April 24, 2007 Meeting Minutes

	MINUTES
	DRYCLEANER ENVIRONMENTAL RESPONSE TRUST FUND COUNCIL of ILLINOIS HOLIDAY INN SELECT - NAPERVILLE NAPERVILLE, ILLINOIS APRIL 24 , 2007
	John Polak, Chairperson, called the Drycleaner Environmental Response Trust Fund Council of Illinois meeting to order at 10:18 a.m. A quorum was present. Roll call was taken with the following members present:
	John Bredenkamp David Gibson Paul Kwak Charles Kwon Jerry Lewicki John Polak Young B. Kim Also present were: H. Patrick Eriksen, Program Administrator's Office John J. McCarthy, Program Counsel
	PRELIMINARY BUSINESS
	The minutes from the February 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 7-0.
	APPEALS
	Mr. Eriksen reported there are several appeals for review by the Council.
	1.	Appeal of Loss of Remedial Program Benefits - Site #0001486 - Vogue Cleaners:
		Mr. Eriksen noted Mr. Venkat Venkatasamy is the drycleaner operator and president of RAJ Kumar, Inc. who owns Vogue Cleaners located at 291 S. Schmidt Rd in Bolingbrook , IL . Mr. Venkatasamy was participating in the appeal via telephonic conference. The facility has been continuously insured by the Fund since June 29, 2000. The Fund did not receive documentation that intrusive testing was conducted at the facility and that contamination existed prior to June 30, 2006 filing deadline. Due to the lack of documentation as of July 1, 2006, the facility was determined to be ineligible for remedial benefits. Mr. Venkatasamy is appealing to the Council denial of remedial program eligibility due to untimely filing of intrusive testing documents. The Phase I site assessment for the facility was received by the Fund on April 28, 2006. It was sent directly to the Fund from Mr. Jack Yan , president of Quality Environmental Solutions, who is the environmental consultant for this drycleaning facility. The Phase II site assessment documenting contamination at the facility was not received by the Fund until August 8, 2006. A letter dated July 25, 2006 was sent to Mr. Venkatasamy stating the Fund had not received intrusive test results for his drycleaning facility. Upon receipt of this letter, Mr. Venkatasamy contacted the Fund stating intrusive testing had been completed and his environmental consultant, Mr. Jack Yan , was to have forwarded the report directly to the Fund. Mr. Venkatasamy sent a copy of the intrusive testing report to the Fund along with a copy of Mr. Yan 's cover letter dated April 4, 2006. The Administrator requested Mr. Venkatasamy submit a copy of the consultant's invoice for preparation of the Phase II site assessment along with a copy of the driller's invoice and a copy of the lab invoices. This information was provided on January 8, 2007. A detailed review of the invoices and the consultant's report indicated the intrusive testing had been completed prior to June 30, 2006. The driller invoice reflected intrusive testing was conducted on February 2, 2006. This correlated with the lab invoices dated February 10, 2006, which noted the samples were received on February 3, 2006. The Phase II report received by the Fund on August 8, 2006 was dated April 4, 2006. Mr. Venkatasamy stated Mr. Eriksen had accurately portrayed the dates, times and events leading up to the appeal for remedial program eligibility. It is his belief Mr. Yan submitted the Phase II report to the Fund prior to the June 30, 2006 deadline and he requested the Council make his facility eligible for remedial program benefits. Mr. Eriksen stated it was his recommendation that the Council deem Vogue Cleaners met the Fund's requirements for receiving remedial program benefits based upon the supporting documentation received from Mr. Venkatasamy . On a motion by Mr. Bredenkamp and a second by Mr. Lewicki , the Council voted 7-0 to allow Vogue Cleaners to be eligible for remedial program benefits.
