BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
IN THE MATTER OF: )
PROPOSED AMENDMENTS TO: ) RO4-22
REGULATION PETROLEUM LEAKING ) (Rulemaking – UST)
UNDERGROUND STORAGE TANKS )
35 ILL. ADM. CODE 732 )
IN THE MATTER OF: )
PROPOSED AMENDMENTS TO: ) RO4-23
REGULATION PETROLEUM LEAKING ) (Rulemaking – UST)
UNDERGROUND STORAGE TANKS )
35 ILL. ADM. CODE 734 )
RE: WRITTEN COMMENTS TO JULY 2005 HEARING FROM CSD
ENVIRONMENTAL SERVICES, INC. BY CINDY S. DAVIS, P.G. AND JOSEPH
TRUESDALE, P.E., P.G.
During the July Hearing, Hearing Officer Marie Tipsord requested CSD provide written
comments on the alternative proposals submitted by USI and CWM. USI, CWM and
CSD agreed we would try to get together and agree on one proposal to be submitted to
the Board. However, in the interim the IEPA presented their list of questions to USI
regarding their proposal and questioned how the three companies could get together
without having an antitrust issue. Council recommendation to CSD, CWM and USI was
not to get together, but to each provide separate comments and/or proposals.
CSD has reviewed USI’s revisions dated September 13, 2005 to the Board and CWM’s
revised proposal in Draft Form to the Board which was prepared after the last hearing. In
general, both proposals have the same basic principals– establish expedited and
maximum values based upon statistical review of future submittals, require submission of
data to be in a format consistent with the tasks outlined in Subpart H, and require a scope
of work for lump sum services. Both proposals are excellent and are far superior to the
proposal contained in the Board’s First Notice. The difference in proposals appears to be
mainly semantics. USI’s proposal contains a great deal of detail. CWM’s proposal is
more general in purpose. CSD can support either proposal if the Board chooses to adopt
one particular or marry the two proposals together. CSD’s comments are listed below:
Expedited Threshold Values vs The Agency’s Proposed Maximum Payments
:
USI provided at the hearing the results of the statistical analysis they conducted of 80
LUST sites obtained from the Agency via the Freedom of Information Act. USI’s
statistical analysis concluded that the Agency’s proposed maximum payment
numbers were significantly lower than the amount the IEPA has been historically
paying. CSD also testified that for most of the numbers the IEPA proposed as
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maximum’s were 50% below what we had historically been reimbursed. IEPA itself
stated many of the numbers were derived from averages. CSD feels it is
inappropriate to apply average numbers to a maximum payment and expect the
payment will cover 90% of the costs.
The concept of applying the maximum payment numbers proposed by the Agency as
Expedited Threshold Values was discussed during the hearing. CSD supports this
concept in that it provides an incentive to consultants and contractors to try to
complete the work for the Expedited Threshold Value. In turn, the consultant is
rewarded with a quicker turn around time for both review and payment. In fact, if the
expedited value is determined from the average, the effect of implementing an
expedited threshold value will serve to lower the average/expedited value each year
resulting in potential cost savings to the UST Fund.
CSD believes a database will need to be established by the Agency in order to
complete statistical analysis to determine reasonable costs such as expedited
threshold/average costs, maximum costs, etc. CSD proposes as did USI and CWM,
the Board adopt the Agency’s maximum payment amounts as Expedited Threshold
amounts during the interim while a database is developed.
USI and CWM’s proposals both provided Expedited and Maximum Payment
Amounts be established. USI provided the expedited numbers as part of Appendix E.
CSD doesn’t believe that actual numbers should be placed into regulation, but the
regulations should refer to the method of how the numbers are derived. The numbers
should be developed in accordance with the method in regulation by the Agency and
presented to the LUST Advisory Committee to ensure the method was used
appropriately and is error free. We propose the numbers be separate to allow for more
flexibility in price adjustments. The numbers can be posted on the Agency’s web
site.
