November 14 , 2007 Meeting Minutes

	MINUTES
	DRYCLEANER ENVIRONMENTAL RESPONSE TRUST FUND COUNCIL of ILLINOIS HOLIDAY INN SELECT - NAPERVILLE NAPERVILLE, ILLINOIS NOVEMBER 14 , 2007
	John Polak, Chairperson, called the Drycleaner Environmental Response Trust Fund Council of Illinois meeting to order at 10:03 a.m. A quorum was present. Roll call was taken with the following members present:
	David Gibson Jerry Lewicki Young B. Kim Paul Kwak Charles Kwon Also present were: H. Patrick Eriksen, Program Administrator's Office John J. McCarthy, Program Counsel
	PRELIMINARY BUSINESS
	The minutes from the September 21, 2007 Council meeting were reviewed. On a motion by Mr. Lewicki and a second by Mr. Kwon, the minutes were approved by a vote of 6-0.
	APPEAL OF CANCELLATION OF INSURANCE COVERAGE
	Mr. Eriksen noted there was one (1) appeal to be heard regarding the cancellation of Fund issued pollution liability insurance coverage.
	1.	Appeal of of Cancellation of Insurance Coverage – Northview Cleaners (Facility #0002543))
		Mr. Eriksen briefly reviewed with the Council that Mr. Chong Sul Kim is the drycleaner owner/operator of Northview Cleaners located at 2644 West Touhy in Chicago, IL. He noted Mr. Kim had appeared before the Council at their September 21, 2007 meeting. The Council had deferred taking any action on his appeal at that time. Mr. Richard Kim of the ESM Compliance Program was in attendance to assist Mr. Kim with his presentation and translate as needed. Mr. Rickard Kim stated he had stopped by in December 2006 to help Mr. Chong Sul Kim renew his insurance coverage and work on his license renewal. During that visit he had reviewed the inspection and repair log for the past 12 months. Mr. Chong Sul Kim suffered from carpal tunnel syndrome which he had corrected via surgery. He indicated the carpal tunnel surgery had caused him to be distracted and not pay attention to his drycleaning business. Mr. Polak inquired how the carpal tunnel syndrome had impacted his responsiveness to business decisions. Mr. Chong Sul Kim replied his wife maintained the financial records but it was his responsibility to follow up with all necessary Fund paperwork, including licensing and renewal of the insurance coverage. Mr. Gibson made a motion to deny reinstatement of the insurance coverage. The motion failed for the lack of a second. Mr. Lewicki made a motion to reinstate the insurance coverage back to March 3, 2007. This motion was seconded by Mr. Kwon and on a roll call vote, passed by a vote of 6-0.
	OPERATIONAL ISSUES
	A.	Solvent Classification for Gen-X :
		Mr. Eriksen reviewed with the Council that he had recently been contacted by a drycleaner regarding classification of a new drycleaning solvent labeled Gen-X. According to the solvent’s MSDS sheet, the two (2) main substances are hydrocarbon, which ranges in composition from 10% to 60% of the total ingredient weight and an aliphatic propylene glycol ether ranging from 10% to 50% of the total ingredient weight. The MSDS sheet notes exact percentages of the two (2) main ingredients is proprietary information. Based on the review of the solvent’s MSDS, it is his recommendation the Council classify Gen-X as a hydrocarbon solvent for purposes of calculating the annual licensure fee and the applicable solvent tax. On a motion by Mr. Lewicki and a second by Mr. Kwon, the Council voted 6-0 to classify Gen-X as a hydrocarbon solvent for taxing and licensing purposes.
