AS97005A.PDF

1 BEFORE THE ILLINOIS POLLUTION CONTROL BOARD

2 IN THE MATTER OF: )

) AS97-5

3 Petition of the Louis

Berkman )

Company, d/b/a

Swenson Spreader ) Ogle

Cty. Crths.

4 Company, for an Adjusted Standard ) Oregon, Illinois

from 35 Ill. Adm. Code Part 215, ) April 17, 1997

5 Subpart F )

6 Hearing commenced at 10:15 a.m.

7 BEFORE:

8 DEBORAH L. FRANK, Hearing Officer,

Illinois Pollution Control Board,

9 608 South Prospect Avenue,

Champaign, Illinois, 61820

APPEARANCES:

ATTORNEY JAMES E. MEASON,

12 of the firm of

Hinshaw & Culbertson,

220 East State Street,

13 Rockford, Illinois, 61105-1389

Counsel for

Swenson Spreader.

15 ATTORNEY BONNIE R. SAWYER and

ATTORNEY CHRISTINA ARCHER,

16 Illinois Environmental Protection Agency,

Assistant Counsel, Bureau of Air,

17 2200 Churchill Road,

Springfield, Illinois, 62794-9276

18 Counsel for the IEPA.

19 ALSO PRESENT:

Mr. Gary

Beckstead, Environmental

20 Protection Engineer with IEPA.

Mr. Brooke Peterson,

21 Legal Investigator with IEPA.

22 REPORTER:

Carrie L.

Vaske,

23 Certified Shorthand Reporter,

Ashton, Illinois

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1 INDEX

2 Witness Page

3 MR. ROBERT A. BALOGH

Mr.

Meason (Direct) . . . . . . . 22

4 Ms. Sawyer (Cross) . . . . . . . 25

Mr.

Meason (Redirect) . . . . . . 27

5 Ms. Sawyer (

Recross) . . . . . . . 28

MR. MARK SWISHER

6 Mr.

Meason (Direct) . . . . . . . 31

Ms. Sawyer (Cross) . . . . . . . 98

7 Mr.

Meason (Redirect) . . . . . . 133

Ms. Sawyer (

Recross) . . . . . . . 142

8 MR. JERRY OLSON

Mr.

Meason (Direct) . . . . . . . 143

9 Ms. Sawyer (Cross) . . . . . . . 180

Mr.

Meason (Redirect) . . . . . . 186

10 Ms. Sawyer (

Recross) . . . . . . . 187

12 EXHIBITS

13 Exhibit Page

14 Petitioner's Exhibit No. 1 . . . . . . 29

Petitioner's Exhibit No. 2 . . . . . . 37

15 Petitioner's Exhibit No. 3 . . . . . . 63

Petitioner's Exhibit No. 4 . . . . . . 125

16 Petitioner's Exhibit No. 5 . . . . . . 93

Petitioner's Exhibit No. 6 . . . . . . 97

17 Petitioner's Exhibit No. 7 . . . . . . 97

Petitioner's Exhibit No. 8 . . . . . . 97

18 Petitioner's Exhibit No. 9 . . . . . . 97

Petitioner's Exhibit No. 10 . . . . . . 155

19 Petitioner's Exhibit No. 11 . . . . . . 168

Petitioner's Exhibit No. 12 . . . . . . 168

20 Petitioner's Exhibit No. 13 . . . . . . 163

Petitioner's Exhibit No. 14 . . . . . . 169

21 Petitioner's Exhibit No. 15 . . . . . . 168

24 Certificate of Shorthand Reporter . . . 189

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1 HEARING OFFICER FRANK: Good morning and

2 welcome to the Adjusted Standard hearing for the

3 petition of Louis

Berkman Company doing business as

4 Swenson Spreader Company for an Adjusted Standard

5 from 35 Illinois Administrative Code Part 215,

6 Subpart F, AS97-5.

7 Before we proceed, I'd like to note for

8 the record that there is still a pending motion

9 before the Pollution Control Board. My guess is

10 that they will rule on it before our second day of

11 hearing which we have not set yet. There's a

12 possibility, I guess, they could be ruling on it

13 today while we're here, but I don't think that they

14 are. We also have a pending motion in

limine which

15 was filed on behalf of Louis

Berkman Company and a

16 response to that which was filed by IEPA. I

17 received the response yesterday by fax. We had a

18 problem with the faxes or I would have had it on

19 Tuesday.

20 At this point I'm going to make an oral

21 ruling that I am going to allow evidence having to

22 do with settlement negotiations as long as it does

23 not go to any admissions by the Company to anything

24 that is pending in the enforcement action and I

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1 think what we're going to have to do is go on a

2 case by case basis on the different evidence that's

3 going to be coming in.

Swenson does not have to admit its guilt

5 in this case and then have it used against it in

6 the enforcement action is what I'm trying to

7 protect, but I do believe what the Agency said,

8 which is that in this case there really isn't an

9 issue of liability because it is an Adjusted

10 Standard rule making, so the burden will be on

11 Swenson to show me why various evidence should not

12 come in and I will rule on it on a case by case

13 basis. So it's hard to make a blanket ruling

14 because I don't know what I'm going to see so we'll

15 just take it on a case by case basis and see what

16 comes up.

17 I'm going to go ahead then and let the

18 attorneys make their appearances on the record.

19 Mr. Meason, if you want to go ahead and go first.

20 MR. MEASON: Yes, my name is James E.

Meason.

21 I'm an attorney with the law firm of

Hinshaw and

22 Culbertson in the Rockford, Illinois office and I

23 represent Louis

Berkman Company doing business as

24 Swenson Spreader in this proceeding and in the

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1 enforcement action PCB 101 -- 97-101.

2 HEARING OFFICER FRANK: Okay.

3 MS. SAWYER: Bonnie Sawyer, Assistant Counsel

4 with the Illinois Environmental Protection Agency

5 representing the Illinois Environmental Protection

6 Agency.

7 MS. ARCHER: Christina Archer, Assistant

8 Counsel for the Bureau of Air representing Illinois

9 Environmental Protection Agency.

10 HEARING OFFICER FRANK: Okay. Are there any

11 other preliminary matters?

12 MR. MEASON: Miss Sawyer and I had a

13 conversation, was it yesterday or a couple days

14 ago, regarding stipulations as to the authenticity

15 of federal and state governmental documents,

16 whether they're published in the federal register

17 or they're regulations, and I don't want to speak

18 for Ms. Sawyer, but I think we agreed that she

19 would stipulate to the authenticity of those types

20 of documents.

21 HEARING OFFICER FRANK: Okay.

22 MS. SAWYER: Yeah, I agree although I'm not

23 sure exactly which documents you're referring to,

24 but if they're federal register publications and

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1 things like that or orders, I'll stipulate to that.

2 HEARING OFFICER FRANK: That's fine. I'll also

3 note for the record that there are no members of

4 the public present.

5 MS. SAWYER: I have one quick matter. We

6 received an answer to our discovery request

7 yesterday, and in relation to the production of

8 documents we didn't receive any documents. It

9 appears as though they have some architectural

10 drawings available for us today and they also said

11 that they were going to submit additional

12 information regarding cost of powder coatings, but

13 the Agency is aware of other documents that meet

14 the demand of our discovery or request to produce

15 documents that were not submitted to us. So I

16 don't know if I want -- should move at this point

17 or --

18 HEARING OFFICER FRANK: My preference is that

19 if there are specific things that you're looking

20 for that first you try and work it out with Jim.

21 If you guys can't work it out, then you'll have to

22 put something in writing to me so I can rule on

23 whether or not it needs to be produced.

24 MS. SAWYER: That's fine.

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1 HEARING OFFICER FRANK: And I would treat that

2 in the nature of any -- like any objection and the

3 Hearing Officer rules so you need to get that done

4 earlier.

5 MS. SAWYER: May something?

6 HEARING OFFICER FRANK: Yeah, May 28th. Is

7 there anything further? Okay. Then Mr.

Meason, if

8 you'd like to go ahead and begin with any opening

9 statement you might have.

10 MR. MEASON: Yes, thank you very much. I'm

11 used to standing up in court so --

12 HEARING OFFICER FRANK: That's fine.

13 MR. MEASON: You get in trouble if you don't

14 stand up upstairs. As the Board knows, the

15 Illinois Legislature created the Adjusted Standard

16 mechanism. It is kind of a middle ground between a

17 formal rule making proceeding and the more informal

18 variance which was strictly not a rule making

19 endeavor.

20 The main difference between those two

21 options was one was permanent relief and basically

22 a company had its own regulation written into the

23 regulations with its own name, and the other one

24 was a piece of paper, really wasn't -- public

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1 didn't know much more about it unless they went

2 down to the Board and did the research and it was

3 limited in length. It was not something that could

4 be set in stone for years and years and years to

5 come. There was a definite time frame to that.

6 And so Illinois Legislature created this

7 option kind of in between the two, and the Illinois

8 Legislature provided statutory criteria to qualify

9 for an Adjusted Standard. Those criteria are in

10 Section 28.1 of the Act. Real briefly, factors

11 relating to the Petitioner that are substantially

12 and significantly different from the factors relied

13 upon by the Board in adopting the general

14 regulation. The existence of those factors

15 justifies an Adjusted Standard. Request standard

16 will not result in environmental or health effects

17 substantially and significantly more adverse than

18 the effects considered by the Board in adopting the

19 rule, and the Adjusted Standard is consistent with

20 any applicable federal law.

21 Section 28.1 also refers to another

22 section of the Act, Subsection A of Section 27.

23 Subsection A of 27 lays out a number of other

24 criteria such as particular contaminant sources in

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1 geographic areas, character of surrounding land

2 uses, zoning classifications and a technical

3 feasibility and economic reasonableness of

4 measuring or reducing the particular type of

5 pollution. In a nutshell, those encompass the

6 standards that are applicable to whether a company

7 would qualify for an Adjusted Standard under the

8 statute.

9 During the upcoming hearing days

Swenson

10 Spreader believes the evidence will show that with

11 regard to substantiality and significantly

12 different factors relied upon by the Board in

13 adopting the general regulation that there are such

14 factors that pertain to its industry. First,

15 evidence will be presented that the primary

16 consumers of

Swenson products are government

17 agencies themselves, from local municipalities to

18 the federal government. Those are the primary

19 purchasers either directly or indirectly of

Swenson

20 Spreader products.

21 The governmental procurement processes

22 oftentimes requests not only a certain type of

23 product but also a particular color and even times

24 specify particular paint manufacturer and

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1 particular paint number. When you obtain the

2 material safety data sheet or MSDS for those what I

3 will call specialty paints,

Swenson Spreader is

4 oftentimes confronted with paints that are above

5 Illinois' regulatory standard of 3.5 pounds per

6 gallon of volatile organic material. I'm speaking

7 very slowly here for the benefit of the court

8 reporter who I did not have a chance to make up a

9 cheat sheet for her and I apologize.

10 HEARING OFFICER FRANK: She's actually -- she

11 does a lot of Board hearings so she's probably

12 okay. She'll let you know if she's not.

13 MR. MEASON: So

Swenson Spreader is caught

14 between a rock and a hard place right from the get

15 go. It's supplying government agencies with the

16 products it wants. Some of those government

17 agencies are the City of Chicago and Illinois DOT.

18 Evidence will be presented that Illinois DOT has

19 put formal requests for proposals on the market

20 requesting particular paints that are above the

21 Board's 3.5 pound per gallon regulation.

Swenson Spreader has a choice. It can

23 either stay in business and bid and try to

24 successfully bid on those projects or it can not

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1 bid on them or it can try to register an

2 exception. Government agencies know what they

3 want, that's why they specify a particular paint

4 and a particular paint color. They don't want an

5 exception. From a common sense standpoint,

Swenson

6 Spreader knows they will not generally be

7 competitive if they don't give government agencies

8 exactly what they call for. That's the first

9 particular circumstance facing

Swenson Spreader

10 that it qualifies to substantially significantly

11 differs from the factors relied upon by the Board

12 in promulgating regulation.

13 The second one is with regard to simply

14 the technology of the paint industry. The Board

15 will receive evidence that there are limits to

16 resins and pigments technology. Paint companies

17 themselves generally are not in the resins and

18 pigments business. They rely on entities called

19 resin houses for their raw materials. They then

20 work a lot of magic that I cannot pretend to do

21 justice to on my own right now, and we have a

22 witness who will testify to that later today.

23 They do reformulate most of

Swenson's

24 requirements but they have not been able to

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1 reformulate all of them because the technology

2 simply isn't there. Again,

Swenson is caught

3 between a rock and a hard place. It doesn't

4 produce the paints, must rely on the paint

5 manufacturers. The paint manufacturers will

6 testify that technology in certain circumstances is

7 not there.

8 Third,

Swenson Spreader is basically what

9 is known as a job shop. It does not have any

10 particular steady product line that they produce on

11 a daily, weekly basis. All of their production is

12 a result of filling orders for government

13 agencies. They experience great variability in

14 their production runs. One week they might be

15 producing for the State of Arizona, the next week

16 they might be producing for Illinois DOT. The

17 types of products produced, the numbers of products

18 produced, whether they're painted, unpainted, the

19 type of steel used, type of primer used are all

20 variables and

Swenson Spreader needs some level of

21 flexibility.

22 There will also be evidence presented to

23 the Board during the hearing days that if

Swenson

24 is granted its requested Adjusted Standard, and

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1 I'll make a point right now, the petition has spoke

2 of what I'll call a tiered -- a tiered request.

3 The first year

Swenson had asked for a 5.25 pounds

4 per gallon based on a monthly average and after one

5 year to go down to a 5.0 pounds per gallon VOM

6 monthly average.

7 Over the ensuing months and working with

8 their major paint supplier,

Tioga, T- i-o-g-a,

9 Coatings Corporation,

Swenson Spreader and

Tioga

10 have come to the joint conclusion that they could

11 support a slight rationing down of that standard to

12 the first year being 5.0 pounds per gallon VOM and

13 the years after that, 4.75 pounds per gallon VOM.

14 So I'll make that distinction for the record right

15 now, and that is not contained in the petition

16 that's currently on file with the Board.

Swenson Spreader believes the evidence

18 will show that these factors, among others, justify

19 an Adjusted Standard. Now, will this Adjusted

20 Standard, if granted, cause, according to the

21 statute criteria, an environmental or health effect

22 substantially and significantly more adverse than

23 the effects considered by the Board in adopting the

24 rule of general applicability? The Board will

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1 receive evidence that we are in -- that

Swenson

2 Spreader is located in Ogle County, Illinois. Ogle

3 County, Illinois, according to the Rockford,

4 Illinois, EPA office records dating back to 1988,

5 has never seen an

excedence (phonetic) or violation

6 of the National Ambient Air Quality Standard for

7 ozone which is currently 0.12 parts per million.

8 Board will also receive evidence that Ogle

9 County is part of a larger Air Quality Control

10 Region, AQCR, of several counties, and going back

11 to as far as 1988, the limit of local Illinois EPA

12 records in Rockford office, the entire AQCR has

13 never had a single

excedence or any violations of

14 the ozone NAAQS.

15 You also receive evidence that the two

16 surrounding

AQCRs, one that is in Illinois and part

17 of Wisconsin has never had

excedences or violations

18 from 1988 to present of the ozone NAAQS. And the

19 other surrounding AQCR, which extends slightly west

20 into Iowa, the Illinois portion of that AQCR has

21 never had any

excedences or violations of the ozone

22 NAAQS although there have been two

excedences in

23 the Iowa portion of the NAAQS some years ago but

24 there have never been any violations of the Iowa

ITV

1 portion of the AQCR for the ozone standards.

2 US EPA has recently issued a proposed

3 regulation for ozone in particular matter. That

4 proposed standard is 0.08 parts per million. I'm

5 simplifying it. There are other calculation

6 criteria that go into that but for simplicity

7 purposes it's 0.08 parts per million. That is not

8 yet set in stone. The public comment period is

9 still open. A lot of politics are going to be

10 involved. I'm sure there are going to be plenty of

11 lawsuits too no matter what US EPA decides to do.

12 Illinois EPA has already done studies

13 looking at the 0.08 parts per million standard and

14 has determined that Ogle County will remain in what

15 is called attainment status with the ozone NAAQS at

16 the proposed level. It is

Swenson Spreader's

17 position and we believe the evidence will show that

18 there will be no environmental or health effects

19 substantially and significantly more adverse than

20 the Board considered in adopting the regulation.

21 Next criteria is whether the Adjusted

22 Standard requested would be consistent with any

23 applicable federal law. We believe the evidence

24 will show that the Clean Air Act is the applicable

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1 federal statutory body in this area. The Clean Air

2 Act as designed by Congress requires implementation

3 of reasonable and available control technology or

4 RACT on areas that are not in attainment, meaning

5 nonattainment status, and also applies it to areas

6 to maintain such a status, and Congress and the US

7 EPA have interpreted that provision also to include

8 areas that are in attainment but would contribute

9 to nonattainment of a neighboring jurisdiction.

10 As I've stated a little while ago, all the

11 surrounding

AQCRs in this region, except for an

12 Iowa portion of the very extreme western region,

13 have never had an

excedence or a violation of the

14 ozone NAAQS dating back to at least 1988. When

15 Illinois promulgated its regulation back in the

16 early '80s, it relied on a document that was

17 generated by US Environmental Protection Agency

18 regarding miscellaneous metal parts and products.

19 The Board will receive evidence that that document

20 is the source of the 3.5 pound per gallon

21 standard. Illinois EPA adopted it in totality for

22 the entire State regardless of a county's

23 attainment or

nonattainment status, and that US EPA

24 cautioned numerous places in that original document

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1 that it was putting together hundreds and hundreds

2 of industry groups under the miscellaneous metal

3 parts and products category that simply it was not

4 reasonable to do individual industry specific

5 studies to determine what a proper control level

6 would be and that the State should view this as

7 guidance and to look at industry specific factors

8 because various technologies would not work from

9 industry to industry with regard to this particular

10 broad category.

11 In short, there is no federal requirement

12 that 3.5 pounds per gallon standard be applied to

13 sources in attainment areas that have never had an

14 ozone

excedence or ozone violation noted and for

15 which US EPA, the courts nor Illinois EPA has ever

16 identified as contributing to other local

17 nonattainment areas such as that in Chicago or

18 Milwaukee.

19 Finally, the one additional criteria from

20 Section 27 A talks about the technical feasibility

21 and economic reasonableness of measuring or

22 reducing a particular type of pollution. The Board

23 on many occasions has been faced with either a site

24 special rule making request or an Adjusted Standard

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1 petition regarding this particular section, Part

2 215, Subpart F that is under discussion today.

3 Companies such as John Deere, National

4 Can, Road Master and others have argued that

5 whatever technologies were that they were going to

6 impose were economically unreasonable. Many of

7 those companies cited a State of Illinois study of

8 1981 by the Illinois Institute of National

9 Resources that found for this particular industry

10 group in attainment areas that the average cost per

11 ton for VOM abatement would be $1,032. The Board

12 will receive evidence that of the various

13 technologies examined by

Swenson Spreader, all of

14 the potential costs are far beyond $1,032, even

15 taking inflation since 1981 into consideration.

Swenson Spreader believes it qualifies for

17 an Adjusted Standard and looks forward to the

18 opportunity to get more in detail later in the

19 proceeding. Thank you.

20 HEARING OFFICER FRANK: Miss Sawyer.

21 MS. SAWYER: As stated by -- good morning, my

22 name is Bonnie Sawyer. As stated by Petitioner,

23 Petitioner is seeking an Adjusted Standard from

24 Subpart F of 35 -- Title 35 of the Illinois

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1 Administrative Code Part 215. This subpart applies

2 to coating operations. In this Adjusted Standard

3 proceeding pursuant to Section 28.1 Petitioner has

4 the burden to prove its operations are

5 substantially and significantly different than that

6 contemplated by the Board in adopting the rule of

7 general applicability.

8 In Adjusted Standard proceedings the

9 Illinois Environmental Protection Agency is

10 required to file a response with the Board

11 recommending that the Adjusted Standard petition be

12 granted or denied. In the instant case, the

13 Illinois EPA is recommending that the Board deny

14 the petition of the Louis

Berkman Company doing

15 business as

Swenson Spreader Company because

16 Swenson has failed to establish that Adjusted

17 Standard relief is appropriate.

18 Specifically, the Illinois EPA recommends

19 denial for the following reasons:

Swenson has

20 failed to establish that compliant coatings are not

21 available for its use. Second,

Swenson has failed

22 to establish that control equipment is not

23 technically feasible nor economically

24 unreasonable -- nor economically reasonable.

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1 Third, Petitioner has presented no evidence to

2 justify the broad across-the-board standard it is

3 requesting. And finally, Petitioner can use powder

4 coatings for a large percentage of its coating

5 operations and, in fact, has offered to use such

6 powder coatings.

7 The significance of powder coatings is

8 that they have no volatile organic material

9 emissions from them. Petitioner's ability to use

10 powder coatings is significant because this will

11 lower Petitioner's VOM emissions to somewhere

12 between 9 to 12 tons annually. This emissions

13 level is well below the applicability threshold in

14 Subpart F of Part 215. This means that Petitioner

15 has the -- that Petitioner's ability to use

16 compliant coatings on its remaining operations or

17 Petitioner's ability to use add-on control

18 equipment is of no significance in this proceeding

19 as it would no longer be required to do so.

20 It cannot be stressed enough that

21 Petitioner is not only able to use powder coatings

22 for about 70 percent of its operations but has, in

23 fact, offered to do so. Petitioner continues to

24 maintain that it needs an Adjusted Standard because

ITV

1 certain customers of its specify the use of

2 noncompliant coatings and continues to assert that

3 the use of add-on control equipment is economically

4 prohibited. In reality, Petitioner intends to use

5 powder coatings which will bring it into compliance

6 with Subpart F of Part 215 by lowering its

7 emissions to well below the applicability threshold

8 for the rule.

9 Interesting enough,

Swenson has not put

10 this position forth before the Board in this

11 proceeding. Petitioner continues to request an

12 Adjusted Standard and suggests that they cannot use

13 compliant coatings. Because the Agency believes

14 that Petitioner can use powder coatings and the

15 Agency knows that Petitioner has, in fact, offered

16 to use powder coatings, the Agency believes that

17 Adjusted Standard relief is inappropriate for this

18 facility as it does not need to have an Adjusted

19 Standard. For these reasons the Illinois EPA

20 ardently maintains that

Swenson's Adjusted Standard

21 petition be denied. Thank you.

