ILLINOIS POLLUTION

CONTROL BOARD

December 17, 1992

SOUTHERN FOOD

Petitioner,

v.

PCB

92—88

(Underground

Storage

ILLINOIS

ENVIRONMENTAL

)

Tank Reimbursement)

PROTECTION AGENCY,

)

)

Respondent.

EDWARD DWYER AND KAmERINE

HODGE, RODGE

& DWYER, APPEARED ON

BEHALF

OF

PETITIONER;

DANIEL MERRIMAN AND

JAMES

RICHARDSON APPEARED

ON

BEHALF

OF THE

ILLINOIS ENVIRONMENTAL PROTECTION AGENCY.

OPINION AND

ORDER

OP THE

BOARD (by B. Porcade)

:•

On June 11, 1992, Southern Food

Park,

Inc.,

(EPPI)

filed a

petition for review of an

Underground

Storage ~ank

Reimbursement

Determination for

its facility located at 700 W..t Main, Benton,

Franklin

County, Illinois.

The

petition for reviów

was

filed

pursuant to 22. 18b(g) of

the Environmental Protection Act

(Act).

(Ill. Rev. Stat. 1991, ch. 111 1/2 par. 3022..1*b(g).)

Hearings were held in Benton, Illinois on

October

6 end

7

1992

•

No members of the

public

were

prss.nt~at..the

hearing..

SFPI

filed

its final

brief

on

November

10,1992

•

The

Illinois

Environmental Protection Agency (Agency)

filed it. final

brief

on

November 30, 1992, along with a motion tofu. tb.

final

brief

instanter. In a December 3, 1992

order, the Board. granted

the

motion to file the

Agency’s

brief

instanter.

BACKGROUND

Man—Dee Mart, a

division of

Southern Food

Park,

Inc., owns

and

operates the

Han-Dee

Mart

convenience

store and

service

station

in

Benton,

Illinois.

A release

of

petroleum

from the

piping between two 1,000 gallon tanks occurred on or before June

21, 1989

•

SFPI

contracted with the engineering

consulting firm

of )Iassac

Environmental

Technologies (MET) to rem.diat. the site.

MET

submitted

an application for reimbursement from the

Underground Storage

Tank Fund

to

the

Agency on

behalf

of

SFPI.

The

Agency, in reviewing SFPI’s submission of invoices

covering the

period

from

June

23, 1989 to

May

20, 1991, denied

reimbursement of eight cost

items. SPPI

is appealing

the

Agency’s denial of reimbursement of the following costs as. listed

in the Agency’s letter of May 14, 1992:

0138-0069

---

2

1. $22,500.00, for costs associated with

the

replacement

of concrete and/or asphalt. These

costs are

not

2. $31,350.06, for an adjustment in non—corrective action

costs. The

associated

costs

are

not

corrective action.

ccc

4. $17,460.00, for an

adjustment

in

ineligible

insurance

charges.

The

associated charges

are

not

corrective

action.

5. $6,132.53, for an

idjustm.nt

in costs

lacking

____

supporting documentation. The owner

failed to provide

demonstration that

these

:

costs were reasonable

as

submitted.

Rec.

Al

at81,82.’

The Act allows for

reimbursement from

the

fund ~for costs of

corrective action or

indemnification.”

(Bction

22.1$b(a).)

Corrective action

is

defined

in

Section

22.10(e) (1) (C) of

the

Act

as:

•..sn action to stop,

minimize, clii mats, or

clean

up

a release of

petroleum :or

iti

effects as may be

necessary or appropriate to protect

h”~’i

health and

the

environment. This includes -but 1 ~mot

.

limited to,

release investigation, mitigation of f~.~èndlafity

hazards, tank

removal,

soil r.a.diation,,

hydrogeological investigations, free prod~ict*~va1

and groundwater

remediation and monitoring, ~xpo.ur.

assessments,

the temporary

or p.raaniñt~eloaation

of

residents

and

the provision of

altsrMti~atr’

supplies.

