BEFORE THE

POLLUTION CONTROL BOARD

OF THE STATE OF ILLINOIS

RECEIVED

CLERK’S OFFICE

TELZROW

OIL

COMPANY,

)

NOV

1/

2005

Petitioner,

)

STATE OF ILLINOIS

Pollution

Control Board

PCB

06-26

(UST Appeal)

ILLINOIS ENVIRONMENTAL

PROTECTION AGENCY,

)

Respondent.

)

NOTICE OF

FILING

TO:

John

Kim

Special Assistant Attorney General

Illinois Environmental Protection

Agency

1021 North Grand Avenue

East

P.O.

Box

19276

Springfield,

Illinois

62794-9276

PLEASE

TAKE

NOTICE

that

on

November

17,

2005

filed

with

the

Clerk

of the

Illinois

Pollution

Control

Board of

the

State

of Illinois

an

original, executed

copy

of a Petition

for Review of Illinois

Environmental

Protection Agency

Decision.

Dated:

November

17, 2005

Respectfully submitted,

Telzrow Oil Company

By:

C

~

One of Its Attori~is

Carolyn S.

1-lesse

Barnes & Thornburg

LLP

One North Wacker Drive

Suite 4400

Chicago. Illinois 60606

(312) 357-1313

305132

(This filing submitted on

recycled paper

as defined

in 35

III.

Adm.

Code IOI.202l

---

CERTIFICATE

OF SERVICE

I,

on

oath

state

that

I

have

served

the

attached

Petition

for

Review

of

Illinois

Environmental

Protection Agency Decision

by placing

a copy in

an envelope addressed

to:

John

Kim

Special Assistant Attorney General

Illinois Environmental

Protection Agency

1021

North

Grand Avenue East

P.O.

Box

19276

Springfield,

Illinois 62794-9276

from

One

North Wacker

Drive.

Suite

4400,

Chicago,

Illinois,

before

the hour of 5:00

p.m.,

on

this l7~~

Day of November, 2005.

.~

11~/~

Carolyn

S. Hes~

IThis filing submitted

on

recycled

paper as defined

in 35

III.

Adm. Code

101.2021

2

---

BEFORE THE POLLUTION CONTROL BOARD

c~J!IVED

OF THE STATE

OF ILLINOIS

S

FAG

TELZROW OIL COMPANY,

)

NOV

1

/

2005

)

STATE OF ILLINOIS

Petitioner,

Pollution

Control Board

)

v.

)

PCB 06-26

)

(UST

Appeal)

ILLINOIS ENVIRONMENTAL

)

PROTECTION AGENCY,

)

)

Respondent.

PETITION FOR REVIEW OF ILLINOIS ENVIRONMENTAL

PROTECTION AGENCY DECISION

Telzrow

Oil

Company,

by

its

attorney,

Carolyn S. Hesse

of

Barnes

&

ThonThurg,

pursuant

to

the

Illinois

Environmental

Protection

Act,

415

ILCS

5/1

ci. seq.

(the “Act”) and

35

Illinois

Administrative

Code

Section

105.400

ci.

seq.,

hereby appeals

certain

decisions

by

the

Illinois Environmental

Protection Agency (the “Agency”).

1.

Telzrow Oil

Company

(“Telzrow”)

is

the owner of underground

storage

tanks

(USTs)

at

a

gasoline

service

station

located

at

605

South

State

Street,

Jerseyville,

Jersey

County,

Illinois

(the

“Station”).

The

USTs

stored gasoline and used oil.

2.

LUST

Incident

Number

20031133

was

assigned

to

the

release.

The

site

has also been assigned LPC #0830255041-Jersey County.

3.

On

March

2,

2005,

the Agency received

an application

for payment dated

February

18,

2005.

The application

for payment

covers

the period

from

December

1,

2003

to

December

31,

2004.

The

amount

requested

is

$40,165.78.

IThis filing submitted

on

recycled paper as

defined in

35111. Adm. Code

101.2021

---

4.

The work

for which

payment

was

sought

was performed

pursUant

to

an

approved Site Investigation Plan (“SIP”)

and

SIP Budget

(“Budget”).

5.

By

letter dated July

14,

2005

(the

“Letter”),

the Agency

rejected certain

costs for which payment was requested.

(See

Exhibit A.)

6.

The Letter stated

that a complete application

for payment was received on

April 26, 2005.

7.

Information

on

the Agency’s website

regarding the Telzrow site indicates

that bills were received for the site on March 2,

2005.

(See

Exhibit B.)

8.

The

Letter

also

advises

Telzrow of its

right

to

appeal

this

final

Agency

decision.

