1
1
BEFORE THE POLLUTION CONTROL BOARD
2 OF THE STATE OF ILLINOIS
3
4 TODD'S SERVICE STATION,
Petitioner,
5
vs. NO. PCB03-2
6 (UST Appeal-Petition
for Review and
7 Hearing/Appeal
8 ILLINOIS ENVIRONMENTAL PROTECTION AGENCY,
Respondent.
9
10
11 REPORT OF PROCEEDINGS before CAROL
SUDMAN, Hearing Officer, on the 15th day of
12 July, 2003, at the Pekin City Hall, Council
Chambers, 100 South Capitol Street, Pekin,
13 Illinois.
14
15
APPEARANCES:
16 ELIAS, MEGINNES,
RIFFLE & SEGHETTI, P.C.
17 BY: ROBERT M. RIFFLE, ESQ.
416 Main Street, Suite 1400
18 Peoria, IL 61602
On behalf of the Petitioner;
19
JOHN J. KIM, ESQ.
20 Assistant Counsel
1021 North Grand Avenue East
21 Springfield, IL 62794
On behalf of the Respondent.
22
23
24
L.A. REPORTING (312) 419-9292
2
1 INDEX
2 WITNESSES
3
4 ALLAN GREEN
5 Direct Examination by Mr. Riffle 12
6 Cross-Examination by Mr. Kim 26
7
8 TODD BIRKY
9 Direct Examination by Mr. Riffle 30, 41, 43
10 Cross-Examination by Mr. Kim 39, 42, 46
11
12 HARRY CHAPPEL
13 Direct Examination by Mr. Kim 48, 78
14 Cross-Examination by Mr. Riffle 68, 80
15
16
17 EXHIBITS
18 Petitioner's Exhibit No. 1 20
19 Respondent's Exhibit No. 1 53
20
21
22 Certificate 87
23
24
L.A. REPORTING (312) 419-9292
3
1 HEARING OFFICER: Good morning.
2 My name is Carol Sudman and I am a hearing
3 officer with the Pollution Control Board.
4 This is PCB No. 03-2 Todd's
5 Service Station versus IEPA. It is Tuesday,
6 July 15th, 2003 and we're beginning at ten
7 o'clock a.m.
8 Before we begin I would like to
9 sincerely apologize for publishing an
10 incorrect address in the hearing notice.
11 Pekin City Hall moved several months ago. I
12 will note for the record that the new
13 address is prominently displayed in the
14 window at the former address and the
15 buildings are only four blocks apart.
16 Accordingly, I find no prejudice
17 to the public in proceeding with this
18 hearing.
19 I want to note for the record
20 that there are no members of the public
21 present. Members of the public are allowed
22 to provide public comments if they so
23 choose.
24 At issue in this case is the
L.A. REPORTING (312) 419-9292
4
1 EPA's modification of petitioner's high
2 priority corrective action plan budget
3 regarding petitioner's property at 1303
4 Washington Road in Washington, Tazewell
5 County. The statutory decision deadline in
6 this case was waived.
7 You should note it's the
8 Pollution Control Board and not me that will
9 make the final decision in this case. My
10 purpose is to conduct the hearing in a
11 neutral and orderly manner so we have a
12 clear record of the proceedings.
13 I will assess the credibility of
14 any witness on the record at the end of the
15 hearing.
16 This hearing was noticed
17 pursuant to the Act and the Board's Rules
18 and will be conducted pursuant to Sections
19 101.600 through 101.632 of the Board's
20 Procedural Rules.
21 I'd like to ask the parties to
22 please make their appearances on the record.
23 MR. RIFFLE: Robert Riffle on
24 behalf of the Petitioner.
L.A. REPORTING (312) 419-9292
5
1 MR. KIM: John Kim on behalf of
2 the Respondent.
3 HEARING OFFICER: Are there any
4 preliminary matters you wish to discuss on
5 the record?
6 MR. KIM: I had one issue I
7 wanted to bring up. In the course of going
8 through our preparation for the hearing we
9 noticed that there's a mathematical error in
10 the final decision that's under appeal and I
11 wanted to point out it's on page 138 of the
12 Administrative record.
13 That's entitled Attachment A.
14 That's attachment A to the final decision
15 which itself is dated June 7 of 2002.
16 Specifically in Section 2 there's a list of
17 line items underneath the statement that The
18 Agency has deemed the following hours and
19 rates acceptable.
20 Second from the bottom is line
21 item for professional engineering and it
22 states 4 hours at $125 an hour equals $250
23 and that's an error that should be $500 and
24 therefore the total amount approved is
L.A. REPORTING (312) 419-9292
6
1 listed as $2,806.08 and actually should read
2 $3,056.08, so certainly that's something
3 that the Agency would consider to be part of
4 the original decision and would certainly
5 consider that additional $250 to be part of
6 the approval.
7 We apologize for the
8 mathematical error.
9 HEARING OFFICER: Mr. Kim, could
10 you provide an amended page of this to the
11 Board?
12 MR. KIM: Well, it's part of our
13 final decision and --
14 HEARING OFFICER: I see.
15 MR. KIM: I can't modify it that
16 way. If the Board order does reflect this
17 should be taken into consideration, then I
18 guess what I was contemplating, if the Board
19 notes, at the very least, no matter what
20 else happens in the case, this $250 line
21 item should read $500. If and when we would
22 take the Board's opinion, put it into the
23 file and consider that as part of the
24 decision, therefore if and when a request
L.A. REPORTING (312) 419-9292
7
1 for reimbursement came in we would consider
2 at least as this line item goes that $500 is
3 approved for professional engineers as
4 opposed to $250.
5 HEARING OFFICER: I think that
6 will work.
7 MR. RIFFLE: Yes.
8 HEARING OFFICER: Do you have
9 anything, Mr. Riffle?
10 MR. RIFFLE: No.
11 HEARING OFFICER: Would you like
12 to proceed with your opening statements?
13 MR. RIFFLE: Yes, thank you.
14 I will be very brief in my
15 opening statement. I think the issues are
16 pretty well crystallized at this point.
17 By way of brief background,
18 Midwest Environmental was engaged by Todd's
19 Service Station as their environmental
20 contractor for the LUST site, for that site,
21 and the initial recommendation was to do
22 this in a phased approach.
23 The IEPA approved of that
24 proposal. When they got into the project
L.A. REPORTING (312) 419-9292
8
1 and got the initial data it become clear
2 that additional work beyond that which was
3 originally budgeted would be necessary.
4 There was considerable
5 coordination between Midwest Environmental
6 and Mr. Malcolm, the IEPA project manager on
7 this project. There were considerable phone
8 conversations at every stage of the way as
9 the project was being developed.
10 Mr. Malcolm encouraged Midwest
11 to proceed on the course they were
12 proceeding on, to go ahead and obtain Tier 2
13 objectives for Tier 2 closure of the site.
14 Midwest did exactly what Mr.
15 Malcolm had approved and encouraged. Mr.
16 Malcolm was aware of every significant step
17 that was being taken along the way. When
18 Midwest put their budget amendment in, it
19 was initially rejected entirely because it
20 was submitted after the No Further
21 Remediation letter was issued.
22 The EPA subsequently
23 acknowledged that Midwest should be allowed
24 to resubmit that budget amendment because it
L.A. REPORTING (312) 419-9292
9
1 had been encouraged to do what they did,
2 that being proceed with the oral approval of
3 the IEPA. The IEPA agreed that it wouldn't
4 be right to reject that budget and alloted
5 it to be resubmitted. When it was
6 resubmitted, the budget was trimmed from
7 roughly $7,500 down to, as Mr. Kim
8 acknowledged, the right number should be
9 somewhere around $3,000.
10 So, significantly more than half
11 of the amended budgeted amount was taken
12 out.
13 Now, there were two reasons for
14 these reductions in the budget. The first
15 is a fairly minor matter in terms of the
16 dollars that are at stake here today.
17 The IEPA reduced the hourly
18 rates of three of the categories of the
19 submittals, but of the 4,000 or so dollars
20 that are at issue here, only about $250 of
21 the reduction relates to these hourly rate
22 reductions. The vast majority of the amount
23 in controversy is a reduction in the number
24 of hours that were authorized for this
L.A. REPORTING (312) 419-9292
10
1 amended budget.
2 We think it's clearly improper
3 for this reduction to have occurred. The
4 evidence will be clear that all of these
5 hours, and indeed many more hours were spent
6 on the project, and moreover, the IEPA's
7 employee, Mr. Malcolm, was specifically
8 aware of the amount of time it was taking,
9 the exact tasks that were involved and the
10 difficulty of the project.
11 We believe that the reductions
12 in these hours were simply arbitrary
13 reductions, not based on the reasonableness
14 of the time expended or the actual fact that
15 these hours were expended, and for those
16 reasons, it's our position that those
17 additional hours should clearly be
18 reinstated and paid as budgeted.
19 This was a project that involved
20 significant effort on Midwest's part to
21 obtain Highway Authority Agreements from two
22 different governing bodies to do extensive
23 testing to avoid having to do a massive
24 clean-up of this property that would have
L.A. REPORTING (312) 419-9292
11
1 been at great expense to the Illinois LUST
2 fund.
