To :
Dorothy M. Gunn, Clerk
Illinois Pollution Control Board
James R. Thompson Center
100 West Randolph Street
Suite 11-500
Chicago, IL 60601
PLEASE TAKE NOTICE that we have this day filed with the office of the
Clerk of the Pollution Control Board the Petition for Review a copy of which is
enclosed herewith and hereby served upon you
December 27, 2005
RECEIIVED
BEFORE THE POLLUTION CONTROL BOARD
OF THE STATE OF ILLINOIS
DEC 2 7 2005
STATE OF ILLINOIS
Pollution Control Board
DALEE OIL COMPANY,
)
Petitioner,
)
v .
)
ILLINOIS ENVIRONMENTAL
)
PROTECTION AGENCY,
)
Respondent .
)
NOTICE OF FILING
John T. Hundley
LAW OFFICE OF TERRY SHARP, P .C
.
P.O. Box 906 - 1115 Harrison
Mt. Vernon, IL 62864
618-242-0246
Counsel for PetitionerDaLee Oil Company.
PCB No. 06-40
(LUST Appeal)
John J. Kim, Assistant Counsel
Special Assistant Attorney General
Division of Legal Counsel
Environmental Protection Agency
1021 North Grand Ave. East
P.O. Box 19276
Springfield, IL 62794-9276
DALEE OIL CO .
By :
Joh
ndl
One of its Attorneys
John1US11OkwavilleNotice
CERTIFICATE OF SERVICE
I, the undersigned attorney at law, hereby certify that I caused copies of the
foregoing document to served by placement in the United States Post Office
Mail Box at Mt. Vernon, Illinois, before 6 :00 p.m. on December 27, 2005, in
sealed envelopes with proper first-class postage affixed, addressed to
:
Dorothy M. Gunn, Clerk
Illinois Pollution Control Board
James R. Thompson Center
100 West Randolph Street
Suite 11-500
Chicago, IL 60601
John J. Kim, Assistant Counsel
Special Assistant Attorney General
Division of Legal Counsel
Environmental Protection Agency
1021 North Grand Ave. East
P.O. Box 19276
Springfield, IL 62794-9276
J
T. H
ley
John T. Hundley
LAW OFFICE OF TERRY SHARP, P .C .
P.O. Box 906 - 1115 Harrison
Mt. Vernon, IL 62864
618-242-0246
Counsel for Petitioner DaLee Oil Company .
BEFORE THE POLLUTION CONTROL BOARD
OF THE STATE OF ILLINOIS
RECEIVED
CLERK'S OFFICE
DALEE OIL COMPANY,
)
DEC 2 7 2005
Petitioner,
)
STATE. OF
ILLINOIS
V
.
)
PCB No. 06-40
Pollution Control Board
(LUST Appeal)
ILLINOIS ENVIRONMENTAL
)
PROTECTION AGENCY,
)
Respondent.
)
PETITION FOR REVIEW
Pursuant to §§ 40 and 57.8(i) of the Environmental Protection Act
("Act"),
415 ILCS 5/40, 5/57.8(i), to the Board's regulations on Leaking Underground
Storage Tank ("LUST") decisions, 35
ILL. ADM. CODE
105.400
et seq.,
and to the
Order adopted herein September 15, 2005, petitioner DaLee Oil Co . ("DaLee")
submits this Petition for Review of the Illinois Environmental Protection Agency
("Agency") decision attached hereto as Exhibit 1 ("Decision") denying DaLee
budget approval for $11,100 in costs incurred under the LUST program .
Pursuant to § 57.8(1) of the Act, DaLee further requests the Board to order
the Agency to pay DaLee's legal costs for seeking payment in this appeal
.
I .
THE AGENCY'S FINAL DECISION
The Decision of which review is sought is contained in Exhibit 1 hereto
.
II .
SERVICE OF THE AGENCY'S FINAL DECISION
The Decision indicates it was mailed August 19, 2005. It was received by
DaLee August 22, 2005. The date for filing of this appeal was extended to
December 27, 2005 by Order of the Board adopted September 15, 2005
.
- 1
-
III . GROUNDS FOR APPEAL
A .
Introduction.
This appeal involves four USTs formerly located at 905 N . Hen House Road
near Okawville in Washington County . In 1993 an over-fill occurred, which was
reported to the Illinois Emergency Management Administration ("IEMA") and
assigned IEMA No. 933050. After a Method II analysis, the site was given "No
Further Action" status in 1995 .