9.

The

Agency’s

Letter

includes

as

reasons

for denying

certain

payments

comments

that

are

contradictory to

the

information

previously provided,

are

internally

inconsistent,

exceed

the

Agency’s

authority

and

are

in

violation of the Act and regulations at 35

IL Admin Code

732.

10.

In

Item

#1

of

Attachment

A

to

the

Letter,

the

Agency

stated

that

the

certain billings exceeded the approved Budget amounts.

1.

The

billings

referenced

in

Item

#1

did

not

exceed

the

approved

Budget

amounts.

12.

In

Item #2

of Attachment A

to

the

Letter

the Agency

stated

that

certain

costs lacked supporting documentation.

13.

Adequate

supporting

documentation

was

provided

with

the

request

for

payment

and

the Agency’s refusal

to

approve payment by claiming lack of

supporting

documentation

exceeds

the

Agency’s

authority

and

is

a

tThis filing

submitted

on recycled paper as defined in 35111. Adm.

Code

1o1.202J

2

---

violation ofthe Environmental Protection Act and the regulations at

35

Ill.

Adm.

Code 732.

14.

Section

57.8 (a)(1) (from P.A. 92-554) ofthe

Act provides as follows:

In the case of any

approved plan budget

for which

payment

is

being

sought,

the Agency

shall

make

a

payment

determination

within

120

days

of receipt

of

the

application.

Such

determination

shall

be

considered

a

final decision.

The

Agency’s

review

shall

be

limited

to

generally accepted

auditing

and

accounting practices.

In no

case

shall

the Agency

conduct

additional

review

of any

plan which

was

completed

within

the budget,

beyond

auditing

for

adherence

to

the

corrective

action

measures

in

the

proposal.

If

the

Agency

fails

to

approve

the

payment

application

within

120

days,

such

application

shall

be

deemed

approved

by

operation

of law

and

the Agency

shall

proceed

to

reimburse

the owner or operator the

amount requested

in

the

payment

application.

However,

in

no

event

shall

the

Agency

reimburse

the

owner

or

operator

an

amount

greater

than

the

amount

approved

in

the

plan.

415

ILCS

5/57.8

(a)(1)

(Emphasis added).

15.

The

term

“Plan”

is

defined

at

Section

57.7(c)(5)

to

include

site

investigation plan budgets.

415

ILCS 5/57.7(c)(5) (PA.

92-554).

16.

The

Agency

did

not

make a

payment

determination

within

120

days of

receipt of the

application

on

March

2,

2005.

The

payment determination

was

made

on

July

14,

2005,

134

days

after

the

payment

request

was

submitted.

17.

By

operation

of law,

the

full

amount

Telzrow

requested

for payment

is

deemed approved.

18.

The

regulations

that

apply

to

TEPA’s

review of applications for payment

are found at 35

Ill. Admin.

Code 732.602.

Section 732.602 (a) states:

IThis

tiling

submitted

on recycled paper as defined in 35111. Adm.

Code

101.2021

3

---

The

Agency

shall

conduct

a

review

of

any

application

for

payment

submitted

pursuant

to

this

Part.

Each

application

for

payment

shall

be

reviewed

to

determine

whether

the

application

contains

all

of

the

elements

and

supporting

documentation

required

by

Section 732.601(b)

of

this

Part

and

whether

the

amounts

sought

for

payment

have

been

certified

in

accordance

with

Section 732.60 l(b)(2) of this Part

as equal to

or less

than

the

amounts

approved

in

the

corresponding

budget plan.

19.

The circumstances under

which

the

agency may conduct

a

full

review of

any

application

for payment are

listed

at

35111.

Admin.

Code

732.602(b).

These circumstances

in

which

the

Agency

may conduct

a

full review

are

limited

to the following:

(I)

If the

amounts

sought

for

payment

exceed

the amounts

approved

in

the corresponding

budget plan;

(2)

If the Agency

has reason

to

believe

that

the

application for payment is fraudulent; or

(3)

If the application

for payment

includes costs

for

early

action

activities

...

and

either of

the following circumstances exist:

(A)

The application for payment is solely

for

early

action

costs

that

have

not

been

approved

as

part

of

a

prior

budget plan; or

(B)

The

application for payment includes

early action costs

that

have

not

been

approved

as

part

of

a

prior

budget

plan, except

that

only the portion of

the

application

for

the

unapproved

early action costs

may be

given a full

review.

IThis filing

submitted

on

recycled paper

ns defined in 35111.

Adm.

Code

101.21)21

4

---

In

other

words,

the

Agency

may

not

conduct

a

full

review

of

a

reimbursement package

submitted

pursuant

to

an

approved budget

unless

one

of the

listed

circumstances has been met.

