July 24, 2013 Meeting Minutes
Michael L. ParsonGovernor

July 24, 2013 Meeting Minutes

The University Club
University of Missouri Campus

Columbia
MO
Start Time:  10:06 a.m.

Chairman McNutt called the meeting to order.

Trustees Present:
Don McNutt, Chairman
Jim Ford, Vice Chairman
Tom Kolb
Marty Miller (for Harry Bozoian)
Danny Opie
Melvin Schebaum
Renee Slusher
Curtis Wall (for John Albert)

Absent:
Ski Mariea
Tom Pfeiffer

Staff Present:
Tim Duggan, Assistant Attorney General
Carol R. Eighmey, Executive Director
Diane James, Executive Assistant
David Walters, Williams & Company Consulting

Others Present:
Ken Koon, Tanks Section, Hazardous Waste Program, MDNR
Ron Leone, Executive Director, MPCA
Jack McManus, Chief Counsel, Agriculture and Environment Division, AGO
Mary Mulhearn, Attorney General’s Office
Heather Peters, Compliance/Enforcement Section,
Hazardous Waste Program, MDNR

Approval of Minutes – May 29, 2013 Open Session Meeting
Renee Slusher moved to approve the May 29, 2013 Board meeting minutes.  Melvin Schebaum seconded.  Motion carried.

Monthly Reports
Chairman McNutt reminded Trustees that the June financial statements were in draft form until the audit is complete and all year-end adjustments have been made.  He observed the Fund’s cash balance declined by about $3 million during FY12, less than anticipated.

Chairman McNutt invited questions and comments on the financial statements or monthly reports.

Equipment Companies Workshops
Chairman McNutt invited Ms. Eighmey to address this subject; she summarized plans being made by the PSTIF, DNR, and Department of Agriculture to hold workshops in four locations for petroleum equipment technicians.  She noted Williams & Company and Rounds & Associates will also participate and that all personnel involved in the workshops will pay their own travel expenses.  She said she had included funds in the proposed PSTIF FY14 budget to pay for promotional efforts, the meeting rooms, and coffee breaks.

Curtis Wall added that MDA thinks the workshops will be very worthwhile and will provide a good opportunity for dialogue with the people who install and maintain petroleum storage and dispensing equipment.  Heather Peters concurred, noting EPA’s proposed new UST rules – to be published by year’s end – will likely require testing of additional components and the workshops will provide a chance to introduce that topic with the people who will be doing the work.

Approval of FY14 CSCAP and Budget
Chairman McNutt noted that two decisions need to be made at today’s meeting regarding the FY14 budget.  He asked Ms. Eighmey to review those decisions.

(Jim Ford arrived at the meeting.)

Ms. Eighmey gave an overview of the appropriations process and the timing of it; she explained why the Trustees then annually approve a budget at the beginning of each fiscal year and how that “budget” for use on the PSTIF’s income statements relates to the appropriations that comprise the “state budget.”

She then reminded them what the “Central Services Cost Allocation Plan” is and that OA annually calculates an amount based on PSTIF’s financial activity compared to other special state funds.

Jim Ford moved to approve OA’s CSCAP expenditure not to exceed $131,658 for FY14.  Tom Kolb seconded.  Motion carried.

Jim Ford then moved to approve the Trust Fund’s FY14 budget as presented.  Renee Slusher seconded.  There was a brief discussion to clarify that the projected net loss is about $5 million, what the “contingency” line is for, and that costs for the Operator Training program are included; Chairman McNutt then called for a vote, which carried unanimously.

Regulatory Updates
DNR Changes to RBCA Rules and Guidance – Chairman McNutt commented that DNR’s proposed changes to the RBCA Rules and Guidance will be considered at a public hearing next month and asked Ms. Eighmey if she planned to testify.

Ms. Eighmey responded that she intends to testify in support of the rulemaking and the proposed changes to the guidance document, and that she will also provide a few additional corrections/clarifications to the guidance document to make it consistent.