In 1997 the four tanks were removed . As required by 415 ILCS 5/57.8(c),
an Office of the State Fire Marshal ("OSFM") agent was at the removal. He
asked that an incident report be made, and one was. The Agency was asked to
treat this incident - assigned No. 972197 - as a continuation of 933050, and for
some time it appeared that that had occurred . However, in December 2002
Harry Chappel, a unit manager in the Agency's LUST Section, on the advice of
Brian Bauer, a project manager in Chappel's unit, ruled that 972197 was not a
continuation of 933050 . Exhibit 2. The work now at issue thus was required
.
In October 2003 DaLee submitted its Site Classification Work Plan & Bud-
get ("SCWPB"), a copy of which is attached as Exhibit 3 . In February 2004
Chappel replied with a letter (copy, Exhibit 4) modifying the budget "pursuant to
Section 57.7(a)(1) of the Act and 35 III. Adm. Code 732.305(c) or 732.312(j)" .
How § 57 .7(a)(1) justified that action was baffling .' The cited regulations were
1
Of four versions of § 57.7 resulting from acts of the 92 nd legislature, the only § 57 .7(a)(1)
to address financial matters was the provision, as amended by P .A. 92-574, 92-651 and
92-735, that prior to conducting soil classification and groundwater investigation the owner-
operator is to submit "a request for payment of costs associated with eligible early action
costs as provided in Section 57.6(b) ." Section 57.6(b) permits, prior to submission of plans
- 2 -
equally uninforming
.2
An attachment prepared by Bauer invoked for 18 of 19
cuts "Section 57.7(c)(4)(C) of the Act and 35 Ill. Adm. Code 732.606(hh)" (see
Exhibit 4, Attach. B, § 2, ¶¶ 1-18). The former citation apparently referred to §
57.7(c)(4)(C) as amended by P .A. 92-574, 92-651 and 92-735, providing :
In approving any plan submitted pursuant to Part (E) of this paragraph
(4), the
Agency shall determine, by a procedure promulgated by the Board under item
(7) of subsection (b) of Section 57 .14, that the costs associated with the plan
are reasonable, will be incurred in the performance of corrective action, and
will not be used for corrective action activities in excess of those required to
meet the minimum requirements of this title .
The latter citation, 35
ILL. ADM. CODE
732.606(hh), merely stated that ineligible
costs include "[c]osts proposed as part of a budget plan that are unreasonable"
.
Chappel and Bauer said the proposal was "not reasonable as
submitted
.
.
.
additional information and/or supporting documentation may be provided to
demonstrate that the costs are reasonable"
(Exhibit 4, Attach. B, § 2, ¶¶ 1-18
(emph. added)) .
Thus, in January 2005 DaLee submitted an Amended Site
Classification Work Plan & Budget pursuant to § 57.8(a)(5) of the Act (Exhibit 5)
("1 s` ASCWPB")
.
It proposed $8,320 in personnel costs not approved pre-
viously, with both the owner and a professional engineer certifying under oath
that the "costs set forth in this budget are necessary activities" and "not for
corrective action in excess of the minimum requirements of 415 ILCS 5/57"
.
to the Agency, removal of certain "visibly contaminated fill material and any groundwater in
the excavation which exhibits a sheen" . The 45-day report attached to the SCWPB made
clear there were no such costs here; hence no payment request was required
.
2 35
ILL. ADM. CODE
732.305(c) provides that "[t]he Agency shall have the authority to
review and approve, reject or require modification of any plan submitted pursuant to this
Section in accordance with the procedures contained in Subpart
E
of this Part". 35
ILL .
ADM. CODE
732.312(j) is substantially the same .
- 3 -
Both owner and engineer further swore that "costs ineligible for payment from
the [LUST] Fund pursuant to 35 Illinois Administrative Code Section 732 .606
are not included in the budget proposal or amendment"
.
In April 2005 Chappel and Bauer rejected the amended budget "for the
reason(s) listed in Attachment A (Sections 57 .71(a)(1) and 57.7(c)(4)(D) of the
Act; 35 III. Adm. Code 732.505(c) or 732.3130) and 732.503(b))" (Exhibit 6) .
35
ILL. ADM. CODE
732.503(b) - the only new citation - provides :
The Agency shall have the authority to approve, reject or require modification
of any plan or report that has been given a full review. The Agency shall
notify the owner or operator in writing of its final action on any such plan or
report, except in the case of 20 day, 45 day or free product reports, in which
case no notification is necessary. Except as provided in subsections (d) and (e)
of this Section, if the Agency fails to notify the owner or operator of its final
action on a plan or report within 120 days after the receipt of a plan or report,
the owner or operator may deem the plan or report rejected by operation of
law .
If the Agency rejects a plan or report or requires modifications, the
written notification shall contain the following information, as applicable :
1) An explanation of the specific type of information, if any, that the Agency
needs to complete the full review
;
2) An explanation of the Sections of the Act or regulations that may be
violated if the plan or report is approved ; and
3) A statement of specific reasons why the cited Sections of the Act or
regulations may be violated if the plan or report is approved
.
