October 18, 2006 Meeting Minutes

	MINUTES
	DRYCLEANER ENVIRONMENTAL RESPONSE TRUST FUND COUNCIL of ILLINOIS HOLIDAY INN SELECT - NAPERVILLE NAPERVILLE, ILLINOIS OCTOBER 18 , 2006
	John Polak, Chairperson, called the Drycleaner Environmental Response Trust Fund Council of Illinois meeting to order at 10:12 a.m. A quorum was present. Roll call was taken with the following members present:
	John Bredenkamp David Gibson Young B. Kim Paul Kwak Charles Kwon Jerry Lewicki John Polak Also present were: H. Patrick Eriksen, Program Administrator's Office John J. McCarthy, Program Counsel C. Michael Perkins, Program Administrator's Office Juho So, Program Administrator's Office
	PRELIMINARY BUSINESS
	The minutes from the September 6, 2006 Council meeting were reviewed. On a motion by Mr. Lewicki and a second by Mr. Kim, the minutes were approved by a vote of 7-0.
	APPEALS
	Mr. Eriksen reported there are several appeals for review by the Council.
	A.	Appeal of Disallowed Remedial Expenses:
		Brite Way Cleaners, Belleville , IL - Site #0001065
		Mr. Eriksen noted that Mr. Louis Ryseff, owner and operator of Brite Way Cleaners located at 1811 West Main Street in Belleville is participating in the appeal process via telephonic conference. Mr. Eriksen reviewed background information on the facility with the Council. He noted an initial budget request had been received on April 25, 2006. The budget was approved on May 1, 2006 in the amount of $11,655.00. Expenses totaling $11,533.10 were submitted for the Phase I and Focused Phase II site investigation of the facility. The Administrator disallowed $642.50 of the site investigation as the work was done prior to preapproval of the budget. The Fund's regulations require all eligible remedial action costs incurred after July 1, 1999 to be preapproved by the Fund in order to be eligible for reimbursement. A Council approved exception is the reimbursement of reasonable and necessary costs associated with a previously approved budget. Since this was the initial budget, that exception was not applicable. The disallowed expenses were reasonable and necessary to complete the Phase I and Phase II site investigations. Mr. Eriksen stated the amount was disallowed because the environmental consultant began work several days prior to receiving budget approval from the Fund for the work. As previously stated, the work was necessary to complete the project and the Administrator recommended that since the costs had come in under budget that the Council allows these as reasonable costs. Mr. Ryseff addressed the Council stating that due to time constraints of the June 30, 2006 filing deadline, the consultant began the project before formal budget approval was authorized by the Fund. On a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council approved the reimbursement of $642.50 to Mr. Ryseff for site investigation activities performed.
	B.	Appeal of Claim Prioritization Process
		1.	Norridge Magic Touch Cleaners, Norridge , IL - Site #0001399
			Mr. Eriksen reviewed with the Council background information on this appeal noting Barry Kaliner was the owner/operator of Norridge Magic Touch Cleaners located at 8345 W Lawrence in Norridge , IL . The facility had been a drycleaning facility since 1973. Operations ceased at the facility on June 15, 2002 at which time Mr. Kaliner transferred the drycleaning business to a different facility. This drycleaning facility is one of four (4) facilities that had completed their focused site investigation and had budget approval to complete their remedial action plan (RAP) but did not have the RAP completed by April 1, 2006. The RAP budget was approved on February 10, 2005 and was completed on September 22, 2006. The site was prioritized and has a priority ranking score of 88. Mr. Kaliner is requesting his facility be exempted from the prioritization process and grandfathered for immediate funding as it is his representation that he has fulfilled all of his obligations, including payment of the deductible in an effort to get the RAP for this facility completed. The reason for the delay was the responsibility of the contractor that was retained to prepare the RAP. In addition, Mr. Kaliner has represented that he has been sued personally by the owner of the shopping mall where the facility once operated. Mr. Erik Samore, the attorney representing Mr. Kaliner, addressed the Council noting his client ran into contract issues that delayed the completion of the RAP. These delays were outside of Mr. Kaliner's control. The Illinois Environmental Protection Agency (IEPA) views this facility as one with significant contamination that needs to be cleaned up as soon as possible. Mr. Kaliner is being sued by his landlord for lost rents. To date, the total exceeds $200,000 and the landlord is seeking $5,000 per month in damages. Mr. Mike Butler, Director with Northern Environmental, stated there is significant contamination at the site that should be addressed as soon as possible. Mr. Samore reviewed the facility history with the Council noting the delays went back to the original consultant, Clayton Environmental, who did not complete the initial site investigation and lost interest in completing the focused site investigation. Mr. Kaliner was forced to find a new consultant. Illinois EPA approved the remedial objectives report on May 12, 2006. After general discussion by the Council, on a motion by Mr. Lewicki and a second by Mr. Gibson, the Council voted 7-0 to grandfather Mr. Kaliner's facility from the prioritization process and make it immediately eligible for funding.
