May 28, 2014 Meeting Minutes - Missouri Petroleum Storage Tank Insurance Fund
Michael L. ParsonGovernor

May 28, 2014 Meeting Minutes

Governor Office Building
Room 470

Jefferson City,
Start Time:  9:31 a.m.

Chairman McNutt called the meeting to order.

Trustees Present:
Don McNutt, Chairman
John Albert
Ski Mariea
Marty Miller

Danny Opie
Renee Slusher

Jim Ford, Vice Chairman
Tom Kolb
Tom Pfeiffer
Melvin Schebaum

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

Others Present:

Todd Burkhardt, Neumayer Equipment
Robert Kelly, Morris Oil Company
Heather Peters, Compliance/Enforcement Section, Hazardous Waste Program, DNR
Keith Piontek, TRC
Pat Rounds, Rounds & Associates
Jason Smith, Environmental Works, Inc.
Brian Wiegert, Rounds & Associates

Claim Appeals – Morris Oil/Village Marts #20 and #3 – Claims 63180/63181

Chairman McNutt introduced Robert Kelly from Morris Oil Company and Jason Smith from EWI and invited them to present Morris Oil’s two claim appeals.

Mr. Smith noted the two locations involve similar but slightly different situations, noting tanks were removed from Village Mart #3 last October and tanks are scheduled to be removed at Village Mart #20 next month.  He distributed a timeline, which has been filed with the official Board meeting records, and summarized Morris Oil’s request that the Board pay 100% of cleanup costs at each location instead of only a portion, as determined by Williams & Company.

Mr. Kelly said he now handles all PSTIF insurance matters for the company, but emphasized he was not working for Morris Oil when the decision was made in 2009 not to purchase the extended reporting period for Village Mart #3.

Chairman McNutt asked Pat Vuchetich to comment on the two claim appeals.  Mr. Vuchetich concurred with the verbal summary provided by Mssrs. Smith and Kelly; he agreed that none of Morris’ actions had resulted in loss of full coverage for Village Mart #20 and stated that Williams had since changed its procedures so other owners are now allowed to keep the extended reporting period endorsements in force on their prior policies, even if they subsequently put some or all of the tanks back into use.

Regarding Village Mart #3, he verified that Morris had not exercised its option to purchase an extended reporting period endorsement for its first policy, which meant the opportunity to file a claim for the out-of-use tanks had passed.

Chairman McNutt then invited questions from the Trustees.  Discussion ensued, with Trustees clarifying several details and confirming that no one present could say definitively why the extended reporting period was not purchased for the second location.

After the discussion, Chairman McNutt informed Mr. Smith and Mr. Kelly the Trustees would discuss the appeals in closed session later that day and the Executive Director would inform them of the Trustees’ decision in writing.

Review and Approval of Minutes – March 19, 2014 – Open Session Meeting

Marty Miller moved that the minutes from the March 19, 2014 Board meeting be approved after correcting a name.  Ski Mariea seconded.  Motion carried.

Update – Corrosion Concerns

Chairman McNutt commented on the corrosion occurring in diesel tank systems since EPA required refiners to reduce the amount of sulfur in diesel fuel and reminded the

Trustees he had signed and sent a letter to EPA after the last Board meeting.  He directed their attention to the response received from Ms. Carolyn Hoskinson, Director of EPA’s Office of Underground Storage Tanks, and asked if there were any questions about the letter or this issue.  None were raised.

Chairman McNutt expressed appreciation to the DNR and the MDA for working with the PSTIF on this issue and noted all three agencies are involved in offering a webinar to help educate tank owners on this subject.  He opined that this will help get the word out to be on the lookout for unusual corrosion problems.

Ms. Eighmey, Mr. Albert, and Ms. Peters thanked the Trustees for their interest and initiative, noting that this issue had clearly been elevated in importance and was getting more attention as a result of the Trustees’ letter.  Mr. Albert noted it went “from a non-topic to the number one topic” at the recent NISTM conference.  Ms. Peters reported the subject had been added to the agenda for an August meeting of EPA and state UST regulators, which she will attend.

Monthly Reports

Chairman McNutt invited questions or comments from the Trustees about the financial statements, monthly activity reports, or large-loss claims.  There were none.

Legislative Report

Chairman McNutt asked Ms. Eighmey to report on actions by the 2014 Missouri General Assembly.  She distributed a written summary, which is filed with the official Board records of the meeting.

Ms. Eighmey briefly summarized the appropriations bills and other bills enacted by the Legislature, noting the Governor has until July 14 to sign or veto each.  She reported two bills passed by the Senate that would have limited the length of time Trustees could serve in expired terms were not passed by the House.