The definition of corrective action presents a

two part test:

whether the costs are

incurred

as a result of an

action

to “stop,

minimize,

eliminate, or

clean up a

release

of

petroleum

or

its

effects”

and whether

the costs

are

the

result -of such activities

as release investigation, tank

removal,

soil -~.diation,

•tc.

(See Enterprise

Imasinp

v.

IEPA (June

4, 1992), P~ 91—174.)

Section 22.18b(d) (4) specif i.e the requirements for a claim

for reimbursement from the

fund.

One

requirement

of -the claim

1

References to the

Agency

record will be cited as Rec. Al

and

Rec. al where Al references

Part

1, Book A

of the fiscal file

and

81 references Part 1, Book B of the fiscal file.

The

transcript

will be referenced as Tr.

0138-0070

---

3

f

or reimbursement

is that:

The

owner

or operator provided

an accounting

of all

costs, demonstrated the costs to be

reasonabl.

and

provided either

proof

of

payment

of such costs or

demonstrated

the

financial need

for

joint

payment

to

the owner

or

operator and the oimer’ a or

operator’s

contractor

in order to

pay

such costs.

Section

DISCUSSION

Replacement of Concrete

Prior to discussing the arguments presented

in this case the

Board

notes

its

prior holdings

concerning

the

reimbursement of

the

costs for replacement of concrete. ‘In

PlatOlens

500.

Inc. v~.

~

(May 7, 1992), PCB 92—9, ___PCB

,~theoard held

that in

most

cases

the replacement of

oancret~I~ót~irrectiv. action

and

is not

reimbursable.

(Se.

also ~

~(Kay

21,

-

1992),

PCB

91—105, PCB, Warren’s Service

v.-I~~Jufle

4, 1992),

PCB 92—22, _PCB

and Bernard

Miller (July

9, 1992),

PCB

92—

‘49, _PCB_,

Ma~ETn

Oil Marketina

#64 v. ~EPA

(August

13,

1992), PCB 92—53,

_PCB____

SPPI

recognizes

the

prior Board decLaiMs ,thding the

replacement of concrete is

not

corrective action ‘rand

therefor. is

not reimbursable.

However, SFPI argues that the Board’s holding

was

limited to

the

particular

facts in .a~

ai*

eM

that the

Board noted

that under some circumstances ~~*~plaasnt

of

concrete

may

be reimbursable. BFPI

cont~i’~tthe

hgsncy

sisapplied the

Board’s

findings on the x~1*Ld~:~ntfor

the

replacement of. concrete by applying a

itrie’it

that the

replacement of concrete is not

reimbursable

SFPI

argues

that

based

on the

facts

or

thts ci..

that the

replacement of concrete at this

particular site ~s

Corrective

action. Larry Schneider of

~METtestified thit

~

remains even if the

soil objective i.

satisfied.

,

(Tr.

at

342.)

Be

further

noted that at this

particular site

the contamination

extended

under a

public roadway and as is o~sE~practice tb.e

area under

the

rOad

was not excavated. (Tr.~1t 343

~) ~

wall.

where

the

contamination did exist were lined

with high

density

polyethylene membrane (HDP) and

the seams where the sheets ~et•

were

joined with

special tap.. (Tr.

at 344.)

~e

.xplzinsd ‘how

the concrete serves to minimize

the

effects

of a release

as

A.

If

the concrete had not been replaced, there would be a

greater

likelihood that

water

would come in contact.

Whatever the, source of that water

from

either runoff

above

grade

or from rainfall would have, come in contact

0138-00.71

---

4

with constituents of concerns still present either

along the perimeter of the

property

or within the

boundaries of

the

base

of

the property,

and

it’s a

possibility that

those

would be

picked

up in solute

with the water, moved into

other areas that

currently

have not

experienced

contamination. He

argues

that the

concrete reduces

the likelihood that

water will enter

the contaminated area

and move contamination

into

groundwater

or areas

which

were not

previously

contaminated.

