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July
2003 Meeting Minutes
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MINUTES |
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DRYCLEANER
ENVIRONMENTAL RESPONSE TRUST FUND
COUNCIL of ILLINOIS
HOLIDAY
INN SELECT
NAPERVILLE, ILLINOIS
JULY 24,
2003
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John
Polak, Chairperson, called the Drycleaner Environmental Response
Trust Fund Council of Illinois meeting to order at 9:00 a.m. A quorum
was present. Roll call was taken with the following members present:
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John Bredenkamp
Augustine Chung
Andrew Chweh
David Gibson
Young B. Kim
Jerry Lewicki
John Polak
H. Patrick
Eriksen, Program Administrator's Office
John J. McCarthy, Program Counsel
Dorcee Lauen, Program Administrator's Office
C. Michael Perkins, Program Administrator's Office
Juho So, Program Administrator's Office
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PRELIMINARY
BUSINESS |
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The minutes
from the June 11, 2003 Council meeting were reviewed. On a motion
by Mr. Bredenkamp and a second by Mr. Chung, the minutes were
approved by a vote of 7-0.
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STRATEGIC
PLANNING SESSION |
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Mr. Polak
noted the meeting would last most of the day, with the majority
of the focus of the meeting on the Council's annual strategic
planning session.
Mr. Polak
asked Mr. Eriksen to give the Council an update on the July 16,
2003 meeting with the Governor's Senior Environmental Advisor,
Julie Curry. Mr. Eriksen reported Rep. Mike Smith, Chairman Polak
and he met with Ms. Curry to update her regarding Fund status
and activities. Discussion focused on the Council's need to increase
revenue to successfully implement the changes of SB1000. Ms. Curry
indicated that the Governor was aware of the needs for increased
revenue and the Governor's office is expecting the Council to
take the appropriate action in terms of adjusting the solvent
taxes and license fees to insure that the Fund remains solvent.
Discussions were also conducted regarding the possible transfer
of monies from the Trust Fund to the General Revenue Fund to offset
administrative expenses. Mr. Polak went on record on behalf of
the Council that such transfers would be very detrimental to a
fund that is already facing substantial shortfalls. Mr. Polak
noted that the group pledged to keep Ms. Curry informed of any
Council action regarding the proposed increase in solvent taxes
or license fees.
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I. |
Review of Program Status and Evaluation of Past Goals |
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A. |
Review of Policies and Procedures |
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Ms. Dorcee
Lauen reviewed with the Council each of the policy changes that
the Council adopted since the November 7, 2002 Strategic Planning
Meeting as to the remedial and insurance claims, licensing and
underwriting policies and procedures.
Mr. George
Vaselakos commented that he had a concern with the Council's change
in policies and procedures requesting that the drycleaners supply
the poundage of clothes that they dry clean annually. Mr. Eriksen
noted that this was a request of information from the actuary
that could help them further tailor actuarial insurance premiums
for the insured drycleaning population. Mr. Vaselakos stated that
his concern was that if the poundage of clothes was considered
public information, it could be obtained by competitors of drycleaners
and used to give them an unfair competitive advantage. Mr. Eriksen
stated he would request Mr. McCarthy review the issue and determine
if this information could be kept confidential.
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B.
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Direct
Connect Coupling Requirements for Delivery of Petroleum Solvent: |
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Mr. Eriksen
reviewed with the Council that the Trust Fund Act requires that
all drycleaning solvents (including both chlorine-based and petroleum-based
solvents) are to be delivered via a direct coupled closed loop
system. In 1999, when the Council was developing their initial
policies and procedures, it was determined that it was not feasible
to deliver petroleum solvents via a direct coupled closed loop
system.
