ILLINOIS POLLUTION CONTROL BOARD
March 11,
1993
BEVERLY MALKEY, AS EXECUTOR OF
THE ESTATE OF ROGER MALKEY,
d/b/a
MALKEY’S MUFFLERS,
Petitioner,
v.
)
PCB 92—104
)
(UST Fund)
ILLINOIS ENVIRONMENTAL
)
PROTECTION AGENCY,
)
)
Respondent.
KYLE L.
STEPHENS, CANTLIN
LAW
OFFICES, APPEARED ON BEHALF OF
PETITIONER;
DANIEL
P.
MERRIMAN, APPEARED ON BEHALF OF RESPONDENT.
OPINION
AND
ORDER OF THE BOARD
(by R.C.
Flemal):
This matter comes before the Board on a petition for review
filed July 16,
1992~,by Roger Nalkey pursuant to Section
22.18b(g)
of the Environmental Protection Act
(415 ILCS
5/22. 18b(g)) (Act)
2~
During the pendency of this matter, Roger
Malkey died,
and his wife,
Beverly Malkey,
as executor of the
estate,
and d/b/a Malkey’s Mufflers (Beverly Malkey or
petitioner),
is now pursuing the action.
(Tr. at 11.)
The
caption of the matter has been revised to reflect these changes.
Beverly Malkey seeks review of the Illinois Environmental
Protection Agency’s
(Agency) partial denial of reimbursement of
corrective action costs from the Underground Storage Tank
(UST)
Fund.
Hearing was held on December 4,
1992,
in Eariville,
Illinois.
No members of the public attended.
Briefs in this matter were due from both parties on January
25,
1993,
by hearing officer oral order.
(Tr. at 198.)
The
petitioner filed her brief on February 4,
1993,
(mailed January
27,
1993) accompanied by a motion to file instanter.
Petitioner’s attorney states that on January 24,
1993, he
sustained an sprain injury to his hip, resulting in a delay in
filing the brief.
The Board grants the motion to file.
1
At hearing, discussion was had regarding the filing of an
amended petition.
(Tr.
5-7).
No amended petition was ever filed
in this matter.
2 The Act was formerly codified at Ill.Rev.Stat.
1991, ch
111½,
par. 1001 et ~g.
01
L~O—QO23
—2—
The Agency filed its brief on February 18,
1993, accompanied
by a motion to file instanter; no filing for extension of time
had been filed.
The Agency’s reasons for not timely filing are
stated as “due to the press of Agency business and other
circumstances beyond the control of the undersigned Agency
attorney)”.
(Motion at par. 2)
The Agency also states that
petitioner has no objection to the late filing, and that
petitioner will not suffer any irreparable harm by this delayed
filing.
The Board denies the Agency’s motion to file.
The Agency
does not state sufficient reasons for the lateness of the filing,
especially considering that the filing
is three weeks late.
The
Board also points out that it is not only other parties that
would be prejudiced by such late filing, but the Board is
prejudiced through the hampering of its decision-making process
caused by failure to have a matter briefed in a timely manner.
This is especially true in cases,
such as the instant matter,
where a decision is due by a date certain.
The sole issue
in this appeal
is whether certain costs
denied for reimbursement by the Agency are reasonable,
and would
be eligible for reimbursement under the Act.
BACKGROUND
This case involves the removal of two underground storage
tanks located at Malkey’s Mufflers owned by Roger Malkey in
Earlville,
Illinois.
The tanks were 550 and 1000 gallon gasoline
tanks that were taken out of service and removed on March 28,
1991.
On that date,
it was discovered that both tanks had
released gasoline.
(Rec.
at 4-8.)
Roger Malkey contracted with
Dan Whittaker,
a local excavator,
and with P
& P Consultants,
Inc.
(P&P),
for tank removal and cleanup of the release.
P
& P
submitted the reimbursement application to the Agency.
(Tr. at
16—20; Rec at 3.)
On June 10,
1992, the Agency sent a letter to Roger Malkey.
The letter states that various invoices were submitted covering
the period of March 28,
1991,
to December 27,
1991,
and that the
total amount requested for reimbursement is $34,263.48, and that
the deductible is $10,000 for this claim.
The letter further
states that the Agency would be reimbursing $14,751.98 of the
requested amount.
An attachment to the letter contains four
paragraphs indicating the cost figures denied for reimbursement,
what activities the costs covered, and the reasons for denial of
payment3.
(Rec. at 25—27.)
The petitioner contests three of
the four denial paragraphs.