Q. How would

the

replacement of

the concrete

minimize

the

affects (sic) of

that release and the

remaining

contamination?

A. The concrete would

have

significantly

— —

does

significantly

reduce

the impact because

it

catches the

water before it can filter into the

soil and

moves

down

into ‘the storm

drain

system and

-carries

it

away, end

therefore that water

doesn’t impaCt

or pick up

any

of

the

constituents

that

were still at the site.

Tr.

‘at

345’.

SPPI argues

that

the Agency, in reviewing the

application,

did not perform a site-specific review but

a~pliSdan inflexible

policy

in determining the

reimbursibility of. concrete

replacement. SPPI argues

that the replacea.~t

of

~ancrete at

this

site was corrective

action because the concrete ainiaized

the effect of the release by providing a barrisr~bstwesn

surf

ace

water

and

contamination.

SFPI further argues. that

the Agency did

not present• any testimony to rebut SPPI’

$ contention

-

that,

the

concrete

served as a

barrier.

The

Agency

argues that the language

of

the

itatute controls

the

determination of what is reimbursable. The Agency

contends

that a site specific review was performed. (Tr. at 216.) The

Agency contends that even if the Agency

did not use ~the

proper

method in reaching its determination, it

does not

alter

the

reimbursement determination.

The Agency asserts that

it i.

the

reimbursement determination

that

is at

issue

.before the Board

and

not the Agency’s method of reviewing

reimbursement claims.

The Agency con$*nda

that based

on

the faCts

of

this case,

SPPI has

not shown

ti*~

replacement of

concrete

at the

site

was

corrective

act

~~n.’ The

Agency

motes

that the

resaining

contaminants wexe already off—site and were

separated from

the

excavation site by

the HDP. The

Agency also contends that

concrete is subject to cracks, raising the question of the

effectiveness of the concrete to act as a

barrier.

The Agency

also notes that groundwater presented

rio

problem or concern

during the excavation. ‘(Tr. at 410.)

The

Agency also content

0138-0072’

---

5

that the ‘use of concrete in

this situation does not differ

tr~

most

other sites.

The Agency

contends

that the, main

purpose in

replacing the concrete was to enable SPPI to continue operation

as a gasoline station. The

Agency

notes

that the ‘consultant to

SFPI testified that concrete was replaced for restoration’

purposes. (Tr. at

393, 394, 399.)

While

the

Board

has

previously held

that under

sone

circumstances it

may

be shown

that

the

replaoesr~t

of

concrete

constitutes corrective action,

the Board find. that the

circumstances of

this

case do not support

a

finding

of

corrective action.

The

facts

.

surrounding the r.plao.a-nt

of

the

concrete at this site present no unusuaIc1&c~tances ~aM the

concrete was

essentially

replaced for restoration purposes.

In Platolene, the Board discussed the

difference between

corrective action and restoration.

In

the process

of removing u~rgrei’’

~*thrage

tanks and

subsequent

resediation of the

sits there are

a variety of tasks to be

performed.

~o.s

of the

functions can

clearly be classified as jther

corrective action or restoration.

Ce.

Under

the

facts

of this case,

sctLons~that

occurred

prior to

backfiliing

the

excslitien wits

would

be

considered

as corrective

action end

e ‘setions

which occurred after

backfilling wou1d~søonsider.d

restoration.

The Board further noted

that thes. general ~!uIU~tI1

mel

universally apply to

all

factual situatLcm.~I”

that‘the

particular facts surrounding the

action and

~ ~po.e

of the

action will ultimately

determine ,wbethsr ~* ~ttt~d*r

‘action is

corrective action or restoration.

(Vj~~~

ta~y

‘7-, ‘3992), PCB

92—9.)

SFPI ‘s analyBis on

how

the replacement of ‘Ocncrete is

corrective

action would apply to

most rea.diatien sites.

It is

common

for

some level

of

contamination to zemain’la

*he soil -even

after

remediation is

performed.

