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Chairman
Creech called the meeting to order at 9:35 a.m. Trustees present:
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| Trustees
Present: |
Absent: |
William "Bart" Creech III, Chairman
Judy Baker
James Ford
Neal Gibbons, Sr.
Ron Hooker
Robert Jackson
Don McNutt
Dan Schuette (Designee for Steve Mahfood) |
Bob Abernathy
Gary Collins
Joyce Murphy |
| Staff
Present: |
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Carol
R. Eighmey, Executive Director
Tim Duggan, Assistant Attorney General
Terry M. Nichols, Administrative Assistant |
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Claim
Appeal - Scott City Texaco, Claims 40008 and 61121
Chairman Creech asked if there was anyone present representing Scott
City Texaco who wished to make any comments to the Board. There was
not, so the Trustees referred to the written material in their notebooks.
Ms. Eighmey noted the letter from the attorney requesting a waiver
of the deadline to appeal, and that the appeal involved whether or
not a second deductible assessed should be assessed.
Former
Mark I Tire & Auto - Claim 51788
There also was no one present to present this claim in person, so
the Trustees referred to the written material in their notebooks.
It was noted that PSTIF had paid 25% of the costs for soil excavation
and disposal, and the appellant had requested that 2/3 of the costs
be paid, since 2/3 of the sample results were above clean fill standards.
Approval
of Minutes
Neal Gibbons moved that the minutes from the January 23, 2002, meeting
be approved. Ron Hooker seconded the motion, which carried.
Monthly
Reports
The Trustees reviewed the monthly reports. Ms. Eighmey noted there
had been an increase in the number of UST sites insured as a result
of the combined efforts of Department of Agriculture, Department of
Natural Resources and PSTIF to make sure every operational UST site
is either insured by PSTIF or has another financial responsibility
mechanism. She noted some of the recently-received applications are
examples of "hard-core" non-compliance, where the owner/operator has
never complied with monthly leak detection requirements; as a result
of their application to PSTIF, their operating practices are being
improved.
Chairman
Creech asked Ron Hooker whether his inspectors report to DNR if they
inspect a location that is not doing leak detection. Mr. Hooker replied
that his inspectors do not normally check to see if the operator is
doing leak detection, as their inspections focus on other aspects
of the facility and its operation; he noted his inspectors would need
additional training in order to review leak detection practices.
Don McNutt
asked if there is any follow-up if a UST owner/operator lets his PSTIF
policy lapse. Ms. Eighmey responded that she provides a list of those
persons each month to DNR's Tanks Section. Ed Galbraith said his staff
then sends letters to the tank owners, asking how they are complying
with the financial responsibility requirement.
Ms.
Eighmey noted that PSTIF staff work hard to prevent policy lapses,
but there are some instances where a UST owner ceases operation of
his facility and lets his coverage lapse. She said these properties
may become problems, because the owners will have no way to make a
claim with PSTIF, and if it is later discovered that there is contamination
on the property, the owner will have to pay for cleanup himself.
It was
noted that three additional large loss claims, where the costs were
incurred a couple of years ago, were recently identified; Ms. Eighmey
noted this is an example of how PSTIF may have large, unknown liabilities
at any given time.
Dan Schuette
arrived at this point in the meeting.
DNR
FY02 YTD Report
Chairman Creech directed Trustees' attention to the report in their
notebooks. Ms. Eighmey noted she, Ed Galbraith and Dan Schuette have
a meeting scheduled to confirm the schedule for presentation and negotiation
of the FY04 work plan.