20.

None of the

listed circumstances at Section

732.602(b) exist.

21.

The Agency may require the owner or operator to submit

a full accounting

(i.e. invoices) supporting

all

claims only when conducting a full review of

any application for payment.

35

Ill.

Admin. Code 732.602(c).

A

full

review

may

include

review

of any

or

all

elements and

supporting documentation

relied

upon

by

the

owner

or

operator

in

developing

the

application for payment, including but

not limited

to

a

review

of

invoices

or

receipts

supporting

all

claims.

35111.

Admin. Code 732.602(d).

22.

The

Agency’s

denial

of

certain

costs

as

lacking

documentation

demonstrates

that

IEPA

performed

a

full

review

of

Telzrow’s

reimbursement claims which is in violation of section 732

602(b).

23.

Section

57.8

(a)(3) (from PA. 92-554) ofthe

Act provides as follows:

In

the case

of insufficient

funds,

the

Agency

shall

form

a

priority

list

for

payment

and

shall

notify

persons

in

such

priority

list

monthly

of

the

availability

of

funds

and

when

payment

shall

he

made.

Payment

shall

be

made

to

the

owner

or

operator

at

such

time

as

sufficient

funds

become

available

for

the

costs

associated

with

site

investigation

and

corrective

action

and

costs

expended

for

activities

performed

where

no

proposal

is required, if applicable.

Such priority list

shall

be

available

to

any

owner

or

operator

upon

request.

Priority

for

payment

shall

be

determined

by

the date the Agency

receives

a complete request

for

partial

or

final

payment.

Upon

receipt

of

notification

from

the Agency

that

the requirements

of this

Title

have

been

met,

the

Comptroller

shall

This

filing

submitted

on recycled paper as defined in 35111.

4dm. Code

101.2021

5

---

make

payment

to

the

owner

or

operator

of

the

amount

approved

by

the

Agency,

if

sufficient

money

exists

in

the

Fund.

If there

is

insufficient

money

in the Fund, then payment

shall not be

made.

If

the

owner

or

operator

appeals

a

final

Agency

payment

determination

and

it

is determined that the

owner

or

operator

is

eligible

for

payment

or

additional

payment,

the

priority

date

for

the

payment or additional

payment

shall be

same as the

priority

date

assigned

to

the

original

request

for

partial or final payment.

415

ILCS

5/57.8

(a)(l).

24.

The

requirements

for

a

complete

application

for payment

are

listed

at

35

III. Admin.

Code 732.601(b).

(b)

A

complete

application

for

payment

shall

consist ofthe following elements:

(1)

A

certification

from

a

Licensed

Professional

Engineer

acknowledged

by

the

owner

or

operator

that

the

work

performed

has

been

in

accordance

with

a

technical

plan

approved

by the

Agency

or, for early

action

activities,

in

accordance

with

Subpart

B

of this Part;

(2)

A statement of the amounts approved

in the corresponding budget plan and

the

amounts

actually

sought

for

payment

along

with

a

certified

statement

by

the

owner

or

operator

that the amounts so

sought have been

expended

in

conformance

with

the

elements

of a

budget plan

approved

by the Agency;

(3)

A

copy

of

the

OSFM

or

Agency

eligibility

and

deductibility

determination;

(4)

Proof

that

approval of

the

payment

requested

will

not

exceed

the

IT

his

filing

submitted on recycled paper as defined

in

35111. Adm.

Code

101.2021

6

---

limitations

set

forth

in

the

Act

and

Section

732.604 of this Part;

(5)

A

federal

taxpayer

identification

number

and

legal

status

disclosure

certification;

(6)

A Private Insurance Coverage form;

(7)

A

Minority/Women’s

Business

Usage form;

and

(8)

Designation

of the address

to

which

payment and notice offinal action on

the application for payment

are to

be

sent.

25.

There

are

no

other

listed

items

that

must

be

included

in

order

for

an

application

for payment

to

be

considered complete.

As

long

as

all

ofthe

information

listed

in

Subsection

732.601(b)

is

provided,

the

application

for payment is complete.

26.

The

application

for payment

dated

February

18,

2005

that

the Agency’s

Letter states was received

on March

2, 2005 was

complete.

27.

The

Agency’s

statement

in

the

Letter

that

the

application

was

not

complete until April

26, 2005

is in error and the Agency’s alteration of the

date

it

received

the

application

is

arbitrary

and

capricious,

exceeds

the

Agency’s authority and

is in violation ofthe Act and regulations.

28.