22 HEARING OFFICER FRANK: Mr.

Meason, you want to

23 call your first witness.

24 MR. MEASON: Yes, I'd like to call Mr. Robert

ITV

1 Balogh.

2 ROBERT A. BALOGH,

3 being first duly sworn, was examined and

4 testified as follows:

5 DIRECT EXAMINATION

6 BY MR. MEASON:

7 Q. Good morning, Mr.

Balogh. Would you please

8 state your name and spell it for the record.

9 A. Robert A.

Balogh, B-a-l-o-g-h.

10 Q. Thank you. Who is your employer, Mr.

Balogh?

11 A. Meyer Products.

12 Q. And what is your position with Meyer Products?

13 A. Executive vice president.

14 Q. How long have you been an employee of Meyer

15 Products?

16 A. 21 years.

17 Q. How long as executive vice president?

18 A. Three months.

19 Q. Three months. What are your duties as

20 executive vice president of Meyer Products?

21 A. I run Meyer Products, all phases. They report

22 to me.

23 Q. Ever heard of an entity called the Louis

24 Berkman Company?

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1 A. Yes.

2 Q. Could you describe what the Louis

Berkman

3 Company is.

4 A. The Louis

Berkman Company is a privately held

5 holding company consisting of several companies,

6 Meyer being one of them.

7 Q. And where is Louis

Berkman Company

8 headquarters?

9 A. Steubenville, Ohio.

10 Q. Do you know how many entities compose the Louis

11 Berkman Company?

12 A. I believe there's six or seven companies.

13 Q. Is a company called

Swenson Spreader one of

14 those?

15 A. Yes.

16 Q. How many Louis

Berkman Companies operate in

17 Illinois?

18 A. Just

Swenson Spreader, one.

19 Q. Could you describe the relationship, if any,

20 between Meyer Products and

Swenson Spreader.

21 A. Swenson and Meyer are both parts of the Louis

22 Berkman Company.

Swenson reports through Meyer and

23 then we report to the Louis

Berkman Company.

24 Q. Operationally reports through you.

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1 A. Through me.

2 Q. Do you exercise day-to-day control over

Swenson

3 Spreader?

4 A. No.

5 Q. And who does that?

6 A. Mark

Swisher.

7 Q. What was -- you said you'd only been executive

8 vice president for three months.

9 A. Yes.

10 Q. Is there a president of Meyer Products?

11 A. Yes.

12 Q. And what is his name?

13 A. Jim

Ciula (phonetic).

14 Q. And is Mr.

Ciula currently active in the

15 company?

16 A. Well, he's out right now. He's had heart

17 problems.

18 Q. Has he been hospitalized several times

19 recently?

20 A. Yes, majority of the last three months.

21 Q. So you are, you are the person at Meyer

22 Products now.

23 A. Yes.

24 MR. MEASON: I have nothing further. Reserve

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1 the right to recall on cross.

2 CROSS EXAMINATION

3 BY MS. SAWYER:

4 Q. Okay. Mr.

Balogh, Meyer Products' relationship

5 through

Swenson Spreader is that you are just

6 another division of the Louis

Berkman Company; is

7 that correct?

8 A. Swenson is another division but they report

9 through Meyer.

10 Q. To the Louis

Berkman Company?

11 A. And we report to the Louis

Berkman Company.

12 Q. Okay. Now, do you or does Mr.

Ciula from Meyer

13 Products, do you have some title within

Swenson

14 Spreader?

15 A. I don't.

16 Q. Does Mr.

Ciula?

17 A. I don't know.

18 Q. Okay, but you would -- you are the corporate --

19 the Louis

Berkman Corporate, I don't know,

20 intermediary with

Swenson Spreader.

21 A. Yes.

22 Q. If

Swenson Spreader is going to make a major

23 capital acquisition, do they require approval from

24 the Louis

Berkman Company?

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1 A. Well, first they require approval from us, from

2 Meyer.

3 Q. Oh, they require approval from Meyer?

4 A. Yes.

5 Q. And does Meyer have to obtain further approval

6 through the Louis

Berkman Company?

7 A. Yes.

8 Q. Has -- are you aware if Meyer or the Louis

9 Berkman Company has given approval for

Swenson

10 Spreader to install a powder coating system?

11 A. Yes.

12 Q. Yes, they have --

13 A. Yes.

14 Q. -- given corporate approval? Just a couple

15 questions about the operations at Meyer. What do

16 you do at Meyer Products?

17 A. We make snowplows.

18 Q. Snowplows, and do you use powder coating

19 operations there?

20 A. Yes.

21 Q. On about what percentage of your products do

22 you use the powder coating operations?

23 A. 95 percent.

24 MS. SAWYER: I have nothing further at this

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1 time.

2 HEARING OFFICER FRANK: Do you have anything

3 else?

4 MR. MEASON: Yes, I do.

5 REDIRECT EXAMINATION

6 BY MR. MEASON:

7 Q. Mr.

Balogh, you stated on cross examination

8 that corporate approval has been given for powdered

9 coating; is that correct?

10 A. Yes, to go ahead with it and look into it, yes.

11 Q. To look into it.

12 A. Yes, we haven't finalized any plans yet.

13 Q. Okay, so no green light, no corporate green

14 light has yet been given to the definite

15 installation of powder coating.

16 A. That's true. We're waiting for permits and

17 there's testing to be done on the paint itself.

18 Q. Have architectural drawings been prepared?

19 A. Yes.

20 Q. Have you -- has the architect received

21 quotations yet for contractor work?

22 A. No, no, we have to wait for permits first.

23 MR. MEASON: No further questions.

24 HEARING OFFICER FRANK: Okay. Miss Sawyer, do

ITV

1 you have anything else?

2 MS. SAWYER: Just a couple quick questions.

3 RECROSS EXAMINATION

4 BY MS. SAWYER:

5 Q. When you refer to permits, what type of permits

6 are you referring to?

7 A. Part of our proposed area is in a floodplain

8 and we're waiting for permits from, I think it's

9 the natural resource -- Department of Natural

10 Resource.

11 Q. Have you applied for an air construction permit

12 from the Illinois EPA? Are you aware whether --

13 A. Not that I'm aware of.

14 Q. At the powder coating operation at Meyer

15 Products, how large -- does this -- how large can

16 the equipment that's coated in this system be, do

17 you know? Is there a size limitation?

18 A. For our system?

19 Q. Uh-huh.

20 A. Yes.

21 Q. And what is that?

22 A. The way it's constructed, it would be 10 foot

23 long by 18 inches in width and 40 inches in height.

24 Q. And when did you install that equipment?

ITV

1 A. Approximately two years ago.

2 MS. SAWYER: I have no further questions.

3 HEARING OFFICER FRANK: Anything else,

4 Mr. Meason?

5 MR. MEASON: No.

6 HEARING OFFICER FRANK: Thank you, Mr.

Balogh.

7 THE WITNESS: Thank you.

8 HEARING OFFICER FRANK: Please call your next

9 witness.

10 MR. MEASON: Miss Frank, at this time I would

11 like to move into evidence

Swenson's petition on

12 file with the Board to be the record in this

13 hearing.

14 HEARING OFFICER FRANK: You have several

15 petitions. There was an amended and some

16 additional --

17 MR. MEASON: Right, they're accumulative

18 basically. I don't know -- I brought a copy but

19 the Board already has all this, so I don't know if

20 you want --

21 HEARING OFFICER FRANK: I actually would like

22 to mark it so that it's part of all the exhibits,

23 so. Is there any objection to the petition being

24 marked as Exhibit 1?

ITV

1 MS. SAWYER: No.

2 HEARING OFFICER FRANK: Okay. The petition is

3 marked --

4 MS. SAWYER: I just have a question. Is that

5 the accumulative petition?

6 MR. MEASON: Yeah.

7 MS. SAWYER: With the three amendments?

8 MR. MEASON: That -- if I remember correctly,

9 the third amendment or the second amendment was

10 nature of the substitute so the old pages are gone.

11 MS. SAWYER: But it has the third amended --

12 MR. MEASON: What she has right there is the

13 latest and greatest up-to-date petition through our

14 last file.

15 HEARING OFFICER FRANK: There's no objection?

16 MS. SAWYER: (Shakes head.)

17 MR. MEASON: But there wouldn't be, like, two

18 Page 45s or whatever.

19 HEARING OFFICER FRANK: Good, thank you.

20 MR. MEASON: At least I hope not.

21 HEARING OFFICER FRANK: It will be marked as

22 Petitioner's Exhibit 1 and it is the Adjusted

23 Standard Petition.

24 MR. MEASON: Just for the record I'd like to

ITV

1 note that there is a section in there that has

2 exhibit tabs when it was filed, and those exhibit

3 tabs range from A through R. In the course of this

4 proceeding I'll refer to Petitioner's Exhibit 1,

5 Item A, for example, to reference Exhibit A tab.

6 HEARING OFFICER FRANK: That's great.

7 MR. MEASON: Next like to call Mark

Swisher.

8 HEARING OFFICER FRANK: Please swear the

9 witness.

10 MARK SWISHER,

11 being first duly sworn, was examined and

12 testified as follows:

13 DIRECT EXAMINATION

14 BY MR. MEASON:

15 Q. Good morning, Mr.

Swisher. Would you please

16 state your name and spell it for the record.

17 A. Mark A.

Swisher, S-w- i-s-h-e-r.

18 Q. And who's your employer?

19 A. Swenson Spreader.

20 Q. And what's your position with

Swenson Spreader?

21 A. General manager.

22 Q. How long have you held that position?

23 A. Approximately a year and a half.

24 Q. And how long have you been with

Swenson

ITV

1 Spreader?

2 A. Two years.

3 Q. What's your duties as general manager?

4 A. At that facility I manage all functions.

5 Q. You're responsible for all functions?

6 A. Responsible for all the functions there, yes.

7 Q. And does that include environmental health and

8 safety issues?

9 A. Yes, they fall under my umbrella.

10 Q. They fall under your umbrella. Does that

11 signify that you don't take primary operational

12 responsibility for that?

13 A. That's correct.

14 Q. And who does?

15 A. I've passed that on to Terry

Rielly to handle

16 that for our company.

17 Q. Could you go into a little bit of your prior

18 professional experience before

Swenson Spreader.

19 A. Well, going back to where I graduated, I have a

20 BS in industrial engineering from

Purdue

21 University.

22 Q. What year was that?

23 A. 1977. If you want to know previously where

24 I've worked, I've worked at various companies. I

ITV

1 started work with Rockwell International, moved on

2 to Caterpillar Tractor in engineering and

3 planning. I've worked for a company local here,

4 White Sundstrand in

Belvidere.

5 Q. What did you do for Rockwell?

6 A. I was a design engineer, design process,

7 industrial engineer.

8 Q. And how about for Sundstrand?

9 A. For White Sundstrand I was a manufacturing

10 engineer.

11 Q. Have you taken any graduate work?

12 A. Yes, I have. I've most recently -- had been

13 working towards a master's degree in engineering

14 through NIU.

15 Q. That's Northern Illinois University?

16 A. Northern, yes.

17 Q. What is

Swenson Spreader?

18 A. Well,

Swenson Spreader is a company that

19 manufactures equipment for the snow and ice control

20 industry, mainly what you would call salt

21 spreaders, salt, sand, chip spreaders.

22 Q. Have you ever heard the term original equipment

23 manufacturer before?

24 A. Yes.

ITV

1 Q. And could you explain what that is.

2 A. Well, it's a company that manufactures

3 equipment usually from the ground up, from bare

4 metals, manufacturing through to the finished

5 product and sells or distributes to other people.

6 Q. Does it signify something more than mere

7 assembly, actually fabrication?

8 A. Usually does, yes.

9 Q. And would that original equipment manufacturer

10 designation apply to

Swenson Spreader?

11 A. Yes.

12 Q. Mr.

Swisher, I'm going to hand you a document

13 from Petitioner's Exhibit No. 1, Item A. I'll show

14 it to the -- showing it to Miss Sawyer.

15 HEARING OFFICER FRANK: Got it.

16 Q. If you could take a look at that document,

17 please. Do you recognize those documents?

18 A. Yes.

19 Q. Could you describe what those documents are.

20 A. Basically what these are, these are our

21 specification sheets that we hand out to our

22 dealers or our people wanting to purchase our

23 equipment to describe what our products are.

24 Q. Are there photographs in those documents?

ITV

1 A. Yes, there are.

2 Q. And what do those photographs describe?

3 A. Well, photographs that we have here show the

4 variety of equipment that we manufacture and

5 actually shows some of them setting in place on

6 bodies on -- dump bodies on trucks.

7 Q. And does

Swenson manufacture the dump bodies on

8 trucks?

9 A. In essence we do have a new product line that

10 can be considered a dump body, yes, but

11 historically we are not a dump body manufacturer.

12 Q. I'll take those documents back, thank you.

13 Could you go into a little detail as far as what

14 type of actual processes and activities

Swenson

15 Spreader undertakes when it's producing its salt

16 spreaders.

17 A. Just to give you an idea of what we do, we take

18 basically raw materials of various

makeups, sizes,

19 shapes, bring those in and through a fabricating

20 department we will cut the link, cut the size,

21 punch holes, shear angles to make finished

22 components. We take these components then and we

23 assemble them in our welding department to come up

24 with a finished

weldment which we call finished

ITV

1 weldment. We take those products as finished

2 weldments, we remove them through a cleaning

3 process, a painting process. Once painted, you

4 know, the various

weldments would be assembled

5 together along with purchase parts to come up with

6 the finished product which would then be rolled

7 outside and either stored or shipped out to the

8 final destination.

9 Q. I'm going to show you a potential exhibit.

10 Showing it to Ms. Sawyer, the Hearing Officer. Can

11 you examine that, please. Do you recognize that

12 particular material?

13 A. Yes, I do.

14 Q. Could you tell the Board what that particular

15 material is.

16 A. Well, this is hot rolled bar material that has

17 two holes punched in it.

18 Q. Do you get that type of material in

Swenson

19 Spreader?

20 A. This is the primary material that we use in the

21 manufacture and the making of our products.

22 MR. MEASON: Miss Frank, I would ask to move

23 this bar stock into evidence.

24 HEARING OFFICER FRANK: Any objection?

ITV

1 MS. SAWYER: No.

2 HEARING OFFICER FRANK: Then it's admitted.

3 Q. And that bar stock that's been introduced --

4 MR. MEASON: Petitioner's Exhibit 2; correct?

5 HEARING OFFICER FRANK: Yes.

6 Q. It's Petitioner's Exhibit 2, is that

7 representative of the bar stock you get in the

8 plant?

9 A. Yes, it is.

10 Q. Does

Swenson Spreader machine the surface in

11 any way to get the -- let me back up. Could you

12 describe the outer surface of that bar stock.

13 A. Well, it has a typical hot rolled surface

14 condition. It's not a highly polished-type

15 condition. It has what they call a scaly

16 condition. It's typical of a hot rolled piece of

17 material.

18 Q. Is it common to have some type of corrosion or

19 rust to some extent on it --

20 A. It can, yes.

21 Q. -- when you get it in your plant?

22 A. It can, yes.

23 Q. And is it coated with any type of material

24 typically?

ITV

1 A. Most times not, no.

2 Q. Sometimes it does have a coating?

3 A. Depending on where you purchase and who the

4 supplier is it could come in with a slightly oily

5 coating.

6 Q. Slightly oily coating?

7 A. Yes.

8 Q. Okay. Could you describe

Swenson Spreader's

9 market. Who do you supply products for?

10 A. Majority of our products, nature of, you know,

11 the size and the market that we're in are provided

12 to various types of government agencies. It might

13 be a state, a county, federal, a city, airport

14 entity.

15 Q. Government agencies.

16 A. That's correct.

17 Q. And how do you sell them your products?

18 A. The majority of our work is done through our

19 distributor network.

20 Q. And what does that signify, your distributor

21 network?

22 A. We have various distributors throughout the

23 country and they would work with the requirements

24 of all the various agencies local to them, and

ITV

1 through that process they would bid on certain

2 requirements that they would have. That would

3 generate orders to us and we would build those,

4 ship those to our distributors and they would

5 supply the needs of the local agencies.

6 Q. So is it correct to say the local agencies --

7 have local agencies issued any type of

8 specification or request for proposal that the

9 dealers are acting upon?

10 A. Normally what they do is they would come up

11 with a request for proposal or request for

12 quotation which would include a list of

13 specifications of what this equipment is supposed

14 to meet.

15 Q. And do those specifications at times require

16 particular color paints?

17 A. Yes, they do.

18 Q. And do those specifications at times require

19 particular paint manufacturers?

20 A. Yes, they do.

21 Q. And do those specifications at times require

22 particular paint manufacturer numbers?

23 A. That's correct.

24 MR. MEASON: Mr.

Swisher and Miss Frank, Miss

ITV

1 Frank, I'd like to direct your attention generally

2 to Plaintiff's Exhibit No. 1, Items D1 through D4

3 and E as containing -- just generally containing

4 various requests for proposals and MSDS sheets in

5 response to those proposals.

6 Mr.

Swisher, I'm going to hand you a

7 document --

8 HEARING OFFICER FRANK: He can use this one if

9 that's easier.

10 MR. MEASON: Okay. Well, keep me on track.

11 I've handed you a document. Do you

12 recognize that document?

13 A. Yes, I do.

14 Q. What is it?

15 A. It's from

Kaffenbarger Truck Equipment who is

16 one of our distributors and it's basically asking

17 for a quotation from -- a request for quotation

18 from the City of Dayton.

19 Q. And does that -- for lack of a better term I'll

20 call it a request for proposal, RFP. Does that RFP

21 specify the type of paint?

22 A. Yes, it does.

23 Q. And what is that?

24 A. The paint they're calling out is a

DuPont

ITV

1 Centari Paint No. 6847 A, yellow.

2 Q. Okay. I'll take the document back, please.

3 HEARING OFFICER FRANK: That is Exhibit D1,

4 Petitioner's Exhibit 1.

5 MR. MEASON: I'm going to the very next sheet

6 now.

7 Mr.

Swisher, I'm handing you another

8 document. Can you examine that, please. Here's

9 the second page, two pager. Do you recognize that

10 document?

11 A. Yes, I do.

12 Q. Could you tell the Board what that document

13 is.

14 A. This is a material safety data sheet from

15 DuPont for Product 6847 AM, yellow.

16 Q. Is that the product that was specified by the

17 City of Dayton in its RFP?

18 A. That's correct.

19 Q. And does that MSDS sheet specify the VOC or VOM

20 content of that paint?

21 A. Yes, it does.

22 Q. And what is that VOM content?

23 A. VOM content is 4.3 pounds per gallon.

24 Q. 4.3 pounds per gallon.

ITV

1 A. Right.

2 Q. And what is the Illinois standard?

3 A. 3.5.

4 Q. Thank you. I'm now turning to D2.

5 Mr. Swisher, I'm going to hand you a document.

6 Would you examine it, please. Do you recognize

7 that document?

8 A. Yes, I do.

9 Q. Could you tell the Board what that document is.

10 A. Okay, this is a specification from the State of

11 Illinois for request for quote for a dump body for

12 a hopper-type spreader.

13 Q. And does Illinois specify the type of paint to

14 use?

15 A. Right, yes.

16 Q. And what does it specify?

17 A. A

DuPont No. LF1021 AM.

18 Q. Okay. Mr.

Swisher, I'm handing you another

19 document.

20 Ms. Sawyer, it's just the next several

21 pages under D2 but not the entire.

22 Can you examine that document, please,

23 Mr. Swisher. Do you recognize that document?

24 A. Yes, I do.

ITV

1 Q. And what is that document?

2 A. This is a

DuPont MSDS sheet for Paint No. 1021

3 A, alternate one.

4 Q. And is that the point specified by Illinois in

5 its RFP?

6 A. Yes.

7 Q. Does the MSDS list the VOC content of the

8 paint?

9 A. Yes, it does.

10 Q. And what is that?

11 A. It's 4.3 pounds per gallon.

12 Q. So the MSDS sheet for Illinois is 4.3 pounds

13 per gallon.

14 A. That's correct.

15 Q. And what is the Illinois regulatory standard?

16 A. 3.5 pounds per gallon.

17 Q. Thank you. Mr.

Swisher, I'm handing you

18 another document, if you could examine it, please.

19 That's the remainder of D2, Miss Sawyer.

20 Could you examine that document.

21 A. Yes.

22 Q. Do you recognize that document?

23 A. Yes, I do.

24 Q. Could you tell the Board what it is.

ITV

1 A. This is a

DuPont MSDS sheet for Paint No. 1021

2 A, alternative No. 2, lead free.

3 Q. And is that the paint number specified in

4 Illinois' RFP?

5 A. Yes.

6 Q. And is the VOC content specified?

7 A. Yes, it is.

8 Q. And what is that?

9 A. It's 4.5 pounds per gallon.

10 Q. So alternative two and the -- what -- again,

11 what is the VOC content in the MSDS?

12 A. 4.5 pounds per gallon.

13 Q. What is Illinois regulatory standard?

14 A. 3.5 pounds per gallon.

15 Q. Thank you. In the

RFPs that -- let me back

16 up. The request proposals that you examined here

17 today from the City of Dayton, Illinois DOT, are

18 they representative generally of what

Swenson

19 receives then?

20 A. Yes.

21 Q. When a governmental agency specifies a

22 particular paint, how often is it that they allow

23 an alternative or a substitute? Is it normal that

24 they at least put in the RFP that a substitute is

ITV

1 potentially available?

2 A. Well, the spec clearly spells out what they're

3 looking for if that's what you're asking, so you

4 either put down that you will match the

5 specification or you take an exception.

6 Q. Take an exception to it meaning you don't give

7 them exactly what they want.

8 A. That's correct.

9 Q. And how do you go about taking an exception?

10 A. When you would submit a bid on a certain

11 product you would list -- basically list your price

12 for this bid specification and you would list all

13 the exceptions that you would be taking.

14 Q. And all those exceptions is not what that

15 particular agency wanted.

16 A. Well, I mean, they want what they have on their

17 specification.

18 Q. And you're not giving that to them in taking an

19 exception.

20 A. Oh, that's right.

21 Q. From a business perspective do you have an

22 opinion as to whether it's advisable to file these

23 exceptions as opposed to giving the government

24 agencies exactly what they specify?

ITV

1 A. Well, it's never advisable to put an exception

2 down because that is one way for you to be thrown

3 out of the bid process.

4 Q. In favor of who?

5 A. Well, if you take an exception you would be

6 thrown out and someone else that did not take an

7 exception would be allowed to take that particular

8 bid.

