RECE~VE~

CLERK’S OFFICE

BEFORE THE POLLUTION CONTROLBOARD

FEB

112004.

OF THE STATE OF IILLINOIS

STATE OF ILLINOIS

ILLINOIS AYERS OIL COMPANY,

)

Pollution

Control Board

)

Petitioner,

)

)

V.

)

PCBNo.03-214

)

ILLiNOIS ENVIRONMENTAL

)

PROTECTION AGENCY,

)

)

Respondent.

)

NOTICE OF FILING AND PROOF OF SERVICE

TO:

Dorothy Gunn, Clerk, Illinois Pollution Control Board, James R. Thompson Center,

100

W.

Randolph, Suite 11-500, Chicago, IL 60601-3218

Carol Sudman, Hearing Officer, Illinois Pollution Control Board,

1021 North Grand

Avenue East, P.O.

Box 19274, Springfield,

IL 62794-9274

John Kim, Illinois

Environmental Protection Agency, Division ofLegal

Counsel, 1021

North Grand Avenue East, P.O.

Box 19276, Springfield,

IL 62794-9276

PLEASE TAKE NOTICE that on February 9, 2004,

I sent to

the Clerk of the Illinois

Pollution Control Board the original and nine (9) copies, via U.S. mail, ofPetitioner’s Brief for

filing in the above-entitled cause, a copy of which is attached hereto.

The undersigned hereby certifies that a true and correct copy of theNotice of Filing

together with a copy of

Petitioner’s Brief, was served upon the Hearing Officer via U.S. mail and

the Respondent via U.S.

mail and facsimile, on the

9th

day ofFebruary,

2004.

MOHAN, ALEWELT, PRILLAMAN & ADAMI

1 North Old Capitol Plaza, Suite

325

Springfield,

IL

62701-1323

Telephone: 217/528-2517

Facsimile:

217/528-2553

THIS FILING SUBMITTED ON RECYCLED PAPER

C:\Mapa\CSD Environmental\NoticeofFiling.wpd\crk\2/9/04

---

RECEIVED

CLERK’S OFFICE

BEFORE

THE ILLINOIS POLLUTION CONTROL

BOARD

FEB

112004

ILLINOIS AYERS OIL

COMPANY,

)

STATE OF ILLINOIS

Pollution

Control Board

Petitioner,

)

)

vs.

)

PCB

No.

03-214

)

(UST Appeal)

ILLINOIS ENVIRONMENTAL

)

PROTECTION AGENCY,

)

)

Respondent.

)

PETITIONER’S BRIEF

NOW COMES Petitioner, Illinois Ayers Oil

Company (hereinafter“Petitioner” or

“Illinois Ayers”), by its undersigned attorneys, and for its brief states as follows:

I.

INTRODUCTION

Petitioner seeks Board review ofthe Agency’s decision to

modifythe proposed corrective

action plan by reducing the number ofsoil borings and drastically slashing the budget from

$52,367.96

to

$22,074.77.

These

$52,367.96

is actually a reduction from

an earlier budget

proposal which is

currently before the Board in Illinois Ayers v.

JEPA, PCB No. 03-70.

By

reducing the scope ofwork and

certain costs to

$52,367.96,

Petitioner had hoped to avoid

litigation of this matter.

Unfortunately, those concessions did not sate the Agency’s appetite and

the Board is now asked to

decide whether the

$52,367.96

is reasonable and appropriate.

Most ofthe problems with the Agency’s decision stem from three major mistakes.

First,

the Agency Reviewer cut rates for persoimel and equipment solelybased upon a secret rate sheet

which is illegal and incompetent evidence in this proceeding.

Petitioner asks that the rate sheet

and all testimony premised on the rate sheetbe stricken.

Second, the Agency Reviewer

1

---

eliminated ten direct-push soil borings on her mistaken assumption that soil conditions at the site

were homogenous.

The subject corrective action plan and the referenced Berg Circular clearly

state the contrary.

Finally, the Agency Reviewer concluded that each of the direct-push borings

could be accomplished in an hour based upon a number ofarbitrary assumptions and little

attention to

the technology ofpush-driven technology.

Since a number ofcosts

in the budget

depend on the number of soil borings and the time requirements for a direct-push investigation,

these last two mistakes resulted in corresponding reductions in a number ofrelated costs which

should not have been reduced, either.

Petitioner asks that the Board approve the entire corrective

action plan and budget, as submitted.

II.

STATEMENT OF FACTS

Illinois Ayers operates a gasoline service station at 310 State Street, Beardstown, Cass

County, Illinois.

(Agency Rec., at p. 4) In 2000, a release was reported from three underground

storage tanks on the property, eachofwhich is eligible for reimbursement from the LUST Fund.

(Agency Rec., at p.

82) The site was subsequently classified

as a “high priority” site because one

or more groundwater quality standards were exceeded at the property boundary line.

(Agency

Rec.,atpp.4&84)

Illinois Ayers hired

CSD Environmental Services, Inc. (hereinafter “CSD

Environmental”) to perform remediation services related to

the incident.

CSD Environmental is

an experienced civil and environmental consulting firm specializing in land development and

environmental restoration projects.

(Pet.’s Ex.

18(a)) On behalf ofits client, CSD

Environmental

submitted corrective action plans and budgets to

the Agency.

The plan that

is the subject of this

2

---

Board Appeal is entitled “Revised’ Phase

1

—

Corrective Action Plan & Budget” and was

submitted to the Agency fOr review and

approval on December 4, 2002.

(Agency Rec., at p.

1 ~

~q~) Before discussing the subject application, the events leading up to the revised plan and

budget are pertinent.

The initial High PriorityCorrective ActionPlan was submitted to

the Agency on June 20,

2002.

(Pet. Ex.

6(A)) On October 11, 2002, the Agency rejected the planbecause,

inter alia,

“the

plan proposed

direct push groundwater sampling.

The Illinois EPA wishes

to clarify that

monitoring wells must be installed to obtain groundwater samples.”

(Pet. Ex. 6(A)) The Agency

also rejected as excessive some ofthe hours and the numberof soil samples to be taken.

(~)

In an attempt

to resolve these issues without an appeal, Illinois Ayers and the Agency

obtained a ninety-day extension ofthe appeal deadline.

~

Illinois Ayers Oil Co.

v. JEPA, PCB

03-70 (Nov. 21, 2002).

Thereafter, representatives ofCSD Environmental and the Agency met

twice.

(Hrg. Trans. at pp.

26 & 29)

In the first meeting, the parties discussed both the Illinois Ayers site and another CSD

Environmental project in Gibson City, Illinois, called the Royal Oil

site.

(Hrg. Trans.

at pp. 68-

69) Both projects involved direct-push groundwater sampling and were “essentiallyidentical.”

(Hrg. Trans.

at pp. 69)

Joseph Truesdale,

a professional engineer with CSD

Environmental,

brought to

the Agency’s attention an Agency fact sheet stating that push-driven technology is

acceptable for sampling both soil

and groundwater.

(Hrg. Trans.

at pp.

33-34, Pet.

Ex.

9) Doug

Clay of the Agency conceded this to be

true.

(Hrg. Trans.

at p. 34) The Agency agreed to

approve the investigation plan for the Royal Oil site, but requested a second meeting to

independently discuss the Illinois Ayers site.

(Hrg. Trans. at p.

70)

3

---

At the second meeting, Truesdale emphasized that the investigation plan for Illinois

Ayers was the same as that

approved for Royal Oil.

(Hrg. Trans.

at p.

69) He noted on his

copy

ofthe denial letter:

“NEED

TO CLARIFY

LIKE

ROYAL OIL.”

(Hrg. Trans. at p.

60; Pet.’s Ex.

6)

Truesdale justified to Agency representatives the number of hours for the work (Hrg. Trans.

at

pp.

36-38,

56)

and the number of soil samples.

(Hrg. Trans. at p. 67)

At the request ofthe

Agency, he described how the direct-push ground water samples would be

obtained, drew

diagrams depicting the equipment and strategy, explained average number oflineal feet of

borings that could be accomplished in a day and identified the proposed locations for the borings.

(Hrg. Trans.

at pp.

37-38) Truesdale testified that he felt that the Agency understood and agreed

with his rationale.

(Hrg.

Trans.

at p.

67)

The Agency asked for concessions on the numberofhours for certain personnel and the

number ofsoil borings.

(Hrg.

Trans. at pp.

