MINUTES DRYCLEANER ENVIRONMENTAL RESPONSE TRUST FUND COUNCIL OF ILLINOIS HOLIDAY INN SELECT-NAPERVILLE NAPERVILLE, ILLINOIS.

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1 MINUTES DRYCLEANER ENVIRONMENTAL RESPONSE TRUST FUND COUNCIL OF ILLINOIS HOLIDAY INN SELECT-NAPERVILLE NAPERVILLE, ILLINOIS May 12, 2010 John Polak, Chairperson, called the Drycleaner Environmental Response Trust Fund Council of Illinois meeting to order at 9:32 a.m. A quorum was present. Roll call was taken with the following members present: John Bredenkamp Young B. Kim Charles Kwon Jerry Lewicki 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 The minutes from the April 2, 2010 Council meeting were reviewed. On a motion by Mr. Lewicki and a second by Mr. Bredenkamp, the minutes were approved by a vote of 5-0.

2 APPEAL OF LOSS OF REMEDIAL PROGRAM BENEFITS 1. Clean Clean Dry Cleaners, 4454 W Belmont, Chicago, IL- Site # Mr. Eriksen reviewed background information with the Council, noting Mr. Dong Sun Yoo is the owner/operator of Clean Clean Dry Cleaners, located at 4454 W Belmont in Chicago, IL. The facility has been insured with the Fund since May 30, 2000 and had an eligible remedial claim with the Fund. On June 11, 2009, the Fund issued pollution liability insurance policy expired for failure to renew coverage and pay the appropriate insurance premium. On June 25, 2009, the Administrator sent a letter via certified mail, informing Mr. Yoo that his drycleaning facility was no longer eligible for remedial program benefits. Mr. Yoo subsequently submitted his insurance information and insurance premium, and a new policy was issued effective August 10, On January 27, 2010, the Fund received a letter from Mr. Yoo, dated December 30, 2009, requesting reinstatement of remedial benefits for the facility. Mr. Eriksen noted the issue before the Council is do they wish to reinstate the remedial program benefits for Clean Clean Dry Cleaners? Mrs. Yoo was in attendance to address the Council. Ms. Heidi Kang, of NDI, translated on her behalf. Mrs. Yoo told the Council they did not understand the Fund s letter regarding renewal of insurance coverage and did not realize they would lose remedial program benefits if the insurance cancelled. Mr. Polak asked her what prompted her to reapply for insurance coverage, to which she had no response. After discussion by the Council, Mr. Polak inquired if there were any similar cases that the Council had made a decision on. Mr. Eriksen and Mr. McCarthy stated they were not certain but they would do additional research. On a motion by Mr. Bredenkamp and a second by Mr. Kwon, the Council voted to table a decision pending further research by the Administrator and legal counsel. The Motion passed by a vote of 5-0. APPEAL OF LICENSE LATE PAYMENT PENALTY FEES 1. Park Plaza Cleaners, Inc, 8300 South King Drive, Chicago, IL - Site # Mr. Eriksen reviewed background information with the Council noting that Ms. So Young Bang-Lee is the owner/operator of Park Plaza Cleaners, located at 8300 South King Drive in Chicago, IL. Ms. Lee has owned the facility since 2000 and the facility has been licensed through

3 The 2009 license fees were paid on June 17, 2009, resulting in the assessment of late fees of $835. The Administrator received a letter on June 27, 2009 asking for the late fees to be waived inasmuch as Ms. Lee did not have the money to pay the license fees on time. The Administrator responded on June 26, 2009 that he was unable to waive the late fees but Ms. Lee could appeal the late fees to the Council. On March 5, 2010, Ms. Lee sent another letter to the Council requesting to appeal the license late fees for calendar year The Administrator responded on March 9, 2010, noting she had failed to appeal his decision to the Council within 60 days of the date of the letter of June 22, Subsequently, the Administrator received a telephone call on April 9, 2010 from Ms. Lee. In the conversation, he determined she did not fully understand the appeal process and therefore, there are potentially two (2) issues before the Council for their review: 1. Does the Council wish to waive the 60 day requirements for Mrs. Lee to appeal the Administrator s decision to the Council? 2. If the Council grants the waiver listed in Issue #1, does the Council wish to waive or reduce the $835 in license late payment fees for calendar year 2009? Mrs. Bang-Lee addressed the Council via telephonic conference. She noted for the Council that the drycleaning business has been very difficult for the past two (2) years and they are struggling to keep the business open and was requesting the late fees for 2009 be waived. After discussion by the Council, on a motion by Mr. Kwon and a second by Mr. Kim, the Council voted 5-0 to waive the requirement of appealing the Administrator s decision within 60 days to the Council. Mrs. Bang-Lee noted the rent has been reduced for the past two (2) years by the landlord in order to help them weather the current downturn in business. Mr. Polak asked what the late fees would be if the council applied a 20% interest rate for the time period. Mr. Eriksen stated it would be $137. Mrs. Bang-Lee indicated she had the ability to pay the $137. On a motion by Mr. Kim and a second by Mr. Kwon, the Council voted to reduce the $835 in license late payment fees for 2009 to $137. The motion passed by a vote of 5-0. Mr. Eriksen noted this facility also had remedial claim benefits that were lost due to cancellation of the insurance coverage for failure to license the facility on a timely basis. It was the Council s consensus to table discussion of this issue pending further research by the Administrator. 3

