FCB 03-54,56,105,179,

04-02:

Exhibits to Electronic Filing of April 8, 2005

RECE P/ED

CLERK’S OFFICE

APR 122005

STATE OF ILLNOiS

Pollution Control Board

---

m

0~

—1-

-~

---

HIIh

Kalamazoo

Lansing-

howardf~Howard

law for business-

•lrect dial: 309.999.6309

Diana

1\’I.

Jagiella

email: djagiella(~howardandhov~ard.com

March

5,

2003

Via Facsimile

—

(217) 524-7740

Via Facsimile

—

(217) 782-9807

James L. Morgan, Assistant

John Kim, Esq.

Attorney Genera!

flhinois Envii~onmenta1Protection Agency

Office ofthe Attorney General

Division ofLegal Counsel

500 S. Second Street

1021 N. GrandAvenue East

Springfield, IL 62706

Spi:ingfield, IL 62702

Via Facsimile

—

John Waligore, Esq.

Illinois Environmental Protection Agency

Division ofLegal Counsel

:1

1021 N. Grand Avenue East

Spring~e1d,IL62702

Re:

Freedom Oil Company

401 S. Main Street, Paris,

illinois

—

Edgar County

Our File No. 17273-1

Gentlemen:

Enclosed is a copy of the OSFM’s February 26, 2003 letter approving Tanks 1 and 6 for

Fund Eligibility. As you know, EPA considered receipt ofthis eligibility approval letter necessary

to

include Tanks

I

and 6 in the proportion of approved cleanup costs. They previously were

considered by EPA to be Fund Ineligible due to the lack of an OSFM eligibility determination;

The proportion ofreimbursable costs was correspondingly reduced.

We currently have a large reimbursement request pending. Would you please ensure the

amount approved for reimbursement includes Tanks

I

and 6 in the Fund eligible proportion. I have

asked MacTee to make sure Mike Heaton, who is handling the technical review, has a copy ofthe

Eligibility Determination. We also were previously denied reimbursement for the proportion of

costs allocated to these tanks in the prior reimbursement request. This denial is the subject ofthe

pending Board appeal. To eliminate further unnecessary legal costs, would you also please have the

amount denied forthese tanks in the earlier request approved for payment.

Onc

Technology Plaza.

Suite 600. 211 Fulton Street,

Peoria.

IL 61602.1350

309.6~2.l483 Fax: 309.62.1368

www.h21aw.com

---

omfield Hills

Kalamazoo

Lansing

r

Howardf~Howard

law for business

directdial: 309.999.6309

Diana M. Jagiella

email: djagiella@howardandhoward.com

June 30, 2003

John J. Kim, Esq.

Division ofLegal Counsel

Illinois Environmental Protection Agency

1021 North Grand Avenue East, P.

0. Box

19276

Via Facsimile (217) 782-9807

Springfield, IL

62794-927

6

and Regular US. Mail

Re:

Freedom Oil Company, Paris,

Illinois

LUST Fund ReimbursementDenial

Our File No. 17273-1

Dear John:

As you know, two release incidents occurred at the Freedom Oil Company station in Paris,

Illinois (“Property”) in 2002. In April, 2002 a shear valve leaked. This was discovered after vapors

were noted in the sewer connected to Paris High School across the street from the Property.

(Incident 20020433) In August 2002, a tank liner failure occurred. This was discovered after

vapors were reported in the southern sewer. (Incident 2002112)

EPA has denied LUST Fund reimbursement to Freedom Oil Company (“Freedom”) in the

amount of

$293,733.95.

Specifically, on December 18, 2002, $102,122.04 was denied. On

March 19, 2003,

$169,051.90

was denied. On May 28, 2003,

$22,559.71

was denied. Freedom has

appealed denial ofthese costs to the Illinois Pollution Control Board. We seem to be in agreement

that a discussion prior to a Board hearing to determine if settlement can be reached would be

appropriate. As promised, set forth below is a summary

of the costs

denied, and our basis for

requesting EPA to reconsider its denial.

I.

Handling Costs

EPA denied $24,638.82

in handling costs. As illustrated

in the chart below, based on

handling charges allowable under the law, Freedom is entitled to an additional $9,643.95 in

handling charges.

One Technology Plaza. Suite 600, 211 Fulton Street, Peoria, IL 61602.1350

309.672.1483

Fax: 309.672.1568

www.h21aw.com

---

John J. Kim, Esq.