		2.	Village Laundry & Drycleaning, N. Aurora , IL - Site #0003082
			Mr. Eriksen reviewed background information with the Council noting Mr. LeRoy S. Halle is the owner and former operator of this drycleaning facility located at 106 S. Lincoln Way in N. Aurora , IL . Mr. Halle purchased the business in 1978 and operated it as a laundry and drycleaning facility until 1996. Mr. Halle sold the property February 15, 2001 on a 5-year balloon contract and retained title to the property. Intrusive testing was conducted in early 2005 and contamination was discovered. Mr. Halle filed a remedial claim and the facility is eligible for remedial program benefits up to $50,000 as an inactive drycleaning facility. This claim was one of four (4) claims that had their (RAP) budget approved prior to April 1, 2006 but the RAP was not completed by that date. The RAP budget was approved on March 8, 2006 and was completed on April 25, 2006. The site was prioritized and has a priority ranking score of 70. Mr. Halle is requesting his facility be exempted from the prioritization process and be grandfathered for immediate funding in order to complete the cleanup of the facility without additional undue financial hardship. Mr. Halle addressed the Council noting the cleanup is creating a financial hardship for him. It is currently estimated the total cleanup for the facility will be at least $70,000. To date, for the investigation and remedial action plan, he has spent $30,000 out of his own pocket. After discussion by the Council, on a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council, by a vote of 7-0, voted to grandfather Mr. Halle's claim from the prioritization process.
	C.	Cancellation of Insurance Coverage
		1.	Pure Cleaners, Mundelein , IL - Site #0001744
			Mr. Tae Wung Um, owner of Pure Cleaners, located at 1142 West Maple Avenue in Mundelein , IL , had appealed to the Council cancellation of his Fund insured insurance coverage. Mr. Um was to be present for the appeal. In as much as Mr. Um was not present, the Council agreed to defer his appeal to the next meeting.
		2.	Modernway Cleaners, Schiller Park , IL - Site #0002596
			Mr. Eriksen reviewed background information with the Council noting Mr. Gilbert Gonzalez is the owner and operator of Modernway Cleaners located at 9603 W Lawrence Ave in Schiller Park , IL . He has owned and operated the facility since August 29, 2005. The previous owner of the facility was Mr. Andrew Vaccaro. The Fund issued pollution liability coverage on this facility cancelled on June 25, 2006 because Mr. Gonzalez failed to obtain the required compliance program continuing education credits for calendar year 2005. Neither Mr. Gonzalez nor the previous owner Andrew Vaccaro obtained any CEU credits for calendar year 2004. In 2005, Mr. Gonzalez was required to obtain eight (8) continuing education credits in order to maintain his insurance coverage. In 2005, he obtained the four (4) necessary CEU compliance credits for 2004 and the insurance was not cancelled because he met the Council's one (1) time exception regarding compliance program CEUs. Mr. Gonzalez only acquired an additional two (2) CEUs in 2005 and therefore he was short two (2) CEUs for 2005. Since he had used his one (1) time exemption to meet the 2004 CEU requirement, his insurance cancelled in 2006. Mr. Gonzalez addressed the Council stating he had been confused on the number of CEUs he had obtained in calendar year 2005. He thought he had a total of seven (7) or possibly even nine (9) or ten (10) but based upon the Administrator's calculation, he had only received a total of six (6) in calendar year 2005 and four (4) of those were applied to the calendar year 2004 requirement. He presently has obtained four (4) in 2006 and asked the Council if he could have one (1) more exemption as he would have no problem meeting the requirements for calendar year 2006. After discussion by the Council, on a motion by Mr. Gibson and a second by Mr. Lewicki, the Council voted of 7-0 to give Mr. Gonzalez one (1) additional exemption to meet the CEU requirement. The motion passed by a vote of 7-0.