56

& 67) These concessions were made in the hopes

ofavoiding litigation before the Board (Hrg. Trans.

at p.

119), but as will be discussed later, they

merely set the stage for the Agency to demand further reductions.

However, no understandings were reached with respect to the rates charged for personnel

and equipment.

Members ofthe Agency are not allowed to disclose an acceptable rate to

the

public, even at meetings intended to resolve budget disputes.

(Pet.’s Ex.2 at pp.

96-98)

The

Agency’s denial letter does not disclose which rates are excessive and what an

appropriate rate

may be.

(Admin. Rec. at p. 91) Thus, the only non-litigation resolution proposed by the Agency

was to make arbitrary cuts

as to rates.

4

---

After the last meeting, Illinois Ayers submitted a new application entitled “Revised’

Phase

1

—

Corrective Action Plan & Budget” (Agency Rec. at p. 2) The accompanying

correspondence indicated that the enclosed plan and budget contained revisions “in

accordance

with our October 24, 2002 meeting.”

(Agency Rec. at p.

1) The Petitioner did not make any

reductions in its standard rates, stating that its rates are actual billing rates and that the Agency’s

analysis ofrates is statistically invalid.

(~)

On March 27, 2003, Carol Hawbaker, the Agency Reviewer, reviewed the plan and

budget.

(Agency Rec. at p.

84) On March 28, 2003, the Agency issued a letter rejecting the plan

and budget as submitted and modifying the plan by (a) reducing the number ofdirect-push soil

borings from

13

to 3,

and (b) reducing the budget from

$52,367.96 to

$22,074.77.

(Admin. Rec.

atpp.

86-92) Among the items reduced were those which had alreadybeen reduced as a

concession to

the Agency.

For example, Petitioner reduced the number ofhours for licensed

professional engineering oversight from ten to five as a concession, but the Agency cut the hours

to two.

(Hrg.

Trans. at p.

56)

In addition, Petitioner eliminated laboratory analysis for ten soil

borings as a concession to

cost, only to have the Agency eliminate the ten soil borings as

irrelevant without the chemical

analysis.

(Hrg.

Trans. at p.

1 04)\

From the March 28, 2003

letter, Illinois Ayers brought this LUST appeal.

The previous

appeal concerning the initial corrective action plan is still pending before the Board and is

currently stayed until the subject appeal is decided.

5

---

III.

REGULATORY BACKGROUND

The purpose of a corrective action plan is to formulate a remedy “to mitigate any threat to

human health, human safety, or the environment resulting from the underground

storage tank

release.”

(415 ILCS

5/57.7(b)(2))

Ifreimbursement from the LUST Fund will be

sought, the

plan must also be accompanied by a budget that includes an

accounting ofall costs associated

with the implementation and

completion ofthe corrective action plan.

(415 IILCS

5/57.7(b)(3))

The Agency is

directed to

review and approve corrective action plans pursuant to Section

57.7(c)

ofthe Illinois Environmental Protection Act.

(415 ILCS

5/57.7(c))

In making

its

determination, the Agency must utilize “a procedure promulgated by the Board under Section

57.14.”

(415 ILCS

5/57.7(c)(3))

These procedural rules begin at Section 732.500 ofthe Board’s

rules.

(35

Ill. Admin.

Code

§

732.500) Together, the Act and the Board’s procedural rules

govern the obligations of the respective parties and define the issues for review by the Board.

All plans submitted to

the Agency must be made on forms proscribedby the Agency.

(35

Ill. Admin.

Code

§

732.50 1) Within 45

days ofreceiving a plan, the Agency must conduct a

completeness review “to determine whether all information and documentation requiredby the

Agency form

for the particular plan are present.”

(35

Ill. Admin.

Code

§

732.502(a)) If any

information or documentation is missing, the Agency must notify the applicant ofthe specific

type of information needed.

(35

Ill.

Admin.

Code

§

732.502(b))

Ifthe Agency fails to notify the

owner or operator within 45

days that a plan is incomplete, the plan is deemed complete.

(35

Ill.

Admin.

Code

§

732.502(d))

6

---

Assuming that the plan is complete, the Agency initiates a full technical and financial

review of the corrective action plan and associated budget.

(35

Ill. Admin. Code

§

732.504(a)(1)) Such

a review is described in the Board’s procedural rules as follows:

A full technical review shall consist ofa detailed review of the steps proposed

or completed to accomplish the goals of the plan and to achieve compliance

with the Act and regulations.

Items to be reviewed, if applicable, shall

include, but not be limited to, number and placement of wells and borings,

number and

types of samples and analysis, results of sample analysis, and

protocols

to be followed in making determinations.

The overall goal of the

technical review for plans shall be to determine if the plan

is

sufficient to

satisfy the requirements ofthe Act and

regulations and has

been prepared in

accordance with generally accepted engineering practices....

A full financial review shall consist of a detailed review of the costs

associated with each element necessary to accomplish the goals of the plan as

required pursuant to the Act and regulations.

Items to be reviewed shall

include, but not be limited to, costs associated with any materials, activities

or services that are included in the budget plan.

The overall goal of the

financial review shall be to assure that costs associated with materials,

activities and

services shall be reasonable, shall be consistent with the

associated technical plan,

shall be incurred in the performance of corrective

action activities, and shall not be used for

corrective action activities in

excess

of those necessary to meet the minimum requirements of the Act and

regulations.

(35 Ill. Admin. Code

§

732.505(a),(c))

Ifthe Agency determines that the plan should be rejected ormodified, the Agency must

give the owner or operator written notice within 120

days ofreceipt ofthe plan, and said notice

shall be accompanied by a detailed explanation ofthe legal provisions which might be violated if

the plan is approved, ofthe “specific” type of information, if any, which the Agency deems the

applicant did not provide, and ofthe “specific” reasons why the law might not be met if the plan

is approved.

(415 ILCS

5/57.7(c)(4)(A)-(D))

7

---

Within 35

days ofreceipt ofthe Agency’s decision, the owner or operator may appeal the

Agency’s decision to the Board.

(415 ILCS

5/57.7(c)(4))

The

Agency’s denial letter frames the

issues before the Board.

Kathe’s Auto Service Center v.

IEPA, PCB 96-102 (Aug.

1,

1996).

The

Agency is precluded from raising additional reasons not specified in the denial letter.

IEPA v.

IPCB, 86 Ill.2d 390 (1981);

Clinton County Oil Co.

v. JEPA, PCB 91-163 (June 4,

1992).

The

burden ofproofis on the petitioner.

(415 ILCS 5/40(a)(1)) Once the petitioner has established a

primafacie

case, it becomes incumbent,upon the Agency to refute the

primafacie

case.

Sexton Contractors Co.

v.

PCB, 201

Ill. App. 3d 415, 425

(1St Dist.

1990).

While the procedures in this appeal

are based upon those in permit appeals, the roles of

the parties are reversed.

In a permit appeal, the Agency’s role is to advocate those controls or

restrictions which best protect the environment from pollution and its threats, while the permit

applicant complains about the cost ofthose controls or restrictions.

In UST appeals, the Agency

seeks to protect the LUST Fund, while the petitioner seeks more environmental protection.

The

Board is the arbiter of those disputes, but in the final analysis it is environmental protection

which is the reason for the existence ofthe Act, the Agency and the Board.

IV.

ARGUMENT

A.

THE RATE SHEET

AND ALL

TESTIMONY BASED UPON THE RATE

SHEET

SHOULD BE STRICKEN.

For a number ofthe contested issues, the Agency’s decision was based solely upon a rate

sheet,

(Pet. Exhibit 2, at pp.

56, 68, 69, 70,

95)

A redacted version ofthe rate sheet can be found

as an attachment to

Petitioner’s Exhibit 3.

(Pet. Ex.

3(Att.

3)) Petitioner

sought, and was refused

access to, the entire rate sheet and the data which forms its basis.

Petitionerwas also refused

8

---

access to portions ofthe rate sheet which were relied upon in this case.

For example, the Agency

Reviewer testified that rates for drilling labor, utility trucks, and job trailers were not reasonable

based upon the rate sheet.

(Hrg. Trans. at pp.179-80) The same was true for rates for the

concrete coring machine and Bentonite chips, (id. at

182), the phlORP/temperature meter (j~at

184), the camera (jd.), the number ofUSP

sample shipments (id.), and the rate ofthe peristaltic

pump.

(Id.)

None ofthese items

is included in the redacted rate sheet given to Petitioners.