Th.

amount

of

Contamination

remaining

in

the area required

the use of ~P to I.O1St.,-*he

contaminated

area under the

roadway from -the ar.*.~øf.th..arvio.

station

where

the

contaminated

soil

had been ‘remov~I~*aplaced

with

backfill.

The layer of

BDP material used *t

this sits

already

served the

purpose

of

isolating the ‘contaminated areas

and minimizing the

transport

of

contaminants

through

the

flow

of

water. The bottom and sides of

the

excavation pit

were lined

with high density polyethylene

and

the concrete

yea

placed

atop

the backfill in the excavation

pit.

While the concrete

say

create a

cap to prevent water from

entering

the soil end

transporting contaminants, the

Board finds that given

the type

of

OI38O~~3

---

6

remediation done at

this site, any effect of

the

concrete as a

barrier,

is minimal. The

Board further

notes

that

the area of

high contamination was off—site under the

roadway and

the area

under the concrete satisfied

the

clean—up objectives.

The

concrete that was replaced in this

matter created

a

cap above the

area that was backfilled with unconta*inat.d

sOil and isolated

from

the remaining

contamination by

a layer of 1W?.

The

Board

believes

that in

this

case,

the main

intent

of

replacing

the

concrete at

the

sits

was

to

restore the area’ to

its

previous condition in order to

continue

.

operation as a gas

station

•

At the

time

that

the concrete was laid, the clean up

objectives at the site had been meet. •tbe C~ste

‘~

did

wotatop,

minimize,

eliminate or

clean up a

release of

petroleum or. its

effects.

The amount

of

contamination

at

the

site wa. the

same

before

and

after the concrete was

installed.

‘In addition, SFPI argues

that

the

doctrine

of

.stoppel

is

applicable to this

matter

•

Mr

.

chnsid.r, :~s ~smsultant,

testified

that

the replacement of concrete ~s;emiabers.d

-

in

other projects in

which

he

has been a consultant.

.-~(~.i*t338,.)

Re

further stated

that

the replacement of concrete

iia$áncluded

in the corrective action

plan

approved by the Aqency.i4Tr.

at

334.) He also contends that at no

time

did the Agency represent

to him that it was.

improper

or

unacceptable,to replace

the

concrete. (Tr. at 348.)

SFPI

argues

that. th.,*gancy..oannot

ignore the

ongoing

ccuunications

relatioi*.hip between the Agency

and

the

applicant

where

the

applicant sought the.

royal

at

every step of the rea.diation from the Agency end~me1i.d~on

the

Agency’s

consent

in

carrying out

corrective action measures.

SYPI

also notes

that the Board baa expresaed’~ite~omoern~over’

the

Guidance Manual misleading the public. (B.rnard~a4

li5~ VA~1IPA

(July

9, 1992),

PCB

92—49.)

‘

SPPI

further arges$~hat the

appellate court held that

there

is a Jine of

~~eees-bol4ingthat

even

though ,a rule

is

improperly promulgated,

-it-mmy:be

binding

upon

the governmental agency. (Wynn v.

Color

(4th Dist. 1987),

159 Ill.App.3d 719, 512 N.E.2d 1066.) The

elements

of

proof are

demonstrating the NuserN relied on

the manual to

his or

‘her

detriment and

that there was no notice of a

change in policy, or

custom. (Wynn at 724—725.)

The

Agency argues

that

as a

general rule principles

of

equitable estoppel

do

not normally apply.

against govsziasnt but

may be ‘pplied

to the

government

only in rare :‘snd

UnUU*1

circumstance

to prevent fraud or

gross injustice. (Dean Foods Co.

v. PCB

(2nt~

Dist. 1986), 143 ill.

App.

3d

322,492 N.E. 1344)

‘The Agency

does

not find any special

circumstances

that

would

invoke the doctrine of estoppel in

this matter.