3 The project was done
4 efficiently, the project was done in a
5 reasonable manner, all the expenses were
6 both reasonable and actually expended. We
7 think the record will be unrebutted on those
8 points and for those reasons we would
9 respectfully request the full reinstatement
10 of the amended budget.
11 Thank you.
12 HEARING OFFICER: Mr. Kim, would
13 you like to give an opening statement?
14 MR. KIM: Just a very brief one.
15 The Illinois EPA believes that based upon
16 the information that was included in the
17 budget that was reviewed, the circumstances
18 that surrounded the submittal of that
19 budget, and the past approval that was
20 issued by the Agency in this case, that the
21 decision that's under appeal is actually
22 correct. It was appropriate. The deductions
23 were reasonable and that upon review of the
24 facts and the law the Board should issue an
L.A. REPORTING (312) 419-9292
12
1 order affirming the decision.
2 That's all.
3 HEARING OFFICER: Thank you.
4 Mr. Riffle, you may proceed with
5 your case.
6 MR. RIFFLE: Our first witness
7 will be Mr. Allan Green, the president of
8 Midwest Environmental.
9 HEARING OFFICER: Would the
10 court reporter please swear in the witness?
11
12 ALLEN M. GREEN,
13 having been first duly sworn, was examined
14 and testified as follows:
15
16 DIRECT EXAMINATION
17
18 BY MR. RIFFLE:
19 Q. Mr. Green, would you please
20 state your name for the record?
21 A. Allan Green.
22 Q. Would you briefly state your
23 educational background?
24 A. I have a Bachelor's degree in
L.A. REPORTING (312) 419-9292
13
1 Prelaw from the University of Illinois,
2 Springfield, and a Bachelor's degree in
3 Civil Engineering, environmental emphasis
4 from Bradley University.
5 Q. You indeed are the president of
6 Midwest Environmental?
7 A. Yes.
8 Q. Can you describe what that
9 company is?
10 A. We're an environmental
11 consulting firm. We do underground storage
12 tank work, modeling, and general
13 environmental investigations, Phase 1, Phase
14 2s, property transactions.
15 Q. Approximately how long has
16 Midwest been in business?
17 A. Since '91.
18 Q. Can you approximate how many
19 LUST fund projects Midwest has been involved
20 in?
21 A. Well over 300.
22 Q. With respect to the Todd's
23 project, could you give an overview of what
24 that project involved?
L.A. REPORTING (312) 419-9292
14
1 A. Todd's Service Station is
2 located in Washington, Illinois. We did a
3 preliminary investigation of that property
4 prior to an underground storage tank
5 upgrade, discovered there was contamination
6 around the tanks. Rather than upgrade the
7 tanks at that point, they got an incident
8 number with the state, and instead of
9 upgrading the tanks decided to remove them
10 and replace them.
11 We oversaw the removal of the
12 tanks, the early action activities,
13 significant contamination in the tank
14 backfill and line areas. That material was
15 removed as part of early action, and then
16 they replaced their tank systems, repaved
17 their lot and we went on with the
18 classification of the site.
19 We did the soil borings, and
20 testing the site, received a high priority
21 classification based upon contamination at
22 the property boundaries above the standard,
23 and at that point we had to look at remedial
24 alternatives, and took the TACO approach
L.A. REPORTING (312) 419-9292
15
1 basically looking for a closure to the site
2 without undergoing a massive remediation,
3 and basically that is the way the site was
4 closed.
5 Q. Did you submit an initial
6 budget?
7 A. Yes. The budget started with
8 the submittal of the classification plan and
9 budget.
10 Q. Did you suggest at that time to
11 do some kind of a phased approach to
12 assessing and remediating the site?
13 A. Yes.
14 Q. Could you give a little bit of
15 detail as to what that entailed?
16 A. Basically we would do a
17 preliminary investigation of the site and at
18 that particular point determine what our
19 next course of action would be and then we
20 would submit a plan and budget for the next
21 course of action from there.
22 Q. What response did you receive
23 from the IEPA with respect to that proposal?
24 A. It was approved.
L.A. REPORTING (312) 419-9292
16
1 Q. Did Midwest proceed to do site
2 related activities at that site?
3 A. Yes.
4 Q. What activities did Midwest
5 perform?
6 A. We performed a site
7 investigation to determine what the extent
8 of contamination was on and off site, to
9 come up with a corrective action plan.
10 Q. Did you encounter any particular
11 difficulties in connection with that phase
12 of the project?
13 A. The off-site contamination was
14 determined to extend underneath the highway,
15 the right of way was governed by the state
16 and by the city. The utilities, including
17 fiber-optic lines that ran along that
18 section of road made it difficult to get
19 close to the road to do any kind of borings.
20 So we had to eventually move across the
21 street and drill on the other side of the
22 street and attempt to get closure that way.
23 Q. Were those borings on the other
24 side of the street included in your initial
L.A. REPORTING (312) 419-9292
17
1 budget?
2 A. No.
3 Q. Did you receive any type of
4 approval from the IEPA to advance those
5 borings and do that testing across the
6 street?
7 A. Yes.
8 Q. What approval did you receive?
9 A. They basically gave us an
10 approval to do a certain number of borings
11 to try to determine the extent of the
12 contamination.
13 Q. Was that in one communication or
14 was this an ongoing dialogue with the IEPA?
15 A. This was pretty well extensively
16 communicated between the project manager who
17 was assisting that we try to get as close to
18 the road on the station side as possible to
19 the point where we attempted to do hand
20 borings, but with the utilities we could not
21 safely get into that area. So there was
22 ongoing dialogue back and forth as to how to
23 solve the problem without creating the
24 problem.
L.A. REPORTING (312) 419-9292
18
1 Q. Who was your point of contact at
2 the IEPA?
3 A. James Malcolm.
4 Q. Were the Highway Authority
5 Agreements part of the initial budget?
6 A. No.
7 Q. Can you briefly describe the
8 efforts undertaken by Midwest to obtain
9 highway authorities? Let me back up. Can
10 you tell us what governmental bodies were
11 necessary to obtain Highway Authority
12 Agreements from?
13 A. The IDOT, the State Department
14 of Transportation and the city of
15 Washington.
16 Q. Can you describe the efforts you
17 undertook with respect to obtaining the
18 Highway Authority Agreement from IDOT?
19 A. The Department of Transportation
20 had contacted the department division
21 headquarters for that area. They send you
22 the forms to be filled out and basically
23 you're giving them a copy of everything you
24 have for them to review to determine if it's
L.A. REPORTING (312) 419-9292
19
1 going to be acceptable to them to leave it
2 there. Fill out the forms.
3 Once in a while they ask for a
4 bonding agreement. In this case that wasn't
5 asked for. Basically, it's a matter of
6 filling out forms, sending them to the
7 department. They send those back. Then we
8 fill out another section and they send it to
9 their division headquarters, and if they
10 agree, they will send us an approval.
11 Q. Did you indeed obtain a Highway
12 Authority Agreement from the Illinois
13 Department of Transportation on behalf of
14 the Todd's Service Station?
15 A. Yes.
16 Q. That was part of the amended
17 budget?
18 A. Right.
19 Q. In turning now to the city of
20 Washington, can you describe the efforts you
21 undertook, or Midwest undertook to obtain a
22 Highway Authority Agreement from the city of
23 Washington?
24 A. The city of Washington had never
L.A. REPORTING (312) 419-9292
20
1 dealt with this before, so it took a little
2 bit for them to decide how they were going
3 to approach it and who was going to handle
4 it, and basically it was a matter of
5 communicating back and forth with the city
6 to make them feel at ease in signing the
7 Agreement with their legal representation
8 and all different members of the city that
9 were involved in trying to figure out, since
10 they hadn't dealt with us before, if they
11 were going to sign it or not.
12 Q. Can you approximate how many
13 hours you spent in attempting to obtain and
14 actually obtaining the Highway Authority
15 Agreement from the city of Washington?
16 A. I myself probably had anywhere
17 between 8 and 12 hours and then my staff
18 probably roughly the same.
19 MR. RIFFLE: I will have this
20 marked as Exhibit 1.
21 (Petitioner's Exhibit No. 1 was
22 marked for identification.)
23 HEARING OFFICER: Off the
24 record.
L.A. REPORTING (312) 419-9292
21
1 (Discussion held off the record.)
2 HEARING OFFICER: We'll go back
3 on the record.
4 Petitioner is submitting Exhibit
5 No. 1, which is --
6 MR. RIFFLE: Three pages from
7 the Administrative record, the first of
8 which is one page from the amended budget,
9 which is the summary of the personnel costs.
10 That is stamped or marked as page 119 from
11 the Administrative record.
12 The second page is a page from a
13 letter or receipt from the Illinois
14 Environmental Protection Agency which shows
15 which amounts were approved and which were
16 not. That's marked as 138.
17 The third is a handwritten sheet
18 that addresses what part of the amended
19 budget the IEPA was going to approve and
20 that was marked page 139.
