BEFORE THE POLLUTION CONTROL

BOARJ~ECE~VED

OF THE STATE OF ILLINOIS

CLERKS

OFFICE

SEP

2 62003

TODD’S SERVICE STATION,

)

SThTE OF ILLINOIS

Petitioner,

Pollution

Control

Board

)

vs.

)

)

PCB No. 03-2

ILLiNOIS ENVIRONMENTAL

)

(UST Appeal

—

Petition for Review and

PROTECTION AGENCY,

)

Hearing/Appeal)

)

Respondent.

)

PETITIONER’S REPLY

BRIEF

NOW

COMES

the

Petitioner,

Todd’s

Service

Station,

and

its

contractor,

Midwest

Environmental Consulting

&

Remediation

Services,

Inc.

(“Midwest”)

by

their attorneys,

Elias,

Meginnes, Riffle

&

Seghetti, P.C., and as and for Petitioner’s Reply Brief, states as follows:

ARGUMENT

I.

PETITIONER’S

RECITATION

AND

CHARACTERIZATION

OF

THE

RELEVANT FACTS IS FAIR AND ACCURATE.

The Illinois Environmental Protection Agency

(IEPA) takes great issue with Petitioner’s

characterization of certain statements and facts,

as set

forth in

its

Brief.

However, it should

be

noted that Petitioner cites extensively to specific testimony ofwitnesses at the hearing in support

ofits arguments and claims.

The IEPA makes no effort to

cite to specific testimony or evidence

which rebuts the specifically quoted testimony.

The most crucial assertions made by Petitioner are as follows:

“It is

undisputed that Midwest expended at least the number of hours

set

forth in

the

amended

budget (Petitioner’s

Exhibit

1) in

order

to

properly

complete the

project.

(Tr.

22-23;

38;

71;

77).

It

is

also

undisputed that

these

hours

were

reasonably necessary,

and

were expended at the direction of the IEPA (or, at the

very least, with their full approval).

(Tr. 32).”

(Petitioner’s

Brief, p. 7)

---

The testimony

in support

ofthese claims was cited to

and quoted at length in

Petitioner’s

Brief.

The

work

performed

pursuant

to

that

budget

included

the

TACO

calculations

and

modeling, two

Highway Authority Agreements, and the

plans

and

budget work.

(Tr.

32).

Mr.

Birky,

an employee of Petitioner’s environmental consultant, testified that he had frequent phone

contact with James

Malcolm of the IEPA regarding the work which was performed in the field.

(Id.)

The project was complicated because ofthe presence of fiber optic lines (which limited the

locations for subsurface

sampling).

(j~) Mr. Malcolm ofthe IEPA made the

suggestion to

do

off-site sampling across a major roadway.

(Id.)

That

suggestion significantly added to the cost

of the project.

(Tr.

36).

The off-site testing

and

the necessity of obtaining

two

(2)

Highway

Authority Agreements were a major portion ofthe costs involved in this case.

Mr. Birky identified Petitioner’s Exhibit

1

(which was admitted without objection) as the

personnel

page of the

budget amendment which

was submitted.

(Tr.

37).

He

was personally

involved in the preparation of that document.

Mr.

Birky testified that

Midwest spent at least the

number of hours depicted on Petitioner’s

Exhibit

1

in

connection with the amended

budget for

the project in question.

(Tr. 38).

Mr. Green testified as follows

regarding the scope ofwork related to the amended budget,

and the reasonableness ofthe amounts charged:

A.

It would have been for the actual TACO and tier for closure ofthe

site, the model and calculation, the Highway Authority Agreements, and the final

closure documentation, the report to the EPA and

the final reimbursement for that

work.

Q.

The total

amount

you

charged

for

that

phase of the

project

was

$7,483.58?

A.

Yes.

Q.

Has

that

amount

indeed

been

paid

by

Todd

to

Midwest

Environmental?

A.

Yes.

2

---

Q.

In

your

experience

was

$7,483.58

a

reasonable

total

amount

to

charge for the scope ofwork that was covered by the amended budget?

A.

Yes.

Q.

In

your

experience

have

you

seen

instances

where

significantly

higher amounts have been charged for that type ofscope of work?

A.

Yes.

(Tr.

24-25).

The IEPA called only one

witness

to

testify on

its behalf at the hearing.

