T-TOWN DRIVE THRU, INC.,

Petitioner,

ILLINOIS ENVIRONMENTAL

PROTECTION AGENCY,

Respondent.

)

PCB No. 07-085

)

(LUST Appeal)

)

Pursuant to 35

ILL. ADM. CODE

§§

101.500, 101.508 and 101.516, petitioner T-Town

Drive Thru, Inc. ("Petitioner"), by its attorneys, The Sharp Law Firm, P.C., moves the

Board to enter summary judgment for Petitioner and against respondent Illinois

Environmental Protection Agency ("Agency") with respect to the $8,109.02

in corrective

action costs at issue

in this appeal.

L iNTRODUCTION.

This appeal, like several others with which we will soon move to have this matter

consolidated, comes to the Board

in a brown paper wrapper marked "claim lacking

documentation," but

it is much more than that. At issue is whether the Agency is

empowered, on review of an application for reimbursement pursuant to and within a

previously-approved budget, to disregard its previous decision, to disregard the

applicant's evidence, and to attempt to limit reimbursement to one kind of out-of-pocket

cost incurred by the consultant, rather than the cost incurred by the owner/operator for

all the relevant services as defined by 35

ILL. ADM. CODE Part 732 Subpart H. As shown

below, both applicable statutory provisions and the legislative history

of the regulations

at issue demonstrate that the Agency has no such power.

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Electronic Filing, Received, Clerk's Office, September 12, 2007

II.

The motion is based on the following facts, which are not genuinely disputed.

Petitioner

is the owner of a Leaking Underground Storage Tank ("LUST") site in

Effingham County. Rec. at 019-021. It retained United Science Industries, Inc. ("USI")

as consultant-contractor for remediation of the site pursuant to the portions of the Illinois

Environmental Protection Act governing such remediation, 415 ILCS 5/57

et seq.

(the

"LUST Act"), and USI filed with the Agency a Corrective Action Plan ("Plan") and a

related budget. Rec. at 005; August

29, 2006 approval letter, Exhibit A hereto.

The

Agency modified the Plan and budget

in relatively modest respects and, as modified,

approved same.

Id.

The approved budget expressly called for analysis costs of

$15,867.57. Exhibit A at attachment

A; Rec. at 008, 022.

After the Plan was completed, Petitioner sought reimbursement for $8,109.22

analysis costs for services rendered in connection with various tests which are subject

to the lump-sum or unit-price

reimbursement rates set forth in 35 ILL. ADM. CODE Part

732 Appendix

D. Rec. at 024-025. In each case, the amount sought was the approved

amount set forth

in said appendix, as adjusted for inflation under 35 ILL. ADM. CODE

732.870. In support, Petitioner submitted two invoices relevant here:

• An October 20, 2006 invoice from USI to Petitioner seeking, inter alia,

$60,287.11 for "Field Purchases and Other".

Rec. 053. Attached to this invoice

was detail material stated

on forms originally prepared by the Agency and

The Agency has filed as the Administrative Record ("Rec.") only part of the information before it when it

made its decision. Additional materials relevant to this motion are attached as exhibits hereto.

2 As more fully discussed below, the changes effected by adoption of35 ILL. ADM. CODE Part 732 Subpart H

established maximum amounts deemed to be reasonable for all services

in a series of task areas, including analysis

services. In some cases, these rates were stated in per-unit terms (e.g., $l/Ft.

of well) and in others as a flat amount

for the services. Because in either case they applied to all services related to the task area, lumped together for

brevity herein we refer to them hereinafter

as "lump sum" rates.

-2-

customarily used by USI as back-up for its invoices.

Among the back-up were

Rec. 061, detailing charges of $60,207.59, and Ree. 122, containing the additional

$79.52. The $60,207.59 included $7,787.00 of the $8,109.02 analysis costs now at

issue (Rec.

061).4 To establish that the samples had in fact been collected, sent

for analysis, analyzed

by an approved lab on the basis claimed, and handled by USI

in the resultant evaluation of the Plan's success, USI attached, among other things,

results from Teklab, Inc. ("Teklab") for the samples. Rec. 064-098, 103-117.

An October

11,

2006 invoice from USI to Petitioner seeking, inter alia,

$44,662.80 for "Field Purchases and Other".

Rec. 129. Among the back-up for this

invoice were

Rec. 140, which detailed $44,662.80 and itemized the additional

$322.02 of analytical costs now at issue.

Again, to establish that the samples had

in fact been collected, sent for analysis, analyzed on the basis claimed, and handled

by USI in the resultant evaluation of the Plan's success, USI attached results from

Teklab.

Rec. 143-146.

Petitioner also admitted certifications, under penalty of perjury, from John Buening,

Petitioner's owner, and Joseph

M. Kelly, P.E., that "the bills in the attached application

for reimbursement are for performing corrective action activities", that said bills "were

incurred

in conformance with the Environmental Protection Act", that "the costs for

remediating the above-listed incident are correct, are reasonable, and were determined

We are advised that some of these forms were no longer being used by the Agency, but USI had

continued to use them as detail to its invoices.

Specifically, Rec. 061 itemizes 20 BETX Soil with MTBE at $87.37, 20 PH at $14.39, 20 PNA or PAH

Soil at $156.24,20 Metals Total Soil at $96.62,20 soil preparations for the Metals Total at $16.45,20 soil

sample collection kits at $10.57, and 3 sample shipping at $51.40.

Specifically, Rec. 140 itemizes 1 BETX at $87.37, 1 Flash Point at $33.92, 1 Paint Filter at $14.39, 1

PH at $14.39, 1 Moisture Content at $12.33, 1 Lead TCLP Soil at $16.45, 1 soil preparation for metals

TCLP at $81.20, 1 sample shipping at $51.40,

and 1 soil sample collection kit at $10.57.

-3-

in accordance with Subpart H: Maximum Payment Amounts, Appendix D Sample

Handling and Analysis amounts". Rec. 021. Also submitted was a sworn certification

"that the amount sought was expended

in conformance with the approved budget and

approved plan".

Rec. 020.

The Agency denied the analysis costs claim

in its entirety, stating:

$8,109.02, deduction for costs that lack supporting documentation. Such costs are

ineligible for payment from the Fund pursuant

to 35 Ill. Adm. Code 732.606(gg). 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; therefore, such costs are not approved pursuant to

Section 57.7(c)(4)(C)

of the Act because they may be used for corrective action

activities in excess

of those required to meet the minimum requirements of Title XVI of

the Act.

Analysis costs

do not have any backup invoices listing the costs for lab costs.

Rec. 003 (the "Decision").

consultations with USI, the Agency insisted that Petitioner

submit invoices from Teklab for the portion of the services performed by

it and that

reimbursement

be limited to those invoices.

The Agency disregarded the

documentation

USI and Petitioner

had

submitted, disregarded the sworn certifications

submitted to

it, and based its decision on no admissible evidence in its record.

m. SUMMARY JUDGMENT STANDARDS

Summary judgment is appropriate when the pleadings, depositions, admissions on

file, and affidavits disclose that there is no genuine issue as to material fact and the

moving party

is entitled to judgment as a matter of law. McDonald's CorP. v. IEPA, PCB

04-14 at 2 (Jan.

22, 2004). Because the denial letter frames the issues to be reviewed,

the Board focuses only

on the grounds stated in the Decision in determining whether it

may be affirmed. Pulitzer Comm. Nsprs., Inc. v. IEPA, PCB 90-142 at 6-7 (Dec. 20,

1990).

-4-

LUST Act

57.7(c), as amended by P.A. 92-554

5, provides:

(l) Agency approval of any plan and associated budget, as described in this subsection

(c), shall be considered final approval for purposes

of seeking and obtaining payment

from the Underground Storage Tank Fund

if the costs associated with the completion of

any such plan are less than or equal to the amounts approved in such budget.

(3) In approving any plan submitted pursuant

to subsection (a) or (b) of this Section,

the Agency shall determine, by a procedure promulgated by the Board under Section

57.14, that the costs associated with the plan are reasonable, will be incuned in the

performance

of site investigation or corrective action, and will not be used for site

investigation or corrective action activities in excess

of those required to meet the

minimum requirements

of this Title.

LUST Act

57.7(c)(4), as amended by P.A. 92-651

74, P.A. 92-735

5, and P.A. 92-

574

5, provides substantially the same.

LUST Act

57.8 states:

(a) Payment after completion of corrective action measures. The owner or operator

may submit an application for payment for activities performed at a site after

completion

of the requirements of Sections 57.6 and 57.7, or after completion of any

other required activities at the underground storage tank site.

(l) In the case of any approved plan and 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

LUST Act

57.7(c)(4), as amended by those acts, provides:

(A) Agency approval of any plan and associated budget, as described in this item (4), shall be considered

final approval for purposes

of seeking and obtaining payment from the Underground Storage Tank Fund

if the costs associated with the completion of any such plan are less than or equal to the amounts

approved in such budget.

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 perfonnance

of conective

action, and will not be used for conective action activities in excess of those required to meet the

minimum requirements

of this title.

-5-

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.

ILL.

ADM. CODE

732.800 states:

a) Methods for Determining Maximum Amounts. This Subpart H provides three

methods for determining the maximum amounts that can be paid from the Fund for

eligible corrective actions costs. All costs associated with conducting corrective action

are grouped into the tasks set forth in Sections 732.810 through 732.850

of this Patio

l) The first method for determining the maximum amount that can be paid for each

task is

to use the maximum amounts for each task set forth in those Sections, and in

Section 732.870

....

b) The costs listed under each task set forth in Sections 732.810 through 732.850 of this

Part identify only some

of the costs associated with each task. They are not intended as

an exclusive list of all costs associated with each task for the purposes of payment from

the Fund.

With respect to the sections referenced in

732.800(b), 35 ILL. ADM. CODE

732.835

deals with sample handling and analysis and states:

Payments for costs associated with sample handling and analysis must not exceed the

amounts set

fOlih in ... Appendix D of this Part. Such costs must include, but are not

limited to, those associated with the transportation, delivery, preparation, and analysis

of samples, and the reporting of sample results....

Appendix D, referenced in

732.835, provides in pertinent part:

Chemical

Max. Total Amount

per Sample

BETX Soil with MTBE

$85

Flash Point or Ignitability Analysis

$33

Paint Filter

$14

Polynuclear Aromatics PNA, or PAH SOIL

$152

Moisture Content

$12

Lead TCLP Soil

$16

Metals Total Soil

$94

Soil preparation for Metals TCLP Soil

$79

Soil preparation for Metals Total Soil

$16

En Core® Sampler, purge-and-trap sampler, or equivalent

$10

sampling device

Sample Shipping

$50

-6-

With respect to those rates, 35 ILL. ADM. CODE

732.870 states:

The maximum payment amounts set fOlih in this Subpart H must be adjusted annually

by an inflation factor determined by the annual Implicit Price Deflator for Gross

National Product

as published by the U.S. Department of Commerce in its Survey of

Current Business.

Also relevant are 35 ILL. ADM. CODE

§§

732.845 and 732.850, which state in part:

Section 732.845 Professional Consulting Services

Payment for costs associated with professional consulting will be reimbursed on a time

and materials basis pursuant to Section 732.850

....

Section 732.850 Payment on Time and Materials Basis

This Section sets forth the maximum amounts that may be paid when payment is

allowed

on a time and materials basis.

a) Payment for costs associated with activities that have a maximum payment

amount set forth in other Sections

of this Subpart H (e.g., sample handling and analysis,

drilling, well installation and abandonment, or drum disposal[)] must not exceed the

amounts set forth in those Sections, unless payment is made pursuant to Section

732.860 of this Part. ...

35 ILL. ADM. CODE

732.606(gg), relied upon by the Decision, states merely, "Costs

ineligible for payment from the Fund include but are not limited

to ... [cJosts that lack

supporting documentation".

Agency's Attempt, on

Application,

To Reverse Its Findings on Budget Approval Is Improper.

There is no dispute that in reviewing Petitioner's proposed budget, the Agency

approved contemplated analysis costs of $15,867.57. See

p. 2 above. There also can

no dispute as to what that approval means. LUST Act

57.7(c), as amended by

P.A. 92-554

5, expressly provides (emphasis added):

(l) Agency approval of any plan and associated budget, as described in this subsection

(c),

shall be consideredfinal approval for purposes ofseeking and obtaining payment

-7-

from the Underground Storage Tank Fund ifthe costs associated with

ofany such plan are less

or equal to

amounts approved

(3)

In approving any plan submitted pursuant to subsection (aJ or (b) ofthis Section,

the Agency shall determine,

by a procedure promulgated by the Board under Section

57.14, that the costs associated with the plan are reasonable, will be incurred in the

performance

of site investigation or corrective action, and will not be used for site

investigation or corrective action activities in excess

of those required to meet the

minimum requirements

ofthis Title.

For purposes of that provision:

the term" plan" shall include:

(A) Any site investigation plan submitted pursuant to subsection (a) ofthis Section;

(B) Any site investigation budget submitted pursuant

to subsection (a) of this Section;

(D)

Any corrective action plan budget

submitted pursuant to subsection (b) of this

Section.

LUST Act

57.7(c)(5), as amended by P.A. 92-554 (emph. added). Section 57.7 as

amended by the other acts of the

legislature provides in substance the same.

Hence, as a matter of law, the Agency's approval of Petitioner's budget constituted

findings that the proposed costs were "reasonable", would "be incurred

in the

performance of site investigation or corrective action", and would "not be used for site

investigation or corrective action activities

in excess of those required to meet the

minimum requirements of this Title."

57.7(c)(3) as amended by P.A. 92-554. Having

made that decision

in approving the budget, on application for payment "[i]n 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." LUST Act

57.8(a)(1). Significantly, in rendering its Decision, the Agency

did not claim that the tests at issue were not

in "adherence to the corrective action

measures in the proposal" it had approved.

-8-

The claim that the Agency "cannot determine that costs will not be used for activities

in excess of those necessary' to meet the minimum requirements" of the Act, and hence

must

be denied under "Section 57.7(c)(4)(C) of the Act because they may be used for

corrective action activities in excess of those required to meet the minimum

requirements" of the Act (Rec. 003),

is not only contrary to the previous finding, it is

specious. This was a

reimbursement

application; the claimed costs "will not" be used

for

any

activities -

the activities have been completed.

The Decision's erroneous future

tense reflects a failure to appreciate that

an application for payment under

57.8

is not

a plan or report under

57.7(c)(4)(C), which it invol<es.

This result is not changed by the rulemaking commenced in 2004 which resulted in

substantial changes to 35 ILL. ADM. CODE Part 732, including adoption of maximum

reimbursable amounts for many common LUST clean-up activities (the "Rulemaking

Proceedings").? Indeed, the legislative history for those amendments makes clear that

after-the-fact reconsideration of approved budgets

is improper. For example, during

that rulemaking the Agency sought to have emergency regulations adopted, claiming

that otherwise

it could only process applications for payment submitted pursuant to

budgets approved prior to Illinois Ayers Oil Co., PCB 03-214 (Apr.

1, 2004). Its

rationale for being able to make payments under approved budgets was that "[r]eviews

of such applications for payment can continue because the reviews consist of

comparing the costs

in the applications for payment to the costs approved in the

budgets."

Illinois Environmental Protection Agency's Motion for the Adoption

In the Matter of Proposed Amendments to Regulation of Petroleum Leaking Underground Storage

Tanks

(35 III. Adm. Code 732), R04-22A. Excerpts of papers filed in those proceedings bearing on issues

in this appeal are attached hereto as exhibits; in addition, for the reader who wishes to cite full documents

in the Board's electronic database, the filing date thereof in R04-22A is provided.

-9-

Emergency Rules,

R04-22A (Apr. 19,2004) at 2 (Exhibit B hereto).

Moreover, Doug Clay, manager

of the Agency's LUST Section, later testified:

the statute talks about review based on generally accepted audit and accounting

practices

.... [T]his refers to when there's been a budget approved ahead of time, and

that is what we

do. The budget has been approved. And what the LUST claims unit

will do is basically add

up invoices, make sure that the costs are eligible and consistent

with the plan

... and budget that had been approved.

Transcript

('Tr.

Proceedings Held May

25,

2004,

R04-22A (Jun. 1, 2004) at 23-24

(Exhibit C). LUST Claims Unit head Doug Oakley gave similar sworn testimony:

When we look at budget approved claims, it is different than early action, in that we

don't look at individual rates. We look

to make sure the costs associated with certain

activities are within the line that that's like six budget line items. And

if the costs for

those activities fall at or below those line items, that's

as far as we go, other than

looking for mandatory documents.

Id.

at 84.

Q.... You have to have an approved budget and has been reviewed and compared to

something to determine what is being reasonable? And then it'sreimbursed, right?

A. (BY MR. OAKLEY)

the type of amounts are equal to or less than those line

items, it will be paid.

Tr.

Proceedings Held May

26,

2004,

R04-22A (Jun. 1, 2004) at 60 (Exhibit D) (emph.

added).

Q. But so long as all of the items are contemplated within the budget and the budget

has been specific enough, and those items that are being claimed for recovery are in fact

pmi of the budget, you approve that?

A. (BY MR. OAKLEY) Right.

Tr.

Proceedings Held May

25,

2004,

R04-22A (Jun. 1,2004) at 91 (Exhibit C).

The Agency further stated:

Setting forth rates in the rules will allow owners, operators and consultants to know the

amounts considered reasonable for purposes

of reimbursement from the UST Fund, and

the Illinois EPA can easily review and approve costs as long as

not exceed

applicable ma.ximum

amounts.

- 10-

Illinois Environmental Protection Agency's Response to Prefiled Questions,

R04-22A

(Jun. 15,2005) at 22 (emph. added) (Exhibit

E).

The rules will also help simplify the reimbursement process by setting forth the rates

that are considered reasonable for reimbursement from the UST Fund.