21 HEARING OFFICER: These are
22 three pages of the Agency's Administrative
23 record.
24 MR. RIFFLE: Yes.
L.A. REPORTING (312) 419-9292
22
1 HEARING OFFICER: We have marked
2 it as Exhibit No. 1.
3 MR. KIM: The handwritten notes
4 are page 135, and the Respondent doesn't
5 object.
6 BY MR. RIFFLE:
7 Q. Mr. Green, I am handing you what
8 has been marked for identification as
9 Petitioner's Exhibit 1, and particularly
10 drawing your attention to only the first
11 page of that which is stamped 119 in the
12 lower right-hand corner. Can you take a
13 moment to look at that and identify the
14 document?
15 A. It's the personnel summary sheet
16 from the corrective action plan budget
17 amendment submitted to the IEPA by Midwest.
18 Q. Was that prepared by Midwest
19 under your direction and control?
20 A. Yes.
21 Q. I want to spend some time
22 looking at this in detail. I want to ask
23 you a couple general questions first. Does
24 this document, page 1 of Exhibit 1,
L.A. REPORTING (312) 419-9292
23
1 accurately depict the number of hours that
2 Midwest spent solely in connection with the
3 scope of work covered by the amended budget?
4 A. Actually there were probably
5 more hours spent. This was what we deemed
6 to be reasonable and acceptable to submit in
7 as far as the time that was spent.
8 Q. As to each of the categories
9 where you have specific hours listed, can
10 you testify unequivocally that Midwest spent
11 at least that many hours on each of the
12 those categories for each of those
13 classifications of individuals solely on the
14 amended budget phase of the project?
15 A. Yes.
16 Q. Looking now at the hourly rates,
17 I note that the IEPA challenged three of
18 those rates. They happen to be the first
19 three on that listing. If my records are
20 accurate, they reduced the hourly fee for
21 environmental hydrogeologist from $98.00 to
22 $85.00. In your experience in the
23 environmental field is the $98.00 an hour
24 amount that Midwest charged for
L.A. REPORTING (312) 419-9292
24
1 environmental hydrogeologist reasonable and
2 customary?
3 A. Yes.
4 Q. Turning now to the professional
5 geologist category that reduced that from
6 $110.00 to $100.00, in your view was the
7 $110.00 an hour rate that you charged
8 reasonable and customary?
9 A. Yes.
10 Q. Thirdly, they have reduced the
11 senior environmental manager category from a
12 $110.00 to a $100.00. In your experience is
13 a $110.00 an hour for senior environmental
14 manager a reasonable and customary amount to
15 charge for those tasks?
16 A. Yes.
17 Q. I'd like you to just generally
18 describe what the scope of work was solely
19 for the amended budget portion of the Todd's
20 project.
21 A. It would have been for the
22 actual TACO and tier for closure of the
23 site, the model and calculation, the Highway
24 Authority Agreements, and the final closure
L.A. REPORTING (312) 419-9292
25
1 documentation, the report to the EPA and the
2 final reimbursement for that work.
3 Q. The total amount you charged for
4 that phase of the project was $7,483.58?
5 A. Yes.
6 Q. Has that amount indeed been paid
7 by Todd to Midwest Environmental?
8 A. Yes.
9 Q. In your experience was $7,483.58
10 a reasonable total amount to charge for the
11 scope of work that was covered by the
12 amended budget?
13 A. Yes.
14 Q. In your experience have you seen
15 instances where significantly higher amounts
16 have been charged for that type of scope of
17 work?
18 A. Yes.
19 Q. To get TACO closure on a
20 project?
21 A. Yes.
22 Q. Do you believe that the IEPA had
23 a clear understanding of exactly what
24 Midwest Environmental was doing in
L.A. REPORTING (312) 419-9292
26
1 connection with the scope of work covered in
2 the amended budget?
3 A. Yes.
4 Q. On what do you base that
5 conclusion?
6 A. The ongoing coordination and
7 conversations with the project manager at
8 the EPA.
9 MR. RIFFLE: No further
10 questions.
11 HEARING OFFICER: Thank you.
12 Mr. Kim?
13
14 CROSS-EXAMINATION
15
16 BY MR. KIM:
17 Q. I think I am going to have a few
18 questions of this witness.
19 Mr. Green, there have been
20 several budgets submitted in relation to the
21 Todd's Service Station site, is that
22 correct?
23 A. Yes.
24 Q. There is at least one budget
L.A. REPORTING (312) 419-9292
27
1 that was submitted regarding site
2 classification work?
3 A. Yes.
4 Q. Two budgets submitted regarding
5 corrective action work, is that correct?
6 A. Yes.
7 Q. The first budget that was
8 submitted regarding corrective action work
9 was submitted sometime in September of 2000.
10 Does that sound right?
11 A. It sounds correct.
12 Q. Sometime in the fall of 2000?
13 Does that sound about right?
14 A. Yes.
15 Q. The second budget amendment was
16 submitted in April of 2002, is that correct?
17 A. It sounds correct.
18 Q. I will show you page 114 of the
19 Administrative record.
20 A. Yes.
21 Q. What is page 114? What is that
22 a depiction of?
23 A. Cover letter from Midwest
24 Environmental onto the EPA submitted with
L.A. REPORTING (312) 419-9292
28
1 the budget amendment for the project.
2 Q. This is the cover letter that
3 accompanied the budget amendment that is
4 currently the subject of the appeal, is that
5 right?
6 A. Yes.
7 Q. In between the submittal of the
8 first budget for the corrective action work
9 and the second budget for the corrective
10 action work a No Further Remediation Letter
11 was issued in December of 2001, is that
12 correct?
13 A. Yes.
14 Q. I am going to reference the No
15 Further Remediation Letter with the acronym
16 NFR. Is it correct some member of your
17 staff had a conversation with the EPA staff
18 concerning whether or not the second budget
19 amendment could be submitted after issuance
20 of the NFR letter?
21 A. Yes.
22 Q. It was decided through some
23 conversation that the second budget
24 amendment could be submitted after the
L.A. REPORTING (312) 419-9292
29
1 issuance of the NFR letter?
2 A. Yes.
3 Q. I know that you're not the
4 owner-operator of the site, you're the
5 consultant, you represent Todd's Service
6 Station. Did you represent Todd's Service
7 Station and did you prepare the first budget
8 amendment for corrective action work?
9 A. Yes.
10 Q. To the best of your knowledge
11 did Todd's Service Station file an appeal of
12 that first budget decision?
13 A. No.
14 MR. KIM: Nothing further.
15 HEARING OFFICER: Any redirect?
16 MR. RIFFLE: No.
17 HEARING OFFICER: Thank you very
18 much.
19
20 (Whereupon the witness was excused.)
21
22 HEARING OFFICER: Call your next
23 witness.
24 MR. RIFFLE: Our next witness
L.A. REPORTING (312) 419-9292
30
1 would be Todd Birky, also an employee of
2 Midwest Environmental.
3
4 TODD BIRKY,
5 having been first duly sworn, was examined
6 and testified as follows:
7
8 DIRECT EXAMINATION
9
10 BY MR. RIFFLE:
11 Q. Please state your name for the
12 record.
13 A. Todd Birky.
14 Q. What is your current position?
15 A. Environmental geologist at
16 Midwest Environmental.
17 Q. Would you briefly describe your
18 educational background?
19 A. I have a Bachelor's in Geology
20 and geophysics from the University of
21 Missouri at Rolla.
22 Q. In what year did you receive the
23 degree?
24 A. 1995, I believe.
L.A. REPORTING (312) 419-9292
31
1 Q. How long have you worked for
2 Midwest Environmental?
3 A. Four and a half years.
4 Q. What type of experience do you
5 have in the clean-up of petroleum
6 contaminated sites?
7 A. As far as?
8 Q. Approximately how many petroleum
9 contaminated sites have you worked on?
10 A. About 75, maybe.
11 Q. Have you worked considerably
12 with the Illinois Environmental Protection
13 Agency in getting closures at those types of
14 sites?
15 A. Yes.
16 Q. Of those 75, how many would have
17 been in Illinois?
18 A. Most of them.
19 Q. Can you briefly describe your
20 personal involvement in the remediation of
21 the Todd's Service Station site?
22 A. I was basically the one
23 overseeing the project. I wrote all the
24 plans in the budget from site classification
L.A. REPORTING (312) 419-9292
32
1 on. I was not involved in any of the early
2 action. I did perform all the site
3 classification field work, and completion
4 reports. I wrote the corrective action
5 plan, the initial corrective action planned
6 in the budget, performed all the field work
7 there, and was also involved in doing the
8 corrective action budget amendment as well
9 as the complete report for closure and the
10 TACO work as well.
11 Q. Specifically in connection with
12 the amended budget that's at issue here
13 today, did you do quite a bit of the work
14 that was involved in the scope of work
15 within that amended budget?
16 A. Yes.
17 Q. Can you describe specifically
18 the tasks you performed that were covered by
19 that amended budget?
20 A. We did the detailed TACO
21 calculations and modeling. We also do the
22 -- I did the Highway Authority Agreement
23 with the City and the State, and then all
24 the plans and the budget.