The

Agency’s continuing assertion that it has provided “relevant” portions ofthe rate sheet is

simply

untrue.

See Response to Motion for Interlocutory Appeal,

¶

1.

With the caveat that therehas not been anything close to

complete disclosure ofrelevant

portions of the rate sheet, Petitioner renews its legal

objectionto the rate sheet that the Agency

stated was prematurelyraised by pre-hearing motion.

~

at

¶5.

Specifically, the rate sheet is an

invalid rule which should be stricken and given no legal effect in this proceeding.

Alternatively,

the rate sheet is summary evidence which should be stricken and given no

legal effect in this

proceeding since the Agency refused discovery ofthe basis of said evidence.

1.

The Rate Sheet is an Invalid

De Facto

Rule.

The Agency’s rate sheet is

an unpromulgated rule that violates the Illinois Administrative

Procedure Act (hereinafter “the APA”).

5

ILCS

100/1

et seq.

Under the APA, a rule means

“each agency statement ofgeneral applicability that implements, applies, interprets, orprescribes

law or policy.

.

..“

(5

ILCS

100/1-70)

The Agency’s rate sheet implements an Agency policy

proscribing the “maximum allowable cost” for a wide variety ofitems.

(Pet. Ex.

2 (Att. 3)) The

Agency Reviewer testified that she and other members ofthe LUST

Section “are required to use

9

---

the rate sheets” as a matter ofAgency “practice.”

(Pet. Exhibit 2,

at p

70)

In reviewing the

reasonableness ofany rate, the Agency Reviewer did not deviate

one iota from the rate sheet or

look at

any information upon which the rate sheet was based.

(Hrg. Trans.

at 205)

Brian Bauer,

the LUST Project Manager most closely involved with the administration ofthe rate sheet,

testified that the rate sheet was intended to promote consistency and speed of review.

(Hrg.

Trans. at p. 221) While these objectives are laudable, the rate sheet accomplishes the goal of

consistencyby creating “standards ofgeneral

applicability” that implement the Act’s requirement

that only reasonable costs are reimbursed. The Illinois Supreme Court has ruled that there is “no

doubt” that an

agencypolicy for calculating reimbursable costs under Medicare is a rule of

general applicability subject to

strict adherence to the notice and comment provisions ofthe

APA.

Senn Park Nursing Center v. Miller,

104 fll.2d 169,

178 (1984).

Guidance or policy

statements that determine the amount ofmoney the State will compensate for services affect the

rights and procedures available to people and entities outside the agency.

jçj~

While there are certain statutory exceptions to the notice and comment requirements,

these are exceptions of“a limited nature which

should be appropriately applied.”

~

at

179.

The exceptions the Agency believes apply are obvious from the cover page ofthe rate sheet:

Effective immediately the attached rate sheet should be used in the review of

all budgets

and reimbursement claims.

The rate sheet is meant to be

a

guidance document therefore, any requests for reimbursement for costs

above the amounts listed on the rate sheet if justifiable, should be discussed

with your unit manager.

Please note that the rate sheet is for internal use

only.

(Pet. Ex. 2

(Att. 2))

This bit ofboilerplate reveals the Agency’s legal strategy in defending its

use ofthe rate

sheet, but it tells us little

about how the rate sheet is actually used.

First, while the rate sheet

10

---

states that it is

“for internal use only,” the sole purpose ofthe rate sheet is to decide how much

money people outside ofthe Agency will be paid.

In order for the rate sheet to be exempt from

notice and comment requirements, it must relate to the “internal management of an agency and

not affect

private rights or procedures available to persons or entities outside the agency.”

(5

ILCS

100/1-70(i)) Any question on this point is resolved by the Illinois Supreme Court’s

comparable ruling that the amount ofmoney the state reimburses nursing homes does not relate

“solely” to internal agency management.

Semi Park Nursing Center,

104 Iii. 2d at

181.

Nor is it true that the rate sheet is merely guidance.

According to

the Agency Reviewer of

this particular planthe Agency’s practice is that “we are required to use the rate sheets.”

(Pet.

Ex.

2, at p.

70) Similar testimony was provided by the Agency employee in charge ofthe rate

sheets:

Q.

.

.

.

intended to be used by project managers in

a case where a rate presented in

found on the rate sheet?

A.

It would either be

—

or modified down to the maximum level.

(Hrg. Trans. at p. 217

(Bauer Testimony))

Now, Bauer admittedly refined his answer later under leading questions by the Agency’s

attorney (id.), but Bauer’s answer is not only clear and unequivocal, but corresponds precisely

with how the Agency Reviewerviewed her duty to the rate sheet.

For each cost or expense

to

which the rate sheet applied, no other evidence was relied upon by the Agency.

In other words,

the public face on the LUST program minimizes the significance of the rate sheets, while in

11

---

reality, the rate sheet is the only thing that matters and project managers have no idea under what

circumstances a larger rate would or could be justified.

Nonetheless, whether or not project manager’s have the discretion to exceed the

maximum costs allowed in the rate sheet, this

does not make the rate sheet any less an “agency

statement of general applicability that implements, applies, interprets,

or prescribes law or

policy.”

(5

ILCS

100/1-70) The rate sheet is not issued on a case-by-case basis; it is not a

statement made specifically about Illinois Ayers.

It is a statement of Agency policy applicable to

“all budget and reimbursement claims.”

(Pet. Ex. 2 (Att. 2)) Even the Agency’s explanation of

the program indicates that there is a general statement ofpolicy which discriminates between

costs which exceed the “maximum allowable cost” and those which do not.

By testifying that the purpose of the rate sheet is to promote consistency and speed of

review, the Agency has admitted that it has moved away from any pretense ofadjudicatory

decisionmaking in UST reimbursement decisions.

In Platolene 500

v. JEPA, PCB No.

92-9 (May

7, 1992), the Agency told the Board that it had electednot to promulgate rules, but instead make

case-by-case adjudications.

~

at pp.

13-14.

The Board commented on the practical problems

with such an

approach, namely the utter lack ofguidance to

applicants and the ultimate necessity

of a Board appeal to

determine what costs are reimbursable.

~

at 14.

To these problems must

be added that case-by-case determinations do not lend themselves to consistency or speed,

since

each budget request must be evaluated on its specific facts without reliance upon general

standards.

In Platolene

500, the Board held that Agency guidance (if that

is what this is) can

have no legal or regulatory effect in these proceedings. j~

12

---

Finally, the APA forbids the Agency from engaging in ratemaking unless expressly

authorized to do so by statute

and without promulgating rules which define the practice and

procedure to be followed in setting rates.

(5

ILCS

100/5-25;

see also

5

ILCS

100/1-65

(definition of“ratemaking”) Assuming in

arguendo

that the Agency’s statutory authority to

reimburse “reasonable” costs gives the Agency authority to’ set rates, then the Agency was

obligated to promulgate rules which would determine how such rates would be set.

The Agency

is further restricted in its exercise ofdiscretion by section 5-20 ofthe APA,

“whichrequires that

an agency define as clearly and precisely as possible the standards by which it will exercise its

discretionary power in order to fully inform those affected.”

Guzzo v. Snyder, 326 Iii. App.

3d

1058,

1062

(31(~

Dist. 2002) (citing

5

ILCS

100/5-20)).

Together, these provisions ofthe APA

indicate that the Agency should promulgate rules or propose rules to the Board.

The problems with the Agency’s secret rate setting

are numerous.

The practice spurs

litigation.

The only way Petitioner learned what rates were acceptable and which were not

acceptable to

the Agency was by bringing this appeal.

Second, errors in calculations cannot be

corrected through the scrutiny ofothers.

Testimony in this hearing indicated that the Agency

uses a statistical methodology for sampling which introduces bias.

(Hrg.

Trans. at pp.

237-38)

The Agency’s “expert” on the rate sheet heard this testimony and then left the room without

response.

(Hrg. Trans.

at p.

239)1

The Agency does not at all feel compelled to respond to

criticism about its closely-guarded secrets.

The final problem with secret rules is that it violates

the spirit ofopen government, encouraging cynicism and loss of confidence in the government.

1

Brian Bauer took

a single

class in basic statistics fifteen years ago.

(Pet.’s Ex. pp. 27-

28)

13

---

In summary, the rate sheet is

a

defacto

rule which should be given no legal effect in this

proceeding.

Since the Agency relied exclusively on the rate sheet in rejecting rates as

unreasonable, the corresponding costs should be restored to the budget.

2.