Legislation
The Executive Director then discussed the legislative report in the
notebooks. Relative to HB1115, she distributed a document, attached
hereto, which explains how the Office of Administration had calculated
the "cost allocation" in the bill, including the $211,000 proposed
to be charged to PSTIF. She noted the proposed charge is for three
areas: costs incurred by the Office of Administration and the State
Auditor, based on expenditures from the fund; costs incurred by the
State Treasurer and Department of Revenue for cash receipts; and costs
of retiree health care, allocated by the number of current employees
employed by each fund. It was noted that PSTIF is already paying for
Department of Revenue to collect the transport load fee, and that
the Board is already incurring costs for an annual audit required
by law. Ms. Eighmey noted the House had approved the supplemental
appropriation from special funds like PSTIF, but the Senate Appropriations
Committee had removed that from HB1115 last night. She said it was
likely the final decision would be made by a conference committee.
There
was then a discussion of HB 1906, which is an attempt to change or
override the state laws like the one governing PSTIF which prohibit
the use of money in the fund for other purposes. Ms. Eighmey noted
the bill contains two provisions - one would authorize a "sweep" of
unobligated funds from PSTIF annually, the other would authorize annual
cost allocations like the one in HB1115.
Bob Jackson
observed that these bills appear to be a hidden tax to support the
operations of state government. Judy Baker asked what services PSTIF
is receiving in return for the proposed $211,000 "cost allocation."
Ms. Eighmey replied she had posed that question to Office of Administration,
and did not think it was proper for PSTIF to pay twice for the same
services.
Jim Ford
said he thought the legislature should recognize the limitation in
the current statute, prohibiting use of PSTIF monies for other purposes.
Dan Schuette commented that the situation is difficult, since the
state is experiencing a budget problem, and suggested the Board should
support the Governor. Don McNutt commented that he could not support
any taking of money from PSTIF to balance the state's general revenue
budget.
Ms.
Eighmey thanked Diane Miller and Ron Leone for their help educating
legislators about PSTIF and keeping her informed of events in the
Capitol. Chairman Creech recognized Ron Leone, who expressed the view
that the legislature cannot just ignore current law, and that he believes
the supplemental appropriation bill, HB1115, violates the law because
it would take money from PSTIF before any change to the statute authorizing
such action could be passed and go into effect. He observed that the
Trustees have a fiduciary responsibility to the Fund's participants
and that it would be helpful if the Board communicated its concerns.
He distributed copies of a MPCA memorandum on the subject, which is
attached hereto.
There
was some additional discussion on this subject. Then Ms. Eighmey completed
the summary of other legislative proposals which could affect PSTIF.
Regarding
SB971, Ms. Eighmey asked for and received the Board's consent to continue
working to remove PSTIF from the bill. She noted John Young had made
a good presentation in the Senate Committee hearing on why the bill
was not needed.
Regarding
HB1689, which would create a contractor licensing program, Ms. Eighmey
noted some concerns with the bill. She requested and received the
Board's consent to participate in discussions which will likely take
place on the subject, in order to assure that PSTIF's interests are
considered.
Cash
Flow Projections
Before making his presentation, Pat Eriksen introduced two new staff
members who have joined Williams & Company and are providing services
to PSTIF - Mike DePaemelaere, manager of the Jefferson City office,
and Dan Henry, geologist.
Mr. Eriksen
then distributed copies of his presentation and a revised cash flow
projection, which are attached hereto, and reviewed the information.
He noted current projections indicate that if the transport load fee
remains at $40, and no additional remedial claims are funded, projected
revenues and expenditures balance. If an additional 342 remedial claims
are financed, an estimated deficit of $5.75 million would result,
and if an additional 1,323 remedial claims are funded, there will
be an overall deficit of $56.96 million. He summarized changes made
in this projection, compared to the one presented six months previously.
He noted that the continuing increase in average costs of cleanup
is a concern, and reiterated that the greatest unknown is the number
of remedial claims to be filed in the future.
Dan
Schuette asked if it would be possible to utilize past claim costs
in the projections in order to make them more accurate. Mr. Eriksen
responded that this is how the projections are done, and that the
Fund's actual costs are updated and utilized each time the projections
are revised. He noted, however, that it would be misleading to assume
the average cost of cleanup for sites which were cleaned up already
will be the overall average cost, since the easiest and least expensive
cleanups are completed quickly, while the more expensive ones which
may stretch over years are not yet closed.
