MINUTES DRYCLEANER ENVIRONMENTAL RESPONSE TRUST FUND COUNCIL OF ILLINOIS HOLIDAY INN SELECT-NAPERVILLE NAPERVILLE, ILLINOIS APRIL 15, 2008

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1 MINUTES DRYCLEANER ENVIRONMENTAL RESPONSE TRUST FUND COUNCIL OF ILLINOIS HOLIDAY INN SELECT-NAPERVILLE NAPERVILLE, ILLINOIS APRIL 15, 2008 John Polak, Chairperson, called the Drycleaner Environmental Response Trust Fund Council of Illinois meeting to order at 10:08 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 Yong Kim, Program Administrator s Office John J. McCarthy, Program Counsel PRELIMINARY BUSINESS The minutes from the February 27, 2008 Council meeting were reviewed. Mr. Kim addressed the Council regarding the Council s vote to move ahead with a change in the license fees effective January 1, He wanted to note for the record he had misunderstood the motion. Mr. Kim believed the motion was to conduct public hearings first to get industry input regarding possible license fee adjustments which would be followed by the Council discussing and taking a vote on proposed license fee adjustments.

2 The minutes were amended to reflect Mr. Kim s comment regarding his vote to adjust the license fees. On a motion by Mr. Lewicki and a second by Mr. Gibson, the minutes were approved as amended by a vote of 7-0. APPEAL OF CANCELLATION OF INSURANCE COVERAGE A. Lupo Cleaners, Bolingbrook, IL Facility # Mr. Eriksen reviewed background information with the Council noting Ms. Eun Hee Kim is the drycleaner owner/operator of Lupo Cleaners located at 596 N. Pinecrest Rd in Bolingbrook, IL. Ms. Kim began operating the facility on October 8, The pollution liability insurance coverage issued by the Fund cancelled on January 12, 2008 for failure of the insured to pay the second annual installment premium of $700. On January 3, 2008, a telephone call was made and staff spoke to Kiwook Lee, who is Ms. Kim s brother. He indicated he would follow up and if the check had not been sent, he would send it immediately. The Administrator, on February 20, 2008, received a letter dated January 18, 2008 from Ms. Hee Kim wishing to appeal the cancellation of the insurance coverage. She indicated in her letter that she was seriously injured in October 2007 while operating a press machine at the drycleaning facility. This required several operations and during that time period she did not realize there had been a notice from the Fund requesting payment of the $700 installment premium. She paid the $700 that was owed on January 30, Ms. Kim addressed the Council stating she had been involved in a work accident that has resulted in significant injury to her arm. The arm had been broken and required skin grafts due to the burns. There was a period of approximately six (6) months from when the accident occurred when she was not really aware of what was happening at the business. She would appreciate reconsideration by the Council to not cancel her insurance. On a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the insurance coverage was reinstated to January 12, 2008 without a lapse in coverage and the remedial program benefits were reinstated. B. Martin Luther Cleaner, Chicago, IL Facility # Mr. Eriksen reviewed with the Council that Mr. Hyun Jin Kim is the drycleaner owner/operator of Martin Luther Cleaner located at 4200 S. Martin Luther King Drive in Chicago, IL. The facility had pollution liability insurance coverage with the Fund from June 29, 2000 through April 12, 2008, when the insurance cancelled for failure of the insured to get the necessary compliance program continuing education hours for calendar year On February 12, 2008, the Fund sent a letter to Mr. Kim noting that our records reflected he had only two (2) hours of continuing education credits for calendar year 2007, in as much as two 2