In the Alternative, the Agency’s Refusal to Disclose the Basis of the

Rate Sheet Prohibits its Use as Evidence.

Assuming that the rate sheet is

found not to be an illegal rule, the question remains as

to

whether the rate sheet has any legitimate evidentiary value in an adjudicatory proceeding.

Where

an Agency is reluctant to

disclose information it wants protected from the public, its

choices are

not without consequences:

Although one cannot force a government agency to disclose

information is deems confidential, the government has the option of holding

back such information and taking the risk of not being able to prove its case,

or ofproducing the material and allowing it to be subject to cross

examination.

(2

Am. Jur.

2d, Administrative Law

§

330 (citing Wirtz

v.

Baldor Electric

Co., 337 F.2d 518

(D.C. Cir.

1964).

In Wirtz, the government was calculating the prevailing minimum wage in the electrical

industry based upon employer surveys obtained under

a pledge ofconfidence.

Wirtz,

337 F.2d at

522.

Employers that did not pay the prevailing minimum wage were to be denied certain

government contracts.

Id. at 520 n. 1.

In an administrative hearing to set aside the wage

determination, the government refused to disclose the underlying data on which the wage

conclusions had beenreached, but instead offered into evidence tables summarizing the data.

While the Court ofAppeals refused to

compel the government to disclose the underlying data

under those circumstances, it held that the government could not support its decision based upon

14

---

summaries of evidence that it refused to disclose the opposing party.

~

at

526-27.

In support of

this conclusion, the Court ofAppeals stated that the rules of evidence permit the introduction of

summary evidence only if “the documents supporting the tables and on which they are based

are

introduced or at least made available to the opposing party.”

Id. at 526.

Furthermore, the

federal Administrative Procedure Act give parties the right to rebut evidence and conduct such

cross-examination as may be required for a full

and true disclosure of the facts.

~ft

at

525.

A

right to rebut and challenge the government’s case was impossible without an opportunity to

review the underlying data:

It

is

difficult to see how the accuracy, authenticity and

relevancy of

these tabulations could be tested in any way without the disclosure of the...

data upon which the tabulations

are based.

The tabulations were complied

from data which was kept secret, but which was in

the possession of the

government.

Errors in the computation could not be checked...

and the

real meaning of the figures could not be developed

unless the character of the

individual sales could be inquired into.

Id. at

526-27.

Similarly, if the rate sheet is seen as a compendium of data summarized by the Agency

and not

as a rule, then Petitioner should have been given access to the underlying data and not

merely summaries of the data or more specifically selectively-redacted summaries.

The rules of

evidence and

administrative law that were applicable in Wirtz are also

applicable in this

proceeding.

Illinois’ APA also gives parties to

administrative hearings a right to

respond to

evidence and

argument

(5

ILCS

100/10-25(b)), and to

conduct cross-examination (5 ILCS

100/10-40(b)).

Under the Act, parties to proceedings before the Board have a right to cross-

examination.

(415 ILCS

5/32)

Since the Agency’s decision on several matters is based solely

upon the rate sheet, the

only means a party has to

challenge the Agency’s decision is to examine

15

---

the facts surrounding the rate sheet.

The only opportunity to dispute evidence relied upon by the

Agency is in the Board’s hearing.

EPA v.

PCB,

138 Ill. App. 3d

550,

551

(3rd

Dist.

1985).

Similarly, Illinois

law follows federal

evidence law with respect to summaries.

~

People v. Wiesneske, 234 Ill. App. 3d 29,

41(1St

Dist.

1992) (applying Federal Rule ofEvidence

1006).2

It has also long been a rule ofevidence in Illinois that summaries may only be

considered if the documents summarized are made available in court or otherwise made available

to the opponent.

Heller Financial, Inc. v. Johns-Byrne Co., 264 Ill. App. 3d 681, 692 (Pt Dist.

1994); see

also In re Marriage ofDeLarco, 313 Ill.

App. 3d 107,

116 (2’~

Dist. 2000) (summaries

ofbilling records inadmissible).

A summary of evidence can only be

admissible if the

underlying materials upon which the summary is based are admissible.

Wiesneske, 234 Ill. App.

3d at 44 (holding that most ofthe underlying data would have been admissible, but the

summaries were also based in part upon discussions that were inadmissible hearsay).

In other

words, the admission ofsummary evidence is premised upon the notion that it is the underlying

data (the best evidence) which is actuallybeing admitted, albeit in a more convenient form.

Illinois law and the fundamental mechanics ofthe adversarial process require the underlying data

to

be subject to examination

and possible challenge.

2

The contents ofvoluminous

calculation.

The originals, or duplicates,

available for examination

or copying,

or both,

at reasonable time and place.

be produced in court.

(Fed. R.

Evid.

1006 (emphasis added))

16

---

Substantial

questions were raised about the rate sheet in this hearing. First,

a number of

the rates rejected were previously approved in earlier applications, raisingthe highly suspect

notion that the Agency’s statistical

analysis reveals falling prices.

(Hrg.

Trans. at pp.

135,

137)

Second,

since the Agency not only keeps its rates secret, but also the categories for which it

keeps rates, neither the private consultants nor the Agency project reviewers know for certain

what any ofthe titles mean (such as project engineer).

(Hrg. Trans.

at p.

138; Pet.’s Ex.

2, at p.

88) The only way to

know whether categorical rate correctly applies to

any job description would

be to

examine the underlying data.

Finally, the Agency’s description ofhow it obtains a

representative sample (subjectively eliminatingbudgets from the same consultant) for

establishing a “reasonable” statistical range indicates that it is

introducing bias into its

equations.

(Hrg. Trans. at pp. 237-38)~Without access to the underlying data, however, these problems

cannot be fully examined.

Petitioner was not even allowed to challenge the rate sheet with

Petitioner’s own list ofAgency decisions in which the rates were accepted.

(Hrg. Trans.

at p.

156;

Pet.’s Ex.

19)

The purpose ofthis proceeding is to allow Petitioner the opportunity to challenge the

basis for the Agency’s decision.

EPA v. PCB,

138 Ill. App. 3d

550,

551

(3~’

Dist.

1985); Kathe’s

Auto Service Center v. IEPA, PCB 96-102 (Aug.

1, 1996).

To

allow the Agency to base its

decisions concerning rates on a document that cannotbe

subjected to traditional avenues of

~ Another potential source ofbias in the sampling

is its limitation to budgets submitted to

a single consumer, the Agency.

This can have a downward bias if,

for example, a consultant

submits lower rates in order to avoid litigation before the Board.

The more frequently a

consultant lowers rates to appease the Agency, the less the information on rates in the Agency’s

records reflect prevailing market rates.

This bias can only be eliminated by expanding sampling

beyond a single

consumer.

17

---

adversarial examination would involve nothing less than elevating the rate sheet to the status of a

rule.

The Agency cannot have it both ways

—

it cannot both base its decisions on the rate sheet,

while keeping its details secret.

B.

TECHNICAL REVIEW OF THE

CORRECTIVE ACTION PLAN

1.

The Re~iuirementsof the Act and the Regulations Will Be Met If the

Remedial Investigation Includes Thirteen Direct Push Borings

and Not Merely

Three.

The Agency modified by the corrective action plan with the following condition:

The plan includes

13

additional “direct push” soil borings to better define

and evaluate the extent and relative distribution ofpetroleum contaminants

in

the subsurface.

The plan proposes that only 3

ofthese direct push soil

borings will be

sampled for BTEX concentrations.

Therefore,

it appears

as

though the remaining 10 direct push soil borings would be to classify and log

the subsurface soils

in connection with the 13

direct push groundwater

sampling probes to define groundwater extent.

For the purposes of

reimbursement, as the soils were previously classified at the site

during site

classification

activities, the additional

10

direct push soil borings are in

excess of those necessary to meet the minimum requirements of Title

XVI

of

the Act for corrective action

investigation; costs for

such activities are not

reimbursable (Section 57.5(a) of the Act and 35 IAC 732.606(o)).

(Joint Ex.

at pp.

86-87 (emphasis added)

The Board’s rules recognize that corrective action may include additional soil and

groundwater examination.

(35 Ill.

Admin.

Code

§

732.404(e) (additional investigation activities,

“include, but are not limited to, additional soil borings”)

Additional investigation was deemed

necessary by the project’s professional engineer because ofinformation learned during soil

classification

activities.