The Agency

asserts that

the Board has previously held

that

the acceptance of

a corrective action plan cannot be

construed

as approval for

reimbursement. (Martin Oil liarketina #64

v.

IEPA (August 13,

1992), PCB ‘92-53.) The Agency

further

contends that

SPPI’s

DI 38-OO7I~

---

7

interpretation of the Guidance Manual

is in

error

and

notes

that

the

Board

has previously held that the manual

has

no

legal or

regulatory

effect and will not be considered by the

Board. The

Agency

further

argues that even if estappel was applicable, SF71

has not

shown

detrimental reliance, a

necessary element

of

estoppe..

The

Board

has previously refused to allow

reimbursement

under

an eatoppel

theory

argument. The Board held

that ~al3.owing

for reimbursement which is not

a correctiv, action

would be in

violation of the statute.”

(Strube

(Kay 21,.

1992) PCB 91—205.)

The Board

does

not find

any unusual facts in this

matter that

would warrant the

use

of

satoppel

to prevent tr*nd and gross

injustice.

The

Board

does

not

find that ‘SF71 ~reliad

on

the

manual to its detriment,

there

is no

indication

that the concrete

would not have

been

replaced if

SF71 bad known reimbursement

would not have been

allowed. Further,

the Board does

not

recognize the manual

as a rule and has

not interpreted

the

language

of the manual. (Strube

(May

31, 1992) ~PCB 91—305.) In

Martin

Oil (August 13, 1992) PCB

92-53, the

bard held that the

approval of a corrective action plan

.

osn,iot be construed as an

approval

for reimbursement.

The

Board

finds

that

estoppel is

not

applicable in this case

and

even if

estcppel were

applicable.

SFPI has not proven

the

elements of

estcçpsl.

The Board finds that the cost of the

replacement

of

concrete

is this matter is

nOt reimbursable

because

the replacement of

concrete has not been shown .‘to be a

corrective

action

•

The Board

affirms the Agency’s denial of

reimburs~nt.

Renlacément of

Tank

System

The

$31,350

•

06 is

comprised

of costs for parts ‘and .quip.snt

associated with

reinstalling

the tank system. The costs denied

reimbursement

include testing of

the

system (pressure,

tightness

and proctor density testing), parts for the

electrical

system

and

piping for the

tank

system.

The leak

at this site was from the associated piping feeding

into one of the

underground tanks.

SFPI contends that to remove

the

contaminated

soil,

it

was necessary to

r~~vethe

‘storage

tanks, the associated piping and the electrical system.

SF71

asserts

that in removing the

tanks,

the associated piping and

the

electrical system, it was

necessary

to cut so.. parts asking them

unusable for reassembly. SF71

contends

that sound engineering

practice requires

that certain parts such as piping and

electrical

items be

replaced with new parts.,

instead

of reusing

old parts. SF71 also contends that the

system

testing was

required

for

recertification of the tank

system and

necessary

for

proper installation.

SF71 argues

that

the

removal of the

tank

system was required to remediate the

contaminated

soil. Because

the removal was required for remediation, SF71

argues

that the

0136-0075

---

8

removal and the

replacement satisfy

the

definition of

corrective

action. SFPI further

notes that the

reassembly

of parts was not

practical in

this matter.

SF71 argues that the

Agency made

its

determination

by

applying the standard as

described

in the

Guidance Manual which

draws a distinction

between reassembly and replacement.

SF71

notes that

the

appropriate

standard is for the Agency to

determine if the action is a

corrective

action end not base

its

determination on

“replacement” or “reassembly”.

BPPI argues

that

the

tank

system was not “upgraded” in

that

the sane type of parts

and

equipment

were installed. SF71 argUes

that sound engineering

practice required the replacement of parts nd the

testing

of

the

system. SF71

further contends that these actions wsr. necessary

for

public

health

and

safety.

The Agency

argues that

the costs associated with

replacing

the tank system were not

corrective action bet ~re costs

associated with upgrading and

replacing th ‘~nkeystem.

