March 23, 2016 Meeting Minutes - Missouri Petroleum Storage Tank Insurance Fund
Michael L. ParsonGovernor

March 23, 2016 Meeting Minutes

The University Club, University of Missouri Campus, Columbia, MO
Start Time:  9:32 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
Danny Opie
Tom Pfeiffer
Renee Slusher



Staff Present:

Tim Duggan, Assistant Attorney General
Carol R. Eighmey, Executive Director
Dan Henry, Williams & Company Consulting
Diane James, Executive Assistant

Others Present:

Thais Folta, Attorney General’s Office
Ken Koon, Tanks Section, Hazardous Waste Program, DNR
Ron Leone, Executive Director, MPCA
Stephanie Pearson, Attorney General’s Office
Heather Peters, Compliance/Enforcement Section, Hazardous Waste Program, DNR

Approval of Minutes – January 27, 2016

Tom Kolb moved to approve the minutes from the January 27, 2016 open meeting. James Greer seconded. Motion carried.

Monthly Reports

Trustees reviewed the financial statements, monthly activity reports, and large-loss claims; there were no questions.

[Marty Miller arrived at the meeting.]

DNR Mid-Year Report on Tanks-Related Expenditures

Chairman McNutt asked Ms. Eighmey to review the legislative report; she summarized bills of interest that appear to have a chance of passage this year.

Ron Leone said MPCA is hopeful the bill providing liability protection for retailers who sell E15 and other new fuels will pass. This prompted a brief discussion about MDA’s requirements for E15 dispensers; John Albert noted if a retailer converts an old dispensing system from a traditional fuel like E10, without knowing whether the equipment is compatible with E15, the MDA inspector would “tag it out” of service. Ms. Eighmey briefly commented on the provision in the bill prohibiting insurers from denying claims based on equipment incompatibility, reporting one state representative had questions about that at the committee hearing on the bill.

There was a brief discussion about the bill requiring OA to publish information on the state’s accountability portal about all contracts between state agencies and attorneys.

Ms. Eighmey noted there are a substantial number of senators and representatives who want to “push back” against the growing number of regulatory requirements being imposed by the federal government and various state agencies. Ron Leone observed there are significant political differences in the General Assembly, especially in the Senate, that could slow passage of bills this year, as happened last year.

Cleanups and Claim Closures

Chairman McNutt asked the Trustees to review the information in their notebooks and invited Ms. Eighmey to comment on the list of 23 old remedial claims. She reminded the Board these are all very old, low-risk claims at locations that have been operating fuel facilities since the pollution was discovered. She said there is a common misperception that in every case where there is a difference of opinion, it is the PSTIF who differs with the DNR; she pointed out several on the list where the owner’s consultant has concluded there is no risk and DNR’s requirements have been met, but the Department disagrees.

She said efforts expended over the last 2-3 years to resolve issues related to “free product recovery” still have not resulted in a clear and effective means of demonstrating when this requirement has been met; instead, consultants and PSTIF staff typically must meet with DNR to try and resolve this issue on each file. She noted this is a time-consuming approach, estimating there may be as many as 325 files “stuck” on this issue.

She then suggested that, instead of continuing to hear from her and Williams’ staff on these concerns, it might be useful for the Board to hear directly from the DNR as to their views on what the problems are and how they can be solved.

Marty Miller concurred, although he didn’t think a formal vote to that effect was necessary, and said he had already initiated conversations with DNR staff about this. He said he wanted to gain a better understanding of the free product issue, noting that – in addition to the bulletin jointly developed by the DNR and PSTIF in 2015 – DNR staff had suggested a longer guidance document be developed. Mr. Miller acknowledged there are challenges with such documents, as they cannot be regulatory in nature unless they are properly promulgated as such; however, he noted it may be helpful to have such a document. He also said he wants to review the lists Ms. Eighmey has provided to the Trustees and gain a better understanding of what the situation is on those files.

Ms. Eighmey offered to meet with Marty and/or DNR staff, if desired, to assist in gathering information or planning the Department’s presentation. She said one of her reasons for suggesting the Board hear directly from the DNR is that PSTIF staff have been pushing to get cleanups done and she thinks it’s only fair and reasonable for the Trustees to also hear directly from the Department. She suggested the Department’s presentation include specifics on what it considers reasonable goals for completing cleanups. Mr. Miller agreed and said DNR would contact her to discuss this before the next PSTIF Board of Trustees’ meeting.

Renee Slusher said she believes it is important for the Department to comment specifically on the 23 old remedial claims listed in the meeting materials. She also referenced a 2012 report by EPA that was unflattering to both the DNR and the PSTIF and noted EPA also had written directly to the Trustees recently; since the EPA has questioned whether PSTIF’s refusal to pay for things is contributing to the slow pace of cleanups, the Trustees have a responsibility to investigate and analyze that allegation. She asked if information can be provided on what and how often the PSTIF refuses to pay for things when DNR believes it is necessary.