	OPERATIONAL ISSUES
	A.	Compliance Program Audits:
		Mr. Eriksen noted for the Council that enclosed in their Council packet was draft compliance audit program procedures for the upcoming audit of the compliance programs. Council members reviewed the procedures and noted that they had no additions or deletions to the Administrator's proposed audit procedures. The Council discussed dates for the compliance program audit. Ms. Sue Kratz, representing the STAR Program, stated that Henry Parker of S&ECC had requested that the audit be done at the end of the first quarter of 2007. That way if drycleaners drop out of the program in early 2007, their files would not need to be audited. Mr. Polak stated Mr. Parker's request was not relevant as the Council was auditing the records for calendar years 2005 and 2006. Mr. Eriksen noted the Administrator's office would be doing a mailing to all insured drycleaners reminding them to get their four (4) CEUs for this calendar year. In addition, he would be contacting the compliance programs to remind them to contact their members about the CEU requirements. Mr. Polak stated it was his recommendation the Council conducts the audit in the first quarter of calendar year 2007. After additional discussion, it was tentatively established the February Council meeting would be Wednesday, February 21 st and that meeting would primarily be for the purpose of auditing all of the compliance programs. Mr. Eriksen stated he would notify the compliance programs of that date and ask them to confirm immediately if they had a conflict with that date.
	B.	Amendments to the Fund's Administrative Rules:
		Mr. Eriksen reviewed with the Council three (3) proposed amendments to the administrative rules. These were based upon the Council's decisions made at their September 6, 2006 Strategic Planning session. The first involved the designation of funding of up to $800,000 per year for three (3) consecutive years to complete the focused site investigation at eligible drycleaning facilities that should be able to obtain a No Further Remediation (NFR) letter from the Illinois Environmental Protection Agency (IEPA) via institutional controls with minimal funding. The second was a correction of the reference error on the prioritization formula and the third was the listing of Green Earth as a “green” solvent for purposes of licensing and the solvent tax. On a motion by Mr. Lewicki and a second by Mr. Bredenkamp, the Council , by a vote of 7-0, approved the wording and instructed the Administrator to file the proposed amendments with the Joint Committee on Administrative Rules and the Secretary of State.
	C.	Replacement of Contaminated Solvents :
		Mr. Eriksen reviewed with the Council that previously they have granted an exemption regarding the treatment for licensing and solvent taxing purposes for solvent that was contaminated due to equipment failure. He noted this request comes from Mr. Fred Monroe of Monroe Cleaners in Marion , IL . Mr. Monroe had a drycleaning machine fire that damaged his machine and contaminated 275 gallons of petroleum solvent. He is requesting the Council waive applying the replacement 275 gallons against the calculation of his purchases/usage for determining his 2007 license and also allow for the refund of the solvent tax paid on the replacement gallonage. The Administrator's office has received documentation of the purchases related to the contamination in addition to receipts documenting the disposal of the 275 gallons of contaminated solvent. It is the Administrator's recommendation the Council agree to Mr. Monroe's request and not require the 275 gallons of replacement solvent to be applied to the annual solvent purchases/usage calculation for the 2007 license and the solvent taxes paid on the 275 gallons be refunded to Mr. Monroe. On a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council, by a vote of 7-0, adopted the Administrator's recommendation to waive the solvent tax and the inclusion of the replacement solvent in calculating the 2007 license.
	D.	Licensing of Drop/Dry Facilities:
		Mr. Eriksen noted licensing of drop/dry facilities has been discussed by the drycleaning industry for a number of years. In 2000 it was part of legislation the industry had endorsed to amend the Trust Fund Act. Unfortunately, the legislation did not pass and specifically, the licensing of drop/dry stores was opposed by a down-state senator. The senator felt it would be inappropriate to license facilities such as convenience store, beauty shops, etc., that serve as a drop off only as a convenience to their customers rather than as a profit center for their business. This topic was briefly discussed at the September 6, 2006 Strategic Planning meeting. Due to time constraints, the Council had tabled further discussion for a future meeting. Mr. Eriksen stated the issue is “Does the Council wish to seek legislation requiring the licensing of drop/dry stores?” He reviewed with the Council six (6) bullet points he believed needed to be addressed in the discussion of this topic. Mr. Kim stated convenience stores that take in drycleaning should be excluded as should be drycleaner routes. His main concern is there are a substantial number of drop stores in Chicago that he believes should be contributing to the Fund and offsetting some of the costs of the cleanup and the licensing costs that are being borne by the active facilities in the state. The Council conducted a lengthy discussion of the pros and cons of licensing drop stores. Mr. Eriksen reminded them that licensing of drop stores would require legislation and it may be difficult to get legislation support for a fee in which the person being charged the fee had no way to access any of the benefits offered by the Fund. Mr. Eriksen noted in 2000, for discussion purposes, it was estimated there were at least 2,000 drop stores in the state but there was no survey or polling data presented to determine if that number was accurate. Mr. Polak directed the Administrator to put together several pro forma financial projections using estimated numbers of drop stores for the Chicago and suburban areas for discussion at the Council next meeting.