Agency contends that

these casts

were incurred 1n-retu~ning

the

station to operating condition and ‘were not -dit,~,ly

related

to

remediation of the

site.

The Agency as*erts~~ttbse

activities do not satisfy

the definition

of

corrective action

because these

are not

actions

to stop,

ai,4aiSS,’~s1iainate

or

clean up a release of

petroleum

or

its affe~ts.

Reimbursement was

allowed

for the coste:’assoCLated with

the

removal of the storage tanki and

the

‘rain

Ws.U~nt~fthes. costs

are. ‘not at

issue on

appeal.

There

is no

oo~t**tton~that‘the

removal of

the tanks

was

not necessary to

r~iate the

aite.

The Board does not

find

a relationship ~bs~

~~lao~nt

of

the

tanks

and corrective action related to a release. The

replacement of the tanks

is only necessary IfIPPI intends

to

càntinue operation as a service station. ~

*atiOns *elated to

reinstalling

the

system

do

not

function to

~

limbs.,

eliminate or clean up a release

of

petroleum ~r its ffscts.

• While SF71 may have followed sound engineering praCtices in

reinstalling the system, these

practices

do not

serve

to prevent

or minimize the

effects of

the detected relsale. ‘The replacement

of the tanks

was

restoration.

At

the time that the tanks were

being replaced, the contaminated soil

had

been replaced

at

the

site, remediation

of the area

had been o~leted.

The Board does

not find

that t”~ costs ssociated

with

the

replacement of

the tank system

in this case are a

corrective

action. The

Board

affirms

the Agency’s denial of reimbursement

of the

costs associated with

the replacement of

the

tanks.

Insurance Costs

The Agency denied reimbursement of $17,746.00 in insurance

coverage as non—correctIve action. This

figure

is comprised of

0138-0076

---

9

two separate insurance charges: $11,760.00 for MET

general

liability and

$5,700.00’

for Southern Illinois Petroleum

Maintenance Company

comprehensive and

automotive. 5171

is

only

appealing

the denial of

the

$11,760.00 for MET general liability.

This charge was originally included

as part of

overhead.

The

insurance charge was later broken out of

the overhead and

submitted to the Agency on MET

letterhead

stating the insurance

charge

for insurance coverage from 6/23/89 to

5/20/91.

(P.c.

El

at 238.)

$171 maintains

that while the

denial

letter

states that the

insurance

coverage is not

reimbursable because

it is

not

corrective action, the Agency pursued a

different t.ason

for

denial at hearing. SF71

contends that th agency denied

reimbursement

based on

the form in which

the charges

were

submitted to the Agency. SF71

note. that the Agency

did

not

request

additional

documentation

on the insurance

charges. SPPI

contends that documentation of

the charges

~as available and

Mould have

been provided to the

Agency upon request. (Tr.

at

386.)

The

Agency argues that due to the

form

of

~thS

‘submission of

the

insurance charges it is impossible to

d~teraine the type

of

insurance, the

type

of coverage and

whether

it

-was related to

this site, therefore without

the

proper ~ó~~i~ttion

it is

impossible to determine if

it is

correctivs~lbtion. The

Agency

notes that the

document declaring

the insurance’

charge does not

indicate the names of

the insurers,

the names of the insured,

the

nature of the coverage,

the

level of ooverage,~betype of

policy

or policies involved or the relationship

b~’

sit. and

the

insurance.

The

Agency

also argues

~tbatno~WoOf

‘of

payment vas

provided.

The

Agency

also argues

that the ~ObIt at imsuraflc.

coverage fails to meet the definition of

co~*eativeaction.

Mr.

Schneider described

the

insurance coverage as

follows:

Q.

The insurance, the $11,760, what kind

of

insurance was

that?

A.

We

carry general liability,

omissions and pollution lability.

Q. The

commercial

general liability

policy carries

the

pollution exclusion that’s

standard in

the industry and

so that’s

why

you have the

pollution liability?