Division ofLegal Counsel

Illinois Environmental Protection Agency

June 30, 2003

Page3

ESE Invoice 0369674

Invoice

Amount

Allowable Handling

Charges Based on Per

Subcontract’

Field Cost

Equipment rental

520.69

62.40

Field Supplies

355.31

42.64

Photo

21.24

2.54

Printing

1.00

.12

Total

$280,054.95

$15,354.08

Amount Paid by EPA

$10,988.58

Amount Still Owed to Freedom

$ 4,365.50

II.

$362.84 for Cell Phone and Milcage Handling Costs

•

$226.76 was deducted for cell phone rental from 10/28/2002

-

11/27/2002. Apparently,

EPA made this deduction based on a belief ESE staff were on site for five days, not

nine days. A similar deduction of $103.96 was made for the period

09/28/2002

-

10/27/2002. Attached are time sheets verit~ringESE staff were on site for

these time periods.

•

$23.39 was deducted as a handling charge on mileage costs. This should have been

allowable.

ifi.

$20,000 Deductible Assessed

EPA denied reimbursement of$20,000 as deductible amounts owed. Although no reason

for this deduction was specified, it appears the adjustment was made because an additional

deductible was anticipated to be owed with respect to a subsequent incident number assigned at the

facility for the release caused by tank liner failure in August 2002. (Incident 20021122) It also

appeared EPA was unaware the $10,000 deductible for Incident 20020433 was already paid by

Freedom. Accordingly, Freedom should be reimbursed for the $10,000 deductible for Incident

20020433 which had already been paid.

1V.

$27.76

—

Tracer Dye

I

$140.00

—

Notice

ofSmoke

Testing

EPA denied $27.76 for dye for tracer testing the sewer on the basis it “has been determined

to not be related to Early Action Activities. Therefore, it is not reasonable...

MACTEC completed dye tracer testing ofsewer in order to determine if a sewer connection

existed between the Freedom Oil station and sewers in the vicinity ofthe site. The dye testing ofthe

Howard!~

Howard

---

John J. Kim, Esq.

Division ofLegal Counsel

Illinois Environmental Protection Agency

June 30, 2003

Page

5

:;;VOlUflle

UST #

.A~allons)

4

4.000

Gasoline

Registered. 20020433;

20021122

5

1,000

Gasoline

Registered. 930540, tank

removedprior to April 1, 2002;

incident closed

6

1,000

Kerosene

Registered. 20021122

Total

18,000 gallons

The following table lists the Old Tanks subsequently discovered at the site during the clean

up. These tanks were apparently taken out ofservice prior to 1974. The Old Tanks were located on

the east side of the property. Although there were no releases from these tanks, EPA assigned

Incident No. 20021420 to these tanks.

Unregistered/Previously Unknown Tanks (“Old Tanks”)

~~flF

~~allons)

~ i

~‘jroduct

-~

7

500

Heating Oil

8

1,000

Gasoline

9

1,000

Gasoline

10

1,000

Gasoline

11

500

Heating Oil

Total

4,000 gallons

Reimbursement Application I. Corrective Action costs in the amount of

$185,644.12

were

incurred between April 3, 2002 and August 2, 2002 in connection with Incident 20020433. These

costs were incurredbased on activities ordered by OER for the purpose ofidentifying the migration

pathway from the shear value release to a conduit causing vapors in the school. In summary, these

costs included trench excavation to halt migration and sewer exploration to identify the conduit of

the free product entering the sewer purported to have caused gasoline vapors in the school. On

December 18, 2002, EPA denied $81,954.58 ofthe requested costs basedon the presence oftanks

ineligible for reimbursement.

EPA reimbursed

55.814

of the costs. In reaching this amount, EPA decided a total of

21,500 gallons of tank product storage was present at the site. Twelve thousand gallons was

considered by EPA to be associated with Fund eligible tanks (Tanks 2, 3 and 4) and

9,500

gallons

to be associated with Fund ineligible tanks (Tanks 1,

5,

6,

7,

8, 9

and 10). According to EPA,,

in

evaluating this application, it considered the following tanks with the registration/eligibility status

notedbelow:

I

Howard ~Howard

---

John J.

Kim,

Esq.

Division ofLegal Counsel

Illinois Environmental Protection Agency

June 30, 2003

Page 7

As noted, 17,000 gallons was considered by EPA to be associated with Fund eligible tanks

(Tanks 1,2, 3,4, and 6) and 4,500 gallons to be associated with Fund ineligble tanks (Tanks

5,

7, 8,

9, and 10). Based on this ratio, EPA reached an 80.95 reimbursement allocation.

Reimbursement Application 3

-

February 11, 2003. The next reimbursement submission,

dated February 11, 2003, requested $116,848.37. On May 28, 2003, EPA denied $22,189.00 for

similar reasons.