Recently,
the Administrator became aware that distributors of petroleum
solvent are not delivering petroleum solvent via a direct-coupled
system. A survey of several distributors indicated that in many
instances, the distributor is delivering a 55-gallon drum of petroleum
solvent and is not responsible for transferring the solvent into
the drycleaning machine. Discussions with several drycleaners
indicate the petroleum solvent is being pumped out of the 55-gallon
drum into a 5-gallon pail and then poured directly into the drycleaning
machine. It was also noted that some drycleaners are receiving
their petroleum drycleaning solvent into storage tanks via a tank
wagon that has a dispenser nozzle similar to that used to fuel
automobiles. Mr. Eriksen stated that based on the recent information
provided to the Administrator, it appears that a direct coupled
delivery system has not been developed and/or is not being utilized
by the industry. He noted his office suspended further enforcement
of the direct-coupled system requirement until the Council has
had a chance to review and discuss the issue. His question is
how does the Council wish to proceed on this issue?
After lengthy
discussion by the Council, it was their consensus that the Administrator
enforce the direct coupling requirement for petroleum solvents.
Consideration should also be given to require Department of Transportation
training as part of the compliance program for drycleaners who
are receiving petroleum via a tank wagon.
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C. |
Proposed Revision of the Insurance Renewal Process: |
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Ms. Lauen
noted that the Administrator currently sends an insurance renewal
application to each insured facility approximately 120 days prior
to the expiration date of the insurance policy. The Administrator
requests that the insured review the data contained in the renewal
application, make changes as necessary, and return it within 30
days, but no later than the expiration date of the policy. The
Administrator reviews the renewal information and upon receipt
of the appropriate premium, renews the insurance policy for another
year.
Approximately
60 days prior to the expiration of the insurance policy, a renewal
premium notice is sent to the insured stating the amount of premium
that is due and must be paid by the expiration date of the policy
to keep the insurance coverage in effect.
The Administrator
would like the Council to consider combining these two (2) steps
into one (1) process in order to minimize the number of times
the insured would have to handle paperwork in completing the renewal
process and reducing the possibility of sending the premium without
a renewal application on file. The Administrator is proposing
that the renewal application and billing notice be sent together
approximately 90 days prior to the expiration of the insurance
coverage. The insured could complete the renewal application and
send a premium with the renewal application, thus minimizing having
to handle their renewal documentation twice. All other insurance
renewal procedures would remain the same.
The Council
conducted a general discussion of the topic. On a motion by Mr.
Bredenkamp and a second by Mr. Lewicki, the Council voted 7-0
to authorize the Administrator to revise the procedures and combine
the previous steps into one and sending the renewal application
and billing notice together approximately 90 days prior to the
expiration of the insurance coverage. The Council recommended
that in the cover letter it should be noted that the insured will
now only get one (1) notice instead of two (2) in the renewal
process.
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D. |
Revised Insurance Application: |
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Ms.
Lauen reviewed with the Council the proposed revision to the insurance
application. Most of the revisions dealt with pollution prevention
measures and hazardous waste information. The revised application
was approved by consensus by the Council. It was noted that careful
attention should be paid to the size of the secondary containment
pan for storing of hazardous waste as various hazardous waste haulers
use different size waste containers which could impact compliance
with that requirement. |
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Mr.
Polak recessed the meeting at 10:13 a.m. and reconvened at 10:35
a.m. |
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E. |
Review of Fiscal 2003 Goals and Program Statistics: |
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Mr. Polak
noted that the Council had accomplished a great deal over the
past nine months by effectively addressing a number of longstanding
issues. The most significant being the passage of SB1000, which
extended the life of the Program, increased the remedial benefits
on active facilities to $300,000, and gave drycleaners a second
chance to participate in the remedial program.
Mr. Eriksen
reviewed with the Council the status of their goals for fiscal
2003. He noted that those goals involve fund solvency (i.e., solvent
taxes, license fees, claims prioritization), legislative initiatives,
pollution prevention, and communication. He noted that the passage
of SB1000 included new licensing categories for chlorine, petroleum-based
and green solvents. The new licensing categories were structured
to be revenue neutral. The Governor signed SB1000 on July 14,
2003, with it being effective January 1, 2004. Mr. Eriksen noted
that later in the meeting he would do a more detailed presentation
of the financial projections for the Fund program.