As part of soil

classification activities, a licensed professional engineer

18

---

must verify whether the physical soil

classifications are consistent with the “Berg Circular.”4

(415 ILCS 5/57.7(a)(3)) Here, the Berg Circular indicated that the geologic materials beneath the

site. are designated A2 and/or AX, which consists of“thick permeable sand and gravel within 20

feet ofland surface and/or modern river alluvium consisting ofa mixture ofgravel, sand, silt,

and

clay along streams, variable in composition and thickness.”

(Agency Rec., at p.

8 (emphasis

added)) Such soil conditions pose a high potential for both surface and groundwater

contamination.

(Agency Rec., at p.

8)

Petitioner verified the classifications in the Berg Circular were correct:

The actual geology encountered at the site was representative of “AX” type

stratigraphy, containing assemblages of sand, silt, and

clay in varying

proportions, to a depth of approximately twelve (12) to fifteen (15) feet below

the ground surface at which point clean sands and gravel representative of

~~A2t~

type stratigraphy were encountered.

(Admin. Rec. at p.

9 (emphasis added))

A diagram ofa stratigraphic cross section was included in the corrective action plan

(Admin. Rec. at p.

19), alongwith these discussions ofthe actual soil conditions and the

information drawn from the Berg Circular.

Having verified that site conditions conform to

those

described in the Berg Circular, there was still inadequate information to determine the “the full

extent ofsoil or groundwater contamination and ofthreats to human health and the

environment.”

(35 Ill. Admin. Code 732.404(e))

The Act also requires an investigation and

remediation of natural migration pathways, which the Board defines as “natural routes for the

transport ofmobile petroleum free-liquid or petroleum-based vapors including, but not limited

to

~ The

Illinois Geological Survey Circular (1984) titled “Potential for Contamination of

Shallow Aquifers in Illinois,” by Berg, Richard C. et al.

19

---

soil, groundwater, sand seams and lenses and gravel seams and lenses.”

(35

Ill. Admin.

Code

§

732. 103)

Because soil conditions at the site were determined to be variable, Petitioner did not have

enough information to

determine the extent ofBTEX contamination.

Joseph Truesdale, a

professional engineer with CSD Environmental,

explained:

The Act requires evaluation of potential natural migration pathways.

Since

the soils at the site were specified as variable in composition and thickness

without quantifying that variability across the potential limits ofthe plume,

there would be no way to fully evaluate those identified natural migration

pathways or, as a matter of fact, would not be able to identify those potential

natural migration pathways on off site locations, whatsoever.

(Hrg. Trans.

at p.

72)

In order “to better define and evaluate the extent

and relative distribution ofpetroleum

contaminants in the subsurface,” Petitioner proposed to

advance six on-site “direct-push”

soil

borings and seven off-site “direct-push” soil borings.

(Agency Rec., at p.

6) The location of

these thirteen soil borings would also be used fortaking groundwater samples from each ofthese

thirteen locations.

(~)

Since the groundwater samples are to be taken within two feet of the soil

borings, there are a total of26 borings proposed at 13

locations.

(j~at 68)

Modeling from the

initial site classification work was used to

determine the number and location of the direct-push

borings.

(Pet.’s Ex.

1,

at p. 6) The proposed direct-push boring were identified on a map

submitted with the plan and labeled B-5 through B-17.

(Agency Rec., at p.

16) At the hearing,

Truesdale testified on the location and number of borings:

We proposed a total of 13

direct-push soil

and ground water

sampling

locations, the majority of which were down gradient from the source, some of

which were in the source area.

A single location was up gradient, in order to

characterize potential input of contaminant

mass from an off site location.

20

---

And the final boring location was placed side gradient to evaluate additional

potential contaminant flux from

a second potential off site location.

As we discussed in the meeting with the Agency personnel, boring B5

was located to evaluate potential source contaminant mass flux from an off

site location located to the east of State Street.

Boring B6

was also located in

order to evaluate flux from a potential

—

a second potential off site

located to the south of Fourth Street.

located at that approximate distance based on preliminary

outlined in the application.

center line as estimated, using equation R26.

(Hrg. Trans..

at pp. 4 1-43)

Truesdalé testified that thirteen borings at the described locations is

the minimum that

would be necessary to achieve the Act’s goals, and in fact, more borings may ultimately be

required.

(Hrg. Trans.

at p.

72) He also testified that this plan was prepared in accordance with

generally accepted engineering practices.

(Hrg. Trans.

at p.

97) The investigation approach taken

was

consistent with USEPA guidance entitled “Expedited Site Assessment Tools for

Underground Storage Tank Sites,” a copyofwhich was brought to the Agency’s attention prior

to

filing the subject plan and budget with the Agency.

(Hrg. Trans.

at pp.

65-66;

Pet.’s Ex.

10)

At the locations identified in the map accompanying the plan, Truesdale proposed taking

both soil and groundwater samples

using direct-push technology.

(Agency Rec., at p.

6; Hrg.

Trans.

at p. 35) As the Agency Reviewer previously rejected the use of such technology for

taking water samples (Joint Ex. 6(A) at

¶5),

the nature ofthis emerging technology may need

some explanation.

In April of 2001, the Agency published guidance entitled “Use ofPush-

Driven Technology.”

(Pet.’s Ex. 9) This

document describes push-driven technology as a “useful

21

---

and cost-effective technology, which yields accurate and representative soil and

groundwater

samples.”

(Id.)

This technology may be used to “investigate contaminant migration along

natural

and man-made pathways.” (j~)

While the corrective action plan states that

13 direct-push soil borings will be advanced,

soil samples will only be taken from three locations for laboratory analysis.

(Agency Rec., at p.

6) Originally, Petitioner proposed that soil samples be taken and tested from

all thirteen

locations, but as a concession, Petitioner would only “log and screen” the soil borings at ten of

the locations without laboratory backup.

(Hrg. Trans. at p.

104) This would be done in

accordance with the Board’s rules at Section 732.308.

(Agency Rec., at p. 68) Even without

quantitative chemical analysis, these soil borings should provide useful qualitative information

concerning soil conditions

and characteristics ofpotential migration pathways, including soil

constituents, consistency, moisture content, nature and extent ofsand or gravel seems and/or

lenses,

visual and olfactory evidence of contamination and volatile organic vapor concentrations

based on field screening with instruments

capable ofdetecting such vapors.

~

35

Ill. Admin.

Code

§

732.3 08(a).

While the Section 732.308(a) rules

are in the subpart dealing with site

evaluation and classification, the purpose ofthese soil borings

is not to re-classify the soil, but

“to better define and evaluate the extent and relative distribution ofpetroleum contaminants in

the subsurface.”

(Admin. Rec. at p.

6)

In summary, initial investigation identified variable soil conditions, which make it

particularly difficult to know the extent and nature of the contamination at the site.

This

investigation

also revealed the need for further investigation ofnatural migration pathways to be

investigated, remediated and restored.

This information was in the corrective action plan

22

---

submitted to

the Agency.

Its veracity and

sufficiency was supported from a licensed professional

engineer, Joseph Truesdale, the

only person with such qualifications testifying in these

proceedings.

His resume is

in the record (Pet.’s Ex.

8) and he testified to his qualifications and

his previous experience in direct-push operations.

(Hrg. Trans. at pp.

22-24, 40) There was no

other comparable testimony at the Board’s hearing.

The Agency’s denial is premised on

a number of errors, but particularly,

the falsebelief

that the soil conditions at the site were homogeneous.

The Agency Reviewer’s testimony is

clear:

Q.

So tell me, do you know whether the soils at offsite locations

at this

A..

According to their site classification report, yes, that is what they

found.

Q.

Okay.

And if that were not in the site classification completion report

and that finding were not made, would you change your view that perhaps

they need to do some soil investigation as part of this Phase

1

Plan?

A.

Ifwe had found some layers that seemed to be heterogeneous in

However, that was not the case.

Q.

So the fact that the soils at off-site locations were known to be uniform

homogenous soils

—

A.

Regional

soil geology has

been proven to be

It can be assumed that it is uniform off-site as well.

‘(Pet.’s Ex.

2, at pp.

2 1-22 (emphasis added))

Q.

And in this particular case you believe that during site

classification

they confirmed that the Berg Circular properly described regional

A.

If I remember correctly it did.

I

know

it was an AX classification.

23

---

Essentially what it was

determined it was, it was homogenous

throughout the site.

Q.

A.

Yes.

Q.

And that’s why some of the cuts were recommended by you in

your review letter to the Agency

—

already confirmed, and it was

A.

would be helpful.

Q.

Okay.

A.