3 (2) of the hours he reported for 2007 were applied to his 2006 compliance program requirements. He has already used his one (1) time opportunity to get back into compliance with the Fund s CEU requirements. That one (1) time opportunity was used for calendar year Mr. Kim faxed a letter to the Administrator on March 24, 2008 requesting to appeal the upcoming cancellation of his pollution liability insurance coverage for failure to have the necessary compliance program CEUs. Mr. Kim addressed the Council and indicated he did not know the CEU course he had taken from Environmental Safety & Management (ESM) at the end of 2007 was only good for two (2) hours of CEU credits. He said it was his mistake he missed getting the 2006 CEU inspection. Mr. Kim, of ESM Compliance Program, was in attendance and stated he thought possibly Mr. Hyun Kim had attended other CEU courses and that was why he was not concerned that he had only attended a single two (2) hour CEU course that ESM offered for calendar year Mr. Kwak stated he felt it was unfair for the Council to penalize the drycleaner owner/operator if there was no way for them to effectively rectify the error during the 60-day cancellation period. Mr. Polak inquired as to how many CEUs Mr. Kim had for He stated to-date he has two (2) CEUs as he just completed a site inspection by the NDI Compliance Program. Mr. John Bredenkamp believes the Council needs to consider modification of their current policy which would provide everyone who gets a cancellation notice an opportunity to rectify their cancellation notice during the time period given. After considerable debate by the Council, Mr. Polak stated that may be something the Council should consider in the future but this does not help Mr. Hyun Kim, whose policy cancelled under the Council s existing policies and procedures. On a motion by Mr. Bredenkamp and a second by Mr. Kim, the Council voted 6-1 to provide Mr. Hyun Jin Kim one (1) additional exception to the continuing education requirement. Mr. Kim has until December 31, 2008 to get the required number of CEUs for 2008 and correct the 2007 CEU shortage. Mr. Polak commented it would be appropriate to review the CEU issues regarding cancellation of insurance coverage. Mr. Kwak believes the Council should notify all cleaners by September 1 st that they need to get their CEUs. It was also mentioned the Fund send an advance cancellation notice so if the drycleaner does not get the appropriate CEUs, the insurance would cancel as of December 31st. Mr. Polak noted there were insurance law issues that would need to be researched if the Council took that approach. Mr. McCarthy stated this approach would involve a great deal of paperwork by both the compliance program and the Administrator. After additional discussion, Chairman Polak stated he would like to discuss the issue further at a future meeting. 3

4 OPERATIONAL ISSUES A. Legislative Update: Mr. Eriksen updated the Council as to the status of HB2170. It has been passed out of the House Environmental and Energy Committee and should be scheduled for a vote in the House in the near future. Rep. Mike Smith is still confident the legislation can pass during the current legislative session. He also reviewed with Rep. Smith what information and parameters are needed in order for the legislature to consider licensing of drop stores. Rep. Smith indicated it was his opinion such legislation could not easily be passed and the industry would have to make a compelling case that drop stores are receiving direct benefits from the Fund. Mr. Kwak is in favor of licensing drop stores as he is concerned active drycleaning plants will consolidate which will result in a further shortfall of revenue for the Fund. After discussion by the Council, Mr. Polak stated if the Council wishes to move ahead with this issue, they must define what a drop store is and must define the benefits the drop store would receive. He stated if there was a consensus by the Council, he will include the topic on the next meeting s agenda for further discussion. Mr. Gibson suggested sending a letter to all licensed plants asking them to list all of the drop stores they do work for or currently own. This would be one way of getting the information to determine approximately how many drop stores exist in Illinois. Mr. Chang Lee addressed the Council stating it is essential drop stores be licensed in order for it to be equitable for all drycleaners in the state. Mr. Kim concurred that there is a need to license drop stores. Mr. Polak again reiterated it would be necessary to define what a drop store is and what benefits they would receive before proceeding ahead with consideration of any legislation to license drop stores. B. Fund Solvency Timetable for Public Hearings: Mr. Eriksen reviewed with the Council the process they must follow in order to adjust the license fees. The Council is required to hold public hearings and accept written comments on the proposed license fee revisions. Once those comments have been received, they would be reviewed by the Council and the proposed license fee revisions would either be affirmed or modified. Upon final action by the Council, the proposed modifications would be presented to and reviewed by the Joint Committee on Administrative Rules (JCAR). 4

5 Mr. Kwon interjected and asked the Chairman and the Council to reconsider their vote and decision to adjust the license fees as of January 1, 2010 as passed at the February 27, 2008 Council meeting. He stated the Council did not adequately consider Scenario B or Scenario D as previously outlined by the Administrator. After brief discussion by the Council, Mr. Polak noted the Council would move forward with public hearings to discuss the license fee modifications passed at the February 27, 2008 Council meeting unless there is a revote on the issue. Mr. Eriksen recommended the Council begin the public hearings in September and conclude them by the end of October This would allow time for the Council to review and discuss the public hearing comments prior to January 1, In the early part of 2009, the Council could take their final recommendation to JCAR for their review and comment. Mr. Kwon again addressed the Council stating he had concerns with the proposed license fee adjustments and asked the Council give consideration to revisiting their February 27, 2008 vote. Mr. Kim made a motion to reconsider the February 27, 2008 vote to adjust the license fees. The motion was seconded by Mr. Kwon. On a roll call vote, the motion failed by a vote of 3-4, with Mr. Kwon, Mr. Kwak and Mr. Kim voting to reconsider the vote and Mr. Bredenkamp, Mr. Gibson, Mr. Polak and Mr. Lewicki voting in opposition. Mr. Bredenkamp recommended the Council begin the public hearings in early September and end them by October 15, 2008, to avoid having any delays due to weather conditions. Mr. Chang Lee interrupted the discussion and argued the Council s previous actions were invalid as at least two (2) members of the Council are not valid members as their terms have expired. Mr. Lee went on a vocal tirade against the Council, accusing them that they had not done their job by individually reviewing claim costs, talking to the drycleaning industry people and soliciting their input on significant matters such as changes to the license fee and solvent taxes, and controlling program costs such as the Administrator s fees, incurring costs for rental of meeting rooms to hold Council meetings, etc. Mr. Polak requested Mr. Lee hold any further comments until the Public Comment Period on the agenda. Mr. Lee refused and continued his tirade against the Council, at which time the Chairman terminated any further discussion regarding the timetable for public hearings. 5