9 Q. Is it -- the government agency has specified in

10 these cases particular paint because it has a track

11 record with those paints; would that be correct?

12 A. Majority of the time what happens is that yes,

13 they are buying probably a truck from someone, say

14 GM or something, and they would spec out the exact

15 same paint that General Motors would have put on

16 that truck. That's what happens a lot of times and

17 then they might again put that on their

18 specification.

19 Q. So for example, the City of Dayton or Illinois

20 have developed the specification and

RFPs many

21 times to match the original truck or whatever the

22 equipment is going to be placed on.

23 A. Yes.

24 Q. So that the exact same paint --

ITV

1 A. Right.

2 Q. -- on -- okay. Mr.

Swisher, do you know

3 generally why we're here today?

4 A. Yes, I do.

5 Q. And why is that?

6 A. Well, we're here seeking an Adjusted Standard

7 from the Illinois EPA ruling stating, I guess, that

8 we have to meet the 3.5 pounds per gallon VOC

9 emissions rule.

10 Q. Is that 3.5 rule always applicable? Does it

11 depend on any other factors to be applicable?

12 A. As far as the 25, you have to be over 25, I

13 guess, tons emissions during a year, and once

14 you've exceeded that limit, then you have to be

15 3.5 pounds or not allowed to use 3.5 pounds per

16 gallon paint.

17 Q. And is

Swenson Spreader above 25 tons a year --

18 A. Yes, we are.

19 Q. -- VOM emissions?

20 A. Yes.

21 Q. Could you describe -- let me strike that.

22 Is

Swenson Spreader's production on a

23 weekly or monthly basis the same from one week to

24 the next or one month to the next?

ITV

1 A. No.

2 Q. Is there a great variability in production

3 runs?

4 A. Yes, there are.

5 Q. Could you explain to the Board why that is.

6 A. What happens in our business is depending on

7 who we have won bids from or who our dealers are

8 winning bids from, you'll be just running a large

9 variety of types of products through at various

10 times. At one point in time we might win a bid

11 from Arizona, say, for 50 Large B box units and

12 they'll require a specific paint, and so during one

13 month we might be only painting Arizona's versus,

14 say, our -- you know, the next month we might be

15 building a lot of stainless steel units which

16 require very small amounts of paint or we might

17 have a mixture where we are doing some

18 specification or we would be also filling in with

19 our standard product coloring which is Omaha orange

20 which is below 3.5 pounds per gallon

VOCs, so tends

21 to be -- you know, depending on what bids we are

22 winning, it greatly affects our production runs.

23 Q. Would it be correct to say that

Swenson

24 Spreader is a job shop?

ITV

1 A. I would say so, yes.

2 Q. Does

Swenson Spreader coat all its products?

3 A. No.

4 Q. What type of products does it -- under what

5 conditions would it not coat the product?

6 A. We have products that are requested to be made

7 out of 304 stainless steel which we do not paint in

8 most instances.

9 Q. Are there instances where you would only prime

10 as opposed to prime and paint a product?

11 A. That's correct. We -- there's probably a

12 couple instances. Sometimes a specific agency

13 might request that we only use a primer coat. We

14 also have a product line that we produce called an

15 APB, an all purpose body, which we send out only

16 primed to the dealer distributor and they would

17 finish coat that to match the particular chassis

18 body that they're going to be assembling to.

19 Q. And when you send this APB, all purpose body

20 line that is primed only to the dealers, the

21 dealers themselves paint?

22 A. That's correct.

23 Q. What -- how do the dealers store your product

24 after it leaves your facility?

ITV

1 A. Oh, because of the size of the product -- it is

2 a dump body. It is very large and majority of them

3 would end up setting these things outside until

4 they're ready to install it on the truck.

5 Q. What length of time might it sit outside?

6 A. Could be anywhere from three to eight months

7 from what I've heard depending on the turnaround,

8 depending on truck deliveries and things like that,

9 so yeah, there's a chance they can sit outside.

10 Q. Now, has that presented any particular problems

11 for Swenson in choosing a primer for that

12 particular line of product?

13 A. Yes, it has.

14 Q. And what problems are those?

15 A. Well, what it means is you can't use a very

16 general lightweight primer because they're not made

17 to withstand being set outside in the rain, the

18 snow and the sun and everything else that degrades

19 that, okay? And what happens is if you don't -- if

20 you use a real lightweight-type primer it ends up

21 either coming off or rusting through, or whatever,

22 after a short period of time, so we've had to look

23 into some alternatives and find something that has

24 a better outdoor storage life. And all the ones

ITV

1 that we've ran into that will allow you to have any

2 type of outdoor storage life tend to have more

VOCs

3 than those so you go to, like, an epoxy type of a

4 primer.

5 Q. And generally speaking, are those primers -- is

6 it one primer you use or are there more than one

7 primer?

8 A. We use one primer for our APB which we store

9 outside, right.

10 Q. And is that particular primer in compliance

11 with the 3.5 pound per gallon --

12 A. No, it's not.

13 Q. And the reason being that -- what is the

14 reason?

15 A. The reason is

is that we're putting that on

16 there so we store it out in our yard before we ship

17 it and dealer stores it in his yard, that you don't

18 end up basically rusting the body which means you

19 have to bring it in for all kinds of surface

20 preparation after that.

21 Q. There's a question I should have asked you a

22 little while ago. What's the smallest size product

23 that Swenson makes?

24 A. Size-wise?

ITV

1 Q. Size-wise.

2 A. Probably like a 2 by 3 by 8 foot.

3 Q. 2 by 3 by 8 foot, and what would be the largest

4 product that

Swenson Spreader makes?

5 A. We've made some that are 21 feet long, 7 feet

6 wide, approximately 7 feet tall.

7 Q. So quite a --

8 A. Yes.

9 Q. Quite a difference in product lines.

10 A. That's finished goods.

11 Q. Right, right. What has

Swenson Spreader done

12 to try to come into compliance with the 3.5 pound

13 per gallon VOM regulation?

14 A. Well, we've tried to and looked into a lot of

15 different things. One of the first things that we

16 did is we converted over to some electrostatic

17 paint guns from what they had previously been using

18 to try and get a better transfer efficiency.

19 Along with that we went into and purchased

20 and installed some in-line heaters which won't

21 allow us to use different types of paints, like

22 high solid-type paints that are a little thicker

23 and you don't have to use solvents to thin those

24 out to spray them. The heating action would tend

ITV

1 to thin them so that you can spray those.

2 We've spent a lot of time and worked with,

3 you know, and talked to a lot of different people

4 about reducing the

VOCs in the paints that we are

5 using, you know, the ones we have control over and

6 the ones that we have some alternatives on. And we

7 do talk to, you know,

Tioga which is one of our

8 people that we deal with and various others.

9 Q. Mr.

Swisher, I'm going to hand you a document.

10 This is from Petitioner's Exhibit 1, Item H, the

11 first three pages. Would you examine that

12 document, please. Do you recognize that document?

13 A. Yes, I do.

14 Q. Could you explain to the Board what that

15 document is.

16 A. Well, this is just literature for the high

17 pressure electrostatic spray gun that we use

18 currently.

19 Q. That you installed.

20 A. Right, that we installed.

21 Q. Thank you. Mr.

Swisher, I'm going to hand you

22 another document which are the next two sheets also

23 in Item H. Examine those, please.

24 A. Okay.

ITV

1 Q. Do you recognize those documents?

2 A. Yes, I do.

3 Q. Could you tell the Board what those documents

4 are.

5 A. Okay. Well, this is an invoice showing that we

6 ordered and received an in-line heater system from

7 Dove Equipment.

8 Q. In-line heater, does that mean the heated lines

9 that you referred to before?

10 A. Yeah, heats the paint up for spraying.

11 Q. What's the advantage of heating it up?

12 A. The idea is it thins the paint out through the

13 heating action so that you can spray it, you know,

14 eliminating the alternative of having to thin it

15 with solvent or a thinner.

16 Q. Does it have something to do with viscosity?

17 A. Right, so it lowers the viscosity.

18 Q. So by lowering the viscosity through heat you

19 can change your solvent use; is that correct?

20 A. That's correct, right.

21 Q. And you change your use upward or downward?

22 A. You definitely reduce the amount of solvent

23 used which means you'd reduce the amount of

VOCs

24 that we would emit.

ITV

1 Q. And what's the advantage -- going back to the

2 high efficiency spray guns, what's the advantage of

3 moving to the high efficiency spray guns from what

4 you had before?

5 A. Well, the idea of those is that you want to

6 reduce the amount of paint that you're using so --

7 which would cause you to reduce your emissions.

8 This type of gun will allow you to, I guess,

9 increase your transfer efficiencies so you can use

10 less paint and get a good coating which means

11 you're not

overspraying a lot. You're not spraying

12 material that's actually just going on the floor or

13 going down into the paint pit.

14 Q. Now, you mentioned real briefly that you've

15 worked with companies like

Tioga to reformulate

16 paints. Could you give a little more detail on

17 what your efforts have been.

18 A. Well, what we've done, I mean, once we realized

19 where the problems were that we've had, we've

20 contacted anybody and everybody that we could to

21 talk about, you know, how do we go about doing

22 this, and

Tioga was very, very helpful. And they

23 were at one time, still are, one of our vendors and

24 explained the situation and they've been very

ITV

1 helpful in reformulating the paints that we, I

2 guess, call our standard -- color standard paints

3 that we can utilize in our operation to come to

4 change those to more of a high solid, low VOC-type

5 paint.

6 Q. Did you contact any other paint companies also?

7 A. Oh, we've talked with a variety of other ones.

8 We've talked to

DuPont, Sherwin Williams,

9 Rustoleum, you know.

10 Q. So national companies --

11 A. Right.

12 Q. -- in addition to

Tioga.

13 A. In addition to also other local manufacturers

14 of paint.

15 Q. Who is your major paint supplier at present?

16 A. Right now it would be

Tioga.

17 Q. And is there a reason for that?

18 A. The main reason is that they've worked very

19 well with us and they're willing to work on lower

20 volumes of paint and reformulating versus some of

21 the other companies and the larger companies tend

22 to, you know, have a standard product, this is it,

23 take it or leave it, and they're not very

24 responsive, you know, to our needs.

ITV

1 Q. So for a bigger company, a national company,

2 it's just not worth -- is it possible that one of

3 their considerations is it's just not economically

4 worth their while to engage in

RFPs on your behalf?

5 MS. SAWYER: I'm going to object to this

6 question. It calls for hearsay. I don't think

7 that's within Mr.

Swisher's knowledge.

8 MR. MEASON: Mr.

Swisher has already testified

9 that they have contacted Sherwin

Williams and

10 DuPont and he has knowledge of what the results of

11 those contacts were and I'd like to allow him to

12 answer.

13 MS. SAWYER: Now he's trying to say what they

14 want to do and what they don't. I think that's a

15 little bit different.

16 MR. MEASON: I'll rephrase the question.

17 HEARING OFFICER FRANK: Okay, please do.

18 Q. Did you contact

DuPont at any point in time

19 regarding reformulating paints?

20 A. Yes, we did.

21 Q. And was

DuPont receptive to reformulating

22 paints to your requirements?

23 A. No.

24 Q. Did you contact Sherwin

Williams with regard to

ITV

1 reformulating paints?

2 A. Yes.

3 Q. Was Sherwin

Williams receptive to your

4 reformulation requests?

5 A. No.

6 Q. Did you contact any other national paint

7 companies that you can recall?

8 A. Rustoleum was the only other one that we've

9 really talked to.

10 Q. And was

Rustoleum receptive to your

11 reformulation requests?

12 A. No.

13 Q. Thank you. Has

Swenson been successful in

14 reformulating all of its standard spray coatings?

15 A. Yes, we have.

16 Q. And standard meaning what?

17 A. What we would call standard would be a color

18 that a -- we would get an order and they would spec

19 out mainly a color versus a specific paint-type

20 name brand or designation.

21 Q. Has

Swenson been successful in working to

22 reformulate all its specialty spray coatings?

23 A. No.

24 Q. And for

Swenson a specialty coating would be

ITV

1 what?

2 A. Well, that would be one where certain specs for

3 a customer would call out a given type of paint or

4 a given name brand, such as maybe a certain number

5 of a Centari or a Dulux or an Imron or Sunfire, if

6 you will.

7 Q. Now, those names you just gave,

Centari and the

8 others,

Imron, are those trade names?

9 A. Well, they're -- I guess you would call that a

10 trade name of a paint that

DuPont would supply some

11 of them and Sherwin

Williams supplies

Sunfire.

12 They're just a standard line of paints that they

13 produce.

14 Q. When

Swenson Spreader approached regional or

15 local paint companies such as

Tioga, was Tioga --

16 was Tioga receptive to those reformulation

17 requests?

18 A. Yes.

19 Q. Was

Tioga always your major paint supplier?

20 A. No.

21 Q. Is it today?

22 A. Yes, it is.

23 Q. And why is it today?

24 A. Well, mainly because they have worked with us

ITV

1 on our standard coatings which are the ones that

2 we, you know, use the highest volumes of, you know,

3 to work with us on trying to come up with some

4 different formulations that would meet the 3.5

5 rules.

6 Q. So they reformulated.

7 A. Right.

8 Q. Did

Swenson Spreader look at any other

9 alternatives to try to come in compliance with the

10 3.5 pound per gallon regulation?

11 A. Yeah, we tried and looked into, you know, other

12 things, yes.

13 Q. And what were they?

14 A. Well, along the way we've looked at, you know,

15 I guess other paint formulations. I mean, there's

16 other avenues to go by. There's water based

17 paints. We did some testing and tried to see if

18 there's a way that we could utilize those but we

19 didn't have a lot of success because of adhesion

20 problems and the type of materials that we

21 utilized. We looked at another approach, I guess,

22 of eliminating the

VOCs and we got a quote for an

23 afterburner, a fume oxidizer, whatever you want to

24 call it, to burn off the emissions that would be

ITV

1 coming out of our paint booth.

2 Q. Mr.

Swisher, I'm going to hand you a document

3 from Petitioner's Exhibit 1, Item I, ask you to

4 examine it. Do you recognize that document?

5 A. Yes, I do.

6 Q. And could you tell the Board what that document

7 is.

8 A. This is a proposal quotation from

Brule,

9 Incorporated, for an afterburner or a fume

10 oxidizer, as they call it.

11 Q. And

Swenson Spreader requested that quotation?

12 A. That's correct.

13 Q. And what's the date of that quotation?

14 A. May 16th, 1995.

15 Q. Does that quotation list a size of the system?

16 A. Yes, it lists the flow at 32,000 SCFM which

17 matches up to the flow of our -- out of the paint

18 booth in our paint system.

19 Q. Okay. Is there a price listed on that

20 quotation?

21 A. Yes, there is.

22 Q. And what is the price?

23 A. The price for the fume oxidizer itself is

24 $203,720 just for the equipment.

ITV

1 Q. Thank you very much. Mr.

Swisher, I'm going to

2 hand you a document. I'll show it to Ms. Sawyer

3 and to the Hearing Officer.

4 Mr.

Swisher, can you examine that

5 document, please.

6 A. Okay, yes.

7 Q. Do you recognize it?

8 A. Yes, I do.

9 Q. And could you tell the Board what that document

10 is.

11 A. It's a blueprint from

Binks Manufacturing who

12 manufactured the spray booth for

Swenson Spreader.

13 Q. Does this blueprint specify the capacity or

14 size of the afterburner?

15 A. Yes, it does.

16 Q. And what does it say?

17 A. It says total --

18 MS. SAWYER: Excuse me, the size of the

19 afterburner? As I recall that print wasn't about

20 that.

21 Q. Well, this is what? This is down draft?

22 A. This is down draft.

23 Q. Let me ask the question again. What is this

24 blueprint of?

ITV

1 A. It is the blueprint from

Binks Manufacturing

2 who manufactured the down draft spray booth for

3 Swenson Spreader.

4 Q. Does the blueprint specify capacity of the down

5 draft?

6 A. Yes, it does.

7 Q. And what is that capacity?

8 A. The capacity is stated as 32,000 SCFM.

9 Q. Does the blueprint state any number of fans in

10 that down draft?

11 A. Yes, it does.

12 Q. And what is that number?

13 A. Says two required, total of two required, each

14 one at 16,000 SCFM.

15 MR. MEASON: Thank you. I would move that this

16 document be entered into evidence.

17 HEARING OFFICER FRANK: Is there any

18 objection?

19 MS. SAWYER: (Shakes head.)

20 HEARING OFFICER FRANK: Then the blueprint of

21 the down draft spray booth is marked as

22 Petitioner's Exhibit 3.

23 Q. Mr.

Swisher, you previously stated that you

24 have a bachelor's degree from

Purdue in industrial

ITV

1 engineering; is that correct?

2 A. That's correct.

3 Q. And you've done some graduate work at Northern

4 Illinois University, also in engineering; is that

5 correct?

6 A. That's correct.

7 Q. And you've worked for, if I recall correctly,

8 Rockwell, White Sundstrand, Caterpillar and

Swenson

9 Spreader in your professional career; is that

10 correct?

11 A. That's true.

12 Q. And you're currently the general manager of

13 Swenson Spreader?

14 A. That's correct.

15 MR. MEASON: Ms. Frank, I would move that

16 Mr. Swisher be recognized based on his professional

17 background and education as an opinion witness.

18 HEARING OFFICER FRANK: Is there any

19 objection?

20 MS. SAWYER: No.

21 HEARING OFFICER FRANK: Do you want to ask him

22 any questions in

voir dire?

23 MS. SAWYER: Can I do that on cross?

24 HEARING OFFICER FRANK: Yeah, I didn't know if

ITV

1 you want to

voir dire his credentials.

2 MS. SAWYER: No, that's fine.

3 HEARING OFFICER FRANK: Then he is admitted --

4 or qualified, I guess. You can't be admitted.

5 Q. Based upon the blueprint of the down draft and

6 based upon the existing paint booth at

Swenson

7 Spreader, do you have a professional opinion as to

8 the appropriateness of the quotation for an

9 afterburner system? I believe it was 32,000 cubic

10 feet a minute from

Brule. Do you have a

11 professional opinion on the appropriateness of the

12 size of that quotation?

13 A. I guess what I would say is that yeah, you

14 would have to match the air flow from the paint

15 system to the afterburner, you know, otherwise if

16 you did not it would be undersized and you wouldn't

17 be able to burn off all the VOC emissions coming

18 from the system. So yeah, it does match and in my

19 opinion that's what it would have to do.

20 Q. As a professional engineer?

21 A. Yes.

22 Q. Thank you. When you -- when

Swenson Spreader

23 received the

Brule quotation in 1995, did

Swenson

24 immediately act upon that and install it?

ITV

1 A. No, it did not.

2 Q. Why was that?

3 A. Well, one of them was because of the high cost

4 involved, also in discussions with other people

5 that had installed them, looked at, you know,

6 annual operating costs, plus just all the problems

7 that could be related to that type of technology.

8 Q. Do you need water?

9 A. I'm fine. Just got a frog in my throat.

10 Q. So what did

Swenson Spreader do then to try to

11 find a solution to its noncompliance problem?

12 A. Well, the initial tact was and talking to some

13 of the initial people involved, in any

14 investigation the tact was to reduce our emissions

15 below 25 tons as best we could so that we would not

16 have to meet that 3.5 pounds per gallon rule. That

17 was the tact strategy, if you will. And the way we

18 approached it was yes, we're going to go in and we

19 are going to eliminate as many

VOCs, VOMs as we

20 could through reformulation which is what we have

21 tried to do.

22 We also changed our practices for solvent

23 use, basically have eliminated, I guess, the

24 solvent that we use for thinning by going to heated

ITV

1 lines. So in that respect we have reduced

2 emissions by doing that also.

3 Q. Were these efforts enough?

4 A. No.

5 Q. Why?

6 A. Well, there's a couple things that happened.

7 One was we did end up reducing the emissions but at

8 the same time we've had a pretty steady increase in

9 business and change in product lines that, you

10 know, the reductions we did achieve we offset by

11 higher paint usage so we're not able to reduce

12 enough to get below the 25-ton rule.

13 Q. So despite your working with paint companies

14 and despite your installation of heated paint lines

15 and high efficiency spray guns, you weren't able to

16 come in compliance.

17 A. That's correct.

18 Q. Roughly when did

Swenson kind of come to this

19 realization that this wasn't going to be enough?

20 A. Probably the end of '95, towards the end of

21 '95, 1995.

22 Q. So end of '95

Swenson realizes something else

23 has to be looked at; is that correct?

24 A. That's correct.

ITV

1 Q. So what did

Swenson do then?

2 A. Well, one thing we did is we hired someone that

3 was more of a specialist in the, I guess, legal

4 field as far as EPA concerns, because, you know, we

5 did have some problems, to get some guidance. And

6 we also worked with the people at Meyer in starting

7 to look at and evaluate what we could do as far as

8 powder coating.

9 Q. With regard to your legal avenues available,

10 did you start considering some type of waiver, for

11 lack of a better term, a waiver?

12 A. That was another option that was put forth to

13 us, that, you know, there was other -- I guess

14 other avenues to get through the situation, and I

15 think one of them was the Adjusted Standard which I

16 think was brought up to us in some of the meetings

17 that we had had probably back in '95.

18 Q. With regard to powder coating, why did

19 Swenson -- why is

Swenson potentially interested in

20 powder coating?

21 A. Well, there's a lot of reasons. One is that

22 there aren't any

VOCs, VOMs involved in powder

23 coating, so that's an immediate reduction right

24 there. Two, it's a very, very good, durable,

ITV

1 strong type of coating so there's some benefits to

2 be had by the coating, but also a reduction in

3 VOMs.

4 Q. So some type of product enhancement aspect to

5 it?

6 A. Well, there's definitely an enhancement to your

7 product and something that people would look very

8 positively on as far as an enhancement, not only to

9 the product but also customers would look at it

10 also.

11 Q. Is powder coating considered to be a more

12 durable coating than -- generally speaking, than

13 water based or high solids?

14 A. Yes, it is.

15 Q. Did

Swenson Spreader solicit bids on powder

16 coatings?

17 A. Yes, we have.

18 Q. Did

Swenson Spreader solicit more than one bid,

19 do you know?

20 A. Can't answer that.

21 Q. The bid that's being contemplated for the

22 powder coating system, was there a definitive

23 dollar amount that was put forward for the powder

24 coating system itself?

ITV

1 A. As I understand it, we've come up with a

2 budgetary number.