Tom Pfeiffer opined cleanups have been moving too slowly for many years and there has been too much “foot-dragging” but no solutions; he suggested the Board send a letter to the DNR Director, asking her to figure out what the problem is and fix it. He said it is embarrassing that there are cleanups that have supposedly been underway for 25 years and are not yet completed; he further commented if the DNR’s requirements are not clear, they need to be made clear so owners and their consultants can meet them and get files closed.

Marty Miller noted some cleanups stall because there is no legally-responsible party. He also said he’s heard the reason many cleanups don’t get completed in a timely way is that PSTIF staff refuse to fund all or part of the consultant’s plan; he agreed with Ms. Slusher that it is important to know whether this is a significant factor and suggested that the Department needs to be more assertive in requiring the responsible party, where there is one, to move forward, regardless of any differences that party may have with PSTIF staff regarding payment issues. On the other hand, he acknowledged that if the DNR is requiring things that are not really necessary, that also needs to be addressed.

Mr. Pfeiffer said he’d like to see more of a sense of urgency at the DNR to analyze and address whatever is causing the problems. Mr. Miller committed the Department to preparing a presentation for the next PSTIF Board of Trustees’ meeting.

Jim Ford agreed he’d like to see more information on what/when PSTIF staff are refusing to pay. Ms. Eighmey remarked this has been alleged for many years, but since David Walters has been Claims Manager, he’s worked hard to assure his staff finds a way to say “yes” instead of “no;” she said there will always be issues that have to be worked out on a few files, but she is unaware of any data demonstrating this is holding up progress on more than a handful of the 900 open claim files.

Renee Slusher asked if EPA is saying something needs to be done to clean up a site and the DNR is concurring with EPA, but the consultants disagree. Ms. Eighmey clarified EPA does not set cleanup standards; they are set by each state, so EPA doesn’t get involved in the details of cleanup plans or reports. Marty Miller said EPA’s role is related to its funding of the DNR’s UST program.

Don McNutt asked how many requests for pre-approval of costs are received each month and said he’d like to know what percentage of those the Board’s staff is rejecting. Tom Kolb said he has about half a dozen cleanups underway and his consultant says he is frustrated with the DNR’s “moving targets;” he agreed with Mr. Pfeiffer that the DNR’s requirements need to be clear and consistent.

James Greer agreed the Trustees need to hear from DNR and “get to the bottom” of the problem. Ski Mariea concurred and said if it is true that the Board’s staff is holding up action on a significant number of files, the Board will look into that and solve the problem. Marty Miller said he didn’t know whether the Department could quantify this and suggested Ms. Eighmey might have access to better data; Ms. Eighmey agreed to confer with Williams & Company to see what data can be obtained to better quantify how many files are affected by funding disagreements.

Chairman McNutt confirmed the Trustees will expect the DNR to provide a report or presentation for their next meeting and asked Mr. Miller to identify who the Department’s decision-maker will be to work with the Trustees to solve this problem. He then brought up the recent letter from the EPA Regional Administrator and said he believes a prompt response is in order. He said he had asked Ms. Eighmey to draft a response for his signature and circulate it to all Trustees for review and comment. He asked the Trustees to review the draft and respond promptly.

Implementation Plan – UST Operator Training

Chairman McNutt directed the Trustees’ attention to the plans in the meeting materials and opined it appears to be a reasonable approach for checking compliance with the Operator Training requirement. He invited feedback from the Trustees.

Jim Ford moved to approve expenditures up to $5700 for the proposed operator training mailing and software changes. Ski Mariea seconded. Motion carried.

Administrative Issues

Annual Audit and Actuarial Report – Chairman McNutt said the Invitation For Bid (IFB) for the annual financial audit has been issued, and some of the Trustees are also working with Ms. Eighmey to issue an IFB for actuarial services. He said the Board intends to award both contracts before June 30.

Biofuels Infrastructure Grants – Chairman McNutt noted the Department of Agriculture’s recent grant awards for biofuels equipment and invited comment from John Albert. Mr. Albert said additional applications will likely be accepted, since MDA has more funds available.

Approve Executive Director’s Out-of-State Travel in April – Tom Pfeiffer moved to approve the Executive Director’s out-of-state travel to Pittsburgh. Tom Kolb seconded. Motion carried.

Reminder – Financial Disclosure Forms – Chairman McNutt reminded Trustees to heed the deadline for submitting their financial disclosure forms to avoid penalties.

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 Capitol Plaza Hotel in Jefferson City on May 25, 2016. He then asked the Trustees to go into closed session to:

•    Approve the minutes from the January 27 closed session;
•    Discuss a claim appeal;
•    Discuss ongoing and threatened litigation; and
•    Discuss matters relating to contracts and personnel.

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

Chairman McNutt adjourned the meeting at 10:33 a.m.

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