	APPROVAL OF PROGRAM BILLINGS
	Mr. Eriksen noted that the following bills were before the Council for their review and approval:
	1. Williams & Company Consulting, Inc $53,028.00 Standard flat fee billing for August 2006, licensing, underwriting and claims processing.
	2. John J. McCarthy $2,127.50 Professional legal services to the Council for the period of August 24, 2006 through October 9, 2006.
	2. Williams & Company Consulting, Inc $55,964.00 Standard flat fee billing for September 2006, licensing, underwriting, claims processing andsite inspections.
	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 with the Council that as of September 30, 2006, there were 1,312 licensed facilities in the state; 749 of those facilities had pollution liability insurance coverage from the Fund; open active remedial claims totaled 591 with estimated claim reserves of $43.1 million. The September 30, 2006 financial statements reflect a Fund balance of $3,053,429.
	CLAIM PAYMENTS IN EXCESS OF $75,000
	Mr. Eriksen noted there were three (3) claims that were approaching or were currently in excess of the $75,000 limit which requires Council approval of additional budgets.
	United Cleaners – Site #0001973
	Mr. Eriksen noted there was one (1) claim payment in excess of $75,000 requiring Council review and action. Mr. Mike Perkins would provide specifics on the budget request to the Council. Mr. Perkins reviewed background information for the Council and noted the Remedial Action Plan (RAP) has been approved by Illinois EPA and this facility is currently undergoing remediation and was one of those facilities grandfathered from the prioritization process. This facility had been a pilot project in 2002 involving a thermally enhanced soil vapor extraction system. The pilot study was initiated in September 2002 and completed on July 2003. The approved RAP recommends the excavation of the remaining impacted soil using an 8 ft. diameter Caisson auger to drill to the depth of 25-27 ft. below ground. This method of drilling will require that the building foundation be underpinned but will not require shoring of the excavation walls. Two (2) vendor bids were received for the excavation of the impacted soils. Based upon a review of the costs in comparison to other sites the presented RAP appears reasonable. The following is requested for approval by the Council: 1) A waiver to the 3-bid rule to perform the remedial activities at the facility 2) A budget in the amount of $105,850.00 The budget request includes a contingency cost of $26,105 which would encompass one (1) additional day of Caisson drilling and related sampling and disposal. On a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council approved the Administrator's recommendations for waiver of the three (3) bid requirement and the budget request of $105,175 by a vote of 7-0.
	OTHER ISSUES AS PRESENTED
	The Council tentatively scheduled Wednesday, December 6, 2006 as the next Council meeting. This will be the Council's last regularly scheduled meeting for calendar year 2006. Mr. Eriksen reported the Fund has been refunded $18,936 for the fiscal year 2005 audit. The Auditor General's Office does not charge the audited agency where they do the audit rather than contracting it out, and therefore refunded the amount that had been previously withdrawn from the Fund. Mr. Eriksen noted for the Council members that the Comptroller is requiring reimbursable travel expenses be submitted monthly for payment rather than accumulated and submitted only once or twice during the year. .
	PUBLIC COMMENT PERIOD
	Mr. Polak asked if there were any comments from the public. Dennis Callan, a drycleaner from Lisle, IL, stated that he had a problem with his prioritization ranking stating the delay will cause him some hardships. Mr. Eriksen briefly reviewed how the prioritization scoring was established. There being no further business, on a motion by Mr. Lewicki and a second by Mr. Kim, the Council adjourned the meeting at 12:23 p.m. by a vote of 7-0.
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