Beardstown is old hat.

I would be very, very surprised to find

I think what are you four blocks from the river?

It’s all sand.

(Pet.’sEx.2,

atpp.

100-101)

Had theAgency Reviewer read the corrective action plan instead ofrelying upon her

recollection ofnearly two years at the Agency, she would have known that the Berg Circular did

not describe soil conditions as homogenous, but as a mixture ofgravel, sand, silt, and clay which

was “variable in composition and thickness.” (Agency Rec., at p.

8) She would have also read

that

the actual geology encountered at the site was, in fact, a mixture ofsand, silt, and clay in

varying proportions.

(Agency Rec., at pp.

9

&

19) Attached hereto as Exhibit A is a stratigraphic

cross section which was included with the corrective action plan.

(Agency Rec. at p.

19)

The primaryreason for reprinting large chunks ofthe Agency Reviewer’s testimony is in

case there

is any doubt as the veracity ofher testimony when she later testified that whether soils

conditions were homogenous or heterogenous was “irrelevant” to her decision.

(Hrg.

Trans. at p.

24

---

202)

Herprevious

testimony, taken under oath and with multiple opportunities

for her to explain

herself, is quite to the contrary.

In fact, Hawbaker’s testimony that her decision to reject the ten

soil borings based upon her perception ofsoil conditions at the site is a judicial admission which

cannot be withdrawn or rebutted by the Agency.

In re Estate of Rennick,

181

Ill. 2d

395, 406-07

(1998).

Judicial admissions are defined as deliberate, clear, unequivocal statements by a party

about a concrete fact within that party’s knowledge.

Id.

The Agency Reviewer clearly had

personal knowledge ofthe reason for reducing the number ofsoil borings and the lengthy quotes

from her testimony clearly show that her decision was based upon an erroneous assumption about

soil conditions at the site.

Her testimony cannot be changed as a matter oflaw.

Even ifthe Agency Reviewer’s

testimony can be adjusted, the explanation given at

hearing requests this Board to make a highly dubious ruling.

It is the Agency Reviewer’s

contention that regardless of local site or soil conditions, a high priority investigation plan can

never include soil borings without chemical analysis.

(Hrg. Trans. at p.

201) The Board has

never before expressed rigid, inflexible limits on the scope ofinvestigation during corrective

action.

~

35

Ill. Admin.

Code

§

732 .404(e)(”additional investigation activities beyond those

required for the site evaluation and classification maybe necessary”).

Petitioner has proposed

additional

soil borings

at new locations to

obtain information additional to that which was

obtained at the site classification stage.

As the Agency Reviewer explained in her testimony, the

initial site investigation work is merely “an initial

assessment based on the Berg Circular.”

(Pet.’s Ex.

3, at p.

100)

There are two fallacies in the Agency Reviewer’s position.

First, it is not true that soil

borings without chemical

analysis can never provide useful information about the extent of

25

---

contamination.

The Agency Reviewer’s opinion overlooks the fact that even though chemical

analysis is not proposed to

be done on the ten soil borings (the Agency’s own cost-saving

strategy), there will be information on field observations (such

as color and odors) and OVA/PD

readings for petroleum vapors.

~

35

Ill.

Admin. Code

§

732.308.

The second fallacy is that

information specific to soil conditions can never provide useful information as to the extent of

contamination.

The reason local

soil conditions are investigated in the first place is

to obtain

information on the potential for contamination to migrate.

The Act and the Board’s rules require

investigation and remediation ofnatural migration pathways, which requires an understanding of

local soil conditions.

In this case, it requires knowledge oflocal soil conditions beyond knowing

simply that soil conditions vary.

The purpose ofa’technical review ofthe plan is “to determine if the plan is sufficient to

satisfy the requirements ofthe Act and regulations

and has been prepared in accordance with

generally accepted engineering practices.”

(35 Ill. Admin. Code

§

732.505(a))

The thirteen soil

borings

were proposed based upon site-specific conditions which were analyzed in depth by

Petitioner’s professional engineer.

This is the minimum number ofborings that would be

necessary to

achieve the goals ofthe Act and may not ultimately be enough.

The Agency’s

contrary position is based purely on a mistake.

26

---

C.

FINANCIAL REVIEW OF THE BUDGET

1.

The

Investigation Costs are Reasonable Given the Actual Length of

Time to Perform the Direct Push Investigation.

The Agency eliminated $8,910.72 for Investigation Costs:

As

10 direct push borings are in excess ofthe minimum requirements of Title

XVI, the Direct Push investigation should take 2 days

to complete (8 direct

push borings per day).

Therefore, the costs for the direct push investigation,

drilling labor, utility truck, job trailer, decontamination

activities, and

disposable sampling tubes have been modified accordingly.

Please note that

drilling labor and

utility truck must be included

in the Geoprobe per day

cost.

Job trailer is part of mobilization costs and are included in the

mobilization rate.

Sampling tubes have been modified from 70

to 6.

In

addition, costs for Direct Push investigation, drilling labor, utility truck and

job trailer are not reasonable as submitted (35 IAC 732.606(hh))

(Agency Rec., at p.

90)

The Agency also eliminated $108.00 for the following investigation costs:

Costs for the concrete coring machine and

and have been

modified accordingly.

(Agency Rec., atp.

91)

Together the investigation costs eliminated from the budget total $9,018.72.

a.

The Reduction to 10 direct-push borings is

erroneous.

The Agency eliminated

10 direct-push borings in its

technical review of the corrective

action plan.

Petitioner restates and reincorporates its

arguments pertaining to that decision here.

b.

The Time the Agency Claims that it Takes to Conduct

the

Direct-push Investigation is Erroneous.

Petitioner proposed 26 borings at

13

locations.

(Agency Rec., at p.

68)

The first boring

would be for direct-push subsurface investigation

and the second boring for direct-push

27

---

groundwater sampling.

(Id.)

The budget estimated 50 hours

to conduct these 26 borings.

(Ti)

As per the Agency’s forms, this estimate was based upon the number offeet to be bored; since

each boring was to reach 20 feet, then there was a total of 520 feet to be bored.

(j~)

Before further explaining the basis of the 50 hour estimate, Petitioner would like

to point

out that it offered into evidence as a demonstrative exhibit, Truesdale’s calculations that

accompanied his testimony.

(Pet.’s

Ex.

13) This document was not admitted into evidence

because it was redundant, but allowedunder an offer ofproof

(Hrg.

Trans. at pp.

79-81) The

primary issue in admitting demonstrative evidence is whether it will help the trier of fact

understand the issues in the case.

Burke v.

Toledo, Peoria & Western R.R.

Co.,

148

Ill. App.

3d

208,

213

(Pt Dist.

1986).

This exhibit is available if it would help the Board.

Truesdale testified that

in a meeting with the Agency he explained his

figures and drew

diagrams on the dry erase board to help.

(Hrg. Trans. at p. 37) CSD Environmental conducted

fieldtests in order to

develop numbers for estimating the time it would taketo conduct the direct-

push investigation.

(Hrg. Trans.

at p.

40) There were three components to

the analysis: (1) how

long would it take to drill non-stop

on a per-foot basis, (2) how long would it take to draw

groundwater samples, and (3) how long would it take to mobilize on off-site properties.

(Hrg.

Trans. atp. 37)

Truesdale testified that in his experience, a team could drill between 140 to

170 feet in a

ten hour day,

and in this case he estimated 160 feet per-day.

(Hrg. Trans.

at p. 37) Given that

there were 520 total feet to be drilled,

this meant it would take 32.5 hours or 3.25 days simply to

do the drilling.

28

---

The recovery ofgroundwater samples from direct-push technology is not instantaneous.

Enough time must pass in order for groundwater to

accumulate in the screen in order to be

collected.

(Hrg. Trans.

at p. 37) Truesdale testified that it may take anywhere from 20 minutes

to

an hour-and-a-half for the groundwater to

accumulate.

(Hrg. Trans.

at p.

46)

Given local

site

conditions,

Truesdale estimated it would take an average of a

half-hour per groundwater sample.

(FTrg. Trans. at p. 46) Since two groundwater samples were to be taken from each ofthe 13

sites

(for a total of26

groundwater samples), there would be 13 hours in which probing would stop in

order to

allow groundwater to

accumulate.

Furthermore, the direct-push investigation on off-site locations will require an additional

hour to move equipment and setup offsite.

(Hrg. Trans. at p.

37) Since there are five off-site

locations to be investigated, Truesdale

added five hours to his

estimate.