Owners and

operators and consultants will know the amounts that will be considered reason-able

for the activities being proposed, and the Illinois EPA can easily review ami approve

costs

as long as they do not exceed the applicable maximum payment amounts.

Id.

at 35 (emph. added). Agency witness Gary King made similar points in comparing

the Agency's proposal with a counterproposal from USI:

it seems like what is being proposed here is [not] that much different than what the

agency

is proposing, we'rejust using different terms and setting different points on the

normal distribution. The agency's proposal is basically saying, you know, we're going

to take the average, which I think is sort

of taking as a median, we got 50 percent of

cases falling below that point of normal distribution, that will be your expedited unit

rate. They call it maximum, but it's the expedited.

you come in with costs under

that point, it's going

to fly through the system.

. .. So it seems to me that if we could

just get beyond the semantics, that we're sort

of getting to the same point here, and that

is where do you set that point in which you get expedited review. And there are

problems

if you set it too high, everything moves to that high point ... The agency

proposal set at a median,

....

Tr. of Proceedings Held July

27,

2005,

R04-22A (Aug. 8, 2005) (Exhibit F) at 158

(emph. added).

Here the amount billed by

USI to Petitioner and sought by Petitioner from the

Agency was

less

than what the Agency had previously found

to be "reasonable" and to

"be incurred

in the performance of ... corrective action activities [not] in excess of those

required to meet the minimum requirements" of the Act. Its attempt to reconsider those

findings

on application for payment under LUST Act

57.8 is not only without statutory

basis, it

is unreasonable and contrary to the representations which the Agency made in

obtaining approval of the Subpart H regulations.

- 11 -

Before the amendments sought in the Rulemaking Proceedings, reimbursement for

remediation activities generally was governed by a "time and materials" basis.

In the

Rulemaking Proceeding, the Agency sought - and succeeded

in the case of the

services now at issue - to replace that system with a new one providing for "lump sum"

maximum amounts which

it would pay for bundles of services in a series of identified

task areas. See

Statement

Reasons, Synopsis

Testimony, Statement Regarding

Material Incorporated

by Reference, and Statement

Amendment to the Board's

Version

the Rules,

R04-22A (Jan. 13, 2004) at 21, 29-30 (Exhibit G). The goal, the

Agency repeatedly said, was to "streamline" the remediation reimbursement process

(id.

at 30, 34). This was to be accomplished as follows:

Subpart H divides all response activities into tasks and sets forth the maximum amounts

that can be paid from the UST Fund for each task. Because

of the difficulty of

enumerating every cost that may be associated with a site, Section 732.800(b) explains

that the costs identified in Subpart H are only the major costs associated with a

particular task.

The maximum payment amount is intended to include all costs

associated with completing the identified task.

Id.

at 30 (emph. added). The Agency told the Board that "Illinois EPA anticipates a cost

savings

as a result of the streamlining".

Id.

at 34. indeed, Mr. Clay stated:

The new budget and reimbursement process would eliminate the majority

of budgets

and reimbursement packages submitted based on a time and material basis and replace

them with submittals based on unit rates and lump sums for specific tasks established in

the regulations. We believe this will streamline the approval

of budgets and the

processing

of reimbursement claims. Currently, there is a tre-mendous amount of time

spent reviewing budgets and the processing

of reimburse-ment claims.

Testimony

Douglas W. Clay in Support

the Environmental Protection Agency's

Proposal

to Amend

III. Adm. Code

732 (attached to

Illinois Environmental Protection

Agency's First Errata Sheet

to Its Proposal for the Amendment

of 35

III. Adm. Code 732,

-12 -

R04-22A (Mar. 8, 2004)) at 2 (Exhibit H).

In numerous instances, industry participants objected because it was not clear what

all was to be included

in the proposed lump sum. The Agency repeatedly replied that

everything related to a task was included.

Q....

Do you have a list of tasks that you utilize to develop those original numbers of

hours at the rater?]

MR. CLAY: I think we included in the original testimony a list

of tasks that were not

intended to be all inclusive.

The scope of work is what you need to do to meet

regulations.

That list oftasks was not intended to be all inclusive.

Tr.

Proceedings Held July

27,

2005,

R04-22A (Aug. 8, 2005) at 16-17 (Exhibit F)

(emph. added).

Q....

[H]ow is it competitive bidding provisions are supposed to apply in the absence

of the scope of work?

MR. CLAY: The scope

of work is what it takes to meet the regulations, I've answered

that.

MR. [KOCH]: So, how am I to know what is and what is not included for purposes

using competitive bidding?

MR. CLAY: It'swhatever it takes to meet the regulations

....

Id.

at 43-45.

Cf Statement

Reasons, Synopsis

Testimony, Statement Regard-ing

Material Incorporated

by Reference, and Statement

Amendment to the Board's

Version

ofthe Rules,

R04-22A (Jan. 13,2004) at 30 (Exhibit G) (emph. added):

the costs identified in Subpart H are only the major costs associated with a particular

task.

The maximum payment amount is intended to include all costs associated with

completing the identified task.

The Agency argued, and the Board agreed in its first-notice decision, that tasks not

specifically listed

in the description could not be reimbursed separately:

As to the suggested change

to allow for tasks not specifically listed under a maximum

payment amount

to be reimbursed separately, the Agency believes that such a change

-13 -

will eventually result in Subpart H becoming a reimbursement on time and materials

basis for every item not specifically identified in the rules. The Agency states that

developing an all-inclusive list

of costs associated with each task identified in Subpart

H would be impossible.

Opinion and Order

the Board,

R04-22A (Dec. 1, 2005) at 45 (Exhibit I).

Comments

the Illinois Environmental Protection Agency,

R04-22A (Sep. 23, 2005) at

18 (Exhibit J).

Those principles were expressly and repeatedly applied to analysis costs such as

now at issue. For example, Daniel

King asked the Agency:8

Pursuant

to 734.835 Sample Handling and Analysis, costs associated with

transportation, delivery, preparation, analysis and reporting

of samples are reimbursable

costs and should be billed in accordance with the rates listed in 734.Appendix

the Agency's intent that the per sample rates listed may be divided up between the

entity doing the transpOliation, deliver, analysis, etc.?

The Agency responded:

Sections 734.835 and 734.Appendix D merely set forth the maximum payment amounts

owners and operators may be reimbursed for costs associated with sample handling and

analysis. Please note that an individual maximum payment amount for shipping is

included at the bottom

of Section 734.Appendix D.

The Board'sproposed rules do not

address, and the Illinois EPA did not envision the rules addressing, how the amounts

reimbursed

to an owner or operator are divided among the parties performing the

work.

Illinois Environmental Protection Agency's Response to Prefiled Questions,

R04-22A

(Jun. 15,2005) at

12 (emph. added) (Exhibit E). Similarly, Jay P. Koch asked:

Subpmi H, Appendix D provides rates for Sample Handling and Analysis. Section

734.835 indicates that these rates are for transportation, delivery, preparation, analysis

and result reporting. Often times analytical samples are transported to a central

shipping location by one party, delivered

to the laboratory by another and then analyzed

by the lab (a third party). Are the rates provided in Appendix D to cover the activities

of all three parties described above?

The Agency responded, "The Illinois EPA included all costs associated with sample

Prefiled Questions of Daniel

King,

R04-22A (May 4, 2005)

!f[

41 (Exhibit K).

Prefiled Questions of Jay

Koch,

R04-22A (May 4, 2005)

!f[

6 (Exhibit L).

- 14 -

handling and analysis, regardless of the number of parties involved, in the maximum

payment amounts

it proposed under Sections 734.35 and 734.Appendix D."

lliinois

Environmental Protection Agency's Response to Prefiled Questions,

R04-22A (Jun. 15,

2005) at 14-15 (Exhibit

E).

Thus, as adopted 35 ILL. ADM. CODE

732.835, dealing with sample handling and

analysis, expressly states (emph. added):

Payments for costs associated with sample handling and analysis must not exceed the

amounts set forth in Section Appendix D

of this Part. Such costs

must include, but are

not limited

to,

those associated with the

transportation, delivery, preparation,

and

analysis

of samples, and the reporting of sample results.

Similarly, 35 ILL. ADM. CODE

732.800(b) as adopted states (emph. added):

The costs listed under each task set forth in Sections 732.810 through 732.850 of this

Part identify

only some ofthe costs associated with each task. They are not intended

as an exclusive list

of all costs associated with each task for the purposes of payment

from the Fund.

That the maximum amount represents all costs is further shown by the Agency's

Analytical Cost Form (Rec. 024), which states:

The laboratory analysis charge includes all costs associated with the transportation

and/or delivery and analysis

of each applicable sample. The charge includes but is not

limited

to costs associated with laboratory persollilel, sample handling, trans-portation

and/or delivery

of samples to the laboratory, sampling equipment, sampling containers,

sample disposal and all aspects

of the applicable laboratory analysis.

There can be no doubt that the Board relied on the Agency's representations in its

decisions. For example, the Board adopted the Agency's logic for deleting references

to "materials, activities, or services" because pursuant to the proposed Subpart

payment would generally no longer be made based on "materials, activities, or

services".

Opinion and Order of the Board,

R04-22A (Feb. 17,2005) at 9 (Exhibit M). It

said new Subpart H intended to "streamline payment from the UST Fund" with "lump

- 15-

sum" or unit rates for many activities.

Id.

at 11. It adopted the Agency's logic that under

the proposal "less time

[wiil be] required for Agency review".

Id.

at 17, 24.

It also

explained that the amounts provided in proposed Subpart H for its 11 categories of

tasks covered "all reimbursable tasks"

in those categories

(id.

at 17, 24), and it stated

that Subpart H

enumerates only the "major costs" associated with a task. The section clarifies that

the

maximum payment amount is intended to include all costs associated with an activity

and the subpart does not enumerate eligible costs.

Id.

at 12 (emph. added). The Board said it proposed "a rule that includes

lump sum

maximum payments for certain tasks".

Id.

at 82 (emph. added). Finally, language

evidencing that all services and costs related to a task area were covered by the lump

sum was included in the final regulations (see p. 15 above), and when the Board finally

decided that professional consulting would "be reimbursed

on a time and materials

basis pursuant to Section 732.850" (35

ILL. ADM. CODE

732.845), it expressly provided

that professional services associated with the "sample handling and analysis" task were

not covered (35

ILL. ADM. CODE

732.850(a)).

The foregoing is, we submit, more than sufficient to grant Petitioner's Motion for

Summary Judgment, but if there were any doubt it

is dispelled by events which occurred

as a result of changes which the Board required. Specifically, the Board sought to

temper the harshness of the Agency's "average equals maximum" approach by allowing

reimbursement of a larger amount when it was established through a competitive

bidding process.

In offering the amendment, Mr. Clay made clear that consultants are

After first notice, the Agency reiterated its goal of streamlining, based in significant part on the premise

that at the reimbursement stage "the Illinois EPA can easily review and approve costs as long as they do

not exceed the applicable maximum payment amounts".

Illinois Environmental Protection Agency's

Response

to Prefiled Questions,

R04-22 (Jun. 15, 2005) at 15, 22, 35 (EXhibit E).

-16 -

Electronic Filing, Received, Clerk's Office, September 12, 2007

entitled to the Subpart H amounts even if parts of the services in a task area are

acquired, or could be acquired, at a lower price:

Q. .., So I go out and I get three bids as the Agency has allowed me. And it also

allows me that

if I wanted to, I could do the work for the lowest bid. How do I get paid

for my handling for my time

to go get those bids for the scope of work? Because I'm a

person who is using a subcontractor with the indirect financial interest. I mean, how

I get paid?

A. (By Mr. Clay) In that case, I think

you would be entitled to that lump sum as ifthe

owner

and operator were paying for the subcontractor.

And then, you know, that's

sort

of a business decision. That's a decision you're making, that you want, in your

case, your company

to do the work as opposed to the low bidder.

Tr.

Proceedings Held Aug.

2004,

R04-22A (Aug. 20, 2004) at 86-87 (Exhibit N)

(emph. added).

See also id.

at 67-68 (emph. added):

[Member Johnson] ... [Y]our proposed language is the maximum payment amount

for the work bid shall be the amount

of the lowest bid, unless the lowest bid is less than

the maximum payment amount set forth in Subpart

H, in which case the maximum

payment amount set forth in Subpart H shall be allowed. .

.. [I]t's implying that

regardless

of what the bids are [--] you get three of them, they're all under the amount

that you've defined

as the maximum number ... [-- w]e're going to get the maximum

payment allowed. Am I reading that right?

A. (By Mr. Clay)

Yes.

He admitted he didn't expect charges to be less than what Subpart H deemed

reasonable often.

Tr.

Proceedings Held July

27,

2005,

R04-22A (Aug. 8, 2005)

(Exhibit

F) at 156.

Petitioner Submitted Adequate Docwrnentc.ttion

As shown above, the amounts charged by USI to Petitioner, and sought in reim-

bursement by Petitioner, were exactly what Subpart H provided for the tasks at issue,

adjusted for inflation

as provided under 35 ILL. ADM. CODE

732.870. There can be no

dispute that these amounts are, as a matter of law, reasonable. In the rule-making, the

-17-

Electronic Filing, Received, Clerk's Office, September 12, 2007

Agency stated,

"Under the Board's First Notice Proposal costs are considered

reasonable

as long as they do not exceed the applicable maximum payment amount

lump sums".

Illinois Environmental Protection Agency's Response to Premed

Questions,

R04-22 (Jun. 15,2005) at 34 (Exhibit E). Similarly, Mr. Clay testified that the

"numbers that we proposed, the Board has now proposed

in their first notice, we believe

are fair and reasonable."

Tr. of Proceedings Held July

27,

2005,

R04-22A (Aug. 8,

2005) at 55 (Exhibit F). See also

Illinois Environmental Protection Agency's Post

Hearing Comments,

R04-22A (Sep. 23, 2004) at 7-8 (Exhibit 0) (amounts set forth in

Subpart H "are reasonable for the work being performed" and "generally consistent with

the amounts owners and operators request for reimbursement and the amounts the

Illinois EPA approves"). Moreover, the Board expressly found that, except

as rejected

with respect to professional services,

the Board has found the maximum payment rates to be 'reasonable'and not in 'excess'

of activities necessary to meet the 'minimum'requirements of the Act.

Opinion and Order of the Board,

R04-22 (Dec. 1, 2005) at 62-63 (Exhibit I).

Because the services provided by Teklab are only a part of those covered by the

SUbpart H lump sum, the Agency's demand for documentation of Teklab's charges and

its attempt to limit reimbursement

to those amounts are improper. Moreover, the

historical function of subcontractor invoices was as evidence for a consultant's handling

charge, not at issue here (see

Tr. of Proceedings Held Aug.

2004,

R04-22 (Aug. 20,

2004) at

37 (Exhibit N)), and the Agency told the Board in the rulemaking that "[w]ith the

new streamlining process" many documents "will

no longer be submitted to the Agency",

specifically citing subcontractor invoices.

Id.

at 45. Indeed, it said a reimbursement

application properly could include merely "an invoice with a minimum amount of

-18 -

information to document the costs requested for reimbursement (e.g., the task

performed, the amount charged for the task, and the date the task was conducted)."

Comments

of the Illinois Environmental Protection Agency,

R04-22A (Sep. 23, 2005) at

19 (Exhibit J). Petitioner provided

at least

that information here. See pp. 2-4 above.

It bears noting that in offering those final comments, in an attempt to beat back

industry proposals and

to obtain approval of its proposals, the Agency

repeatedly

stressed that USI supported or did not object to provisions which were in fact adopted

by the Board.

Id.

at 16, 18,20,21,22, 23, 25, 26. It is disconcerting that after having

explained its proposals

in ways designed to win USI's and the Board's approvals, the

Agency now seeks to breach those representations.

The statute makes clear that when, as here,

an owner-operator seeks reimburse-

ment for

an amount equal to or less than that set forth in a previously-approved budget,

the Agency

is supposed to abide by its previous decision that the budgeted costs are

"reasonable" and to "be incurred in the performance of ... corrective action activities

[not] in excess of those required to meet the minimum requirements" of the Act (see pp.

5-8 above). Moreover, in approving the Subpart H rate at issue, the Board found it "to

be 'reasonable' and not

in 'excess' of activities necessary to meet the 'minimum'

requirements of the Act" (p. 18 above). As the Agency repeatedly made clear (pp. 12-

16 above), under its proposals the sum allowed for sample handling and analysis tasks

covers not just the laboratory analysis of the soil, but everything related thereto. Thus,

under the regulation

as adopted the lump sum at issue "must include, but [is] not limited

to, those associated with the transportation, delivery, preparation, and analysis of

- 19-

samples, and the reporting of sample results" (35 ILL. ADM. CODE

732.835). Here

Tekiab merely analyzed the samples and reported the results to US!. Everything else

was done and provided by US!.

It was the Agency which proposed the lump-sum, bundle-of-services approach

which now applies, and it did so on the logic that it would review less paperwork and on

the assurance that applications which were within previously-approved budgets and the

Subpart H limits would be paid (pp. 9-12,

16 above). Its current attempts to walk away

from its representations, and to evade the terms of the law, must be rejected. The

reimbursement sought by Petitioner was proper, and Petitioner submitted appropriate

documentation (pp. 2-4, 18-19 above). Denial of the claim was thus erroneous.

Accordingly, Petitioner's Motion for Summary Judgment should be granted.

September

12, 2007

T-TOWN DRIVE THRU, INC.

By:

/~~-~~--/1j--

{., ..

~.~~

One of its Attorneys

John

Hundley

Mandy

L. Combs

THE SHARP LAW FIRM, P.C.

P.O. Box 906 - 1115 Harrison

Mt. Vernon,

IL 62864

618-242-0246

Counsel for Petitioner T- Town Drive Thru, Inc.