EPA reimbursed 80.95 of the costs. In reaching this amount, EPA found a total of

20,000 gallons oftank product had been present at the site. According to EPA, in evaluating this

application, it considered the following tanks with the registration/eligibility status noted below:

Tank 1

4,000 gallon diesel

Eligible

Tank 2

4,000 gallon gasoline

Eligible

Tank 3

4,000 gallon gasoline

Eligible

Tank 4

4,000 gallon gasoline

Eligible

Tank 5

Excluded from

consideration by EPA

.

Tank 6

1,000 gallon kerosene

Eligible

Tank 7

500 gallon heating oil

Ineligible

Tank 8

1,000 gallon petroleum

Ineligible

Tank 9

1,000 gallon petroleum

Ineligible

Tank 10

1,000 gallon petroleum

Ineligible

Tank 11

500 gallon heating oil

tank

Ineligible

Total

20,000 Gallons

17,000 Gallons Eligible/4,000 Gallons Ineligible

As noted, 17,000 gallons was considered by EPA to be associated with Fund eligible tanks

(Tanks 1,2,3,4, and 6) and 4,500 gallons to be associated with Fund ineligible tanks (Tanks

5,7,

8,

9, and 10). Based on this ratio, EPA reached a 80.95 reimbursement allocation.

There is No Scientific Evidence Whatsoever Connecting the Old Tanks at the Site to the

Work Undertaken

With respect to the corrective action amounts denied,denial ofthese costs is contrary to law.

While Section 57.8(m)(l) of the Act allows the Agency to apportion reimbursement costs to eligible

and ineligible tanks, this apportionmentmust be based on the corrective action actually necessitated

by the Old Tanks and the owner’s failure to justify the costs as related to the eligible tanks. In this

case, there is no relationship between the costs incurred and the Old Tanks at the site. The presence

ofthe Old Tanks did not necessitate any ofthe work conducted.

HowardE~Howard

---

John J. Kim, Esq.

Division of Legal Counsel

Illinois Environmental Protection Agency

June 30, 2003

Page9

Conclusion

We hope this infonnation is helpful to explain Freedom’s position it should not have been

denied the requested Fund reimbursement. We look forward to hearing from you.

Sincerely,

Enclosures

cc:

A. Michael

Owens

Michael J. Hoffman

sw;f~ik\swG:\F\FreedomOiI\cor\iepa (kim) 6-30M3.doc

Howard ~Howard

---

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---

Page 2

petition for a hearing within 35 days after the date ofissuance ofthe final decision. However,

the

35-day

period maybe extended for a period of time not to exceed 90 days by written ~iotice

from the owner or operator and the illinois EPA Within the initial 35-day appeal period.. Ifthe

applicant wishes to receive a 90-day extension,

A

written request that includes a statement of the

date the final decisionwas received, along with a copy of this decision, must be sent to the

Illinois EPA as soon is possible.

For information regarding the filing of an appcal., please contact:

•

Dorothy Guam,, Clerk

Illinois Pollution Control Board

State

of

illinois Center

100 West Randolph, Suite 11-500

Chicago, illinois 60601

312/814-3620

For information regarding the filing of an extension, ~iease contact:

ilhjn.ois Environmental Protection Agency

Division ofLegal Counsel

.

1021 North Grand Avenue East

Springfield, Illinois 62794-9276

.

.

.

217/782-5544

.

If you have

any

questions or require further assist~nce,please contact Michael Heaton of

Michael Lowder’s

staff

at

217/782-6762.

Sinc

Dough E: Oakley, Manager

(

LUST

Clauns Unit

Plauxiing & Reporting Section

Bureau

of

Land

DEO:LH:MH:ct\02l35 .doc

Attaehinenl

cc:

Harding ESE

---

Attachment

Page 2

The total gallonage

of t~n1c~

eligible to access the LUST Fund is 12,000 gallons. the

total gallonage

of t~2n1csnot

eligible to access the LUST Fund

is 9,500

.gallons.

Therefore,

55.814

df

costs are apportioned

to the tanks

eligible

to

access

the LUST

Fund, and- 44.186

of costs

are apportioned

to the

t~n1c~

not eligible to access the

LUST

Fund-

With regard

to

$81,954.58

deduction,

540,01419

was deducted from Personnel, S27..40

was deducted from Equipment,

$857.23

was deducted from Material~and Expendable

•

.

(in stock

items), $2,866.22 wa-s deducted from Materials & Expendables (field

purchases, alter the $140 and $27.76 deductions listed

on

lines •a and b

above),

and

•

$38,18M4 was deducted from Subcontractors.

MTL.nth\020433a3.doc

e.