That witness,

Mr. Chappel,

did

not

testify

that

the hours

expended were

unreasonable.

With

respect to

the

number ofhours actually expended, he testified as follows:

(by Mr. Riffle)

Q.

Do you have

any

specific

evidence that

the

hours claimed in the

amended budget were not actually expended by Midwest on this project?

A.

No, I do not.

(Tr.

71).

(by Mr. Riffle)

Q.

You

don’t

know

how

many

hours

actually

were

expended

by

Midwest

on this project, correct?

A.

No.

(Tr. 77).

The

IEPA (without

any

citation

to

the

transcript)

takes

issue

with

Petitioner’s

claim that the reasonableness ofthe charges stands unrebutted.

The IEPA’s argument on

this issue is as follows:

This

is

a false

and,

at best, misleading statement.

First,

there

is no

question but

that

the hours set

forth

in

the amended

budget are in

dispute,

as that

forms

the

very

basis for the appeal.

What may be undisputed, at least from the Petitioner’s

perspective, is that Midwest billed the Petitioner for those hours and that Midwest

claims

it provided work for all those hours.

However, that does not mean that

the

Illinois

IEPA did not,

and does not now, find

that those hours were excessive for

the

work described.

Also, there

is

clearly

a question as to

whether those

hours

were

reasonably

necessary.

The

Illinois

EPA

has

taken

the

position,

as

memorialized in its decision of June 7, 2002 (AR,

pp.

136-139), that not all of the

hours included in the amended budget were reasonably necessary.

IEPA Brief, at p.

3

3

---

The fact that the IEPA “has taken the

position”

or “finds” that the hours submitted were

unreasonable

does not mean that the claim of reasonableness, as specifically

testified to

by

two

witnesses whose testimony has been deemed

credible, has been properly contested

or rebutted.

The

IEPA had

every

opportunity,

at the hearing, to

elicit testimony

and

introduce

evidence

to

establish

that

the hours

expended were

unnecessary and/or

unreasonable,

and/or

not

actually

expended.

Once

Petitioner

presented

credible

testimony

in

support

of

its

claim

of

reasonableness,

the

burden

then

shifted

to

the

IEPA

to

rebut

this

claim

with

testimony

or

evidence ofunreasonableness.

This it did not do.

There is not one

single citation in the IEPA’ s

Brief to the hearing transcript or record which

in any way establishes that

the hours expended

were unreasonable.

Petitioner stands

by its

position that the reasonableness of the hours claimed

has been established, and not rebutted.

II.

PETITIONER

SHOULD

NOT

BE

PENALIZED

FOR

FOLLOWING

THE

SUGGESTIONS AND INSTRUCTIONS OF THE IEPA.

The IEPA goes to great lengths

to

argue that its

employee’s

“suggestions” to

Mr.

Birky

regarding

a

specific

course

of action

did

not

constitute pre-approval

of the

hours

expended.

While

this

might

be

technically

correct,

it would

be

an

abuse

of discretion

for the

IEPA to

specifically instruct or suggest

a certain course of action (such as the specific location of off-site

testing,

such as occurred in this case), and then determine that the hours necessarily expended in

the course of following that suggestion or instruction were “unreasonable”.

Moreover, there has

been absolutely no

showing that the off-site testing in question was not necessary.

Mr.

Birky

testified

at

length

regarding

the

conversations

between

himself

and

Mr.

Malcolm ofthe IEPA, and the events which led up to

the off-site testing.

(Tr.

33-37).

Mr. Birky

testified that he

had

several conversations with

Mr. Malcolm of the IEPA regarding this project,

and that Mr. Malcolm would “give me instructions on his thinking.

.

.“

(Tr.

53).

4

---

Mr. Birky further testified as follows:

A.

When we were

fairly certain we couldn’t get access to

an

area to

determine that without potential damage to fiber-optic cables, we decided to move

across the street.

Q.

When

you

say we decided,

can you

give a

little

detail as to how

that happened?

A.

That

was

basically

a

telephone

conversation

that

I

was

on

site

talking with James Malcolm on the phone and

kind of telling him where I was at

and what I was looking at there.

That’s basically when he and I decided if we had to we could

go across the

street and obtain the Highway Authority Agreement.

Q.