L.A. REPORTING (312) 419-9292
33
1 Q. When you say you did them, are
2 you talking about the drafting of those
3 documents?
4 A. Yes.
5 Q. Did you have communication with
6 the Illinois Environmental Protection Agency
7 with respect to the scope of work covered by
8 the amended budget?
9 A. Yes.
10 Q. What was the nature of that
11 communication?
12 A. Several telephone conversations,
13 and mostly I spoke with Mr. James Malcolm.
14 Me and him were fairly consistent as far as
15 what we had -- what we would talk about and
16 how we would respond with each other. If we
17 did this, is that okay. He would, you know,
18 give me instructions on his thinking as well
19 because I didn't want to do anything over
20 and beyond what he thought was necessary as
21 well.
22 Q. Can you give us a little more
23 detail as to exactly what was going on in
24 the field in terms of decisions on how to
L.A. REPORTING (312) 419-9292
34
1 remediate the property?
2 A. When we were doing the
3 corrective action investigation, there was,
4 toward the front of the station there was
5 significant utility problems. We had
6 fiber-optic cables overhead as well. We
7 were trying to get placements of those
8 borings on site to determine whether those
9 utility conduits had been impacted,
10 specifically the underground conduits.
11 When we were fairly certain we
12 couldn't get access to an area to determine
13 that without potential damage to fiber-optic
14 cables, we decided to move across the
15 street.
16 Q. When you say we decided, can you
17 give a little detail as to how that
18 happened?
19 A. That was basically a telephone
20 conversation that I was on site talking with
21 James Malcolm on the phone and kind of
22 telling him where I was at and what I was
23 looking at there.
24 That's basically when he and I
L.A. REPORTING (312) 419-9292
35
1 decided if we had to we could go across the
2 street and obtain the Highway Authority
3 Agreement.
4 Q. Was that something that he
5 suggested or you suggested, or do you
6 recall?
7 A. I think it was him, because it
8 was -- I was a little reluctant to have to
9 go that extra step beyond what had been
10 approved as far as the Highway Authority
11 Agreement. I told him I really can't get
12 access to this area, you know, comfortably
13 anyway. He suggested I move across the
14 street and obtain those.
15 Q. Did you proceed to do that?
16 A. Yes.
17 Q. It's probably obvious to
18 everybody. Can you explain why it was that
19 you couldn't do more borings right around
20 the front of the property there?
21 A. We had done a boring earlier, I
22 believe it was part of site classification.
23 To step closer to the fiber-optic cables,
24 you damage a fiber-optic cable and you're
L.A. REPORTING (312) 419-9292
36
1 looking at huge amounts of money that the
2 state would not reimburse. It was just not
3 a risk that I am willing to take just to
4 determine that. It would be much easier to
5 go across the street.
6 Q. I think you mentioned there was
7 hand-augering. What was the purpose of
8 that?
9 A. It was discussed whether or not
10 a hand-augering boring would be sufficient
11 enough, but given the place of our last
12 boring and the fiber-optic cable, it was
13 deemed we really wouldn't be able to tell
14 anything significant from that because it
15 was in relatively close proximity to our
16 previous boring location.
17 Q. Would it have been significantly
18 less costly to obtain closure of this site
19 if you hadn't had to obtain the off-site
20 samples and the Highway Authority Agreement?
21 A. Yes.
22 Q. Would it be fair to say a
23 significant portion of this amended budget
24 relates to the need to go off site and do
L.A. REPORTING (312) 419-9292
37
1 the testing and to obtain the two Highway
2 Authority Agreements?
3 A. Yes, as well as obtaining
4 off-site access from the City of Washington.
5 Q. The City of Washington was the
6 owner of the off-site property?
7 A. That's correct. It was joint
8 between them and the Illinois Department of
9 Transportation.
10 Q. You have in front of you what
11 has previously been identified as
12 Petitioner's Exhibit 1. Do you remember
13 that document?
14 A. Yes.
15 Q. Can you just identify that for
16 the record?
17 A. This is the personnel page of
18 the budget amendment submitted.
19 Q. Did you have personal
20 involvement in the preparation of this
21 document?
22 A. Yes.
23 Q. Do you see the hours listed in
24 each of those categories, next to
L.A. REPORTING (312) 419-9292
38
1 environmental hydrogeologist, 12 hours? Can
2 you attest to the accuracy of that entry as
3 to hours actually expended on the project by
4 an environmental hydrogeologist?
5 A. Yes. At least.
6 Q. Would the same be true with
7 respect to each of those categories that are
8 depicted on page 1 of Petitioner's Exhibit
9 1?
10 A. Yes.
11 Q. It's your testimony that Midwest
12 spent at least the number of hours depicted
13 on Petitioner's Exhibit 1 in connection with
14 the amended budget for this project?
15 A. That's correct.
16 Q. Can you quantify approximately
17 how many conversations you had with Mr.
18 Malcolm in connection with the amended
19 budget?
20 A. The amount of time, I am not
21 quite sure, it was around four or five.
22 MR. RIFFLE: No further
23 questions.
24 HEARING OFFICER: Thank you.
L.A. REPORTING (312) 419-9292
39
1 Mr. Kim?
2
3 CROSS-EXAMINATION
4
5 BY MR. KIM:
6 Q. Just a few questions, Mr.
7 Birky.
8 Look at petitioner's Exhibit No.
9 1, page 119, there are different line items
10 for different job titles, is that correct?
11 A. Yes.
12 Q. You stated that you are by
13 training an environmental geologist, is that
14 correct?
15 A. Yes.
16 Q. Is it safe to say of these
17 different line items, the line item for
18 hydrogeologist is referencing your work?
19 A. That's correct.
20 Q. On this site you were not the
21 professional geologist, is that correct?
22 A. That's correct.
23 Q. Not going through the whole
24 list, you were not acting in any of the
L.A. REPORTING (312) 419-9292
40
1 capacities of any other of the line items,
2 you were acting as the hydrogeologist?
3 A. No, I had some tasks as senior
4 project manager as well.
5 Q. If we look at the line items for
6 environmental hydrogeologist and the line
7 item of senior project manager, the line
8 item for hydrogeologist states that the work
9 performed was relevant to the letters CACR,
10 which is Corrective Action Completion
11 Report, is that correct?
12 A. Yes.
13 Q. I am going to reference that as
14 CACR. On that line item the tasks to be
15 performed are listed as Contractor Highway
16 Authority Agreement and Final Reimbursement
17 Preparation, is that right?
18 A. That's correct.
19 Q. Under line item for senior
20 project manager, line items Contractor,
21 letters TACO, pathway exclusion and Highway
22 Authority Agreement, is that correct?
23 A. That's correct.
24 Q. Comparing the two line items
L.A. REPORTING (312) 419-9292
41
1 TACO and Pathway Exclusion are listed under
2 senior project manager, otherwise the two
3 line items are both listing Contractor and
4 Highway Authority Agreement, is that
5 correct?
6 A. That's correct.
7 MR. KIM: That's all I have.
8 HEARING OFFICER: Any redirect?
9 MR. RIFFLE: Yes.
10
11 REDIRECT EXAMINATION
12
13 BY MR. RIFFLE:
14 Q. Did you also serve as project
15 manager on this project?
16 A. I may have. It just depends on
17 what kind of work that's referring to.
18 Q. I see that there's different
19 rates for senior project manager and project
20 manager in that the project manager's hourly
21 fee is $78.00, which is the lowest of the
22 professional categories. What kind of
23 projects would come within that $78.00
24 project manager category?
L.A. REPORTING (312) 419-9292
42
1 A. If there were, say maps or a
2 CADE program, when you use the CADE program
3 to draw maps and stuff like that, that would
4 fall under the project manager scope of
5 work.
6 Q. Do you perform that type of
7 function?
8 A. Yes.
9 MR. RIFFLE: Nothing further.
10 HEARING OFFICER: Any recross?
11
12 RECROSS-EXAMIANTION
13
14 BY MR. KIM:
15 Q. Did you say on this site you did
16 or did not act as project manager as set
17 forth in 119?
18 A. I didn't have extensive project
19 manager billing on this site.
20 Q. The 8 and a half hours that are
21 attributed to the project manager for this
22 site, those do not include your time, is
23 that correct?
24 A. That's probably the case, that's
L.A. REPORTING (312) 419-9292
43
1 correct.
2 MR. KIM: Thank you.
3 HEARING OFFICER: Thank you.
4
5 (Whereupon the witness was excused.)
6
7 HEARING OFFICER:
8 Do you have any more witnesses?
9 MR. RIFFLE: Can I have a short
10 break?
11 HEARING OFFICER: Sure. We'll
12 go off the record for a minute.
13
14 (A short recess was taken.)
15 HEARING OFFICER: Back on the
16 record.
17 Mr. Riffle?
18 MR. RIFFLE: With counsel's
19 permission, I'd like to recall Mr. Birky for
20 one last question or two.