Double-Wall Requirement for USTs – Chairman McNutt reported EPA approved the DNR’s plan for implementing the double-wall requirement for USTs.  He said he is glad to see a definitive response from EPA and hopes this means there will be no reason to delay or withhold any of Missouri’s federal funds for the UST program in the future

MDA Rule on E15 – Chairman McNutt reminded the Trustees that the Department of Agriculture had circulated a draft rule that would allow, for the first time ever, the sale of E15 in Missouri.  He said if this rule is finalized, the DNR and PSTIF will both be getting questions from retailers about equipment requirements.  He asked Heather Peters if she had any comments on how those questions might be answered.

Ms. Peters said the Department is still reviewing the matter; Marty Miller added that the Department has not yet decided whether to comment on MDA’s proposed rule.  Ms. Peters said if it is enacted, E15 will be similar to E85 in that the facility owner will have to demonstrate all equipment is compatible with the product; she noted the newer monitoring equipment is compatible but there could be problems with older tank systems.

Ron Leone said the MPCA will file comments opposing the rule and will ask JCAR to hold a hearing on it; he added that MPCA’s position is that changes to Missouri’s policy on what products can be sold as fuel should be made by legislative action, not executive branch rulemaking.

Administrative Issues
Advisory Committee Appointment – Chairman McNutt asked for a motion to appoint Gary Bemboom, Bemboom Enterprises d/b/a Bee Line Snack Shops, to the PSTIF Advisory Committee.  Curtis Wall moved to appoint Gary Bemboom to the PSTIF Advisory Committee.  Jim Ford seconded.  Motion carried.

Inspections for FY14 – Chairman McNutt asked Trustees if there were any questions about the information provided in their notebooks; there were none.

Audit and Actuarial Analysis – Chairman McNutt directed Trustees attention to the status reports on the financial audit and actuarial analysis.  He asked Ms. Eighmey what her impression was of the new actuaries since she had spent some time with them a few days before this meeting.

Ms. Eighmey commented that she thought they would do a good job for the Fund and noted the actuaries were very impressed with the PSTIF data, saying it is one of the “cleanest data sets” they’d ever seen, a testament to the PSTIF software and Williams’ diligence in maintaining our records.

Billings – Chairman McNutt asked if there were any questions on any of the billings; there were none.

Chairman McNutt reminded those present that the date for the next Board Meeting had been changed to Tuesday, September 24, 2013 at the University Club on MU’s campus.

He then invited Tom Kolb to describe a recent problem with one of his tanks.  Mr. Kolb described a recent incident involving an AST storing ultra-low sulfur diesel at his bulk plant in Jefferson City.  The tank, which is only about seven years old, developed a leak which was fortunately discovered by a driver on a Friday evening and was contained by the concrete containment surrounding the tanks.  He reminded the Trustees of pictures and reports they’d seen previously showing an odd brownish sludge which – it is theorized – is caused by bacteria which flourish in diesel fuel now that the sulfur content is so low.  The bacteria cause dramatically accelerated corrosion.  Mr. Kolb said his maintenance personnel will be collecting samples from his tank when it is cleaned and repaired, but it seems apparent this is what caused his leak, and it is his contention that nearly every diesel tank in the country is going to fail as a result of this problem.

His comments prompted considerable discussion, including questions about biocides and water management techniques.  Trustees expressed concern about the potential risk this poses to the PSTIF.  Ms. Eighmey said PSTIF and DNR staff who attend the upcoming National Tanks Conference will talk to EPA and other state regulators about the problem.  Several people commented that biocides may need to be added at the terminals because it is unrealistic to expect individual tank owners to manage this problem at thousands of tank facilities around the country.

(Jack McManus arrived at meeting during this discussion.)

After this discussion, Chairman McNutt announced that the Trustees needed to go into closed session to:

  • Approve the minutes from the last closed session;
  • Hear confidential communications from legal counsel and staff related to ongoing lawsuits, third-party claims and subrogation demands; and
  • Get an update on the RFP for Operator Training.

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 Kolb seconded.  A roll call vote was taken; motion carried without dissent.

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