Regarding
claims prioritization, the Council had tentatively approved the
Administrator's initial prioritization matrix but had pended moving
ahead with it until the passage of SB1000 had been determined.
He noted that due to the shortened timeframe for conducting intrusive
testing at active drycleaning facilities and depending upon what
action the Council took towards increasing the revenue stream
for the Fund, it may be necessary within the next 12 months for
the Council to look at prioritizing payments in order that the
intrusive testing could be completed by June 30, 2006. He reviewed
the Trust Fund Act modifications included in SB1000, noting that
they would be outlined in a newsletter to all drycleaners. He
reported that the Administrator conducted 97 insurance site inspections
during the past year and that later during the meeting there would
be a presentation of the Administrator's audit of the five (5)
Council approved compliance programs. Regarding communication,
he noted that a number of things had been accomplished during
the past 10 months. It was noted the license renewal instructions
and the "Frequently Asked Questions and Answers" were translated
into Korean and posted on the Fund's web site. Presentations about
the Fund were made during this period to KADA and the Illinois
Association of Environmental Professionals. The Fund had an informational
booth at the KADA Trade Show in May 2003. An informational mailing
was sent to all drycleaners regarding program and legislative
issues. Green Earth Solvents made a presentation to the Council
and discussion on the promotion of green solvents occurred with
the Alternative Solvents Coalition. The Fund sponsored a vendor
seminar for environmental professionals to review new remedial
technologies.
Mr. Eriksen
reviewed Program statistics with the Council. He distributed to
the Council the June 30, 2003 monthly activity report, noting
the number of license and insurance applications in effect and
the status of the remedial claims and their respective reserves.
The Fund balance, as of June 30, 2003, was $6,467,286. Approved
budgets as of that date were $2.8 million, with total reserves
on eligible claims at $12,258,062.
Mr. Eriksen
noted for the Council that an error had occurred in the drafting
of the appropriation bill for the Trust Fund for fiscal year 2004.
Instead of reappropriating any remaining dollars of the initial
fiscal year 2003 appropriation, the bill included a reappropriation
from fiscal year 2002. This error reduces the Council's FY04 spending
appropriation by approximately $2 million. Mr. Eriksen stated
that he is working with the Office of Management and Budget in
the Governor's Office to resolve this issue, but it is possible
it may take legislative action during the November veto session
to correct this error. He would keep the Council updated on the
status of this issue.
Mr. Eriksen
reviewed with the Council various graphs, including licensed versus
insured drycleaners, total licenses issued since inception of
the Fund, claim dollars paid to date, cash balance compared to
approved budgets and for the 217 facilities with contamination,
the age distribution of when the facility began drycleaning operations.
He noted that the graph is comparable to the previous year and
it further reinforces that for drycleaning facilities in operation
prior to 1999, management practices at the facilities are more
indicative of potential contamination than the number of years
the facility has been an active drycleaning plant.
Mr. Eriksen
reported that 84% of the licensed facilities using a chlorine-based
solvent are paying the lowest fee of $500 per license, with 12%
paying the $1,000 fee and 4% paying the $1,500 license fee. This
is comparable to previous year when 81% of the facilities using
chlorine-based solvents paid the lowest fee of $500 per license.
Regarding
petroleum-based solvents, 83% paid the $500 license fee, 11% paid
the $1,000 license fee and 6% paid the $1,500 license fee. This
is also comparable to the previous year in which 80% paid the
$500 license fee. He reported that 91.1% of the licensed facilities
use strictly a chlorine-based solvent, 7.4% use a petroleum-based
solvent and 1.5% use both a chlorine-based and petroleum-based
drycleaning solvent. This is comparable to the previous year in
which 92.6% of the licensed facilities use strictly chlorine-based
solvents. It does indicate that there is a small but growing trend
of drycleaners moving away from chlorine-based solvents to petroleum-based
solvents.