A.

That’s not the reason we

have pollution liability. We

carry

the pollution liability

because

its necessary to

do business in some states,

and

it’C also

good

Tr. at 384, 385.

0138-0077

---

10

The

insurance was general coverage that MET maintains

for all

projects in

the

general course of doing

business.

There is no

evidence

that this insurance was obtained for this

particular

site.

The

cost of the insurance is an

Mr. Schneider explained how MET prorated its overhead costs

to this project.

A.

The

amount

was an average

monthly

cost

that were

(sic)

attributed not only to this job

but

to several other

projects.

This

was the

portion

that this project took.

Q.

I guess I’m interested in how you actually made

that a

(sic) portion.

A. Took the total costs over a year,

divided it by 12.

Q. That’s monthly, and then what?

A.

And

then took

the

months in

terms

Of

project, in which

this client was involved in that project, and applied

it against it as a multiple against

the number

of

months.

Q.

‘

So

if you had three jobs going

ma given

month,

then

you would

take

a third of that

monthly overhead?

Is

that——

A. Well, it wasn’t done

so

much

in a given month but over

a

period it

was

determined

it

wasn’t equally portioned.

It was

also

dependent

upon

th. size of the project,

would have been unfair for a

small project to ogepare

to

the same

— —

Tr•

at 381, 382

Mr. Stellar of the

Agency,

testified

that

site—specific

insurance would be reimbursable if it

was

documented,

reasonable

and

a corrective action. (Tr. at 148.) However, the

testimony

and billing documentation do not

support

a

finding that the,

insurance

was site-specific.

The

issue of whether insurance

charges

represent a

reimbursable óost

is not before the

Board

The

method

of prorating the

overhead

costs is also

not

at issue’

before the

Board. The

issue before

the

Board is

whether

the

documentation of ~he insurance charges support a finding

of a

corrective

action and

whether

the documentation

shows

thos

costs

•to be reasonable.

The

Board finds

that

it

is

impossible

to

determine whether the insurance coverage was a corrective action

or reasonable based

on the documentation provided.

The

documentation does not describe

the

type

of insurance, the

insurer or the insured.

0138-0076

---

11,

The ‘Board affirms

the charges for insurance coverage.

Undocumented Costs

Of the $6,132.53 of

undocumented costs,

SIPI

is only

appealing

the denial of $4,032.03 in costs. Tb.

amount appealed

is comprised of $1050.00 for telephone calls,

$660.00 for

telephone and fax service, $1,125.00 for

secretarial services,

$357.03 for office supplies and $840.00 for maintenance

coverage.

These charges were originally submitted an I*PA

subcontractor

forms and were included in the

amount

of $14,130

•

66 under

eadainistrative and

overhead

costs~. (Rec. $1 ‘~t3.) The Agency

requested a breakdown of

these costs. MET

submitted ‘a breakdown

of these

costs

into five

line

items (Manifest, Ped-ex,

UPS,

Overhead

and Profit). (Rec. Al at 55.) A

further breakdown

of

the overhead charge was provided by

listing each

charge

separately on MET letterhead.

‘(Rec.

El a~

23.7,~239

—

241.) ‘These

items

were prorated by MET from yearly business ~n.es

in the

same

manner

as

the

insurance charges.

SPPI argues that the Agency required that these items be

broken out of

overhead

but

did not request supporting

documentation.

In addition 8171 contends

that.

the Agency’s

denial of

these

costs were based on the erroneous

assumption that

the

hourly rates used by 8171 were

loaded rates

(i... includes

overhead and expenses).

SPPI argues

that the Agency

‘would

have

reimbursed these

costs

if

the items

had beenincluded

in the

professional service rate

•

SYPI further argues

that

the

additional documentation was available and

would

have been

submitted to the Agency, if requested.

The

Agency contends

that the

items were

submitted to the

Agency as direct costs

•

The

Agency argues that there ‘was no

support ing documentation tying the

costs

specifically to

the

site

in question,

and

thus no

substantiation

that they

represent

corrective action or are reasonable.