3 Q. Planning purposes?

4 A. Right.

5 Q. Rough planning number?

6 A. Right.

7 Q. And what is that number?

8 A. It's approximately $750,000.

9 Q. And that's just -- what does that entail?

10 A. That would be just the powder coating system

11 itself.

12 Q. Can

Swenson Spreader's existing facility house

13 that powder coating system?

14 A. No, it cannot.

15 Q. Has

Swenson looked into the cost of facility

16 erection to house the powder coating system?

17 A. Yes, we have.

18 Q. And did

Swenson receive any type of cost

19 estimate?

20 A. A budgetary type number we have, yes.

21 Q. Strictly for planning?

22 A. Right.

23 Q. Rough planning purposes?

24 A. Rough planning purposes.

ITV

1 Q. And what is that cost?

2 A. It was initially $750,000.

3 Q. And do you know roughly how that cost was

4 derived?

5 A. Well, what you tend to do and what builders can

6 do is they know what the square footage is and

7 there's -- you can make a standard assumption of

8 what the approximate cost per square foot would be

9 and you multiply the two together and you come up

10 with a general cost for a building.

11 Q. So the -- for planning purposes, what is the

12 combined cost of the powder coating system and the

13 facility to house the powder coating system?

14 A. 750,000 plus 750,000 is $1.5 million.

15 Q. And that's just a rough planning figure?

16 A. Right.

17 Q. Where does that project stand today?

18 A. Right now we've -- well, we have actually done

19 quite a bit of work. We have hired an architect to

20 draw up some plans for the building. He's actually

21 done quite a bit of work working with some

22 engineering firms as far as doing test borings for

23 the areas where we're looking at building to decide

24 what type of footings, foundation, et cetera, need

ITV

1 to be put into that building which are definitely

2 going to affect the cost. Like I said, he's to the

3 point where he is, I think, ready to almost go out

4 and put out for a bid.

5 Q. Any particular problems that have come up at

6 all with this potential project?

7 A. Well, where we're located, we're located near a

8 creek which has some areas that are considered

9 close to or in the floodplain so in reviewing that

10 and the engineers reviewing that, they found that

11 we needed to submit to get a permit, I guess, from

12 the division of natural resources for construction

13 in a floodplain.

14 Q. And has

Swenson Spreader received approval from

15 the Department of Natural Resources?

16 A. No, we have not.

17 Q. And are there zoning or other issues that still

18 have to be addressed at some point in time?

19 A. Right, the actual -- once those things are

20 resolved you have to go through the building permit

21 process to get a building permit, so those things

22 had to be reviewed also.

23 Q. And has

Swenson Spreader applied for an

24 Illinois EPA construction permit yet?

ITV

1 A. I can't answer that.

2 Q. The powder coating system being contemplated by

3 Swenson Spreader, can it powder coat all of

4 Swenson's products?

5 A. No.

6 Q. What types of products can it not coat?

7 A. We have a couple of problems. One is that a

8 lot of our products are very, very large, might use

9 different sizes and things for the materials, so

10 those would not be able to be run through this

11 specific system just because of the size, general

12 shear size of the products. The other ones are

13 as -- we have certain ones that require a specific

14 primer coating so on those also we would have to

15 run through a wet coated system.

16 Q. Wet coated meaning regular spray?

17 A. Regular spray coating as we currently do it

18 now.

19 Q. Can powder coating -- can you use powder

20 coating on plastics and motors and things like

21 that?

22 A. That's, I guess, another problem is you can't

23 do it on every single part of a smaller product

24 line because you have motors and bearings and

ITV

1 plastic parts, as you stated, that you can't run

2 through the curing oven of a powder coat system so

3 those would also have to be wet coated.

4 Q. When

Swenson Spreader went forward and started

5 looking at powder coating, did

Swenson Spreader

6 have to make a decision as to the size or amount of

7 product that it was willing to have powder coated

8 or the system set up to powder coat?

9 A. Yes.

10 Q. And how was that derived?

11 A. Well, we tried to look at all the different

12 product lines that we had and try and size the

13 system so at least we could get possibly 70

14 percent, somewhat, of our product. We just looked

15 at our higher volume-type products and the sizes

16 that related to it and that's how it was sized.

17 Q. And is there a specific size that corresponds

18 with this 70 -- this rough 70 percent figure?

19 A. Well, it's related basically to one of our

20 product lines. We make large V boxes and it was

21 sized to a 10 foot maximum size of a V box, so

22 anything 10 foot and below we could powder coat,

23 try to powder coat. Anything above that would not

24 fit through the system.

ITV

1 Q. And based on

Swenson's rough analysis of the

2 demand for your product, you've estimated that

3 somewhere in the neighborhood of 70 percent of your

4 product is 10 foot and below.

5 A. That's correct.

6 Q. Do the governmental

RFPs, the request for

7 proposals that you receive, currently do they

8 permit powder coating or do they ask for powder

9 coating?

10 A. No, they don't. I haven't seen one.

11 Q. And so what will

Swenson Spreader have to do to

12 sell a powder coated product to an agency that's

13 not asking for a powder coated product?

14 A. We'll have to work with our distributors and

15 the end users to have that approved or added to the

16 specification in those cases where they're spelling

17 out the type that's required.

18 Q. Does

Swenson Spreader believe that that's going

19 to happen quickly?

20 A. No.

21 Q. So you're going to have to work at it for

22 awhile to achieve some measure of success.

23 A. Yes, yes, we will.

24 Q. In the time period between when -- if and when

ITV

1 Swenson institutes powder coating and government

2 agencies begin to start asking for powder coated

3 products in their request for proposals, will

4 Swenson use powder coating up to its capacity at

5 the plant?

6 A. I'm not sure I understand the question.

7 Q. I'll rephrase it. You stated previously that

8 Swenson's going to have to work to change

9 governments to permit powder coating --

10 A. Right.

11 Q. -- on their products and you stated that you

12 were not optimistic that that was going to happen

13 quickly.

14 A. That's true, right.

15 Q. So if

Swenson decided to install powder coating

16 there would be a certain production rate that is

17 theoretically possible through the powder coating

18 system; is that correct?

19 A. That's correct.

20 Q. But would it be correct to say that the demand

21 for powder coating for

Swenson Spreader products,

22 powder coated products, would not be up to the

23 maximum or preferred utilization rate of the new

24 system?

ITV

1 A. You could assume, yeah. You could say that,

2 yes.

3 Q. And that's a situation that would last for some

4 unknown period of time.

5 A. That's true, depending on how long it takes to,

6 like I say, convert over more and more of the

7 specifications to that, to the powder coating.

8 Q. And during that time frame how will

Swenson

9 coat its products?

10 A. Well, those that you can't will still have to

11 go through the current paint system which uses

12 solvent based paints.

13 Q. And there's no guarantees that

Swenson is

14 ultimately going to be successful in changing these

15 government agencies' minds to include powder

16 coating in their request for proposals.

17 A. That's true.

18 Q. So this is strictly a gamble on

Swenson

19 Spreader's part, an educated guess, that there is

20 likely success --

21 A. That's true.

22 Q. -- at some point in time in the future.

23 A. Right.

24 Q. And

Swenson Spreader doesn't know how long

ITV

1 that's going to be.

2 A. Couldn't make a good estimate, no.

3 Q. Did

Swenson Spreader ever -- you stated earlier

4 that Swenson Spreader got a quotation for an

5 afterburner back in 1995. Did

Swenson Spreader

6 revisit that possibility?

7 A. Revisit?

8 Q. Yeah, go back and look into afterburners again?

9 A. Oh, yes, we did.

10 Q. And when was that?

11 A. Approximately a month ago we went back.

12 Q. And who did you go back to?

13 A. Well, we went back to the person who we had the

14 original quotation from,

Brule.

15 Q. I'm going to hand you a document. First I'll

16 show it to Ms. Sawyer. Mr.

Swisher, I'm handing

17 you a document, ask you to examine it, please.

18 A. Okay, yes.

19 Q. Do you recognize that document?

20 A. Yes, I do.

21 Q. Would you tell the Board what that document

22 is.

23 A. This is basically an updated proposal from

24 Brule for a Model FB 1270 fume oxidizer.

ITV

1 Q. Is that the same model that was quoted by

Brule

2 in 1995?

3 A. Yes, it was.

4 Q. Is there a capacity listed in that document for

5 that model afterburner?

6 A. Yes, there is.

7 Q. And what is that capacity?

8 A. It's 32,000 SCFM.

9 Q. Is that the same capacity as was quoted in the

10 1995 afterburner?

11 A. That's correct.

12 Q. What is the price, if any, that's listed in

13 that quote?

14 A. The price for the basic system is $168,965.

15 Q. That's actually a little cheaper than what

16 you -- the quote in 1995.

17 A. That's correct.

18 MR. MEASON: Madam Hearing Officer, I'd ask

19 that this document be moved into evidence.

20 HEARING OFFICER FRANK: Any objection?

21 MS. SAWYER: No. I'm wondering if we could get

22 a copy of that document. Do you have an extra

23 copy?

24 MR. MEASON: That's my only copy but we can go

ITV

1 some place and get one done at the break.

2 HEARING OFFICER FRANK: It's admitted into

3 evidence and hopefully at lunch we can get another

4 copy made.

5 Q. Based upon this second quotation from

Brule,

6 did Swenson Spreader calculate the total cost of

7 the system?

8 A. Yes, we did.

9 Q. And do you recall the specifics of those

10 calculations?

11 A. Not all the specifics, no.

12 Q. If I handed you a document, would you be able

13 to refresh your recollection?

14 A. Yes.

15 Q. I'm going to hand you a document, show it to

16 Ms. Sawyer first. Here's a copy. Here's a partial

17 copy of the quote. That's not the whole thing.

18 I'll hand you this document. If you could

19 examine it, please.

20 A. Okay, yes.

21 Q. Do you recognize that document?

22 A. Yes, I do.

23 Q. Did you prepare that document?

24 A. Yes, I did.

ITV

1 Q. Does it refresh your recollection?

2 A. Yes, it does.

3 Q. Do you have a better recollection of your

4 calculations of the total costs of the second

5 quotation?

6 A. Yes, it is. What we came up with was basically

7 adding everything together as we had done

8 previously to come up with just a total what it

9 would take to install this system, and it consisted

10 of $315,000 for purchasing the equipment which

11 included the heat exchanger, a thousand dollars to

12 be operated, so much -- thousand dollars for the

13 foundation, $1100 for the handling and erection,

14 $16,000 for piping, $570 for electrical hookup,

15 $10,000 for performance test, $5,000 for

16 contingencies which totaled up to $351,891.

17 Q. Where did you get these various figures from?

18 How did you arrive at these figures?

19 A. Majority of them we went out and solicited a

20 quotation from someone to find out what it would

21 cost.

22 Q. I'm going to hand you a document, show it first

23 to Ms. Sawyer.

24 MS. SAWYER: Are you introducing these

ITV

1 documents as exhibits?

2 MR. MEASON: Ultimately it is my intention to

3 introduce them as exhibits, including what

4 Mr. Swisher has in front of him now.

5 Mr.

Swisher, I'm going to hand you a

6 document. If you'd examine it, please.

7 A. Okay, yes.

8 Q. And what is that document?

9 A. It's a budget --

10 Q. Excuse me, excuse me. Do you recognize that

11 document?

12 A. Yes, I do.

13 Q. Could you state to the Board what that document

14 is.

15 A. It's a budget quotation from Miller Engineering

16 for doing all the piping and duct work for

17 installing the afterburner.

18 HEARING OFFICER FRANK: Can you spell that.

19 THE WITNESS: M-

i-l-l-e-r.

20 Q. And does that quote list a price for the work?

21 A. Yes, it does.

22 Q. And what is that quote?

23 A. $16,390.

24 Q. And is that quote listed in your calculations

ITV

1 of the overall cost for the afterburner?

2 A. Yes, it is.

3 Q. And is it listed as $16,390?

4 A. Yes, it is.

5 MR. MEASON: Thank you. Off the record.

6 (A discussion was held off the record.)

7 Q. I'm going to hand you another document that

8 Ms. Sawyer has already reviewed, and if you could

9 examine it, please.

10 A. Okay, yes.

11 Q. Do you recognize that document?

12 A. Yes, I do.

13 Q. Would you tell the Board what it is.

14 A. It's a proposal from Concrete Systems to pour a

15 concrete pad for this afterburner.

16 Q. Is there a price listed for that service?

17 A. Yes, there is.

18 Q. And what is that price?

19 A. It's $1,260.

20 Q. And is that price reflected in your cost

21 calculations for the overall cost of the

22 afterburner?

23 A. Yes, it is.

24 Q. And where is that reflected?

ITV

1 A. In the foundation cost.

2 Q. And what is the cost that you have put in your

3 calculations?

4 A. We put in $2,000 for that cost.

5 Q. And is there a reason that you put in a higher

6 cost than the bid?

7 A. We added some additional costs because this

8 certain bid did not allow for any certain

9 excavation or fill required.

10 Q. Specifically says that in the bid?

11 A. Right.

12 Q. And it was your engineering estimation that

13 that type of work might be required?

14 A. Could be possible, yes.

15 Q. And so you added --

16 A. That's right.

17 Q. -- some money to cover that potentiality.

18 A. That's correct.

19 Q. I hand you another document that Ms. Sawyer has

20 reviewed. Take a look at that document for me,

21 please.

22 A. Okay.

23 Q. Do you recognize that document?

24 A. Yes, I do.

ITV

1 Q. Would you tell the Board what that document

2 is.

3 A. It is a quotation proposal from Area Rigging

4 for unloading and assembling and installing the

5 incinerator unit.

6 Q. Is there a price listed in that quotation?

7 A. Yes, there is.

8 Q. And what is that price?

9 A. $1,150.

10 Q. Is that price reflected in your overall cost

11 calculation?

12 A. Yes, it is.

13 Q. And what is the cost that you put in your

14 calculation?

15 A. $1,150.

16 Q. With regard to the capital cost, the capital

17 cost calculations, did those three bids constitute

18 all the categories?

19 A. Not completely, no.

20 Q. Where did you -- could you go down the list and

21 tell the Board where you obtained the various

22 amounts from starting at purchase price.

23 A. Purchase price was a quotation from

Brule. The

24 freight cost that we put in was in discussions with

ITV

1 our shipping foreman who had contacted various

2 freight companies. He got a verbal estimate of

3 what it would cost shipping it from Chicago area to

4 here.

5 Foundation was a quotation. The handling

6 and erection was a quotation. Piping was a

7 quotation. Electrical hookup, based on discussions

8 with Brule and with our maintenance people, we made

9 an estimate of the time required and came up with

10 $570.

11 Q. Is that something you'd be doing in-house --

12 A. Yes, that's correct.

13 Q. -- to keep costs down?

14 A. That's correct.

15 Q. Instead of contracting it out.

16 A. That's true.

17 Q. Performance test was --

18 A. Came up with an average of some discussions

19 that we had with some people we had contacted, plus

20 also was in one of the, I think, reports that we

21 had received from EPA that they had contacted other

22 people and I took the average of those numbers to

23 get $10,000 for the performance test.

24 Q. And contingencies?

ITV

1 A. Basically put something in there for something

2 that maybe we had possibly overlooked in any of the

3 above categories to try to cover that.

4 Q. So that's your engineering professional

5 judgment?

6 A. We made an estimate, yes.

7 Q. Made an estimate of $5,000.

8 A. Right.

9 Q. And what is the total capital calculation?

10 A. It's $351,890.

11 Q. And that's strictly -- is it correct to say

12 that's strictly the one-time cost of powder

13 coating, purchase and installation?

14 A. That's correct.

15 Q. Were there other costs?

16 A. The other costs we looked at would be the

17 annual operating costs.

18 Q. Now, where'd you get those annual operating

19 costs from?

20 A. What we did was we used the manufacturers -- we

21 broke it down to direct and indirect. The direct

22 costs we put in were the maintenance and the fuel

23 costs which came up to $203,589 per year based on

24 information given from the manufacturer.

ITV

1 Q. Is there another category listed?

2 A. There's an indirect annual operating cost

3 summary which came to $168,527 which I based all

4 those numbers on EPA recommendations that we had

5 received on a report February 25th, 1997.

6 Q. Was that February 25th, 1997 report the

7 affidavit by Gary

Beckstead attached to the

8 Agency's response to our Adjusted Standard?

9 A. Yes.

10 MR. MEASON: Off the record.

11 (A discussion was held off the record.)

12 MR. MEASON: Back on the record.

13 I believe I misspoke a few minutes ago

14 when I referred to the term powder coating when I

15 was actually referencing the

Brule's second

16 afterburner quotation. Is it possible for the

17 court reporter to go back and --

18 HEARING OFFICER FRANK: There's no need to do

19 that if you just straighten it out on the record.

20 They don't need to go back and strike it.

21 Q. Just to make that clear, Mr.

Swisher, I'll be

22 handing you a document I'm showing Miss Sawyer

23 right now. If you could examine that document,

24 please. Is that the document that you spoke of a

ITV

1 few minutes ago?

2 A. Yes, it is.

3 Q. Is that the document from which you obtained

4 your bases for the cost calculations?

5 A. Yes, it was.

6 HEARING OFFICER FRANK: For the record, it's

7 been marked Petitioner's Exhibit 9 and it is the

8 affidavit of Gary

Beckstead.

9 MR. MEASON: Off the record.

10 (A discussion was held off the record.)

11 Q. Mr.

Swisher, could you share with the Board how

12 you arrived at the various calculations for the

13 second -- for

Brule's second afterburner quotation,

14 the overall costs, based on Mr.

Beckstead's

15 affidavit.

16 A. You're talking about the indirect costs?

17 Q. Indirect costs, yes.

18 A. I basically used his method of, I guess,

19 information that he had used, the formulas he had

20 used. It was stated on there that they were

21 approved, came from an approved source as, I guess,

22 budgetary-type concerns or estimates, and so I

23 basically used the same format and formulas as he

24 had done, just basically related it to the project

ITV

1 and the costs that we had at hand.

2 Q. So your figures are not identical to his.

3 A. No, of course not.

4 Q. Because they relate to

Swenson's specific cost

5 quotations that they had to consider.

6 A. That's true.

7 Q. What were your total direct annual operating

8 cost calculations?

9 A. It came to $203,589.

10 Q. What is the biggest component of that cost?

11 A. It's the natural gas fuel cost.

12 Q. Could you share with the Board how you derive

13 that particular figure.

14 A. Basically I got with the manufacturer just to

15 double-check exactly what, you know, this piece of

16 equipment was rated as, and it was rated at, as I

17 recall, 50 million BTUs per hour, and in talking

18 with them a number of times and having them recheck

19 and recheck, that is indeed what they said it is

20 rated at. And in converting that to

therms, I just

21 made simple calculations from BTUs to

therms per

22 hour and made a calculation based on 500

therms per

23 hour, 16 hours per day, five days per week, 50

24 weeks per year, 25 -- an average of 25 cents per

ITV

1 therm, gives you an annual fuel cost.

2 Q. Of --

3 A. Well, for a system with a heat exchanger it

4 came to $200,000 per year.

5 Q. The cost per

therm that you used, where did you

6 get that figure from?

7 A. Well, one, that was kind of the standard that

8 was used in the previous proposal that we had

9 submitted as an average, and in looking at ours, it

10 falls in the range that we paid for per

therm also.

11 Q. You also -- did you also look at indirect

12 annual operating costs?

13 A. Yes, I did.

14 Q. And on what did you base your calculations?

15 A. Like I said, all those calculations were based

16 on information provided in the affidavit that Gary

17 Beckstead had prepared previously, and I used his

18 same percentages and formulas to produce those

19 numbers.

20 Q. Gary

Beckstead is an Illinois EPA employee to

21 your knowledge?

22 A. As far as I know, yes.

23 Q. Could you go over the various categories of

24 indirect annual operating costs.

ITV

1 A. Okay. Well, we had -- for overhead we had

2 $2,154; administrative charges came to $70,378;

3 property taxes to 3 -- $35,189; insurance, $3,519

4 and capital recovery at $57,287, came to a total of

5 $168,527 per year.

6 Q. Did you attempt to figure out what the

7 annualized cost per ton of required VOM reduction

8 would be for this afterburner system?

9 A. Yes, I did.

10 Q. And could you share with the Board how you

11 derived your calculations.

12 A. Well, the basic calculation would be to take

13 the tons of emissions for 1996 as an estimate,

14 which were 32.1 tons, multiply it times 81 percent

15 minimum efficiency, which was a requirement stated

16 in, we've got here, Section 215.205 B1, and you

17 multiply those two together and you have come up

18 with 26 tons required reduction in emissions.

19 Basically I took the sum of the annual

20 costs, the direct, plus the indirect, which was

21 372,116 divided by the 26 tons, gives you $14,312.

22 Q. So the $14,312 is the annualized cost per ton

23 of required VOM reduction in your calculation?

24 A. Yes.

ITV

1 Q. And in your judgment as a professional

2 engineer, are your calculations and the bases for

3 those calculations based upon sound engineering

4 principles?

5 A. Yes.

6 MR. MEASON: I have nothing further subject to

7 recall.

8 HEARING OFFICER FRANK: Let's go off the

9 record.

10 (A discussion was held off the record and

11 a recess was taken at 12:55 p.m. and proceedings

12 resumed at 1:45 p.m.)

13 HEARING OFFICER FRANK: Okay. Let's go ahead

14 and go back on the record. Mr.

Swisher, I remind

15 you we're still under oath.

16 MR. MEASON: Off the record real quick.

17 (A discussion was held off the record.)

18 HEARING OFFICER FRANK: Let's go back on the

19 record. We're discussing Exhibits 5 through 9 and

20 did you want to go ahead and move those and then

21 you can correct the one that -- assuming there's no

22 objection.

23 MR. MEASON: Do you want to correct it before

24 or after?

ITV

1 HEARING OFFICER FRANK: Why don't we go ahead

2 and -- first of all, are there going to be any

3 objections because otherwise we'll take them

4 individually if there are going to be objections?

5 MS. SAWYER: No.

6 HEARING OFFICER FRANK: Why don't we go ahead

7 and admit them and we'll correct them.

8 MR. MEASON: How many are there?

9 HEARING OFFICER FRANK: 5 through 9.

10 MR. MEASON: Madam Hearing Officer, I would

11 move that Petitioner Exhibits 5 through 9 be

12 admitted into the record.

13 HEARING OFFICER FRANK: And there's no

14 objection from the Agency?

