ELECTRONIC FILING,

RECEIVED,

CLERK’S OFFICE,

SEPTEMBER 23,

2005

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bred

Scien ~eboO!

StOPS

Inc.

RU

Box

360

6295

East

IL Highway

5

Woooawn,

62

I

r860

377.3.

prone

6

~5

735

24

fax

613.735.2937

www.unjtedscience. corn

September 22, 2005

Ms.

Marie Tipsord

Hearing Officer

Illinois Pollution Control Board

James R. Thompson Center

100

West Randolph, Suite 11-500

Chicago, Illinois

60601

Re:

Proposed Rulemaking

R04-22 (UST

Rulemaking)

& R04-23

(UST

Rulemaking

Consolidated)

Dear Ms. Tipsord:

As

part

of

its

July

27,

2005

testimony

United

Science

Industries,

Inc.

(USI)

provided

the

Illinois

Pollution

Control

Board (IPCB)

with

the

results of

a statistically

valid random

sampling and analysis that USI

performed on

the UST reimbursement files

of the illinois Environmental

Protection Agency (IEPA or Agency).

The random

sampling and analysis performed

by

US!

focused on

the professional

consulting

costs that the 1EPA

has historically reimbursed

as reasonable

for professional

consulting

services

typically rendered

during each

phase of an

Illinois

UST

remediation

project.

Specifically, the results of the random

sampling and analysis performed by USI

revealed

the number of professional consulting

hours, hourly rates

and total professional

consulting costs that the IEPA has

historically approved as reasonable and necessary on

a

phase by phase basis.

A

summary

of

the

professional

consulting

hours,

rates

and

the

total

extended

professional

consulting

costs

per

phase

revealed

by

USI’s

sampling

and

analysis

are

summarized in Attachment One to

this letter.

On

July

27th

US!

showed

that

the Maximum Payment Amounts that

the

IEPA is

proposing for professional consulting services in Subpart H will

cut UST Fund benefits

to

tank owners/operators for the

costs of professional consulting services

by

approximately

fifty percent (50).

Since July27~~

US! has revisited the testimony of Harry Chappel which was

filed

with the

IPCB

on

March 8,

2004.

Mr.

Chappel is the

IEPA employee

that

provided the

September 20 2005 letter to IPCB

Page

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of4

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ELECTRONIC FILING,

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CLERK’S OFFICE, SEPTEMBER 23,

2005

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primary

testimony

in

support

of

the

Subpart

H

professional

consulting

Maximum

Payment Amounts

(734.845)

and

apparently

the

IEPA

employee

primarily responsible

for

their

development.

In

his

testimony,

Mr.

Chappel

refers

to

nineteen

UST incidents

that he claims to have evaluated when developing the hourly rate he used to

calculate the

Maximum Payment

Amounts found

in 734.845.

In

his

testimony,

Mr.

Chappel states

the

IEPA

randomly

selected

nineteen

incidents

to

review

to

determine

if an

average

hourly rate of $80 per hour for professional services is reasonable.

US!

understands that

when requested

to

produce a

list of those incidents

that were

reviewed

for this purpose,

Mr.

Chappel

produced

a list

of only seventeen incidents.

These

incidents

are

those that

are

listed

in

Attachment

Two

to

this

letter.

Mr.

Chappel’s

testimony

was

obviously

designed to

lead one to believe

that the

Maximum Payment Amounts being proposed by

the Agency for professional consulting services were not significantly different

from the

Agency’s historical reimbursement practices.

However, this is simply not the case.

US!

immediately

recognized

from

its

experience

that

Mr.

Chappel’s

testimony

was

inaccurate

and highly misleading.

Upon

reading the draft

rule

published at First

Notice, and realizing that the

IPCB probably unknowingly relied upon the erroneous

and

misleading

testimony

of

Mr.

Chappel

when

it

published its

First

Notice

Draft

of

the

proposed

rule,

US!

felt

obligated

to

provide

the

IPCB

with

appropriate

facts

so

that

it

would have a complete,

accurate and factual record.

This

was

one

of

the

main

reasons

why

so

many

of

the

employees

of

USI

requested

an

additional hearing in this matter and was

also one of the main reasons why

USI

took

the

initiative

to

perform

its

own

statistically

valid

random

sampling

and

analysis of IEPA reimbursement practices.

The

results of USI’s

random

sampling

and

analysis

of

the

Agency’s

historical

reimbursement practices provides more

than enough

evidence

to disprove

Mr.

Chappel’s

testimony

and

invalidate

the

Maximum

Payment

Amounts

for professional

consulting

services

proposed

by

the

JEPA.