The "explanations" and "specific reasons", stated in an attachment, were
:
The budget includes costs that lack supporting documentation (35 Ill . Adm
.
Code 732 .606(gg)). A physical soil classification and groundwater investiga-
tion budget must include, but not be limited to, an accounting of all costs as-
sociated with the development, implementation, and completion of the phys-
ical soil classification and groundwater investigation plan (Section 57 .7(a)(2)
of the Act and 35 Ill. Adm. Code 732.305(b)(2)). Since there is no support-
ing documentation of costs, the Illinois EPA cannot determine that costs will
not be used for activities in excess of those necessary to meet the minimum
requirements of Title XVI of the Act (Section 57.5(a) of the Act and 35 Ill
.
- 4 -
Adm. Code 732.606(o))
.
The budget amendment indicated that unforeseen circumstances occurred the
[sic] necessitated the increase in the amount needed for personnel time to
complete site classification activities however, [sic] no specific circumstan-
ces were provided. The amendment also refers to the completion of a Site
Classification Completion Report and Corrective Action Completion Report
.
Costs for a Corrective Action Completion Report should not be included in a
budget for Site Classification. In addition, costs associated with work con-
ducted for incident 20010256, a non-LUST is [sic] not eligible for reimburse-
ment .
Exhibit 6, Attach A. Thus, Chappel and Bauer faulted DaLee for failing to in-
clude "all costs associated with the development, implementation, and comple-
tion of the physical soil classification and groundwater investigation
plan",
even though the Agency's form ordered that "Amendments must include only
the cost over the previous budget". They then wrongly faulted DaLee for in-
cluding Corrective Action Completion Report ("CACR") costs in the site class-
ification budget
. 3
They went on to say there was "no supporting documenta-
tion of costs," even though the additional costs were expressly stated to be
staff costs and Agency forms were filled out as to tasks, personnel rank, etc
.4
Finally, they suggested - contrary to sworn evidence - that some costs were
for clean-up after incident 20010256, involving vandalism to a dispenser for a
tank clear on the other side of the complex
.
In 2004 the Board had found that the Agency had been using an unlawful
3 The cover letter in Exhibit 5 speaks of "completion of the SCCR/CACR", but the assump-
tion that the slash meant "and" rather than "or" was unwarranted . Had the budget been
consulted (pp. A-1, G-1, G-2 and Certificate page), Chappel and Bauer would have seen it
sought no compensation for corrective action, made no reference to CACR work, and
certified that all the time at issue was for site classification
.
4 35
ILL. ADM. CODE
732.501 requires the use of those forms
.
- 5 -
rate sheet in LUST cases
.
Illinois Avers Oil Co. v. ]EPA, PCB 03-214 (copy,
Exhibit 7). That sheet was drafted by Bauer, under Chappel's supervision
(id.
at 6-7)
.
Many reimbursement denials based thereon were found to be unreas-
onable
(id.
at 16-17). The Agency responded by asking the Board to adopt
the rate sheet as an emergency rule
.
In the Matter of Proposed Amendments
to Regulation of Petroleum Leaking Underground Storage Tanks,
Nos. R04-
22, R04-23,5
Motion
for
Adoption of
Emergency Rules (Apr. 19, 2004) (copy,
Exhibit 8). Facing opposition, the Agency withdrew that request and proposed
temporary rules under which "[a]Il requests for approval of costs shall be cer-
tified by the owner or operator and the Licensed Professional
Engineer or
Licensed Professional Geologist" which could create "a presumption of reas-
onableness for all work and costs contained in such submittal"
.
Amended
Motion
for
Adoption of
Emergency Rules (May 18, 2004) at 6-7 (Exhibit 9)
.
The Board refused to adopt either of the proposals, finding no emergency .
Order
of
the Board (June 3, 2004) (Exhibit 10)
.
It noted that a Sangamon
County court had ordered the Agency to stop using the rate sheet .
Id .
n .1
.
Rebuffed on emergency relief, the Agency continued
to seek permanent
rulemaking, with Chappel and Bauer serving as key proponents
.6
5 In January
2004
the Agency had filed two rulemaking cases, one (docketed
No. R04-22)
seeking to amend
35 ILL. ADM. CODE
Part
732
to, among other things, establish maximum
reimbursable amounts for LUST cleanups governed by prior law ; the other (docketed
No .
R04-23)
to establish a new
35 ILL. ADM. CODE
Part
734
with comparable provisions for
cleanups under an amended statute
.
The cases were consolidated for most purposes,
though some filings relate to only one .