-20 -

I, the undersigned attorney at law, hereby certify that I served the foregoing

document upon all persons entitled to same by causing copies to be deposited

in the

United States Post

Officemailboxat14thandMainStreets.Mt.Vernon.IL. before 6:00

p.m. this date,

in envelopes with proper first- class postage affixed, addressed as

follows:

Dorothy

M. Gunn, Clerk

Illinois Pollution Control Board

James

Thompson Center

100 West Randolph Street

Suite 11-500

Chicago,

IL 60601

James

G. Richardson, Esq.

Illinois Environmental Protection Agency

1021 N. Grand Ave. East

Springfield,

IL 62702

Hon. Carol Webb

Illinois Pollution Control Board

1021 N. Grand Ave. East

P.O. Box 19274

Springfield,

IL 62794

September

12, 2007

John

T. Hundley

Mandy

L. Combs

THE SHARP LAW FIRM, P.C.

P.O. Box 906 - 1115 Harrison

Mt. Vernon, IL 62864

618-242-0246

Counsel for Petitioner T- Town Drive Thru, Inc.

MandyCombs\USI\T-Town/SummJudgMtn2.doc

John\USI\T-Town/SummJudgMtn.doc

Brenda\USI\T-Town/SummJudgMln2.doc

- 21 -

7; () 3/

(Pf

ILLINOIS ENVIRONMENTAL PROTECTION AGENCY

1021 NORTH GRANO AVENUE EAST,

P.O.

Box 19276,

SPRINGFIELD,

ILLINOIS 62794-9276 - ( 217) 782-3397

JAMES

THOMPSON CENTER,

100 WeST

RANDOLPH,

SUITe 11-300,

CHICAGO,

IL 60601 - (3121 814.6026

ROD

R. BlAGOJEVICH,

GOVERNOR

DOUGLAS

P. SCOTT,

DIRECTOR

217/782-6762

CERTIFIED

MAn.

7004 2510 0001 8587 2851

AUG 292006

AUG

3~.

REC'O

T-Town Drive Thro

Attn: John Buening ..... .

802 West Main Street

Teutopolis, Illinois 62467

Re:

LPC #0490450002 -- Effingham County

TeutopolisIT-Town Drive

Thru

101 West Main Street

Leaking liST Incident No. 942051 & 982759

Leaking

liST Technical File

Dear Mr. Buening:

The

Illinois Environmental Protection Agency (Illinois EPA) has reviewed the High Priority Corrective

Action Plan (plan) submitted for the above-referenced incident.

This plan. dated July 10, 2006. was

received by the Illinois

EPA on July

21~

2006. Citations in this letter

are:from

the Environmental

Protection Act (Act) in effect prior to June 24,2002. and

35 Dlinois Administrative

Code

(35 m. Adm.

Cooe)~

Pursuantto Section 57.7(c) ofthe Act and 35

Adm. Cooe 732.40S(c). the plan is modified. The

following modifications

are necessary. in addition to those provisions already outlined in the plan, to

demonstrate compliance with Title

XVI ofthe Act and 35

Adm. Code 732:

The Plan

shaH

be modified as follows:

The amount ofsoil that is purposed for removal and replacement shaH not include overburden and

those

soils not analytically determined to be impacted above the applicable Tier 2 cleanup criteria;

The costs for the services, materials, and activities for the Plan and said modificatioos shall be

reasonable and kept

in accordance with the minimum requirements to comply with the act.

Please note that all activities associated with the remediation ofthis release proposed in the plan must be

executed in accordance with all applicable

regulatory and statutory requirements, including compliance

with

the proper permits.

addition, the total budget for the High Priority Corrective Action Plan is approved for the amounts listed

in Attachment

Please note that the costs must be incurred in accordance with the approved plan. Be

aware that the amount

ofpayment from

the

Fund maybe limited by Sections 57.S{e), 57.8(g)

of the Act, as well as 35 m. Adm. Code 732.604, 732.606(s), and 732.611.

ROCKfORD -

4302 North Main Street, Rockford,

11.61103 -

(615) 987-7760 •

Des

P1.AJNES -

9511 W. Harrison St.,

Des

Plaines, It

ELGIN -

595 South State, Elgin, It 60123 - (847)

608-3131

•

PeORIA -

5415 N. University St., Peoria, Il61614 - (309) 693.5463

BUREAU Of LAND. PEORIA

-7620 N. University St.,

Peoria,

II.. 61614 - (309) 693.5462

CHAMPAlGN -

2125

Sooth

first Street, Champaign, It 61820 - 121i'}278-5800

SPRINGFf€LD - 4500

S. Sixth Street Rd., Springfield, II.. 62706 - (217) 786.6892

•

COLliNSVIllE -

2009 Mall Street. Collinsville, Il62234 - (618) 346.5120

MARION-

2309 W. Main St, Suite 116, Marion, IL62959 - (618) 993-7200

PR1NTI:D ON RECYCLED PAPER

Page 2

Please note that, ifthe owner or operator agrees with the Illinois EPA'smodifications, submittal of an

amended plan and/or budget, ifapplica.ble, is not required (Section 57.7(c) ofthe Act. Additionally,

pursuant to Section 57.8(aX5)

ofthe Act and 35

Adm. Code 732.405(e), ifpa}ment from the Fund

win

be sought for any additional costs that may

incurred as a result of

the

IUinois EPA'smodifications, an

amended budget must besubmitted.

NOTE': Amended plans and/or budgets must

submitted and approved prior to the issuance of

Further Remediation (NFR) Letter. Costs associated

with

a plan or budget that have not been approved

prior

to the issuance ofan NFR Letter will not be paid.

All future <:orrespondence must be submitted to:

Illinois Environmental Protection Agency

Bureau

ofLand q #24

Leaking Underground Storage Tank Section

1021 North Grand Avenue East

Post Office Box 19276

Springfield,

62794-9276

Please submit all correspondence

in duplicate and include the Re: block shown at the beginning ofthis

letter.

An underground storage

tank

system owner or operator may appeal this decision to the Illinois Pollution

Control

Board. Appeal rights are attached.

Ifyou have any questions or need further assistance, please contact Sam Hale,

ill

at 217/782-.6762.

Sincerely,

Clifford

L. Wheeler

Unit Manager

Leaking Underground Storage Tank Section

Division

ofRemediation Management

Bureau ofLand

CLW:SH:m1s\061281.doc

Attachment:

Appeal Rights

United Science Industries

Division File

Attachment A

Re:

LPC #0490450002

Effingham County

TeutopolisIT-Town Drive

Thru

101 West Main Street

Leaking UST Incident No.

942051

982759

Leaking UST Technical File

SECTION 1

The following amounts are approved:

$2,008.80

$15,867.57

$192,282.08

$12,951.56

$30,040.36

$39.042.16

Drilling and Monitoring Well Costs

Analytical

Costs

Remediation and Disposal Costs

UST Removal and Abandonment Costs

Paving, Demolition. and Well Abandonment Costs

Consulting Fees

Handling charges will

be determined at the time a billing package is reviewed by the illinois

EPA. The amount

allowable handling charges will be determined

accordance

with

Section

51.8(f) ofllie Environmental Protection Act

and 3S lllinois Administrative Code 132.607.

The Total Amount approved for the

High Priority CAP is $292,192.53..

SH:mls/061282.doc

Appeal Rights

An underground storage

tank

owner or operator may appeal this final decision to

the

illinois

Pollution Control Board pursuant to Sections 40 and 57.7(c)(4) ofthe Act by

filing

a petition for

a hearing within 35 days after the date of issuance ofthe

final

decision. However, the 3S-day

period may be extended for a period oftime ,not to exceed 90 days by written notice from the

owner or operator and the Illinois EPA within the initial 35-day appeal period.

the owner or

operator wishes to receive a 90-day extension, a written request that includes a statement ofthe

date the final decision

was

received, along

with

a copy ofthis decision, must be sent to the

Illinois EPA as soon as possible.

For information regarding the filing of

appeal, please contact:

Dorothy Gunn, Clerk

minois Pollution Control Board

State ofminois Center

100 West Randolph, Suite 11-500

Chicago,

60601

312/814-3620

For information regarding the filing ofan extension, please contact:

minois Environmental Protection Agency

Division of Legal Counsel

1021 North Grand Avenue East

Post Office Box t9276

Springfield,rL 62794-9276

217n82-5544

SHlrnlsl06128Ldoc

PROPOSED AMENDMENTS TO:

REGULATION OF PETROLEUM

LEA.K1NG UNDERGRdUND STORAGE

TANKS (35 ILL. ADM. CODE 732)

RECEIVED

CLERK'S OFFICE

BEFORE THE ILLINOIS POLLUTION CONTROL BOARD

APR 19 2004

IN THE MATTER OF:

)

STATE OF

ILLINOIS

)

Pollution Control Board

)

R04-22

)

(Rulemaking - Land)

)

IN THE MATTER OF:

)

PROPOSED AMENDMENTS 'TO:

)

REGULATION OF PETROLEUM

)

LEAKING UNDERGROUND STORAGE )

TANKS (35 ILL. ADM. CODE 734)

)

R04-23

(Rulemaking - Land)

ILLINOIS ENVIRONMENTAL PROTECTION AGENCY'S

MOTION

FOR THE ADOPTION OF EMERGENCY RULES

NOW COMES the Illinois Environmental Protection Agency ("Illinois EPA"),

and through its attorney Kyle Rominger, and submits this Motion for the Adoption of

Emergency Rules. The Illinois EPA moves that the Illinois Pollution Control Board

("Board") adopt

as soon as possible the illinois EPA's proposed amendments to 35 ill.

Adm. Code 732 and the proposed 35 Ill. Adm. Code 734 in an emergency rulemaking

pursuant to Section 27(c) of the Environmental Protection Act ("Act") [415 ILCS

5/27(c)], Section 45 of the Administrative Procedures Act ("APA") [5 ILCS 100/5-45],

and Section 102.612

ofthe Board'sprocedural rules [35 Ill. Adm. Code 102.612]. The

Illinois EPA makes this motion so it can review budgets and applications for payment

from the Underground Storage Tank Fund ("UST Fund") prior to the Board'sadoption

final rules in this rulemaking.

The basis for this Motion is the Board'sOpinion and Order in Illinois Ayers Oil

Co., PCB 03-214 (April

1, 2004).

that opinion the Board found that the Illinois EPA's

internal rate sheet

is an improperly promulgated rule that should have been promulgated

pursuant

to the Administrative Procedures Act. rd. at 16, 18. Without the rate sheet, the

Illinois EPA lacks

standard methodology for determining whether the costs submitted

for approval in budgets and applications for payment are reasonable. A standard

methodology for determining the reasonableness

of costs is included in the proposed

rules currently before the Board.

The Board's adoption

of the proposed rules in an emergency rulemaking will

allow the Illinois EPA to review budgets and applications for reimbursement prior to the

Board'sadoption

of final rules. If emergency rules are not adopted, the Illinois EPA will

be limited to reviewing only applications for payment

that are submitted pursuant to

budgets approved prior to the Board's opinion in the Illinois Ayers case. Reviews of

such applications for payment can continue because the reviews consist of comparing the

costs in the applications for payment to the costs approved in the budgets. The Illinois

EPA cannot review other cost submissions, however, (e.g., budgets that have not yet been

approved and applications for payment that are not submitted pursuant to a budget

approved prior to the Illinois Ayers opinion) until a standard methodology for

determining whether the costs are reasonable is adopted in rules.

The Illinois EPA believes the adoption

ofthe proposed rules in an emergency

rulemaking is proper. The Board has the authority to adopt rules in an emergency

rulemaking

if a situation exists which "reasonably constitutes a threat to the public

. interest, safety, or welfare." 5 ILCS 100/5-45; 415 ILCS

5127(c);

35 Ill. Adm. Code

ILLINOIS POLLUTION CONTROL BOARD

May 25, 2004

IN THE MATTER OF:

PROPOSED AMENDMENTS TO:

REGULATION OF PETROLEUM LEAKING

UNDERGROUND STORAGE TANKS

(35 ILL. ADM. CODE 732)

R04-22

(UST Rulemaking)

IN THE MATTER OF:

PROPOSED AMENDMENTS TO:

REGULATION OF PETROLEUM LEAKING

UNDERGROUND STORAGE TANKS

(35 ILL. ADM. CODE 734)

R04-23

(UST Rulemaking)

Consolidated

The Rulemaking Proceeding, before the Illinois

Pollution Control Board, was held May 25, 2004, at the

McLean County Law and Justice Center, Room 700,

Bloomington, Illinois, commencing at 9:00

a.m.

Reported By:

License No.:

Ann Marie Hollo, CSR, RMR

084-003476

APPEARANCES:

Illinois Pollution Control Board

100 West Randolph Street

Suite 11-500

Chicago, Illinois 60601

By: Marie Tipsord, Esq., Hearing Officer

Illinois Pollution Control Board Members:

Chairman J. Philip Novak, Esq.

G. Tanner Girard, Ph.D.

Thomas E. Johnson, Esq.

Andrea Moore, Esq.

Anand Rao, Senior Environmental Scientist

Alisa Liu, P.E.

Posegate & Denes, P.C.

111 North Sixth Street

Springfield, Illinois 62701

By:

Claire A. Manning, Esq.

Appearing on behalf of PIPE and ISPE

Barnes & Thornburg

Suite 4400

One North Wacker Drive

Chicago, Illinois 60606-2809

By:

Carolyn S. Hesse, Esq.

Appearing on behalf of CW3M

Illinois Environmental Protection Agency

1021 North Grand Avenue East

Springfield, Illinois 62794

By:

M. Kyle Rominger, Esq.

Appearing on behalf of IEPA

Illinois Environmental Protection Agency Witnesses

Gary P. King, Douglas W. Clay, P.E.,

Harry A. Chappel, P.E., Brian Bauer,

Hernando A. Albarracin, and Chris Kohrmann

Exhibit Number

Exhibit Number 16

Exhibit Number 17

Exhibit Number 18

Exhibit Number 19

Exhibit Nos. 20 - 22

Exhibit Number 23

EXHIBITS

Marked

Admitted

made to that?

MR. BAUER:

Sure.

Basically, we added a

whole section for the kind of -- we had an oversight.

We only included costs for engineering barriers. So

this time, we also included any costs for replacement

of asphalt and or concrete as part of the corrective

action in this.

We also, under some of the costs, based on

some of the comments from -- I believe it was probably

the rates.

That they made some comments about the

rates for tax purposes and mobilization charge. We'll

cover that a little later.

MR. ROMINGER:

On page 229 through 231 of the

transcript, we said we would look into Section

578 (a) (1) of the Act regarding a requirement and its

relation to the Agency's review of all reports versus

10 percent of the reports submitted.

MR. CLAY:

The issue was, you know, whether

the Agency is looking at all the reports, and I think

10 percent was used. There's actually a 20 percent

number in the regulations at 732.504 (a) (3). And so I

don't believe there's any percentage in the statutes

themselves.

At 578 (a) (1), the statute talks about review

based on generally accepted audit and accounting

practices. And this is when this refers to when

there's been a budget approved ahead of time, and that

is what we do.

The budget has been approved.

And

what the LUST claims unit will do is basically add up

invoices, make sure that the costs are eligible and

are consistent with the plan that had been approved,

the plan and budget had been approved.

In addition, 732.504(a) (3) talks about the 20

percent of site classification reports being

reviewed. That is the goal as stated in 732.504(a).

That section goes on further under 732.504(b)

to state the Agency may conduct a full review of any

plan or report not selected in accordance with the

provisions of this section.

In 732.504(c), notwithstanding any other

limitation of review, the Agency may conduct a full

technical review of any plan of report identified in

this section.

And in 732.504(d), it identifies the Agency's

decision on whether or not to select plans, reports

for full review shall not be subject to appeal.

MR. ROMINGER:

In the same area on pages 228

through 229 and page 231, the Agency was to look at

function versus a full review of the Agency.

When the Agency reviews a claim for payment

of a cost that's already been in an approved budget,

does it do a full review? Would it consider what the

Agency reviews, a full review of those claimed costs

that are already in an approved budget, and does it

take an additional 120 days to do so?

(BY MR. CLAY)

I would say we have up to 120

days, and I would characterize it as an audit. I'd

like Doug Oakley to talk about exactly what they look

like.

MR. OAKLEY:

When we look at budget approved

claims, it is different than early action, in that we

don't look at individual rates. We look to make sure

the costs associated with certain activities are

within the line that -- that's like six budget line

items. And if those costs for those activities fall

at or below those line items, that's as far as we go,

other than looking for mandatory documents.

So if the costs are all included in the

budgeted approved amount, they're approved?

Amounts, plural. It's within the six

it's

not a bottom line. It's within those six lines.

What we would do, for instance, you have

field investigations. Let's say investigation.

That

would be one line, or I believe six of them. And then

you have a total at the bottom. What we do is look at

the individual lines to make sure the activities

associated with those individual lines are equal to or

less than.

So in your opinion, if one doesn't match up

and it's over in terms of the number of hours or it's

over in terms of the number of -- the particular

amount?

Amounts only. We don't look at hours, right.

If it's over the amounts that have been

budgeted, it would be a complete denial then?

No.

Then what would happen?

We would deny down the amount that was

approved for that particular line. And then at that

point, an amendment would be required or something.

And so what happens then?

Do you write a

letter to the applicant?

Yes. What we do is we write a final decision

letter and explain which line that they exceeded, and

that's that.

And you consider you have 120 days to perform

Well, I'm saying if a claim was submitted for

a budget that was approved that included ineligible

costs, I believe we would deny those costs.

Even if you earlier approved the costs as

being eligible in the budget?

We do not approve costs in budgets.

I'm

talking about the claim review process.

MR. CLAY:

Let me give you an example.

If on one of the line items -- and I think

this is one of the line items. Field purchases. And

if there is a flagpole on the invoice for the field

purchases, Doug is going to cut that because that is

obviously not corrective action.

