MINUTES DRYCLEANER ENVIRONMENTAL RESPONSE TRUST FUND COUNCIL OF ILLINOIS CHICAGO MARRIOTT NAPERVILLE NAPERVILLE, ILLINOIS.
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1 MINUTES DRYCLEANER ENVIRONMENTAL RESPONSE TRUST FUND COUNCIL OF ILLINOIS CHICAGO MARRIOTT NAPERVILLE NAPERVILLE, ILLINOIS January 23, 2013 John Polak, Chairperson, called the Drycleaner Environmental Response Trust Fund Council of Illinois meeting to order at 10:01 a.m. A quorum was present. Roll call was taken with the following members present: John Bredenkamp Young B. Kim Paul Kwak Jerry Lewicki Dae Kim John Polak (via telephonic conference) Also present were: H. Patrick Eriksen, Program Administrator s Office John J. McCarthy, Program Counsel Yong Kim, Program Administrator s Office PRELIMINARY BUSINESS Mr. Jerry Lewicki presented a plaque to Mr. Charles Kwon, recognizing his contribution to the Trust Fund by serving as a Council member from 2005 through The minutes from the December 13, 2012 Council meeting were reviewed. On a motion by Mr. Kim and a second by Mr. Lewicki, the minutes were approved by a vote of 6-0.
2 APPEAL OF REMEDIAL PROGRAM BENEFITS Site # Kings Gard Cleaners, 648-B North Northwest Hwy, Park Ridge, IL Mr. Eriksen reviewed background information with the Council noting that Mr. Sun Kim is the owner/operator of Kings Gard Cleaners located in Park Ridge, IL. The drycleaning facility was eligible for remedial program benefits, and to date the Fund has reimbursed Mr. Kim $30, for eligible site investigation and remedial action costs. On July 23, 2012, the Fund received a proposal from Pioneer Environmental requesting budget approval of $3,340 to obtain a new No Further Remediation (NFR) letter for the facility and to pay for additional Illinois Environmental Protection Agency (IEPA) review costs. The Administrator s staff confirmed with Pioneer Environmental that the new NFR letter is not required by IEPA but by the landlord and the claimant. Mr. Eriksen noted IEPA issued an NFR letter on the drycleaning facility on September 6, Subsequent to that NFR letter, IEPA requested additional confirmation sampling as there were discrepancies noted in previous samplings, which called into question the validity of the samples. The Fund approved costs for the resampling at the site for which a report on that effort was provided to IEPA for their review. In a letter dated November 17, 2011, IEPA acknowledged the report but did not issue a new NFR letter. The Administrator denied the proposed budget of $3,340 because IEPA has granted a valid NFR letter and the Fund has met its obligation to reimburse reasonable costs to obtain an NFR letter. Mr. Eriksen stated Mr. Kim is before the Council today requesting budget approval for the environmental consultant to prepare for IEPA a new NFR letter request for the drycleaning facility. Mr. Sun Kim addressed the Council. Mr. Yong Kim, of the Administrator s office, translated for Mr. Kim. Mr. Kim stated he has paid all insurance premiums when due without violations. He noted his landlord refused to sign the first NFR letter which forced him to hire a new environmental consultant to re-review the records. Additional sampling was done at the facility and he is now requesting the Fund approve a budget to pay for the filing of a new NFR letter. After questions by the Council and additional discussion, on a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council voted 6-0 to deny Kings Gard Cleaners request for additional funding for a new NFR letter. APPEAL OF LICENSE TRANSFER REQUIREMENT Site # Carriage Cleaners, 215 S Waukegan, Lake Bluff, IL 2
3 Mr. Eriksen reviewed background information with the Council noting Mr. Dae Yong Kim was the owner/operator of Carriage Cleaners in Lake Bluff, IL. Effective August 31, 2012, he sold the facility to Mr. Andy Oh. As part of the sale transaction, Mr. Kim was to transfer to Mr. Oh the existing drycleaning facility license and the pollution liability insurance coverage at the facility. One of the Council s required policies and procedures for a license transfer between two (2) parties is that the original license must be returned to the Fund to be voided so that a license in the name of the new owner/operator can be issued. Failure to submit the original license negates the ability to transfer the existing license and the new owner/operator must purchase his own license beginning the date that he purchased the drycleaning facility, which in this case is August 31, Mr. Kim was unable to locate the original license for calendar year 2012 and submit it to the Fund as part of the transfer. The Administrator s staff was unable to transfer the license and has requested Mr. Oh pay a license fee for the period of August 31, 2012 through December 31, Mr. Kim requested the Council waive the requirement that the original license for 2012 be submitted to the Fund in order to transfer the 2012 license to Mr. Andy Oh. Mr. Kim addressed the Council and was assisted by Ms. Heidi Kang, who translated on his behalf. Mr. Kim noted that during 2012, he remodeled the facility and during that timeframe he was unable to locate the original license certificate. His wife had been on vacation for approximately three (3) months and when she returned she also could not find the license. This resulted in Mr. Oh paying $750 in license fees for a new license for the balance of Mr. Kwak inquired why the Council had the requirement to request return of the original license. Mr. Eriksen stated that was part of the Council s original policies and procedures when the Trust Fund was established and it was done to discourage drycleaners from taking the license to a new location and avoiding paying a license fee for the new location. After additional discussion by the Council, on a motion by Mr. Kwak and a second by Mr. Kim, the Council voted to waive the requirement that the original license be returned to transfer the license. The motion passed by a vote of 6-0. Mr. Kwak requested this Council policy be added to next month s agenda for additional discussion. OPERATIONAL ISSUES A. Policy Issue - CEU Requirement for Drycleaning Facilities Required to Have Insurance Coverage Per Public Act : 3