	B.	Policy Issue – Payment of Legal Fees to Obtain Groundwater Ordinance:
		Mr. Eriksen reviewed background information with the Council noting key criteria for a contaminated drycleaning facility to receive a No Further Remediation (NFR) letter from the Illinois Environmental Protection Agency (IEPA) is to demonstrate that there are no completed exposure pathways that would present an opportunity for the general public to come in contact with the drycleaning solvent contamination. A key exposure pathway that needs to be evaluated is whether the groundwater has been contaminated by the drycleaning solvent and whether the possibility currently (or in the future) may exist whereby the general public can come in contact with the contaminated groundwater. For example, in the city of Chicago most groundwater pathway exposures have been eliminated through the city of Chicago’s groundwater ordinance which prohibits citizens from installing groundwater wells on their property. Recently, the Fund was contacted by an environmental consultant who has a drycleaner client located in Tinley Park, Illinois. The facility has both soil and groundwater contamination. The levels of contamination are not extremely high but exceed the Tier I levels which would allow for a No Further Remediation (NFR) letter without either implementation of institutional controls or active remediation of the contaminated soil and groundwater. In order to obtain a NFR letter for this drycleaning facility, the contaminated groundwater must be actively remediated to the required TACO standards, or an institutional control must be put in place to prevent the general public from being exposed to the contaminated groundwater. The environmental consultant approached the Village of Tinley Park to inquire if they would be receptive to considering passage of a groundwater ordinance. The attorney for the Village of Tinley Park responded that they would consider passage but only if the drycleaner funded the costs to have the Village’s environmental consultant and legal counsel review the related documentation. The attorney for the Village has estimated the professional/legal costs to range from $3,000 to $10,000. The Administrator estimates the cost of remediation of the groundwater contamination at this facility will exceed $100,000. The issue is does the Council wish to treat legal/professional expenses to be incurred by a city/village to obtain a groundwater ordinance for the affected property as an eligible remedial action expense reimbursable from the Fund? The Council conducted a lengthy discussion on the topic. The pro position was that by spending a maximum of $10,000, it could potentially save the Fund in excess of $100,000 of reimbursable cleanup costs. The con was that up to $10,000 could be spent in this specific instance and it would not result in a solution addressing the groundwater contamination. One suggestion was for the Council to approve the $10,000 on a contingency basis. If the Village approves the groundwater ordinance, the Fund would reimburse the $10,000. After general discussion, the consensus by the Council was that this issue should not be a policy decision but should be made on a case-by-case basis based on the specific facts related to the case. The question was raised is would this $10,000 be treated as a site investigation cost subject to the existing $5,000 site investigation deductible or would it be a remedial action cost subject to the current $10,000 deductible? After lengthy discussion, it was the consensus of the Council that it should be treated as a remedial action expense. On a motion by Mr. Gibson and a second by Mr. Lewicki, the Council voted 6-0 that issues similar to this should be brought to the Council on a case-by-case basis for a decision versus having a blanket policy decision. Mr. Kwak made a motion seconded by Mr. Kim to allow the drycleaner the option to either actively remediate the facility or go ahead and seek budget approval to reimburse the Village for professional/legal expenses incurred to obtain a groundwater ordinance for this property and adjacent properties. This cost would be subject to the remedial action deductible. The motion passed by a vote of 6-0.
	C.	Policy Issue – Reimbursement of Illinois Environmental Protection Agency (IEPA):
		Mr. Eriksen reviewed with the Council that in 1999, the Council established the fees charged by the Illinois Environmental Protection Agency (IEPA) for reviewing the documents and issuing a No Further Remediation (NFR) letter at an eligible drycleaning facility would be an eligible remedial expense reimbursable from the Illinois Drycleaner Environmental Response Trust Fund (Fund). In 2003, the Council determined the Fund may pay IEPA directly on eligible claims for site remediation fees charged by IEPA for reviewing the technical reports associated with the process of obtaining an NFR letter at the facility. Specifically, the procedure notes that “at the time the Fund receives the SRP invoice and reviews it for eligibility, if the claim is not eligible, IEPA would be informed of the ineligibility and they would have to seek payment directly from the claimant.” Recently, IEPA has sent directly to the Fund, SRP invoices for services involving claims that were at one point in time eligible for remedial program benefits from the Fund but as of the date of the receipt of the invoice, were currently ineligible. Based on the current Council procedure, these invoices are being denied as being ineligible in as much as the claims were ineligible upon receipt of the SRP invoices from IEPA. Previously, the Council has determined that for environmental consultants and contractors, services rendered by the consultant and/or contractor prior to loss of eligibility would be eligible for reimbursement from the Fund. Does the Council wish to apply the same policy to SRP review fees incurred by IEPA prior to the loss of eligibility by the claimant? After discussion by the Council, on a motion by Mr. Lewicki and a second by Mr. Kim, the Council voted 6-0 to treat IEPA’s review fees the same as the environmental consultant’s services, meaning the invoice will be reviewed in detail and all services rendered prior to the claim’s loss of eligibility will be reimbursed by the Fund.
	D.	Amendments to the Fund's Administrative Rules:
		Mr. Eriksen noted there are two (2) sets of regulations requiring the Council’s review and adoption. The first set involves the settlement of a drycleaner facility insurance claim. The Council has previously adopted regulations that deal with the settlement of remedial claims but had not specifically defined in regulations the procedures for settling of an insurance claim. The settlement procedures as outlined in the proposed regulation mirrors the Council’s current written policies and procedures and also the terms of the current insurance policy. On a motion by Mr. Kwon and a second by Mr. Lewicki, the Council voted 6-0 to have the Administrator move forward with filing with JCAR the proposed rule dealing with the settlement of an insurance claim. The second set of rules involves the record retention requirements for licenses, remedial claims, insurance documentation and appeals. The Council has previously reviewed and established the time periods for record retention. On a motion by Mr. Kwak and a second by Mr. Lewicki, the Council approved the proposed record retention regulation by a vote of 6-0.