Telzrow’s

request for payment

is

reasonable

and

consistent

with

the

Act

and regulations at 35

Ill.

Admin.

Code 732.

29.

The

Agency’s

rejection

of the

request

for

payment

was

arbitrary,

and

capricious,

violates the Act and regulations at 35

III. admin.

Code 732, and

is for the sole purpose of harassing Telzrow and its consultant.

IThis filing

submitted

on recycled

paper as defined in 35111.

4dm. Code

101.2021

7

---

30.

Petitioner

is appealing the Agency’s decision Letter dated July

14,

2005.

31.

On August

19,

2005, the parties timely filed a joint

notice to extend the

35

day

period

to

appeal

the

Agency’s

July

14,

2005

decision.

On

September

1,

2005

the Board issued

an order extending the time to

appeal

to November 17,2005.

(See

Exhibit C.)

Wherefore,

Telzrow

Oil

Company,

respectfully

requests

that

the

Board

enter an

Order:

That Telzrow

is

owed

by

operation of law

the

full amount

of the

requested payment;

That the Agency

violated

the

Act

and

regulations

and

require the

Agency comply with the

Act and regulations;

That

the

Agency

approve

the

request

for payment

submitted

on

March 2. 2005;

That

the

Agency

must

correct

the

queue

date

for

priority

of

payment from

April 26, 2005 to

March

2,

2005; and

For Petitioner’s attorneys’ fees and costs

in bringing this appeal.

Respectfully submitted,

Telzrow Oil

Company

By:

~

~

One of Its Attori~eys

Carolyn

S.

Hesse,

Esq.

Barnes & Thornburg LLP

One North Wacker Drive

Suite 4400

Chicago, Illinois

60606

(312) 357-1313

Cl

1)501

(511

)05(Ib)v2

ibis filing

submitted

on recycled paper as defined

in

35111. Adm.

Code

lOl.202p

8

---

@8/95/2005

14:38

2175228912

CW3M

COMPANY

PAGE

ILLINOIS

ENVIRONMENTAL

PROTECTiON

AGENCY

3021

NORTH

GRAND

AVIt4UE

EAST,

PD.

Box

19276,

SPRINCFIELD, ILLINOIS

62794-9276, 217-782-3397

jfr.MES It

THOMPSON

CENTER,

100 WEST

RANDOLPH,

Suwt

11-300,

CHIcAGO,

IL 60601, 3i 2-814-6026

Roo

R.

BLAG0jEVIcH,

GOWRNJOR

RENEE

CIPRIANO,

DIRECTOR

217/782-6762

CERTIFIED MAIL

1i1

JUL

14

2Q05

7U04

~51fl

0001

8645

~3L8

Telzrow Oil Company

Attn:

Jim

Telzrow

P.O.

Box

571

Carlinville, illinois

62626

Re:

LPC #0830255041

—

Jersey

County

Jerseyville/Telzrow

Oil Company

605

South State Rd.

LUST Incident No. 20031133

LUST FISCAL FILE

Dear Mr. Telzrow:

E~©l~fl~fl

~:c

~

L

The Illinois Environmental Protection Agency has completed the review of your application for

payment

from the Underground Storage Tank

Fund

for the above-referenced LUST incident

pursuant to Section 57.8(a) of the Illinois Environmental Protection Act (Act), and 35

111. Mm.

Code 732, Subpart F.

This information is

dated February 18,

2005 and was received by the

Agency

on March 2, 2005.

The application forpayment covers the period from December 1,

2003 to December

31, 2004.

The

amount requested is $40,165.78.

The deductible amount

Lot this claim is $10,000.00, which was previously deducted from the

billing submittal received by the Agency on May

18, 2004 for

$90,437.96.

There

are costs from

this claim that are not being paid.

Listed in Attachment A are the costs that are not being paid

and the reasons these costs are not being paid.

On April 26,

2005, the Agency received your complete application for payment for this claim.

As

a result ofthe Agency’s review of

this application for payment,

a voucher for $27,053.03

will

be preparedfor submission to the Comptroller’s Office for payment as fluids become available

based upon the date the Agency received your completerequest for payment of

this application

~For

payment.

Subsequent applications for payment that have beenlare submitted will be

processed

based upon the date complete subsequent application forpayment

requests

are

received by the Agency.

This constitutes the Agency’s fmal action with regard to the

above

application(s) for payment.

An underground storage tank owner or operatOr may appeal

this final deciaion to the Illinois

Pollution Control Board (Board) pursuantto

Section

57.8(1)

and Section

40 ofthe Act by filing a

R(,COOrI,— 431(2 North Main

Sired,

Rocktord,

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---

08/05/20$5

14:38

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75228012

CW3M

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Page2

.