15 MS. SAWYER: No.

16 HEARING OFFICER FRANK: You had a correction to

17 make on one of the exhibits.

18 MR. MEASON: Mr.

Swisher, did you see an error

19 on one of those exhibits?

20 THE WITNESS: I don't know which exhibit that

21 is.

22 HEARING OFFICER FRANK: It is Exhibit 5.

23 THE WITNESS: On Exhibit 5, the

Brule thermal

24 oxidizer quotation --

ITV

1 MS. SAWYER: The quotation from

Brule, this is

2 what you're referring to?

3 THE WITNESS: This is the actual summary sheet.

4 MR. MEASON: His calculations.

5 MS. SAWYER: What Exhibit number?

6 HEARING OFFICER FRANK: 5.

7 THE WITNESS: On the indirect operating costs,

8 the administrative charges and the property tax

9 charges were estimates. The actual calculation

10 ended up being off. I just noticed that. I'm

11 looking at -- the decimal place got moved so those

12 costs are overstated.

13 MS. SAWYER: What are the --

14 HEARING OFFICER FRANK: We all want to know

15 that.

16 MR. MEASON: Mr.

Swisher, what would the proper

17 figures be?

18 THE WITNESS: Without a calculator in hand,

19 instead of $70,000 it would be 7 -- you'd be moving

20 the decimal point one place to the left so it would

21 be $7,378 and for the property taxes it would be

22 $3,519.

23 MR. MEASON: Instead of?

24 THE WITNESS: Instead of $35,119.

ITV

1 HEARING OFFICER FRANK: I'm going to hand you a

2 pen. Would you go ahead and write on that exhibit

3 and correct it so in case someone doesn't find this

4 transcript page when they're looking at it.

5 MR. MEASON: Bonnie, if I could get a copy of

6 that from you because I gave you my copy.

7 MS. SAWYER: Oh, I didn't realize that, Jim. I

8 thought it was an extra copy. We have notes all

9 over it.

10 MR. MEASON: I'll get a copy from the Hearing

11 Officer. That's fine.

12 THE WITNESS: It also affects another page on

13 that same document, so should I go ahead and change

14 that?

15 HEARING OFFICER FRANK: Please do. We can go

16 off the record while he's changing that.

17 (A discussion was held off the record.)

18 HEARING OFFICER FRANK: Let's go ahead and go

19 back on the record.

20 Mr.

Swisher, can you tell us the

21 corrections that you've made to the document.

22 THE WITNESS: On indirect annual operating cost

23 summary the administrative charges were changed to

24 $7,378. The property tax estimate was changed to

ITV

1 $3,519. The total was changed to $73,517 per

2 year. And on the cost per ton of required VOM

3 reduction, the indirect annual cost was changed to

4 $73,517 with the total changed to -- of the total

5 of the indirect, and the direct changed to 277,106

6 and the annualized cost per ton of required VOM

7 reduction, that calculation was also changed. The

8 annualized reduction was changed to $10,657.

9 MS. SAWYER: 10,000 --

10 THE WITNESS: 657.

11 MR. MEASON: What was that exhibit marked

12 ultimately?

13 HEARING OFFICER FRANK: 5.

14 MR. MEASON: That's Exhibit 5.

15 THE WITNESS: Page 2.

16 MR. MEASON: And then what is Exhibit 6?

17 HEARING OFFICER FRANK: I'm going to read them

18 all and identify them. Exhibit 5 is the

Brule

19 thermal oxidizer sheet. Exhibit 6 is the Miller

20 Engineering document. Exhibit 7 is the Concrete

21 Systems document. Exhibit 8 is the Area Rigging

22 document, and Exhibit 9 is Gary

Beckstead's

23 affidavit and the attached documents. And those

24 are all admitted with the corrections on Exhibit

ITV

1 5. Is there anything further, Mr.

Meason?

2 MR. MEASON: No.

3 HEARING OFFICER FRANK: Okay.

4 CROSS EXAMINATION

5 BY MS. SAWYER:

6 Q. Good afternoon, Mr.

Swisher. Could you

7 describe your coating operations at your facility.

8 For instance, do you have one coating booth?

9 A. Yes, we do.

10 Q. And is all of your coating done in that booth?

11 A. Yes.

12 Q. And that's for both if you have to coat motors

13 and plastic parts?

14 A. Right, yes, it's strictly just a wet system.

15 Q. You characterized

Swenson Spreader's operations

16 as a job shop-type operation; isn't that correct?

17 A. Yes.

18 Q. And by job shop, do you mean that you

19 essentially produce products to fill a specific

20 order?

21 A. That's true.

22 Q. And essentially you would fill it -- be

23 fulfilling that order just in time to ship it?

24 A. Yes.

ITV

1 Q. In your testimony you referenced a prime coat

2 only operation, that you do some coating that's

3 prime coat only. Is that something you manufacture

4 on an adjusted time basis?

5 A. We do both. We do have orders that would come

6 through for a specific order to be shipped right

7 away. We do have -- we only have certain versions

8 that we make and we might want to put into stock in

9 our backyard, a common size which you would prime

10 and stick out in our storage area.

11 Q. And why would you want to do that?

12 A. Because we only make so many common sizes and

13 if we don't have the orders, rather than not

14 produce anything or if you want to produce

15 something to a forecast that you know that is going

16 to be sold in a short period of time, we would

17 possibly do that.

18 Q. Okay, so you're suggesting that to kind of fill

19 time at the facility you may produce --

20 A. Yes.

21 Q. -- product to store.

22 A. That's true.

23 Q. When you ship the prime coat only to a -- I

24 believe it's a dealer that you ship them to.

ITV

100

1 A. Right.

2 Q. Why is it that the dealer needs to store that

3 equipment rather than just order it to fulfill an

4 order, an immediate order?

5 A. Probably -- there's two ways that this could

6 work. One is that they want to order and have it

7 on hand based on something they see in the future,

8 you know, they're speculating that they're going to

9 win a bid. Two is that they would get the product

10 in. They have to marry many, many products to come

11 in to build a complete unit. Ours is one small

12 portion of that whole bid so if ours gets in and,

13 you know, a truck manufacturer is on strike and

14 they're six months behind schedule receiving a

15 chassis, it's going to sit there.

16 Q. And what percentage of your business is this

17 prime coat only?

18 A. I would say -- currently it's a new product.

19 Approximately say 10 percent.

20 Q. You said it's a new product. What product is

21 this?

22 A. It's called our all purpose body.

23 Q. And I believe this was -- this is Attachment A

24 to your Exhibit 1 -- to Petitioner's Exhibit 1. I

ITV

101

1 was just wondering if you could point out which

2 product you're referring to.

3 HEARING OFFICER FRANK: For the record we need

4 to --

5 MS. SAWYER: Is there a page number?

6 THE WITNESS: It is the one that says APB, all

7 purpose body.

8 MR. MEASON: It's the second -- I believe it's

9 the last two pages under Petitioner's Exhibit 1,

10 Item A; is that correct?

11 HEARING OFFICER FRANK: Yes.

12 Q. And during your direct examination when you

13 were referring to the dump body, is this what

14 you're referring to?

15 A. That's true.

16 Q. Could I take that back. On your direct

17 examination you stated that some of your products

18 were made with hot rolled steel; isn't that

19 correct?

20 A. That's true.

21 Q. And what products are those?

22 A. All of our products utilize hot rolled steel

23 except those made out of stainless as far as I can

24 tell.

ITV

102

1 Q. And what is that? I mean, how many are made

2 out of hot rolled steel versus stainless?

3 A. I guess a rough -- I don't have the exact

4 numbers in front of me at this point in time but a

5 rough estimate might be 80 percent are hot rolled.

6 Q. And why is it that

Swenson uses hot rolled

7 steel for these products?

8 A. One, it's a very common material, easy to get.

9 It's a material that has been used by other

10 manufacturers. I mean, we are not the only person

11 in this business and it's very competitive so you

12 all utilize the same type of resources.

13 Q. Okay. I'm going to move ahead to your

14 testimony on government contracts, and I believe

15 you stated that they comprise the majority of your

16 business; is that correct?

17 A. That's true.

18 Q. In Petitioner's Exhibit 1 on Page 4 -- just one

19 second. Sorry, strike that question or that

20 statement. I don't know if it made a question, but

21 on Page 13 of Petitioner's Exhibit 1 it's stated

22 that in 1995 government contracts comprised about

23 27 percent of your business.

24 HEARING OFFICER FRANK: Page 13?

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103

1 THE WITNESS: Of which exhibit?

2 MR. MEASON: Just Page 13 of the text,

3 referring to the second full paragraph on that

4 page.

5 A. That's correct.

6 Q. And what are you referring to when you refer to

7 that 27 percent on that page?

8 A. What the statement is

is that approximately 27

9 percent of our paint usage in 1995 was related to

10 special requests for paints other than standard

11 type colors that we utilized.

12 Q. And in all of those instances was the paint

13 that you're -- the specialized paint, was that a

14 noncompliant coating?

15 A. I can't say. I don't have all that information

16 in front of me but I would say that not all of it

17 would be, no.

18 Q. So the 27 percent represents the portion of

19 Swenson's business that is not fulfilled using

20 standard coatings?

21 A. Correct.

22 Q. And the standard coatings are?

23 A. Are paints that we have some control under how

24 they're formulated. They're not specified by any

ITV

104

1 agency that it has to be a

DuPont, Imron, Centari,

2 whatever.

3 Q. I guess I'm asking specifically what are your

4 standard coatings, the actual coatings, do you

5 know?

6 A. All of the different ones?

7 Q. How many are there?

8 A. I think approximately 11.

9 Q. And you stated that your standard coatings are

10 all in compliance with the 3.5 standard; isn't that

11 correct?

12 A. I believe so, yes.

13 Q. Mr.

Swisher, did you sign the Title V

14 application submitted to the Illinois Environmental

15 Protection Agency?

16 MR. MEASON: Objection, beyond scope of

17 direct.

18 MS. SAWYER: If I could give an offer of proof,

19 it's just to really go over the same number.

20 There's a number included in that application, a

21 percentage.

22 HEARING OFFICER FRANK: I'm going to allow it.

23 Go ahead.

24 Q. You did sign the application?

ITV

105

1 A. Yes.

2 Q. And in that application did you state that over

3 the last several years the government contract

4 specified coatings constituting approximately 21

5 percent of

Swenson's coating usage? Do you

6 recall -- if you don't recall --

7 A. I can't recall.

8 Q. Perhaps if I show you the application that

9 would refresh your recollection.

10 A. Yes.

11 MR. MEASON: I would like to see it.

12 Q. Mr.

Swisher, what I have here is not the

13 complete application. I'll refer you to your

14 signature page, first of all, and is that your

15 signature?

16 A. Yes, my signature, yes.

17 Q. And you signed this on March 7th, 1996.

18 A. That's correct.

19 Q. Then if you would refer to this page, if you

20 could just take a look at that.

21 A. Okay.

22 Q. In your Title V application did you specify

23 that coating usage on government contracts

24 specified of

Swenson -- the portion of

Swenson's

ITV

106

1 business that was comprised of government contract

2 specified coating operations comprise about 21

3 percent of your business?

4 A. That's what it says.

5 Q. Thank you. Set that aside.

6 A. Approximately 21 percent.

7 Q. Okay. This is what's referred to as Exhibit D

8 of Exhibit 1 of Petitioner's Exhibit 1 and it's

9 No. 1 under Exhibit D. It's a quotation.

10 HEARING OFFICER FRANK: He's got it.

11 Q. Oh, okay. If you look at the second page of

12 that quotation, it reads, all portions of the

13 Spreader shall be

DuPont Centori 6847, a yellow.

14 What are the three words that follow that?

15 A. Or approved equal.

16 Q. Does this RFP, does that represent a bid that

17 you were successful on?

18 A. I don't recall. I can't say for sure.

19 Q. So on the coating specification it provides a

20 DuPont coating or an approved equal as what should

21 be used to fulfill that.

22 A. That's true.

23 Q. I'm now looking at what would be No. 2 in that

24 same section of Petitioner's Exhibit 1 and the

ITV

107

1 request for a proposal from State of Illinois

2 Department of Transportation. If you turn to the

3 second page of that specification, essentially it

4 reads all parts normally painted shall be finished

5 in a color complying with Department of

6 Transportation paint specification serial number

7 M 1487,

DuPont No. LF 1021 AM or equal. Is that

8 what that reads on that specification?

9 A. I don't have it.

10 Q. You don't have that page?

11 MR. MEASON: It's not in there.

12 THE WITNESS: I don't see it.

13 MR. MEASON: Under 2, go to Tab 2.

14 THE WITNESS: Now I have it. I'm sorry.

15 Q. If you look under general No. 1 --

16 A. Yes, okay.

17 Q. -- does it state that it should be a color

18 complying with Department of Transportation paint

19 specification serial number M 1487,

DuPont No. LF

20 1021 AM or equal; is that correct?

21 A. That's correct.

22 Q. In fact, doesn't it say that the paint or the

23 part shall be coated with a color complying with

24 Department of Transportation's paint

ITV

108

1 specifications? It references color specifically.

2 A. That's true.

3 Q. Does it specify what coating you have to use?

4 A. I think it does by saying

DuPont No. LF 1021

5 AM.

6 Q. Doesn't it say that that's supposed to be the

7 color?

8 A. I don't think that is a color. That is a paint

9 because that's related to

DuPont material safety

10 data sheet for a certain paint with an identity

11 number of 1021 A, alternative one. That's what it

12 says.

13 Q. Right. Could you read the first two lines --

14 or yeah, the first two lines of that No. 1 there.

15 A. All parts normally painted shall be finished in

16 a color complying with.

17 Q. So aren't they indicating that the color is

18 what must comply with

DuPont No. LF 1021 AM?

19 MR. MEASON: Objection, it's quite clear what

20 it says. It talks about particular national paint

21 manufacturer, that particular manufacturer's paint

22 number.

23 MS. SAWYER: I don't understand your

24 objection. Was that testimony? I didn't

ITV

109

1 understand your objection. What is the basis for

2 your objection?

3 MR. MEASON: Asked and answered.

4 HEARING OFFICER FRANK: I think that it's still

5 unclear and I would like an answer to the

6 question. They may be disagreeing with the answer

7 but I would like to at least hear what the answer

8 is.

9 A. If I was looking at this my impression would be

10 I would go to

DuPont, which is what we do, and say,

11 hey, we were given this, here's the spec, how do

12 you interpret that. They sent us a material safety

13 data sheet saying this would be the paint we

14 recommend and that is what we would do.

15 Q. Okay. Doesn't this No. 1 go on to say, a color

16 sample of which will be furnished the successful

17 bidder upon request? Doesn't it make that

18 statement?

19 A. That's true. That's standard practice in every

20 business I've ever been. They will give you a

21 color sample so that you can match your paints to

22 that sample.

23 Q. If you're using

DuPont LF 1021 AM, what do you

24 have to match it to?

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1 A. We match it to that. That's what I'm saying.

2 You have to get that paint and that is what they

3 want you to verify that you are providing the right

4 paint with the right color.

5 Q. Is

DuPont No. LF 1021 AM a specific color

6 paint?

7 MR. MEASON: I'm going to have to object. I

8 believe the Agency's questions are going more in

9 depth into paint chemistry than Mr.

Swisher is able

10 to answer.

11 HEARING OFFICER FRANK: I'm going to overrule

12 you. If Mr.

Swisher can't answer, then he can just

13 state that he can't answer and if he can, I think

14 it's a valid question.

15 A. I can't answer that question then.

16 Q. So you don't know if a specific

DuPont numbered

17 paint is a specific color?

18 A. That's correct.

19 Q. So this IDOT or Illinois Department of

20 Transportation RFP requests a certain color paint

21 or equal.

22 A. Okay, looking at this data sheet it gives you

23 the number. I do not see a color, so my assumption

24 is by reviewing this that they are telling you the

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1 type of paint you need. They will send you the

2 color chip to match the paint to that color.

3 Q. What paint are you matching if you're

4 purchasing

DuPont No. LF 1021 AM?

5 A. That is a type of paint.

6 HEARING OFFICER FRANK: Do you then add die?

7 THE WITNESS: I do not do that, no. We do not.

8 Q. Does

DuPont do that?

9 A. DuPont would match that to the color chip just

10 like you would do if you would go to your store and

11 get a paint for your house.

12 Q. Okay.

13 MR. MEASON: Could we go off the record real

14 quick?

15 HEARING OFFICER FRANK: Sure.

16 (A discussion was held off the record.)

17 HEARING OFFICER FRANK: Let's go back on the

18 report. This conversation is not one that should

19 be had off the record. At this point you have no

20 formal objection --

21 MR. MEASON: I object. The Agency is

22 attempting through its own lack of preparation,

23 lack of understanding, to paint

Swenson Spreader as

24 lacking or having insufficient knowledge to contact

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1 paint companies to solicit their paints from them.

2 HEARING OFFICER FRANK: I disagree and you're

3 overruled. I think what is trying to happen here

4 is the Agency's trying to ask questions. If your

5 witness can't answer them, he can simply say that

6 it's beyond the scope of what his knowledge is. It

7 doesn't reflect on

Swenson as a whole. It reflects

8 that this witness can't answer their questions and

9 maybe they can ask them of another witness.

10 And at this point I'm fairly confused

11 about how the paint works and I think that it's

12 worth this being on the record, because if I am

13 confused by it, it's possible that someone at the

14 Board may be confused by it, so I think these

15 questions are useful.

16 MR. MEASON: I will recall my opening statement

17 where I did state on the record that a

18 representative of

Tioga Coatings, a paint chemist,

19 would provide testimony today.

20 HEARING OFFICER FRANK: And if Mr.

Swisher

21 can't answer it, then maybe Miss Sawyer will ask

22 the same questions. I can't ask questions for

23 her.

24 MR. MEASON: I would ask that the Agency

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1 reserve these particular questions for the paint

2 chemist.

3 MS. SAWYER: I think these questions are

4 appropriate for Mr.

Swisher. You've put him on as

5 an expert, first of all, in industrial engineering

6 in general. He is involved in

Swenson's production

7 of these products and

Swenson is the company that

8 coats these products. I think that it's

9 appropriate to ask these questions.

10 As the Hearing Officer has pointed out, if

11 he can't answer them, if he's unable, then -- you

12 know, then he's unable and that's fine, but I

13 think --

14 MR. MEASON: I think he's already stated on the

15 record that he wasn't able to answer the questions

16 and if continued along the same line of

17 questioning.

18 HEARING OFFICER FRANK: He said he was unable

19 to answer one question. He answered other ones, so

20 I'm going to allow the questioning. If there's a

21 specific objection to a specific question, then I

22 will take it. If the witness doesn't have

23 knowledge, then he just simply has to say that he

24 doesn't have knowledge and I'm sure that they will

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1 be reasked of another witness. Please continue.

2 Q. Mr.

Swisher, do you know if you were successful

3 in bidding on this particular request for proposal?

4 A. No, I don't.

5 Q. In general on bidding on these request for

6 proposals, both of them said -- had a specific

7 coating listed and then said or equal. When you

8 respond or bid on such proposals, do you always

9 specify the coating listed or do you at times

10 suggest that you will use an or equal, something

11 equal?

12 A. We have done both depending on availability.

13 Q. So you do fulfill some of the orders with a

14 coating other than the ones listed on the

15 specification.

16 A. And/or equal, yes, that's correct.

17 Q. And in those cases -- I'll strike that.

18 In your direct testimony you testified a

19 little bit about powder coatings and you stated

20 that they are a good and durable product and more

21 durable than conventional coatings, I believe; is

22 that correct?

23 A. That's my understanding, yes.

24 Q. And you also stated that they are considered a

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1 product enhancement and would be viewed positively

2 by your customers; is that correct?

3 A. Yes.

4 Q. If it's your understanding that they would be

5 viewed positively by your customers, do you think

6 there is going to be situations where you're going

7 to be able to substitute the listed coating and the

8 specification with a powder coating?

9 A. I can't answer that. I don't know.

10 Q. So when you say your customers view it

11 positively, which customers are you referring to?

12 A. Well, the end users of the products that would

13 get it I'm sure would be very happy with the

14 quality.

15 Q. So powder coating is a higher quality coating

16 and that was your testimony.

17 A. Yes.

18 Q. But you can't really speculate on whether any

19 individual customer would accept a product with

20 powder coating.

21 A. No.

22 Q. In your direct testimony you also referred to

23 essentially there being a time frame if you use

24 powder coating in the time that it would take for

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1 Swenson to get these coatings accepted as an

2 alternative to the listed coating in the

3 specification.

4 A. That's correct.

5 Q. So you do anticipate that you will be able to

6 in some instances be able to substitute powder

7 coating for your listed coating.

8 A. I wouldn't say you could substitute it. What

9 you would have to do, you would have to work very

10 hard and work through the people that write the

11 specifications to get them to look at and review

12 and try and coax them into making that the

13 specification.

14 Q. Do you have any idea how long this process may

15 take?

16 A. No.

17 Q. Do you have any knowledge as to whether Meyer

18 Products had to do a similar -- if Meyer

19 Products -- let me strike that and start again.

20 Do you have any idea if Meyer Products had

21 to convince customers that powder coating was

22 something that was acceptable on their products?

23 MR. MEASON: Objection, calls for speculation.

24 Mr. Swisher is not a Meyer Products employee. He's

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1 a Swenson Spreader employee.

2 MS. SAWYER: Well, I don't think it calls for

3 speculation, but as he isn't a Meyer Products

4 employee, I just asked him if he had any knowledge

5 on not something speculative but something that has

6 already occurred since they've already installed

7 powder coating.

8 HEARING OFFICER FRANK: I'm going to allow it.

9 A. No.

10 Q. In your testimony you stated that

Swenson was

11 considering using powder coating, in essence that

12 they had evaluated that possibility.

13 A. Are evaluating, yes.

14 Q. And as part of this evaluation you've actually

15 applied for permits to construct a new area or

16 something like that, to house the powder coating

17 system.

18 A. That's correct.

19 Q. And you've also had architects out at the

20 facility to -- or an architect out at the facility

21 to evaluate that?

22 A. That's correct.

23 Q. Isn't it true that

Swenson Spreader has offered

24 to use powder coatings in the context of an

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1 enforcement proceeding involving the facility, has

2 made this offer to the attorney general's office?

3 A. Can you re --

4 Q. Okay. Isn't it true that

Swenson Spreader has

5 offered to use powder coating in an enforcement

6 action that -- involving the attorney general's

7 office?