	E.	Fund Solvency:
		Chairman Polak noted that since all of the Council members were not present at the meeting, he would like to defer discussion of Fund solvency until the December 2007 Council meeting.
	F.	Modification of Council's Three (3) Bid Requirement for Remedial Action Plan (RAP) Proposals:
		The Council currently requires a claimant obtain three (3) bids for preparation of a Remedial Action Plan (RAP). This was to insure that a claimant, and indirectly the Fund, was receiving the best value for the remedial action planning services. Proposals from three (3) different consultants also provided for additional insight and possible innovative ways to cost effectively remediate the contaminated facility. For the past several years, it has become more difficult for the claimants to get three (3) bids for RAP’s due to the limited number of consultants that are actively doing remediation work for Fund participants. The RAP bids have ranged in dollar costs from $4,500 to a high of $9,500, with the majority ranging between $5,000 and $7,000. An environmental consultant is requesting the Council to modify their policy and no longer require the claimant to obtain three (3) bids for the preparation of a RAP. Specifically, this individual stated it was particularly important now considering the Fund will be increasing the remedial action deductible from $10,000 to $15,000 if the RAP is not completed by December 31, 2007. The issue for Council consideration is does the Council want to modify their existing policy regarding the number of bids required for preparation of a RAP? Mr. Eriksen reviewed three (3) different options with the Council, including: 1) maintaining the existing policy; 2) modifying the three (3) bid requirement so that only one (1) bid is required  for the period between now and December 31, 2007; or 3) modifying the requirement so that only one (1) bid is required for a RAP. If the bid is deemed by the Administrator to be excessive or does not address the appropriate scope of work, the Administrator reserves the right to require at least two (2) additional bids. After discussion by the Council, on a motion by Mr. Lewicki and a second by Mr. Kwak, the Council voted 6-0 to adopt the Administrator’s recommendation #3, whereby only one (1) bid is required for the RAP. If the Administrator deems the bid to be excessive or does not address the appropriate scope of work, the Administrator has the right to request at least two (2) additional bids.
	G	Report on State Coalition for Remediation of Drycleaners Meeting:
		Mr. Eriksen reported that Dr. So and he had attended the annual SCRD meeting at the end of October 2007 in Portland, Maine. He noted a number of the states are moving their focus towards compliance with regulatory requirements. This is being accomplished via site inspections. In the near future a regulatory compliance PowerPoint presentation for perc drycleaners will be posted on the SCRD web site. Staff members assisted in the development of this presentation. He noted there were no new cleanup technologies discussed at the meeting. Florida has shifted their focus to removing the worst of the contamination in the major source areas and letting natural attenuation take place where the contamination is minimal. Lack of funding for most state programs is still an issue. Texas reported that drycleaners wishing to participate in their cleanup fund cannot use perc at the facility once it has been remediated. This appears to be a limiting factor in fund participation as only approximately 135 sites have entered their program. Wisconsin is increasing their gross receipts tax by 1% from 1.85% to 2.85%, effective January 1, 2008 and has also eliminated some of the deed restrictions associated with institutional controls. Oregon requires the drycleaners to report the number of pounds of hazardous waste generated annually at the facility. This may be something that Illinois would wish to consider requesting from the drycleaners in the future.
	APPROVAL OF PROGRAM BILLINGS
	Mr. Eriksen noted there were five (5) bills were before the Council for their review and approval.
	1. Williams & Company Consulting, Inc $52,392.00 Standard flat fee billing for September 2007, licensing, underwriting, claims processing and site inspections.
	2. John J. McCarthy $2,579.18 Professional legal services to the Council for the period of August 14, 2007 through September 11, 2007.
	3. Iain Johnston, Holland & Knight $1,353.13 Professional legal services as an Administrative Hearing Officer for September 2007
	Mr. Eriksen stated the following bills had been emailed to the Council and a copy was also provided today for their review.
	4. Williams & Company Consulting, Inc $49,856.00 Standard flat fee billing for October 2007, licensing, underwriting, claims processing and site inspections.
	5. Iain Johnston, Holland & Knight $869.42 Professional legal services as an Administrative Hearing Officer for September 2007
	On a motion by Mr. Lewicki and a second by Mr. Kwon, the bills were approved by a vote of 6-0.