Nonetheless,

USI

believes

that

in

order

to

fully and

appropriately discredit Mr. Chappel’s testimony

it is fitting to report to the

Board, via the

public

comment period, the

results of a study that

US!

performed on the

reimbursement

records

of the

seventeen

incidents

which

Mr.

Chappel

apparently

used

to

support

his

testimony.

In

order

to

disclose

all

relevant

facts,

USI

secured

copies of the

reimbursement

records for the

seventeen incidents that Mr. Chappel allegedly

reviewed when evaluating

the reasonableness of the hourly rate of $80 per hour for professional consulting services.

The findings

of this review show that the average hourly rate

for professional consulting

services

is

$79.89

per

hour

and

not

the

$68

per

hour

testified

to

by

Mr.

Chappel,

Nonetheless,

Mr.

Chappel ‘s

error

in

his

calculation

of

the

average

hourly

rate

had

negligible

impact

on

the Agency’s

proposal since the

Agency utilized

an average hourly

rate of $80 per hour for calculating the Maximum Payment Amounts in Subpart H.

What

Mr.

Chappel

failed

to

disclose to

the

IPCB

is

that

the

average

total

professional

consulting service costs reimbursed by the Agency

on those same seventeen incidents are

vastly more than the levels proposed

in Subpart H.

September20

2005 letter to IPCB

Page

2

of4

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ELECTRONIC FILING,

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SEPTEMBER 23, 2005

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In

fact,

the

average

total

professional

consulting

charges

by

phase

on

those

seventeen projects

were slightly more than the averages

reported to the

!PCB by US! on

July

27,

2005.

This

titanic

discrepancy

between

the

proposed

Subpart

H

Maximum

Payment Amounts

for professional consulting services

and those historically reimbursed

on

Mr.

Chappel’s

list

of seventeen

incidents

is

due to the

fact that

Mr.

Chappel

did

not

use

the

actual

claims

for

reimbursement

to

determine

the

number

of

professional

consulting hours required to

complete each phase

of a UST project.

Instead he developed

highly erroneous

estimates

of the number of hours that he guessed might be necessary to

complete the

arbitrary

tasks

that he created in support of his Maximum Payment Amount

proposal.

The

actual

number of professional consulting hours that have been required to

date

on

the seventeen

projects

are

provided

in

the

Attachments to

this

letter.

They

arc

substantially higher than those estimated by Mr.

Chappel when developing his

Subpart H

proposal.

Finally,

it should be noted

that on the

seventeen incidents allegedly evaluated

by

Mr.

Chappel,

the

Agency reimbursed the

claimed

costs at a higher average rate than

those incidents that US! analyzed and reported to

the IPCB on

July

27th~

A summary

of the

results

of USFs

review of

the

professional consulting

costs

associated

with

the

seventeen

incidents

Mr.

Chappel

apparently

reviewed

is

found

in

Attachment Two and detailed information is provided in Attachment Three.

It

should

be

noted

that

all

projects

included in

the

population

from

which

(JSI

performed

its

random

sampling

for

its

July

~

testimony

had

received

closure letters

thereby

helping

to

assure

that

USI’s

findings

would

be

as

inclusive

as

possible of

all

professional consulting costs necessary to complete the subject projects.

To

the contrary, only six of the seventeen

incidents

(approximately 35)

utilized

by

Mr.

Chappel had received

closure

letters.

That

means

that

additional

costs

beyond

those

contained

in Attachments Two

and Three are

almost certain to be

incurred

against

the

Chappel projects

and

that

the

average

costs

of remediation

for

those

projects

will

increase commensurately.

For example, if one reviews the

eight (8)

incidents

in Mr.

Chappel’s

incident set

that have incurred

costs during the

Corrective Action Phase, one

will find that only three

(3) of those

incidents, or thirty-seven and one half percent (37.5)

have received closure

letters.

Of

the

three

(3)

that

have

received

closure

letters,

the

average

number

of

professional consulting hours

claimed is 266.25.

This is higher than the average of 259.3

professional

consulting

hours

found

by

US!

during

its

statistical

evaluation.

The

remaining

five

(5) incidents are

still

works-in-process

so

it is

not appropriate

to

include

those projects as part of an evaluation since it is relatively certain each of these incidents

represents and incomplete record.

In

summary,

the testimony provided

by Harry Chappel

addressed only

part of the

facts related to the seventeen incidents that he allegedly reviewed.