4 2. PJ Cleaners, Inc, 238 West Madison Street, Oak Park, IL - Site # Mr. Eriksen reviewed with the Council that Mr. Young Ai Kim is the owner/operator of PJ Cleaners Inc, located at 238 West Madison Street in Oak Park, IL. Mr. Kim purchased the drycleaning facility in late The facility has been licensed through Mr. Kim paid his 2010 license fees on March 27, 2010 and was assessed late fees of $425. He is requesting waiver of the late fees inasmuch as he did not have the money to pay the license fees on time. Mr. Kim addressed the Council stating for the last 1 ½ years, business has been very tough. He only used 50 gallons of perc last year and is currently making a high monthly loan payment due to the business loan that he incurred to buy their business. He apologized for being late but was requesting the mercy of the Council in waiving the late fees. Mr. Polak asked what the late fees would be applying the 20% interest rate. Mr. Eriksen replied the late fee would be $70. On a motion by Mr. Kwon and a second by Mr. Kim, the Council voted to reduce the 2010 license late payment fees from $425 to $70. OPERATIONAL ISSUES A. Legislation: Mr. Eriksen noted HB6115, which would phase out the use of perc at drycleaning facilities in the state, has been referred to the Rules Committee and is dead for the remainder of the spring legislative session. The initial meeting scheduled by Rep. Julie Hamos between the Illinois Environmental Protection Agency (IEPA), the drycleaning industry and the Council which was cancelled has not been rescheduled at this time. Mr. Eriksen appeared before the Senate Appropriations Committee on April 28, 2010, to present the Council s budget request for fiscal 2011 in the amount of $5,360,000. There were questions on contamination issues related to the Crestwood incident of a year ago and questions on funding of the program. B. Review of Compliance Program Audits: Enclosed in the Council packet is a draft copy of the compliance program audits conducted February 26, 2010 by the Council. Mr. Eriksen reviewed the overall summary of the audit and recommendations that were listed on pages 8 and 9. Mr. Polak stated the recommendations should be included as a central topic for the Strategic Planning meeting in August 2010, at which time the Council could talk through the mechanics of the Administrator s recommendation in greater detail and make a decision on each one. It was the consensus with the Council to address the recommendations at the August meeting. 4

5 Mr. Eriksen referenced a letter from Mr. Henry Parker of S&ECC, outlining that S&ECC would be willing to be the sole provider of a compliance program on behalf of the Council if it would improve the compliance program process. Mr. Parker reviewed the proposal and stated if at some point in time, either now or in the future, the Council wished to go with just one (1) compliance program, S&ECC would be pleased to do so and would not require a contract or fee from the Council. Any fees would be paid by the drycleaner. The Council took no action on Mr. Parker s offer. C. Legal Representation: Mr. Eriksen reviewed with the Council that Mr. John McCarthy s fiscal year 2010 contract with the Council expires June 30, His contract was a one (1) year contract for total costs not to exceed $19,999. To date, the Council has paid Mr. McCarthy $ 14, Mr. McCarthy currently charges the Fund $155 per hour for professional services and $90 per hour for travel time. It is Mr. Eriksen s recommendation that the Council enter into a contract with Mr. McCarthy to provide legal services to the Council for fiscal year 2011 for a cost not to exceed $19,9999. Mr. McCarthy is requesting his rates remain the same, which are $155 per hour for professional services and $90 per hour for travel time. On a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council approved entering into a contract with Mr. McCarthy for professional legal services for fiscal year 2011 for a cost not to exceed $19,999. The motion passed by a vote of 5-0. D. Administrative Hearing Officer: Mr. Eriksen reviewed with the Council that Mr. Iain Johnston s fiscal year 2010 contract with the Council expires June 30, His contract was a one (1) year contract for total costs not to exceed $19,999. To date, the Council has paid Mr. Johnston $0.00. Mr. Johnston currently charges the Fund $265 per hour for professional services. It is Mr. Eriksen s recommendation that the Council enter into a contract with Mr. Johnston to provide legal services to the Council for fiscal year 2011 for a cost not to exceed $19,999. Mr. Johnston is requesting his current hourly rate of $265 per hour remain the same On a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council approved entering into a contract with Mr. Johnston for professional legal services for fiscal year 2011 for a cost not to exceed $19,999. The motion passed by a vote of