For brevity, those cases will be referenced herein
by their docket numbers, or collectively as the Proposed Amendments Cases
.
6
See Testimony
of
Harry A. Chappel, P.E. in
Support of
the Environmental Protection
Agency's Proposal to Adopt
35
lll.
Adm . Code
734, R04-23
(Mar .
8, 2004)
(Exhibit 11)
;
- 6 -
On June 1, 2005, DaLee again attempted to meet the Agency's objections
in this case, submitting another Amended Site Classification Work Plan &
Budget, together with a SCCR, which submission is attached as Exhibit
18
("2 nd ASCWPB"). While it was pending, the Board on July 27, 2005 held its
final hearing in the Proposed Amendments Cases, focusing on objections by
DaLee's consultant, United Science Industries, Inc
.
("USI"). In connection
therewith, DaLee's principal, Ronald Kruep, appeared prominently in a video
presented by USI conveying his opposition to the proposals
.
Shortly thereafter, the Agency issued the Decision
.
Although Chappel
conceded the activities covered were appropriate (Exhibit 1, p . 1) and, in a
separate letter (Exhibit 19), approved the SCCR,
he again "modified" the
budget "pursuant to Section 57.7(a)(1) of the Act and
35 III. Adm. Code
732.305(c) or 732.312(j)" (Exhibit 1, p. 1)
.
Although he knew the work was
completed and an NFR letter issued, he disingenuously went on to state :
Please note that the costs must be incurred in accordance with the approved
plan. Be aware that the amount of reimbursement may be limited by Sections
57.8(e), 57.8(g), and 57.8(d) of the Act, as well as 35 Ill . Adm. Code 732.604,
732.606(s), and 732.611
.
NOTE: Amended plans and/or budgets must be submitted and approved prior
to the issuance of a No Further Remediation (NFR) Letter . Costs associated
with a plan or budget that have not been approved prior to the issuance of an
Testimony of Harry A. Chappel, P.E. in Support of the Environmental Protection Agency's
Proposal to Amend
35111.
Adm. Code 732, R04-22 (Mar. 8, 2004) (Exhibit 12) ; Testimony of
Brian Bauer in Support of the Environmental Protection Agency's Proposal to Adopt 35
111.
Adm. Code 734, R04-23 (Mar. 8, 2004) (Exhibit 13) ; Testimony of Brian Bauer in Support
of the Environmental Protection Agency's Proposal to Amend 35 III . Adm. Code 732, R04-
22 (Mar. 8,
2004) (Exhibit 14)
;
Hearing Transcript,
R04-22, R04-23 (Mar .
15, 2004)
(excerpts,
Exhibit 15) ;
Hearing Transcript,
R04-22, R04-23 (May 25, 2004)
(excerpts,
Exhibit 16)
; Hearing Transcript, R04-22, R04-23 (May 26, 2004) (excerpts, Exhibit 17)
.
- 7
-
NFR letter will not be reimbursable
.
[7 ]
Bauer's attachment offered as the full statement of "explanation" and
"specific reasons" for the disallowance :
$11,100.00 deduction for costs that lack supporting documentation (35 Ill
.
Adm. Code 732.606(gg))
.
A physical soil classification and groundwater
budget must include, but not be limited to, an accounting of all costs associated
with the development, implementation, and completion of the physical soil
classification and groundwater investigation plan (Section 57 .7(a)(2) of the Act
and 35 Ill. Adm. Code 732.305(b)(2)). Since there is no supporting
documentation of costs, the Illinois EPA cannot determine that costs will not
be used for activities in excess of those necessary to meet the minimum
requirements of Title XVI of the Act (Section 57 .5(a) of the Act and 35 Ill
.
Adm. Code 732.606(o))
.
The budget amendment previously submitted indicated that unforeseen
circumstances occurred the [sic] necessitated the increase in the amount
needed for personnel time to complete site classification activities however,
[sic] no specific circumstances were provided
.
Exhibit 1, Attach. A, § 2. So little attention was given to the 2 nd ASCWPB
that even the typographical errors in the prior response were repeated
.
On December 1, 2005, the Board moved to Second Notice on the pro-
posed amendments (excerpts, Exhibit 20) . While it approved many of the
proposals, it
rejected
the limitations on consultant costs at issue here
.
B .
The Decision's Stated Grounds
Are Not Supported by the Record .
The Agency's denial letter generally frames the issues on appeal . See
Illinois Ayers Oil Co . v. IEPA, PCB 03-214 (Apr. 1, 2004). Thus, the threshold
issue is whether the record supports the conclusion that there was "no
Chappel issued an NFR letter (Exhibit 19) simultaneous with the Decision . Upon receipt,
USI contacted the Agency to see if it had overlooked that DaLee requested no NFR be
issued if the amended budget was not approved . It said there was no oversight and
nothing DaLee could submit would result in approval of the disallowed costs
.