--

petition for a heaxing within 35

days after the date of issuance of the final decision.

However,

the 35-day period may be extended for a period of time not to exceed 90

days by written notice

from the owner or operator and the illinois EPA within the initial 35-day appeal period,

lithe

applicant wishes to receive a 90-day extension, awritten request that includes a statement ofthe

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

Illinois EPA as soon as possible.

For

information

regarding

the

filing of an appeal, please

contact:

Dorothy Guon, Clerk

lliinojs Pollution Control Board

State of Illinois Center

100 West Randolph, Suite

11-500

Chicago, lilinois 60601

312/814-3620

For information regarding the filing ofan extension, please contact:

Illinois 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

assistance,

please contact

Niki

Weller of my

staff or

Eric

Kublinan of the technical

section at 2j7/’782-4762.

E.

Oaldey, Manager

LUST

Claims

Unit

Planning

&

Reporting

Section

Bureau of Land

DEO:NW:z-nJs\05

1503

.doc

Attachment

PAGE

03

JUL

152005

S.

cc:

CW3M

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08/05/2005

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2175229012

CW3M

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04

AttachinentA

_______

Technical Deductions

JULI5aJOS

H

Re:

LPC#o83o255041—J~eyCot~.nty

.

U

.Ierseyville

/

Tejzrc,w Oil Company

605

South

State

Street

LUST Incident No, #20031133

LUST Fiscal File

Citations in this

attachment are

from

andthe

Environmental

Protection

Act (Act)

and

35

Illinois

Administrative Code (35 ifi.

Adm.

Code).

Item #

Description ofDeductions

$4,040.25,

deduction for costs associated with site investigation

activities,

The

billings submitted exceed the approved

budget amounts.

Therefore, the fflinois EPA is

unable

to approve billings that exceed the approved budget

amounts.

(Section

57.8(a)(l) ofthe Act

and

35111.

Acm.

Code 732.601(f))

The Illinois EPA has determined

that

these costs

are

not reasonable as submitted since

their drilling costs

exceed the approved budgeted

amount

for investigation costs.

2.

$9,072.50, deduction forcosts

that

lack supporting

documentation

(35

111.

Adm.

Code

732.606(gg)).

Since there is no

supporting

documentation of

costs,

the Illinois EPA

cannot determine

that

costs

were

not used for activities in excess ofthose necessary to

meet the

minimum

requirements of Title XVI of the Act (Section

57.5(a)

of the Act

and

35

111. Adm.

Code

732.606(o)).

The Illinois

EPA has determined that

these costs

are

not reasonable as submitted,

and

these costs are

not consistent with the requirement for a line

item estimate

of

all

costs

associated

with

the development, implementation,

and

completion of site

evaluation

activities

required

in 35111. Adm. Code 732,307

(35 111.

Adm. Code 732.305(b)(2)).

Please

note

that additional information and/or

supporting doeume~tation

may be

providedto demonstrate the costs are reasonable.

EK:EK\

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ILLINOIS POLLUTION CONTROL BOARD

September

1, 2005

TELZROW OIL COMPANY,

)

)

Petitioner,

)

)

v.

)

PCB 06-26

)

(UST Appeal)

ILLINOIS ENVIRONMENTAL

)

(90-Day Extension)

PROTECTION AGENCY,

)

)

Respondent.

)

ORDER OF

THE BOARD (by J.P. Novak):

On August

19, 2005,

the parties timely filed ajoint notice to extend the 35-day period

within which Telzrow Oil Company may appeal

a July

14,

2005 determination ofthe illinois

Environmental Protection Agency (Agency).

See

415 ILCS

5/40(a)(1) (2004);

35

Ill. Adm.

Code

105.402,

105.406.

The Agency denied reimbursement ofcertain claimed costs of corrective

action plan from the Underground Petroleum Storage Tank (liST) Fund for Telzrow Oil

Company’s leaking UST facility located at

605

South State

Road, Jerseyville, Jersey County.

The Board extends the appeal period until November

17,

2005,

as the parties request.

See

415

ILCS 5/40(a)(l) (2004);

35

fli. Adm.

Code 105.406.

IfTelzrow Oil Company fails to file an

appeal

on or before that date, the Board will

dismiss this case and close the docket.

IT

IS

SO ORDERED.

I, DorothyM.

Gumi, Clerk of the Illinois Pollution Control Board,

certify that the Board

adopted the above order on September

1,

2005, by a vote of5-0.

Dorothy M.

Gunn, Clerk

Illinois Pollution Control Board