administrators in communicating key information, program status and/or changes about the Fund to the drycleaning industry.

APPROVAL OF PROGRAM BILLINGS

Mr. Eriksen noted that there were four (4) bills before the Council for their review and approval:

1. Williams & Company Consulting, Inc $ 107,804.00
Standard flat fee billing for June 2006, licensing, underwriting, claims processing and site inspections.

2. John J. McCarthy $ 1,887.50
Professional legal services to the Council for the period of May 26, 2006 through June 30, 2006.

3. John J. McCarthy $ 1,305.00
Professional legal services to the Council for the period of July 1, 2006 through August 23, 2006.

4. Williams & Company Consulting, Inc $ 70,830.00
Standard flat fee billing for July 2006, licensing, underwriting, claims processing and site inspections.

Mr. Eriksen noted that regarding the first two (2) bills, verbal approval was obtained from the Council members in early August and they were paid by the August 15, 2006 cutoff deadline for all fiscal year 2006 bills.

On a motion by Mr. Lewicki and a second by Mr. Bredenkamp, the Council approved the bills by a vote of 5-0.

CLAIM PAYMENTS IN EXCESS OF $75,000

Mr. Eriksen noted that there were five (5) claims requiring Council approval as the budget amounts are in excess of $75,000.

A. Sanders Cleaners

Mr. Perkins reviewed in detail background information and previous remedial activities at this drycleaning facility. The consultant is recommending a two-part strategy to obtain a No Further Action letter from IEPA. The first is to install two (2) soil borings inside the facility and the area of the highest remaining impact. Four (4) samples will be collected and analyzed for VOCs. The second method is to make the TACO Tier III argument of impractical remediation based upon the attempts made to date and the lack of practical alternatives to complete the remediation at the facility. The budget request is $18,000, which includes a contingency of $3,600. If approved, the revised total budget cap for the facility will be $180,175.

On a motion by Mr. Lewicki and a second by Mr. Bredenkamp, the Council approved the additional budget request of $18,000 by a vote of 5-0.

B. Kustom Klean Cleaners

Mr. Perkins reviewed background information at length with the Council noting that if this budget approval request is approved, it is subject to the prioritization process and funding will be deferred accordingly. The remedial activities IEPA has requested involve a deep groundwater investigation to identify the vertical extent of groundwater contamination migration and potentially eliminate a potential surface water receptor. The budget request to do this requested testing totals $30,270 which includes a contingency of $5,045. If approved by the Council, the revised total budget cap will be $88,509.

On a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the budget request was approved by a vote of 5-0.

C. Joy Cleaners

Mr. Perkins reviewed with the Council remedial background information on the facility. A Remedial Action Plan has been prepared and three (3) technologies evaluated to remediate the Csat impact of soil at the facility. The selected technology that appears to have the best cost/benefit ratio is the injection of RegenOx into the contaminated soil. The required budget for this project is $70,800 which includes a contingency of $20,000 for an additional injection with confirmation sampling and removal of hazardous waste drums. If approved, the total revised budget cap will be $114,207.

On a motion by Mr. Kim and a second by Mr. Gibson, the budget request was approved by a vote of 5-0.

D. Elmhurst Cleaners

Mr. Perkins reviewed background information on this facility with the Council noting various technologies have been evaluated. The proposed technology is an injection of Fenton's Reagent at the facility. The proposed budget to do this is $295,102. The remaining remedial benefit available is $216,325. All the costs in excess of the $300,000 cap will be the responsibility of the claimant and the budget request does not include IEPA oversight and review fees.

On a motion by Mr. Bredenkamp and a second by Mr. Kim, the Council approved the additional budget request by a vote of 4-0 with Mr. Lewicki abstaining.

E. Fox Valley Cleaners

Mr. Perkins reviewed background information on the facility with the Council. The additional budget request is for $44,540 which includes a contingency of $7,500. The budget request is for an additional site investigation to further delineate the vertical extent of groundwater contamination in the bedrock and provide information to assist in the passage of a groundwater ordinance for the village of St. Charles .

The total revised budget cap for this site, if approved by the Council, will be $168,851.

On a motion by Mr. Bredenkamp and a second by Mr. Kim, the budget request was approved by a vote of 5-0.

OTHER ISSUES AS PRESENTED

The Council tentatively set Thursday, October 19, 2006 as the next Council meeting.

PUBLIC COMMENT PERIOD

Mr. Polak asked if there were any comments from the public. There were none.

There being no further business, the Council adjourned their meeting at 5:31 p.m.

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