- 8
-
supporting documentation" for the denied requests. Far from supporting that
conclusion, the record here disproves it . The
2"d
ASCWPB went on and on :
.
.
.
this justification outlines the additional costs necessary to close
out
incident 972197 . Additional costs are associated with the I
s` ASCWPB, 2
nd
ASCWPB, SCCR, and other tasks to complete the Site Classification
(i.e.,
monitoring well abandonment) .
The ASCWPB includes a total of 70 hours of Project Manager (PM) time
.
The PM acts as the sole manager responsible for every aspect of a project,
including analyzing data, client and IEPA correspondences,
report prep-
aration, budget breakdowns, assessment and approval of all costs associated
with project, overseeing map preparation, monitoring of invoices and reim-
bursements, and general project management .
The amended budget sub-
mitted with this justification includes 40 hours of additional PM time for
professional oversight, data review, work & safety plans associated with
site classification activities, client/IEPA correspondence, OSFM correspon-
dence, and time associated with drafting the first ASCWPB, this ASCWPB
and justification. The amended budget submitted with this justification also
includes 30 hours of PM time for project management, drafting the SCCR,
and drafting work & safety plans for the monitoring well abandonment
activities
.
The ASCWPB includes a total of 30 hours of Environmental Specialist (ES)
time. The ES is responsible for any task assigned to them from the PM . These
tasks may include: Technical writing, ISGS and ISWS data reduction,
well
mapping, JULIE utility clearance, offsite access work, report forms (well com-
pletion, well purging & boring logs), well tables, analytical reduction and tab-
les, and report submittal . The amended budget included with this justification
includes additional ES time for the compilation of the work & safety plans as-
sociated with site classification activities, ISGS/ISWS information, analytical
tables for the SCCR, Appendices for the SCCR, and the compilation of the
SCCR .
The ASCWPB includes a total of 10 hours of Project Coordinator (PC) time
.
The PC's responsibility includes preparation of LUST paperwork, breakdowns
of all cost incurred for work phase including preparing and gathering receipts
and supporting documents for preparation of submittal, preparing
line item
breakdown of actual costs on EPA forms, revisions after Professional En-
gineer's review, copying paperwork and logging of information for tracking,
final review and submission of costs to PM for budget information . The
amended budget included with this justification includes additional PC time for
historical cost breakdowns and reimbursement package preparation .
- 9 -
The ASCWPB includes a total of 10 hours of Professional Engineer (PE) time
.
The PE is responsible for final review of the Corrective Action Report, CA
Budget, and certifying required documents for submittal to the Agency, as well
as, reimbursement review and certifications . The PE is also responsible for
final review and certifications of any amended budget submitted to the
Agency. Therefore, the amended budget submitted with this justification
includes PE time for professional supervision, 1 51 ASCWPB certification, 2
nd
ASCWPB certification, SCCR review and certification, and reimbursement
package certification
.
The ASCWPB includes a total of 5 hours of Clerical (CL) time . The CL is
responsible for copying, binding, filing, and mailing all reports . Therefore, the
amended budget submitted with this justification includes additional CL time
for copying, binding, filing and mailing reports . (1" ASCWPB, 2"d ASCWPB,
and the SCCR)
The ASCWPB includes a total of 10 hours of Draftsman (DR) time . The DR is
responsible for drafting maps and figures for reports submitted to the Agency,
inputting GPS data, and inputting groundwater survey data . The DR is also
responsible for drafting geological cross-sections in order provide a detailed
representation of the vertical extent of contamination . The amended budget
submitted with this justification includes additional DR time for drafting maps
and figures for the work plans as wells as drafting site maps, figures, diagrams,
and geological cross-sections for the SCCR
.
Exhibit 18, App. H, Addendum M. Indisputably, the record does not support the
Decision on its stated ground. Accordingly, it should be reversed
.
C .
The Agency Was Not Unable to Determine
Whether Costs Were for Unpermitted Purposes.
The Decision speculates that the denied costs may have been used for
unpermitted purposes .
It says the costs were denied because the Agency
could not determine that this was not so
.
However, multiple provisions,
unutilized by Chappel and Bauer, refute the claim that they had no way of
determining whether the requested costs were for improper purposes
:
•
At § 57.15, the Act grants the Agency "the authority to audit all data,
reports, plans, documents and budgets submitted pursuant to" the LUST
- 10 -
statute .
However, it conducted no audit here
.
•
In § 57.7,
8
the Act permits the Agency to conditionally deny a proposal
by stating "the specific type of information
.