The

Agency determined that

the rates used by

8171

were

loaded by comparing

them

with billings

from other sites

throughout the state. (Tr. at 63.) Doug Oakley, ‘~fromthe Agency,

testified that most

submittals use loaded rates and that

the

Agency prefers to

deal with

loaded rates. (Tr.

st 63.) :‘Me

further

testified that an unloaded rate for a

t.~itici.nwould be

around $15 an hour. (Tr. at 63.) Mr

•

Schneider testified that

the hourly rate includes the

compensation to.

the

employee,

the

benefits to the employee,

and

matching PICA and unemployment

involvement through the employee. (Tr. at 376.) Mr

Schneider

contends that

the rates are not loaded and that if the overhead

expenses were averaged

into the hourly rates, the rate would be

within the Agency’s acceptable rates. (Tr~at 377.)

The Agency

does not contest

the hourly rates

0I38~oo79

used by 5171 but maintains that

---

the rates are consistent with loaded rates.

In its )Iay 14,

1992 letter to SF71

reviewing

the

claim,

the

Agency adjusted the

amount

reimbursed to SF71 to reflect a

deduction in the amount

of handling

charges. (Rec.

Al at 81.)

The Agency adjusted the

‘handling charges

to 15,

the rate

considered reasonable by

the Agency.2 (Tr.

at 46.)

The Agency’s request for a breakdown of

overhead and

administration costs was reasonable

considering

the

am,unts

involved and

the

related

charges. Tb. Board

finds

that the

Agency’s determination

was reasonable

that

the

rates used by

SF71

were loaded, based on the testimony of Agen~cy

personnel

concerning similar billings.

The costs at issue could have been

averaged into

several other cost items without .zc..ding

the

allowable

amount

•

As a result of the cost breakdown, the items

were presented to the

Agency

as

direct costs. ‘Therefore

it was

reasonable for

the Agency

to

require .uppcrtthg4oaua.ntation

to

verify the costs and to conclude

that vithout’auffici.nt

documentation the costs were

not

reimbursable.

-

The Board finds that the costs as

submitted lacked

supporting documentation.

The costs, were submitted on”IIET

letterhead stating the general

category,

the

ti.

period and

the

cost.

The

record provides no

proof’

that these items were

actually billed to MET,

there

is also

no

description

of

the type

of services provided or

the relationship to thep.cific

site.

There is also no

supporting

.docuaentation On

the method used to

prorate these

expenses

to

this

project.

-

The’3Osrd affirms the

Agency’s denial of reimbursement for

these costs for lacking

supporting~documentation.

This opinion constitutes the

Board’s

finding

of

tact’ and

conclusion of law -in this

matter.

ORDER

The Board affirms

the Agency denial of reimbursement of

costs associated with

the replacement of

concrete,,

the

reinstallation of ‘the tank system, insurance coverage

and

undocumented

costs.

IT IS SO

ORDERED.

2

P.A. 87—1171, effective September 18, 1992,

established

maximum amounts for handling charges

eligible for payment from

the

fund.

The maximum allowable

amount

is based on a percentage of the

subcontract or field purchase cost. The

maximum

percentage is 12,

where purchase costs are less

than

$5,000.

o

I 38-0090

---

13

Section 41 of

the Environmental Protection Act (Ill.

Rev.Stat.

1991, ch. 111 1/2, par

1041) 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 Ill. Ads. Code 101.246,

Motions for Reconsideration, and

Castenada v. Illinois

Human

Rights Commission (1989), 132

lU.

3d

304, 547 NE.2d 437)

I, Dorothy M.

Gunn,

Clerk of

the Illinois Pollution Control

Board, hereby cer~4~y..that the

ye opinion and

order

was

adopted on the

/7~

day of

,

3992,.by a

vote of 7—c~2

Ill~

~A.

Control

L~

Board

0138 -008.1