21 HEARING OFFICER: Yes.
22
23 REDIRECT EXAMINATION OF TODD BIRKY
24
L.A. REPORTING (312) 419-9292
44
1 BY MR. RIFFLE:
2 Q. Mr. Birky, you were asked
3 earlier some questions about your
4 involvement in which categories of page 1 of
5 Exhibit 1 you were involved in. Can you
6 just identify for the record who else was
7 involved in this project on behalf of
8 Midwest, and generally speaking, what their
9 responsibilities were?
10 A. Sure. Professional geologist,
11 Penny Silver is a licensed PG in the state
12 of Illinois; that would have been her. She
13 did a lot of the -- some of the TACO
14 calculations in Tier 2 calculations and
15 modeling.
16 Senior environmental manager
17 would have been Mr. Green, and he would have
18 overseen all the reports and basically a
19 general oversight of the entire project.
20 Administrative/Clerical would
21 have been Kaylynn Green. She's the office
22 manager and she would take care of mailing
23 the reports and copying the reports and
24 binding them.
L.A. REPORTING (312) 419-9292
45
1 Senior project manager, that
2 was, some of that was me. Some of it was
3 also Penny Silver, our professional
4 geologist. Some of that work may have
5 fallen under Mr. Green.
6 Professional engineering, that
7 would have been Dale Bennington. He is our
8 licensed PE in the State of Illinois. He
9 would review reports and make sure the
10 calculations were correct, and also
11 reimbursement. He would certify the
12 reimbursements as well.
13 Principal was Mr. Green. It's
14 the same, he would overlook all the reports
15 and have some work in preparing the final
16 draft.
17 Project manager, most of that
18 work would fall under Greg Hugher, he is not
19 currently with us any longer. He would be
20 the one responsible for all the CADE and
21 sample preparations, sending them out to the
22 lab and what not.
23 Q. You had personal involvement in
24 the preparation of the amended budget?
L.A. REPORTING (312) 419-9292
46
1 A. Yes.
2 Q. Your testimony was that page 1
3 of Exhibit 1 does accurately reflect the
4 hours that Midwest spent on that phase of
5 the project or you spent at least that many
6 hours, is that correct?
7 A. Yes.
8 MR. RIFFLE: No further
9 questions.
10 HEARING OFFICER: Mr. Kim?
11 MR. KIM: I have one follow-up.
12
13 RECROSS-EXAMINATION
14
15 BY MR. KIM:
16 Q. You were describing just now the
17 different work people did and how it might
18 go different ways. To clarify, on page 119
19 of the Administrative record which is part
20 of the exhibit there, there's no breakouts?
21 For example, look at your line item
22 environmental hydrogeologist at 12 hours and
23 3 tasks listed. There's not a breakdown of
24 how many hours per task was performed, is
L.A. REPORTING (312) 419-9292
47
1 that correct?
2 A. That's correct.
3 Q. With the exception of somebody
4 who was one line item, for the other people
5 on the page that have multiple tasks, there
6 are no breakouts of how many hours were
7 spent on each task to come up with that
8 total number of hours, is that right?
9 A. That's correct.
10 MR. KIM: That's all I have.
11 HEARING OFFICER: Mr. Riffle?
12 MR. RIFFLE: Nothing further.
13 HEARING OFFICER: Thank you, Mr.
14 Birky
15
16 (Whereupon the witness was excused.)
17 HEARING OFFICER: Any further
18 witnesses?
19 MR. RIFFLE: No.
20 HEARING OFFICER: Mr. Kim, you
21 may proceed with your case.
22 MR. KIM: I'd like to call Harry
23 Chappel, please.
24
L.A. REPORTING (312) 419-9292
48
1 HARRY A. CHAPPEL,
2 having been first duly sworn, was examined
3 and testified as follows:
4
5 DIRECT EXAMINATION
6
7 BY MR. KIM:
8 Q. Would you state your name and
9 spell your last name?
10 A. Harry Chappel. C-H-A-P-P-E-L.
11 Q. Mr. Chappel, what is your
12 current employment?
13 A. I am currently the manager of
14 one of the units in the Leaking Underground
15 Storage Tank Section, Bureau of Land,
16 Illinois EPA.
17 Q. Have you held different
18 positions within the EPA?
19 A. Yes, I have.
20 Q. Can you describe what those
21 different positions were?
22 A. Going back to when I started?
23 Q. When did you start with the EPA?
24 A. 1976.
L.A. REPORTING (312) 419-9292
49
1 Q. Well, let's relate it to your
2 positions with the leaking underground
3 storage tank program.
4 A. I formed the leaking underground
5 storage tank section as the original manager
6 in 1991. Served as the manager until
7 1994-95, which I then left the Agency and
8 went into private practice.
9 I came back to the Agency two
10 years ago, and approximately one year ago
11 was hired as the unit manager, which is the
12 position I am in now.
13 Q. During the time you worked
14 outside of the Agency in private practice,
15 can you describe whether or not that work
16 also related to leaking underground storage
17 tank remediation?
18 A. Many of the projects in private
19 practice that I dealt with were underground
20 storage tank projects being approved and
21 reimbursed through the Agency Program as it
22 existed.
23 Q. Do you know roughly how many
24 leaking underground storage tank sites you
L.A. REPORTING (312) 419-9292
50
1 have worked on either directly or in a
2 managerial capacity during your time at the
3 EPA?
4 A. Hundreds.
5 Q. Would it be close to a thousand?
6 A. It could be.
7 Q. That's fine.
8 Do you have any professional
9 certifications or registrations?
10 A. Registered professional engineer
11 in Illinois. I am a registered asbestos
12 inspector, management planner and designer.
13 Q. Specifically turning to the site
14 that's the subject of the appeal, are you
15 familiar with Todd's Service Station?
16 A. Yes, I am.
17 Q. Were you responsible for signing
18 -- I am going to turn to 136 of the
19 Administrative record. Could you look at
20 that document?
21 A. Okay.
22 Q. Are you familiar with that
23 document?
24 A. Yes, I am.
L.A. REPORTING (312) 419-9292
51
1 Q. Can you describe what it is?
2 A. It's a June 7, 2002 modification
3 of the High Priority Corrective Action
4 Budget submitted June 4th and received June
5 4th, 2002, and it specifies the amounts of
6 that budget that were approved.
7 Q. Who signed that letter?
8 A. I did.
9 Q. Do you have an understanding of
10 the review and decision making that led to
11 the issuance of that letter?
12 A. Yes, I do.
13 Q. On page 138, could you
14 specifically describe what that page is?
15 A. 138 is Attachment A to the June
16 -- is that June 7th?
17 Q. I think so.
18 A. June 7th, 2002 approval with
19 modification of the budget submittal. It
20 specifies how much of that budget was
21 approved and how much was not. It doesn't
22 specify how much was not, but specifies the
23 amounts being approved in that modified
24 budget.
L.A. REPORTING (312) 419-9292
52
1 Q. By implication, does it show the
2 difference?
3 A. If you do the mathematics, you
4 would know the difference.
5 Q. Could you also please look at
6 what's identified as page 98 of the
7 Administrative Record?
8 After you have had a chance to
9 look at it, would you describe what that is?
10 A. This is a November 1st, 2000
11 approval of a High Priority Corrective
12 Action Plan and Budget with modifications
13 for Todd's Service Station. This would have
14 been, I believe, the original corrective
15 action plan budget.
16 Q. Who signed that letter?
17 A. Kendra Brocamp.
18 Q. Can you describe your position
19 now compared to Ms. Brocamp's position in
20 her capacity when she signed that letter?
21 A. Mrs. Brocamp was serving in the
22 exact same position that I am in presently.
23 I replaced her.
24 Q. The letter on page 99, is there
L.A. REPORTING (312) 419-9292
53
1 a name provided as a contact person?
2 A. In terms of Agency contact?
3 Q. Yes.
4 A. In case of assistance, please
5 contact James R. Malcolm, III and it lists
6 his phone number.
7 Q. Does he work for you now?
8 A. Yes, he does.
9 Q. Are you familiar with that
10 letter?
11 A. Yes, I am.
12 Q. Did you review that letter as
13 part of your decision-making process that
14 led to the issuance of the June 2002 letter?
15 A. Yes, I did.
16 MR. KIM: I would like this
17 marked as Respondent's Exhibit No. 1.
18 (Respondent's Exhibit No. 1 was
19 marked for identification.)
20 BY MR. KIM:
21 Q. Could you look at what's been
22 marked as Respondent's Exhibit No. 1?
23 A. Yes.
24 Q. Do you know what that document
L.A. REPORTING (312) 419-9292
54
1 is?
2 A. Yes, it's a budget summary that
3 I prepared on July 11, 2003 in preparation
4 for this hearing of the two budgets that
5 were submitted and the actions taken by the
6 Agency on those budgets.
7 Q. Is the information on this sheet
8 contained within the Administrative record,
9 not necessarily in this form?
10 A. It is not in this form. The
11 information is there. Other than maybe the
12 rates, if you look at the column under
13 9-20-2000, that rates approved column there,
14 may not be in the original budget approval.
15 Other than that these numbers are all in the
16 record.
17 Q. Let's focus on that. If you
18 turn to page 98 -- page 100 of the
19 Administrative record, can you describe what
20 that page is?
