BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
May 8,2006
IN THE MATTER OF:
PROPOSED AMENDMENTS TO:
REGULATION OF PETROLEUM
LEAKING UNDERGROUND STORAGE
TANKS (35
1LL.ADM.CODE 732)
IN THE MATTER OF:
PROPOSED AMENDMENTS TO:
REGULATION OF PETROLEUM
LEAKING UNDERGROUND STORAGE
TANKS (35
1LL.ADM.CODE 734)
)
1
1
R04-022
1
(UST Rulemaking-Docket B)
)
)
1
)
)
)
R04-023
)
(UST Rulemaking)
1
Consolidated-Docket
B)
COMMENTS OF UNITED
SGIENCE INDUSTRIES, WC.:
In its December 1,2005 Opinion and Order, the Board set forth fair standards that it
requires in a professional consulting services rule. Specifically, the Board
mkd that the
professional consulting services portion of this
mle
"...must include a scope of
workfor the
tasks
for which the rules
specifj, lump
sum payment
anzourzts
and lump sum rates which more
accurately reflect current and historical
reinzbursement rates." (December 1, 2005 Opinion
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and Order
at 60).
The Board's standards are further clarified in another portion of that same Opinion
and Order. That portion provides that
"...the
rutes (those originally proposed by the Agency
in their Initial Filing and published at First Notice
in Docket A) need to be adjusted to reflect
the actual scope of work
and current
market rates (emphasis added)." (December
1,
2005
Opinion
&
Order at 60).
The Agency's testimony and proposal presented at the March 23,2006 hearing falls
woefully short of meeting the standards set by the Board in their December 1,2005 Opinion
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and Order. The Agency's March 23,2006 testimony is primarily a reverberation of their
original proposal. The costs for professional consulting services originally proposed by the
Agency in their Initial Filing with the Board on January 13,2004 which
have already been
rejected by the Board are slightly greater than those proposed by the Agency in Sub Docket B
on March 23,2006 and both proposals by the Agency are a fraction of the professional
consulting costs historically reimbursed by the Agency.
Given that the Agency is
unwilling to significantly deviate from their original
position, the Board should move to First Notice in this Docket B proceeding. In doing so, the
Board should consider the following:
1.
The Agency testified at the March 23,2006 bearing that their database did
x-
not contain information to support their proposed
maximum lump sum
payment amounts on a per task basis. Therefore the Agency convened an
internal
workgroup to develop proposed maximum lump sum payment
amounts for professional consulting services. This workgroup only
estimated amounts for each task and did not use market-data as a means
for developing the rates.
It should again be emphasized that the amounts
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proposed by the Agency
&&group
do not materially
differ'from those
rejected by the Board in December 2005.
2.
The standard that has been set by the Board for this
rule is that the
maximum lump
sum payment rates should be based
upon current market
rates and should more accurately reflect current and historical
reimbursements. The Agency's proposed maximum lump sum payment
amounts do not meet the "market-based" standard or the current or
historical reimbursement standards set by the Board.
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3.
The Board has ruled that a scope of work must be developed for each task
for which a maximum lump sum payment amount is proposed. Because
standardized tasks for professional consulting services have not been
utilized under the Illinois UST program, prices for professional consulting
services can only be
based on market data and can only reflect current and
historical reimbursements after:
I.) standardized tasks have been
established; 2.) scopes of work have been clearly defined and set forth for
each standardized task; 3.) the standardized tasks and scopes of work are
promulgated; 4.) The Agency provides clear definition and training on the
detailed specifications for each task;
5.) consultants are required to report
professional service charges pursuant to the standardized task list; and 6.)
the Agency has been allowed time to collect true market based data in a
fashion that can be reliably analyzed.
4.
The record in this proceeding shows that the rate sheet that was
historically used by the Agency in determining the reasonableness of
professional consulting costs did not include prices for professional
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consulting tasks but instead focused on hourly rates for professional
consulting personnel. (please refer to pages
61,89 and 90 of the transcripts
for the March 23,2006 hearing).
Several times in these proceedings the
Agency has implied that when their prior use of this rate sheet was
declared illegal, it became more difficult for them to make reasonableness
determinations.
5.
The Board has already promulgated, through Sub docket A, a list of
Professional Consulting Personnel Titles and the hourly rates that may be
charged for each title. This restores, as of March 1, 2006, all aspects of
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the rate sheet that the Agency claims they used in the past to adequately
regulate professional consulting charges.
6.
Doug Clay, at the most recent hearing, during his cross examination of Jay
Koch of United Science Industries, Inc., made it quite clear that the
Agency already has the ability to determine the reasonableness of
professional consulting costs. In his cross examination, Mr. Clay implied
that the Agency has historically evaluated and determined the
reasonableness of professional consulting costs by reviewing not only
reimbursement payment applications but also budget proposals. He also
implied that the cuts of professional consulting charges made during the
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budget review process are
substantially greater than the reductions made
during the review of payment applications.
In
making these implications,
Mr. Clay admits that the Agency has appropriately carried out its statutory
mandate and made reasonableness determinations and
controlled/reduced
the costs for professional consulting charges. In fact, this has been done
consistently for years by Agency reviewers as part of the budget review
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process.
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7.
At this point in the rulemaking process, and in light of the facts provided
in Items 4 through 6 above, the Board should rest assured that the Agency
has the ability and is regulating professional consulting costs today.
8.
PIPE has set forth: 1.) standards that it believes are appropriate for this
rule; 2.) an approach to implementing this rule; and
3.)
specific
implementation steps that it believes are appropriate for this
rulemaking.
9.
PIPE'S
standards, approach and implementation steps are consistent with
the standards that the Board has set for this rulemaking and there has been
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no private sector objection to the standards, approach or implementation
steps set forth by PIPE.
10.
At the March 23,2006 hearing US1 offered a specific proposal for
components of a proposed rule.
US1 designed its proposal to meet the
requirements of PIPE and the standards set forth by the Board which are
listed above.
11.
The Budget and Reimbursement Forms that were prepared by the Agency
in order to implement the Sub docket A rule, included Standard
Remediation Categories. These Standard Remediation Categories are very
similar to the task list proposed by
US1 in its March 23,2006 testimony
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and proposal.
12.
Since March 1,2006 the Agency has required all consultants in the state to
report all professional consulting charges under the Standard Remediation
Categories.
Conclusion
&
Recommendation:
US1
is of the opinion that additional hearings prior to First Notice in this matter are not
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necessary. US1 believes that the record
cle&i~;.~emonstrates
that, under the
cir6umstances,
the only logical way to approach the development of
lump sum payment amounts for
professional consulting services is to follow the standards, approach, and implementation
steps set forth
by PIPE in their March 2006 testimony.
This would entail
continuing,to
reimburse professional consulting services on a time and
materials basis through the
completion of Phase
I1 of the implementation approach specified by PIPE. It would also
entail the collection of market-based data that is necessary to provide for a proper evaluation
of which professional consulting tasks may be eventually converted to maximum lump sum
payment amounts. This approach is consistent with the standards that the Board set for this
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mlemaking
in its December 1,2005 Opinion and Order.
US1 recommends that the Board
rule in favor of the standards, approach and implementation steps outlined by PIPE in March
of 2006.
Respectfully Submitted,
UNITED SCIENCE INDUSTRIES, INC.
6295 East IL Hwy.
15
Woodlawn, Illinois 62898
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((618) 735-241
1
(618) 735-2907 (fax)
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