Now, as he said, he didn't do a detailed

review where he looks at, you know, every single item,

but that's going to be something that jumps out at us

as an obvious ineligible item that would be cut.

But so long as all of the items are

contemplated within the budget and the budget has been

specific enough, and those items that are being

claimed for recovery are in fact part of the budget,

you approve that?

(BY MR. OAKLEY)

Right.

But you have 120 days within which the Agency

ILLINOIS POLLUTION CONTROL BOARD

May 26, 2004

IN THE MATTER OF:

PROPOSED AMENDMENTS TO:

REGULATION OF PETROLEUM LEAKING

UNDERGROUND STORAGE TANKS

(35 ILL. ADM. CODE 732)

R04-22

(UST Rulemaking)

IN THE MATTER OF:

PROPOSED AMENDMENTS TO:

REGULATION OF PETROLEUM LEAKING

UNDERGROUND STORAGE TANKS

(35 ILL. ADM. CODE 734)

R04-23

(UST Rulemaking)

Consolidated

The Rulemaking Proceeding, before the Illinois

Pollution Control Board, was held May 26, 2004, at the

Lincoln Library, Carnegie North Room, 326 South

Seventh Street, Springfield, Illinois, commencing at

9:30 a.m.

Reported By:

License No. :

Ann Marie Hollo, CSR, RMR

084-003476

APPEARANCES:

Illinois Pollution Control Board

100 West Randolph Street

Sui te 11-500

Chicago, Illinois 60601

By: Marie Tipsord, Esq., Hearing Officer

Illinois Pollution Control Board Members:

Chairman J. Philip Novak, Esq.

G. Tanner Girard, Ph.D.

Thomas E. Johnson, Esq.

Andrea Moore, Esq.

Anand Rao, Senior Environmental Scientist

Alisa Liu, P.E.

Posegate & Denes, P.C.

III North Sixth Street

Springfield, Illinois 62701

By:

Claire A. Manning, Esq.

Appearing on behalf of PIPE and ISPE

Barnes & Thornburg

Suite 4400

One North Wacker Drive

Chicago, Illinois 60606-2809

By:

Carolyn S. Hesse, Esq.

Appearing on behalf of CW3M

Illinois Environmental Protection Agency

1021 North Grand Avenue East

Springfield, Illinois 62794

By:

M. Kyle Rominger, Esq.

Appearing on behalf of IEPA

Illinois Environmental Protection Agency Witnesses

Gary P. King, Douglas W. Clay, P.E.,

Harry A. Chappel, P.E., Brian Bauer,

Hernando A. Albarracin, and Chris Kohrmann

EXHIBITS

Exhibit Number

Marked

Admitted

Exhibit

Number

Exhibit Number

Exhibit

Number 26

Exhibit Number

Exhibit

Number 28

191

Approved budgets -- when the Agency approved

a budget, and let's assume they used these rate

sheets, or whatever sheet, they're only going to

approve a certain amount for hours or rates or unit

rate, correct? I mean, you have to get an approved

budget?

(BY MR. CLAY)

Yes.

There has to be an

approved budget before payment can be made.

And what is only going to be reimbursed is

only going to be a part of the approved budget? I

think you've provided that testimony before. You have

to have an approved budget and has been reviewed and

compared to something to determine what is being

reasonable? And then it's reimbursed, right?

(BY MR. OAKLEY)

If the type of amounts are

equal to or less than those line items, it will be

paid.

And I believe the testimony has already been

provided previously that the Agency feels that the

proposed rules will be in line with 90 percent, or

whatever within these sites will be in line with what

has already been reimbursed? The rates that you felt

were reasonable, being reimbursed, approved by the

budget and so forth?

JUN 15 2005

R04-22

STATE

ILLINOIS

(Rulemaking - Land)

Pollution.Control Board

BEFORE THE ILLJNOIS POLLUTION CONTROL BOARD R E C lei V IE D

IN THE MATTER OF:)

CLERK'S OFFICE

)

PROPOSED AMENDMENTS TO:

REGULATION OF PETROLEUM.

LEAKING UNDERGROUND STORAGE

TANKS (35 ILL. ADM. 'CODE

732)

.IN THE MATTER OF:.

)

PROPOSED AMENDMENTS

TO:

•. )

REGULATION OF PETROLEUM.

)

LEAKING UNDERGROUND STORAGE )

TANKS (35 ILL. ADM. CODE 734)

)

R04-23

(Rulemaking - Land)

ILLJNOIS ENVIRONMENTAL PROTECTION AGENCY'S

RESPONSE TO PRE-FILED QUESTIONS

'NOW'COMEStheIllinois

EnviroiJin~hta.rPi6tectioJ.i

Agency ("Illinois EPA"), by .

...

'~:

I " ;";. '."

and through

on~

ofits attorneys, Kyle Rominger, and submits the following responses to .

the pre-filed questions

ofUnited Science Industries, Inc. ("USI"), CW3MCompany, Inc..

("CW3M"), and CSD Environmental Services, Inc. ("CSD") for the July 27, 2005,

hearing. The Illinois EPA would like to thank the Hearing Officer for granting an

extension for the fiUngofthese responses.

The

respons~s

are divided into four sections: .the first contains responses to

Daniel King'squestions, the second contains responses to Jay Koch'squestions, the third

contains responses to

CW3M'squestions, and the fourth contains responses to CSD's

questions. The number of each response corresponds to the numbers ofthe pre-filed

. '. .

questions. To minimize the number ofcitations, most responses refer only to the

provisions

ofPart 734. Where appropriate, however, the responses would also apply to

the corresponding provisions of

Part

732 unless the context ofthe response indicates

otherwise.

t\nswers to the Pre-Filed Questions of Daniel King of US!

'I.

The maximum payment amounts for activities required under Section'

734.210(a) are found throughout Subpart H and depend upon the activities being

performed. For example, amounts fortank removal activities are addressed

in Section.

734.810, amounts for free product removal activities and groundwater removal and, ",

disposal activities

are

addressed in Section 734.815, amounts foisoil removal and

disposal activities are addressed in Section 734.825, and amounts for professional

consulting services are addressed

in Section 734.845.' As alternatives to the amounts set

forth intheseSecticins, owners and operators

calldefennine"m~xii.num

payment amourits

',;: .. H

i.·!·;~.~·

~ l!~;:'j.

;:; .!ll: •. : ...

,,"., ',., '...:ll "_II, ;', '-'

,"_."

"",.

.:~ .;-:~

1;~:.~r9f.;i::'~';'[ir':::."·.,

",~;

':;~.

i;. ::\(•.r:.:.:;

l.l!,

~',:'"

via bidding under Section 734.855. Owners and

op~t'itibf~ cihal~6's~ek

alternative

maximum payment amounts for unusual and extraordinary circumstances underSectiort '

734.860.

The maximum payment amounts for activities required under Section

734.21

O(b) are found throughout Subpart H and depend upon the activities being

performed. Examples

of activities that might beperformed to comply with Section,

734.21 O(b) arid the Sections containing the maximum payment amounts for those

activities are set forth

in question 1 above. As alternatives to the maximum payment

amounts, owllers and operators can also bids costs Section 734.855 and seek alternative

maximum payment amounts for unusual and extraordinary circumstances under Section,

734.860.

39.

Section 734.340(c) is not new language proposed

by the Illinois EPA The

Section merely repeats language that already exists in Section 732.407(c).

40.

The illinois EPA included costs'associated with the preparation

ofmaps in

the maximum payment amounts it proposed for the preparation and submission ofplans

and reports (Section 734.845). In many cases; the preparation of a map requires only the

updating

of an existingmap from an ,earlier plan or report.. As with other costs;, ifthe

maximum

paymen,tamounts

set forth in the rules are insufficient for a particular site, they

can be exceeded through the bidding or the unusual or extraordinary circumstances

provisions. ,

41.

Sections 734.835 and 734.Appendix

merely set forth the maximum.

payment amounts

o~ers

and operators may be reimbursed for costs associated with,

sa:rnple handling and analysis. Please notethit

individual maximum payment amount

for shipping is included at the bottom

of Section 734.Appendix D. The Board'sproposed

, rules do not address, and the lllinois EPA did not envision the rules addressing,

how the'

amounts reimbursed to an owner or operator are divided among the parties performing

the work.

42.

The installation

ofmonitoring wells, including their depths, should

comply with Section 734.430 and generally accepted engineering practices.

43.

Some maximum payment amounts are applicable through all phases

of:

work. For example, the maximum payment amounts,for sample handling and analysis

(Section 734.AppendixD) are applicable during the early action phase, the site"

investigation phase, and the corrective action phase.

44.

Sections 734.315, 734.320, and 734.325 contain general requirements

regarding the depths

ofborings. The Board'srules do not mandate the use of a specific

tool

for borings.

45.

The owner

or operator should propose the most cost-effective method of

disposal.

4.6.

The Illinois EPA included all submittals ofplans, budgets, reports, c

. applications for payment, and other documentation in the maximum payment amounts it

proposed

for professional consulting services under Section

734.845~

For example, the"

Illinois

EPA proposed $4,800 as the maximum payment amount for the preparation and.

submission ofa1120-Day and 45-Day Reports, regardless ofhow many 20-Day and 45-

Day reports are submitted. .'

47.

The

maximumpaynient amounts theI1linb1s:EPA:proposed to the Board

were either evaluated against actual reimbursement

sub~ittals

directly or developed

using costs that were evaluated against actual reimbursementsubniittals.

Answers to the Pre-Filed Questions of Jay Koch of USI

.Please refer to the response to Daniel

King~s

question 29.

If an alternative technology corrective action plan is rejected one or more

times,

but is eventually approved, the Illinois EPA envisions that reasonable and justified

profe~sional

service hours that do not exceed the maximumpaymeht amounts set forth in

Section 734.Appendix E would be reimbursed. If an alternative technology corrective

action

plan is rejected one or more times and as a result is never approved and .

implemented, and then a conventional technology corrective action

plan is submitted, .

approved, and implemented, the Illinois

EPA does not envision that costs associated the

preparation and submission ofthe alternative technology corrective action plan would be

eligible for reimbursement. The Illinois EPA envisions that the costs

~ssociated

with the

preparation and subrnissiOli

ofthe conventional technology corre<;:tive action plan would

be subject to the maximum payment amount set forth in Section 734.845(c)(1).

The Illinois EPA envisions that the determination ofwhether an unusual

or extraordinary circumstance exists at a particular.site will be .based upon site-specific

circumst?llces. What may

be an unusual or extraordinary.circumstance at one site may..

not be

an~unusual

or extraordinary circumstance at another site.. During previous

. hearings the Illinois EPA gave'some examples

ofwhat might be considered an unusual or

extraordinary circumstance. However, developing a list of unusual or extraordinary

circumstances that could be applied prior to knowing the specific circumstances

ofa .

particular site would be impossible. Furthermore, the Administrative Procedures Act

prohibits the Illinois EPA from publishing the requested lists of specific examples unless

they are adopted

in rules.

The Illinois EPA would not objectto the addition of one or more

representatives to the LUST Advisory Committee

ifthe Board.determines that the

Committee'scurrent composition does not provide adequate representation ofinterested

parties.

Please see the response to Daniel King'squestion 17..'

The Illinois EPA included all costs associated with sample handling and

analysis, regardless

ofthe number ofparties involved,in the maximum paymeiltamounts.

it propose.d under.Sections 734.835 and 734.Appendix D.Please note that an individual

maximum payment amount for shipping is included at the bottom

ofSection

734.Appendix D. This amount was proposed for costs associated with the shipping of

samples to ,the laboratory. The Illinois EPA included costs associated with transporting

samples from the collection site backto the office for shipping in the maximum paynient:-:

amoUnts it proposed fortravel (Section

734.845(e)).

One ofthe goals the Illinois EPA hopes to achieve through this

rulemakingis a reduction

in the time it spends reviewing plans, budgets, reports, and'-

applications

for payment. "

.8:

The illinois EPA believes that such an audit would be costly and time

,consuming and is unnecessary.'

The Illinois EPA has explained how it developed the "

rates

it proposed to the Board; and the Board determined that'thoserates,as amended in

the Board'sFirst Notice Proposal, will provide reimbursement ofreasonable remediation

costs. Any party

thatbelievesth~proposed

amendments will not provide reimbursemeIlt,:'

ofreasonable remediation costs has the'opportunityto present testimony and comments

to the Board.

'This question is addressed to the Board. '

10.

',Theprovision proposed by the illinois EPA that would make "costs an

owner or operator is required to pay to a governmental,entity or other person in order to

conduct corrective action" ineligible for reimbursement is not included in the Board's

First Notice Proposal. Pursuant to the Board'sFirst Notice Opinion and Order, such

costs should be reviewed

on a site-specific basis. Because a site-specific determination is

necessary, and because the Administrative Procedures Act requires the ,1l1inois EPA to

adopt the requested lists as rules, the Illinois EPA cannot provide the requested lists in '

these responses.

6.'

Groundwater must be remediated in accordance with the Tiered Approach

to Corrective Action Objectives

("TACO") regulations (35 TIl. Adm. Code 742).

GroUIidwater remediation required as

a: part of corrective action is eligible for

reimbursement from the

UST Fund.

The Illinois

EPA did not consider any effect on property values in cases

where groundwater ordinances are

used as institutional controls. Groundwater .;.

ordinances,have always

been available as all.institutional control underTACO and have

been used at hundreds, ifnot thousands, of sites..

..8.

Intel: alia,

use ofthe proposed rules will help reduce costs to the UST

Fund by helping to streamline the LUST Program. The proposed rules will allow a:

greater standardization 0

infonnation submitted to the illinois EPA, which in

turn

will

. allow for shorter document preparation time and shorter document review time, thereby

reducing per-project costs for the

owner'sor operator"s consultant and the Illinois EPA.

Use ofthe proposed rules will also help reduce per-project costs by simplifying the

reimbursementprocess. Setting forth rates

in the rules will allow owners, operators, and .

consultants to know the amounts considered reasonablefQrpurposes

ofreimbursement

::from the USTFund, and the Illinois EPA can easily review and approve costs as long as

they do not exceed the applicable maximum payment amounts. Finally, maximum

payment amounts for the preparation and submission

ofvarious documents will reduce

costs

by encouraging the submission of compiete documents that can be approved in one

submission, without

the need for the preparation, submission, and review of amendments

or additional infonnation.

. 22

1:.

The question, as posed, makes the activities associated with the

development of Tier 2 or Tier 3 remediation objectives sound daunting. However, the

activities consist mainly of entering minimal data into computer softWare that

,. , '

.automatically runs the required calculations. The Illinois EPA does not believe that

payment on a

time and material basis is necessary for this task '

The illinois EPA does not track the requested information.

. Jt.,

The Illinois EPA does not track the requested information.

1.'

The illinois EPA included costs associated with applications for payment

from the

UST Fund throughout the maximum payment amounts it proposed for

professional consulting services underSection 734.845. The Illinois EPA did,not include

a particular num:ber

of applications for payment under any subsection of Section 734.845,

Yes.

The Illinois

EPA used the rate of $80 per hour multiplied by the total

numbers ofhours allocated to a particular task. Time associated with seeking

reimbursement was included in the total number ofhours allocated to each task.

Please see the response to question D(2) above.

Under the Board'sFirst Notice Proposal costs are considered reasonable

as long as they

donot exceed the applicable maximum payment am.ount lump sums or

urntrates.

The Illinois

EPA multiplied eight hours ofpersonnel time by the average -,

rate of $80 per hour. '

An unforeseen circumstance that requires the amendment-ofa-corrective

action plan

mayor may not be an unusual or extraordinary circumstance. An owner or '

operator can seek

reimbu~sement

for the preparation and submission ofthe amended plan;'

under Section 734.860

if he or she can make the demonstration required under that

Section.

,M.

.1.::, ' :

The Illinois EPA does not know how the referenced statistics were ,',

generated and therefore declines to answer this question. '

The Illinois EPA does not know how the referenced statistics were

generated and therefore declines to answer this question.

The IllinQis EPA believes the proposed rules will help improve review

times and review consistency in the LUST Program.

Interalia,

the proposed rules will,;;'

help streamline the LUST Program by allowing for a greater standardization of '

information submitted to the TI1inois EPA. Greater standardization will allow for shorter ,

document preparation time, shorter document review time, and more consistent reviews.

The rules wi11also help simplifY

the reimbursement process by setting forth the rates that

are considered reasonable for reimbursement from the

UST Fund. Owners and operators

and consultants will

know the amounts that will be considered reasonable for the

activities being proposed, and the Illinois EPA can easily review and approve costs as

long as they do

not exceed the applicable maximum payment amounts.

The Illinois EPA will continue to review information submitted to It to

determine whether the information demonstrates, compliance

with the Environmental

Protection

Act and the Board'sregulations.

BEFORE THE ILLINOIS POLLUTION CONTROL BOARD

IN THE MATTER OF:

PROPOSED AMENDMENTS TO:

R04-22

(UST Rulemaking)

REGULATION OF PETROLEUM LEAKING)

UNDERGROUND STORAGE TANKS (35

ILL. ADM. CODE 732)

IN THE MATTER OF:

R04-23

PROPOSED AMENDMENTS TO:

(UST Rulemaking)

REGULATION OF PETROLEUM LEAKING) (Consolidated)

UNDERGROUND STORAGE TANKS (35

ILL. ADM. CODE 734)

Proceedings held on July 27, 2005, at 10:00 a.m., at

Southern Illinois University School of Law, Room 206,

1150 Douglas Drive, Carbondale, Illinois, before Marie

Tipsord, Chief Hearing Officer.

Volume I

Reported by: Angela R. Kelly, CSR

CSR License No:

84004498

KEEFE REPORTING COMPANY

11 North 44th Street

Belleville, IL 62226

A P PEA RAN C E S

ILLINOIS ENVIRONMENTAL PROTECTION AGENCY

By: G. Tanner Girard, Ph. D.