ToTa. P.e~

---

Page 2

the 35-day period may be extended for a period oftime not to exceed 90 days by written notice

from the o~ieror operator ~nd the illinois EPA within the initial

35-day

appeal period. If the

applicant wishes

to

receive a 90-day extension: a written request that includes a statement ofthe

date the flnal decision was received, along with a copy ofthis decision, must be sent to the

Illinois EPA as soon as possible.

For Information regarding the filing of an appeal, please contact

Dorothy Gunn, Clerk

Illinois Pollution Control Board

State

ofIllinois

Center

100 West Randolph7 Suite

11-500

Chicago, Illinois 60601

312/814-3620

For information regarding the filing of an extension, please contact:

Illinois Environmental Protection Agency

Di.vision of Legal Counsel

1021 North Grand Avenue East

Springfield, Illinois 62794-9276

217/782-5544

If you

2nve any questions or require

further assistance, p~e~secontact Lieux-a Hackrnan of

my

staff orMichael Heaton of Michael Lowder’s

staff

at

217/782-676L

s~.

E.

Oakley. Manager

LUST Clalrns Unit

Planning & Reporting Section

Bureau

ofLan’~J

DEQ;LH:jk\0329S5.doc

Attachrnent~

cc:

Hardinu ESE

-

---

Page2

~i

A deduction itt the amount

of $359.66

was made because the Jones & Son invoice

~submirredwith the claim was less than the amount requested by Bodine.

A

deduction in the amount of

S5.98

was made for a

meal

for R. Pletz on

September 27, 2002.

3.

$0.27, deduction for costs due to amathematical error. (Section

57.7(c)(4)(C)

of the

Act and 35 Ill. Adm. Code

732.606(fi))

This deduction was made because the amount requested on the Subcontractors form

datedAugust 23. 2002 and October 15,2002 is incorrect. The amounts listed on the

form total S302.4098S.

•

4.

$29.74, adjustment in the handling charges due to the deduction(s) ofineligible costs

(Section 57~S(f)of the Act and 35 111. Adm. Code 732.607).

A deduction ofSi 7.83 was made on the ineiiaible costs of$890.66 requested on ESE

• invoice 0000369674.

A deduction of$1 1.91 was made on the ineligible cell~phoneco~tsin the amouni of

5342.IS.

524.638.82. deduètion for handling charges in the billing(s) exceed the handling

• charges set forth in Section

57.~(f)

ofthe Act. Handling charges are eligible for

payment

only if they are equal to or less than the amount determined by the

fo1Iowin~

table (Section 57.8(1)

of

the Act and 35 Ill. Mm.

Code 732.607):

Subcontract or

Eligible Handling Charges

Field Purchase Cost

as a Percenraee ofCost

S

0-53.000

12

55.001415.000

5600

i-

10 ofamount over S5.000

•

Si 5,001450.000

$1600 +

~

ofamount over S15,000

530.0014100.000

54400 +

5

ofamount over $50,000

5100.001-SI .000.000

56900 ~-2 ofarnouin over SI 00~000

• A deduction in the amount of$11.223.01 was madt on the harding ESE

invoice

numbered 0000383876.

A deduction in the amount ofSlI.415.8l was made on the Harding ESE invoice

numbered 369674.

DEQiH:jk\032955.doc

---

• ELUNOIS ENVIRONMENTAL

PROTE~rioNAGENCY

1021 NoR-n-I

GRAND

AVENUE

E.’.ST, P.O. Box 19276,

SPRINCFtELO,

ILUNOLS 62794-9276

JAMES R. THOMPSON

CENTER.

100

WEST

RANDO(J’t-l,

SurrE 11-300, CHIc’~co,

IL 60601

Roo

R. 8L~SGOJEVICH,GOVERNOR

RENEE CIPRIANO, DIRECTOR

tiAY25

2003

Freedom Oil

Co.

Attention: Gene Adams

Post Office Box 3697

Paris, IL 61944

Re~ LPC ~04SO305043

—

Edgar County

ParisfFreedom

Oil

401 SóuthMain

LUST Incident No. 20020433

LUST FISCAL FILE

Dear Mr. Adams:

The Illinois Environrhental Protection Agency has completed the review

ofyour

application

for

payment

from the Underground Storage Tank Fund

for the above-referenced LUST incident

pursuant to Section

57.8(a)

ofthe Illinois Environmental Protection

Act (Act),

and

35111.

Adm.

Code

732, Subpart F. This information is dated February

11,2003

arid was receivedby the

Agency on February 20,

2003.

The application forpayment covers the period

from March 1,

2002 to

January 24, 2003. The amount requested is $116,848.37.