Determination of Expedited and Maximum Payment Amounts
– CSD proposes
the method for determining expedited and maximum payment amounts be included in
regulation. The following wording (prepared by CWM) is endorsed by CSD:
Section 734.880 Determination of Expedited and Maximum Payment Amounts
The Agency shall establish maximum and expedited payment amounts for the
specific tasks set forth in Subpart H in accordance with this section. In order
to establish rates, the Agency must collect data in a format consistent with the
tasks outlined in Subpart H and the Agency must scientifically calculate rates
to a 95% confidence level.
a) The maximum payment amount shall be set at a rate where 90% of
submittals fall below that rate.
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b) The expedited payment amount shall be set at a rate where 50% of
submittals fall below that rate. For submittals which are below the
expedited payment amount, the Agency shall complete its review in 60
days.
c) Once the Agency has calculated rates, the rates must be posted on their
website with an effective date, equaling the date of their posting.
d) The rates shall be calculated no sooner than following the collection of 6
months of reimbursement submittals to the Agency. The second
calculation shall be following six more months of data collection.
Thereafter, the Agency must update the rates on an annual basis and no
more frequently.
e) All requests for payment must be submitted in accordance with 734.850.
Scope of Work or definition of Typical
- During the hearing many different
scenerios were presented by the consulting community to the Agency in an attempt to
show the Board that without a clear definition of typical site it is difficult for the
consultants to make a demonstration to the Agency that their site or situation is not
typical and therefore unusual or extraordinary circumstances of 734.860 apply. At
the last hearing it was clear the Agency has adopted a “we will know an extraordinary
condition when we see it” type of mentality. This type of mentality is totally arbitrary
and capricious. CSD proposes this rulemaking establish the correct procedure to
define typical. USI’s proposal included an Appendix D which lists Standard Tasks
and Appendix F a detailed Scope of Services and Reasonable Quantity Guidance.
CWM’s proposal included Appendix G – Scope of Work for Lump Sum Items. CSD
suggests combining USI’s Appendix D with CWM’s Appendix G. The combined
Appendix would include a generic task such as Prepare and Submit a 45 Day Report
and under the generic task, the details of what is included in a 45 Day Report. CSD
further suggests that the scope of work could be referred in regulation to be developed
by the LUST Advisory Committee and posted on the Agency’s web site. In addition,
we suggest the Board direct the LUST Advisory Committee to continue to refine the
scope of work for each lump sum pay item.
Lust Advisory Committee
– the LUST Advisory Committee pursuant to 734.150 is
to be comprised of one individual each from the Illinois Petroleum Marketers, Illinois
Petroleum Council, ACEC, Illinois Society of Engineers, American Institute of
Professional Geologists, PIPE, Illinois Association of Environmental Laboratories,
Illinois Environmental Regulatory Group, Office of State Fire Marshal, and IDOT for
a total of 10 positions. CSD proposes the Committee number be an odd number for
voting purposes. CSD proposes since the members of PIPE has been the most
concerned party through out these regulations that PIPE be allowed two seats on the
Committee.
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CSD proposes that the LUST Advisory Committee be tasked with the responsibility
of developing standardized forms for submittal, guidance documents, evaluation of
expedited and maximum rates to ensure the rates reflect prevailing market rates,
review statistical calculations for determining the expedited and maximum rates and
propose appropriate amendments to regulations. Requiring the LUST Advisory
Committee to be an active arm of the LUST program forces the Agency and the
Consultants to repair the strained relationship resulting from this rulemaking.
Due Process
– CSD believes the regulations as proposed at First Notice continue to
deny due process to owners/operators who cannot afford to take an appeal to the
IPCB (Board). CSD on behalf of our client, Illinois Ayers (Ayers), took an appeal
before the Board in 2004. The attorney fees for this appeal exceeded $45,000. These
expenses are typical for taking cases to the Board. The Board did award Ayers
attorney fees in the amount of $44,456.49 on August 5, 2004. However, it took until
June 16, 2005 for the Comptroller to issue a check for the attorney fees awarded in
the case. In fact, Ayers incurred additional attorney fees of $14,732.32 attempting to
prompt the Agency to comply with the August 5, 2004 order. Most owners/operators
cannot afford to spend an average of $50,000 to take a case to the Board, even if the
Board does award fees which take almost a year to receive. Additionally, most cuts
issued by the Agency are less than $50,000 making it uneconomical to take an appeal
of less than $50,000 to the Board.