Board Member

Illinois Pollution Control Board

702 N. Schrader Avenue

Havana, IL 62664

By: Thomas E. Johnson

Board Member

Illinois Pollution Control Board

2125 South First Street

Champaign, Illinois 61820

By: Anand Rao

Senior Environmental Scientist

Illinois Pollution Control Board

100 West Randolph Street, Ste. 11-500

Chicago, Illinois 60601

By: M. Kyle Rominger

Assistant Counsel

Illinois Environmental Protection Agency

1021 North Grand Avenue East, PO Box 19276

Springfield, Illinois 62794-9276

By: Gary P. King

Manager, Division of Remediation Management

Bureau of Land

Illinois Environmental Protection Agency

1021 North Grand Avenue East, PO Box 19276

Springfield, Illinois 62794-9276

By: Doug Clay

Bureau of Land

Illinois Environmental Protection Agency

1021 North Grand Avenue East, PO Box 19276

Springfield, Illinois 62794-9276

NUMBER

Exhibit 94

Exhibit 95

E XH I BIT S

~1ARKED

MR. SINK: Yes.

MR. CLAY: Well, professional services, for

example, a drilling event, if you were to say

investigation may be included in the stage one, stage

two, stage three professional services. It was for

excavation, it could be in preparation for that, and the

professional services could be an early action, soil

removal early action, could be under your corrective

action plan of soil removal under corrective action.

Professional services, we feel, is accounted for

throughout depending on what part of the mediation you

have to be in.

MR. SINK: So in this $960 for professional

services, exactly what tasks did that -- those involve,

what was that scope of the work?

MR. CLAY: It's the tasks associated as you

see in your question, preparation for the abandonment

removal. And I think if you look at our original

testimony, you could further get an explanati6n as to

exactly what that is and how we arrived at that $960.

HEARING OFFICER TIPSORD:

Anything else?

Moving right along then.

MS. ROWE: I'm sorry, Carol Rowe, CW3M.

Just to follow up with Barry's question.

I think where

he was trying to get to was when the agency developed

their number and their projections, and in this case,

preparation, there was I think in the earlier hearings

you had a set number of hours at set at a rate. In those

developments, did you guys ever put together a scope of

work report to say those five tasks or those ten tasks

that we can think of at this point we would consider in

that, you know, because a lot of answers to these

questions were is this included, and the answer was

well, it's all included. Well, at some point, what is

extraordinary? How do we define that out here, if the

answer is always what was included.

Do you have a list

of tasks that you utilize to develop those original

numbers of hours at the rate.

MR. CLAY: I think we included in the

original testimony a list of tasks that were not

intended to be all inclusive. The scope of work is what

you need to do to meet regulations. You know that was

stated before in testimony, but we did give some

examples of the types of things that we identified were

going into a corrective action plan, and that list was

developed in consultation with the CECI Consulting

Engineers Counsel, which is now ACEC, but we did not

necessarily do that for all of the numbers. That list of

tasks was not intended to be all inclusive.

MS. DAVIS: Cindy Davis with CSD

Environmental. If the task list is all inclusive, how

do we know what tasks are included in the cost, and what

tasks aren't?

subpart

Not even site investigations, a whole other

part of work. How is an engineers to certify a cost

associated with a bid obtained to perform that water

supply well survey, in an entirely different phase of

work than what the agency has intended the payment

amount to fall under, or that activity to fall under

with regard to payment amount, and wouldn't that

certification provided by an engineer be provided on an

illegal basis because that's not the agency's

intentions? Although maybe it's not illegal, because

it's never stated that that's where the regular costs

was to be allocated.

So my question really is, is how are we to

make any kind of heads or tails of this regulation, and

how is it competitive bidding provisions are supposed to

apply in the absence of the scope of work?

MR. CLAY: The scope of work is what it takes

to meet regulations, I've answered that.

MR. COOK: It is what it takes to meet the

regulations, but requirement under site investigation

where the agency's division of cost are covered under

early action, if that is in fact were required to show

that the cost cover all the cost in the maximum payment

amount, the maximum payment amount for 20 and 45 day

reports is an early action activity, there's no

opportunity to demonstrate that those costs are being

covered under site investigation. It's impossible, yet

we would be expected to know how those allocations were

envisioned, but not communicated; is that correct?

MR. CLAY: I mean, I don't understand the

question.

I mean, you're making a statement and

apparently you understand it, you're making this

characterization, so.

MR. COOK: Let me put this another way. The

$960 for preparation for tank abandonment, is it

reasonable that that cost is covered under the site

investigation phase?

MR. CLAY: No.

MR. COOK: Is it reasonable to say that the

cost to consult with the agency with regard to the

preparation for that abandonment is included in the

cost, in that $960?

MR. CLAY: What consultation is required?

MR. COOK: They have to call and talk to the

agency or talk to the fire marshall about scheduling

tank removal, is value that cost included?

MR. CLAY: Yes, if they need to call OSFM as

part of that, that would be included.

MR. COOK: The cost to coordinate with JULIE;

is that included?

MR. CLAY: If that were required, yes.

MR. COOK: Are either of those two tasks that

you just described listed any where in regulation

relative to $960?

MR. CLAY: I don't believe they're listed

specifically.

MR. COOK: So, how am I to know what is and

what is not included for purposes of using competitive

bidding?

MR. CLAY: It's whatever it takes to meet the

regulations, and as a professional, I would hope you

would know what it takes to meet regulations.

MR. COOK: I would hope I would as well.

However, I'll save that for later, never mind.

HEARING OFFICER TIPSORD:

MR. TRUESDALE.

MR. TRUESDALE: I have a quick yes or no.

With relation to competitive bidding, did you not state

in prior testimony today, Doug, that if you were to ask

the consultants in this room to list what they

considered to be items included in the scope of work for

a particular task, you would expect to get different

lists from each consultant?

MR. CLAY: Yes, I did.

MR. TRUESDALE: Okay.

MR. RUARK:

Following up on that question,

if each consultant would look at this $960 and picture

different things being performed for that, how am I, as

an owner operator, a lay person, going to evaluate that

to tell a consultant they ought to know what is in

testimony, the documentation we did for those numbers is

what we provided in testimony.

MR. SCHWEIGERT: The issue becomes then to me

in my next question is how can we determine fair,

because let's say it's $960, and your range on average

was $500 to $2,000, and we don't know that range and you

set it at $960, how can it be fair then that for the

consultant that comes out, and the work is actually

going to cost $2,000, they lose for the one that comes

out, they do it for $500, they win. If you don't know

your range, and how broad that is, how can this possibly

be fair?

MR. CLAY: The numbers that we proposed, the

board has now proposed in their first notice, we believe

are fair and reasonable.

MR. SCHWEIGERT: That's just a statement. If

you do not have the definitive date to support that,

where we can see that that range of cost is fair, is it

your intent the some people will lose and some people

will win.

Fair to me means the range is high enough,

that the people will come out on average and will make a

reasonable amount of money as a professional in the

field, and will not have to take this on an

extraordinary basis to bidding. You said before you did

not believe professional services should go to bidding,

on average, and I agree with that completely. How

without a range can you say this is fair?

for a corrective action plan for $5,120, we would

anticipate paying that. Now, if you showed an invoice

for $4,000, we're not going to pay $5,120.

MR. COOK: Are we still required to bill,

Doug, on a time and materials basis?

MR. CLAY: No, we would expect to see -- I

would think we would see a one page invoice from you

that says preparation, corrective action plan for

$5,120, we would review that, and I'm assuming that

corrective action plan had been submitted, and we would

pay it.

MR. COOK: And in this instance where

156

averages are maximums, maximums become minimums too,

because if they're not, then how do you ever make up on

the site where the level of effort the five times what's

necessary, or what paid for, how do you ever make that

up?

You have to

ch~rge

that much to have any hope

whatsoever of coming close to breaking even, and that's

inherently problematic.

BOARD MEMBER JOHNSON: Contrary to statute,

too, I guess the agency would have to say that they are

going to consider any billing statements submitted for

$5,120, that's the figure, as inherently reasonable,

because that's what the statute requires, only allows

you to pay reasonable cost.

MR. CLAY: Reasonable costs incurred.

BOARD MEMBER JOHNSON: That's a question from

Electronic Filing, Received, Clerk's Office, September 12, 2007

the very first hearing.

I asked how are you going

handle that if, in fact, that reasonable cost is less

than the maximum allowable, I'm not sure I understand

what you're saying.

MR. CLAY: If it's less than, then you know

we wouldn't anticipate that.

MR. COOK: Duane just brought up a excellent

point, that is that the tank owner's reimbursement, if

they own one site, which the vast majority of tank

157

owners remain within the responsible party basically in

the state of Illinois, have one to two incidents, so if

there site, on the plot data points, their site happens

to fallout here, outside of the realm of the undefined

ordinary, they are in trouble.

MR. DOTY: To really look a little bit

further, you're only going to reimburse maximum costs

incurred. Putting yourself in the shoes of the tank

owner, you either got two or three sites, you either get

fully reimbursed or you don't. You can't get 80 percent

reimbursed on one job, and 20 percent reimbursed on

another.

It won't come out in the wash for the tank

owner.

MR. G. KING: I do have sort of an

observation question. At times, it seems like what is

being proposed here is that much different than what the

agency is proposing, we're just using different terms

Electronic Filing, Received, Clerk's Office, September 12, 2007

and setting different points on the normal distribution.

The agency's proposal is basically saying, you know,

we're going to take the average, which I think is sort

of taking as a median, we got 50 percent of cases

falling below that point of normal distribution, that

will be your expedited unit rate. They call it maximum,

but it's the expedited. If you come in with costs under

158

that point, it's going to fly through the system. If

it's something above that, then we have to go to our

other sections on usual circumstances or, you know, come

in and justify. Some of the values that you are coming

in with, I mean, I understand all the problems with how

the numbers were arrived at and scope of work, but it

seems like a lot of consultant groups would like to move

that point beyond the median and put it out there

somewhere where it might cover at least 80 percent of

the situations. So it seems to me that if we could just

get beyond the semantics, that we're sort of getting to

the same point here, and that is where do you set that

point in which you get expedited review. And there are

problems if you set it too

, everything moves to

that high point, and you haven't saved any money. The

agency proposal set at a median, so that 50 percent of

them apply, and the other one, you know, obviously have

different circumstances, and are going to have to be

reviewed on a site by site basis. Now is that a fair

characterization of where we are at this point in time?

BEFORE THE ILLINOIS POLLUTION CONTROL BOARD

IN THE MATTER OF:

)

PROPOSED AMENDMENTS TO

)

REGULATION OF PETROLEUM

)

LEAKING UNDERGROUND STORAGE )

TANKS (35 ILL. ADM. CODE 732)

)

OLf "'tr'V

(Rulemaking - Land)

STATEMENT OF REASONS, SYNOPSIS OF TESTIMONY, STATEMENT

REGARDING MATERIAL INCORPORATED BY REFERENCE,

AND STATEMENT

OF AMENDMENT TO THE BOARD'SVERSION

OF THE RULES

NOW COMES the Illinois Environmental Protection Agency (nIllinois EPAn) and,

pursuant to

35 Ill. Adm. Code

102.202,

submits its Statement ofReasons, Synopsis of

Testimony, Statement Regarding Material Incorporated by Reference, and Statement of

Amendment to the Illinois Pollution Control Board's("Board's")Version of the Rules for the .

above referenced proceeding.

STATEMENT OF REASONS

Facts in Support, Purpose and Effect

Background

this proposal the Illinois EPA submits proposedamendments to 35 Ill. Adm. Code 732

("Part 732"), the rules governing the Leaking Underground Storage Tank ("LUST") Program.

Part 732 prescribes the corrective action measures that must

be taken in response to releases

from petroleum underground storage tanks (''USTs'').

also sets forth procedures and

requirements for seeking payment from the Underground Storage Tank Fund ("UST Fund").

The amendments

ar~

proposed in response to Public Act 92-0554, which amended the LUST

Program'sresponse requirements for UST releases reported on or after June 24,

2002,

and Public

Subpart F: Payment or Reimbursement

Section

732.~01

- Applications for Payment. Because, Under the proposed new Subpart

H, payment from the UST Fund will generally

no longer be submitted and paid on a "time and

materials" basis, references to "materials, activities, or services" are deleted from Section

732.601(a).

conjunction with the proposed amendments to Sections

732~200

and 732.204,

Section 732.601 (a) is also amended to reflect that a budget plan is not required for early action

activities, other than free product removal activities conducted more than 45 days after

confirmation

ofthe presence of free product.

New Sections 732.601(b)(9) through (11) are proposed to require the submission

c'ertain information as part of the application for payment. The information under Section

732.601 (b)(9) is necessary to provide adequate documentation

ofthe costs incurred by and

owners and operators, and has always been required by the Illinois EPA prior to providing

payment from the UST Fund. The information under Section 732.601(b)(10) is necessatyto

confirm that subcontractors have been paid in cases where handling charges are requested.

Finany, the information under Section 732.601(b)(11) is necessary to confirm that sample

analyses for which costs are requested were conducted

by. an accredited laboratory in cases

where Section 732.106 requires analysis

by an accredited laboratory.

conjunction with the amendments to Section 732.305(d) and 732.405(d), Section

732.601(f) is amended to require the submission of a budget plan prior to the Illinois EPA's

review

of a corresponding application for payment, except for early action costs other thful costs

associated with free product removal activities conducted more than 45 days after

the"

confirmation ofthe presence of fre(;} product. Due to numerous additional citations that need to

Section 732.703(c) is amended to allow sites located in a right-of-way of any highway

authority to perfect a No Further Remediation Letter via a Memorandum

of Agreement between

the highway authority and the Agency. Currently, such perfection

of a No Further Remediation

Letter is available only to sites located in Illinois Department

of Transportation right-of-ways.

Corresponding amendments are made to Sections

of Section 732.703(c).

Section 732.704 - Voidance ofa No Further Remediation Letter. Section 732.704(a)(2)

is amended to delete unnecessary language. Owners and operators must complete any

groundwater monitoring program prior to the issuance

of a No Further Remediation Letter.

For consistency with the language of other provisions, Section 732.704(a)(5) is amended

to refer to the 45-day period for recording the No Further Remediation Letter rather than a 45-

day period for perfection

of the letter. The amendment makes no substantive change to the

Section because the date

ofperfection is the date of recording.

Section 732.704(a)(7) is amended in conjunction with the proposed amendments

Section 732.703(c). Sections 732.704(b) and (b)(l) are amended for consistency with Section

732.704(b)(2).

Subpart H: Maximum Payment Amounts

The Agency proposes new Subpart H as a part

of the amendments designed to streamline

payment from the UST Fund. Subpart H contains proposed maximum amounts that can be paid

from the UST Fund for various release response activities. The maximum'amounts for some

activities are set forth as lump sums

or unit rates, while the maximum amounts for others will

continue to require review on a time and materials basis due to the inability to adequately,

detennine standard lump sums or unit rates for aU sites. A more detailed description ofthe

Subpart fonows.

Section 732.800 - Applicability. Section 732.800(a) explains that Subpart H divides all

response activities into tasks and sets forth the maximum amounts that can be paid from the UST

Fund

for each task. Because of the difficulty of enumerating every cost that may be associated

with a site, Section 732.800(b) explains that the costs identified in Subpart H are only the major

costs associated with a particular task. The maximum payment amount is intended to include all

costs associated with completing the identified task. Section 732.800(c) explains that Subpart H

sets forth only the maximum payment amounts for eligible costs. Whether a particular costs is

eligible for payment is still determined under Subpart

Section 732.810 - UST Removal or Abandonment Costs. Section 732.810 sets forth the

maximum payment amounts for costs associated with the removal

or abandonment ofUSTs.

The maximum payment amount is based upon the volume

of each UST removed or abandoned in

place.

Section 732.815 - Free Product or Groundwater Removal and Disposal. Section 732.810

sets forth the maximum payment amounts for costs associated with the removal and disposal

free product or groundwater. Payment ofcosts associated with the removal of free product or

groundwater via handbailing

or a vacuum truck is based upon the number of gallons removed.

Payment for costs associated with other methods

ofremoval is determined on a time and

materials basis.

Section 732.820 - Drilling, Well Installation, and Well Abandonment. Section 732.820

sets forth the maximum payment amounts for costs associated with drilling, well installation,

and

well abandonment, excluding drilling conducted as part of free product removal or an alternative

technology. Payment for costs associated with drilling are based upon the drilling method used

and the number

of feet drilled. Payment for costs associated with the installation and

associated with sample handling and analysis. The maximum payment amounts are based upon

the analysis conducted. Maximum payment amounts are also provided for sampling devices and

sample shipping.

Section 732.APPENDIX E - Personnel Title and Rates. Section 732.APPENDIX E sets

forth the titles and maximum hourly rates for personnel when personnel costs are paid on a time

and materials basis. The Section also sets forth the educational, licensing, and experience

requirements applicable to each title and rate.

Technical Feasibility and Economic Reasonableness

Technical Feasibility

No new technical requirements are created by the proposed amendments. The only

amendments affecting technical requirements are those updating existing methods and

procedures. Therefore, the Illinois EPA believes that no issues

of technical feasibility are raised

in this proposal.

Economic Reasonableness

This proposal may result in both increased and decreased incidental costs to the Illinois

EPA and the Board.

As a result ofthe proposed amendments, the Illinois EPA anticipates

incurring costs related to fonns revisions, internal training, public outreach, and an expected

increase in application for payment submittals during the year following the adoption

of the

proposed amendments due to the deadline added at Section 732.601(j). The Illinois EPA

anticipates a costs savings as a result

ofthe streamlining ofplan, budget plan, and report reviews

provided

by the proposed changes to Subpart E and addition of Subpart H.