The deductible

amount for this claim is $20,000.00, which

was previously deducted from the

Invoice Voucher dared January 17, 2003. Listed in Attachment A are the costs which are

not

being paid and

the

reasons these casts are not being paid.

On

March 3, 2003, the Agency

received your complete application forpayment forthis

claim.

As a result ofthe Agency’s review of

this application for payment,

a voucher for$94,288.66 will

be prepared for submission

to

the Comptroller’s Office forpayment as funds

become available

based upon the date

the

Agency received your complete

request

for payment ofthis application

• for payment. Subsequent applications for payment

that

have

been/are submitted will

be

processed based upon the date complete subsequent application for payment requests

are

received by the Agency. This

constitutes the

Agency’s

final

action with regard to the above

application(s)

for payment

•

•

•

Anunderground storage tank owner

or operator may

appeal this final decision to the Illinois

Pollution

Control Board (Board)

pursuant to Section

57.8(i)

and Section 40 of the Act by filing a

petition for a hearing within 35 days

after

the date of

issuance

ofthe final ~lecision. However,

the 35-day

period may

be extended for a period of

time not

to exceed 90 days by

written

notice

Rccxsow

—

4302

Worh

Main Strvc~.

Rccklorci.

II.

61103

—

(~1

5 987-7760

•

Ots Pi~w~tS

— 9511

W.

Harrison

St.,

Des

Flames, II.

60016—1847)

294-4000

ELC,~—

595 South

State.

Elgin. tL 60123 (6471

603.31)1

• PtQRtA

— 541S N~

IJnive&ty

St..

Peoria. II. 61614

—(309)

693-5463

~AU QI

L~ucg-

P~o*,-&—~7620

N.

University

St.. Peoria, II.. 61614 — (309) 693-5462

•

C-~r..~icN

.-2125

South

F~rs~

Street,

Champaign. IL 61820— (217) 278-5800

S~c,,iu

—

4500 S. Sixth Street Rd..

Springrield.

0. 62706

—

(217) 786~6~92

• Cout.dv,u.t

— 2009 MalI

Street.

CoMnsville. IL 62234 —(618) 346-S120

M~RIOr4

— 2309 W.

Main

S.. Suite 116. Marion. 0. 62959 —(618)

993-7200

217/782-6762

PI,r.n~~or.~ RtCYO.(D

PArES

---

*

•

Attachient A

-

•

Technical Deductions

Re:

LPC)t~

0450305043

-~

Edgar County

Pams /Freedom Oil Coxupany

401 south Main Street

LUSt Incident No. 20020433, 20021122, and 20021420

LUSt File

Citations ii this attac

nt~ef~ the Enviromnental Protection Act (Act) and

35

flhinois

• Adnumstrgtive

Code

(35

fli. Adm

Code).

-

j~

#

t)es~ri~tjo~ofDeductio~

-

-

-

$~3.2s

for VHS

co~~

Ths cost has

been determined to

not be

related

to

Early

•

Action activities, therefore

is not reasonable

(35 AC

732.606(jj)).

$22,189.00, for deductions for costs for corrective action activities

for

underground storage tanks for which the owner

or operator

was .deemned inciigible

• to

access

the

fund (Section

578(ri)(l) of

the Act

and

35

IAC 732.608).

Specifically, there were ten tanks at

the

-

subject facility, each of which was

determined

.by

the Office of State Fire Marshal to have had a signifl~antrelease.

Tank

Nos. 1, 2, 3, 4, and

6

were deemed eligible to access the LUST Fund for

reimbursement purposes, -r~

5, 7, 8, 9,

and 10 ~iavenot been det m..ined~to

be

eligible to access the

LUST

Fund

for

reimburscm~itpurposes. SinceTank

Swás

addressed under ~

Incident

No. 930540. -it is’ not

included .in

the

gallonage

total for Tanks

for

which an eligibility detemitnation has

not

been made

by

illinois Office of

State Fire Marshall (OSFM).

-

Tank # Description

1

4.000-eallon diesel tank

-

• 2

4,000-gallon gasoline tank

-

3

4,000-gallon gasolinâ

Stank

-

4

4,000-gallon gasoline tank

5

1,000-gallon gasoline tank

• 6

1,000-gallon kerosene tank

7

500-gallon heating

oil tank

-

8

1,000-gallon gasoline and/or-diesel tank

9

1,000-gallon gasoline

andfor diesel tank

10

11

500-gallon heating oil tank

---

Exhibit 2

---

Bluonifield

Hills

Kalamazoo

Lansing

Howard ~ Howard

•

law for business

directdial: 309.999.6309

Diana M. Jagiella

email: djagiella@howardandhoward.com

December 18, 2003

John J.