	2.	Appeal of Expiration of Insurance Policy – Site #0001376 – Mr. Snappy Cleaners
		Mr. Eriksen reviewed background information with the Council regarding the cancellation of insurance. He noted Min W Lee is the drycleaner owner/operator of Mr. Snappy Cleaners located at 1925 Roosevelt Rd in Broadview , IL . The facility had pollution liability insurance coverage with the Fund from June 29, 2000 until January 21, 2007, when the insurance expired for failure to pay the second semi-annual premium installment. On January 11, 2007, via certified mail, the Fund had sent a Notice of Cancellation for non-payment of premium to Mr. Lee which he signed for on January 15, 2007. On January 12, 2007, the Administrator's staff called Mr. Lee and reminded him that his $700 installment payment was past due and the Fund had sent a 10-day cancellation notice. He was informed if the $700 semi-annual installment premium was not received by January 21, 2007, his insurance would cancel and he would lose all program benefits. Mr. Lee stated he would take care of the issue immediately. The $700 installment payment was not received by January 21, 2007 and the insurance policy expired for failure to pay the insurance premium. On February 2, 2007, the Fund received the $700 installment payment. The envelope was postmarked January 31, 2007. Mr. Lee was in attendance to present his appeal to the Council. Mr. Lee addressed the Council noting he has had various personal problems that have impacted his business. In May 2006, his wife, who is his primary work partner at the drycleaning facility, became ill. His wife's illness had her in and out of the hospital throughout the last half of 2006, which hampered his ability to focus on his business. At the end of 2006, his wife underwent another major surgery. He apologized, recognizing that he was late with his payment and he promised that it would not happen again. Mr. Polak asked the Council if they believe there are extenuating circumstances that impacted Mr. Lee 's ability to make his insurance premium payment on time. Mr. Lewicki noted it was a minor infraction and the premium was received within several weeks after the due date. Mr. Kim noted with the wife not working and being a partner in the business, it has a major impact on a small business. Mr. Eriksen reported the license fees have not yet been paid for 2007. Mr. Gibson asked Mr. Lee if he was prepared to immediately pay the license fee and late payment penalties. Mr. Lee replied that he would. After discussion, on a motion by Mr. Bredenkamp and a second by Mr. Lewicki , the Council voted 7-0 to reinstate the insurance coverage back to January 21, 2007 provided that the appropriate paperwork and late payment fees are paid immediately.
	3.	Appeal of License Late Payment Fees - Site #0003024 - Wilton Cleaners:
		Mr. Eriksen noted that he had received a call on Tuesday evening from the CPA representing the owners of Wilton Cleaners, requesting the appeal be deferred until the next Council meeting.
	APPEAL REQUESTS TO EXTEND 30 DAY TIMEFRAME TO REMOVE DRYCLEANING MACHINES AT INACTIVE FACILITIES
	Mr. Eriksen reviewed with the Council his memorandum regarding five (5) drycleaning facility owner that have sent letters to the Administrator requesting an extension of the date to remove the drycleaning machine(s) from their facilities or an exception to the Council's policy that they adopted in January 2007. The policy requires facilities moving from an active to an inactive drycleaning plant status must remove all drycleaning solvent and the drycleaning machine(s) from the premises within 30 days or be subject to the Fund's licensing requirements. Mr. Eriksen presented four (4) issues for Council consideration: Regarding Issue #1, does the Council wish to grant the facilities listed in the memorandum additional time to remove their drycleaning machines from their plant or else require them to be licensed for 2007? The Council conducted considerable discussion noting that they feel the 30-day timeframe is still reasonable. Regarding licensed facilities that cease operations in 2007 and future years, it was noted that it would be inappropriate to have them remove their machines by December 31 st if they still have the right to operate the machine through that date. On a motion by Mr. Bredenkamp and a second by Mr. Kwak, the Council by a 7-0 vote, amended their policy for machines removed in calendar 2007 and future years by requiring the machines be removed by January 31 st of the following year or be subject to the annual licensure requirements. The Council discussed the waiver requests of the drycleaners listed in the memorandum. After additional discussion, on a motion by Mr. Gibson and a second by Mr. Bredenkamp , the Council voted 7-0 to give these facilities until May 31 st to remove the solvent and machine(s) from the premises. Regarding Issue #2, the Council took no action as the drycleaner did not convert the facility from an active plant to a drop store but simply closed all operations at the facility. Issue #3: Will the Council allow the drycleaner to continue using his existing drycleaning machine as a dryer for wet cleaning? The Council conducted a lengthy discussion on this issue. On a motion by Mr. Gibson and a second by Mr. Bredenkamp , the Council voted 5-2, requiring the drycleaner to remove the machine by May 31, 2007. Mr. Kwak and Mr. Kwon cast the dissenting votes. Issue #4: Does the Council wish to provide the Administrator with some discretionary authority to grant extensions to the 30-day requirement for removing the drycleaning machine or does the Council wish to review and act upon each request? After discussion by the Council, on a motion by Mr. Bredenkamp and a second by Mr. Lewicki , the Council voted 7-0 to grant the Administrator an additional 30-day authority for removing the drycleaning machine based upon his discretion. Mr. Polak recessed the meeting at 12:00 p.m. and reconvened the meeting at 12:18 p.m.