The petitioner does not contest the
$10,000 deductible determination.
~ The Board notes an $11.00 computational error that is not
explained nor is it addressed at any point in this proceeding.
01 i.O-0O2L~.
—3—
DISCUSSION
Paragraph 1, Handling Charges
The Agency deducted
$5,556.66
of the costs submitted for
handling charges.
The Agency states that the owner or operator
failed to demonstrate that the costs submitted for handling
charges are reasonable, and reduced the amount of handling
charges to 15
of the total cost of corrective action.
(Rec.
at
27)
Carney D. Miller, operations manager of P&P, testified on
behalf of petitioner.
He stated that he has been employed in the
same position by P&P for three years and has had experience with
approximately thirty UST cleanup sites.
(Tr. at 33,35.)
He
testified that the charges P&P levees are fairly standard within
the company and that their rates would be reflective of those in
the industry.
(Tr. at 36-7).
He defined “handling charges” as
a
“percentage for mark—up and subcontractor costs”, (Tr. at 46),
but
later clarified that the handling charges are the difference
between the actual cost of the subcontractors to P&P and the rate
billed to the customer.
He stated that the handling charges did
not include fixed operational costs.
(Tr.
at 61-2).
When asked
if he believed a 58
handling charge was reasonable, he stated
that he could not give an opinion on that since that decision was
an internal company decision of which he was not privy.
(Tr.
at
79.)
William Ziegler,
chief operating and financial officer of
P&P testified on behalf of petitioner.
Regarding handling
charges, he testified that the 58
handling charge rate was the
negotiated rate,
and that it would be reasonable “for our
purposes”.
(Tr. at 103.)
Mr. Ziegler stated that the handling
charges were consistent with what other consultants in the
industry are charging.
(Tr. at 105).
He also did not have any
knowledge of how the rates are determined within the company.
(Tr. at 91-2).
When asked whether the charges in this cleanup
were reasonable, Mr. Ziegler could not answer.
(Tr.
at 90.)
The Board affirms the Agency’s reduction of $5,556.66 in
handling charges.
Although Mr. Ziegler testified that the
handling charges were consistent with what other consultants in
the industry are charging, he provided no documentation to
support this claim.
Petitioner never submitted actual handling
charges by any others in the industry.
(See,
Enterprise Leasing
v. IEPA (April
9,
1992),
PCB 91-174,
132 PCB 79.)
Moreover, none
of petitioner’s witnesses testified unequivocally that the
charges were reasonable.
The Board finds that petitioner did not
carry its ,burden of demonstrating that the handling charges of
58
were reasonable.
01~~0-0O25
—4—
Paragraph 2.
Costs Lacking Supporting Documentation
The Agency deducted $1,751.84 for costs
it states lack
documentation to support reimbursement.
The Agency states that
the owner or operator failed to demonstrate that these costs were
reasonable as submitted.
(Rec.
at 27.)
The costs denied consist
of $11.00 for a facsimile transmission and $1,740.84 for “fixed
operational costs”.
Kyle Rominger of the Agency testified that he deducted
$11.00 for a facsimile transmitted document,
stating that there
was no evidence that the document was ever received by the
Agency.
(Tr. at 120).
This fact was unrebutted in the record.
The “fixed operational costs” relate to “rent, heat,
electricity,
etc.”
(Rec.
at 72).
The record reveals that the
Agency denied reimbursement because there was no documentation
that indicated that these costs were related to corrective
action’, and that there was insufficient documentation to show
the costs were reasonable.
(Tr.
at 141; Rec.
at 27).
Petitioner argues that the Agency would have paid these
rates if they were included in the loaded rate5.
Petitioner
further argues that additional information would have been
provided to the Agency,
if requested.
The record reveals that
a loaded rate was charged for
employees and that the fixed operational costs were charged in
addition to this loaded rate.
(Tr. at 62; 71—72).
Although the
Agency witness answered affirmatively when asked whether
reimbursement would have been allowed if there were no fixed
operational costs and a higher loaded rate, he also testified
that in this case he believed the fixed operational expenses were
already figured into the loaded rate.
(Tr.
at 177-8).
The Board finds that the Agency was correct in finding that
these costs lacked sufficient documentation to conclude that the
costs were reasonable.
When requesting reimbursement from the
fund, the owner or operator must provide an accounting of all
costs, demonstrate the costs are reasonable, and provide either
proof
of payment or demonstrate financial need for joint payment.
(Section 22. 18b(d) (4) (C).)