There
was additional discussion about the cash flow projections. Don McNutt
then asked the chairman if the Board could return to the discussion
of pending legislation. Chairman Creech concurred.
Additional
Discussion - HB1115 and HB1906
Don McNutt then made a motion that the Board take a position on the
proposed legislation, and express its opposition to funds being taken
from PSTIF. Bob Jackson seconded the motion.
There
was much discussion on the motion. Judy Baker noted the Board has
authority to decide what services are needed and how much should be
paid for those services. Bob Jackson suggested a letter be sent to
the legislature, outlining the Board's position and opposing anything
that undermines the Board's integrity or responsibilities. Bart Creech
noted that the Trustees have a fiduciary responsibility to manage
the Fund's money. Neal Gibbons expressed support for the motion.
After
considerable discussion, Ms. Eighmey suggested that the Board might
send a letter to the Governor and leaders of the House and Senate,
expressing its desire to fulfill its responsibility under current
law to review and approve expenditures from the Fund for all services,
including those provided by various state agencies. She noted this
approach would be less adversarial than simply opposing HB1115 or
HB1906.
Chairman
Creech suggested the Board take a vote on what its position is, then
direct the Executive Director to draft a letter, to be signed by the
Chairman, which the Board could review and approve in a conference
call.
Don
McNutt amended his motion to reflect the Chairman's suggestion; Bob
Jackson seconded the amended motion. There was further discussion.
Ms. Eighmey asked if the Chairman or a member of the Board would be
willing to testify in committee on HB1906; there was general consensus
this should be done.
Chairman
Creech called for a vote on the motion; all Trustees voted in support,
with Dan Schuette abstaining. It was then decided that the Executive
Director would distribute a draft letter by email within a couple
of days, and the Board would meet by conference call on Tuesday, March
26, at 10:00 a.m.
Risk-Based
Corrective Action
Ms. Eighmey reported that a proposed rule establishing procedures
for risk-based cleanup of groundwater had been published in the February
1 State Register, and referred the Board to a copy of the rule in
their notebooks. She noted it is a positive development, but that
the rule was very complex, and staff has some concerns that it would
impose new requirements on many tank site cleanups that could cause
delays, invite third party claims, and increase costs. She noted that
detailed written comments would be provided by staff before the April
2 deadline.
Ed Galbraith
noted he believes the rule would provide an opportunity for many tank
sites which are now open claims to receive a "No Further Action" letter.
He reminded Trustees that the Tanks Section has employed a consultant
to assist with revisions of their guidance documents and regulations,
and distributed a schedule of events prepared by the consultant, which
is attached hereto.
Administrative
Issues
Items in the notebook were reviewed, including the status of efforts
to implement the Board's decision to fund "Hold claims."
Jim Ford
moved that the Board approve the appointment of Roger Mertens to the
Advisory Committee; Ron Hooker seconded the motion. Dan Schuette asked
if there was any concern about adding another petroleum marketer from
mid-Missouri to the Committee. Ms. Eighmey noted Steve Madras, a marketer
from St. Louis, had recently dropped off the committee and Mr. Mertens
would be filling that slot. The Board approved the motion.
Trustees
were reminded of the May 1 deadline for filing their annual reports
with the Ethics Commission.
Jim
Ford moved that the Board go into closed session to discuss and vote
on matters related to legal actions, causes of action, litigation
and/or personnel issues pursuant to Section 610.021, RSMo. Don McNutt
seconded the motion, which carried.
If
such action is approved a majority vote of a quorum of the Board,
the Board of Trustees of the Petroleum Storage Tank Insurance Fund
may go into closed session at this meeting to discuss legal, confidential
or privileged matters pursuant to Section 610.021, RSMo.
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