Mr. Perkins
provided a review of the analysis of site investigation statistics
as requested by Dr. Chweh. He noted that he had reviewed 60 drycleaning
files that were selected at random from 224 eligible remedial
claims. He noted that if only three (3) soil borings are advanced
at a site at 8 ft. below ground surface and does not encounter
groundwater at that depth, there remains a 24.7% chance that the
impacted soil and groundwater would have been missed. He stated
that the percentage is significantly reduced if four (4) soil
borings are advanced at least 12 ft. below ground surface and
does not encounter groundwater. The percentage of potential impacted
sites that are missed is reduced to 8.3%. If groundwater is present,
an additional 2.3% of the investigated sites would be missed.
The combined percentage of missed sites is 10.6%. Based on the
Administrator's analysis, the Council was comfortable with the
parameters being utilized for the initial intrusive testing to
determine if a facility is contaminated.
Mr. Eriksen
provided the Council a comparison of the Illinois program to other
state programs. He noted Illinois still has the lowest solvent
fee for any state at $3.50 per gallon on perc and $ .35 per gallon
on petroleum. Illinois is second only to Florida in the number
of entities that pay fees. He reported to the Council that on
the average, the total fees paid per drycleaner in Illinois is
$1,625, with Kansas being the highest at $6,000. Regarding site
assessment initiatives, Illinois is second only to Florida in
site investigations, having initiated 172 facilities as of April
2000, when these numbers were compiled. Kansas is a distant third
at 46 initiated site investigations.
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F.
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Review
of Fund Financial Projections for the Period of July 1, 2003 Through
January 10, 2010 and for the Period of July 1, 2003 Through January
1, 2020: |
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Mr.
Eriksen reviewed with the Council the two (2) sets of financial
projections and related assumptions that were included in the Council
packet. The first set of projections is based on the current statute
in which the Program sunsets as of January 1, 2010. It assumes that
600 of the Fund's insured facilities would be contaminated and would
file a claim by June 30, 2004. This results in total claim costs
yet to be paid of $43,731,113 and assuming the current revenue structure
remains constant, would result in a potential Fund deficit of approximately
$30 million. The second set of financial projections for the period
of July 1, 2003 through January 1, 2020 assumes a realistic scenario
based upon SB1000. Under this scenario, it is assumed that 1,170
sites would be deemed to be contaminated and eligible for remedial
benefits. This results in total claim costs of approximately $117,058,050.
Assuming that the revenue stream does not increase and remains at
current levels, the program deficit as of January 1, 2020, would
be approximately $88 million. He noted that the Administrator has
updated the statistics on sites that have conducted intrusive testing
and found approximately 93% of the sites that have been tested are
contaminated. The Administrator has used a 90% contamination ratio
in these projections. A review of the number of sites needing remediation
remains constant with approximately 55% of those sites that are
determined to be contaminated needing either remediation of soil
or groundwater in order to get a No Further Remediation (NFR) letter
from the Illinois Environmental Protection Agency. The average cost
per claim is anticipated to be $92,500, which is still slightly
less than Illinois EPA's projected average cost of $100,000 per
site. Mr. Bredenkamp inquired if it was necessary for the Council
to hire an actuary to review these costs to determine how realistic
they were. Mr. Eriksen replied that at this time, based upon the
limited data, he is quite comfortable with the numbers and feels
that an actuary would not be able to add any more substance to the
anticipated remedial costs, as they would not have the background
and understanding of the components of the program. |
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Mr.
Polak recessed the meeting for lunch at 12:09 p.m. The meeting reconvened
at 1:17 p.m. |
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G. |
Segregation of Insurance Program Funds: |
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Mr.
Eriksen reviewed with the Council that the Chairman had requested
that the insurance fund transactions be segregated from all other
revenues and expenditures of the Program to give a true picture
of what the financial position of the insurance program was. Mr.
Eriksen stated that the Administrator's staff had recast those numbers,
which resulted in the insurance fund ending balance as of June 30,
2003 of $882,073. This was arrived at by including all of the insurance
premiums plus a percentage of the Fund's interest income, subtracting
an appropriate amount for administrative expenses, audit expense
and actuary expense, to arrive at a net insurance fund balance.