	OPERATIONAL ISSUES
	A.	Review of Compliance Program Audits:
		Mr. Eriksen reviewed the draft compliance program audit report with the Council, noting the deficiencies that were found during the audit. Mr. Eriksen stated he is asking for direction from the Council regarding the following issues: 1. Does the Council wish to pursue an audit of the Environmental Safety & Management Program administered by Richard Kim ? Mr. Kim was unable to attend the meeting and has had no contact with the Administrator since early February. 2. Several of the compliance programs failed to have all of their documentation available for audit at the February 21, 2007 meeting. Does the Council want the Administrator to schedule a time with each of the compliance programs to visit their facilities and try and review the documents that were not available during the audit? 3. What action, if any, does the Council wish to take to address the deficiencies as outlined in the draft audit report? The Council discussed at length the various deficiencies and their impact on the effectiveness of the compliance programs. The Council agreed that they need to define criteria for possibly decertifying a compliance program. Discussion centered on conducting another audit within six (6) months to review the status of the files. Ms. Sue Kratz , representing the STAR program, stated that giving everyone another six (6) months to get their files in order would be unfair as everyone was notified well in advance of the Council's audit date and had adequate time to get their files in shape. If they have done an appropriate job in administering their compliance program, they should not need six (6) months to get their files in order. After additional discussion, on a motion by Mr. Bredenkamp and a second by Mr. Kim , the Council directed the Administrator to contact all of the compliance programs and request them to bring their files that were audited in February to the next Council meeting for a second review. They should have copies of the missing documents or an explanation of why those documents were not available to them. In addition, the Administrator was to convey to them that the Council would be reviewing the programs for possible decertification. The motion passed by a vote of 7-0.
	B.	Review of Fiscal 2006 Audit Report:
		Mr. Eriksen noted the audit report had not yet been released but would be released prior to the next Council meeting at which time he would distribute and review it in detail with the Council.
	C.	Legislative Update:
		Mr. Eriksen noted that as of Tuesday, April 17, 2007, the Council's requested amendments to the Drycleaner Environmental Response Trust Fund Act had been drafted and are being reviewed by Speaker Madigan's staff. He is anticipating the legislation will be introduced yet this year but due to numerous issues surrounding the proposed state budget, introduction and passage of the legislation is far from certain. In the draft fiscal year 2006 audit report, the auditors had commented the Council has not been complying with the requirement that all invoices and bills relating to the remediation work shall be submitted with appropriate documentation, as deemed necessary by the Council, not later than 30 days after the work had been performed. In the audit exit interview, Chairman Polak noted enforcing this 30-day requirement is not practical, as often the claimant has not received the invoices from the consultant within 30 days of when the work was performed. The Administrator is proposing the following recommendation that 415 ILCS 135.40(f)(6) be modified as follows: (6) Unless emergency conditions exist, a service provider shall obtain the Council's approval of the budget for the remediation work before commencing the work. No expense incurred that is above the budgeted amount shall be paid unless the Council approves the expense prior to its being incurred. All invoices and bills relating to the remediation work shall be submitted with appropriate documentation, as deemed necessary by the Council , . not later than 30 days after the work has been performed. On a motion by Mr. Bredenkamp and a second by Mr. Lewicki , the proposed legislative change was approved by a vote of 7-0.