PIPE recommended earlier in these proceedings an alternative dispute resolution
mechanism be derived to settle reimbursement issues. PIPE suggested the Agency
issue Draft Denial Letters prior to final decision letters to allow the owner/operator
the opportunity to discuss the cuts issued prior to a final decision being made. This
suggestion was rejected by the IEPA. PIPE also suggested an alternative process
prior to formal appeal to the Board, but the Agency again was opposed to agreeing to
any alternative which was less costly to the owner/operator.
CSD recommends the Board adopt an alternative formal procedure for decisions
regarding reimbursement other than filing a formal appeal to the Board. If the Board
does not adopt an alternate procedure, a proposal to the State Legislature may be
necessary to address the due process issue.
Costs incurred after receipt of an NFR Letters
– CWM’s proposal added 4 items
to 734.630(gg) of which CSD supports:
6) Incremental costs incurred by a highway authority through
maintenance or improvement of the Right of Way covered by a
Highway Authority Agreement;
7) Costs to investigate and remediate threats to human health and the
environment caused by a previously unknown migration pathway;
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8) Costs to investigate and remediate contamination found beyond the
previously defined contamination plumes which threatens human
health and the environment; and
9) Costs to investigate and remediate contamination which is
discovered on properties whose owner or operator or their agent
were previously denied access and the requirements of Section
734.350 were met.
Mobilization Charges for Drill Rigs
– the regulation as proposed under 734.820
Drilling, Well Installation, and Well Abandonment includes
mobilization/demobilization of the drill rig and supply trailer as part of the per foot
drilling price. CSD believes the price per foot is not adequate to allow for
mobilization of two pieces of equipment to the job site, especially in light of the
current price of fuel. Both USI and CWMs’ proposals added mobilization as a
separate item to the drilling charge which CSD supports.
Proof of Payment
- the Board in the First Notice included the Agency’s proposal to
require proof of payment from subcontractors. In order for a consultant to submit a
proof of payment or lien waiver from subcontractors the subcontractors must be paid.
If the consultant is financing the project often the subcontractor such as the landfill
will agree to wait for payment. Requiring proof of payment requires the owner (or
consultant if financing) to borrow money to complete remediation or to place the
remediation on hold until the owner or consultant has the resources. We don’t
understand how proof of payment is applicable under the context of the suggested
reasons for this rulemaking. There is no readily apparent means of streamlining the
lust process or saving fund resources via the proposed proof of payment provisions.
Both USI and CWM deleted reference to proof of payment from their proposals
which CSD supports.
CSD has spent numerous hours attending hearings, preparing testimony and writing
comments. We feel we have stated over and over our concerns to no avail. We and other
consultants have provided testimony showing the Agency’s numbers are absolutely
incorrect and threaten to put us out of business. The Board stated in the First Notice that
an alternate proposal was not presented. It seems unfair to require consultants to provide
an alternative proposal that addresses all issues and is rule ready. We understand this is
not our job, but the Agency’s. We can’t express how frustrating the rulemaking has been
for us. We don’t understand how the Board can proceed to second notice with a
rulemaking that has not had
any, and we mean any,
support from the regulated
community. The Agency has refused to listen and even consider our arguments when
they know they have inappropriately established numbers. The have adopted a smug
attitude that makes it clear they have no intention of listening now or in the future to
correct the inadequacies of this rule. They feel empowered by the Board because their
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proposal was adopted pretty much as is for first notice. If the Board adopts this rule, we
will have no course of action except to seek help from the State Legislature and file any
and all appeals necessary to stop this madness. Currently 50% of the LUST sites are not
being actively remediated. This rulemaking will ensure the total demise of the LUST
reimbursement program and we can guarantee the Board that the number will
significantly rise to higher levels. Only those cleanups being funded by large
corporations or by owners in the Chicago area where property has value will be cleaned
up. Downstate Illinois will suffer because our property values are low and many times
the property is not worth the money it will take to clean it up. How is this rulemaking as
adopted at First Notice expected to help the State of Illinois, except to guarantee more
money will be available in the LUST Fund because no one will be able to afford to
complete work for the established prices. Maybe this is the directive and objective of this
rulemaking.
CSD asks the Board to provide a directive to the Agency to work with the consultants to
prepare a rule that is more widely supported by the regulated community and start over
with First Notice.
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