6 APPROVAL OF PROGRAM BILLINGS Mr. Eriksen noted there were two (2) bills included in the Council packet for the Council s review and action. 1. John J. McCarthy... $ 2, Professional legal services for the period of March 23, 2010 through April 26, Williams & Company... $ 74, Standard flat fee billing for April 2010, licensing, underwriting, claim processing and site inspections. On a motion by Mr. Bredenkamp and a second by Mr. Kim, the Council approved the bills as presented by a vote of 5-0. REVIEW OF ACTIVITY REPORT AND FINANCIAL STATEMENTS Mr. Eriksen noted the Council packet contained the monthly activity reports and financial statements for March 31, He distributed to the Council members the April 30, 2010 monthly activity report and financial statements. As of April 30, 2010, there were 1,051 licenses issued; 567 drycleaners had pollution liability insurance coverage through the Fund and the open remedial claims totaled 347, with estimated reserves to complete cleanup on these claims totaling $33.7 million. The Fund balance as of April 30, 2010 is $4,195,832. Year-to-date claim payments total $2,402,173. CLAIM PAYMENTS IN EXCESS OF $75,000 Mr. Eriksen addressed the Council noting there were seven (7) claims with budget requests requiring the Council s review and action; six (6) were included in the Council packet and one (1) was a carry-in. A. Perruso Cleaners, Chicago, IL - Claim #50664, Site # : Council review and approval for $90,000 for remedial activities. The site has been partially released for funding of $100,000. 6

7 He reviewed background information on the facility noting the proposed remedial action pilot study involves chemical oxidation via gravity feeding. On a motion by Mr. Kim and a second by Mr. Lewicki, the Council approved the $90,000 in remedial action costs by a vote of 5-0. B. Dial Cleaners, Northbrook, IL - Claim #50072, Site # : Council approval of remedial action costs totaling $170,000. The site has been fully released for immediate funding. He reviewed background information on the facility noting that a pilot study was conducted at the facility but not enough chemical oxidant was delivered to the targeted area for complete cleanup of the contamination. The results of the pilot study indicated more chemical oxidant and more contact time for oxidation will be required for cleanup. The proposed remedial process/budget is broken into the following steps: 1. Installation of Injection Wells 2. Installation of Injection Wells & Remedial Activities 3. Confirmatory Site Investigation & Well Closure On a motion by Mr. Kim and a second by Mr. Lewicki, the Council approved the $170,000 in remedial action costs by a vote of 5-0. C. Berwyn Cleaners, Berwyn, IL Claim #50572, Site # : Council review and approval for $150,000 in remedial activities. The site has been released for immediate funding. He reviewed background information on the facility noting a pilot test using chemical oxidation was conducted in January Not enough chemical oxidant was delivered to the target area to complete the cleanup at the facility. The $150,000 will be used for installation of additional injection wells, injection of chemical oxidant, confirmatory site investigation, and well closure. Mr. Bredenkamp inquired about the pilot project results. Mr. Eriksen stated the benefit of conducting a pilot project is to attack the hot spot area of the contamination and determine how the site responds to the amount of chemical oxidant injected. These results are then used to determine the parameters of a full scale remediation process. He noted the injection process is not an exact science due to the soil porosity, the delivery pressure of the chemical oxidant and the potential for developing preferential pathways at the facility. 7