Kim,

Esq.

Mr. Mike Heaton

Division ofLegal Counsel

Illinois Environmental Protection Agency

Illinois Environmental Protection Agency

Bureau ofLand #24

1021 North Grand Avenue East

P.O. Box 19276

P. 0.

Box 19276

Springfield, IL 62794-9276

Springfield, IL 62794-9276

Mr. Mike Lowder

Illinois Environmental Protection Agency

Bureau

of

Land #24

P.O. Box 19276

Springfield, IL 62794-9276

Re:

LUST Fund Reimbursement Denial

Our File No. 17273-1

Dear Gentlemen:

At our August meeting, we agreed to focus our LUST Fund reimbursement discussions on

the big ticket item

—

the costs deducted based on the presence offour unregistered tanks, Tanks 7, 8,

9 and 10 (“Ineligible Tanks”). At the meeting, we argued the remediation costs incurred had no

connection to the Ineligible Tanks. The costs were necessitatedby two significant events

-

an April

2002 shear valve leak and an August 2002 tank liner failure.

All of the costs incurred were associated with work ordered by IEPA-OER before the

Ineligible Tanks were even discovered. In particular, IEPA-OER had ordered excavation, and

removal of soil from property line to property line prior to discovery of the tanks. Thus, the

discovery of the tanks did not give rise to

an obligation for remedial activities -

that obligation

already existed. Further, the nature of the work conducted and the analytical results obtained

confirm the Ineligible Tanks did

not

contribute to the need for site cleanup or emergency response

activities. Thus, apportionment ofcleanup costs to the Ineligible

Tanks has no basis in fact or law.

You requested that we present our technical information in support of this point for further

consideration and evaluation by you. This information is presentedbelow.

One Technology Plaza. Suite 600, 211 Fulton Street, Peoria, IL 61602.1350

309.6721 483

Fax: 309.672.1568 www.h21aw.com

---

John J.

Kim,

Esq.

Mr. Mike Heaton

Mr. Mike Lowder

December 18, 2003

Page 3

included investigation of the school vapors and efforts to abate any related threat

(including air monitoring). Freedom also investigated to determine ifa conduit from

the pump to the school could be identified. These activities included sewer

investigation (via smoke and remote controlled camera), installation oftwo

interceptor/collection trenches on Crawford Street and sampling from the trench, an

exploratory excavation along Crawford Street, sampling from seven soil borings,

installation of four new wells and sampling ofall wells.

August 2002 Vapors were discovered in the sewer lines in the southern alley and homes to the

south. The vapors were caused by a release from one ofthe active tanks foundto

-

have a tank liner failure. Emergency response activities included installation ofan

interceptor/collection trench along the southern alley. In addition, the USTs were

removed, along with approximately 11,811 tons ofsoil and on-site structures to

allow removal ofunderlying soil. The extent ofsoil removal was determined and

dictatedby IEPA-OER before actual excavation began. The Ineligible Tanks were

discovered and removed as part ofthe soil excavation previouslyordered by IEPA-

OER. The site was backfilled.

Summary of Relevant Facts

The following facts underscore the conclusion the Ineligible Tanks did not contribute to the

need for any site cleanup or emergency response activities for which cost reimbursement was

requested.

• The Ineligible Tanks are located slightly north and west ofthe center ofthe site. They

are approximately 40 feet due north ofthe UST bed ofeligible tanks. The Pump Islands

are in between the eligible and IneligibleTanks. (See Exhibit 1)

• IEPA-OER ordered removal ofthe on-site structures and excavation ofsoil from

property line to property line prior to thediscovery ofthe pre-74 tanks. Their discovery

did not expand the work already ordered by IEPA-OER.

•

The Ineligible Tanks were discovered and removed on October 1, 2002. Both field

observations and analytical results, as documented in the attachments, demonstrate the

tanks did not give rise to aremediation obligation. Analytical results confirm the

absence ofsoil and groundwater contamination from the Ineligible Tanks. Specifically:

•

PD readings taken around the pre-74 tanks during the removal and excavation

in October 2002 were very low indicating no releases requiring remediation

from these tanks. The PD readings were 0.0, 1.0, 1.6, 1.8, 1.8, 3.4, and

8.5.

The exact locations at which these P11) readings were taken are depicted on the

attachedmap. (See Exhibit 2)

Howard!~Howard

---

John J. Kim, Esq.