	REVIEW OF ACTIVITY REPORT AND FINANCIAL STATEMENTS
	Mr. Eriksen reviewed with the Council the September 30, 2007 monthly activity report, noting there are currently 1,259 facilities licensed. Of those, 695 are currently insured through the Fund; 509 open remedial claims are in effect with estimated future reserve payments of $40.3 million. The Fund balance as of September 30, 2007 is $4,453,952. Expenditures exceed revenues by $22,867. Year-to-date claim payments total $550,714.
	CLAIM PAYMENTS IN EXCESS OF $75,000
	A.	Garbers Cleaners, Champaign, Illinois (claim #50076; site #0001209)
		Mr. Eriksen reviewed background information on the facility noting that Stephen Hamburg, owner of Garber’s Cleaners, is requesting the Council waive the three (3) bid requirement for the preparation of the Remedial Action Plan (RAP). The request is being made so he can expedite the completion of the RAP and the remediation as he is currently considering redevelopment of the property. Estimated proposed remedial cost will most likely exceed $300,000 but will be better known upon completion of the RAP. The environmental consultant has indicated at this time the most likely plan of remediation will be insitu treatment of the contaminated soils followed by some over-excavation of those contaminated soils. Budgets approved to date total $ 92,888.74. The total amount reimbursed to date is $ 74,281.27. The Administrator is requesting the Council approve consulting costs in the amount of $6,000 for preparation of the RAP and waiver of the three (3) bid requirement for preparation of the RAP. Based upon the Council’s earlier decision, the waiver of the three (3) bid requirement is no longer needed. On a motion by Mr. Lewicki and a second by Mr. Kwon, the Council approved the consulting costs in the amount of $6,000 for the preparation of the RAP.
	B.	Fox Valley Cleaners, St. Charles, Illinois (claim #50043; site #0002295)
		Mr. Eriksen reviewed background information on this facility. The facility has soil contamination in excess of the Csat limits. The consultant has been working with the City of St. Charles in trying to obtain a groundwater ordinance. If they are not successful in obtaining a groundwater ordinance, cleanup of the project will exceed the $300,000 cap. The Administrator is requesting budget approval of $16,700 for the continued site characterization and correspondence with the associated parties with this claim. This includes a 20% contingency. Mr. Eriksen stated everyone is optimistic at this point in time that a groundwater ordinance can be successfully negotiated for this facility and adjacent properties. Total approved budgets to date are $127,648.75. The reimbursed amount is $81,629.46. On a motion by Mr. Lewicki and a second by Mr. Gibson, the Council approved additional consulting costs in the amount of $16,700 by a vote of 6-0. Mr. Eriksen said there was a third claim included in the Council packet but it was included only for a waiver of the three (3) bid requirement for preparation of the RAP. No action is needed as the Council had modified their policy earlier in the meeting.
	OTHER ISSUES AS PRESENTED
	The Council tentatively set the next meeting date for Wednesday, December 19, 2007. Mr. Eriksen stated the audit of the fiscal 2007 financial statements will begin the first week of December and the Administrator has just received from the Administrative Hearing Officer, an opinion where he upheld the Council’s decision regarding an appeal of cancellation of insurance coverage for a drycleaning facility.
	PUBLIC COMMENT PERIOD
	A drycleaner in attendance commented regarding the appeal process and wondered if the Council couldn’t establish guidelines that if the appellant is late on paperwork the first time, the Administrator does not cancel the insurance coverage. If they are late the second time, charge them some monetary penalty. Mr. Peter Marbury asked the Council if they were going to take any action on cost recovery against solvent distributors based upon the recent ruling by the City of Modesto in which they were successful in obtaining a verdict against solvent manufacturers and distributors. The Council replied they have looked at both issues and the Attorney General’s Office, along with Mr. McCarthy, have determined the Council does not have standing to take such action. Mr. Bu Myung Park, KADA president, addressed the Council stating he would like the Council to meet with KADA directly to discuss any potential changes in the license fees/solvent taxes prior to the Council taking any official action so they could survey and inform their members. Mr. Park believes this issue should be addressed by the industry associations and the compliance programs should not be relied upon to deal with this issue. Mr. Polak responded it has not been the Council’s past practice to request any associations to conduct a survey on the Council’s behalf, and the Council is not currently sanctioning any survey.
	ETHICS TRAINING
	Mr. Eriksen conducted the annual Ethics Training with the Council members. There being no further business, on a motion by Mr. Polak and a second by Mr. Gibson, by a vote of 6-0, the Council meeting adjourned at 1:12 p.m.
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