September 20

2005 letter to IPCB

Page 3 of4

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ELECTRONIC FILING,

RECEIVED,

CLERK’S OFFICE,

SEPTEMBER

23,

2005

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If

Mr.

Chappel

performed

a

thorough

and

detailed

review

of

the

seventeen

incidents then he would

have seen that the total reimbursements for professional services

on

those seventeen

incidents

were substantially more

than his Subpart

Fl

proposal.

The

reason

for this is that the number of professional service hours required

for each phase of

a UST project is

substantiallymore than those that he estimated when developing Subpart

H.

Fortunately, the confusing

inaccuracies of Mr.

Chappel’s fractional

testimony

are

now

clarified

and

all

relevant

facts

are

complete.

It

is

obvious

that

the

Maximum

Payment Amounts proposed

in

Section 743.845

are completely out-of-line and should

not

be utilized

in any fashion.

USI,

and numerous others,

believe that the Board should

abandon

the Subpart

H

proposal made by the

IEPA

and either

adopt,

at Second Notice,

the

alternative proposal

recently

made

by

US!,

or

as

an

alternative,

terminate

this

rulemaking

altogether

and

initiate

a new rulemaking process.

Sincerely,

~

Inc.

ay P. Koch

President

September 20

2005 letter to

IPCB

Page 4 of4

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ELECTRONIC

FILING,

RECEIVED,

CLERK’S OFFICE,

SEPTEMBER 23,

2005

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ATTACHMENT

1

Professional Labor Analysis Summary

69 Incidents Randomly Selected and Analyzed

TITLE

# of

Incidents

Title Used

Hour

Weighted

Average

Unit Rate

($/hr)

Standard

Deviation

Systematic Data

Transformation

80

Coverage /

95

Confidence

(LowerLimit)

Systematic Data

Transformation

80

Coverage /

95

Confidence

(Upper Limit)

Professional Engineer

43

$100.18

$17.47

$74.10

$126.76

Professional Geologist

II

$6354

$21.43

$24.21

$121.94

ProjectManager

52

$86.47

$13.93

$61.90

$103.65

Engineer

32

$73.89

$15.79

$51.01

$103.13

Geologist

40

$73.80

$11.94

$55.20

$93.37

ScientisL

30

$67.27

$11.08

$46.07

$83.00

AccountTechnician

21

i54.21

$12.39

$41.25

$79.73

Draftsj~rson

43

$50.86

$9.98

$33.93

$65.52

Technician

35

$48.75

$7.70

$39.21

$64.17

Administrative

52

$37.57

$8.35

$23.90

$49.79

44 of

Incidents

Average

Unit

Rate

($/br)

Standard

Deviation

Systematic

Data

Transformation

80

Coverage

I

95

Confidence

(Lower Limit)

Systematic

Data

Transformation

80

Coverage /

95

Confidence

(Upper Limit)

Alt Professional Personnel

69

$70.68

$11.70

$54.23

$89.40

Outliers Excluded

PHASE

44

of

Incidents

Average

hours

per

~phase

Standard

Deviation

Systematic Data

Transformation

80

Coverage /

95

Confidence

(Lower Limit)

Systematic Data

Transformation

80

Coverage /

95

Confidence

(Upper Limit)

FA

43

85.58

64.94

7.6

218.90

SC

56

139.53

70.58

68.7

461.90

CA

42

259.30

163.50

61.5

558.10

---

ELECTRONIC FILING,

RECEIVED, CLERK’S OFFICE,

SEPTEMBER 23, 2005

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ATTACHEMENT

2

The Agencies

17 incidents “analyzed” for the

development of Subpart H

7-27-05 Hearing

Info

Analysis of

69 Incidents

CA

8

161.22

hr

146.06

259.3

163.5

Closed

3

266.25

hr

189.95

Open

5

98.20

hr

77.80

EA

14

93.07

hr

61.63

85.58

64.94

Closed

6

108.13

hr

67.12

Open

8

81.78

hr

59.13

SC

10

176.40

hr

87.28

139.53

163.5

Closed

4

159.25

hr

77.55

Open

6

187.83

hr

98.55

7/27/2005

Hearing Info

Ouantitv

Unit Rate

Unit Rate

Personnel

4,356.70

hr

$79.89

$70.68

Account Technician

89.25

hr

$53.70

$54.21

Administrative

416.00

hr

$39.96

$37.57

Draftperson

125.75

hr

$58.44

$50.86

Engineer

949.25

hr

$83.55

$73.89

Geologist

345.00

hr

$77.52

$73.80

Professional Engineer

200.75

hr

$98.21

$100.18

Professional Geologist

15.00

hr

$102.67

$63.54

Project Manager

1,609.50

hr

$95.18

$86.47

Scientist

413.75

hr

$68.80

$67.27

Technician

192.45

hr

$53.57

$48.75

FOJA

Analysis

-

The Agencies

17

incidents

“analyzed”

for

the development of Subpart H

# of Incidents

Average

Professional Hours

Standard

Deviation

Average (hrs.)