Mr. Eriksen also reviewed the budgeted FY04 numbers for the insurance
program, noting that we are looking at a potential scenario in which
revenue would exceed expenditures by approximately $2 million. This
is assuming that 400 facilities buy back insurance coverage plus
pay the 20% penalty and also reflects the actuarially determined
insurance premium for fiscal year 2004 of $1,400 per drycleaning
facility. |
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II.
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Program
Goals - Fiscal 2004 |
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Mr. Eriksen
briefly reviewed with the Council that the Program goals for fiscal
year 2004 are a continuation of those that have been set previously
by the Council and focus on Fund solvency, update of administrative
rules, pollution prevention and communication.
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A. |
Fund
Solvency |
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Mr. Eriksen
noted that for discussion purposes, he included in the Council
packet for their review, two (2) sets of data:
1. A break-even analysis comparison between SB1000 and existing
Trust Fund Act; and
2. A set of projections reflecting staged increases in revenue
that reflect a break-even position for the Fund, assuming 1,300
claims are filed by June 30, 2006. The initial increase in license
fees and solvent taxes would be effective January 1, 2004, a second
increase effective July 1, 2006, and a third increase effective
July 1, 2009.
He noted
the extension of the Fund's sunset date, combined with an extension
of the intrusive testing/remedial claim filing deadline, minimizes
the initial license fee and solvent tax increase necessary to
maintain Fund solvency. It allows all active drycleaning facilities
wishing to participate in the remedial program to conduct their
intrusive testing and file their claim within the next three (3)
years. On June 30, 2006, the Council will have a definitive number
of eligible remedial claims that will need funding and can more
accurately adjust the revenue stream at that time. He noted based
on a sunset date of January 1, 2020, the Fund's annual revenue
would need to increase by $3.7 million beginning January 1, 2004,
to eliminate the projected deficit.
In reviewing
the break-even analysis, Mr. Eriksen noted that the first column
reflects the projected deficit under the current program that
sunsets January 1, 2010, assuming 600 claims are filed by June
3, 2004. With a projected program deficit of approximately $32
million, the increase annual revenue needed per drycleaner would
be $3,341. Based on the legislation included in SB1000, the potential
deficit is $91 million, but spread over 16½ years equates to $3,758
increased annual revenue needed per drycleaner. He noted that
the key point between the two (2) scenarios is that in the first
scenario only 40% of the active drycleaning facilities are cleaned
up by the program, where approximately 90% of the active drycleaning
facilities are cleaned up under the SB1000 scenario, with an increased
cap in benefits for active facilities of $300,000.
He then reviewed
his break-even scenario, noting that it reflects a license fee
structure per the attached schedule in which drycleaners using
0-50 gallons of chlorine-based solvent would pay a $500 license
fee, effective January 4, 2004. Those using over 50 gallons through
100 gallons would pay a $1,000 license fee and those drycleaners
using more than 100 gallons through 150 gallons would pay a $1,500
license fee. The license fee increases by $500 per 50 gallon category.
Those drycleaners using over 600 gallons would pay a $6,500 license
fee. The solvent tax on chlorine-based solvents would go to $10
per gallon and the petroleum-based solvents would go to $1.00
per gallon. He noted that the next increase in license fees per
his scenario would be effective January 1, 2007, in which the
lowest license fee category of 0-50 gallons would go to $1,000
and each subsequent category would increase by $500. The next
increase in license fees would be effective January 1, 2010, when
the lowest category of 0-50 gallon usage would go to a $1,500
license fee and the subsequent categories would go up by $500
each. Effective July 1, 2006, it is assumed that the tax on chlorine-based
solvents would go to $20 per gallon and the solvent tax on petroleum
would go to $2 per gallon. The scenario reflects these taxes would
increase one (1) more time to $25 per gallon on chlorine-based
solvents July 1, 2009 and to $2.50 on petroleum July 1, 2009.