The sole document presented shows one
line item for these “fixed operational costs”
(Rec.
at 72), and
is not a sufficient accounting of all costs or a demonstration
‘
The Board does not determine whether these costs were
related to corrective action.
The Agency’s denial letter only
states that these costs were undocumented and unreasonable, and
mentions nothing about corrective action.
(Rec.
at 27).
~ The loaded rate is the billing rate for an employee’s time
in contrast to the employee’s actual pay rate.
ORU-0026
—5—
that these costs are reasonable.
Furthermore, petitioner did not
present any testimony at hearing explaining why these costs
should be considered reasonable.
(See, Platolene 500 v. IEPA
(May 7,
1992),
PCB 92—9,
133 PCB 259; Southern Food Park v. IEPA
(December 17,
1992),
PCB 92-88,
—
PCB
.)
The Board affirms the Agency’s denial of reimbursement for
$1,751.84 for “fixed operational costs” and $11.00 for a
facsimile transmission.
Petitioner failed to provide an
accounting of all costs and failed to carry its burden of
demonstrating that these costs were reasonable as submitted.
Paragraph 4. Equipment and Mileage Costs
The Agency deducted $744.00 for certain equipment and
mileage charges.
The Agency states that the owner or operator
failed to demonstrate that these costs were reasonable as
submitted.
The record indicates that P&P charged $310.00 per day for
the use of a photoionization detector during cleanup of the site.
(Rec.
at 36).
The Agency reduced reimbursement, finding that a
$142.00 per day charge is considered reasonable
for use of this
machine.
The Agency determined the reasonableness of the charge
for the machine by comparison to market prices.
(Tr. at 152;
144-149).
P&P also charged a $1.00 per mile charge for mileage
costs incurred during cleanup.
(Rec.
at 69). The Agency reduced
reimbursement for the mileage charge based on comparisons which
were similar to those performed for the photoionization machine
(Tr.
at 139;
152).
Petitioner argues that all P&P’s charges were reflective of
normal industry standards in a competitive business.
Petitioner
also alleges that the Agency’s reimbursement procedures are
conducted in an arbitrary manner.
Petitioner does not directly
address the photoionization machine or mileage charges in her
brief.
Again,
neither of petitioner’s witnesses from P&P were able
to testify unequivocally that the charges for the photoionization
machine or mileage were reasonable.
The fact that P&P now
charges $150.00 per day for the machine,
and that Mr. Miller
testified that he has seen reimbursements for $150.00 per day,
but never more than that
(Tr.
at 41-43),
supports the inference
that the $310.00 per day charge was unreasonable.
Furthermore,
neither witnesses testified regarding how the $310.00 machine or
mileage charges were actually arrived at, nor did they present
any documentation to support a claim that these charges were
reasonable and consistent within the industry.
(See,
Tr. at 65—
66;
85,
91,
96).
(See,
Enterprise Leasing v. IEPA
(April 9,
1992), PCB 91-174,
132 PCB 79).
The Board affirms the Agency’s
reduction of the charges for the photoionization machine and
01 t~.0-0O27
—6—
mileage.
Petitioner failed to carry its burden of demonstrating
that the charges were reasonable.
In summary,
it is petitioner who has the burden to
demonstrate that the charges sought to be reimbursed are
reasonable.
Petitioner did not carry
its burden of proof in this
matter.
The Board affirms the Agency’s decision that a total of
$8,052.50 is not reimbursable.
This opinion constitutes the Board’s findings of fact and
conclusions of law.
ORDER
The Illinois Environmental Protection Agency’s determination
that $5,556.66 in handling charges,
$1,751.84 in fixed
operational and facsimile charges, and $744.00
in equipment and
mileage charges, are not reimbursable is hereby affirmed.
IT IS SO ORDERED
Board Member Bill Forcade concurred.
Section 41 of the Environmental Protection Act, 415 ILCS
5/41
(1992), provides for appeal of final orders of the Board
within 35 days.
The Rules of the Supreme Court of Illinois
establish filing requirements.
(But see also 35 Iii.
Adm. Code
101.246, Motions for Reconsideration, and Castenada v.
Illinois
Human Rights Commission
(1989),
132 Ill.2d 304, 547 N.E.2d 437.)
I, Dorothy M.
Gunn,
Clerk of the Illinois Pollution Control
Board, hereby certify that the above opinion and order was
adopted on the
//~-‘
day of
___________________,
1993,
by
avoteof
__________
01 Ii.D-0028
I
1~
/
Control Board