This brings the direct-pushinvestigation to

a total of

50.5

hours (which was rounded

down to 50 hours on the budget).

The Agency’s belief that the work could be done

in 16 hours is

without basis. Even if ten soil probes were eliminated from the corrective action plan, there

would still be 13 hours in which groundwater was being collected.

Since the Agency had

previously denied that direct-push technology can be used to sample groundwater, the

unmistakable impression is that the Agency is not fully familiar with the benefits and limits of

this technology.

The Agency Reviewer admitted that she did not know how long it would take to

conduct

the direct-push investigation,

so she asked Harry Chappel, her unit manager.

(Pet. ‘s Ex. 2, at p.

32) Chappel testified that he was asked his opinion on the number ofdirect-pushborings that

could be done in a day and he responded eight.

(Pet.’s Ex.

3, at p.

27) Chappel was never told

29

---

any information about the site, was not told that groundwater samples would be taken, was not

told how many feet were to be drilled and was not told about any site or soil conditions.

(Pet.’s

Ex.

2, at pp.

32-33; Pet.’s Ex~

3, at pp. 34-36; Hrg. Trans. at pp.

209-10)

The Agency Reviewer’s conclusion that eight probes per day is reasonable is based upon

the erroneous assumption that all probes are the same.

The Agency Reviewer had no information

that the total number ofhours was unreasonable other than an off-hand question to

her supervisor

that lacked any ofthe details necessary to make an informed decision.

In contrast, Truesdale

testified in depth about his experience and the numerous practical considerations which were

relied upon in reaching the appropriate 50 hour estimate.

c.

Other Investigation Costs Are Reasonable Given These Time

Considerations and the Unrebutted Evidence of the Reasonableness of

the Rates.

The remaining investigation costs were reduced by the Agency based upon the

assumptions that the direct-push investigation would take only two days.

Since the direct-push

investigation will take fifty hours

(5

days), the Agency’s reductions are erroneous.

These costs

are located in the chart on the bottom halfofpage 68

of the Agency Record.

Truesdale testified that the decontamination equipment will be needed for five days in

order to decontaminate equipment between borings, (Hrg. Trans.

at p.

53

& 89), labor will be

needed to run the decontamination equipment (j~at 89), a concrete coring machine is needed for

five days in order to provide an opening in impervious materials (j~at 53), the disposable

sampling tubes

are needed in order to extract the soils to be logged (whether or not a chemical

sample will be taken) (id.), drilling labor is needed to

conduct the work (j~),utility locate is

required before digging on-site (j~),the utility truck and job trailer are required (j4~

at 53-54 &

30

---

91) and the Bentonite Chips are required to seal the bore holes in order to prevent additional flux

ofcontamination to

the subsurface (id.

at 54).

It is unclear how cuts were made to these investigation costs.

The Agency Reviewer

merely testified that she cut other investigation costs from five days to two

days. (Hrg. Trans.

at

p.

179) In addition, the Agency Reviewer testified that

costs associated with the direct-push

investigation,

drilling labor, utility truck,job

trailer, concrete coring machine and Bentonite chips

were unreasonable based upon her comparison with the rate sheet.

(Hrg. Trans.

at pp.

180-8 1)

For the record, Petitioner was neverprovided those portions of the rate sheet relating to

these

items.

(Pet.’ s Ex.

3, Att. 3) Cindy Davis offered unrebutted testimony as to the reasonableness of

all of these rates.

(Hrg.

Trans. at pp.

144-46)

Since most ofthe reductions for other investigation equipment derive from the Agency

Reviewer’s reduction of the investigation plan from five days to two days, a change that should

be rejected, Petitioner asks that these costs be restored given the evidence that it will take five

days.

Furthermore,

to the extent that the Agency cut rates based upon a secret rate sheet, those

cuts

should be restored because the rate sheet should be given no legal effect in this proceeding.

In summary, Petitioner asks that $9,018.72 in investigation costs be restored.

2.

The Analysis

Cost

Necessary

to Calculate TACO Objectives Should

Be Restored.

The Agency eliminated $490.00 for analysis costs:

The following analyses have cut from the budget: moisture content analysis,

Foc analysis, bulk density, particle density.

In

addition, there is no mention

in the plan that soil cuttings will be transported to a landfill.

Therefore, pH,

paint filter,

flash point

and TCLP lead have been

cut from the budget.

31

---

(Agency Rec., atp.

91)

The budget contains $3,010.00 in analysis costs.

(Agency Rec., at pp.

70-71) Joseph

rruesdale explained the importance of the analyses the Agency proposes to

cut:

In

order to develop

risk based objectives for subsequent

determination of appropriate clean

up levels, these parameters must be

obtained during investigation in

order to calculate

the appropriate risk based

objectives under TACO.

(Hrg. Trans.

at p.

65)

The Agency Reviewer also

stated that she relied upon the rate sheet in eliminating and/or

reducing the phlORP/temperature meter.

(Hrg. Trans. at p.

184)

Therefore the $490.00 for

analysis costs should be restored as both reasonable and necessary.

3.

The Personnel Costs are Based Upon Reasonable Rates and Work

Necessary to Complete the Corrective Action Plan.

The Agency eliminated $18,450.00 in personnel costs:

The following

job titles have been modified to

a

more reasonable

rate and

time to complete tasks: Professional Engineer, Project Engineer, and Staff

Geologist.

In addition the Job title Field Manager has been cut from the

budget for excessive personnel at the site.

In

addition, as the plan has been

modified, the hours attributed to the above titles exceed the minimums:to

comply with Title

XVI (35

IAC 732.505(c))).

(Agency Rec., atp. 91)

The Agency provided a breakdown ofits

rate and time reductions.

(Pet. ‘s Ex.

11,

at

¶3(d)) The rate reductions are based entirelyupon the illegal rate sheet and should be rejected

outright.

Without waiving said objection, Petitioner states that the rates and time are not

excessive for the following reasons:

32

---

Professional Engineer.

The Agency appears

to have cut the number ofhours for the professional engineer from

5

hours to 2 hours.

(Pet.’s Ex.

11, at ¶3(d)) Truesdale testified that by law the professional

engineer is required to

oversee all phases ofthe work, which he is signing and certifying.

(Hrg.

Trans. at p.

56;

see 225 ILCS 325/14 (Professional Engineering Practice Act); 68 Ill. Admin.

Code 1380.300(a)(2) (implementing regulations).

“Two

hours is obviously not enough time to

oversee the.

.

.

upward of400 hours that are specified in the plan elsewhere under the other

items.”

(Hrg.

Trans. at p.

56)

In fact, five hours is not enough in Truesdale’s opinion, but he

reducedthe time as a concession to the Agency.

(j~)According to the Agency, all the

professional engineer needs to

do

is thumb threw some documents and sign-offon them.

(Pet.’s

Ex.

3, atp. 67)

Cindy Davis, owner ofCSD Environmental, testified at the hearing as to

the basis ofthe

$150 hourly rate for professional engineer.

(Hrg. Trans.

at pp.

134-42) The rate is arrived at by

considering the employee’s salary, the employer’s tax contributions, and a standard engineering

profit multiplier which takes into consideration employee health insurance, overhead costs and

company profit. (j~at 134) This is the standard way it is done

in the engineering business.

(~

at

142)

She testified that employee salaries are comparable to Agency salaries.

(~

at

135) The

resulting rate of$1 50-per-hour is the company’s usual and customary rate for all services,

including those paid by CSD

Environmental’s customers. (j~at 135-36)

The Agency has also

approved this rate before.

(~)

In fact, the Petitioner attempted to

submit into evidence the

identity ofnumerous

projects in which the Agency had previously approved rates which it now

33

---

challenges.

(Pet.’s Ex. 19)~

In setting the rate of$150-per-hour,

Cindy Davis was familiar with

rates charges by other companies

in the industry.

(Hrg. Trans. at pp.

136~37)6

Cindy Davis also

purchased a survey that provided standard billing rates for professional engineers in small

Midwest firms at between $132 to

$155

per-hour.

(Hrg. Trans.

at p.

140)

b.

Project Engineer.

The project

engineer’s hours were reduced from

156 hours to

40 hours.

(Pet. ‘s Ex.

11, at

¶3(d)) The project

engineer’s hours are forthe design and development of the corrective action

plan and the corrective action planbudget, correspondence with the Agency and with the client,

coordinating the investigation project, meeting with the Agency and preparing the reimbursement

request.