6 APPROVAL OF PROGRAM BILLINGS Mr. Eriksen noted the following bills before the Council for their review and approval. 1. Williams & Company Consulting, Inc... $ 77, Standard flat fee billing for February 2008, licensing, underwriting, claims processing and site inspections. Mr. Eriksen noted this bill had been verbally approved by each of the Council members prior to the meeting. 2. John J. McCarthy... $ 1, Professional legal services to the Council for the period of February 20, 2008 through April 3, Williams & Company Consulting, Inc... $ 52, Standard flat fee billing for March 2008, 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 reviewed with the Council that as of March 31, 2008, there were 1,096 licensed drycleaning facilities that had renewed their license for 2008 and 8 additional license applications were currently being reviewed; 683 drycleaning facilities have pollution liability insurance policies issued by the Fund in force; open remedial claims total 471, with the representative claim reserves totaling $39.5 million. Outstanding approved budgets on these remedial claims are $3.2 million. The March 31, 2008 financial statements reflect a Fund balance of $5,960,448. To date, $2.3 million in license fees have been received for fiscal year 2008 and $1.9 million in remedial claim payment reimbursements have been made. CLAIM PAYMENTS IN EXCESS OF $75, United Cleaners, Lemont, IL Mr. Eriksen reviewed background information with the Council noting this is the facility in which the Council had approved a pilot study in 2002 to treat the soil with a thermally enhanced soil vapor extraction system. The system was 6

7 unsuccessful and further site investigation work has been done at the facility. The consultant is proposing a remedial action plan which would require using a Caisson auger to excavate the contaminated soil around the building foundation on the property and treat it via thermal desorption. Based on the additional amount of contaminated soil discovered at the facility and allowing for a contingency budget of 15%, the proposed remedial action budget request is $222,850. On a motion by Mr. Lewicki and a second by Mr. Gibson, the Council approved the budget request of $222,850 by a vote of Garbers Cleaners, Champaign, IL Mr. Eriksen reviewed with the Council the proposed Remedial Action Plan (RAP) for the facility. He noted since the February 27, 2008 Council meeting, at which time the Council approved monies for additional site investigation regarding groundwater contamination, he noted Northern Environmental has been negotiating with the Cities of Champaign and Urbana and the surrounding property owners regarding a limited groundwater ordinance for the property. Northern has arrived at an initial agreement whereby the ordinance will apply to all properties within a 1,000 foot radius of the drycleaning facility. Based on the proposed groundwater ordinance, active remediation at the facility will address the contaminated soil and modeling of the groundwater contamination. Three (3) remediation technologies were evaluated and the most cost effective is chemical oxidation of the contaminated soil. The remedial action cost estimate believes the total cost is to be approximately $168,480, plus $25,272 of contingency costs, which is 15 % of the projected total cost. Mr. Eriksen stated the Administrator is requesting Council approval for $193,752 of remediation costs. On a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the motion was approved by a vote of Concord Custom Cleaners, Rockford, IL Mr. Eriksen reviewed background information on the facility noting the claim has not been released for funding. Several site investigations have been conducted at the facility. Illinois Environmental Protection Agency (IEPA) has reviewed the most recent site investigation report and is requesting the installation of three (3) groundwater monitoring wells into bedrock located at off-site locations to further verify the delineation of groundwater impacts. The proposed total cost for this scope of work is $62, On a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council approved the budget request of $62, by a vote of

8 OTHER ISSUES AS PRESENTED Mr. Eriksen stated the next Council meeting is tentatively scheduled for Wednesday, May 14, All Council members indicated the date is okay. Mr. Eriksen reported the draft audit report for fiscal year 2007 should be released shortly. PUBLIC COMMENT PERIOD Mr. Chang Lee inquired why the Council does not ask enough questions about costs; both administratively and regarding cleanup costs. He further took the Council to task stating they do not work for the drycleaning industry. They need to work for the people of the industry and they need to ask for more public opinions. He also questioned when the Council terms expired. There being no further business, on a motion by Mr. Bredenkamp and a second by Mr. Lewicki, by a vote of 7-0, the Council meeting adjourned at 12:48 p.m. Respectively submitted, H. Patrick Eriksen Administrator 8