The Council
reviewed these projections at length. Mr. Polak noted that this
was a starting point for discussion and he thought the staggered
approach of increases was good and that this information would
help the drycleaning community prepare for increases that may
be necessary to keep the Fund solvent. Mr. Chung indicated that
possibly a larger increase needed to be done up front due to the
chance that future increases may not be staged in at the proper
time, which would result in an additional shortfall in tax. The
Council debated at length the proposed license fee increases as
shown in Mr. Eriksen's projections. Mr. Kim asked the Administrator
to plug new license fee rates into his projections, which reflected
that the license fees would increase by $1,000 per category for
all categories exceeding 200 gallons of usage, with the highest
category paying a $15,000 license fee. This license fee structure
would result in a reduction in revenue, assuming that it remains
constant over the life of the program. This is because 84% of
all drycleaners fall into the lowest three (3) categories of fees
and they did not receive any increase in Mr. Kim's projections.
Mr. Polak commented that if future claim forecasts develop more
favorably than currently projected, future fee increases would
not need to be as much.
After additional
discussion, on a motion by Mr. Gibson and a second by Mr. Kim,
the Council voted 7-0 to propose increasing the license fees as
reflected in Mr. Eriksen's projections, subject to appropriate
public hearings and evaluation of those hearing results.
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Mr. Polak
recessed the meeting at 2:40 p.m. and reconvened at 2:53 p.m.
Mr. Polak
stated that the Council was scheduled to hear a license late payment
penalty appeal and wished to deviate from the agenda and move
to that license late payment penalty appeal at this time. Mr.
Eriksen noted that the first appellant, Ms. MaryLou Linares, had
left a message at his office on Wednesday, July 23, 2003, stating
she would be unable to attend today's Council meeting and wished
to reschedule for the next meeting.
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APPEAL
OF LICENSE LATE PAYMENT FEES |
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The license
late payment penalty appeal before the Council today is Guffy's
Cleaners at 1103 West Fayette Avenue in Effingham, IL. The Site
Registration number is 2968.
Mr. Eriksen
reviewed with the Council the background information included
in their Council packet. He noted Mr. Duane Guffy operates Guffy's
Cleaners in Effingham, IL and the facility has been in operation
since 1960. The facility was sent an initial license application
and DS-3 Form in June 1999. In the fall 2002, the Administrator's
office received information that a drycleaning facility was being
operated at that location. A new license application and DS-3
Form was sent to Mr. Guffy on October 2, 2002. Mr. Guffy paid
$2,500 for the 1998 through 2002 license fee at this facility
on October 17, 2002. Late payment fees for the years 1998 through
2002 were assessed totaling $21,845.
Mr. Guffy
appealed the late payment fee on November 11, 2002, indicating
that he received a letter from the Illinois Environmental Protection
Agency, dated November 3, 1999, which he felt exempted them from
the licensing requirement. Attached for the Council's reference
is a copy of the letter from Donald E. Sutton, manager of the
Permit Section of the Division of Air Pollution Control, which
states the Illinois EPA acknowledges the receipt of a letter from
Mr. Guffy, dated October 9, 1999, and "confirms a withdrawal of
your operating permit in accordance with your request." Mr. Eriksen
noted that Duane Guffy and his father, Laurel, were in attendance
at the meeting to present their appeal to the Council.
Mr. Duane
Guffy made a presentation to the Council, reiterating the history
of the facility, noting that in the late 90s it had been inspected
twice by Illinois EPA, who had found everything to be in compliance
at the facility. He said based upon the correspondence letter
that was included in the Council packet from Illinois EPA, they
felt that their facility was exempted from the requirements of
the Trust Fund Act. The Council asked Mr. Guffy if he had a copy
of the letter that he had initially sent to the Illinois EPA on
October 19, 1999. He indicated that he had not been able to locate
that copy and that letter had not been requested from Illinois
EPA.
