July 25, 2012 Meeting Minutes - Missouri Petroleum Storage Tank Insurance Fund
Michael L. ParsonGovernor

July 25, 2012 Meeting Minutes

The University Club
University of Missouri Campus
Start Time:  9:30 a.m.

Trustees Present:
Don McNutt, Chairman
Jim Ford, Vice Chairman
John Albert
Tom Kolb
Danny Opie
Renee Slusher
Leanne Tippett-Mosby (for Harry Bozoian)

Ski Mariea
Tom Pfeiffer
Melvin Schebaum

Staff Present:
Tim Duggan, Assistant Attorney General
Carol R. Eighmey, Executive Director
H Patrick Eriksen, Williams & Company Consulting, Inc.
Dan Henry, Williams & Company Consulting, Inc.
Diane James, Executive Assistant

Others Present:
Doug Drouare, U.S. Environmental Protection Agency – Region 7
Ken Koon, Tanks Section, Hazardous Waste Program, MDNR
Ron Leone, Missouri Petroleum Marketers and Convenience Store Assn
Jack McManus, Chief Counsel, Agriculture and Environment Division, AGO
Heather Peters, Compliance/Enforcement Section,
Hazardous Waste Program, MDNR

Chairman McNutt called the meeting to order.  He introduced the new claims manager hired by Williams and Company, David Walters, and welcomed him.  Mr. Walters briefly summarized his background and said he looked forward to working with everyone.

Chairman McNutt then noted there would be a change of plans for the beginning of the meeting and apologized to those in attendance.  He said Jack McManus from the AGO needed to leave for another meeting, so the Board would go into closed session for a short time to give Mr. McManus opportunity to discuss an issue with the Trustees.  Chairman McNutt said the closed session would then be adjourned and the open session meeting would begin again in about 10 or 15 minutes.

Tom Kolb moved that the Board go into closed session to discuss and vote on matters related to legal actions, causes of action, litigation, and/or personnel issues pursuant to Section 610.021, RSMo.  John Albert seconded.  A roll call vote was taken.  Motion carried unanimously.

Chairman McNutt asked guests to step into the hall and stay close by as this discussion was not expected to take long.

(Renee Slusher left the meeting to attend to another matter.)

Chairman McNutt again called the open session meeting to order at 10:00 a.m. and thanked guests for accommodating Mr. McManus’ schedule.

Approval of Minutes – May 23, 2012 -Open Session Meeting
Jim Ford moved to approve the minutes from the May 23, 2012 Board meeting.  Tom Kolb seconded.  Motion carried.

Monthly Reports
Chairman McNutt announced that some minor year-end adjustments will be made to the June financial statements as the audit is completed, but noted the final statements will not differ significantly from the draft version distributed for the meeting.  He asked if there were any questions or comments on the draft financial reports or monthly activity reports.

Jim Ford asked why there were so many “new” large-loss claims.  Ms. Eighmey said she had asked Williams and Company that same question; most of the seven “new” ones added in the last two months are old claims where recent investigations revealed a larger impact than previously thought.  A few are new claims involving very old tank sites.  She concurred this needs to be monitored over the next six months to see if this is an aberration or indicative of a trend.

(Renee Slusher returned to the meeting.)

Chairman McNutt noted 75% of ASTs are now insured and congratulated John Albert on achieving a high compliance rate relatively quickly.  Mr. Albert responded that a number of owners are on compliance schedules and he hopes to be in the 90% range by the end of the year.

Chairman McNutt then asked Ms. Eighmey to review claims activity.  Referencing the graph in Trustees’ notebooks, she expressed disappointment that so few claims were closed in FY12 and said she had already conversed with the new claims manager, and has regular dialogue with DNR’s program and division directors, about accelerating the pace of cleanups and file closures.  She commented that the good news is the number of new claims being filed is staying about the same..

Review/Approve Proposed Changes to Rules and Application Forms
Chairman McNutt asked Ms. Eighmey to “walk through” the main changes being proposed, since the Trustees are being asked to make a decision and there is a lot of detail in the documents.

Ms. Eighmey explained there are two decisions to be made: (1) Whether to publish proposed changes to the PSTIF Board’s rules, and (2) Whether to change the insurance application forms that are used to implement the Board’s requirements.  Beginning with the rule changes, she noted most of the proposal involves “cosmetic” changes intended to make the rules easier to read.  However, there are a few substantive changes, which she reviewed with the Trustees, noting the Advisory Committee had conducted a similar review a week earlier.  Ms. Eighmey said the DNR’s Heather Peters has also been involved in the review, since some of the proposed changes reflect changes made in 2011 to DNR’s rules.  Finally, she said if the Board approves publication of the proposed amendments, the changes likely would be effective at the end of March 2013.

Chairman McNutt then asked for a motion to approve the proposed rule changes and reminded Trustees that the motion is just to publish the proposed rule amendments and that a public comment period would follow before any final decisions are made.

