July 29, 2015 Meeting Minutes - Missouri Petroleum Storage Tank Insurance Fund
Michael L. ParsonGovernor

July 29, 2015 Meeting Minutes

The University Club
University of Missouri Campus

Start Time:  9:34 a.m.

Chairman McNutt called the meeting to order.

Trustees Present:
Don McNutt, Chairman
Jim Ford, Vice Chairman
John Albert
James Greer
Tom Kolb
Ski Mariea
Marty Miller
Tom Pfeiffer
Renee Slusher

Danny Opie

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, Inc.
David Walters, Williams & Company Consulting, Inc.

Others Present:
Todd Burkhardt, Neumayer Equipment
Thais Folta, Attorney General’s Office
David Lamb, Hazardous Waste Program, DNR
Aaron Schmidt, Division of Environmental Quality, DNR

Approval of Minutes – May 20, 2015 – Open Session Meeting

Jim Ford moved to approve the minutes from the May 20, 2015 Board meeting.  Ski Mariea seconded.  Motion carried.

Monthly Reports

Chairman McNutt commented that the actuarial study and audit are both underway and the June financial statements will be finalized after the audit is complete.  He asked if there were any questions about the financial statements, monthly reports, or large-loss claims; there were none.

Review Appropriations and Approve FY16 Budget

Ms. Eighmey summarized the appropriations process and reminded Trustees an appropriation provides authority to spend.  She then briefly reviewed and explained how the various appropriations from the legislature are presented in the budget that accompanies the monthly income statement and asked the Trustees to approve the budget for FY16.

Trustees noted the budget projects deficit spending for the year and discussed the likelihood that additional revenues will be needed to pay runout claim payments after the 2020 sunset date; they noted a revised estimate of this liability should be available from the actuary soon.  Offsetting the need for more revenue for long-term liabilities is the concern about the Legislature raiding the fund if the balance is too high.

Renee Slusher asked why the amount for inspections was so much less than in FY15. Ms. Eighmey reminded Trustees of the change in the inspection cycle a few years ago, prompted by EPA, and noted this created a surge in the number of inspections done that fiscal year; since then, staff have been working to “smooth out” the number so it is more even each year.

Tom Pfeiffer asked why the PSTIF’s contribution for Central State Services is higher.  Ms. Eighmey said the formula OA uses to pro-rate those costs among state funds is complex and generates different figures each year; she noted that, among other things, the formula considers the amount of revenue into each fund, and the recovery from Conoco Phillips accounted for higher PSTIF revenue in FY14, which caused at least some of the increase in OA’s allocation to PSTIF.

Tom Pfeiffer then moved to approve the budget as presented; Jim Ford seconded.  Motion carried.

UST Regulatory Requirements and Deadlines

The Board then reviewed several upcoming regulatory changes that will affect UST owners and operators.

Regarding the operator training requirement, Jim Ford inquired what the consequence will be if someone doesn’t pass the test.  Ms. Eighmey responded she is working with DNR to implement procedures for checking compliance with this requirement and also will likely discuss those details with the PSTIF Advisory Committee.  She noted the approach will likely be similar as with other UST operating requirements; some are more serious, others less critical, and both PSTIF and DNR focus on working with tank owners/operators to bring them into compliance.

There was also discussion about the recently-published EPA rules, during which it was noted many national trade publications will likely mistakenly say they become effective in October 2015.  Ms. Eighmey emphasized that, in Missouri, federal rules do not apply; she noted DNR will, however, have to amend their rules to reflect EPA’s new requirements and has approximately a three-year deadline for doing so.  David Lamb concurred and distributed informational materials describing the rule changes, noting DNR is in the early stages of outreach to tank owners.

Don McNutt commented the proposed changes will have a significant impact on retailers.  Marty Miller said the Department intends to be as flexible as possible, both in its rule language and in how the rules are administered.  As an example of how challenging it will be, there was discussion about the new requirement to check spill buckets monthly, with some Trustees noting the buckets are essentially receptacles for trash and water.

Discussion then moved to DNR’s new air pollution rule for the St. Louis area, which affects approximately 700 gasoline-dispensing facilities.  It was noted that discussions are still underway about how the rule can be implemented in a practical manner; depending on the outcome of those discussions, the rule could cost a sizeable amount of money and force some small businesses to close.

It was noted a new dispenser labeling rule must be proposed by the Department of Agriculture by January 1, 2016, which is another new compliance requirement for retailers.

Lastly, it was noted retailers who do not spend the money to replace their credit card readers will soon become liable for credit card fraud.  Ms. Eighmey summarized the discussion by noting all these new requirements, and others not discussed, are making it increasingly challenging for PSTIF insured’s to operate; she anticipates there will be further shrinkage in the number of gasoline stations in the next few years and the PSTIF will continue to see claims as businesses close and tank systems are removed.

Status Report – Accelerating the Pace and Improving the Quality of Cleanups

Chairman McNutt asked for a progress report on these ongoing efforts.  Ms. Eighmey responded work is still underway but there has not been a measurable increase in the pace of cleanups yet.  She complimented her staff and DNR on issuance of the technical bulletin on free product.  She also said she had recently discerned that there is a lot of “dead time” waiting for consultants to do work or write reports; she summarized a recent meeting she and David Walters had with a consulting firm that has 50+ PSTIF-funded cleanups underway and does not seem to have sufficient personnel to simultaneously keep all of them moving at a reasonable pace.

The Trustees were interested in this phenomenon, asked several questions, and made some suggestions on how to improve this situation.  They suggested visiting other firms who are in similar situations and/or incentivizing firms who get work done timely.  Ms. Eighmey concurred and said she had asked PSTIF’s Claims Manager to work with DNR’s Tanks Section Chief on this issue.

Update – ULSD and ULSG

The update in the Trustees’ notebooks was briefly reviewed, with Chairman McNutt observing EPA’s ongoing research will likely confirm the Trustees’ perception that corrosion problems in ULSD tank systems are ubiquitous.

Administrative Issues

Report on EPA All-States’ Meeting – Chairman McNutt asked if there were any questions about Ms. Eighmey’s summary; there were none.

National Tanks Conference, September 2015 – Chairman McNutt noted several people are planning to attend this conference, including the Board’s counsel, Tim Duggan.  He invited a motion to approve out-of-state travel for the executive director.  Tom Kolb moved to approve Ms. Eighmey’s travel to the 2015 National Tanks Conference in Phoenix, AZ.  John Albert seconded.  Motion carried.

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

Chairman McNutt reminded those present that the next Board meeting would be at the Governor Office Building in Jefferson City on September 23, 2015.

He then asked the Trustees to go into closed session to:

  • Approve the minutes from the last two closed sessions;
  • Discuss ongoing and threatened litigation; and
  • Discuss matters relating to contracts.

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

Chairman McNutt adjourned the meeting at 10:41 a.m.

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