8 Mr. Peter Marberry inquired if in essence the Council is paying for a do over at the facility. Mr. Eriksen replied no and explained what a pilot study was, the benefits of conducting a pilot study, etc. Mr. Marberry asked several questions regarding Hydrodynamics Consultants, which Mr. Eriksen addressed. On a motion by Mr. Kim and a second by Mr. Lewicki, the Council approved the $150,000 chemical oxidant remediation costs by a vote of 5-0. D. Youngren Cleaners, Northfield, IL Claim #50804, Site # : Council review and approval for $140,000 in remedial activities. The site has been released for immediate funding. He reviewed background information on the facility, noting a pilot study was conducted in October 2009 but again, the target remedial objectives were not obtained because: 1. Not enough volume/concentration of chemical oxidant seems to have been delivered to the target area for the cleanup of contamination, 2. The pilot study seems to have underestimated the area for cleanup at the Facility, 3. Pressurized injection may not have provided enough contact time between the chemical oxidant and chemical of concerns for reaction to occur. The proposed remedial activities include additional injection of chemical oxidant, confirmatory site investigation and contingency costs. On a motion by Mr. Kim and a second by Mr. Lewicki, the Council approved the $140,000 in chemical oxidation costs by a vote of 5-0. E. World s Largest Laundromat, Berwyn, IL Claim #50208, Site # : Council review and approval for $5,750 in soil confirmation sampling costs. The site has been released for full funding. Mr. Eriksen reviewed background information on the facility noting a soil vapor extraction system was installed and started in early The consultant has determined that based on the results of vapor sampling, that significant progress in the remediation of the site has been made and is recommending confirmatory soil sampling to ascertain if remedial objectives have been met. On a motion by Mr. Lewicki and a second by Mr. Kwon, the Council approved the $5,750 in confirmation sampling by a vote of

9 F. Art Cleaners, Tinley Park, IL Claim #50282, Site # : Council review and approval of $38,000 for over excavation of contaminated soil at the facility. He noted the site has been released for partial funding of $25,000. He reviewed background information on the facility, noting the site had petitioned the City of Tinley Park for a groundwater ordinance in order to avoid active remediation at the site. The adjacent property owner refused to provide an ELCU and as such it is necessary to reduce soil concentrations in the source area. It is estimated that nine (9) tons of soil must be removed and disposed of. On a motion by Mr. Lewicki and a second by Mr. Kim, the Council approved the $38,000 in over excavation of the contaminated soil by a vote of 5-0. G. Family Pride Cleaners,West Dundee, IL Claim #50039, Site # : Council approval for $6,000 for costs related to a memorandum of understanding preparation, meetings with the Village of West Dundee and reporting. This facility has been fully released for funding. Mr. Eriksen reviewed background information noting that all that remains to obtain an NFR is to complete a groundwater ordinance covering the affected area to prevent usage of groundwater in that area. On a motion by Mr. Lewicki and a second by Mr. Bredenkamp, the $6,000 in additional consulting costs were approved by a vote of 5-0. OTHER ISSUES AS PRESENTED Mr. Eriksen noted the next Council meeting is tentatively scheduled for Friday, June 25, The Council members in attendance noted that date will work. The Council discussed the Strategic Planning meeting that was tentatively scheduled for August 6, After discussion, the Council agreed to reschedule the meeting for Wednesday, August 18, PUBLIC COMMENT PERIOD Mr. Peter Marberry addressed the Council, stating he was concerned with the Council entering into $19,999 contracts for professional legal services with Mr. McCarthy and Mr. Johnston. It is his recommendation the Council bid these contracts in the future to reduce costs to the Fund. In addition, Mr. Marberry stated that since Hydrodynamics 9

10 was being awarded large sums of money from the Fund, that a representative of the firm should be attending the meeting to explain the budget requests. Mr. Sung Kang asked the Council if the survey conducted by NDI and NDI members that was presented to the Council at their January 2010 meeting would be discussed at any future Council meetings. Mr. Polak replied the topic of Fund solvency would be discussed in more detail at the August Strategic Planning meeting. A general discussion between representatives of NDI and S&ECC was held regarding the compliance program inspection process and the need for timely follow ups on any noted deficiencies. On a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council voted 5-0 to go into Closed Session at 11:34 a.m. to discuss matters of potential litigation. On a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council voted 5-0 to go back in to open session at 11:45 a.m. On a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the Council voted 5-0 to settle the outstanding license and late payment fees for Busy Bee Cleaners at 518 Kedzie Street in Evanston, IL, for a total of $6,683, payable over 12 months. On a motion by Mr. Lewicki and a second by Mr. Kim, the Council voted 5-0 to amend the payment plan for Joseph Cleaners and extend the remaining payments over 22 months. There being no further business, on a motion by Mr. Bredenkamp and a second by Mr. Lewicki, by a vote of 5-0, the Council meeting adjourned at 11:48 a.m. Respectively submitted, H. Patrick Eriksen Administrator 10