4 Public Act requires all active drycleaning facilities that are currently receiving or have received remedial program benefits from the Fund have $500,000 of financial assurance (pollution liability) coverage effective as of January 1, 2012 and maintain continuous coverage until the earlier of January 1, 2020 or the date the drycleaning facility ceases to be an active drycleaning facility as defined by the Trust Fund Act. One of the requirements for the Fund to be able to issue insurance on these facilities is that the drycleaner must be participating in an approved compliance program and annually have completed four (4) hours of continuing education credits. Two (2) credits can be earned via a compliance program site inspection and the other two (2) credits can be obtained by attending various seminars that have been approved by the Trust Fund Administrator. The CEU requirements are on a calendar year basis. Currently, there are 17 drycleaning facilities that have failed to secure the required pollution liability insurance coverage as of December 31, The Administrator is seeking guidance from the Council on how to apply the CEU requirement for calendar year 2012 inasmuch as we are in a new calendar year. Mr. Eriksen reviewed three (3) options with the Council stating he favors either Option #2 or #3, which does not require that the drycleaner make up CEUs for Option #2 would have the CEUs only be required once the actual insurance coverage is in place and the facility would be subject to an annual compliance program site inspection once the insurance coverage is in place. Option #3 is identical to Option #2 except the facility would only be subject to the usual bi-annual compliance program site inspection. Mr. Eriksen noted that whatever decision the Council makes would also be applied to any facilities that had financial responsibility coverage as of January 1, 2012 but the coverage subsequently lapsed or was canceled. After discussion by the Council, on a motion by Mr. Lewicki and a second by Mr. Bredenkamp, the Council voted 5-1 to adopt Option #3, which requires no CEUs for 2012 and requires CEUs only after they have their insurance coverage in place. If coverage is issued in 2013, four (4) CEUs must be completed by December 31, 2013 and the facility would be subject to the usual bi-annual compliance program site inspection. B. Audit of Compliance Programs: Mr. Eriken reviewed background information noting that in April 2012, the five (5) Council approved compliance programs were audited by Council members and the Administrator s staff. The audit results indicated two (2) of the compliance programs had substantial non-compliance and the Council decided these two (2) programs should be subject to a follow-up audit in calendar year 2013 to 4
5 determine if the deficiencies noted have been corrected on a going forward basis. The two (2) compliance programs subject to this audit would be the National Drycleaner Institute (NDI) and Asian-American Small Business Association (AASBA). Currently, 321 of our insureds are participating in the NDI compliance program and 76 are participating in the AASBA compliance program. It would be the Administrator s recommendation that 30 files be selected for NDI to bring for audit at the March 13, 2013 Council meeting and 8 of the AASBA files be selected for review on that date. Mr. Eriksen noted that NDI hand delivered to the Administrator a letter dated October 27, 2012 addressing the April 2012 audit. The letter has been distributed to all Council members and the Administrator issued a response to NDI dated December 7, NDI has requested time today to discuss with the Council their issues of concern regarding the compliance program audit. Mr. Sung Do Kang and Ms. Heidi Kang of NDI addressed the Council regarding the April 2012 audit and the follow-up audit tentatively scheduled for March 13, They utilized a Power Point presentation for part of their presentation. Mr. Kang discussed at length why he felt the audit results compiled by the Fund Administrator were erroneous and requested detail information from the Council so they could refute those results. NDI requested that their electronic version of the site inspection form be approved by the Council for use in lieu of the Council approved and required inspection form. After lengthy discussion, Mr. Kwak recommended the Administrator meet with the five (5) compliance programs and review the current format to determine if it should be updated. Mr. Eriksen stated he would schedule a meeting with the compliance programs to specifically review the form. NDI also requested that they be able to use electronic signatures