	APPROVAL OF PROGRAM BILLINGS
	Mr. Eriksen noted the following bills were before the Council for their review and approval.
	1. Williams & Company Consulting, Inc $68,256.00 Standard flat fee billing for February 2007, licensing, underwriting, claims processing and site inspections.
	2. John J. McCarthy $1,815.00 Professional legal services to the Council for the period of February 13, 2007 through April 17, 2007.
	3. Iain D. Johnston, Holland & Knight, LLP $1,192.50 Professional legal services associated with insurance assignability issues for the month of February 2007.
	4. Iain D. Johnston, Holland & Knight, LLP $583.00 Professional legal services associated with insurance assignability issues for the month of March 2007.
	5. Williams & Company Consulting, Inc $62,174.00 Standard flat fee billing for March 2007, licensing, underwriting, claims processing and site inspections.
	On a motion by Mr. Lewicki and a second by Mr. Bredenkamp, the bills were approved by a vote of 7-0.
	REVIEW OF ACTIVITY REPORT AND FINANCIAL STATEMENTS
	Mr. Eriksen noted that as of March 31, 2007, 1,099 licenses had been issued for 2007. As of April 23, 2007, the total was 1,159, with 63 pending. This is comparable to the renewal rate for 2006. As of March 31, 2007, 716 insurance policies were in effect and there are 572 active and inactive remedial claims with outstanding reserves of $41.7 million. Total remedial claim payments made to date are $15.7 million. Included in the monthly activity report is a listing of released remedial budgets under $800,000. This reflects the budgets on facilities that could possibly receive a No Further Remediation letter with limited site investigation work. Mr. Eriksen reviewed the March 31, 2007 financial statements noting that the Fund balance is $4,654,277.
	CLAIM PAYMENTS IN EXCESS OF $75,000
	Mr. Eriksen reviewed with the Council that Magic Touch Cleaners in Norridge Illinois , Site #0001399 (claim #50001), is requesting a waiver for the 3-bid requirement. Mr. Eriksen reviewed the background and a recap of the facility, noting that only one (1) out of five (5) consultants bid on the remedial action plan, which is a chemical injection using sodium permanganate. Based upon the circumstances as outlined in the memorandum and pending litigation, the claimant is requesting the Council waive the three (3) bid requirement for remedial action in order to proceed with the activities without further delay. On a motion by Mr. Lewicki and a second by Mr. Bredenkamp , the Council voted 7-0 to waive the three (3) bid requirement for remedial action proposals.
	OTHER ISSUES AS PRESENTED
	Mr. Eriksen noted that the next regularly scheduled meeting is May 16, 2007, which is too close to the current meeting. After discussion by the Council, June 13, 2007 was established as the next Council meeting. Mr. Polak stated he is willing to host the Strategic Planning Session in Peoria , which is tentatively scheduled for July 25, 2007. Mr. Eriksen reported the Council's Administrative Rules were approved by the Joint Committee on Administrative Rules (JCAR) and went into effect March 27, 2007. These rules involve the set aside of $800,000 per year for three (3) consecutive years to provide funding for facilities that can get an NFR with minimal additional site investigation and the classification of Green Earth solvent as a “green solvent”.
	PUBLIC COMMENT PERIOD
	Mr. Lou Ryseff addressed the Council with a question and inquired how Dry-Solv is currently being taxed. Mr. Eriksen responded it is currently being taxed as a chlorine-based solvent. There being no further business, on a motion by Mr. Lewicki and a second by Mr. Kwon , by a vote of 7-0, the Council meeting adjourned at 1:25 p.m.
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