As a result

ofthe proposed deadline for the submission of applications for payment, the

Board

may see an increase in the number of appeals relating to applications for payment from the

BEFORE THE ILLINOIS POLLUTION CONTROL BOARD

IN THE MATTER OF:

)

PROPOSED AMENDMENTS TO

)

REGULATION OF PETROLEUM

)

LEAKING UNDERGROUND STORAGE )

TANKS (35 ILL. ADM. CODE 732)

)

R04-22

(Rulemaking - Land)

ILLINOIS ENVIRONMENTAL PROTECTION AGENCY'S FIRST ERRATA SHEET

TO ITS PROPOSAL FOR THE AMENDMENT OF 35 ILL. ADM. CODE 732

NOW COMES the Illinois Environmental Protection Agency ("Illinois EPA"),

and through its attorneys Kyle Rominger and Gina Roccaforte, and submits this First

Errata Sheet to its proposal for the amendment

of 35 Ill. Adm. Code 732. The Illinois

EPA proposes the following amendments to the text

ofthe rules submitted in its proposal

to the Board dated January

1, 2004:

1. Amend Section 732.110(e) to the following to replace "Section

732.

703(d)

with

"Section 732.703(c) or

(d)

in the first sentence. A form addressing site ownership is not

necessary

for sites subject to Section 732.703(c).

Except in the case of sites subject to Section 732.703(c) or (d) ofthis Part,

reports documenting the completion

of corrective action at a site must

contain a form addressing site ownership.

At a minimum, the form shall

identify the land use limitations proposed for the site,

ifland use

limitations are proposed; the site'scommon address, legal description, and

real estate tax/parcel index number; and the names and addresses

of all

title holders

ofrecord ofthe site or any portion of the site. The form shall

also contain the following certification,

by original signature, of all title

holders ofrecord ofthe site or any portion ofthe site, or the agent(s) of

such person(s):

I hereby affirm that I have reviewed the attached report entitled

and dated

, and that I accept the terms and

conditions set forth therein, including any land use limitations, that

apply

to property I own. I further affirm that I have no objection to

the recording

of a No Further Remediation Letter containing the

terms and conditions identified in the report upon the property I

own.

BEFORE THE ILLINOIS POLLUTION CONTROL BOARD

IN THE MATTER OF:

REGULATION

OF PETROLEUM

TANKS (PROPOSED

NEW 35 ILL.

ADM.

CODE 734)

)

LEAKING UNDERGROUND STORAGE )

)

R04-23

(Ru1einaking - Land)

TESTIMONY OF DOUGLAS W. CLAY IN SUPPORT OF

THE ENVIRONMENTAL PROTECTION AGENCY'SPROPOSAL

TO ADOPT

35 ILL. ADM. CODE 734

My name is Doug Clay. I am the manager ofthe Leaking Underground Storage

Tank ("LUST") Section within the Bureau

ofLand ofthe Illinois Environmental

.. Protection Agency.. I have been in my current position since September of 1994..The

LUST Section is primarily responsible for reviewing the technical adequacy

ofplans,

reports and assoCiated budgets for the remediation

ofreleases from underground storage

. tanks regulated under Title XVI

ofthe Environmental Protection Act ("Act") and 35 Ill.

Adm. Code, Parts

731 and 732.

Prior to assuming

my current position, I was the manager ofthe Disposal

Alternative Unit within the Permit Section

ofthe Bureau of Land. I have also worked in

the Permit Section in the Bureau ofWater. I have been employed atthe Illinois EPA

since 1983 following the receipt of aB.S. degree in Civil Engineering from the

University

of Illinois. I have been a Registered Professional Engineer in Illinois since

1989. A copy ofmy resume is attached (Attachment 1).

Today I will be testifying in support ofthe proposed 35 TIL Adm. Code, Part 734.

These amendments

are the result of: (1) modification to the Illinois EnvirOnmental.

Protection Act

by Public Acts 92-0554 and 92-0735; (2) the need to reform the current

budget and reimbursement process; and (3) to clarify issues that have arisen since Part

732 was last amended.

My testimony will provide a brief overview and focus on a

portion of Subpart E, Subpart F, Subpart G and Appendices A and

Overview

The proposed Part 734 regulations are identical in substance to the

proposed amendments t9 35 Ill. Adm. Code 732, except as identified in testimony

provided

by Agency personnel. They apply to underground storage tank releases of

petroleum reported to the Illinois Emergency Management Agency on or after June 24,

2002, and to releases that were reported prior to June 24, 2002, for which the owner

operator has elected to proceed in accordance with Part 734. These regulations are

intended to streamline the leaking underground storage tank remediation process, clarify

remediation requirements and most notably refonn the budget and reimbursement

process. The new budget and reimbursement process would eliminate the majority

budgets and reimbursement packages submitted based on a time and J11aterial basis and

replace them with submittals based on unit rates and lump sums for specific tasks

established in the

regulations~

We believe that this will streamline the approval of

budgets and the processing ofreimbursement claims. Currently, there is a tremendous

amount

oftime spent reviewing budgets and reimbursement packages. Furthennore, the

majority

ofplan and report denials, amendments to plans and reports submitted by

consultants, and appeals before the Illinois Pollution Control Board are related to budget

and reimbursement issues, as opposed to technical issues. The Agency believes that the

proposed amendments will allow more efficient use

of Board and Agency resources,

improve consistency, lower remediation costs, expedite cleanups and allow tank owners

and operators to be reimbursed in a more timely manner, The proposed costs in Subpart

ILLINOIS POLLUTION CONTROL BOARD

December

1, 2005

IN THE MATTER OF:

)

PROPOSED AMENDMENTS TO:

)

REGULA

nON OF PETROLEUM LEAKING)

UNDERGROUND STORAGE TANKS (35

)

ILL. ADM. CODE 732)

)

IN THE MATTER OF:

)

PROPOSED AMENDMENTS TO:

)

REGULATION OF PETROLEUM

LEAKING)

UNDERGROUND STORAGE TANKS (35

)

ILL. ADM. CODE 734)

)

Proposed Rule. Second Notice.

R04-22(A)

(UST Rulemaking)

R04-23 (A)

(UST Rulemaking)

Conso1idated

OPINION AND ORDER OF THE BOARD (by G.T. Girard):

On January 13,2004, the Illinois Environmental Protection Agency (Agency) filed two

proposals for rulemaking. On January 22, 2004, the Board accepted and consolidated the

proposals for hearing. The Board held numerous hearings and received substantial comment

before proceeding to first notice on February 17,2005, pursuant

to the Illinois Administrative

Procedure Act

(TAPA) (5 ILCS

100/5-5 et. seq.

(2004). After an additional hearing and

numerous comments, the Board today adopts a second-notice proposal and opens a subdocket B

in this rulemaking, to address ongoing issues involving scope

of work and reimbursement for

professional consulting services.

The Board'sauthority

in rulemaking proceedings stems from Section 5(b) of the

Environmental Protection Act (Act) (415 ILCS

5/5

(2004)), which provides that the Board "shall

determine, define and implement the environmental control standards applicable in the State

lllinois and may adopt rules and regulations in accordance with Title VII of the Act." 415 ILCS

5/5(b)

(2004). Title VII of the Act sets forth the statutory parameters for rulemaking by the

Board. 415 ILCS

5/26-29

(2004). The Board may adopt a rule after hearing and determination

of the economic reasonableness and technical feasibility of the rule.

See

415 ILCS

5/27 (2004).

The Board'sdecision is based on the record before the Board including all testimony and

comments filed with the Board. 35 Ill. Adm. Code 102.418.

SUMMARY OF TODAY'S ACTION

The Board today adopts the proposal for second notice pursuant to the TAPA (5 ILCS

100/5-5 et. seq.

(2004). Due to the comments received after the first notice began and in

consideration

of the prior comments in this rulemaking, the second notice differs from the first

to change the phrase "maximum payment amount" in the first-notice opinion and the Agency

agrees with the Board's decision.

Id.

Section 734.630(ccc).

The Agency does not believe that the deletion of this subsection as

suggested by CW

M is necessary. PC 62 at 14. The Agency states that the proposed rule does

not require the reclassification

of groundwater by an adjusted standard so CW

M's reliance on

35 Ill. Adm. Code 620.260 has not been adequately explained, according to the Agency.

Id.

response to CW

M's claim that this subsection has a negative effect on property values, the

Agency asserts that the effect

of remediation on property values is not a factor in UST Fund

reimbursement.

Id.

The Agency asserts that reimbursement for the UST Fund is limited to costs

necessary to meet the requirements

of the Act and use of a groundwater ordinance as an

institutional control meets the minimum requirements.

Id.

Section 734.665. The Agency is opposed to changes in auditing language proposed by

M. PC 62 at 15. The Agency argues that although the owner/operator is the individual

charged with providing the plans, reports, budgets, and applications to the Agency, those

documents are often submitted directly by the consultant.

Id.

The Agency maintains that in

many cases the owner/operator's only involvement is signing the documents and as a result the

owner/operator

is unlikely to have additional information about the documents.

Id.

The Agency

asserts that limiting the Agency's review to information maintained by the owner/operator would

limit the review to the document the Agency already has, in most instances.

Id.

The Agency

asserts that the Agency needs to review information maintained

by the owner/operator's

consultant in order to conduct a complete and proper review

of the information for the

owner/operator.

Id.

The Agency further states that providing a list of documents required during an

inspection is impossible because the Agency cannot know what information

is in the possession

of the consultant or owner/operator until the Agency conducts the review. PC 62 at 15. The

Agency does not believe that the suggested changes are necessary or that CW

M has provided

sufficient justification

to warrant a change. PC 62 at 15-16.

Section 734.800. The Agency argues that the changes suggested by CW

M and CSD

would entirely alter the intent and effect

of Subpart H. PC 62 at 17. The Agency states that the

rates

in Subpart H are

maximum

payment amounts, not "speed bumps" for reimbursement.

Id.

The Agency asserts that allowing reimbursement above the maximum payment amounts outside

of the bidding and unusual or extraordinary circumstances provisions would render those

provisions superfluous. The Agency also believes that the changes suggested by CW

M would

result

in frequent attempts to exceed the "threshold" amounts in the rules rather than routine

requests at or below those rates.

Id.

As to the suggested change to allow for tasks not specifically listed under a maximum

payment amount to be reimbursed separately, the Agency believes that such a change will

eventually result in Subpart H becoming a reimbursement on time and materials basis for every

item not specifically identified in the rules. PC 62 at

18. The Agency states that developing an

all-inclusive list

of costs associated with each task identified in Subpart H would be impossible.

Id.

alternative proposal would result in a process that violates the Act and the lAP

Therefore, the

Board will not adopt the concept.

Sufficiency of Rates

The Board notes that USI stated that in general the rates proposed in Subpart Hare

acceptable with the use of both the bidding process and the unusual and extraordinary

circumstance provisions. In making this determination, USI employed three tests. The first test

was whether the "unit of measure" assigned to the work activity was appropriate to the work

being performed. Exh. 109 at 37-38. The second test was whether the regulations provided

sufficient detail to allow a scope of work to be authored for a bid specification to allow for

competitive bidding. Exh. 109 at 38-39. The third test was whether USI believes the price

accurately reflects prevailing market prices and the whether the price includes conditions likely

be encountered at most sites in Illinois. Exh. 109 at 39. However, USI does challenge the

maximum rates for professional consulting services.

M's alternative proposal would use the Agency's proposed rates as interim rates

until a process

is in place to develop a database to be used in developing rates. PC 63 at 4.

M specifically states that CW

M does not endorse the rates as proposed.

Id.

In proceeding to first notice with the proposal the Board stated:

The Board will not discuss each and every proposed lump sum maximum

payment amount; however, the Board has carefully reviewed all the rates

proposed by the Agency. Other than the rates discussed in more detail in this

opinion, the Board finds the rates are reasonable and supported by the record.

R04-22,

23 (Feb. 17,2005) at 79.

Given the acceptance

by USI, and even CW

M, of many of the maximum payment amounts

listed in Subpart H, the Board finds that the maximum payment amounts, except

as discussed

below, are reasonable and supported by the record. The Board, as discussed above, further finds

that absent a defined scope

of work, the record does not support the rates for professional

services

in Section 732.845/734.845. The Board will amend the rule to allow for professional

services

to be reimbursed based on time and materials basis.

Statutory Authority

As discussed above and in the Board's first-notice opinion, Section 57.7(b)(2) of the Act

allows reimbursement for corrective action that mitigates "any threat to human health, human

safety, or the environment resulting from the underground storage tank release." 415 ILCS

5/57.7(b)(2) (2004). Section 57.7(c)

of the Act (415 ILCS 5/57.7(c) (2004)) requires the Agency

to determine that costs associated with any plan "are reasonable, will be incurred in the

performance

of site investigation or corrective action, and will not be used for site investigation

of corrective action activities in excess of those required to meet the minimum requirements of

this Title." 415 ILCS 5/57.7(c) (2004). The Board has examined a substantial and detailed

record

in this proceeding and based on that examination, the Board has found the maximum

payment rates to be "reasonable" and not in "excess" of activities necessary to meet the

"minimum" requirements

of the Act. For this reason, employing maximum payment rates is

consistent with the Act and therefore appropriate for the Board to adopt.

4. An Agency Database

An ongoing issue in this proceeding has been the quality of the data available to develop

rates. Patiicipants asked prior to first notice and again after first notice that the Board require the

Agency to develop a database sufficient to support rates. More specifically, both USI and

M, in their alternative proposals, suggest that additional data be developed concerning the

maximum payment amounts in Subpart

H. USI offered testimony concerning the use of

Automated Budget and Reimbursement Approach (ABRA) to collect data concerning both rates

and scope

of work. Exh. 109 at 72. The Agency is concerned that the database software

presented by USI

is complicated, confusing to understand, and cumbersome to use. PC 62 at 29.

The Agency also does not believe that the large majority

of consulting firms would embrace the

use

of the database software.

Id.

Finally, the Agency feels implementation and maintenance of

such a database would require significant resources the Agency does not have.

Id.

The Board addressed the issue of requiring the Agency to develop and maintain a

database concerning reimbursement rates and scopes

of work at in the first-notice opinion. The

Board stated:

The Board acknowledges that many participants have made meaningful

comments about the value of an electronic database to track reimbursement rates.

However, the Board will not require the Agency to develop an electronic database

of reimbursement information. The Board is not convinced that an electronic

database

is necessary to administer either these specific rules or the UST program.

R04-22,

23 (Feb. 17,2005) at 68.

The Board appreciates the effOlis of USI to seek out the development of a system that will allow

for collection

of data concerning reimbursement rates as well as the scope of work for tasks.

However, the participants are in effect asking the Board to direct the Agency to maintain or

developed a process to be used internally by the Agency. The Board

is unwilling to direct the

Agency to

do so, especially given the financial consequences to the Agency for the development

and maintenance

of such a process. And as stated at first notice, the Board is not convinced that

an electronic database

is necessary to administer either these specific rules or the UST program.

Therefore, the Board will not direct the Agency to either use the ARBA system or develop a

system for collection

of data concerning reimbursement rates.

5. Agency Review Process

The issue of how the Agency performs reviews of materials submitted in the UST

program and the length

of time such reviews take has been discussed from the beginning of this

rulemaking process. Most recently, CSD expresses concern that due process

is not afforded to

owners/operators who cannot afford to appeal an adverse Agency decision to the Board. PC 64

at 4. CSD demands that the Board provide an alternative to appeals to the Board

in the rule or

R04-22

(Rulemaking - Land)

RECEIVED

CLERK'S OFFICE

BEFORE THE ILLINOIS POLLUTION CONTROL BOARD

SEP 23 2005

IN THE MATTER OF:

)

STATE OF

ILLINOIS

)

Pollution Control Board

)

PROPOSED AMENDMENTS TO:

REGULATION OF PETROLEUM

LEAKING UNDERGROUND STORAGE

TANKS

(35 ILL. ADM. CODE 732)

THE MATTER OF:

)

PROPOSED AMENDMENTS TO:

)

REGULATION OF PETROLEUM

)

LEAKING UNDERGROU1\TD STORAGE )

TANKS (35 ILL. ADM.

CODE 734)

)

R04-23

(Rulemaking - Land)

COMMENTS OF THE ILLINOIS ENVIRONMENTAL PROTECTION AGENCY

NOW COMES the Illinois Environmental Protection Agency ("Ininois EPA"), by

and through one ofits attorneys, Kyle Rominger, and submits the following comments.

These comments are divided into three sections. The first section contains comments on

testimony submitted to the Board in response to its Proposed Rule First Notice Opinion

and Order dated February 17, 2005,

("First Notice Proposal"). The second section

contains comments

on public comments submitted to the Board in response to its First

Notice Proposal. The third section contains a few suggested non-substantive changes to

the rules'proposedby1he-Board

correctmilmrettors-fmalYromotecI:lrfslStency among

the rules' provisions.

While many suggestions and issues deserving comment have been raised, time

does not permit the Illinois

EPA to provide detailed comments on all ofthem in this

document. Moreover, the usefulness

ofthis document would be diminished by its length

ifthe TIlinois EPA addressed each issue and suggestion raised in the testimony and public

appropriate or necessary,

that CW3M has provided sufficient justification to warrant a

change

to the Board'sFirst Notice Proposal.

Section 734.800

CW3M suggests changing Sections 734.800(a) and (c) to create a

presumption of reasonableness for the costs set forth in Subpart H. It also

suggests amending language in other sections to change maximum payments

amounts into amounts that are "considered reasonable."

See,~,

the suggested

changes to the first sentences of Sections 734.810 and 734.815. CW3M does not

provide any additional testimony to support these changes.

CSD suggests changing the maximum payment amounts in Subpart H to

"threshold values

at or below which proposed budgets and requests for

reimbursement can be approved without significant review, but require the

owner/operator to submit actual costs for Agency review and approval." Exh. 99

3. Reimbursement could exceed the threshold value under a "longer and more

detailed review. " Id.