on compliance program documents. The Council had previously taken a position banning the use of such electronic signatures. After additional discussion by the Council, they deferred taking any action on this issue until the site inspection form issue was resolved. Mr. Kang reiterated he will not participate in a follow-up audit until he has a chance to review the individual items that the Council stated were in noncompliance from the April 2012 audit. After additional discussion by the Council, the Council directed Mr. Eriksen to provide Mr. Kang the discrepancies by individual site that were noted during the April 2012 audit. On a motion by Mr. Lewicki and a second by Mr. Bredenkamp, the Council voted 6-0 to have the Administrator select 30 files for audit from NDI and 8 from AASBA. The audit would only cover calendar year
6 Mr. Eriksen stated the files would be selected and the information provided to the compliance programs in advance of the March 13, 2013 Council meeting. C. Update on Development of January 1, 2014 Operator Training for Perchloroethylene Drycleaners: Mr. Eriksen updated the Council that the Administrator has been working with the Illinois Environmental Protection Agency (IEPA) in the initial planning phases of developing an initial environmental training course for operators of perchloroethylene drycleaning facilities as required by Public Act The initial training course will focus on understanding how best management practices can reduce the potential for air emissions, spills and leaks, environmental contamination and improper management of hazardous waste of perc drycleaning facilities. To date, initial planning has focused on the following subject areas: 1. Instructor preparation 2. Course organization 3. Instructional criteria 4. Course approval The tentative goal of IEPA and the Administrator s staff is to have sufficient detail in these areas defined for distribution and review by representatives of the drycleaning industry by the spring of 2013 with course criteria finalized so training could begin no later than September 1, APPROVAL OF PROGRAM BILLINGS Mr. Eriksen noted there were four (4) invoices before the Council for their review and approval. They were as follows: 1. Williams & Company... $ 64, Standard flat fee billing for December 2012, licensing, underwriting, claim processing and site inspections. 2. John J. McCarthy... $ 1, Professional legal services for the period of December 1, 2012 through January 9, Johnston, Greene, LLC... $ 1, Professional legal services as Administrative 6
7 Law Judge for November Johnston, Greene, LLC... $ 1, Professional legal services as Administrative Law Judge for December Mr. Eriksen noted that per Williams & Company s contract with the Council, Williams & Company is entitled to an adjustment in their billing rates based upon changes in the Consumer Price Index for the previous 12 months. Due to poor financial conditions still being experienced by the drycleaning industry, Williams & Company was waiving their right to increase the billing rates for the next 12 months. On a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council approved the bills as presented by a vote of 6-0. REVIEW OF ACTIVITY REPORT AND FINANCIAL STATEMENTS Mr. Eriksen noted that as of December 31, 2012, there were 1,017 drycleaners licensed, which was 84 less than the 1,101 that were licensed as of December 31, Currently 499 licenses have been issued for calendar year 2013, with 62 pending review or needing additional information, for a total of 561 applications. For the same time period last year, 454 licenses had been issued, with 97 pending or needing new information, for a total of 551. Licensing fee revenue is lagging approximately $40,000 behind what had been collected in the prior year. Insured drycleaners total 531 as of December 31, 2012, compared to 524 as of December 31, Open remedial claims total 230 with estimated reserves of $26.7 million. The Fund balance as of December 31, 2012 is $3,017,000. CLAIM PAYMENTS IN EXCESS OF $75,000 Mr. Eriksen reported there were none for Council review and action. OTHER ISSUES AS PRESENTED Mr. Eriksen noted the next Council meeting is tentatively scheduled for Wednesday, March 13, The fiscal year 2011 audit report was accepted by the Legislative Audit Committee. Mr. McCarthy updated the Council that H.H. Coleman has appealed the Administrative Law Judge s decision, which upheld the $5,500 in civil penalties assessed for delivering 7
8 solvent to unlicensed drycleaners. Mr. McCarthy stated the Attorney General s Office would represent the Council in this review. The Council adjourned for a brief recess at 12:28 p.m. Mr. Polak reconvened the meeting at 12:33 p.m. PUBLIC COMMENT PERIOD Mr. Sung Do Kang, representing the National Drycleaner Institute (NDI), addressed the Council stating he feels the April 2012 compliance program audit was unfair and that he will not participate in an audit for the March 2013 Council meeting. Council members asked Mr. McCarthy what options Mr. Kang had. Mr. McCarthy stated there were none, that as part of a Council approved program, he agreed to be audited at the Council s request. There being no further business, on a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council voted 6-0 to adjourn the meeting at 12:50 p.m. Respectively submitted, H. Patrick Eriksen` Program Administrator 8
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