21 A. It's Attachment A to the
22 November 1st, 2000 approval of the original
23 Corrective Action Plan Budget, which
24 specifies the amounts that were approved for
L.A. REPORTING (312) 419-9292
55
1 that plan.
2 Q. On the Respondent's Exhibit No.
3 1, there's reference to a September 20, 2000
4 budget. Is that the budget that was the
5 subject of that final decision that you're
6 looking at in the Administrative record?
7 A. Yes.
8 Q. Is there a method or way that
9 you could calculate the figures found in the
10 rates approved column in Exhibit No. 1,
11 comparing it to the Administrative record?
12 A. Well, if you look at the
13 Administrative record on page 100, it
14 indicates, on Section 2 it indicates that
15 $612.00 for an adjustment in mobilization
16 rates and the hourly rates for a
17 hydrogeologist was deducted.
18 Later on in the second
19 paragraph, it indicates that the
20 environmental hydrogeologist rate was
21 unreasonable and reduced by $572.00. The
22 amount proposed for mobilization was reduced
23 by $40.00.
24 If you look at the $572.00 that
L.A. REPORTING (312) 419-9292
56
1 was reduced for the hydrogeologist, the
2 budget proposed 44 hours for that
3 hydrogeologist, so if you divide 572 by 44
4 hours, you get the reduction in hourly rates
5 for that hydrogeologist, which was $98.00 to
6 $85.00.
7 Q. Were there any other deductions
8 of hourly rates?
9 A. In the original budget, no.
10 Q. If you were to then look to page
11 80 of the Administrative record, what is
12 that a page from, can you tell us?
13 A. Page 80 is contained in Appendix
14 E, which is the originally approved budget
15 for the Corrective Action Plan.
16 Q. Does that page contain hourly
17 rates?
18 A. Yes, it does.
19 Q. How do those hourly rates
20 correspond to the information found on
21 Exhibit 1?
22 A. The 9-20-2000 on Exhibit 1, that
23 table, the rates are all the same except for
24 environmental hydrogeologist which was
L.A. REPORTING (312) 419-9292
57
1 reduced from 98 to 85.
2 Q. Let's just take one line item,
3 the very first senior project manager, can
4 you walk through each one of those columns
5 to provide an example of how that works out?
6 A. This is from the 9-20-2000
7 approved Corrective Action Plan Budget.
8 Senior project manager was listed as
9 requiring 42 hours, Rate PROP, is the rate
10 proposed for those hours, and the amount
11 PROP is the amount proposed. If you take 42
12 hours as proposed times the rate, $98.00,
13 they were proposing $4,116.00 for that task.
14 The next column on my
15 preparation is the number of hours the
16 Agency approved from that plan and budget,
17 the rates we approved from that budget and
18 the resulting amount approved in that
19 budget.
20 It goes through the same thing
21 for each one of the categories.
22 Q. Based upon that, and based upon
23 your explanation of the reduction in the
24 environmental hydrogeologist rates, is it
L.A. REPORTING (312) 419-9292
58
1 your testimony that the information found on
2 the table there for the September 2000
3 budget is found within the Administrative
4 record?
5 A. Yes.
6 Q. Let's move to the more recent
7 budget submittal. If you could look on page
8 119 of the Administrative record, I believe
9 this has been testified to already. I think
10 that has been identified as part of the
11 second budget submittal and specifically
12 listing personnel hours and rates. Could
13 you compare your table in Respondent's
14 Exhibit No. 1 with page 119 of the
15 Administrative record?
16 A. The second table on my
17 information again breaks out the personnel
18 titles, the hours proposed for those titles,
19 dollar rates they proposed, and the amount
20 based on those rates.
21 The last three columns are what
22 the Agency approved from that budget, the
23 rates we approved and the resulting amount
24 therefore approved under that budget
L.A. REPORTING (312) 419-9292
59
1 amendment.
2 Q. If you look at pages 119 and
3 page 138, is the information contained
4 within your table, in Respondent's Exhibit
5 No. 1 found in the Administrative record?
6 A. Yes, it is, except for the
7 mathematical error that was discussed
8 earlier.
9 Q. To summarize then, although this
10 information was prepared after the issuance
11 of the final decision, is the information
12 included within Respondent's Exhibit No. 1
13 all taken from information already in the
14 Administrative record?
15 A. Yes.
16 MR. KIM: I know that the
17 Board's rule and the Board case law is very
18 clear that information that postdates the
19 final decision is not something that's
20 generally considered to be part of the
21 record and not appropriate as evidence.
22 However, the Board has made at
23 least one exception and that is when
24 evidence or exhibits are prepared as
L.A. REPORTING (312) 419-9292
60
1 demonstrative evidence where they simply
2 contain information taken from part of the
3 record and put onto one page.
4 I have a case, Community
5 Landfill Company and City of Morris versus
6 IEPA, specifically on page 16 -- page 19 of
7 the Board's order, the Board does state
8 toward the bottom of that page that the
9 exhibit that was discussed there, which is
10 D2, was something that was demonstrative
11 only, cumulative to other information in the
12 record.
13 Based upon that and based upon
14 Mr. Chappel's testimony, I would ask that
15 Respondent's Exhibit 1 be admitted.
16 MR. RIFFLE: Two comments. One,
17 I have only had this document for this
18 morning and haven't had a chance to check
19 the matter. We want to reserve the
20 objection with respect to any accuracy
21 issues.
22 Second, I think I want to
23 comment on the, what I believe is the
24 irrelevancy of the top half of that
L.A. REPORTING (312) 419-9292
61
1 document. We're here only dealing with the
2 budget amendment and I am not sure what if
3 any use would be made of the top half of it,
4 but again, I think there's no relevance to
5 the analysis of the initial budget that is
6 not at issue here today.
7 With those two caveats, I have
8 no objection to at least the last half of
9 that exhibit, assuming it's mathematically
10 accurate.
11 HEARING OFFICER: Mr. Kim, would
12 you like to comment on the first half?
13 MR. KIM: First of all, I hope
14 the math on the exhibit is going to be
15 better in the final decision of appeal.
16 I understand Mr. Riffle's point.
17 The reason that the first half relating to
18 the September 2000 budget I believe is
19 relevant is it goes to one of the rates
20 that's in dispute, specifically the Agency
21 reduced the rates for the environmental
22 hydrogeologist, and in the decision that's
23 under appeal from $98.00 to $85.00, and Mr.
24 Green testified previously that he was aware
L.A. REPORTING (312) 419-9292
62
1 a budget had been submitted for corrective
2 action work earlier that was not appealed
3 and in that budget the Agency made a similar
4 deduction from $98.00 to $85.00 for
5 environmental hydrogeologist, and so it's
6 relevant in that we're being consistent.
7 We have taken that specific
8 action with a specific job title on this
9 site and we want to demonstrate what we did
10 there was not appealed. What we did here
11 was consistent with what we did before.
12 Mr. Green's testimony was his
13 rates are customary and reasonable, which is
14 fine, but we want to demonstrate what we
15 have done is at least in this particular
16 case customary in the sense that it's
17 something we have already issued.
18 That's why I think the first
19 part is relevant and why, as Mr. Chappel
20 stated, he did review the initial decision
21 and the information that led to the initial
22 decision that's found within the
23 Administrative record.
24 HEARING OFFICER: Does that
L.A. REPORTING (312) 419-9292
63
1 address your concerns, Mr. Riffle, as to the
2 first half of the form?
3 MR. RIFFLE: I don't want to
4 make a large issue of it because I don't
5 think it's that important. I want to make it
6 clear for the record that my position is a
7 failure or decision not to appeal a prior
8 decision of the Agency doesn't stop us from
9 challenging it at a different time.
10 I want to make clear simply
11 because somebody doesn't appeal an earlier
12 decision as to an hourly rate, they are not
13 forever barred from making a challenge.
14 In an earlier decision, it may
15 be of such a low dollar amount it wouldn't
16 be cost effective to challenge. To the
17 extent they are trying to use it as some
18 type of estoppel or course of dealing or
19 acquiescence, I want to make it clear for
20 the record we would disagree with that
21 position.
22 In terms of allowing it in for
23 the other purpose stated to show that they
24 have taken the position on the prior
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1 occasion, I have no objection.
2 HEARING OFFICER: Duly noted.
3 I am going to go ahead and admit
4 Respondent's Exhibit No. 1 into the record.
5 I will just add a citation to
6 the case that Mr. Kim cited, Community
7 Landfill Company and City of Morris versus
8 IEPA is PCB 01-48 and 49. That was a
9 consolidated docket and the Board's order is
10 dated April 5th, 2001, and we were looking
11 at page 19.
12 Mr. Kim, you would describe this
13 as a summary of the figures that are in the
14 Administrative record?
15 MR. KIM: That's correct.
16 Frankly, I thought it would be easier to
17 reference one page.
18 HEARING OFFICER: This is a very
19 nice, readable document and it's really,
20 it's very clear. It makes it easy to
21 understand.
22 I agree with Mr. Riffle, neither
23 of us has had an opportunity to refer to the
24 record. I will go ahead and admit this as
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1 Respondent's Exhibit 1.