Was that something that he

suggested or you suggested, or do you

recall?

A.

I think it was him, because it was —I was a little reluctant to have to

go

that

extra step

beyond what

had

been

approved as

far

as

the

Highway Authority Agreement.

I told him I really can’t get access

to this area, you know, comfortably anyway.

He suggested I move

across the street and

obtain those.

Q.

Did you proceed to do

that?

A.

Yes.

(Tr.

34-35).

The foregoing testimony

stands

unrebutted.

The necessity of that additional

work,

and

the

fact that

the hours

claimed were

actually performed, also

stands

unrebutted.

Whether the

actions of Petitioner’s

consultant

were

technically

“pre-approved”

is

not

the

issue

here.

The

issue

is

whether the Amended Budget (which contains

budget amounts for the additional

work

“suggested”

by

the

IEPA)

was

reasonable.

The

clear

testimony

in

this

case

is

in

favor

of

Petitioner on this point.

5

---

III.

THE

UNREBUTTED

TESTIMONY

THAT

THE

HOURS

CLAIMED

WERE

ACTUALLY

EXPENDED,

COUPLED

WITH

THE

TESTIMONY

THAT

THE

TASKS

WERE

“SUGGESTED”

BY

THE

IEPA,

IS

RELEVANT

TO

THE

DETERMINATION

OF

WHETHER

THE

HOURS

REQUESTED

WERE

REASONABLE.

The IEPA acknowledges Mr.

Chappel’s testimony that he

had no

evidence that the hours

were not expended, but then proceeds with a curious

argument that the number of hours actually

expended is irrelevant.

The IEPA’s argument in this regard is as follows:

Unfortunately for the Petitioner, the testimony cited to has no bearing on whether

the

hours

sought

for the

approval

were

reasonable

as

submitted.

Whether

the

hours were actually expended, or how many hours

were actually expended,

is not

relevant

to

the

decision

of

whether

the

hours

presented

in

the

budget

were

themselves reasonable.

If Midwest had

spent three times the number of hours as

were

presented,

and provided

every scintilla of evidence

documenting that

they

had been expended, would that proofor knowledge thus result in a conclusion that

the hours were reasonable?

The answer is no.

Even if Mr. Chappel had complete

knowledge that the hours in the amended budget were actually expended, or that

a

greater

number of hours

.was

spent

than

was

requested

for

approval,

that

still

would not affect the decision here of whether the hours actually presented

in the

budget are reasonable forthe tasks described.

There

is

evidence in the record that the

tasks performed by Petitioner’s

consultant were

necessary to

accomplish closure.

There

is

evidence that

the IEPA was

aware

of,

and

in

fact

suggested

or

instructed,

a

particular

course

of

action

(namely,

off-site

testing).

There

is

unrebutted

testimony that

hours even in excess of those

set forth in

the Amended Budget were

actually expended.

There is no evidence that the project (or any aspect ofthe project) could have

been completed with

the expenditure of less hours than those

expended, (and/or those claimed).

It

is

an

incredibly unreasonable

position for the

IEPA

to

take

that

it

can

suggest

a

particular

course of action,

that the suggested

course of action was reasonable

and was actually followed,

that it can know that a certain number ofhours were expended

in following that course of action,

but it can then declare the requested hours to be “unreasonable”.

6

---

IV.

NO

CLEARLY

DEFINED

STANDARD

OF

REVIEW

FOR

REVIEWING

THE

AMENDED BUDGET WAS

APPLIED BY THE

The IEPA cites to

the

applicable

regulations

(including

35

Ill.Admin.Code

§~732.505and

732.606)

and

claims

that

since these

regulations

were

in

force,

and

referenced

in

the

Final

Decision under

review,

there was,

indeed, a

clearly

defined standard

of review.

The

obvious

problem with this argument is that Mr. Chappel (the person who decided to reduce the number of

hours and who

issued the Final Decision under

consideration) (Tr.

77) testified that he

did

not

follow any such standard in this case.

With respect to the budget review process, Mr. Chappel testified as follows:

(by Mr. Riffle)

Q.

Do you

have any generic

rules or rules of thumb as to

how much time

you

can

approve for a particularNFR project?

A.

How many hours?

Q.

Right.

A.

That I can allot?

Q.

Right.