Mr. Mike Heaton

Mr. Mike Lowder

December 18, 2003

Page

5

Reimbursement Application 2

Reimbursement of$709,748.50 was requested. $143,123.59 was denied based on the

presence ofIneligible Tanks. This work was initiated afterodors were detected in the sewer and

homes southwest ofthe site. The odors resulted from a release caused by a tank liner failure. The

work addressed the odors and contamination caused by the tank liner failure. It also included

excavation ofsoil north ofthe tank cavityas IEPA-OER believed this work was necessary to

address any contamination that might be present from the April shear value release. All work was

conducted as ordered by IEPA-OER. The emergency response work is depicted on Exhibit

5

and

included:

• Construction ofan interceptor trench on the south alley boundary to intercept and

prevent free product from entering the sewer.

• Free product removal. Free product was observed entering the trench directly south of

the UST bed. Fluid removal was initiated twice daily.

-

• Construction and operation ofa vapor extraction system in the sewer.

• Investigation ofthe UST tank cavity. This investigation revealed the linerin the

southernmost tankhad failed, causing the release. All tanks were removed (one

kerosene, one diesel fuel, and three gasoline USTs). The tanks were in sound condition

except for the two gasolineUSTs located on the south end ofthe tank bed which

appeared to have internal liner damage. One ofthese tanks caused the August 2002

release.

• Removal of Southern Contaminated Soil. Soil excavationbegan in the UST cavity and

proceeded south (South Excavation). A claytile was discovered that may have been the

migration pathway for vapor and free product transport into the sewer. Approximately

5-6,000

tons ofcontaminated soil was excavated aspart ofthe South Excavation. The

approximate areas ofthis excavation are depicted on Exhibit 6. Analysis ofsamples

taken from this excavation revealed significantly contaminated soil.

• Removal ofNorthern Contaminated Soil. EPA-OER demanded that the excavation

continue from the tank cavity to the north (NorthExcavation). (Freedom contended this

excavationwas unwarranted). The excavationproceeded north and an additional

5-

6,000 tons ofsoil was removed. A total of 11,811 tons ofsoil were removed

as

part

of

the South and North Excavation. The full extent ofthe excavation is depicted on

Exhibit

5.

•

The five pre-74 tanks were discovered as the soil excavationmoved north and removed.

Howard!~Howard

---

¾~

John J.

Kim,

Esq.

Mr. Mike Heaton

Mr. Mike Lowder

December 18, 2003

Page 7

remediation would ~iavebeen necessitated by the discovery. For these reasons, we request

reconsideration of the costs denied based on the discovery ofthe Ineligible Tanks.

Sincerely,

HOWARD & HOWARD

Diana M. Jagie a I

cc:

Mr. Michael Owens

Mr. Michael J. Hoffman, P.E.

man:G:\F\Freedom

Oil\ccr\iepa

(Kim-Heaton)

Howard1~Howard

---

rn

0~

-1-

CA)

---

•

BEFORE

THE POLLUTION CONTROL

BOARD

OF THE STATE OF ILLINOIS

FREEDOM OIL COMPANY,

)

)

Petitioner,

)

PCB No.

03~56

)

PCB No. 03-105

v.

)

PcB No. 03-179

)

PCB No. 04-02

ILLINOIS ENVIRONMENTAL

)

(LUST Fund/UST Appeal)

PROTECTION AGENCY,

)

(Consolidated)

)

•

Respondent.

)

RESPONSE

TO PETITIONER’S

FIRST

SET OF

INTERROGATORIES

NOW COMES the Respondent, the Illinois Environmental Protection Agency (“illinois

EPA”), by one of its attorneys, John

J. Kim, Assistant Counsel and Special Assistant Attorney

General, and, pursuant to the Illinois Pollution

Control Board (“Board”) Rules at 35111. Adm. Code

101.616 and 101.620, hereby responds

to the Interrogatories propoundedbythe Petitioner, Freedom

Oil Company (“Freedom Oil”).

GENERAL

OBJECTIONS

The illinois EPA objects to each of the Petitioner’s interrogatories, definitions, and

instructions to the extent that, individually orcumulatively, they purport to impose upon the illinois

EPA duties or obligations which exceed or are different from those imposed.upon.the illinois EPA

by the Board’s procedural rules.

•

The illinois EPA further objects to each ofthe Petitioner’s interrogatories, definitions, and

instructions to the extent that theycall forattorney-clientcommunications, communications between

or among illinois

EPA’s counsel, attorney work product, orany other privileged matters. The illinois

1

---

Interrogatory No. 4: Please state the basis for the assertions in the December 18, 2002, IIEPA

correspondence that gallonage associated with tanks 1,

5,

6,7, 8, 9 and 10 were not eligible to access

the LUST Fund for reimbursement purposes. Please state whether IEPA continues to assert this

contention is factually and/or legally correct.