After general
discussion by the Council, a motion was made by Mr. Gibson to
reduce the late payment penalty to $12,000, provided that the
payment was made within 30 days. The motion died for lack of a
second. Mr. Laurel Guffy addressed the Council, providing the
Council personal background information and business dealings
and stated that he would be willing to settle the late payment
penalty for $10,000 and would pay it within 30 days.
Mr. Gibson
made a motion to accept Mr. Guffy's offer. The motion was seconded
by Mr. Lewicki and was passed by a vote of 5-1-1, with Mr. Bredenkamp
abstaining and Mr. Chung voting in opposition. Mr. Eriksen stated
that he would send a letter to the Guffy's, outlining the Council's
decision on the appeal.
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II.
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Program Goals - Fiscal 2004 (continued) |
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Mr. Polak
returned the meeting to the Strategic Planning Session, stating
the next issue to be dealt with was a discussion on increasing
the solvent taxes.
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A. |
Review of License Fees and Solvent Taxes: |
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Council discussion
focused on what the appropriate increase should be at this time.
It was the general concurrence of the Council that $10 per gallon
for chlorine-based solvents appeared reasonable at this time,
based on the anticipated funding needs of the program. Discussion
then focused on what the appropriate rate should be for petroleum
solvents. After a lengthy discussion, it was the concurrence of
the Council that the petroleum rate should be increased to $2
per gallon, which would put it in a 5-1 ratio in relationship
to chlorine-based solvents. This ratio is the same as several
other state programs and is probably more equitable when you assume
that newer drycleaning machines using DF2000 or any of the newer
petroleum solvents have a solvent usage ratio of 2-1 in comparison
to chlorine-based solvents.
On a motion
by Mr. Bredenkamp and a second by Mr. Gibson, the Council proposed
increasing the solvent taxes, effective January 1, 2004 as follows:
chlorine-based solvents - $10 per gallon
petroleum-based solvents - $2 per gallon
green solvents - $1.75 per gallon
The motion
passed by a vote of 7-0.
Mr. John Spomar
addressed the Council stating that he felt the proposed increase
in petroleum solvent tax was not fair and would penalize petroleum
drycleaners who are using a more environmentally friendly solvent
than perc and that the Council should look at some form of assistance
to those petroleum drycleaners who are trying to use a more environmentally
friendly solvent.
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B. |
Update of Administrative Rules |
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Mr.
Eriksen reviewed with the Council that based on the passage of SB1000,
there would need to be an update to the Fund's Administrative Rules
to reflect the legislative changes. He reviewed the proposed changes
that were outlined in his memo, stating that the Administrator would
begin working on these revised changes in the next several months
and the formal proposed changes would be brought to the Council
later this year for their review and approval. |
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C. |
Pollution Prevention |
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Mr. Eriksen
reviewed with the Council the draft of the compliance program
audit report. He noted for the Council that there was one (1)
change to the report regarding the Drycleaner Compliance Program
operated by S&ECC, in that they visit their facilities a minimum
once per year instead of once every two (2) years.
Mr. Eriksen
summarized that overall it would appear that the compliance programs
expended considerable efforts in the startup but have not matured
as well as might be expected with all but one or two. He noted
that it is recommended that the Council enforce the definitive
criteria set forth as the standard a program must meet or lose
their certification.
Regarding
facility inspections, the volume and quality of the written documentation
associated with the facility inspections vary greatly among the
compliance programs. He noted four (4) of the five (5) compliance
programs appear to have spent substantial time during the initial
phase of the compliance program by working with the drycleaner
members to inspect their facilities and reviewing compliance issues.
Filed documentation of the inspection activities was found to
be lacking or non-existent in many instances and is an area the
compliance programs must improve. In addition, documentation regarding
the resolution of discrepancies/issues noted during the inspection
was lacking in many files. He noted identification of a problem
or potential problem becomes nonproductive if timely follow-up
is not performed and documented.