8 A. I guess I can't state for sure.

9 Q. Mr.

Swisher, are you aware of the enforcement

10 case, it's docketed as PCB 97 101?

11 A. Yes, I am.

12 Q. And are you aware that there have been

13 communications with the attorney general's office

14 in response to this or in relation to this

15 enforcement action?

16 A. Yes, I am.

17 Q. And have you been copied on some of those

18 communications?

19 A. Some, yes.

20 Q. But you said you're not aware that the company

21 had offered to use powder coatings in this

22 enforcement action.

23 MR. MEASON: Objection, misstates his answer.

24 MS. SAWYER: Okay. Could you read back his

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1 answer.

2 (The requested portion of the record was

3 read.)

4 MR. MEASON: Could the Hearing Officer rule on

5 my objection.

6 HEARING OFFICER FRANK: I'm sorry?

7 MR. MEASON: I objected on the basis that her

8 question misstated his answer.

9 HEARING OFFICER FRANK: His answer was

10 basically that he didn't recall.

11 MR. MEASON: Correct.

12 HEARING OFFICER FRANK: So can you rephrase

13 your question, Bonnie.

14 MS. SAWYER: Sure.

15 Mr.

Swisher, you stated that you do not

16 recall whether

Swenson has offered to use powder

17 coating in the context of the enforcement

18 proceeding; is that correct?

19 A. That's true.

20 Q. I have in front of me a letter that was sent to

21 the attorney general's office and you are copied on

22 it and it does make this offer. Would this letter

23 possibly refresh your recollection?

24 A. Yes, it would, I'm sure.

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1 Q. You can read the whole thing.

2 A. Okay.

3 Q. Mr.

Swisher, do you -- after reviewing this

4 letter do you now recall that

Swenson Spreader has

5 offered to use powder coating in the context of

6 this enforcement proceeding?

7 A. Yes, I do.

8 Q. And in the context of this enforcement

9 proceeding, is

Swenson Spreader maintaining that

10 the system is capable of handling roughly 70

11 percent of

Swenson Spreader's components?

12 A. I don't recall the exact numbers.

13 HEARING OFFICER FRANK: Miss Sawyer, do you

14 want to

reask the question now that he's looked at

15 the document.

16 Q. Do you recall that within the context of the

17 enforcement action

Swenson Spreader is suggesting

18 that the powder coating system is quoted as being

19 capable of handling roughly 70 percent of

Swenson

20 Spreader's components?

21 A. That's correct.

22 Q. And are you aware that in the context of this

23 enforcement proceeding

Swenson Spreader has stated

24 that the rationale behind

Swenson Spreader's

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1 commitment to use powder coating is the fact unlike

2 other pollution prevention such as an afterburner,

3 powder coating immediately would solve the

4 Company's 3.5 pound per gallon VOM problems based

5 on current production while affording great product

6 quality improvement.

7 A. That's correct.

8 Q. Mr.

Swisher, prior to this hearing -- to your

9 knowledge, prior to this hearing had

Swenson

10 Spreader ever put forth the position that it was

11 offering to use powder coating within the context

12 of the enforcement proceeding in any pleading filed

13 in this Adjusted Standard proceeding?

14 MR. MEASON: Could you repeat the question.

15 Q. To your knowledge has

Swenson Spreader ever

16 filed a pleading in this proceeding that put forth

17 the fact that

Swenson has offered to use powder

18 coating within the context of the enforcement

19 proceeding?

20 A. I don't recall that.

21 Q. If

Swenson Spreader were to use powder coating

22 for about 65 to 70 percent of its product based on

23 its production levels in the last several years,

24 would its emissions be in the range of 9 to 12 tons

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1 per year?

2 A. I'd say approximately, yes.

3 Q. Mr.

Swisher, during direct examination you

4 testified about I believe it's Petitioner's Exhibit

5 2, which is a blueprint; is that correct? Is that

6 Exhibit 2?

7 HEARING OFFICER FRANK: No, it's --

8 MR. MEASON: 3, I believe.

9 Q. Petitioner's Exhibit 2, which is a blueprint of

10 the portion of

Swenson Spreader's facility,

11 specifically the coating that you currently use; is

12 that correct?

13 A. That's true.

14 Q. And when was that coating booth installed?

15 A. To the best of my knowledge it was sometime in

16 1982.

17 Q. In Exhibit 1, and I'm not certain on what page

18 but I could flip through and find it, Petitioner

19 states that it cannot use the press line averaging

20 provisions of 35 Illinois Administrative Code

21 215 -- I believe it's 207. 215 is missing from my

22 book.

23 HEARING OFFICER FRANK: I have 215.

24 MS. SAWYER: Yeah, that's the right citation.

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1 HEARING OFFICER FRANK: 215.207.

2 MS. SAWYER: Yes, 215.207.

3 Do you want me to flip through the

4 petition and find that?

5 A. Maybe you could help me.

6 Q. Well, that's okay. If you would just look at

7 this regulation. Is one of the reasons that you

8 couldn't meet it, one of the reasons, that it only

9 applies to coating lines constructed or modified --

10 or let's see. Oh, it does not apply to coating

11 lines constructed or modified after July 1, 1997.

12 You don't really know?

13 A. I don't know.

14 Q. Okay, that's fine. Moving back to Exhibit 3, I

15 think you stated that the coating booth had two

16 16,000 SCFM down draft fans; is that correct?

17 A. That's correct.

18 Q. Which is a total down draft of 32,000 SCFM; is

19 that correct?

20 A. That's true.

21 Q. Is the size or the 32,000 SCFM down draft used

22 to keep the air flow in the booth below the lower

23 explosive limitation?

24 A. I guess I can't say for sure. I don't know.

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1 Q. Do you know why there is a 32,000 SCFM fan

2 installed on the down draft of the coating booth?

3 A. Not directly, no, other than that it is

4 designed to get a certain amount of air movement in

5 the system.

6 Q. Based on your engineering knowledge, is the air

7 flow of the booth to an extent, does it affect the

8 lower explosive limit?

9 A. I would assume so, yes.

10 Q. And is lower explosive limit based or

11 determined in part based on the VOM content of the

12 coatings that are sprayed?

13 A. I don't think I'm really qualified to answer

14 that.

15 Q. Okay. Mr.

Swisher, in Exhibit A or Exhibit 1

16 which is your Adjusted Standard petition, you

17 presented one cost for a recuperative thermal

18 afterburner, one cost quotation; is that correct?

19 A. That's correct.

20 Q. And that quotation was from

Brule?

21 A. That's correct.

22 Q. And then today you provided another cost

23 quotation also from

Brule; is that correct?

24 A. That's true.

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1 Q. And this is also for a -- I don't have a copy

2 of it in front of me. May I see exhibits -- I just

3 want to make sure. It's not in this. It's right

4 there.

5 Well, in exhibit -- Petitioner's Exhibit

6 4, the cost quotation is for the same type of

7 system as in the original quotation; is that

8 correct?

9 A. That's correct.

10 Q. Mr.

Swisher, did you contact any other

11 companies for a quotation on add-on control type of

12 equipment?

13 A. We did not get any true quotations from anyone

14 else, no.

15 Q. Did you -- so that's the only quotation. You

16 didn't get a quotation from Regenerative Thermal

17 Oxidizer?

18 A. We did not go through the whole quotation

19 process. We've, you know, tried to talk to

20 different people and it was the cost that we were

21 informed of were in the same range, so we stuck

22 with something that we knew something about, the

23 quotation that we had and decided to get it

24 requoted, see if it -- indeed it was the correct

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1 quotation.

2 Q. And you went back to the same company to get it

3 requoted?

4 A. Yeah, same guy that we had. He was most

5 familiar with our process.

6 Q. Did the person who quoted you from

Brule come

7 out to

Swenson Spreader's facility?

8 A. Yes, he did.

9 Q. And on how many occasions did he come out?

10 A. At least one that I know of.

11 Q. I just want to ask a couple questions about

12 Exhibit 5 which is your cost calculations. On

13 No. 1, capital cost summary, the purchasing price

14 that you have included includes a heat exchanger;

15 is that correct?

16 A. That's correct.

17 Q. If you would look to Exhibit 1 in your original

18 quotation from the afterburner, it's Exhibit I.

19 MR. MEASON: Item I in that.

20 A. Okay.

21 Q. I believe it's on the second page, third page.

22 Could you go down from the -- go down to where it

23 says value of heat recovered from air to air heat

24 exchanger.

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1 A. Yes.

2 Q. And go down to where it says the second to the

3 bottom line. Isn't it true that

Brule quoted you a

4 total savings of $41,250 if you use the heat

5 exchanger on that original quotation?

6 A. That's what they stated, yes.

7 Q. Moving on to Item 2 of your -- of Petitioner's

8 Exhibit No. 5, you have estimated natural gas usage

9 at 200,000. Does that include or is that based on

10 a 95 percent destruction efficiency for the unit?

11 A. That's true.

12 Q. And if you move to the next page, when you

13 estimate annual costs per ton of required VOM

14 reductions, that figure is based on an 81 percent

15 control; is that correct?

16 A. That's correct, per Section 215.205 B1. That's

17 what it said you're supposed to use the way I

18 understood it.

19 Q. In your natural gas usage, did you include any

20 type of -- did you factor in any type of heat

21 value -- strike that question. In your natural gas

22 usage did you factor in the heat value of the VOM

23 destroyed?

24 A. I don't understand the question.

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1 Q. Is it your understanding based on your

2 engineering knowledge that you would get -- recover

3 heated value based on

VOMs destroyed in this

4 system?

5 A. I would assume, yes, you could because you're

6 burning, but most of the heat is generated through

7 the process of using the natural gas to create the

8 heat to burn whatever

VOCs are going through the

9 system.

10 Q. So you said that yes, there would be some heat

11 value.

12 A. Some minute amount, yes.

13 Q. Did you factor that into this calculation?

14 A. No, I did not.

15 Q. It's my understanding that this is a

16 recuperative system that you are providing a cost

17 quotation for.

18 A. Has a heat exchanger on it.

19 Q. Right. Did you factor in any value or -- did

20 you factor in the fact that you're going to be

21 recovering heat from the heat exchanger in that

22 calculation of the natural gas usage?

23 A. Yes, I did.

24 Q. And how did you factor that in?

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1 A. The essence of the heat exchanger is it uses

2 the heat previously produced, reinserts it back

3 into the system so that it does not have to heat up

4 the air again. It starts out with warmer air so

5 you utilize the heat that you've produced

6 previously before to run more efficient, thus using

7 less therms.

8 Q. So this figure that you've included does not

9 assume that you are heating this device to 1400

10 Fahrenheit as far as the gas usage goes.

11 A. Yes, it would be heated.

12 Q. But isn't some of that heat coming from the

13 heat exchanger so you don't need to use natural gas

14 to necessarily heat it up to 1400?

15 A. You still have to heat it up to 1400. You

16 might start from a different starting point, yes.

17 Those calculations that are on here are based on

18 using the heat exchanger. Without the heat

19 exchanger you'll have a much higher gas usage is

20 what you're asking, right?

21 Q. Yeah, I'm asking if it's factored into that

22 figure.

23 A. Yes. It would be $500,000 a year to run it

24 without a heat exchanger based on their numbers.

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1 Q. In your direct testimony you stated that you

2 could not coat plastic parts and motors in a powder

3 coating system.

4 A. That's correct.

5 Q. Do you know the melting point of the plastics

6 that you coat?

7 A. Not all of them, no.

8 Q. Do you know if the melting point is below 350

9 Fahrenheit?

10 A. I can't answer that for sure.

11 Q. Why is it that you state that you can't coat

12 motors in the powder coating system?

13 A. Because we've been told by manufacturers that

14 excessive heat that you would adhere powder

15 coatings to can affect materials inside of the

16 motor.

17 Q. Is it the epoxy in the motor that is of concern

18 or do you know what inside of the motor is the

19 specific concern?

20 A. I can't state.

21 Q. Mr.

Swisher, I believe you testified that you

22 couldn't -- and I don't want to quote you because I

23 don't think I can, but in essence to paraphrase

24 what you stated, that you couldn't respond to the

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1 question as to whether you had received one or

2 more -- I mean, more than one quote on powder

3 coating; is that correct?

4 A. I don't think so.

5 Q. Have you received more than one coating on or

6 more than one bid on a powder coating system?

7 A. Not to my knowledge.

8 Q. Is it your understanding that there is an

9 inherent limitation in powder coating systems, that

10 they can only take or they can only coat -- would

11 you strike that.

12 Is it your understanding that there is an

13 inherent limitation in powder coating systems, that

14 they can only handle parts 10 feet or smaller?

15 A. I don't think -- that's not what I said and I

16 don't think that's the limitation.

17 Q. I'm not suggesting that's what you're saying.

18 A. No, I don't think that's it. In our system it

19 would be.

20 Q. In --

21 A. In the system that was proposed it would be.

22 Q. Have you looked into a larger system or a

23 system that would accommodate larger parts?

24 A. I would say it was reviewed, yes.

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1 Q. And the determination was made that not to

2 pursue that avenue or you haven't decided on that?

3 A. Well, it was all somewhat an economic issue.

4 The larger you are, the bigger the building you put

5 in. The larger the system, the bigger everything

6 gets. There are some economics involved so it was

7 in reviewing with the people that were going to

8 supply or could supply the system, we tried to get

9 something that could economically coat a large

10 percentage of our products.

11 Q. On Item A of Petitioner's Exhibit 1 there is a

12 catalog of products. Isn't it true in the

13 specifications provided as to the size of these

14 products the only product that exceeds 10 feet is

15 the APB, all purpose body?

16 A. That is incorrect.

17 Q. Which other parts exceed 10 feet in length?

18 A. Okay, the APB would do that, and all our

19 different varieties of V boxes have the potential

20 of being longer than 10 feet.

21 Q. They have the potential of being longer than 10

22 feet?

23 A. Yes, we produce many that are over 10 feet.

24 MS. SAWYER: I have no further questions at

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1 this time.

2 HEARING OFFICER FRANK: Okay. Mr.

Meason?

3 MR. MEASON: I have a few on redirect.

4 REDIRECT EXAMINATION

5 BY MR. MEASON:

6 Q. Mr.

Swisher, on cross the Agency asked the

7 question with regard to whether permits had been

8 applied for and architect drawings generated

9 pursuant to the powder coating possibility. Is it

10 a -- to your knowledge is it a standard practice

11 when a company is contemplating a potential major

12 investment such as powder coating to engage in

13 certain initial activities?

14 A. Yes.

15 Q. And would an initial activity in your opinion

16 be applying for permits that would allow you to

17 build potentially into a floodplain?

18 A. That's correct.

19 Q. And would a potential -- excuse me. Would a

20 preliminary activity involve hiring an architect to

21 draw blueprints?

22 A. That's true.

23 Q. Would those types of activities indicate that a

24 company has definitely made a decision to 100

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1 percent for sure go ahead with that particular

2 project?

3 A. No, that's not true.

4 Q. On cross examination the Agency provided you a

5 letter that was written with regard to the

6 enforcement action pending before the Board and

7 being prosecuted by the Illinois Attorney General's

8 Office on behalf of the State and the Agency asked

9 you to read a particular section. Could I borrow

10 that? I don't have that letter here.

11 Do you recall reading a provision where

12 the letter stated the installation of the powder

13 coating system would immediately bring

Swenson

14 under 25 tons based upon prior production levels?

15 MS. SAWYER: I object. Just for clarification,

16 I don't believe I had him read any provision of the

17 letter.

18 HEARING OFFICER FRANK: No, you had him refer

19 to it and you asked him specific questions about

20 it. He used it for --

21 MS. SAWYER: Right, I was just clarifying. I

22 don't believe he read any specific provisions.

23 Q. Was there a provision in the letter to your

24 recollection that stated that the installation of a

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1 powder -- of a powder coating system would

2 immediately resolve the 25 ton problem?

3 A. That's true, yes, correct.

4 Q. In hindsight should that letter have been

5 worded a little differently?

6 A. I would say --

7 MS. SAWYER: I object to that question.

8 HEARING OFFICER FRANK: What's your objection?

9 MS. SAWYER: Relevance.

10 MR. MEASON: I'd do an offer of proof.

11 HEARING OFFICER FRANK: First do you have

12 something to offer in the way -- I'm not requiring

13 an offer of proof yet. We're still arguing on the

14 objection. She wants to know whether or not it's

15 relevant.

16 MR. MEASON: I will state that -- well, I have

17 to say my next question would be relevant to an

18 offer of proof.

19 HEARING OFFICER FRANK: Let's go off the

20 record.

21 (A discussion was held off the record.)

22 HEARING OFFICER FRANK: Let's go back on

23 record.

24 MS. SAWYER: Well, I mean, perhaps his question

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1 could be worded differently but he's asking on

2 hindsight if the letter should have been worded

3 differently. The letter is from Mr.

Meason.

4 Mr. Swisher was copied on it.

5 HEARING OFFICER FRANK: Can you rephrase your

6 question.

7 Q. Will the -- will or would the installation of a

8 powder coating system immediately, immediately

9 solve 3.5 pound per gallon problem?

10 A. Not immediately.

11 Q. And why is that?

12 A. Well, there are a lot of things going into

13 bringing the system on board. There's a big long

14 learning curve. There's -- every product that has

15 to be run through would have to be run through and

16 proved and parameters set up to run, so based on an

17 installation and immediately being up to 100

18 percent proof, that doesn't happen. I mean, you

19 don't go into 100 percent productivity, plus you

20 also have -- it's going to be a long time in trying

21 to get these people to also come on board for some

22 of the special paints that we talked about before,

23 trying to see if we can get specifications written

24 for those.

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1 Q. Is it

Swenson Spreader's hope that ultimately

2 it will be able to fully implement a powder coating

3 system if it installs one?

4 A. That's true, yes.

5 Q. On cross examination the Agency asked whether

6 any representatives of

Brule came out to the plant

7 in connection with providing the quotation for an

8 afterburner. Do you recall?

9 A. Yes.

10 Q. And what was your answer?

11 A. That was correct.

12 Q. I believe it was your answer that to your

13 knowledge they came out at least once; is that

14 correct?

15 A. That's true.

16 Q. Did

Brule representatives ask for any type of

17 documentation from

Swenson Spreader regarding the

18 existing paint booth and/or down draft?

19 A. Yes, they did.

20 Q. And did you provide it to them?

21 A. Yes, I did.

22 Q. And what type of documents did you provide?

23 A. Well, they wanted a layout or print of our

24 paint booth powder system, our exhaust system.

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1 Q. And you're referring to exhibit --

2 A. Exhibit 5.

3 HEARING OFFICER FRANK: No, that one's 3.

4 THE WITNESS: 3, I'm sorry.

5 Q. Were there any other documents that they

6 required to do their quotation that you recall?

7 A. No. Could I add something to that last

8 question?

9 Q. Sure.

10 A. Prior work that was given to them also is they

11 needed to know the type of paints that we were

12 utilizing so they would know the types of

VOCs that

13 would be coming out of and going through the system

14 so that information was also provided.

15 Q. I'd like you to refer to Petitioner's Exhibit

16 1, Item I, the Tab I, fourth page back, the

payback

17 analysis. This is part of

Brule's original quote

18 in 1995; correct?

19 A. That's true.

20 Q. Was this

payback analysis more along the lines

21 of true engineering calculations or a marketing

22 tool?

23 A. My assumption is it's a marketing tool because

24 Brule is the one that provided it. It wasn't, as

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1 far as I know, by anyone at

Swenson.

2 Q. With regard to the Agency's cross examination

3 questioning along the lines of, and I'm probably

4 going to get this all wrong, the heat value

5 returned on combustion, Bonnie tried a couple times

6 and I wasn't following too well, and I believe if

7 I'm wrong correct me, you stated there would be

8 some minute heat value returned to the system.

9 A. I assume that there would be some, yes. I have

10 no -- it would only be a small amount, I'm sure.

11 Q. And when you did your calculations did you rely

12 on guidance or documents from any other --

13 A. I used the documents that were given to me by

14 Brule who is the manufacturer of the product and

15 they're the ones that guided me through the

16 calculations, so.

17 Q. On cross examination the Agency asked you about

18 Page 13 of Exhibit No. 1, Page 13. The Agency

19 directed your attention to the second paragraph

20 where it states that

Swenson Spreader's government

21 contract specified paints fluctuate greatly from

22 year to year and constituted approximately 27

23 percent of

Swenson's paint usage in 1995. Do you

24 recall that question?

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1 A. Yes, I do.

2 Q. And then the Agency referred you to a -- to the

3 Clean Air Act Permit -- excuse me, Clean Air Act --

4 getting long. The CAAP permit, the CAAP permit

5 that I think is on -- somewhere on the table. It's

6 not important, and I believe the statement there

7 that you had signed said that in prior years

8 Swenson Spreader contract specified paints were

9 approximately 21 percent. Do you recall that?

10 A. Yes, I do.

11 Q. Was there a year specified in that CAAP permit

12 language? Do we still have that here someplace?

13 I'm handing you the document that you've examined

14 on cross examination which is at least a portion of

15 the CAAP permit for

Swenson Spreader. Could you

16 read the relevant line for the record.

17 A. "In previous years government contract

18 specified coatings constituted approximately 21

19 percent of

Swenson's coating usage."

20 Q. Does that specify a particular year in that

21 sentence?

22 A. No, it doesn't.

23 Q. Does it say that it constituted exactly a

24 certain percentage of your coating usage?

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1 A. No, it doesn't.

2 Q. Does it use the word approximately 21 percent?

3 A. Yes, it does.

4 Q. And is the time frame listed specific?

5 A. No.

6 Q. What is the time frame listed?

7 A. Previous years.

8 Q. In previous years. Thank you. One last

9 question, on cross examination the Agency inquired

10 as to the percentage of hot rolled versus stainless

11 steel and you responded that approximately 80

12 percent was hot rolled and 20 percent was

13 stainless. Does that figure vary from year to

14 year?

15 A. That's going to vary, I would assume. It could

16 vary quite a bit depending on which State bids we

17 get and which ones we don't get throughout that

18 current year.

19 Q. So it's not set in stone.

20 A. No, it's not a set in stone parity.

21 Q. So it could be 90-10, it could be 70-30.

22 A. Yes.

23 MR. MEASON: Thank you. I have nothing

24 further.

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1 HEARING OFFICER FRANK: Ms. Sawyer?

2 RECROSS EXAMINATION

3 BY MS. SAWYER:

4 Q. Referring to Petitioner's Exhibit 1, Page 13,

5 1994 was the percentage of government specified

6 contracts or the percentage of

Swenson's paint

7 usage that was used to fulfill the government

8 specified contracts 12 percent?

