Score One for the Drycleaners in BAAQMD…at least for a little while

By Marti Russell, REA, Western Sales Manager, EnviroForensics

A Steering Committee Meeting was held on Friday, March 5, 2010 in San Francisco.  As if the economy isn’t bad enough for small businesses and depending on the outcome of this meeting, the cleaners in the Bay Area Air Quality Management District in Northern California may have another hurdle in trying to stay open and meet the mandated regulations bestowed upon them.

The BAAQMD staff was directed by the Board of Supervisors last year to come up with a plan to shorten the time frame on phasing out perc in their District.  All perc cleaners in the BAAQMD know the District wants to accelerate the banning of perc faster than the California Air Recourses Board mandated timeframe of 2023. I have been associated with State and Local committees, hearings and workshops for the Industry for almost 20 years, and went into this BAAQMD Steering Committee Hearing with the expectation that the dry cleaners would be taking another big blow to their business.  The blow would definitely be financial.  Business plans (if cleaners have one in place) will again be altered, ultimately impacting many people; the owners, the employees, their family, supply houses, landlords, property managers, loss of tax revenue, permits, etc from the appropriate agencies…you get the idea.

Once it got underway, Director of Engineering, Brian Bateman, gave four options in the presentation.  Option A, B, and C would shorten the age of perc operating machines by 3, 5, and 8 years respectively.  Option D, the one recommended by Mr. Batemen, would retain California’s ARB 15 year shutdown provision, by advancing the date for final perc phase out by three years to January 1, 2020.

Arguments were heard from all sides, dry cleaners, financiers, other State and City staff Agencies. Issues raised from the alternative methods of cleaning clothes, the cost of a new machine, the annual loss of equity or deprecation of their machines, qualifying for financing in this economy, the availability of machines, and the availability of qualified contractors needed to install the machines. Financial impact quotes used in the BAAQMD presentation were taken from the IRS and Dun and Bradstreet reports.  According to these reports about two thirds of the dry cleaners have an average of 1-4 employees, with average annual sales of $62,200, estimated average annual profits of $4100 and loss of equity of 66-76% of average annual profits.

Over 200 perc units will cease operation this July, and by next July 2011, another 185 machines will have to cease operating.  In late 2007, 3 perc machines were purchased and installed in the BAAQMD before the ARB’s December 31, 2007 regulation; allowing these three machines the usage of perc right up to the State’s phase out timeframe of 2023.  It is those three machine owners’ that will loose the most in equity and depreciation loss.

It was pointed out to the BAAQMD Steering Committee by Mr. Bateman, that by accepting staff’s recommendation of Option D, accelerating the phase out by three years, BAAQMD would be ahead of the time frame of what South Coast Air District has already in place for their cleaners in Southern California. This information makes you want to ask the question: is Option D’s recommendation geared to out do South Coast in a timeframe issue, or will the BAAQMD Steering Committee members actually think of the small business owner’s plight?

Well, after much discussion, and numerous questions to staff and speakers, the Steering Committee unanimously voted to keep the ARB regulation intact and not intensify the 3-year phase out until something can be ‘worked out’ with those last 3 machine owners.  After something is negotiated with them, then the Steering Committee will look again at the Options.  To paraphrase one Committee member, “we made these rules, set them in action and it is not fair to the cleaners to change them in mid-term.”

So, score one for the dry cleaners…at least for now!