Capitol Plaza Hotel, Carnegies Room
Jefferson City, MO
Start Time: 9:32 a.m.
Chairman McNutt called the meeting to order.
Don McNutt, Chairman
Jim Ford, Vice Chairman
Curtis Wall (for John Albert)
Tim Duggan, Assistant Attorney General
Carol R. Eighmey, Executive Director
Diane James, Executive Assistant
David Walters, Williams & Company Consulting, Inc.
Lynn Graves, Graves & Associates, CPAs
Ken Koon, Chief, Tanks Section, Hazardous Waste Program, DNR
Ron Leone, Executive Director, MPCA
Daniel Lupton, Taylor & Mulder
Jack McManus, Agriculture and Environment Division, AGO
Heather Peters, Compliance/Enforcement Section, Hazardous Waste Program, DNR
Amanda Sappington, Environmental Works, Inc.
After requesting deletion of a redundant sentence regarding David Lamb’s remarks in the draft minutes, Marty Miller moved that the amended minutes from the September 23, 2015 Board meeting be approved. James Greer seconded. Motion carried.
The Trustees reviewed the financial reports and monthly activity reports.
Ms. Eighmey briefly reviewed the large-loss claims, noting several examples where the PSTIF had reimbursed costs to excavate significant quantities of impacted soil, yet it still took several more years of study and reports before the files were closed. She commented she has often heard DNR and others allege that, since the 2004 RBCA Guidance was implemented, the PSTIF no longer pays to remove impacted soil, yet there is no evidence to support this contention and there are many examples to the contrary. She suggested this perception of why it’s taking longer to close claims is inaccurate.
Jim Ford noted the number of claim files that are 25+ years old and questioned why it should ever take that long to complete a cleanup. Ms. Eighmey opined there is no valid reason. Renee Slusher asked if offering incentives or internships to consulting firms would entice them to add personnel so as to better handle the workload; Ms. Eighmey suggested this would likely be ineffective, since cleaning up tank sites is a shrinking market and firms would probably be reticent to add and train personnel when the number of future projects will be fewer. Tom Pfeiffer observed petroleum biodegrades, so very old petroleum pollution generally becomes less of a threat to human health or the environment over time; he asked for additional information, including examples and/or case studies, to help the Trustees better understand why these “old files” have not been closed. Ms. Eighmey agreed to provide such at future meetings.
FY15 Financial Audit
Chairman McNutt introduced Lynn Graves to present the FY15 financial audit; a revised draft of his report was distributed at the meeting.
Mr. Graves reviewed the audit report and accompanying management letter, emphasizing his firm was issuing a “clean opinion.” He spent considerable time explaining GASB68 and his recent communications with MOSERS and the Office of Administration, noting adjustments had been made to the report to reflect the PSTIF’s GASB68 liability after the draft report had been mailed in the Trustees’ notebooks.
Jim Ford moved to accept the FY15 financial audit; Tom Pfeiffer seconded. After a brief discussion clarifying the figures for unfunded pension liability required by GASB 68, the motion carried.
Chairman McNutt then introduced Daniel Lupton from Taylor & Mulder, who made a presentation on the FY15 actuarial study. [His presentation is filed with these minutes.]
Mr. Lupton reviewed the scope of work performed; compared his findings with Williams and Company’s case reserves, which he said were reasonable; discussed various categories of claims; and noted he had observed a reasonable amount of “pushback” by Williams’ claims staff. He explained Taylor & Mulder’s projections show the PSTIF’s cash balance on 12/31/20 will likely be just under $50 million; this compares to a projected liability for runout and expenses of $81 million. He said the average age of open claims is 11.2 years.
Marty Miller asked what he meant by “reasonable amount of pushback.” Mr. Lupton responded he looks for evidence that the trustees’ fiduciary duty is being fulfilled, balancing the desire to see remediation progress with an understanding of what reasonable costs are for accomplishing cleanup. He alluded to other states where this is not done well and said Missouri’s tank fund seems to have a good balance.
Jim Ford moved to accept the FY15 actuarial study; Marty Miller seconded. Motion carried.
AST Losses – FY15
Chairman McNutt directed Trustees’ attention to the summary in their notebooks, noting there had been only five known leaks, four of which were diesel. Mr. Walters commented there was little of interest to note about this year’s claims, so a detailed presentation was not warranted; he reported most of the new AST claims were still in the early stages but seemed to be progressing.
Carol Eighmey briefly summarized the memo provided in the Trustees’ notebooks.
UST Rules – She noted Heather Peters from DNR would be providing education and information on the rules package to those she could, and Ron Leone is helping get the word out to his members.
UST Inspections – Ms. Eighmey reported the FY16 inspections were underway and seemed to be going well.
St. Louis Air Pollution Rule for Gas Stations – She said progress is being made toward expanding the list of “legal equipment” and solving the problem of vent valves creating too much vacuum inside UST systems.
First Quarter FY16 Report – The report was reviewed by the Trustees.
Accelerating the Pace and Improving the Quality of Cleanups – Ms. Eighmey recapped the status of 50 files identified in the early stages of the “Backlog Plan” as ones where an insured party existed and the deductible had been met, indicating there should be little financial obstacle to getting cleanup done. She noted four had been closed, 28 were progressing, seven need follow-up and DNR’s Tanks Section is planning to send a letter, and eight cleanups are stalled because the responsible party no longer exists and the current property owner has no interest in completing the cleanup.
Marty Miller asked why the new owners won’t finish the cleanups, since the PSTIF is paying 100% of the costs; Ms. Eighmey said in most cases, the new owner is operating a convenience store and whatever pollution remains from the previous owner is not causing any harm or interfering with their business, so they see no reason to spend any time on it.
Online Map of Tank Sites – Ms. Eighmey reported the DNR had notified her a couple of days previously that they had decided to change their coding system for tank sites in response to the concerns noted; consequently, she withdrew her request for Board action.
Dates and Locations for 2016 – Chairman McNutt asked Trustees to mark their calendars for next year’s meetings and to let Ms. James know as soon as possible if they have any conflicts with future meetings.
Billings – There were no questions about the billings.
The Chairman thanked those in attendance for coming and reminded all present the next Board Meeting would be in Columbia on January 27, 2016 at The University Club on MU’s Campus, weather permitting.
Chairman McNutt then asked the Trustees to go into closed session to:
Jim Ford moved that the Board go into closed session to discuss the matters identified by the Chairman, as authorized by Section 610.021, RSMo. Tom Pfeiffer seconded. A roll call vote was taken; motion carried without dissent.
Chairman McNutt adjourned the open session meeting at 10:49 a.m.