(Hrg. Trans.

at p. 59) Truesdale testified that

156

hours

is necessary to do the work in

the plan in a way that complies with the Act.

(Hrg. Trans.

at pp.

59-60)

When asked by the

Agency’s attorney to explain how she reached 40 hours, the Agency Reviewer testified that she

“felt” that 40 hours should be ample time.

(Hrg. Trans. at p.

189)

The project engineer’s hourly rate is $114-per-hour.

(Agency Rec., at p. 72) These rates

were also based upon the same standard formula discussed supra with respect to professional

engineers.

(Hrg. Trans.

at p.

141) Moreover, the Agency has previously and repeatedly approved

a rate of$1 14-per-hour for project engineers.

(Hrg. Trans. at p.

137) Furthermore, the survey

~

Petitioner submitted a list ofprojects in which the Agency had previously approved

rates which are now deemed unreasonable.

This information is directly relevant to the issue of

whether or not these rates are reasonable and should have been admitted.

6

Cindy Davis testified to her knowledge of comparable rates in the industry based upon

experience in taking

over projects from other companies, Freedom ofInformation Act queries,

participation in the Consulting Engineers Council, and

annual seminars in which pricing issues

are discussed.

(Hrg. Trans.

at pp.

136-37)

34

---

purchased by Cindy Davis stated that project engineers in small Midwestern firms

were charging

approximately $120 to $130 per-hour.

(Hrg. Trans.

at p.

140)

c.

Staff

Geologist.

The Staff Geologist’s hours were reduced from 88

hours to

40 hours.

(Pet.’s Ex.

11, at

¶3(d)) The Staff Geologist’s job is to perform the R26 modeling and CAP

design.

(Hrg. Trans.

at

p.

56)

Truesdale

testified that the number of hours were necessary for the described tasks and

were not excessive.

(Hrg. Trans.

at pp.

57-58)

Petitioner submitted a budget in which the Staff Geologist would be paid $72.00 per

hour.

(Agency Rec., at p. 72) Since the rate sheet has a maximum rate of$86 per hour (Pet.

Ex.

2 (Att. 2)), the Agency did not cut this rate.

(Pet.’s Ex.

11, at ¶3(d))

d.

Field

Manager.

All of the Field Manager’s eight hours were cut as excessive.

(Pet.’s Ex.

11, at ¶3(d))

The Field Manger’s job was to collect groundwater samples.

(Agency Rec., at p. 73) A field

technician was also tasked to help collect groundwater samples for the same eight hours.

(~)

If

either ofthese positions was eliminated, it would take twice

as many hours (16) to perform the

task.

(Hrg. Trans.

at p.

56)

Furthermore, the position that would need to be eliminated would not

be the more-experienced Field Manager ($90 per hour), but the less-experienced Field

Technician ($66 per hour).

(Hrg.

Trans. at p.

56)

However, Truesdale testified that OSHA

regulations do not allow one person to perform this function unassisted.

(~.

at

56)

OSHA

35

---

regulations require the use ofa “buddy system” when handling potentially hazardous materials in

order to provide rapid assistance in the event of an

emergency.

(29 CFR Part

1910)

The Agency did not object to the Field Manger’s hourly rate, and it is

a rate that has been

approved

in the past.

(Hrg. Trans.

at p.

137)

Therefore, there is no

question that the rate is

reasonable.

For the foregoing reasons, all personnel costs must be restored.

4.

The Equipment Costs Are Necessary for the Number of

Days

ofWork

Required and Are Based Upon Reasonable Equipment Rates.

The Agency rejected $849.30 in the following equipment costs:

The following items have been reduced to

2 day’s use:

PID,

ph/ORP/temperature meter, and utility truck for geologist for logging soil

borings.

In

addition, EnCore samplers have been reduced to 6 from 12.

The

pH/ORP/temperature meter (35 IAC 732.606(hh))

(AgencyRec., atp. 91)

In addition, $36.00 for camera costs were also rejected,

(~),

for a total of$885.30 in

equipment costs.

Truesdale explained the necessity for these costs:

As specified on the sheet, the PID and the pH meter were estimated to

be used for five days, which corresponds to the investigation hour estimate

provided on page 68 previously.

The EnCore samplers were estimated based

on the number ofsample

—

the soil samples approved by the Agency

in

accordance with

5035, analysis for BTEX,

two

EnCore samplers must be

submitted to the laboratory for each BTEX sample.

Since we had six

samples that were approved by the Agency,

12 EnCore samplers were

required.

36

---

A camera was

also reduced.

We had

two

days of camera use instead

of five.

(Hrg. Trans.

at p. 61)

The reduction of use ofthis equipment to two days is not appropriate given that the work

will take five days.

The Agency Reviewer also indicated that the camera use had been reduced in

light ofthe rate sheet.

All ofthese equipment costs should therefore be restored.

5.

The Field Purchases Are Necessary for

the Number of Days ofWork

Required

and Are Based Upon Reasonable Equipment Rates.

The Agency eliminated $150.00 as “an adjustment in USP

sample shipping,” $50.00 for

“Misc.

Retail Purchases,” and $270.00

as a reduction for the number ofrental days for a

peristaltic pump.

(Agency Rec., at p.

92) These costs total $470.00.

Truesdale

explained the necessity of these items:

Miscellaneous retail purchases includes ice, film, and miscellaneous

parts in the field.

Ice is required for preservation of samples in the field.

We have film.

Obviously;

that is required for documenting photographic

evidence of what is being conducted.

It is

a relatively small cost on

a per day

basis so we don’t charge for disposable gloves

and shovels and spades and

miscellaneous equipment.

We lump it into

a miscellaneous purchase cost

which is

covered on item one.

UPS, shipment of samples to the laboratory.

Soil and ground water

samples are very heavy and are shipped in coolers.

And

$50.00 per sample

per day is probably actually now slightly low.

Our recent costs are actually a

little bit higher than

that.

The ground water sampling pump is obviously required in order to

obtain the ground water samples.

The screen point sampler and the

disposable ground water sampling tube is also required to obtain direct-push

screen point sampler ground water samples.

37

---

We are required to submit reports to the Agency in duplicate, and as

a result, photocopying is required.

(EIrg. Trans.

at pp.

6 1-62)

These are expenses needed to complete the plan, and which are slightly lower than actual

costs. The Agency reviewer testified that she relied on the rate sheet in determine a reasonable

number of sample shipments and a reasonable rate for the peristaltic pump.

(Hrg. Trans.

at p.

184)

Therefore, these $470 in items

should be restored to

the budget.

6.

.

The Handling Charges Were Reduced Solely Due to Other Cuts

Budget and Therefore

Restored.

The budget included $1,714.76

in handling charges.

(Agency Rec., at p. 78)

There was

no objection to the handling charges themselves,

but once cuts were made elsewhere in the

budget, the $1,714.76 in handling charges exceeded the costs eligible under the statutory

formula.

(Agency Rec., at p.

92) In the event that the Board restores any or all cuts made

elsewhere in the budget, Petitioner asks that the corresponding cuts

in handling charges be

restored as well.

V.

CONCLUSION.

Petitioner gave the Agency a technically sound Phase I High Priority Corrective Action

Plan (Investigation), complying in all respects with the Act and the Board regulations,

and

a

corresponding barebones budget to implement that plan.

Petitioner’s first attempt was rejected,

primarily because the Agency Reviewer mistakenly believed that direct-push soil borings cannot

be used to gather groundwater samples.

Rather than clog the Board’s docket with an appeal,

38

---

Petitioner sought a 90-day extension for appealing the Agency’s decision, timelymet with

Agency personnel to

explain the direct-push technology (using the Agency’s own fact sheet),

and agreed to make certain concessions in an amended plan and budget.

Without advance

warning, the Agency rejected

10 out of 26 direct-push borings and 58

ofthe reducedbudget.

Recognizing a moving target, Petitioner appealed to

the Board and herebyrespectfully requests

the Board reverse the Agency’s changes in the corrective action plan, reverse the Agency’s cuts

to the associated budget, and provide for such otherrelief as the Board deems meet and just.

Respectfully submitted by

ILLINOIS AYERS OIL COMPANY,

Petitioner,

By its attorneys,

MOHAN,

ALEWELT

By

B~

Fred C. Prillaman

PatrickD.

Shaw

Mohan, Alewelt, Prillaman & Adami

One North Old State Capitol Plaza

Suite 325

Springfield,

IL 62704

217/528-2517

39

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