USI does not appear to believe that a fundamental shift in Subpart H to

"considered reasonable" or "threshold" amounts is necessary, at least in Sections

734.810 through 734.840. USI states in its testimony that "USI'sexperience in

LUST work in Illinois indicates that the billing methods, units of measure and

prices [set forth in Section 734.810 through 734.840 of the Board'sFirst Notice

Proposal] are not highly inconsistent with those prevailing in the market today.

And,

to the extent that the maximum payment amounts are inconsistent with

prevailing market rates or insufficient to cover unique situations, the scope of

work for these activities is defined in sufficient detail to accommodate the use of

the competitive bidding provision and extraordinary circumstances provision

provided in 734.855 and 734.860 as a means

of establishing alternative maximum

payment amounts." Exh. 109 at 33-34.

The changes suggested by CW3M and CSD would entirely alter the intent

and effect of Subpart

As stated in the Board'sproposal, Subpart H "provides

methods for determining the maximum amounts that can be paid from the Fund

for eligible corrective action costs."

Ill.

Adm. Code 734.800(a) (proposed)

(emphasis added). The maximum payment amounts in Subpart H were developed

and intended to be used as maximums, not speed bumps. Still, they are not

absolutes. The maximum payment amounts can

be exceeded via the bidding and

the unusual or extraordinary circumstances provisions in the Board'sFirst Notice

Proposal.

Allowing costs to be reimbursed over and above the maximum payment

amounts, outside of the bidding and the unusual or extraordinary circumstances

provisions, renders the bidding and the unusual or extraordinary circumstances

provisions superfluous. Furthermore, based on past experience, the Illinois EPA

believes

th~

changes suggested by CW3M would result in B:equent i[not common

attempts to exceed "considered reasonable" or "threshold" amounts set forth in

the rules rather than routine requests for reimbursement at

or below the

"considered reasonable" or "threshold" amounts because of a desire for more

expeditious reviews and approvals. The Illinois EPA does not believe the

suggested changes are necessary or appropriate, or that CW3M or CSD has

provided sufficient justification to warrant a change to the Board'sFirst Notice

Proposal.

CW3M suggests changing Section 734.800(0) to allow costs not

specifically listed under a particular task to be reimbursed separately from the

maximum payment amount for the task. CW3M does not provide any additional

testimony to support this change.

The suggested change would alter the entire structure

of Subpart H, which

includes all costs associated with a particular task in

the maximum payment

amount allowed for the task. Allowing individual costs associated with a task to

be reimbursed over and above the maximum payment amount for the task will

result in the eventual devolution

of Subpart H into reimbursement on a time and

materials basis for every item and task not specifically identified in the rules. As.

the Illinois EPA testified, the development

of an all-inclusive list of costs

associated with each task identified in Subpart H would

be impossible. The

Illinois

EPA's testimony is echoed in USI's comments, where USI states that "[i]t

is reasonable to believe that

it would be impossible to capture, in a rule of this

nature, a list

of all products or services that may be needed during a UST

remediation project."

PC 59 at 44. The Illinois EPA does not believe that the

_._

-_. _

__._._-----------

suggested change is appropriate or that CW3M has provided sufficient

justification to warrant a change to the

Board'sFirst Notice Proposal.

CW3M suggests changing Section 734.800(c) to eliminate the

submission

of cost breakdowns and invoices for costs paid by "lump sum or unit

of production" and to allow reimbursement in excess of the maximum payment

amounts of Subpart H ifthe reimbursement applicant provides "separate and

adequate justification of [cost] reasonableness on a time and materials basis."

Exh. 106 at Section 734.800(c). CW3M does not provide any additional

testimony to support these changes.

Regarding the first change, a description ofthe type of supporting

documentation the minois EPA believes is necessary in a

reimbur~ement

application is already in the record of these proceedings. One item that certainly

is necessary is an invoice with a minimum amount information to document the

costs requested for reimbursement (e.g., the task performed, the amount charged

for the task, and the date the task was conducted). Regarding the second change,

the Board'sproposal already allows an owner or operator to exceed the maximum

payment amounts via bidding and the unusual

or extraordinary circumstances

provisions. The Illinois EPA does not believe the suggested changes are

necessary or appropriate, or that CW3M has provided sufficient justification to.

warrant a change to the Board'sFirst Notice Proposal.

CW3M suggests adding a Section 734.800(d) to provide

reimbursement

of emergency activities on a time and materials basis. CW3M

does not provide any additional testimony to support this change. There is

nothing to show that emergency activities need to

be reimbursed differently than

non-emergency activities. Under the Board'sproposal emergency activities will

be reimbursed to the same extent and in the same manner as non-emergency

activities. The Illinois EPA does not believe the suggested change is necessary or

--------------.

appropriate, or that CW3M has provided sufficient justification to warrant a

change to the Board'sFirst Notice Proposal.

10.

Section 734.810

CW3M suggests changing Section 734.810

to exclude several costs from the

maximum payment amounts allowed for UST removal and abandonment and to

reimburse the costs on a time and materials basis. CW3M also suggests changing the

maximum payment amounts for UST removal and abandonment. CW3M does not

provide any reasoning for excluding the identified costs from the maximum payment

amounts, nor does

explain how its suggested maximum payment amounts were

calculated.

CSD also suggests changing the maximmn payment amounts in Section 734.810

and suggests reimbursing costs associated with filling USTs abandoned in place on a time

and materials basis. The payment amounts suggested

by CSD are based upon

RS Means

calculations and are different that the amounts suggested by CW3M.

USI states in its testimony that it "agrees with the Board when they state that the

rates.should be based upon actual experience in the UST program in Illinois. RS Means

and other sources that do not specifically track costs associated with the Illinois UST

program are not likely

to reflect the requirements and costs unique to the Illinois

--~

------------------

-----------~---~--------,---.

Underground Storage Tank Program and the peculiarities ofthe Agency's administration

of the program." Exh. 109 at 32 (citations omitted). USI further states that it believes the

maximum payment amounts set forth in Section 734.810 of the Board'sFirst Notice

Proposal "are appropriate," and that it has "no objection to their implementation." rd. at

------------------------

40 (no objection to the maximum payment amounts in Sections 734.810 through 734.840,

excluding drilling mobilization costs).

PIPE previously proposed alternative rates for

UST removal and abandonment

that were based on the 2004

RS Means Environmental Costs Handling Options and

Solutions

publication. See First Notice Proposal at 81.

its First Notice Proposal the

Board stated that it "is not convinced that basing rates on

RS Means

in and of itself is

appropriate. Although as indicated above, the Agency'smethod for developing the

maximum payment amounts had statistical limitations, the Agency'srates were based on

real data from actual sites in Illinois. Therefore, the Board rejects alternative rates, such

RS Means,

and the Board will propose the rates as developed by the Agency for first

notice." rd.

CW3M and CSD have suggested alternative payment amounts for Section

734.810, but they have not provided sufficient additional testimony to show why the

Board must adopt their suggested rates over the maximum payment amounts proposed

the Board, or that the bidding and the unusual or extraordinary circumstances provisions

will not aHow for reimbursement ofreasonable costs in cases where an owner's'or

operator's costs exceed the maximum payment amounts proposed

the Board. The

Illinois EPA does not believe the suggested changes are necessary or appropriate, or that

sufficient justification to warrant a change to the Board'sFirst Notice Proposal has been

provided. Please see the Illinois

EPA's comments on Section 734.800 (above) for a

discussion ofCSD'ssuggested change ofille maximum payment amounts to "threshold"

amounts.

11.

Section 734.820

CW3M suggests adding a provision to Section 734.820 to make the maximum

payment amounts for travel associated with professional consulting services also

applicable to drilling costs to

cover drilling contractors' mobilization charges. See Exh.

106 at 21. USI states in its testimony that the maximum payment amounts proposed

the Board in Section 734.820 "are appropriate" and that it "has no objection to their

implementation," with the exception

of the omission of a maximum payment amount for

mobilization. Exh.

109 at 40.

The I11inois EPA testified that mobilization costs were included in the drilling

rates

it proposed to the Board. Transcript ofMay 26,2005, at 46-47. The Board's

proposal expressly includes mobilization charges in the maximum payment amounts for

drilling. See 35 Ill. Adm. Code 734.820(a) (proposed) ("Such costs must include,

but not

be limited to, those associated with mobilization."). Furthennore, the travel rates that

CW3M proposes to make applicable to drilling costs were developed and intended to be

used for travel costs associated with professional consulting services, not drilling costs.

Neither

CW3M nor 0SI provide sufficient additional testimony to show why the

proposed

maximum payment amounts do not provide reimbursement for reasonable

mobilization costs,

or why the bidding and the unusual or extraordinary circumstances

provisions will not allow for reimbursement

ofreasonable costs associated with drilling

in cases where the

owner'sor operator'sdrilling costs exceed the maximum payment

amounts proposed

by the Board. The Illinois EPA does not believe the suggested

changes are necessary or appropriate,

or that sufficient justification to warrant a change to

the

Board'sFirst Notice Proposal has been provided.

12.

Section 734.825

CW3M continues to suggest changing the maximum payment amounts under

Section 734.825 based upon amounts approved under Illinois Department of

Transportation ("IDOT") contracts. CW3M also suggests changing the "swell factor"

and "weight/volume" conversion factor set forth in Section 734.825, and suggests adding

a reimbursement amount

of $14.25 per cubic yard for "additional expenses" associated

with the transportation of soil that is temporarily stockpiled

on~site

or off-site.

USI states that it believes the maximum payment amounts set forth in Section

734.825

of the Board'sFirst Notice Proposal "are appropriate." Exh. 109 at 40. It has

"no objection to their implementation."

rd. (no objection to the maximum payment

amounts in Sections 734.810 through 734.840, excluding drilling mobilization costs).

. The Illinois EPA submitted as Exhibit 89 a letter from IDOT that explains the

costs in

mOT's contracts "should not be used to compare or justify cost[s] proposed by.

IEPA in this rulemaking." Exh. 89 at 2. The Board has already considered testimony

from CW3M regarding IDOT contract costs and decided not to use those costs to

determine the maximum payment amounts under Section 734.825. See,

Exh. 29 at

49, Appendix

J. CW3M has not provided sufficient additional testimony to show why

the Board must adopt its suggested rates over the maximum payment amounts proposed

by the Board, or that the bidding and the unusual or extraordinary circumstances

provisions will not allow for reimbursement

of reasonable costs in cases where an

ovvner's or operator'scosts exceed the maximum payment amounts proposed

by the

Board.

The weight/volume conversion factor now suggested by CW3M is 1.2 tons per

cubic yard, lower than the 1.5 tons per cubic yard conversion proposed

by the Board.

amount by a sum roughly equal to the transportation charge for hauling contaminated soil

to a landfill, even in cases where the soil is stockpiled on-site. The Illinois EPA does not

believe the suggested changes are necessary or appropriate,

or that sufficient justification

to warrant a change to the

Board's First Notice Proposal has been provided.

13.

Section 734.830

CW3M suggests changing Section 734.830

by adding a "stop fee" for drum

disposaL To accomplish this CW3M suggests making the maximum payment amounts

for travel associated with professional consulting services also applicable to

dmm

disposal.

USI states that it believes the maximum payment amounts set forth in Section

734.825

of the Board'sFirst Notice Proposal "are appropriate." Exh. ]09 at 40. It has

"no objection to their implementation." Id. (no objection to the maximum payment

amounts in Sections 734.8] 0 through 734.840, excluding drilling mobilization costs).

The

Board'sproposal already includes any "stop fees" or other travel fees

associated drum disposal in the maximum payment amounts for drum disposal. See 35

Ill. Adm. Code 734.830 (proposed) (maximum payment amounts include payment for

costs associated

whh drum purchase, transportation, and disposal). Furthennore, the

maximum payment amounts for travel set forth in Section 734.845(e) were developed

and intended to be used for travel costs associated with professional consulting serv-rces,

not

drum disposal. CW3M has not provided any additional testimony to show why the

Board must adopt a "stop fee" in addition to the maximum payment amounts proposed by

the Board, or that the bidding and the unusual or extraordinary circumstances provisions

will not allow for reimbursement

ofreasonable costs in cases where an owner'sor

operator'scosts exceed the maximum payment amounts proposed

the Board. The

illinois EPA does not believe the suggested changes are necessary, or that sufficient

justification

to warrant a change to the Board'sFirst Notice Proposal has been provided.

14.

Section 734.840

CW3M suggests changing the maximum payment amounts in Section 734.840 for

costs associated with concrete, asphalt, and paving. In support

ofthe changes it

references its prior testimony in this rulemaking and states that the suggested-rates-ar.e.

consistent with prevailing rates. Exh. 106

at25.

USI states that it believes the maximum payment amounts set forth in Section

734.840 ofthe Board'sFirst Notice Proposal "are appropriate." Exh. 109 at 40.

has

"no objection to their implementation." Id. (no objection to the maximum payment

amounts in Sections 734.810 through 734.840, excluding drilling mobilization costs).

The Board has already considered the prior testimony submitted by CW3M and

others regarding the maximum payment amounts for concrete, asphalt, and paving, and

declined

to make any changes to the amounts proposed by the Illinois EPA. See First

Notice and Opinion at 81. CW3M has not provided

any additional testimony to show

why the Board must adopt CW3M'ssuggested rates over the maximum payment .amounts

proposed by the Board, or that the bidding and the unusual or extraordinary

circumstances provisions

will not allow for reimbursement ofreasonable costs in cases

where an owner's

or operator'scosts exceed the maximum payment amounts proposed

by the Board. The Illinois EPA does not believe the suggested changes are necessary or

appropriate, or that sufficient justification to warrant a change to the Board'sFirst Notice

Proposal has been provided.

-----------------www.unitec!science.com -----------------

May 3, 2005

Ms,

Marie E. Tipsord

I-learing

Officer

Illinois Pollution Control Board

100

West Randolph, Suite 11-500

Chicago,

1L 60601

Re:

Premed Questions nnd Availability

Dear Ms. Tipsord:

In regard to the April 20, 2005

Hearing Order, please find attached a copy of the prefiled

questions submitted

on behalf of United Science Industries, Inc (US1) for the Agency's

review.

USI

appr~)ciates

the opportunity to have additional hearings in the Southcm

Illinois area. Currently, USI is

unavailable

for hearings on the following dates:

6/6,617,

618,6/9,6/]4,6/15,

7Il,

7/4, 7/5,

7/6,

7/28 and

7129,

If yOl' ave al .. y questions, please feel free to contact me at (618)735,2411.

/J'

/">

/t?!

Daniel

King

Manager of Business Development

United Science Industries, Inc.

Encl

(1)

ELECTRONIC FlUNG, RECEIVED, CLERK'S OFFICE, MAY 3,2005

Qucstit,n~:

(NOTE: /\11

question~

and regul<ltions reCerences have been asked relative to th...,

pruposcd

7.34 regulations, where applicable questions would also apply to corresponding

sL'dions

oC 7:\.2 ilnd possibly

I n::gulatil

ns as well)

I. Pursuant to 7:\421 O(a) tl1i:re arc activities that arc required

be perll

rmcd \vithin

hI's of the confirmation of the relc'lSC. Pursuant to 734.6.25(a)( 1) Early Action

w.:tivitics conducted pursuant

to Subpmt B arc eligible CDI' reimbursement.

However. Suhpart H docs

not include a

P~lY

item inclusive of these tasks.

Docs the Agency intend

to revise Subpart H to include a pay item for the

ctlmpletion

of activities pliNlant to 7:\4.21 O(a)';'

Ie the Agency docs not intend to revise Subpart H to include a pay item

fiJI'

these

costs. with what current Subpmt H pay item are these costs associated"

Pursuant to 734.210(11) there arc six (6) activities that arc required to be

perCorm~d

within 20 dnys orthe l1otific:ltiun of the release

[EI'vlA.

734.21 O(b)( 1) Remove Petroleum to prevent hlrther release

734.210(h)(2) Visunlly inspect Release

<lilt! prevent further migratioll

734.21

O( b)(3) Monitor/mitigme lire, explosion. & vapor hazards

734.2l

O( b)(4) Remedy hazards posed by

cx~avaled

or exposed soils

734.210(b)(5) Measure

[l.1l'the prCSGllec ofil release

734.21O(b)(6) Determine the possihle presence

of free product

However, Subpart H docs not include a pay item inclusive oCthcsc tasks.

Does the Agency intend

to revise Subpart H to include a pay item for the

completion

of activities pursuant to 734.210(b)?

If the Agency does not intend

to revise Subpart H to include a pay item j(lf these

costs, with what current Subpart H pay item are these costs associated?

3. Pursuant to 734.210(d) the ownerioperator is required to prepare a 45-oay report.

In the event of an Early Action extension (734.21O(g))

it necessary and required

to submit a 45-day report within 45+14 days from notification to lEMA if all

Early Action activities are not yet eomplete?

Doing so would require the submission

of an amended 45-day report at the

conclusion

of early action nctivities and potentially result in an unnecessary

duplicated effort.

5/3/20(;5

Page loflO

ELECTRONIC FILING, RECEIVED, C

RK'S OFFICE, MAY

3, 2005

))lKS the cady <lctilJn extension provided Illr in

n-L~

i ii(g)

also extcnd the

submission deadline I\)r the rcport that i, rcquired in 7.l-t..::IO(d) to the end ofthc

early action period?

If 110t, and two reports arc required to be submitted under this eirellll1Swnce.

would the preparation of the second ..,IS-day report be considered an extenuating

circumstance: fll1d lhc:rd()['c

reil11blll"~wbJe

on fl time and mntc:ri,J1s basis purswtnt to

734,R50?

Pursuant to

734,210(g)

!In llwner!npemtor may requcst 111 writing that activities

continue beyond the 45+ 14 day pcriod.