.
. the applicant did not provide" -
but the Agency provided no such specifics here
.
Ili- At § 30, the Act permits the Agency to commence such "investigations
as it shall be deem advisable" - but it commenced no such investigation here
.
In 35
ILL . ADM
. CODE
732.500(b)(1), 732.502(b) and 732.502(d), the
Board has granted the Agency the authority to declare budget submissions
incomplete. The Agency did not declare DaLee's submission incomplete
.
The conclusion is obvious: Bauer and Chappel had no
bona
fide
basis for
suggesting that the denied costs were invalid, and simply made up that
suggestion as a make-weight for the denial based on other grounds
.
D
.
The Decision Applies Unpromulgated
Rules in Violation of the Illinois Avers Decision
.
Those other grounds were unlawful . In making their denials, Chappel and
Bauer improperly applied the standards which they had proposed, but for which
they had not received approval (and which ultimately were
denied),
in the
Proposed Amendment Cases
.
The following demonstrates this fact
.
In January 2004, the Agency commenced R04-23 by asking the Board to
adopt a rule stating in part
:
Payment for costs associated with professional consulting services shall not
exceed the amounts set forth in this Section. Such costs shall include, but not
be limited to, those associated with project planning and oversight ; field work,
8
See § 57.7(c)(4)(C) as amended by P.A. 92-554 and § 57.7(c)(4)(D)(iii) as amended by
P.A. 92-574, P.A. 92-651 and P.A. 92-735 .
field oversight; travel; per diem; mileage; transportation; and the preparation,
review, certification, and submission of all plans, budgets, reports, applications
for payment, and other documentation
.
.
.
.
b)
Site Investigation .
Payment of costs for professional consulting
services associated with site investigation activities conducted pursuant to
Subpart C of this Part shall not exceed the following amounts
:
1)
Payment for costs associated with Stage 1 site investigation
preparation, field work, and field oversight shall not exceed a
total of $3,200.00 .
2)
Payment for costs associated with the preparation and submission
of Stage 2 site investigation plans shall not exceed a total of
$3,200.00 .
3) Payment for costs associated with Stage 2 field work and field
oversight shall not exceed $500.00 per half-day. The number of
half-days shall not exceed the following :
B) One half-day for each monitoring well installed as
part of the Stage 2 site investigation
.
.
.
.
6) Payment for costs associated with the preparation and submission
of site investigation completion reports shall not exceed a total of
$1,600.00 .
Proposed 734.845, as stated at pp. 93-95 of the attachment to Statement
of
Reasons, Synopsis of Testimony, etc . (Jan. 13, 2004) (excerpts, Exhibit 21)
.
Shortly thereafter it filed two "Errata Sheets ." In pertinent part, one amended
proposed § 735.845(b)(1) by changing $3,200 to $1,600 and by providing that
the cap on monitoring well installation (one half-day of work, reimbursed at
$500, per well) be applied at Stage 1 as well as Stage 2 . The other applied the
same principles to cases under Part 732 .9 As amended, the proposal provided :
Payment for costs associated with professional consulting services shall not
exceed the amounts set forth in this Section . Such costs shall include, but not
be limited to, those associated with project planning and oversight ; field work,
9 See n. 5 above. For simplicity, we quote only the Part 734 proposals in the text
.
- 1 2 -
field oversight; travel; per diem; mileage; transportation; and the preparation,
review, certification, and submission of all plans, budgets, reports, applications
for payment, and other documentation .
.
.
.
b) Site Investigation. Payment of costs for professional consulting services
associated with site investigation activities conducted pursuant to Subpart C
of this Part shall not exceed the following amounts
:
1)
Payment for costs associated with Stage 1 site investigation
preparation, field work, and field oversight shall not exceed a total of
$1,600.00
.
2)
Payment for costs associated with Stage 1 field work and field
oversight shall not exceed $500.00 per half-day. The number of half-
days shall not exceed the following
:
B) One half-day for each monitoring well installed as part of the
Stage 1 site investigation .
.
.
.
3)
Payment for costs associated with the preparation and submission of
Stage 2 site investigation plans shall not exceed a total of $3,200 .00 .
4)
Payment for costs associated with Stage 2 field work and field
oversight shall not exceed $500.00 per half-day. The number of half-
days shall not exceed the following
:
B) One half-day for each monitoring well installed as part of the
Stage 2 site investigation
.
.
.
.
6)
Payment for costs associated with the preparation and submission of
site investigation completion reports shall not exceed a total of
$1,600.00 .
First Errata Sheet to Proposal for Addition of 35 111. Adm . Code 734, R04-23
(Mar .
8, 2004),
at
8-9
(Exhibit
22) .