9 A. That's true.

10 Q. And isn't it true that the average of those

11 four years is about 25 percent?

12 A. Without a calculator I suppose I could do that

13 but that could be true.

14 Q. Mr.

Swisher, are any of the

Swenson products

15 that are in excess of 10 feet in length or in

16 excess of 10 feet produced to fulfill government

17 specified contracts?

18 A. Yes.

19 MS. SAWYER: I have nothing further.

20 HEARING OFFICER FRANK: Mr.

Meason?

21 MR. MEASON: (Shakes head.)

22 HEARING OFFICER FRANK: Thank you,

23 Mr. Swisher. I'd like to take a five minute

24 break.

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1 (A recess was taken at 3:22 p.m. and

2 proceedings resumed at 3:32 p.m.)

3 HEARING OFFICER FRANK: Let's go ahead and get

4 ready to go back on the record. Mr.

Meason, do you

5 want to go ahead and call your next witness.

6 MR. MEASON: Yes, I would. I'd like to call

7 Jerry

Olson.

8 HEARING OFFICER FRANK: Could you please swear

9 in Mr.

Olson.

10 JERRY OLSON,

11 being first duly sworn, was examined and

12 testified as follows:

13 DIRECT EXAMINATION

14 BY MR. MEASON:

15 Q. Good afternoon, Mr.

Olson. I apologize

16 personally for you having to sit in the ice box or

17 on ice, as we like to say, out there. It's taken a

18 little longer than I had anticipated.

19 Could you please state your name and spell

20 it for the record.

21 A. My name is Gerald

Olson, G-e-r-a-l-d, L. middle

22 initial, O-l-s-o-n.

23 Q. Do you have a business card on you?

24 A. Yes, I do.

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1 Q. Could you state who your employer is.

2 A. It's

Tioga Coatings.

3 Q. How long have you been with

Tioga Coatings?

4 A. Nine and a half months.

5 Q. Nine and a half months. Could you provide the

6 Board with a little bit of your professional

7 experience prior to coming on board at

Tioga.

8 A. I worked at Gordon

Bartels Company for 32 and

9 three-quarters years. Prior to that I was working

10 with industrial engineering at National Lock. I

11 took a training course, a method in rates

12 department and decided I wanted to be a paint

13 chemist and saw an ad in the paper and I hired in

14 at Gordon

Bartels. Gordon

Bartels Company has

15 since gone out of business. They announced in May

16 they were closing. I started looking for a job and

17 there was an opportunity with a man retiring at

18 Tioga and I took it.

19 Q. Was Gordon

Bartels considered a regional versus

20 a national company?

21 A. They were -- it covered the entire United

22 States. They were exceptionally big in can

23 coatings, implement enamels, toy enamels, any metal

24 deco where there was an extreme degree of

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1 fabrication and high requirements, technical

2 requirements for the coatings.

3 Q. Let's back up a little bit. You said metal

4 deco.

5 A. Metal deco is anything that is coated. The

6 metal that is decorated, fabricated in any sense.

7 Your pop can there is a metal decorated coating.

8 It has a white ink on it, red ink and a varnish on

9 it. We made those type coatings. The coatings

10 such as beer cans and anything with metal, to do

11 with metal. We also deal with plastic as well but

12 metal is the primary function of the company.

13 Q. And I believe you also mentioned the word hide

14 or hiding.

15 A. Hiding is the degree of hiding. Your pop can

16 there is sort of transparent so that you can see

17 the aluminum through it. You have a white base

18 coat, for instance, and then the ink is

19 transparent, so the degree of hiding is important

20 in the coatings in the sense that -- such as

21 these -- the low VOC coatings that we're achieving

22 right now, you have to be able to achieve a degree

23 of hiding with as little paint as you can put on

24 because the solids are so high on these to keep the

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1 cost in check as well as if you put less paint on

2 you're putting less solvent in the atmosphere.

3 Q. What is your current position with

Tioga?

4 A. I'm an operations chemist.

5 Q. And what does that --

6 A. I deal with all the coatings, types of coatings

7 at Tioga and customers. I deal with new

8 development and assuring that all new development,

9 the colors and the quality, is up to the specs of

10 the customer.

11 Q. So you've been in the paint business totally

12 more than three decades, 33 years --

13 A. Yes, sir.

14 Q. -- between

Bartel and Tioga.

15 A. That's true.

16 Q. I imagine you've worked with a lot of different

17 people in 33 years in the paint industry.

18 A. Yes, I've worked with many. I've attended many

19 seminars and I've worked in the field as far as

20 whatever new technology comes and

Bartels has eight

21 chemists there and we had a research and

22 development staff and we had an application staff

23 and we had staff that worked with -- specifically

24 with customers, technical field. And so in that

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1 area you reach and touch all aspects of the

2 customers, the suppliers as well.

3 Q. Over the years was part of your job to train

4 new chemists or personnel?

5 A. I trained all the new chemists that came into

6 the Bartels research and worked with all the

7 teams. I was -- my boss was the original chemist

8 and I was his technician and we went on with the

9 training program, and once he left, then I was in

10 charge of upgrading and further. The original lab

11 was set up with two people and then it grew into

12 where it was eight chemists and two technicians.

13 Q. Would you characterize your background, your 33

14 years in the paint industry, as encompassing kind

15 of an apprenticeship where you worked under the

16 supervision of someone and they taught you -- they

17 taught you the job?

18 A. Yes, it was on-the-job training with

19 supplemental courses such as

palmer course at

20 Rolla.

21 Q. And that's University of Missouri at

Rolla?

22 A. University of Missouri. Courses in OSHA, EPA,

23 color matching courses at ACS in New Jersey.

24 Q. What is ACS?

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1 A. ACS is the unit that manufactures the color eye

2 and the components of the software for matching

3 colors on a computer. They had the first unit that

4 worked in the software that could tell you what

5 colors to put in, how much. It's very

6 sophisticated color matching. We purchased --

7 originally purchased the color matching set from

8 IBM computer, went out to learn how to use the

9 computer and worked on it for one week.

10 All it could do was design grafts on

11 colors, tell you there were two blue, two green,

12 two red, couldn't tell you units, couldn't tell you

13 how much, what colors to use or anything. Found

14 the unit, Gordon

Bartels told me if you see

15 anything, let me know. We found a unit, went out.

16 He let me go to New Jersey and look at it and I

17 took a one-week course at ACS Applied Color

18 Corporation and it was very sophisticated. It had

19 what we wanted.

20 In other words, you'd store your colors in

21 the computer and it could tell you which of those

22 colors to use. It could tell you the percentage of

23 those colors. It could tell you the differentials

24 and how much differentials to use. In other words,

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1 if you made a brown up and it was too gray, it

2 could tell you that it needed yellow, red and

3 white. It could tell you it needed 5 pounds of

4 this, 4 pounds of that, 1 pound of that.

5 You had to use it as a tool. You couldn't

6 do it absolute but if you made it in such as two

7 hits, you'd try to put in 70 percent of that add,

8 you could see it, and then readjust it, put it back

9 in the computer, you could get the color on two

10 hits on brown. However, color computer is not

11 designed for high, deep mass tone colors such as

12 Swenson has.

13 Q. Mask tone?

14 A. Mass tone. These are where the color is like

15 that red there in that book, extremely red,

16 extremely yellow, extremely orange.

17 HEARING OFFICER FRANK: For the record, that

18 doesn't really help.

19 MR. MEASON: Point to a bright red flower for

20 the record.

21 THE WITNESS: A bright red flower.

22 HEARING OFFICER FRANK: On the Sierra Club Date

23 Book.

24 A. But what happens is there's not enough

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1 differential in those colors other than just red

2 for the computer. It could tell you what red.

3 Q. Are you referring to the shading of red?

4 A. The shading. The problem is that red can there

5 and this red can here is --

6 Q. Dr. Pepper and Coca-Cola, for the record.

7 A. They're two different colors, see? That's an

8 orange shade. This has, like, a blue undertone to

9 it. That's what it can't pick out. Here's two

10 shades of red right here.

11 HEARING OFFICER FRANK: On the Dr. Pepper can.

12 A. That's what it can't do. That's what the

13 chemist has to do.

14 Q. We're all in for an education today, I think.

15 A. In that case the computer will tell you what

16 color, what red to use. Can't tell you how much

17 and it can't tell you if you got to put a little

18 bit of this or that in it. That's where the color

19 matching ability comes in. So computers are nice

20 but they're not absolute. But as I said, the

21 computer that we looked at from ACS worked, we

22 bought it, we brought it back, trained on it and

23 then we have to train other people to use it and

24 use it as a tool. It's not something you plug in,

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1 put a color in it and get a color match out of it.

2 Now, in our case with colors that the

3 computer can't match it, you have to make and put

4 several colors together in a clear -- you have to

5 spray it out, come up with a reasonable color

6 match. Then you go about making paint and this is

7 what happens when

Swenson brings a panel to us.

8 They send in a request either from their customer

9 or they bring in a panel or wet paint that they've

10 got something they wish to arrive at.

11 We -- takes us approximately two hours to

12 arrive at something for a color match. We then

13 composite a paint, make up a sample, and this takes

14 anywhere from six to eight hours to make a sample.

15 We therefore have to fine-tune the color. We

16 submit a sample to them, they submit it to their

17 customer.

18 Q. So you attempt -- if a paint company, if it's

19 Swenson or other, they come to you, you try to give

20 them what they need.

21 A. We give them what they need to the absolute

22 color match under the light source that they

23 specify. There are three main light sources;

24 incandescent, fluorescent and daylight.

Swenson

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1 Spreader has to have all their color matches 100

2 percent under daylight. They'd like to have them

3 under

fluorescents so when they show it in a

4 showroom or someplace else and they're looking at

5 the panels, that there's not a huge differential.

6 Some of the times we have what they call

7 metamerism where it matches under one light, does

8 not match under the other. We have to take --

9 physically take every color and walk outside and

10 make sure that color matches outside under

11 daylight. So we start off and we try to make it so

12 it matches under both. It doesn't always do it.

13 Reason being is the pigments in the standards many

14 times are less bearing pigments. They're old

15 standards. They're from State government where

16 they use lead chromate. These colors give us a lot

17 of problems. We're using more transparent pigments

18 because we cannot use lead or toxic colors. Those

19 pigments have extremely good hiding, extremely low

20 cost.

21 Q. Hold on. You said a lot of these State

22 agencies used lead

chromates?

23 A. Their standards are all based on lead chromate

24 because at that time all the implements from these

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1 states were based on high hiding, very good

2 pigments. The lead chromate was a very good

3 pigment.

4 Q. Can you still use that today?

5 A. We cannot use that today.

6 Q. Why is that?

7 A. Because it is toxic.

8 Q. Is this an EPA regulation or something?

9 A. There are State standards and there was

10 established that they would be strictly nontoxic

11 for the waste stream and there is not a -- where

12 you cannot 100 percent use them. There are some

13 places that still use lead.

14 Q. But you're still seeing specifications based

15 upon --

16 A. The specifications are based on lead bearing

17 standards.

18 Q. Because the States have never changed their

19 specs.

20 A. Right.

21 HEARING OFFICER FRANK: So the chip they send

22 you is a lead paint chip?

23 THE WITNESS: Yes, it's a pigment that had lead

24 in it and therefore we have to use different

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1 pigments that use the same color.

2 Q. Let's take a step back real briefly and then

3 we'll get into a lot of detail on paints. Can you

4 tell us a little about

Tioga. What is Tioga?

5 A. Tioga is a corporation of several different

6 companies. They have a company -- I'm not real

7 familiar with them but they have basically three

8 companies. They have one that makes door inserts

9 for plastics. They have another one that makes

10 insulation for the different cars and different

11 things and then they have a paint division. And

12 they have a developmental lab in Cal City that

13 strictly works on making as low of VOC coatings.

14 They are research and development for the large

15 companies in the United States such as General

16 Motors, Ford. These companies that need and want

17 very low VOC coatings to compete against powder

18 coatings.

19 Q. Mr.

Olson --

20 A. Yes, there is a brochure.

21 Q. -- I'm going to hand you a document in a

22 second. I'm showing it to Ms. Bonnie Sawyer,

23 Counsel for Illinois Environmental Protection

24 Agency. Handing you a document, if you could

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1 examine that document real briefly. Tell me if you

2 recognize the document.

3 A. Yes, I do. This details --

4 Q. Could you tell me what it is.

5 A. This details about the parent organization

6 which is

Tioga International. As I said, we're --

7 Tioga Coatings is a division of

Tioga

8 International.

9 Q. Thank you. Do you know if this document is a

10 formal business document of

Tioga Corporation?

11 A. Yes, they give it to their customers.

12 MR. MEASON: I would move to admit this into

13 evidence.

14 HEARING OFFICER FRANK: Any objection?

15 MS. SAWYER: No.

16 HEARING OFFICER FRANK: Then it's admitted into

17 evidence as Petitioner's Exhibit 10.

18 Q. Where is

Tioga located?

19 A. Tioga Coatings?

20 Q. Tioga Coatings.

21 A. It's 208 Quaker Road, Rockford, Illinois.

22 Q. Are there any -- are there other corporate

23 offices or an RD staff anyplace else?

24 A. Yes, Cal City, Illinois.

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1 Q. Calumet City?

2 A. Calumet City, yes.

3 Q. What are your general duties in your position?

4 A. I supervise the lab. I have one technician. I

5 assist with QC, quality control, any production

6 problems. I color match and take care of

7 customers' needs in any way, shape or form,

8 problems, new color development, new systems

9 development, OSHA, EPA requirements that they need

10 assistance.

11 Q. Do you know what the purpose of this proceeding

12 is today?

13 A. Yes, sir.

14 Q. And what is that?

15 A. That is for abatement to try to get a VOC

16 requirement raised from 3.5 requirement to perhaps

17 4.75 to 5.

18 Q. How long have you personally had dealings with

19 Swenson Spreader?

20 A. I would say at least seven, eight years.

21 Q. So that --

22 A. At

Bartels we made coatings. In fact, we had

23 worked on their low solids coatings, regular

24 coatings. We had made and developed two colors for

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1 them on high solids coatings, a red and a black, as

2 well as we worked perhaps three months on a high

3 solids primer.

4 Q. What do you mean by high solids?

5 A. The high solids means that the coating has a

6 solids high enough to meet the 3.5 VOC. The old

7 coatings typically would have a solids in the 45 to

8 55 range. The high solids --

9 Q. Solids meaning pigments and resins?

10 A. Solids means the amount of solid material that

11 would be left in the coating after the solvent is

12 gone. This is what remains on the actual part.

13 Therefore it is the solids from the pigment, the

14 resin, certain additives and fillers.

15 Q. Could you in layman's terms explain what a

16 primer is.

17 A. A primer is laid down on the metal to give

18 adhesion and corrosive resistant properties to the

19 metal and you can put a topcoat -- there are -- we

20 make coatings that go just over bare metal, but

21 what happens is you do not have enough chemical

22 resistance with a one-coat system for high quality

23 coatings such as implements. And there are can

24 coatings we put down only a single coat, we do not

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1 use primers, except where we have an adhesion

2 problem, such as galvanized metal or tin plated or

3 something like that.

4 Q. You said for high quality implements?

5 A. Implements, yes, where you have to be able to

6 stick to the metal and give a base for a topcoat.

7 It gives you -- it helps the color of the topcoat

8 in a sense that you do not need as much on the

9 topcoat as well. In other words, you make the

10 color of the primer the right color and therefore

11 you do not need as much of a topcoat.

12 Q. They complement one another?

13 A. They complement each other and form a

14 continuous film between the two. The topcoat has

15 to bite into the primer. The primer has to be

16 resistant and it gives you the salt spray

17 properties of the coating basically. And in our

18 implement field we require 500 hours of salt spray

19 and there's different --

20 Q. Every paint or primer has to undergo 500 hours

21 of tests of salt spray?

22 A. Yes, it's a 5 percent solution of salt in water

23 and it's atomized in this cabinet that we have,

24 heated to 140 degrees. It forms a fog inside there

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1 just like if you were living up -- like Corpus

2 Christi where it's really salt and fog all the

3 time. So anything that's put into this has to

4 requires -- now, there are types of primers which

5 are called two component primers, two component

6 epoxy primer which

Swenson buys from us, is

7 required at certain State levels. We've not been

8 able to make these at 3.5 because their extreme

9 resistance will not allow just a small amount of

10 solvent in them to solvate them.

11 Q. To what them?

12 A. Solvate them, to thin them down.

13 Q. Okay.

14 A. They require more solvent due to the fact that

15 their molecular chain -- the higher the molecular

16 weight, the more chemical resistance you get. Some

17 States require a two component epoxy system

18 because, like, they're going on salt spreaders or

19 something like that which is extremely -- eats the

20 paint right off basically. It's extreme.

21 Q. And that's

Swenson's product line, is it not?

22 A. Yes, that's part of their product line and

23 that's the two component. In some cases we have to

24 use a two component topcoat over two component

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1 epoxy. The two component topcoat we manufacture is

2 called acrylic urethane. That is a blend of

3 acrylic and a blend of urethane, basically like a

4 four to one ratio. You blend the two together.

5 You get a coating that will resist high degree

6 salt, water, moisture. They use it on bridge

7 deckings, for instance. You have to have something

8 that you're not going to have to repaint for 20

9 years.

10 Q. Not going to wear off easily.

11 A. Not going to wear off. A typical

Swenson

12 system is one component of a primer and one

13 component of a topcoat. That system is designed

14 for 3.5. The -- we had to have -- in the past it

15 was much higher. Since I've been to

Swenson every

16 coating of that type, their general line coating,

17 which just has general requirements for typically

18 farm tractors and trucks and certain types of, you

19 know, general line, what's called a general line,

20 not special, is meeting -- is being reformulated.

21 If it wasn't or isn't 3.5, it has been

22 reformulated.

23 Q. Tioga has reformulated to

Swenson's --

24 A. Yes, I believe we've had 11 of them since I've

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1 been there. There perhaps is as many as 20

2 coatings involved, another nine, but these nine

3 have not been ordered or in the -- if they order

4 something and it was an old coating, is being

5 reformulated to make sure that it meets and does

6 what they want.

7 Q. And what is involved in reformulating the

8 coating?

9 A. Well, reformulating means we look at the old

10 formula and see what the pigments are and the

11 color. We therefore take those pigments and put

12 them in the high solid systems, grind it up, mix

13 it, check the color and the property and see if

14 they're good. If they're good, we submit a panel

15 to Swenson, they approve it, we make the paint.

16 Now, if it was a color that used some sort

17 of a pigment that was -- is too puffy, absorbs too

18 much solvent and therefore cannot meet the 3.5 VOC

19 because of the pigment that was in the old system,

20 we change to some of the new pigments that I

21 brought -- since I've been to

Bartels I brought

22 some new pigments in the house to give

Swenson some

23 additional hiding for some of the very bright and

24 clean colors that they buy.

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1 Q. Let me interrupt you there. I'm going to hand

2 you two objects. I'll show them to Ms. Sawyer

3 first. Handing you these two objects, could you

4 examine them for a bit.

5 A. Okay.

6 Q. Do you recognize those objects?

7 A. Yeah, that is a typical -- these are type of

8 Swenson's coatings that they make. They're very,

9 very clean, very, very bright.

10 Q. What are those objects called?

11 A. These are panels. This is what we -- we make

12 these type of panels. We put the primer down. We

13 color match the topcoat or even match anything for

14 Swenson that -- we have to know what the primer

15 is. If the customer specs their basic primer, high

16 solid primer, we spray up a set of panels and we

17 start color matching them over top of their

18 panels. The primer underneath will affect the

19 color.

20 In the case of

Swenson they buy a light

21 yellow, kind of a beige primer for -- and it works

22 very well. If they have one -- in fact, here it is

23 right here.

24 MR. MEASON: Bonnie?

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163

1 MS. SAWYER: (Nods head.)

2 Q. Here's another one too. One more while we're

3 at it. I've just given you three additional

4 objects. Could you examine them, please.

5 A. Okay. Now, this is the main primer from

6 Swenson.

7 MR. MEASON: Let the record reflect that is a

8 brown -- what color would you call this?

9 THE WITNESS: I call it a tan.

10 MR. MEASON: A tan color, for the record.

11 A. It's unique in this color because it lends

12 itself very well for bright yellows, medium yellows

13 and even reds because this deal on the back, as you

14 see, is quite dark.

15 HEARING OFFICER FRANK: For the record, that's

16 Exhibit 13.

17 MR. MEASON: Which one?

18 HEARING OFFICER FRANK: The primer.

19 MR. MEASON: Primer, 13, okay.

20 A. This primer here took at least three months to

21 develop. Me and myself and

Tioga had been working

22 on this. We both submitted primers to them. They

23 chose

Tioga's -- I was at

Bartels at the time.

24 They approved ours as well. When I went to

Tioga

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1 and I had looked at the primer and had to do some

2 extra developmental work looking at the primer,

3 exactly the same resin system.

4 Shows you up close the manufacturers are

5 all supplying us with the same thing, the same

6 samples. We're working with the same materials as

7 far as raw material suppliers go in many, many

8 cases,

McQuarters (phonetic),

Cargil, Richold

9 (phonetic). These suppliers all call on us as well

10 as Tioga, DuPont, whoever it be, so this is what

11 arrived out of that work. This primer takes the

12 500 hours, takes the scribe test, the resistance.

13 Q. What's a scribe test?

14 A. Scribe is when you scribe it and you tape it to

15 make sure it isn't going to come off. There's also

16 a gravelometer test put on this to make sure the

17 gravel doesn't chip it off.

18 Q. So you actually shoot gravel at it to see --

19 A. Yes, there's a lot of tests involved to make

20 this. The primer is the base to the topcoat. The

21 reason I bring the primer up, the topcoat could not

22 be developed until the primer was developed. This

23 took a lot of time because the original resins

24 would not dry properly.

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1 They did not have the type of dryers that

2 you need for high solids coating. When you get

3 high solids coating, they're thicker, they don't

4 have as much solvent. They have a tendency not to

5 dry through and therefore they're soft and cheesy.

6 You stick them outside and they become tacky. This

7 is what happened for the first year or two of

8 samples that we looked at, and then as I said,

9 within the last two years we were able to develop

10 this primer.

11 Q. So --

12 A. So therefore --

13 Q. Tioga worked for two years to develop one

14 primer?