.

.. .

Answer:

.

.

The Illinois EPA objects to this interrogatory in that it seeks, in part, a legal argument orconclusion.

Without waiving that objection, the Illinois EPA based its December 18, 2002 final decision in

relevant part on a decision issued by the Office ofthe State Fire Marshal (“OSFM”) on August 1,

2002. The illinois EPAtakes the positionthat based upon information available asofDecember 18,

2002, its contention was correct.

Interrogatory No.

5:

Please state the basis for the agency’s decision in its December 18, 2002,

correspondence to apportion 44.186

ofthe clean up costs to

tanks not eligibleto access the LUST

Fund forreimbursement purposes.

Answer:

The Illinois EPA applied the facts as known at the time ofthe decisio.n (SeeAnswer to Interrogatory

No. 4) to Section

57.8(m)

ofthe

illinois Environmental Protection Act (“Act”)

.(415.ILCS..5/57.8(m))

and

Section 732.608 ofTitle

35 ofthe illinois

Administrative

Code

(35

111. Adiñ. Code 732.608).

The

apportionment factor

used represents, the ratio of volume of

tanks

eligible to access the

Underground

Storage

Tank Fund

(“UST Fund”) to the volume ofall

tanks

at the site. The illinois

EPA concedes that the volume oftank

5

~.vaserroneously included in the calculations. Tank 7 was

also erroneously thought to be a 500 gallon tank, although’the correct volume for that tank is 1,000

3

---

Interrogatory No. 8: Does the IEPA contendgallonage orpetroleum associated with tanks 7, 8, 9,

10 and/or 11 caused or contributed to the need for clean up at the site with regard to Incidents

20021122, 20020433 and/or 20021420? Ifso, statethe faôtual and legal basis for this contention.

Answer:

.

‘

The illinois EPA objects to this interrogatory in that it is ambiguous and seeks, in part, a legal

argument or conclusion. Without waiving that objection, the illinois EPA states that Freedom Oil

has represented to OSFM that tanks 7, 8, 9, 10 and 11 have all experienced releases. The illinois

EPA hasnot been providedwith any informationthat demonstrates that tanks 7,8,9, 10 and 11 did

not contribute

to the

contamination at the site.

Interrogatory No. 9: Please identify the facts in support of and the legal basis for IEPA’s

conclusion set forth in its December 18,2002, March 19, 2003, and May 28, 2003, correspondence

that apportionment ofthe clean up costs to tanks 7, 8,9, 10 and/or 11 is allowed under415 ILCS sec.

57.8(m).

Answer:

.

The illinois EPA objectsto this interrogatoryin that it seeks, in.part, a legal argument or conclusion.

Without

waiving that objection, see the Answers to Interrogatory Nos. 4 through 8

Interrogatory No.

10:

Please explain the basis for the state sdenial of$247,267.17 in orrective

action costs giventhat correspondence from the state made representations corrective action costs

would be reimbursed from the Fund on August 16,2002, August 23, 2002, and September 3,2002.

5

---

to applicable statutory

and regulatory guidelines. The initial action taken at the site was the result of

legal action in the form ofan Immediate Injunctive Order datedAugust

15,

2002.

ILLINOIS ENVIRONMENTAL

PROTECTION AGENCY,

Resp~n~~~

Assistant Counsel

Special Assistant Attorney General

Division of

Legal

Counsel

1021 North Grand Avenue, East

P.O.Box 19276

Springfield, illinois 62794-9276

217/782-5544

217/782-9143 (TDD)

Dated: April 6, 2005

7

---

Tank

5

was erroneously included in the calculations.

**:

Tank 7’s volume was erroneously calculated at 500 gallons instead ofthe correct 1,000 gallons.

Ratio oftotal eligible tankvolume to total tankvolume

=

17,000 / 21,500

=

0.7907

Thus 79.07 ofeligible costs were approved.

100 minus 79.07

=

20.93

=

percentage ofeligible costs deducted from final approval ofcosts.

~?O3IEEEEIEEm**mIEIEIE

**:

Tank 7’s volume was erroneously calculated at 500 gallons instead ofthe correct 1,000 gallons.

Ratio oftotal eligible tank volume to total tank volume =17,000 / 21,000

= 0.8095

Thus

80.95

of eligible costs were approved.

100 minus 80.95

=

‘19.05

=

percentage ofeligible costs deducted from final approval ofcosts.

2

Marchl9,l

I

2003

I

EEEE

Final

Decision:

I

I

E

IE**

TB

IE

IE

UK

I

LII1~