That you would normally allot for an NFR.

A.

In determining a budget submittal, the number ofhours?

Q.

Correct.

A.

No, we don’t.

Q.

It’s entirely subjective?

A.

Correct.

(Tr. 73).

There

is absolutely no

citation to the

above-cited provision

of the

Illinois

Administrative

Code in the

hearing transcript.

Rather, by Mr. Chappel’s own

testimony, it is clear that he made

a purely subjective

determination based upon no

actual

policy

or

citation of the agency or the

legislature.

The factors

cited

by

Mr.

Chappel make

it

clear that he made a purely subjective

decision based on his own experience as a reviewer and also from when he was an environmental

consultant.

(Tr.

79).

The

IEPA

acknowledges

that

“there

is

some

subjectivity

involved

in

reviewing

a

budget

proposal.”

IEPA

Brief,

at

p.

9.

Petitioner

respectfully

submits

that

the

7

---

process employed

in

this

case was “entirely subjective”,

as specifically

acknowledged

by

Mr.

Chappel in his sworn testimony.

(Tr.

73).

As previously noted, an agency’s failure to

follow guidelines set by the legislature is

grounds

for a finding that

the agency’s

decision is

arbitrary

and capricious.

188

Ill.2d

474,

722

N.E.2d

1129,

243

Ill.Dec.

60

(1999);

see

also

Greer

v.

Illinois

Housing

Development Authority,

122

Ill.2d 462,

505-06,

120

Ill.Dec. 531,

524

N.E.2d

561

(1988).

That is

precisely what

occurred

here.

V.

THE HOURLY RATES SHOULD NOT HAVE BEEN REDUCED.

Petitioner presented the testimony ofits experienced consultant, Mr. Green,

regarding the

reasonableness ofthe hourly rates.

(Tr.

13, 23-24).

The IEPA failed to produce testimony from

Mr.

Malcolm,

the

individual

identified by

Mr.

Chappel as

the person

who

actually made the

decision to

reduce certain hourly rates.

(Tr.

77).

Any testimony by Mr.

Chappel on this

issue

was

irrelevant hearsay,

as he

was not

involved

in

the

decision.

(Tr.

59).

The testimony

of

Petitioner thus stands

unrebutted, at least by any competent testimony.

The reduction in hourly

rates should therefore be reversed.

CONCLUSION

For

all of the

foregoing

reasons,

Todd’s

Service

Station

respectfully requests

that

the

Final

Decision be

reversed

or

modified

by

increasing

and

accepting

the

budget

as

initially

proposed, thereby allowing additional reimbursement in the amount of$4,677.50.

Respectfully submitted,

Todd’s Se

Station,

Petitioner

By:__

Robert M

Riffle

Its Attorney

8

---

ROBERT M. RIFFLE

Elias, Meginnes, Riffle & Seghetti, P.C.

416 Main Street, Suite

1400

Peoria, IL 61602

(309) 637-6000

603-1066

9

---

CERTIFICATE OF SERVICE

The undersigned certifies that on September

25,

2003, a copy of the foregoing document

was served upon each party to this case by

X

Enclosing a true copy of same in an envelope

addressed to the attorney-cf-record of-each party

as

listed

below, with first class postage

fully prepaid, and

depositing each of said

envelopes in the

United

States

Mail at

5:00 p.m. on said date.

—

Personal deliveryto the

attorney ofrecord of each

party

at the address(es) listed below

Facsimile transmission with confirmation by United States Mail

Via Federal Express

-

Express Package Service

-

Priority Overnight

Dorothy M. Gunn, Clerk

Illinois Pollution Control Board

James R. Thompson Center

100 W. Randolph Street

Suite 11-500

Chicago, IL 60601

JohnJ. Kim

Assistant Counsel

Special Assistant Attorney General

Division ofLegal

Counsel

1021 N. Grand Ave., East

P.O. Box 19276

Springfield,

IL 62794-9276

Ms. Carol Sudman

Hearing Officer

Illinois Pollution Control Board

600

S. Second St., Suite 402

Springfield, IL 62704

Robert M. Riffle

Janaki Nair

Elias, Meginnes, Riffle &

Seghetti, P.C.

416 Main Street, Suite

1400

Peoria, IL 61602

(309) 637-6000

603-1066

10