15 A. On and off we both looked at samples for two --

16 at least two years, trying to find something that

17 would not. There was -- at the time

Tioga was

18 selling the basic primer to them but the --

19 Q. To

Swenson.

20 A. To

Swenson but until the primer was developed

21 we couldn't have a topcoat that would dry over the

22 top of it because the primer would soften the

23 topcoat.

24 HEARING OFFICER FRANK: Let's go off the record

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1 for just a moment.

2 (A discussion was held off the record.)

3 HEARING OFFICER FRANK: Let's go back on the

4 record.

5 A. The only point I wanted to bring out was the

6 reason that we're so slow in developing the topcoat

7 was the primer. Now the topcoat -- the primer is

8 developed whereas the topcoats had been developed

9 and are being developed. This part of the system

10 is put to bed.

11 Q. Now, your work on the primer and the topcoats,

12 was that a result of

Swenson or other companies

13 requesting a reformulation of the then existing

14 paint or primer?

15 A. Yes, it was. They wanted to go high solids,

16 low VOCs.

17 Q. So to lower the VOC content you had to engage

18 for the primer the one- to two-year research and

19 development efforts.

20 A. Yes, right.

21 Q. And until that was done you couldn't even start

22 to work on the topcoats that would be applied on

23 top of that primer; is that correct?

24 A. Yes, yes.

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1 Q. Okay. Let's go back to the five objects that I

2 placed in front of you. The four panels, are those

3 panels

Swenson Spreader panels?

4 A. Yes, they are.

5 Q. Meaning that -- meaning what?

6 A. They're colors that were developed for

Swenson.

7 Q. Developed specifically for

Swenson Spreader.

8 A. Yes.

9 Q. And there is a fifth object in front of you.

10 Could you examine that object. Do you recognize

11 it?

12 A. Yes.

13 Q. And what is it?

14 A. This is a dipping block for

Swenson. The part

15 comes in, it's oily. It's a little rusty and it

16 takes -- they want a black that goes over it with

17 no primer and they'd like to dip the -- the

18 advantage of dipping is on spraying you lose

19 upwards to 30, 40 percent --

20 HEARING OFFICER FRANK: Again, Mr.

Olson,

21 you're expanding way beyond the questions that are

22 asked of you. If you could just confine your

23 answers.

24 A. Yes, this is a dipping enamel for

Swenson.

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1 HEARING OFFICER FRANK: And that's Exhibit 15.

2 MR. MEASON: I would move to have these entered

3 into evidence.

4 HEARING OFFICER FRANK: Is there any

5 objection?

6 MS. SAWYER: No.

7 HEARING OFFICER FRANK: For the record, that's

8 Exhibits 11 through 15 and they're admitted into

9 evidence.

10 MR. MEASON: The black is which one?

11 HEARING OFFICER FRANK: 15, and the primer is

12 13. The rest are color panels.

13 Q. Could you examine the two yellow panels. Is

14 there a difference between those two yellow panels?

15 A. Yes, there is. One is darker and the other has

16 less hiding than the other one.

17 Q. And with regard to those two panels, how is the

18 hiding or lack of hiding noted?

19 A. Let's see, this panel here has --

20 HEARING OFFICER FRANK: You need to --

21 MR. MEASON: What exhibit is that?

22 HEARING OFFICER FRANK: Exhibit 12.

23 A. 12 has less hiding.

24 Q. 12 has less hiding and how --

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1 HEARING OFFICER FRANK: Than Exhibit 11.

2 Q. And how can you tell that?

3 A. It looks greener.

4 Q. Where?

5 A. It cuts the metal more on -- you can see it

6 cuts the metal more.

7 Q. So for the record you're looking at the left

8 edge of Exhibit 12?

9 A. Yes.

10 Q. Is that correct? Here?

11 A. Yes, left edge.

12 Q. And basically you're starting to see the metal

13 and/or the primer show through the topcoat.

14 A. Yes.

15 Q. Could you examine Exhibit 14.

16 A. Yes.

17 Q. And is there anything noteworthy exhibited on

18 Exhibit 14?

19 A. Now, the hiding looks excellent.

20 Q. Meaning you cannot see through the topcoat.

21 A. You can't see through.

22 Q. Is there a relationship between the amount of

23 VOCs used and the hiding?

24 A. In the -- yes.

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170

1 Q. What is that relationship?

2 A. You have to put more paint on to get more

3 hiding.

4 Q. Meaning more paint, you can have more

VOCs.

5 A. Yes.

6 Q. Has

Tioga been successful in reformulating all

7 of Swenson's requests thus far?

8 A. No.

9 Q. Are there some coatings that because of a lack

10 of technology in the industry will not be able to

11 be reformulated below 3.5 pounds per gallon?

12 A. Yes.

13 Q. And is -- move to a different question. With

14 regard to Exhibit 15, the black bar stock in front

15 of you, what is, if you know,

Swenson's current VOC

16 content on its black dip paint?

17 A. It's 5.8.

18 Q. 5.8 pounds per gallon. Why is it that high?

19 A. It's a very oily piece. They dip the black in

20 the very thin -- or dip the part in the very thin

21 paint and it helps to remove the oil and the oil

22 becomes part of the paint.

23 Q. Has

Swenson Spreader come to

Tioga and asked

24 that Tioga attempt to reformulate black dip to meet

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1 the 3.5 pound per gallon Illinois standard?

2 A. Yes, they have.

3 Q. And has

Tioga worked along those lines?

4 A. Yes.

5 Q. And what have you developed?

6 A. I've got a 3.5 VOC black. There are problems

7 with it but there are --

8 Q. What are the problems?

9 A. One of the problems is to get it to 3.5 you

10 need to use acetone and acetone is a very low flash

11 point solvent.

12 Q. Do you know what the flash point is?

13 A. It's zero.

14 Q. Zero, meaning?

15 A. It will flash under any condition, you know, if

16 you've got a spark.

17 Q. Extremely flammable?

18 A. It's extremely flammable and extremely volatile

19 so in a dip tank you have to make sure you're

20 sealed when you're out using it. You're going to

21 have a lot of evaporation also.

22 Q. So you developed an acetone based black dip for

23 Swenson Spreader?

24 A. Yes.

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172

1 Q. What is that VOC content?

2 A. 3.5.

3 Q. 3.5, so you barely made the standard.

4 A. Yes.

5 Q. Are you professionally satisfied with that

6 formulation?

7 A. No, the evaporation rate is quite fast. The

8 next step up is 4.2.

9 Q. Based on a replacement of the acetone?

10 A. Yes.

11 Q. With what?

12 A. MEK. That's

meth --

13 Q. Why is that preferable?

14 HEARING OFFICER FRANK: Let's get what MEK is.

15 THE WITNESS: Methyl ethyl

ketone.

16 Q. Why is methyl ethyl

ketone preferable to

17 acetone?

18 A. Evaporation rate is less, therefore you'd have

19 less solvent coming off of the tank, flash point is

20 25, safer to handle, less stuff coming up as you're

21 using it.

22 Q. So basically for worker safety or workplace

23 safety in your professional judgment you'd rather

24 have an MEK based black dip --

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173

1 A. Yes.

2 Q. -- that doesn't meet the State standard than an

3 acetone based black dip that barely does meet the

4 State standard.

5 A. Yes.

6 Q. Does the technology

Tioga employs in

7 developing, reformulating these coatings differ

8 substantially in your opinion from what is

9 available from other companies in the paint

10 industry?

11 MS. SAWYER: I object to this question.

12 Mr. Olson has not been -- he is asking him an

13 opinion question about the industry.

14 Q. Mr.

Olson, based upon your 33 years of paint

15 industry experience and your numerous classes and

16 your ties within the industry, both professionally

17 within the industry and with companies working to

18 reformulate, do you have an opinion as to what --

19 let me finish.

20 Do you have an opinion as to what the

21 possibly differing levels of technology are, if

22 any, within the paint industry?

23 MS. SAWYER: I object to this question also. I

24 don't think that the rephrasing of it has changed

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1 the nature.

2 MR. MEASON: Allow me one more question?

3 HEARING OFFICER FRANK: I'm not going to allow

4 him to answer that. I would allow you --

5 MR. MEASON: My next question is going to solve

6 it. I would move to have the Board consider

7 Mr. Jerry

Olson an expert in paint chemistry based

8 upon his more than three decades of experience as a

9 paint chemist.

10 HEARING OFFICER FRANK: Is there any

11 objection?

12 MS. SAWYER: I would like to ask a question on

13 voir dire.

14 HEARING OFFICER FRANK: Sure.

15 MS. SAWYER: Mr.

Olson, do you have a degree as

16 a chemist?

17 THE WITNESS: No.

18 MS. SAWYER: And your education as a chemist is

19 comprised of supplemental courses that you've

20 mentioned?

21 THE WITNESS: I've had approximately two years

22 of college, a little better than one year. I've

23 had qualitative chemistry and organic chemistry.

24 MS. SAWYER: Those are your college level

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175

1 chemistry courses?

2 THE WITNESS: Yes, absolutely. I attended

3 night school when I was in the Air Force as well.

4 MS. SAWYER: I don't have an objection. I just

5 wanted --

6 HEARING OFFICER FRANK: You just want to --

7 MS. SAWYER: I wanted to clarify his education.

8 HEARING OFFICER FRANK: You are now qualified

9 as an expert for purposes of this hearing and you

10 may answer the question if you remember what it is

11 about your opinion. Would you like it restated?

12 A. My opinion is based on the suppliers available,

13 they're nationwide, that we have exactly the same

14 raw materials and therefore it would be right, we

15 would have the highest quality we could obtain.

16 They bring the supplies to us and the data sheets

17 and the formulas. We check out their formulas.

18 Q. The supplies are resins and pigments?

19 A. Yes.

20 Q. Paint -- do paint companies generally develop

21 their own resins and pigments?

22 A. Absolutely not.

23 Q. Who does that?

24 A. That is the resin people such as

McQuarters,

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176

1 Cargil, Richold. They develop the resins. They

2 check the formulas out and the resins in their

3 formulas and they present them to us. We check

4 them out to see if they work.

5 Q. So a company going to any particular paint

6 company is going to encounter approximately the

7 same technology regardless of the paint company

8 approached.

9 A. Yes.

10 Q. There would be no substantial differences

11 between --

12 A. No.

13 Q. --

Tioga and DuPont or Sherwin

Williams.

14 A. No.

15 Q. Do you have a professional opinion on the

16 efforts

Swenson Spreader has made to come into

17 compliance to reformulation?

18 MS. SAWYER: Object to this question as overly

19 vague.

20 HEARING OFFICER FRANK: It's sustained. Can

21 you be a little bit more specific.

22 Q. Do you have a professional opinion as to

23 Swenson Spreader's ability to come into compliance

24 with an absolute 3.5 pounds per gallon VOM

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177

1 standard?

2 A. My opinion is they've done what they could do.

3 They approached

Tioga. When I was at

Bartels they

4 approached

Bartels. In other words, any salesman

5 or anyplace they could approach to get this job

6 done, they tried to get people working in it and

7 tried to see if there was technology available and

8 coatings.

9 I mean, they had worked with

Tioga many,

10 many years before they worked with

Bartels.

11 Bartels comes in there and they give us, the

12 Bartels people, the same opportunity. They wanted

13 the job done.

Bartels came up with two coatings.

14 They bought them from them. In other words, they

15 didn't hold back. I've seen companies do that, so

16 they did what they could. They approached other

17 suppliers and said, hey, I need help and that's

18 what we do. That's what's done.

19 Q. Do you have a professional opinion as to what a

20 reasonable available technology as far as level of

21 control VOM would be for a company like

Swenson

22 Spreader?

23 MS. SAWYER: I'll object to this question.

24 HEARING OFFICER FRANK: What's your reason for

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178

1 your objection?

2 MS. SAWYER: That the witness doesn't have

3 sufficient knowledge to respond to this question.

4 MR. MEASON: Can I respond?

5 HEARING OFFICER FRANK: Yes, please.

6 MR. MEASON: Mr.

Olson's already testified he

7 has personally been involved with

Swenson Spreader,

8 I believe for seven years between two different

9 companies, over 30 years as a paint chemist in the

10 industry. He's already qualified as an opinion

11 witness in this proceeding. I think he has more

12 than substantial background to answer this

13 question.

14 MS. SAWYER: You're asking --

15 HEARING OFFICER FRANK: The opinion was for

16 paint base not for the control technology, so

17 unless you're going to qualify him as someone who's

18 an expert in the control technology also, you're

19 beyond the scope of what he was qualified for as an

20 expert.

21 Q. Mr.

Olson, did you testify a few minutes ago

22 that there is little, if no, difference in

23 technology between companies in the paint industry?

24 A. Yes.

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179

1 Q. And that the paint companies are reliant upon

2 the resin and pigments manufacturers --

3 A. Yes.

4 Q. -- for their raw products and those resins and

5 pigments are offered equally?

6 A. Yes.

7 MR. MEASON: I would respectfully move that

8 Mr. Olson be considered an expert with regard to

9 reasonably available control technology with regard

10 to coatings in the United States.

11 MS. SAWYER: I still object. I think that

12 reasonably available control technology is a --

13 it's a regulatory question. It's asking for almost

14 a legal interpretation. If he were asking him

15 reasonably available -- are certain coatings

16 reasonably available, that would be different, but

17 reasonably available control technology, it's a

18 regulatory standard. It's a term of art within --

19 HEARING OFFICER FRANK: Can you rephrase your

20 question?

21 MR. MEASON: A couple of hours ago I could do

22 it real quick. I'm getting a little brain dead

23 now.

24 Do you have a professional opinion as far

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180

1 as Swenson Spreader's ability to seek out --

2 success with which

Swenson Spreader would be able

3 to seek out 3.5 pound per gallon VOM content

4 coatings or lower from other companies in the

5 industry?

6 MS. SAWYER: I'll object to that. I think it's

7 overly speculative.

8 HEARING OFFICER FRANK: I'm going to allow it

9 because I think he rephrased it sufficiently.

10 A. In other words you're saying you think we can

11 get 3.5 from any supplier or any -- is that what

12 you're saying?

13 Q. Swenson can't get it from you, can they go to

14 somebody else and get it? If you can't formulate

15 it, can they get it from somebody else?

16 A. Not other coatings, no.

17 MR. MEASON: That's all I have subject to

18 redirect.

19 HEARING OFFICER FRANK: Okay.

20 MS. SAWYER: I just have a couple of quick

21 questions about the dipping black coating that you

22 referred to.

23 CROSS EXAMINATION

24 BY MS. SAWYER:

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181

1 Q. How does

Swenson coat the parts with the dipped

2 black coating?

3 A. You'd basically hang it on a hook or something,

4 drop it down, have it come through on a conveyor

5 system and lift up.

6 Q. Have it come through what?

7 A. A dip tank.

8 Q. A dip tank?

9 A. Yeah, where the paint is in.

10 Q. So is this part of their coating booth where

11 they spray coat things?

12 A. No, no, the spray booth you have a regular

13 spray. Now, the operation of the dip is very nice

14 compared to the spray. Spray you lose about

15 anywhere from 24 --

16 HEARING OFFICER FRANK: Mr.

Olson, again, I'm

17 going to direct you to just answer the question

18 that was asked.

19 A. No, it's not. It would be a dip tank. It

20 would be a separate entity.

21 Q. Mr.

Olson, you've been in the coating industry,

22 is it 33 years?

23 A. Yes.

24 Q. And over that time there has been a great deal

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182

1 of progress in reformulating coatings to achieve

2 lower VOM contents; isn't that correct?

3 A. That's right.

4 Q. And that progress is ongoing.

5 A. That's right.

6 Q. Your direct knowledge of

Swenson Spreader's

7 efforts to find compliant coatings is their

8 interaction with you as a

Tioga representative and

9 as a Bartel, I believe the name of the company was,

10 representative?

11 A. Right,

uh-huh.

12 Q. What types of coatings does

Tioga produce? If

13 that's too broad I could be more specific.

14 A. They make a very broad range. They have water

15 base solvent, general solvent that's not high

16 solids, high solids. They have what they call a

17 zero VOC coating. That's extremely heavy, takes

18 heat to apply it. That would detail -- basically

19 metal decorating coatings.

20 Q. Is a zero VOC coating a powder coating?

21 A. No, it's not. It's an extremely heavy 100

22 percent solid coating.

23 Q. Does

Tioga produce a powder coating?

24 A. No.

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183

1 Q. You referred to a -- I believe it was a black

2 dip coating that you were working on reformulating

3 and you said you got it to a 3.5 VOM content using

4 acetone.

5 A. Right.

6 Q. What were the other volatile organic materials

7 used in that coating?

8 A. Probably

xylyl. I think there's

xylyl in

9 there. That would be about it. Might be a little

10 toluol and xylyl.

11 Q. So the VOC content that you're referring to is

12 comprised of those components?

13 A. Yes, it is.

14 Q. And your current formulation, you said it's at

15 4.2, I believe, pounds of VOM per gallon of

16 coating?

17 A. The current is 5.8.

18 Q. Okay. The one you're currently working on.

19 A. The one that I'm happy with is 4.3.

20 Q. And that includes methyl ethyl

ketone and

21 acetone also?

22 A. No acetone.

23 Q. No acetone.

24 A. You would have the other aromatics in there

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184

1 though, the

xylyl and the toluol.

2 Q. What type of market share as far as coatings,

3 producing coatings, does

Tioga have?

4 A. You mean as far as selling to all different

5 type of customers?

6 Q. Yeah, do you know?

7 A. I don't know.

8 Q. How about in selling to customers for extreme

9 performance type uses.

10 A. I would have to say they've got a pretty good

11 market share because they've got two major

12 customers on this type of coatings.

13 Q. Pretty good share meaning locally or --

14 A. Yes, locally.

15 Q. Within the State, something like that?

16 A. Within the State, exactly.

17 Q. Mr.

Olson, on direct examination you were asked

18 if Swenson could obtain coatings with 3.5 pound per

19 gallon VOC content elsewhere in the industry and

20 you answered, not other coatings.

21 A. That's right.

22 Q. Are there some coatings with 3.5 VOM per gallon

23 content available?

24 A. The general line is 3.5 or less. There's a

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185

1 couple special coatings that they manufactured for

2 state -- special requirements such as State of

3 Indiana, Arizona, those. They do not meet the 3.5.

4 Q. So you're saying that the coatings requested by

5 those entities or the coatings listed on their

6 specs don't meet the 3.5 standard.

7 A. Absolutely.

8 Q. But you're not saying necessarily that they can

9 not be reformulated.

10 A. That's right.

11 Q. I believe you stated that you've been with

12 Tioga for nine months; is that correct?

13 A. That's right.

14 Q. And how long has

Swenson been using

Tioga as a

15 supplier of coatings?

16 A. I really don't know exactly. That's prior to

17 my time.

18 Q. Is it more than two years, do you know?

19 A. Oh, absolutely. They used to be Rockford

20 Chemical.

Tioga bought Rockford Chemical and

21 that's where the supply comes in.

22 Q. And you stated that they had been working on

23 reformulating the primer coating that is --

24 HEARING OFFICER FRANK: Exhibit 13.

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186

1 Q. -- Exhibit 13 for about two years.

2 A. Yes.

3 Q. Now, you were involved with those efforts for

4 the last nine months or so?

5 A. Right.

6 Q. Just for clarification, earlier in your

7 testimony you were -- you made a statement along

8 the lines of a lot of government entities specified

9 lead chromate-type paints.

10 A. They originally had lead chromate on their --

11 in the specification color coming in to us, the

12 supplier were lead chromate based color chips.

13 Q. Okay, so some of the specifications still

14 actually specify that color?

15 A. Yes.

16 Q. And you reformulate so that the coating no

17 longer has lead in it to match that color from the

18 spec.

19 A. Absolutely, yes.

20 MS. SAWYER: I think that's it for me.

21 HEARING OFFICER FRANK: Redirect?

22 MR. MEASON: Yes, real briefly.

23 REDIRECT EXAMINATION

24 BY MR. MEASON:

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187

1 Q. Can all coatings that are currently above

2 3.5 pounds per gallon be reformulated to below a

3 3.5 pound per gallon?

4 A. No.

5 MR. MEASON: Nothing further.

6 HEARING OFFICER FRANK: Anything else,

7 Mr. Sawyer?

8 MS. SAWYER: Yes.

9 RECROSS EXAMINATION

10 BY MS. SAWYER:

11 Q. As you say no, you mean for the rest of time

12 they cannot be reformulated?

13 A. At this time the epoxy coatings because of the

14 high molecular weight are not available. I just

15 within the last 30 days talked to Shell and

Ciba,

16 the major manufacturers. They are not able to

17 supply the resins to give us a 3.5 two component

18 epoxy system that will meet the requirements of the

19 State government. Those are the -- what I'm

20 referring to.

21 MS. SAWYER: Okay.

22 HEARING OFFICER FRANK: Anything further?

23 MR. MEASON: (Shakes head.)

24 HEARING OFFICER FRANK: I'd just like to state

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188

1 that the three witnesses who testified I found

2 credible so that we don't have to go back and

3 revisit that at the next hearing.

4 I did check with the Board in Springfield

5 and we have the use of the Board's conference room

6 so we will be in the Board's Springfield office on

7 the 21st of May.

8 Let's go off the record.

9 (A discussion was held off the record.)

10 HEARING OFFICER FRANK: Let's go back on the

11 record. The hearing then is continued until May

12 21st at 8 o'clock in the Board's Springfield

13 office. Thank you.

14 (The hearing was adjourned at 4:35 p.m.)

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189

1 BEFORE THE ILLINOIS POLLUTION CONTROL BOARD

2 IN THE MATTER OF: )

) AS97-5

3 Petition of the Louis

Berkman )

Company, d/b/a

Swenson Spreader ) Oregon, Illinois

4 Company, for an Adjusted Standard ) April 17, 1997

from 35 Ill. Adm. Code Part 215, )

5 Subpart F )

9 I, Carrie L.

Vaske, hereby certify that I

am a Certified Shorthand Reporter of the State

10 of Illinois; that I am the one who by order and

at the direction of the Hearing Officer,

11 Deborah L. Frank, reported in shorthand the

proceedings had or required to be kept in the

12 above-entitled case; and that the above and

foregoing is a full, true and complete

13 transcript of my said shorthand notes so taken.

Dated at

Ashton, Illinois, this 23rd day

14 of April, 1997.

Carrie L.

Vaske

18 Registered Professional Reporter

Certified Shorthand Reporter

19 Illinois License No. 084-003845

8991 South Prairie Road

Ashton, Illinois 61006

ITV