2 MR. KIM: I'd like to thank Mr.
3 Chappel for preparing it.
4 Q. I'd like to move away from this
5 a little bit and ask you about your
6 understanding of the communications that
7 took place between the Illinois EPA and
8 Midwest Environmental. Are you aware there
9 were some communications between a member of
10 your staff, Mr. Malcolm, and representatives
11 of Midwest Environmental concerning the
12 submission of the second budget amendment?
13 A. Yes.
14 Q. Can you describe what your
15 understanding of those conversations were?
16 MR. RIFFLE: I will object on
17 hearsay grounds.
18 MR. KIM: In response, it's his
19 understanding of what happened. Mr. Birky
20 and Mr. Green testified as to what their
21 understanding was of these conversations and
22 it's -- I am not asking what was
23 specifically said. I am asking what his
24 understanding was.
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1 HEARING OFFICER: You may
2 proceed with what your understanding was.
3 THE WITNESS: The conversations
4 that I am aware of dealt with the issue of
5 whether a budget could or could not be
6 submitted after the issuance of an NFR. I
7 believe that the conversations and the
8 decisions reached regarding that topic, I
9 documented in a memo that's a part of the
10 record.
11 BY MR. KIM:
12 Q. What authority does the Agency
13 have to issue approvals of budget
14 amendments?
15 MR. RIFFLE: I will object. It
16 calls for a legal conclusion.
17 MR. KIM: Let me rephrase. I
18 will strike that question.
19 Q. Mr. Riffle accurately described
20 there are two deductions that were under
21 appeal, one relating to hourly rates and one
22 relating to the number of hours of work
23 performed. Could you describe the reasoning
24 behind the reduction in the number of hours
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67
1 performed in the second budget amendment?
2 What I am asking is, they asked for X number
3 of hours. We approved a different number.
4 Can you explain the difference between the
5 two numbers?
6 A. You have to take into account
7 the originally approved budget which has
8 certain activities approved and amounts for
9 those, and the amended budget, which was
10 later submitted, which reportedly has
11 additional costs for maybe some other tasks,
12 maybe the same tasks. It's not clear from
13 the second submitted budget exactly what
14 tasks and how many hours were being
15 attributed to those tasks.
16 As I looked at the second
17 submitted budget, I believe that certain
18 portions of those tasks were approved in the
19 original budget, amount and hours.
20 Therefore, I considered the amount of time
21 being spent in preparing the amended budget
22 which had to be submitted and the amount of
23 additional time that may have been spent
24 above and beyond what was approved in the
L.A. REPORTING (312) 419-9292
68
1 original budget.
2 The numbers reflected on this
3 table that show hours approved, are the
4 hours that I deemed reasonable for the
5 additional efforts in preparing the second
6 budget and the Highway Authority Agreements
7 and that I felt were above and beyond the
8 original budget was approved.
9 Q. What did you base what you
10 believe to be reasonable on those specific
11 deductions?
12 A. My experience in preparing
13 budgets and reviewing them.
14 MR. KIM: I don't have anything
15 further at this time.
16
17 CROSS-EXAMINATION
18
19 BY MR. RIFFLE:
20 Q. Mr. Chappel, when did you first
21 become involved in the Todd project?
22 A. I don't recall the specific
23 date. As manager for Mr. Malcolm, I would
24 assume I was probably involved with it on
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69
1 March 18 of 2001 when I became the manager,
2 until today.
3 Q. Other than the work that you
4 described with respect to the amended
5 budget, were there any other specific tasks
6 that you recall being involved in on the
7 Todd's project?
8 A. I believe I had phone
9 conversations with representatives from
10 Midwest Environmental regarding the budget.
11 Other than that, I don't recall any.
12 Q. Do you know how many meetings
13 Midwest attended with the City of Washington
14 to obtain the highway Authority Agreement?
15 A. No, I don't.
16 Q. Do you know how many meetings
17 Midwest attended with the Illinois
18 Department of Transportation to obtain the
19 IDOT Highway Agreement?
20 A. No, I don't.
21 Q. Do you know what process was
22 followed by Midwest to get the City of
23 Washington approval to go on City of
24 Washington land to conduct those additional
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1 soil borings?
2 A. No, I don't.
3 Q. Do you have any doubt that it
4 was Mr. Malcolm who suggested or insisted
5 that Midwest obtain off-site samples in
6 order to complete this project? Do you have
7 any reason to doubt that?
8 A. The suggested part, I accept.
9 The insisted part, I don't accept.
10 Q. In your work in private practice
11 did you ever have occasion to try to obtain
12 Highway Authority Agreements from
13 municipalities?
14 A. No.
15 Q. You've never personally obtained
16 a Highway Authority Agreement, correct?
17 A. No.
18 Q. That would be true of IDOT as
19 well as municipalities?
20 A. That's correct.
21 Q. Do you have an understanding
22 that that can sometimes be a fairly
23 difficult and tedious process?
24 A. I have no experience.
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1 Q. Do you have any specific
2 evidence that the hours claimed in the
3 amended budget were not actually expended by
4 Midwest on this project?
5 A. No, I do not.
6 Q. From the time you reviewed the
7 amended budget were you aware that two
8 Highway Authority Agreements had been
9 obtained by Midwest on behalf of Todd's?
10 A. I believe the budget listed HAA,
11 which I believe stands for Highway Authority
12 agreement, the amended budget listed that as
13 a specific activity. I was not aware there
14 were two or three separate ones.
15 Q. Would that have made any
16 difference in connection with your review of
17 the budget?
18 A. I don't believe so.
19 Q. So you wouldn't allocate any
20 more time to get two or three highway
21 agreements than you would allocate to get
22 one?
23 A. I didn't see that. The budget
24 specified Highway Authority Agreement. As
L.A. REPORTING (312) 419-9292
72
1 far as I knew, that was only one Highway
2 Authority Agreement. The forms for
3 obtaining those are available on the Agency
4 web site. You simply download them, fill in
5 the blanks and send them to the city. I
6 don't see where that was a large expenditure
7 of time or effort.
8 Q. You're not aware in your years
9 of experience with the IEPA that contractors
10 and property owners have had difficulty
11 getting Highway Authority Agreements from
12 municipalities?
13 A. I have heard that those
14 difficulties do exist, yes.
15 Q. Have you ever conducted any type
16 of survey to determine what a reasonable
17 hourly rate is, for instance, for an
18 environmental hydrogeologist?
19 A. No, I haven't.
20 Q. Are there other contractors
21 operating in the, for instance, the central
22 Illinois region that are charging at least
23 $98.00 an hour for environmental
24 hydrogeologists?
L.A. REPORTING (312) 419-9292
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1 A. I wouldn't know.
2 Q. Do you have any generic rules or
3 rules of thumb as to how much time you can
4 approve for a particular NFR project?
5 A. How many hours?
6 Q. Right.
7 A. That I can allot?
8 Q. Right. That you would normally
9 allot for an NFR.
10 A. In determining a budget
11 submittal, the number of hours?
12 Q. Correct.
13 A. No, we don't.
14 Q. It's entirely subjective?
15 A. Correct.
16 Q. Was anybody else other than
17 yourself involved in the determination with
18 respect to the partial disapproval of the
19 amended budget in this particular case?
20 A. I believe it was -- I believe
21 the second budget was reviewed and approved
22 by me. Mr. Malcolm probably wrote the
23 letter, but I reviewed the actual budget and
24 made the deductions.
L.A. REPORTING (312) 419-9292
74
1 Q. Do you have just one standard
2 rate that you approve for hydrogeologist or
3 does that vary from contractor to
4 contractor?
5 A. We have a standard internal rate
6 that has been developed for the different
7 job titles.
8 Q. Are those the rates that have
9 been approved here?
10 A. I believe so, yes.
11 Q. So the IEPA never approves more
12 than $85.00 for an Environmental
13 hydrogeologist on a LUST fund site?
14 A. I didn't say that. That's not
15 to say there aren't projects out there that
16 some higher amounts haven't been approved
17 because the Agency does not review each and
18 every plan and budget submitted.
19 If a plan or budget is not
20 selected for review, there could be much
21 higher rates approved in that budget because
22 it wasn't selected, it has been approved by
23 de facto inaction by the Agency.
24 Q. How was that $85.00 an hour
L.A. REPORTING (312) 419-9292
75
1 figure arrived at for the environmental
2 hydrogeologist?
3 A. I did not develop that number
4 and, like I say, it's developed internally
5 by our LUST claims unit and my limited
6 understanding of it is that is a summary of
7 all the costs for that job title over, and I
8 am guessing three or four years. They find
9 the medium and add the standard deviation
10 and that's the allowable rate.
11 Q. Who is they? Who did this?
12 A. The LUST Claim Unit within the
13 Bureau of Land.
14 Q. Do you know who the people are
15 within that department?
16 A. The manager is Doug Oakley, and
17 he has maybe eight, ten people that work for
18 him.
19 Q. Are you personally familiar with
20 the process that brought that about or are
21 you just --
22 A. No, I am not personally
23 familiar.