Regarding
continuing education, this was the most frequent area of non-performance
by all the programs. Currently, the Fund's guidelines require
that the drycleaner owner/operator participate in four (4) hours
of continuing education courses annually. Several of the various
program administrators verbally represented that their members
had attended continuing education courses but did not have individual
records that could validate their statement. This is an important
area that all compliance programs need to focus on in terms of
documentation. Mr. Richard Kim, who administers the Environmental
Safety Management Program, stated that the Council could assist
with the continuing education requirements by sending a reminder
to drycleaners of the need to get the continuing education or
put it in a newsletter. Mr. John Lee, administrator of the Asian/American
Small Business Compliance Program, stated that the education needs
to be more "neutralized" and that the Council needs to provide
more realistic or flexible guidelines for continuing education
courses, defining what courses are acceptable. Other comments
were made that it should be the Council's responsibility to track
the continuing education hours. Mr. Eriksen stated that he disagreed
with that comment as that is the job of the compliance program
and if the Council must track and remind drycleaners of the continuing
education requirements, then it would be in the Council's best
interest to administer a compliance program.
Mr. Polak
stated that due to the limited time remaining in the day and additional
items to be covered on the agenda, that he would like to table
further discussion and continue review of the compliance program
criteria at the next Council meeting.
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D. |
Communication |
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Mr.
Eriksen reviewed his memorandum with the Council that outlined the
need to communicate with the industry the changes to the Trust Fund
Act as required by SB1000. He stated a mailing to all drycleaning
industry members would be conducted in the very near future. Written
communication of these changes would be provided in both English
and Korean. At least four (4) seminars would be conducted around
the state explaining these changes with emphasis placed on the January
1, 2004 deadline for purchasing back insurance coverage to become
eligible for remedial program benefits. In addition, he noted the
Administrator would begin implementation of a quarterly newsletter
to assist the drycleaning community in becoming better informed
about the Fund's status and current activities. |
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APPROVAL
OF PROGRAM BILLINGS |
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Mr. Eriksen noted that there were three (3) bills for review and
approval by the Council: |
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1.
Williams & Company Consulting, Inc. $ 93,047.00
Standard flat fee billing for June 2003, licensing, underwriting,
claims processing and site inspections. |
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2.
John J. McCarthy $ 1,425.00
Professional legal services to the Council for the period of June
2, 2003 through June 30, 2003. |
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3.
Marzullo Reporting Agency $ 278.85
Transcription of two (2) administrative hearing officer appeals
held on April 23, 2003 |
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On a motion
by Mr. Bredenkamp and a second by Dr. Chweh, the Council approved
the bills as presented by a vote of 7-0.
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OTHER
ISSUES AS PRESENTED |
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There were
no other issues presented.
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PUBLIC
COMMENT PERIOD |
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Mr. Polak
asked if there were any comments from the public. Mr. Henry Parker
of S&ECC stated that regarding the compliance programs, none of
the administrators except himself do it for a living and he is
surprised that they made as much progress as they did in providing
services and welcomes further discussion of the compliance programs
at a later meeting.
Mr. Ken Sink
noted that the Texas program exempts petroleum drycleaners from
solvent taxes and Fund participation except for payment of the
license fees. Mr. John Spomar stated that in Texas they do allow
the petroleum drycleaners to opt out of the program and that should
be an option that should be considered in Illinois. Mr. Eriksen
stated that he would review the Texas law and report back to the
Council at the next meeting.
Mr. Polak
noted that the final issue on the agenda for discussion was review
of the RFP for administration of the Drycleaner Trust Fund Program.
He stated that this discussion would not be closed to the public
but would request that anyone who had an interest in bidding on
the Request For Proposal excuse themselves from the meeting to
not put themselves in a conflict position. Williams & Company
staff excused themselves from the meeting at 5:25 p.m.
Mr. John McCarthy
reviewed the criteria for the RFP with the Council and noted that
he would incorporate their comments in the proposal and that tentatively
he has scheduled a pre-bidders conference for September 17, 2003,
with the proposal to be due October 15, 2003.
There being
no further business, the Council meeting adjourned at 6:00 p.m.,
on a motion by Mr. Gibson and a second by Mr. Chung, on a vote
of 7-0. .
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