In "modifying" DaLee's budgets, Chappel and Bauer hid their reliance on
that unapproved proposal, but their use thereof cannot be doubted now . The
SCWPB proposed personnel costs of
$13,967
(Exhibit
3
at G-2) ; Chappel and
Bauer cut
$4,567
as "not reasonable as submitted", implying that deficiencies
- 1 3 -
could be cured by a fuller submission (Exhibit 4, Attach . B, § 2, ¶¶ 1-18) .
However, when such a submission was made in the 1
St ASCWPB, they allowed
not a penny. When an even fuller submission was made in the 2 nd ASCWPB,
they allowed only $424 in environmental technician time for closing monitoring
wells. Exhibit 1, Attach . A, § 1 . Contrary to the implication in Exhibit 4, Bauer
and Chappel formed a stone wall around the $9,400 originally approved
.
Except for the $424 well abandonment allowance, they refused to reconsider
their original decision no matter how much additional information was provided
.
The significance of their stone wall becomes apparent in light of the work at
issue. Excluding the well abandonment costs, at issue in all three budgets were
consultants' services for (1) a Stage 1 site investigation, (2) a Stage 2 site
investigation, (3) installation of six monitoring wells, and (4) the site investi-
gation completion report. Under the proposed rule quoted at pp . 12-13 above,
reimbursements for these services would be capped at
:
Stage 1 site investigation
$1,600
Stage 2 site investigation
$3,200
Monitoring well installation - 6 x $500
$3,000
Site Investigation Completion Report
$1,600
Total
$9,400
- 14 -
Excluding the well abandonment costs, the record here shows
:
SCWPB sought :
$13,967
Amount allowed
:
$9,400
1 StASCWPB sought
:
$9,400 + $8,320
Amount allowed :
$9,400 (no change)
2nd ASCWPB sought :
$9,400 + $11,100
Amount allowed :
$9,400 (no change)
Allowing $424 for well abandonment in the final ruling was no breach of the
stone wall, because under the draft rule well abandonment was not included in
the lump-sum caps stated above .
10
For activities covered by the $9,400,
Chappel and Bauer allowed no variation, no matter what the showing
.
Use of a figure which equals the unapproved proposal to the
penny
might
be a coincidence if it occurred once, but here it occurred three times .
Perhaps
one should not be surprised. In R04-23, Chappel stated
:
The limits specified include all costs incurred by a consultant for completing
the specified activity, including, but not limited to, project planning and over-
sight, travel, per diem, mileage, transportation, lodging, all miscellaneous
equipment, as well as the preparation of plans, reports, applications for
payment and other documentation
.
There will be no additional monies pro-
vided
if
multiple submittals are required to provide the required information.
Exhibit 11 at 6-7 (emph. added) . Chappel apparently thinks that if he says so, it
must be so. The law, however, is otherwise
.
E .
The Agency May Not Rely On "Discretion"
In Making "Reasonability" Decisions .
As noted above, Chappel and Bauer cited for support of their actions §
57.7(c)(4)(C) as amended by P.A. 92-574, 92-651 and 92-735, providing
:
In approving any plan submitted pursuant to Part (E) of this paragraph
(4), the
Agency shall determine, by a procedure promulgated by the Board under item
(7) of subsection (b) of Section 57 .14, that the costs associated with the plan
are reasonable, will be incurred in the performance of corrective action, and
will not be used for corrective action activities in excess of those required to
meet the minimum requirements of this title .
1°
Nor,
realistically,
could well abandonment be included
in
those
sums,
because
monitoring wells often must remain in place for Stage 3 activity or for monitoring the effect
of corrective action .
- 15 -
They also cited 35
ILL. ADM. CODE
732.606(hh), declaring that ineligible costs
include "[c]osts proposed as part of a budget plan that are unreasonable"
.
Chappel and Bauer apparently contend that whatever they deem "unreason-
able" may be disallowed, but that is incorrect
.
Merely adopting a rule that
unreasonable costs are prohibited is not compliance with a legislative command
to submit and have approved
a procedure
for making unreasonability decisions .
Using an unpromulgated rule is not complying with that statute either
.
Moreover, the Administrative Procedure Act, 5 ILCS 100
("APA"), provides
:
Each rule that implements a discretionary power to be exercised by an agency
shall include the standards by which the agency shall exercise the power . The
standards shall be stated as precisely and clearly as practicable under the
conditions to inform fully those persons affected
.
5 ILCS 100/5-20. A rule which merely prohibits "[c]osts
.
.
. that are unreason-
able" (35
ILL. ADM. CODE
732.606(hh)) simply parrots the statutory grant ; it does
not state "standards by which the agency shall exercise the power" (5 ILCS
100/5-20), and it certainly does not state the standards "as precisely and clearly
as practicable under the conditions to inform fully those persons affected"
.