24 Q. Do you take into consideration
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76
1 the reputation and ability of contractors
2 when you determine the appropriateness of
3 hourly rates?
4 A. No.
5 Q. Regardless of whether somebody
6 is very good or not so good, they are going
7 to get the same hourly rate?
8 A. To the extent humanly possible,
9 I try to do that, yes.
10 Q. You try to do what?
11 A. I try to make the hours and the
12 decision consistent throughout at least my
13 unit.
14 Q. Consistent in that they all
15 receive the same hourly rates?
16 A. Consistent in that given a task,
17 the number of hours that I feel are
18 reasonable for that task, keeping that
19 number consistent.
20 Q. When you undertake your efforts
21 to review a budget, is there any document at
22 all, documents at all that you refer to in
23 making your reasonableness determinations?
24 A. I think I need to clarify one
L.A. REPORTING (312) 419-9292
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1 thing before I go any further. I said that
2 I was the only one that looked at this
3 budget. I noticed there was a reduction in
4 the Senior Environmental Manager from 110 to
5 100. Jamie would have made that, James
6 Malcolm would have made that deduction. The
7 rest would have been mine.
8 Q. Why do you say that?
9 A. I did not look at the hourly
10 rates. I left that up to him to review. So
11 I would not have done that reduction. My
12 reduction would have only been in the hours
13 approved.
14 Q. You don't know how many hours
15 actually were expended by Midwest on this
16 project, correct?
17 A. No.
18 MR. RIFFLE: I have no further
19 questions. I am not certain that I actually
20 moved for the admission of Petitioner's
21 Exhibit 1. I think it was stipulated to.
22 HEARING OFFICER: I thought that
23 you had. Petitioner's Exhibit No. 1 is
24 admitted.
L.A. REPORTING (312) 419-9292
78
1 MR. KIM: Just a few follow-up
2 questions.
3
4 REDIRECT EXAMINATION
5
6 BY MR. KIM:
7 Q. Where in the record is there
8 documentation of how many meetings were held
9 between Midwest Environmental and the City
10 of Washington?
11 A. To the best of my knowledge,
12 it's not in there.
13 Q. Same question. Where in the
14 record are any of the documents put in by
15 Midwest, is there documentation between
16 Midwest Environmental and the Department of
17 Transportation?
18 A. Again, to the best of my
19 knowledge there is nothing in here.
20 Q. I believe you testified earlier
21 that, and if I mischaracterize the question,
22 correct me. I was trying to keep track. I
23 believe you were responding to a question
24 concerning the number of hours that are
L.A. REPORTING (312) 419-9292
79
1 generally allowed for when reviewing a
2 budget in terms of certain types of work
3 that's performed. I think you said that
4 it's a subjective kind of standard. Do you
5 recall giving that answer?
6 A. Yes.
7 Q. What did you mean by subjective?
8 Can you explain that a little further?
9 A. There are no standard tasks or
10 standard number of hours for those tasks
11 within the Agency.
12 I have experience personally in
13 developing those hours within the Agency
14 myself for purposes of a new rule making to
15 be submitted to the Board.
16 So the subjective part is that
17 the number of hours for a given task have to
18 be based on some kind of experience that you
19 have had in either reviewing these before or
20 doing the actual work yourself, or on the
21 specifics provided in the application given
22 to you by the applicant.
23 Q. I think you were also asked
24 regarding preparation of Highway Authority
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1 Agreements, whether or not sometimes they
2 can be tedious, sometimes they can't. I
3 think you testified you don't have any
4 direct firsthand knowledge of that. Do you
5 see budget submittals that specify how much
6 time is attributed to acquisition of a
7 Highway Authority Agreement?
8 A. On other projects you will see
9 obtaining Highway Authority Agreements as
10 one of the activities listed on the line
11 item for the budget, yes.
12 Q. What kind of range do you see?
13 A. I would not be able to even
14 specify a range for that individual item.
15 Q. So there's no consistency
16 necessarily?
17 A. That's correct.
18 MR. KIM: That's all I have.
19 HEARING OFFICER: Mr. Riffle?
20 MR. RIFFLE: Very briefly.
21
22 RECROSS-EXAMINATION
23
24 BY MR. RIFFLE:
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81
1 Q. Would it be fair to say that
2 every site where you're doing environmental
3 clean-up has its own differences from site
4 to site?
5 A. Yes.
6 Q. Do you see quite a variation in
7 the budget proposed in different LUST sites
8 that come by your office?
9 A. Yes.
10 Q. Do you review the environmental
11 data relating to this site?
12 A. No.
13 Q. Have you ever been on that site?
14 A. No.
15 Q. Have you ever reviewed the maps
16 or plans or anything related to the site?
17 A. No.
18 Q. Did you ever speak with Mr.
19 Malcolm about that difficulty with the
20 utility lines that was encountered in terms
21 of where the boring locations could be
22 located?
23 A. Not that I remember.
24 MR. RIFFLE: Nothing further.
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1 MR. KIM: Nothing further.
2 HEARING OFFICER: Thank you.
3
4 (Whereupon the witness was excused.)
5
6 HEARING OFFICER: Mr. Kim, have
7 you no further witnesses?
8 MR. KIM: I have no further
9 witnesses.
10 HEARING OFFICER: Before we hear
11 closing arguments, I would like to go off
12 the record to discuss the transcript
13 availability and the briefing schedule.
14 Off the record.
15 (Discussion held off the record.)
16 HEARING OFFICER: Back on the
17 record. We have had an off-the-record
18 discussion regarding posthearing briefs.
19 The parties have agreed to a
20 briefing schedule. The transcript of these
21 proceedings will be available from the court
22 reporter by July 25th and will appear on the
23 Board web site by July 30th.
24 The public comments deadline is
L.A. REPORTING (312) 419-9292
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1 going to be August 1st and public comments
2 must be filed in accordance with the Section
3 101.628 of the Board's procedural rules.
4 The Petitioner's brief will be
5 due by August 21st and Respondent's response
6 will be due by September 11th. The
7 petitioner's reply brief, if any, will be
8 due by September 25th. The mailbox will
9 apply in this case.
10 At this time I will ask you if
11 you would like to make a closing argument.
12 MR. RIFFLE: Yes. Thank you.
13 We believe the record is
14 abundantly clear that Midwest did need to
15 expend the number of hours that they claim
16 to have expended on this project and in fact
17 they expended more time.
18 The difficulties encountered on
19 the project, the particular requirements of
20 the project and the IEPA's significant
21 involvement in not so much directing Midwest
22 on what to do, but in agreeing with the
23 proper way to clean up this property, I
24 think it's clear in the record, I think
L.A. REPORTING (312) 419-9292
84
1 there's no reason for the reduction in the
2 amended budget that appears of record.
3 The grounds stated for reducing
4 the budget so drastically really are not
5 supportable, we believe, under the totality
6 of the record. We're looking at very, very
7 significant reductions in the hourly amounts
8 allotted for each of the categories of
9 personnel, and again we think that there's
10 no basis in the record to support those
11 types of reductions.
12 For all the reasons stated, we
13 believe it would be appropriate to look at
14 the original amended budget as submitted and
15 reinstate the amounts originally requested
16 in their entirety that we did for both of
17 the criteria that were used to lower the
18 budget, both the hourly rates and the number
19 of hours planned.
20 I think the testimony was clear
21 that what was originally charged is
22 reasonable and customary in the area.
23 There's been no substantial evidence to the
24 contrary and the hours incurred are
L.A. REPORTING (312) 419-9292
85
1 credible. Those hours were really
2 necessarily expended on this project and
3 should be paid for.
4 Another thing to keep in mind is
5 Todd's Service Station has paid their
6 contractor for those amounts and it would be
7 inequitable for that situation to remain as
8 it is when there's no evidence that those
9 hours were not actually expended on this
10 project to remediate the site and no
11 evidence that the site was not remediated in
12 a cost effective manner. Our request would
13 be for reinstatement of the original amended
14 budget.
15 Thank you.
16 HEARING OFFICER: Mr. Kim.
17 MR. KIM: The Illinois EPA
18 waives the closing argument.
19 HEARING OFFICER: At this time I
20 will ask if there are any members of the
21 public that would like to make a statement
22 on the record, and seeing none, I will
23 proceed to make a statement as to the
24 credibility of witnesses testifying during
L.A. REPORTING (312) 419-9292
86
1 this hearing.
2 Based on my legal judgment and
3 experience, I find all of the witnesses
4 testifying to be credible.
5 I thank all of you for your
6 participation and we stand adjourned.
7
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1 CERTIFICATE
2
3
4
5 I, THERESA L. HAAS, C.S.R. in
6 and for the State of Illinois, do hereby
7 certify that I reduced to typewriting the
8 foregoing and it is a true and correct
9 transcript.
10 I further certify that I am not
11 counsel for nor in any way related to any of
12 the parties to this hearing, nor am I in any
13 way interested in the outcome thereof.
14 In testimony thereof, I have
15 hereunto set my hand this 16th day of July,
16 2003.
17
18
19
20
CSR
21 ------------------------------------
22
23
24
L.A. REPORTING (312) 419-9292