Update on Rulemakings

Chairman McNutt then asked Ms. Eighmey to review the various rulemakings summarized in the Trustees’ notebooks.  She did so, reminding them that government requirements applicable to their insured owners are constantly changing, creating a significant challenge for small businesses to stay in compliance.  She noted all the rule changes mentioned in the Trustees’ meeting materials recently had been reviewed and discussed with the PSTIF Advisory Committee.

Regarding the PSTIF claims rule, Ms. Eighmey said all the feedback from consultants, Advisory Committee members, and other interested parties would be evaluated and incorporated into a revised proposal, which she intends to bring back to the Board at its July meeting with a request to publish the proposed amendment in the Missouri Register for formal public comments.

Regarding the UST operator training rule, she noted Williams was working on the web-based courses and tests, which should be ready in July, so she also plans to ask the Trustees at the next meeting to publish this proposed rule for public comment.

She noted the Advisory Committee had a robust discussion about several possible changes to the UST operating rules, led by Heather Peters; she noted EPA is expected to publish new UST rules in final form in the Fall of 2014, after which time DNR will undertake a formal rulemaking to incorporate EPA’s new rules, as well as some other changes.

She reported there is productive and ongoing dialogue with DNR’s air pollution program about their proposed rule change for the St. Louis area, indicating optimism that the rule change will provide an opportunity to alleviate the stress of tank owners who have found it difficult or impossible to comply with both DNR’s UST rules and DNR’s air pollution rule.

John Albert commented briefly on his department’s work to assure that motor oils, antifreeze, and similar products being sold to Missouri consumers meet certain minimum quality specifications.

Marty Miller asked some questions about the proposed changes to the PSTIF claims rule, including whether it is common for people to ask for reimbursement without pre-approval of costs, what the purpose is for the changes numbered 11a and 11b, why a six-month extended reporting period is not automatically provided, why the phrase “temporarily closed” is being deleted, and what #10 is.  Ms. Eighmey responded to his questions and reiterated that she would like to get DNR’s feedback on the draft rule before it is published in the Missouri Register as a proposed amendment.

Presentation of Research Project on LNAPL

Chairman McNutt introduced Keith Piontek from TRC to present the results of the research project funded by the Trustees.  Mr. Piontek thanked the Board for their support of the research and discussed the findings; his presentation is filed with the official Board meeting records.  He emphasized how the research project had added to the growing body of new scientific data being used in educational and training programs across the country, as nearly all states are dealing with this issue.  He said the scientific community’s understanding of free product at petroleum sites has improved dramatically in recent years, which is causing a shift in regulators’ approaches.

A brief discussion followed.  Ms. Eighmey noted that there are numerous claim files for which the question of how to meet the DNR requirement to “recover free product to the maximum extent practicable” is a critical issue and is hampering closure of the file; she said DNR’s Aaron Schmidt had agreed to engage in a collaborative effort with PSTIF and others to try and solve this problem.

Chairman McNutt thanked Mr. Piontek for his report and said the Board looks forward to hearing more on the subject in the future.

Summary of FY14 Inspections

Chairman McNutt introduced Pat Rounds and Brian Wiegert from Rounds & Associates to report on their FY14 inspections.  They summarized the most common violations seen at UST and AST sites and compared recent results with historical ones.  Their presentation is filed with the official Board meeting records.  Trustees were reminded that Rounds performs UST inspections for both PSTIF and DNR under a joint contract.

John Albert commended Rounds’ staff on their expertise and the quality of the inspections.

Chairman McNutt thanked Mr. Rounds and Mr. Wiegert for attending the meeting and for the good work they and their staff have done for the Board.

Administrative Issues

Advisory Committee Appointments – Ski Mariea moved to appoint five new members to the Advisory Committee:  Mark Abel from Abel Oil Company, Todd Burkhardt from Neumayer Equipment, Ron Morton from Town & Country Supermarkets, Heather Peters from the DNR, and Adam Troutwine from Polsinelli.  John Albert seconded.  Motion carried.

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

Chairman McNutt thanked those in attendance for coming and reminded all present that the next Board Meeting would be on July 23, 2014 at The University Club on MU’s Campus in Columbia.

Chairman McNutt asked that the Board go into closed session to:

  • Approve the minutes from two prior closed sessions,
  • Discuss and make decisions on the two Morris Oil claim appeals,
  • Discuss and make decisions on contracts,
  • Hear from counsel on litigation matters, and
  • Hear an update on fraud investigations.

Renee Slusher moved that the Board go into closed session to discuss the matters identified by the Chairman, as authorized by Section 610.021, RSMo.  Ski Mariea seconded.  A roll call vote was taken; motion carried without dissent.

Chairman McNutt adjourned the open session meeting at 11:59 a.m.

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