Std.Deviation

FOIA Analysis

-

Professional Personnel

The Agencies

17 incidents

“analyzed” for the development of Subpart H

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ELECTRONIC

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CLERK’S

OFFICE, SEPTEMBER 23,

2005

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ATTACHMENT

3

FOIA Analysis

-

Professional Personnel

The Agencies

17

incidents “anaiy~ed”

for the development of Subpart H

Average Professional

Standard

Incidents

ijqig~

Deviation

20020214

WED.

Corporation

(Tex

Gas)

15.00

hr

20020013

Werhane Service Center

54.00

hr

7-27-05 Hearing Info

~

trA~

t

Analysis of 69

Incidents

2001208

Lombard

Cirgo

77.25

hr

Average (his.)

I

Std.Deviation

20012025

Franke

Barke Service (vangenhen

& Sons,

Inc.)

128.25

hr

259,3

163.5

20021048

Forest Park Foreign

Car Repair

‘1650

hr

37.50

Closed

62.50

Open

20020021

Casey’s General Store

12.25

hr

20012081

Lombard Cisgo

25.00

hr

20012025

Franke

I3arlce

Service

(Vangenhen

&

Sons, Inc.)

38.50

hr

7

27

05

Hearing Info

20020247

A & Z Corporation

63.00

hr

Analysis of 69 Incidents

Average(hrs)

S&i

Deviation

20020083

West Suburban Auto

79.00

hr

~

20020013

Wethane

Service

Center

109.00

lu

20021048

Forest Park Foreign

Car Repair

163.00

hr

20020080

Martin& Bailey,

Inc.

164.50

hr

42.86

Closed

57.14

Open

20012081

Lombard Citgo

33.25

hr

7-27-05

Hearing Info

Analysis of 69 Incidents

20020013

Werhane Service Center

179.75

hr

20012025

Franke

Barke Service (Vangenhen

& Sons, Inc.)

180.00

hr

20020087

Wesi Suhurban Auto

187.20

hr

20021048

Forest

Park Foreign Car

Repair

203.00

hr

~

Ikha~ ~

~

~

I

Average (firs.)

Std.Deviation

I

139.53

I

163.5

40.00

Closed

60.00

Open

20020080

Martin &

Bailey, lnc

343.75

hr

Indicated

a closed incident

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ELECTRONIC

FILING,

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CLERK’S OFFICE,

SEPTEMBER 23, 2005

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FOIA

Analysis

-

Professional

Personnel

ATTACHMENT

3

The Agencies

I?

incidents

“analyzed”

for the development of Subpart

II

7-27-05 Hearing Info

quantity

.hjli,Rat

Unit Rate

Personnel

4,356.70

hr

$79.89

$70.68

AccountTechnician

89.25

hr

$53.70

$54.21

20020013

WedaaneServiceCcntcr

5.00

hr

560.00

20020080

Marlin & Bailey, Inc.

.

34.75

hr

$51.58

20020083

West

Suburban Auto

31.50

hr

$55.00

20021048

Forest

Park Foreign Car Repair

8.00

hr

$53.75

Administrative

416.00

hr

$39.96

$37.57

20012025

Frankc Barke Service (Vangenhen

&

Sons, Inc.)

29.00

hr

$35.00

20012081

LomhardCitgo

11,50

hr

$29.00

20020013

Werhane Service Center

34,50

hr

$49.57

20020021

Casey’s General

Store

5,25

hr

$36.81

20020041

Huck’s-Canni

19,00

hr

$27.37

20020042

Chebanse Crop Service

85.00

hr

$40.00

20020065

Trickey’s Service

22.50

hr

$40.00

20020070

Martin &

Bayley, Inc.

22.00

hr

$26.59

20020080

Martin & Bailey.

nc.

2.25

hr

$37.78

20020083

West Suburban Auto

35.00

hr

$35.00

20021048

Forest

Park Foreign Car Repair.

41.00

hr

$42.68

20021525

Thomas Management & Associates,

Inc.

109.00

hr

$45.00

Draftperson

125.75

hr

$58.44

$50.86

20020013

Werhane Service Center

19.25

hr

$55.00

20020080

Martin & Bailey. Inc.