Section 732.606(hh) is invalid and Bauer and Chappel may not rely upon it
.
IV . THE AGENCY SHOULD PAY DALEE's LEGAL COSTS
415 ILCS 5/57.8(l) provides that legal costs incurred in seeking payment
under the LUST statute are barred by the general rule prohibiting recovery of
"legal defense costs" "unless the owner or operator prevails before the Board in
which case the Board may authorize payment of legal fees ." The purpose of
this provision is two-fold . First, it was enacted in recognition that one seeking
- 16 -
payment is
a claimant and thus costs of doing so are not literally legal
defense
costs; hence, absent such a stipulation, rules stated elsewhere prohibiting
recovery of "legal defense costs" would not apply. Second, § 57.8(l) recognizes
that in some cases the claimant
should
be recompensed for having to come to
the Board to receive justice . Hence, the "except" clause was inserted, and was
common-sensically limited to situations where a claimant prevails
.
Except that the claimant must prevail, § 57 .8(l) provides no guidelines on
how the Board should exercise its power under the "except" clause . However,
principles which govern when an action is appealed to a Circuit Court provide
reliable guidance by analogy. This is so because in LUST appeals the Board
sits in a position analogous to the Circuit Court in contexts that have the Circuit
Court, rather than another administrative agency, as the reviewing body
between the acting agency and the Appellate Court. Under the APA
:
In any case in which a party has any administrative rule invalidated by a court
for any reason,
including but not limited to the agency's exceeding its
statutory authority or the agency's failure to follow statutory procedures in
the adoption of the rule,
the court
shall
award the party bringing the action the
reasonable expenses of the litigation, including reasonable attorney's fees
.
5 ILCS 100/10-55(c) (emph . added) .
Here there has been a repeated pattern of unlawful activity by the Agency
and by the particular persons whose conduct is at issue . As long-time Agency
employees, Chappel and Bauer must have known that their preparation and
use of a secret rate sheet violated the APA, long before
Illinois Avers came
down. As employees working full-time applying the LUST statute, they
certainly
knew that that sheet was not a "procedure promulgated by the Board under
-17-
item
(7) of subsection (b) of Section 57.14" (415 ILCS 5/57.7(c)(4)(C) as
amended by P.A. 92-574, 92-651 and 92-735). If there was any doubt, it was
resolved by the Illinois Ayers opinion and by the order of the Sangamon County
court in CW3M Co . v. IEPA, 03-MR-0032 (see generally Exhibit 10 n.1) .
If there
was any further doubt, there was the Order denying emergency rulemaking
(Exhibit 10), and those individuals' continued participation in the
proposed
rulemaking. To fail to award attorneys' fees here would be to rule that citizens
are without remedy when bureaucrats cause those citizens injury by deliber-
ately and repeatedly engaging in indisputably unlawful action
.
It does not follow, however, that the award of fees should be made against
the LUST fund. To send a message to Agency management which has allowed
the lawlessness to continue in the LUST section, and to assure that limited
LUST funds are not further diverted from real needs to covering bureaucrats'
errors, the decision should specify that the award not be paid from the fund ."
V .
CONCLUSION .
For all the foregoing reasons, petitioner DaLee Oil Co . respectfully submits
that the Decision should be reversed and the Agency ordered (1) to pay from
the LUST fund the disallowed costs and (2) to pay DaLee's attorneys' fees for
"
The fund will pay significantly for Chappel and Bauer's errors in any event. This case
stems directly from their decision that removal of the tanks not be handled as a
continuation of the over-fill incident. Because of the treatment of the over-fill under Method
II, finding signs of contaminant in the soil upon removal of the tanks was predictable . If
harm to humans from the over-fill could be excluded under Method II analysis, the same
logic and geological factors should have sufficed for contaminants found on removal of the
USTs (and which might be nothing more than the remnants from the over-fill) . Bauer and
Chappel rejected that logic and required treatment as if a release from the USTs had
occurred, with resultant compounding of required work. Yet when all the tests were done,
all soil and groundwater results were below Tier 1 Class I Residential clean-up standards
.
Not one iota of benefit to the environment resulted from Chappel and Bauer's "judgment"
.
- 1 8 -
this appeal from non-LUST funds
.
December 23, 2005
John T. Hundley
LAW OFFICE OF TERRY SHARP, P.C
.
P.O. Box 906 - 1115 Harrison
Mt. Vernon, IL 62864
618-242-0246
Counsel for Petitioner DaLee Oil Company.
John\USI\OkwavilleAppeal
DALEE OIL CO
.