Tom Kolb moved to publish the proposed rule changes.  Jim Ford seconded.  After a brief discussion, the motion carried.

Chairman McNutt then asked Ms. Eighmey to review proposed changes to the insurance application forms.  During her review, it was noted there are concerns about how the question regarding throughput is posed on the UST application, since many marketers consider this to be proprietary information.  In addition, a few typos were noted.

(Dan Atwill arrived at meeting.)

Ms. Eighmey suggested delaying action on the application forms so these details could be discussed and resolved.  Chairman McNutt agreed, so no motion was made regarding the application forms.

EPA Issues
Fund Soundness Reviews – Chairman McNutt remarked that he was glad Missouri’s tank fund is involved in EPA’s national discussion on “fund soundness” and asked Trustees if they had any questions on this information; there were none.

Recent Correspondence Regarding EPAct – Chairman McNutt commented that he hoped Trustees had had time to read the letter from EPA.  He reminded the Trustees that only Kansas and Missouri had opted to require equipment companies to have “FR” instead of requiring all new UST installations to be double-wall tanks and double-wall piping.  He

encouraged all three agencies – DNR, Department of Agriculture, and the PSTIF –  to collaborate to try to satisfy EPA’s concerns.

Decision Whether to Create and Fund an UST Operator Training Program
Chairman McNutt asked Ms. Eighmey to review her report on this issue, noting the Advisory Committee had met last week to discuss this as well.

Ms. Eighmey emphasized that the Advisory Committee had officially gone “on record” recommending that the Board create and fund an UST operator training program for Missouri.  She summarized the feedback from Missouri UST owners/operators, reviewed the potential consequences if Missouri does not implement a program, and outlined some of the challenges of implementing such a program.

Jim Ford moved to create and fund an UST Operator Training Program for the State of Missouri.  Tom Kolb seconded.  During the ensuing discussion, it was noted that the program would have to meet EPA’s requirements or it isn’t worth doing it.  There was again support for “reciprocity,” so that Missouri recognizes training or testing that operators undergo in other states.  Trustees noted the program must be offered at no cost to operators, and that there are readily-available private sector trainers and programs.  A question was raised as to whether a testing program, similar to that implemented by Arkansas, would satisfy Missouri’s statutory requirements.  Finally, it was noted that the Board will have to publish a new regulation to implement this new requirement; Ms. Eighmey said if the Board approves the motion, she will begin work on that with assistance from Heather Peters.  After discussion, the motion carried.

FY13 Budget
Chairman McNutt noted that a new fiscal year is underway and asked Ms. Eighmey to review the FY13 appropriations.

(Tom Kolb left the meeting to attend to another matter.)

Ms. Eighmey briefly explained the list of appropriations from the PSTIF, including those for the Board’s operations and for other agencies, then distributed a suggested budget for use on the Board’s income statements.

(Tom Kolb returned to the meeting.)

Ms. Eighmey and Ms. Slusher explained the longstanding legislative practice of estimating some appropriations, noting they had been designated in the budget bills with an “E” and allow agencies to spend more than the amount listed.  They said a recent lawsuit called into question whether this practice was constitutional, so the Legislature had eliminated the “E” from many appropriations and simply increased the dollar amount, as was done with the PSTIF Board’s appropriation for making claim payments.  However, the PSTIF’s

appropriation for issuing refunds was still an “estimated” amount; Ms. Eighmey said the Board’s Administrator would reach the $10,000 figure by about the end of September and there is a possibility that no more refunds could be issued after that date.  She and Ms. Slusher said they would keep the Board apprised of developments.

(Tim Duggan left the meeting to attend to another matter.)

Leanne Tippett-Mosby said DNR’s accounting office had found an error in the list of appropriations and suggested the appropriation for ITSD had inadvertently been left off the list.  Ms. Eighmey agreed that appears to be the case and said the DNR figure on the budget would need to be corrected also.

Jim Ford moved to approve the FY13 budget with the DNR figure corrected.  Renee Slusher seconded.  Motion carried.

Administrative Issues
(Tim Duggan returned to the meeting.)

Update – RBCA – Chairman McNutt reported that Ms. Eighmey, Ron Leone, and a representative from Wallis Oil were scheduled to meet with the DNR Director next week and said he hopes an agreement can be reached on what rules or requirements are going to be changed, with a schedule for getting done.He invited questions; there were none.

FY12 Audit – Chairman McNutt noted the audit is underway and a report is expected from the auditor, Graves and Associates, in the fall.

Billings – The Chairman then asked if any Trustees had questions on any of the billings listed in the meeting materials; there were none.

Chairman McNutt reminded those present that the next Board Meeting is scheduled at the Capitol Plaza Hotel in Jefferson City on September 19.

Chairman McNutt adjourned the open session meeting at 11:03 a.m. and announced the Trustees would immediately go back into closed session to complete their unfinished business.

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