36.00

hr

$55.00

20021048

Forest

Park Foreign Car Repair

37.00

hr

$62.16

20021525

Thomas Management &

Associates,

Inc.

33.50

hr

$60.00

Engineer

949.25

hr

$83.55

$73.89

20012081

Lombard

Citgo

24.00

hr

$98.00

20020041

I-Iuck’s’Carmi

91.00

hr

$74.45

20020042

Chebanse

Crop

Service

286.00

hr

$86.26

20020065

Trickey’s Service

29,75

hr

‘

$95.40

20020070

Martiat &

Baylcy, Inc.

154.00

hr

$74.68

20020078

lnterstateó6

201.00

hr

$84.13

20020080

Martin & Bailey. Inc.

0.50

hr

$115.00

20020247

A & Z Corporation

03.00

hr

$70.00

Geologist

345.00

hr

$77.52

$73.80

20020042

Chebanse Crop Service

175.75

hr

$80.46

20020083

West Suburban Auto

25,25

hr

$74.61

20020214

WED. Ces~oratinn

(Tex Gas)

5.00

hr

.550.00

20021048

Forest

Park Foreign Car Repair

90.00

hr

$76.11

20021525

Thomas

Managcmcnt &

Associates.

Inc.

39.00

hr

$80.00

Professional Engineer

200.75

hr

$98.21

$100.18

20020013

Werhane ServiceCenter

19.25

hr

$117.08

20020041

Huck’s-Carmi

8.00

hr

5107,78

20020042

Chebanse Crop

Service

1.00

hr

$1 3(1.00

20020065

Trickey’s Service

5.50

hr

$119.00

20020070

Martin

& Bayley. inc.

22.00

hr

S 108.18

20020080

Martin & Bailey. Inc.

650

hr

SI

15.00

20020083

West Suburban

Auto

124.00

hr

$90.00

20021048

Forest

Park Foreign Car Rcpair

4.50

hr

$100.00

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ELECTRONIC

FILING,

RECEIVED, CLERK’S OFFICE,

SEPTEMBER 23,

2005

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#61*

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FOLA Analysis

-

Professional Personnel

ATTACHMENT

3

‘I’he

Agencies

17

incidents

“analyzerl”

for the developtnent

of Subpart H

7-27-05

Hearing

Info

Q~~~jjtv

Unit Rate

Unit Rate

Professional Geologist

15.00

hr

$102.67

$63.54

20020042

Chebanse Crop Service

4.00

hr

$110.00

2002

I 048

Forest

Park Foreign Car Repair

I .00

hr

S

100.00

Project

Manager

1,609.50

hr

$95.18

$86.47

20012025

Franke

Barke Service (Vangenhen &

Sons,

Inc.)

218.00

hr

$99.39

20020013

Werhane Service Center

78.50

hr

$95.04

2002002!

Casey’s General Store

1.00

hr

5107.00

20020080

Manin &

Bailey, Inc.

210.00

hr

$95.00

20020083

West Suburhan

Auto

25.00

hr

$71.20

2002048

Forest Park Foreign Car Repair

282.00

hr

$94.72

20021525

Thoma.c Management & Associates,

Inc.

695.00

hr

$95.00

Scientist

413.75

hr

$68.80

$67.27

20012025

Franke Barke

Service (Vangenhen

&

Sons,

Inc.)

89.75

hr

$72.51

.$

/54

20020013

Werhane Service Ccntcr

63.25

hr

$70.06

20020041

I4uck’s-Casmi

6.00

hr

$50.00

20020065

Trickey’s Service

1150

hr

$75.93

20020070

Martin &

Bayley. Inc.

16.00

hr

$50.00

20020080

Martin &

Bailey.

Inc.

116.25

hr

$65.00

20021048

Forest

Park Foreign Car Repair

99.00

hr

$72.17

20021525

‘Thomas Management &

Associates,

Inc.

10.00

hr

$70.00

~.._..

Technician

192.45

hr

$5337

$48.75

20012025

Franke

Barke Service (Vangenhen

&

Sons, Inc.)

0.00

hr

$54.75

20020013

Werhane

Service Center

23.00

hr

$53.00

20020021

Caseys General Store

6.00

hr

$65.00

20020041

Huck’s.Carrni

12.00

hr

$45.00

20020070

Marlin &

Bayley, Inc.

14.00

hr

$45.00

20020080

Martin &

Bailey, Inc.

102.00

hr

$53.00

20020083

West Suburban

Auto

25.45

hr

$61.96