Are the costs <lssl1ciated with perl()J'll1illg this aelivity eligible ,md reimhursable?

If yes, is this ,l\:livity con:-;iden:d all extct1unting circumstance nl1d therefore

reimbursable on

time 'illd materials basis pur:-;uant to

734.H50?

[('noL what ,Ipplic,lblt: Subpart

pny items would apply to perflmlling this task?

Section

734,R I () of

Sllbpnrt

nllO\\/s for reimburscment of tank removal nne!

abandonmcnt costs, per]\m11cd pursuant to

734,210(1).

on a per UST hasis hased

on the relative size of the tnnk.

Is it the Agency's intent that this eost would include the cost

for

ahandonment

slurry?

6. Taking into consideration thnt n wflivcr of the rcmoval requirements set f<'llth by

the Office of the Slate Fin: Marshall

(OSFM)

to a

How

nbandolll11cnt-in-placc may

only he granted whcn lInusunl situations, determined by

OSFI'vL

arc present that

make it infeasible to remove the UST(s),and as such no typical situation exists,

should all tank abandonment nctivities be considered as extraordinnry

eirCUl11sta nces'?

7. Section 734,845(e) allows for reimbursement of costs associated with travel time,

per diem, mileage, transportation, vehicle charges, lodging and meals for

professional personnel. However, there is not a complimentary section within

Subpart

to allow for tmvel costs associated with field personneL

Would the Agency consider adding a Subpart H Pay Item for field equipment

mobilization charges as an hourly rate, by the mile, or a mileage scale in addition

to a field equipment mobilization pennitting item on a time and materials basis?

If the Agency does not intend to revise Subpart H to include

pay item for these

costs, with what current Subpart H pay items arc these costs associated?

5/3/2005

Page 2 of I()

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, MAY 3,2005

X Scc1illl\

73-U~-+5(;1)(

1) ,dlll\\::i

$()(1()()(}

fl'r prnl'c"iunal scTviu.;s associatt.:d \\itil

the pn:pamtio!l t(lr ab,Hldonment or rcmov,d

of USTs, however, professional

serviccs arc nlso required hut not limited to thc f\lliowing;

Preparatinn

/()j"

Early Action Soil Abatement

Preparation

il)l' a Drilling Event

Preparation j()r Implemcntntio!l ()

Convcn!iona1Corrective Action

Prepnration

I(lr Implementation or Alternative Technologics

Would the I\geney consider the addition

of S%O,ll() Ihr preparation for an Early

Acti(ln soil ahatemcnt, preparation

fiJI' a drilling even!. preparation r\1I'

impkmentmion of conventional corrective m:tl(1I1. and prcpannion IlJr

implclllt.:nlaticlEl or alternative technologies')

If the Agcnt.:y does not intcnd to revise Subpart H to includc a pay item I(lr these

costs, with wlwt current Subpart H pay item are these ensts associated')

9, Pursuant

((1

734,845 costs associated with professional consulting services must

include project planning and oVL'rsight, field wnrk, field oversight, tmvel, per

diem, miicage, tr<lnspnrtation, vehicle charges, Jodging, meals. and the

prepnration, rcview, certifiention, and submission of all plnns, budgets, repons,

and <lpplicmions for paymcnt, and other docLlmcntntion. Sections 734.1-\45(a-O

include provisions Illr each of the above mentioned, with the exception or costs

associated with applications fl)r payment pursuant to 734,625(a)(

14)

Docs the Agency intend

revise Subpart H

include a pay item ror the

owner/operator's reimbursement or the costs associated with the prepnmtion,

certification, and submission of n payment application 11)1' thc thllowing'1

Early Action')

Site Investigation Stnge I?

Site Investigation Stage

2'1

Si\c Investigation Stage 3'1

Corrective Action?

If the Agency does not intend to revise Subpart H to include a pay item for these

costs, with what

ClllTent Subpali H pay item are these costs associated?

10,

accordance with section 734,845(a)(2)(A-C) owner/operators may be

reimbursed for professional oversight

of field activities when one or more of the

following circumstances is taking place:

removal/abandonment of UST's,

ETD&B of contaminated backfill, soil sampling around abandoned UST's, and

when a UST line release

is repaired,

5/312005

Page 3 of III

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, MAY 3. 2005

This :lilownnce

dl)l~S

not <leCilunl

lill'

prof'cssioll;lI SlIpcl'\Ision for tlIe Cllil/irm'ltion

or the release, th<.: immediate actions li1kcI1 10 prevent ,my l'urther rclease. nnd the

identification and mitigation or lire, <.:xplosjon and vapor h,JZ(m!s,

Would the Ag<.:ncy entertain the addition of langunge to section 734.845(a)(2)(B}

which would allow

1'01' the reimbursement of professional oversight or these

nctivities on a time and materials bnsis pursuant

to 734,850?

11, Pursuant to section 734,605(b)(3). an Eligibility

Deductibility !cUer is required

to complete fin "application for paymcll1". Pursuant to 734.615(a)(

15)

the costs

associated with nbtaining

nIl Eligibility & Deductibility !ctter are considered to be

eligible and rcimburs'lble. Ho"vcvcr, SUhpart H does nnt include a pay itel11

indusiv<.: or this task.

Docs the Agency intend to re\.isc Subpart H to include a pay item 1'01' the

preparation and subl11issi()11 oLll1 Elig.ibility

Deductibility letter')

[I'

the Ag.ency does n(lt intcnd to revise Subpart H to include a pay item for these

costs. with what current Subpart H pay item nrc these costs associated?

1.:2. Pursuant to 714.34.5(b), an owncl/opcn1l0r as a minimum requirement must

conduct "best efforts" to obtain otf-site accl's:,: in accordance with 734.350.

Howevcr, Subpart H docs not include a pay itcm inclusiw or this tnsk,

Docs the Agency intend to revise Subpart H to include a pay item 1'01' conducting

"best efforts" to obtain orf-site access?

11' the Agency docs not intend to revis<.: Subp"rt H to include a pay it<.:m 1•

.:11'

these

costs, with what current Subpart H pay item nre these costs associated?

11. Pursuant to 734.210(1) the owner/operator may, as a part of early action. perform

ex-situ treatment

of contnminated till mnterinl.

\Vill the owner/operator be

reimbursed for these activities

in accordance with 734.850, on a time and

materials basis?

14. What technologies does the Agency consider "conventional" for the ex-situ

treatment

of contaminated

fill

material?

15. In our experience, UST removal rates vary depending upon the equipment

required to remove said

T. For instance, tanks from 110-2000 gallons may be

removed with a backhoe, however, tanks with capacities frol11 2,001 - 10,000

gallons require a larger piece of equipment, such as an excavator, to be removed_

Any tanks larger than 10,000 gallons must be removed with a crane. Each

of these

graduations increase the cost tbr the required personnel and equipment to cany

out the removal.

5/.1/2005

Page 4 of!O

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, MAY 3,2005

\\IOllld thc i\gcnc:y be willing ltl resiruelllrc the liST n>!ul1lc p:l)' Item schedule tt'

account !llr thcse cqtllpl11cnt limitntions')

j(i. The titles listed within 734.;\PPENDIX E do not include

job description It)r the

personnel.

When performing a task where pHyment will be in Hccordance with Appendix. E.

will

reimbursement be based solely on the eduentional degree and experience of

the pcrS(in pcrt()rming the task. regardless of the task pcrtlJrllled, the efficiency of

completing the task, and/or the success of regulatory compliance achieved by the

O\Vnel-/opCr<ltor by

perlbrming the task'!

II'

not, would the Agency consider adding n section which would brielly describe

the tasks to be pcr1l)rmet! by each of the personnel listed in Appendix E?

17. Pursuant to Section 734.340(dl remote monitoring may be required during <In

alternati\"C technolog.y.

How will costs nssociflted vvith !\gency required re1110te monitoring he

reimbursed')

I S. In accordance with section 734.3 I5(a)(2)(E) a hydraulic conductivity test must be

completed during Stage I Site Investigation activities. However. Subpart H dnes

not include a pay item ror costs associated with performing and analyzing a

hydntulic conductivity test.

Does the Agency intend to revise Subpart H to include a pay item for costs

associated with pcrllxming and analyzing a hydraulic conductivity tes!'!

If the Agency docs not intend to revise Subpart H to include a pay item fiJI" thesc

costs, with what current Subpart H pay item arc these costs associated?

19. Pursuant tn 734.315(a)(3) an initial \vater supply well survey must be conducted

in accordance with 734.445(a}. Cunently 734.S45(b)(7) of Subpart H provides

for the reimbursement of costs associated with water supply well surveys

conducted pursuant to 734.445(b

c). However, there is no Subpart H pay item

associated 'with activities conducted in accordance with 734.445(a).

Does the Agency intend to revise Subpart H to include

pay item for costs

associated with conducting an initial water supply well survey?

If the Agency does not intend to revise Subpart H to include a pay item f<x these

costs, with what cutTent Subpart H pay itcm are these costs associated?

20. In accordance with section 734.845(b)(7), a lump sum rate of $160 will be

allotted

J~)r

potable water \vell surveys which must be conducted pursuant to

5!3120iJ5

Page 5 of!

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, MAY 3,2005

,;c<.:li\)11S 73,l-l-l:i(b) ,1r

tc),

Tlw cxlcm,l! cllsls associ<lled with compkting a

typic:1I well survey nrc npproximllldy S100

fix

ISCiS and [S\VS provided

inllHll111tion. Givcn this Iypienl sitll:llion, labor costs associated with this tDsk

would amount to 560.

Does thc Agency feci that S60

is sufficicnt

III I'

the professional labor to comply

with the requin.:mcnts

,el fllrth in section 734.445')

Is it also expccted that this Dl110unt \vould ,lccount for time allotted for the

Professional Engineer"s review and cerlifleation, as required

by 734.445(d)(4)'.'

21.

Pursuant to 73 4.

iQ5(

a)( I), for the purposes 0 f rei I11burscmenL the volume of sn iI

removed and disposed

of must be dctermined by the dimcnsions (If the exeavntion

plus 5%

Will a sitc

nl<lp with n cross ,cetion showing vnrying depths be sufficicnt to verify

this vn!tlllle'}

If yes. will it continue to be ncccssmy to provide the

fl~ll()wing

to the Agency:

il.

Copies of the 'weight tickets

fi'ol1l

the land fill accepting the waste')

b, Copies of the special waste manifest'?

e. Copies of the la11lHi1I invoice (prnvidcd that the landfill acted as a

subCOlltractor

to the primmy contractor)'?

Would the additional cost llf collecting GPS coordinates

to determine the volume

of the excavated Inatcrial be considered rcimburs<lble on a time and materials

basis pursumlt to section 734.850'1

:22.

is usrs experilmce that oftsitc investigations onen require widely varying: and

Lmknown scopes

of work.

Would the Agency consider revising the Subpart H pay item associated with

preparation and submittal

Site Investigation Completion Report pursunnt to

734,845(b)(8) to T&M if completed during Stage

!II

due the variability and

inconsistencies within this stage

ofwork?

23. Pursuant to

734.320(b)(3)(A) the owner/operator is required to include within

their Stage 2 Site Investigation Plan one

or more maps detailing hydraulic

gradient and groundwater flow direction.

In order to obtain this infonnation, an

additional site visit, apart from the installation

of groundv\I'ater monitoring wells,

is required

to collect the necessary data.

Does the Agency intend

to revise Subpart H to include a pay item for eosts

associated with completing a survey

of groundwater flow direction and gradient?

51JI2005

Page (, of 10

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, MAY 3, 2005

the Agency dnl's nnt intend h) I'cvisL' Suhpart H to include a

Iny

item 1\)1' thL's\?

costs. with what cllm::nl Subpart II pay itcm arc these costs nssoeialcd'.'

24.

In additinn to the

hnll~dayf\)l'

each lll'll1itoring wcll drilled in nccorclnnce with

seclion 734.845(b)(2)(8) nnd 7:l4.845(h)(6)(B), would the Agency enlCrt"in the

addition of one (1) ndditioni:ll

hall~dilY

for eneh required trip to the site including:

well

development. well surveying. and well sillnpling'?

25.

It is J1jcntioned within the Illinois Pollution Control Board's "Discussion" notes,

page 80. thilt section 734.845(b)(5) and (6) wil! be deleted from the regulntions

and thnt the hll1g:uagc "paymcnt fur costs associated with Slngl;

sile

investigations will be rdmbursed pursuant to Section 734.850" will be added in

its

place, howcver. this l<1ngu<lge hns not been included in the Board's proposed

section 734845 (h).

this omission nn ern;!"'.'

26.

In Brian Bnuer's Prcliled Testimony submitted March 5, 20()4. Mr. Baul'r

indicates that "neither incidental expenses nor decontamination charges" were

necessary, thus the rate fiJI' direct push injections is substantially lower than direct

push soil horings (5

15m

YS. $1

i\/ft).

Based on our experience, costs associated

with expendahle items \vill not change drastically between investigation and

injcction ilctivities. Although investigation activities utilize expendable materials

used only

fix

samplc collection, injection activities utilize expendable points to

pn:vent soil from clogging the injection md. As n result. the cost di ffercntial

between these two <letivities is insignificant.

Additionally, decontamination

betwecn injection points is stillnccessary to prevent cross contamination.

Would the Agency be willing to increase the per foot rate f{)r Direct Push

injections listed in 734.820(a) to S IS,(lO/foot.

17. Ls the cost fi:)]" the placement of an engineered barrier pursuant to 742. 1105

eligible for reimbursement? For the purposes of reimbursement, is it required that

the design of said bnrrier be approved by the Agency prior to implementation? If

yes, why then would the same proposed rates not apply for engineered barriers as

they do for replacement of surface materials?

28. It is our understanding that conventional groundwater remediation strategies

include the use of institutional controls.

What other groundwater remediation mechanisms are characterized as

"conventional" hy the Agency? Subpart H does not include a pay item inclusive

of these tilsks.

Does the Agency intend

revise Subpart H to include a pay item for the

completion of activities pursuant to 734.210(<1)?

5/3/2005

P~ge

7 of; (}

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, MAY 3, 2005

If the

i\.genc)'

docs not IIltc:nd to rcvise Subpart II (() include a pay ilcl1l for these

costs,

with ','ihatcurrcnt Subpart

pay item

nrc

these costs associated')

29.

Pursuant to 734,340 an owner/operator may choose tn use an alternative

technology !()r corrccti ve action in response to a release.

the event the cleanup stnltcgy utilizes both conventional and alternative

remcdii1! methods, and the owner/operator elects to submit a single corrective

action plan

(e/\I')

inclusive of both technologies. \vill the costs associated with

the

preparation and submission or the

CAP

be reimbursed pursuant to 734.B50 nn

a time

and materials basis?

Or will the ()wner/opemlOr be required to submit two

(2) (';\

Ps?

two

(2)

CAPs must be

submittt~dJ

will the ;\g:cncy c,)]lsider the COst for the

conventional technology

CAP

reimbursabk pursuant to 734,H45(c)(

and

cOllsi,kr the cost J()r the nltcrtlntive technology

C,\P

reimhur,:;able pursuant to

734.K50''>

30. It is

USl's experience thnt an Agency project manager may request a groundwater

remcdiHtion CAP be propused after soil remediation has been completed, \Vould

the submission of two (2) separate CAPs be reimbursed pursuant to 734,845(e)( I)

for each submittal

independently?

31. In accordance with 734,355(c) any iletion by the Agency to require a revised CAP

pursuant to 734,355(b) must be subject

ilppcal to the bonnl with 35 days after

the Agency's rinul action,

Should 734,355(c) he revised to include budgcts as well as plans'?

32.

The competitive bidding requirements provided in 734,855 provide an alternative

means for establishing the milximum payment amounts, One of the requirements

of 734,855 (u) is that any bid solicited under 734,855 he based upon the same

scope of work as the applicable Subpart

maximum payment mnounts, Since the

scopes of work have not been defined as part of Subpilrt

maximum pilyment

amounts, how arc the owners/operators to use 734,B55 as a reilsonable alternative

to determine maximum payment amounts?

33, Section 734,860 provides that the Agency may reimburse an amount in excess of

Subpart

maximum payment amounts, if an owner or operator incurs or will

incur eligible costs that exceed the maximum payment amounts set forth in

Subpart

Since no scope of work is deflned in relation to Subpart

maximum

payment amounts, is an owner/operator to assume that all costs incurred in

response to a release above the maximum payment amount are extraordinary or

unusual in the definition of eligible under 734.675?

51.112005

Page Rof I(J

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, MAY 3,2005

34. I-low will the Agency determine prevniling market rates pursuant tt) 734.S75'!

35.

How does the Agency intend to collect the daw needed to require with 734,S75?

36. Would the Agency consider adjusting the maximum payment amounts on January

I of ench year inslend of .Iuly 1 of each year

that

would be 1110re consistent

\vith the IIscal year most nften utilized by private businesses (owners/operntnrs

and consultanb)'?

37. II' the inflation fnctor

in a given year is greater than 5.0% the adjustment in the

maximum pnymenl Hmount under 734.R70 would be limited to 5,0%,

Why not ndjust

the increase in the CPI since it is

rellecti\t~

of netllal market

cond itit lIlS')

38. \Vhen engineering a remedial slrategy l()r an active station. conventional

teclmolngics arc orten not applicable (ex. a dig and haul is nnt possible when a

live

system is in plnee), theref(lre one Illust lonk to alternative remedial designs.

In reference to Section 734.340(b), an oWl1erlOperator must submit a budget that

demonstrates that the cost f(.1f said alternative technology will not exceed the cost

of conventional technologies,

it the Agency's intent to hold an owner/operator liable ji,)I' costs in excess of the

conveniionnl lechnology amount when a conventional technology is not fCrlsible?

Would this circumstance be considered extraordinary'?

39.

Pursuant to section 734,340(c) what is the Agency's intent in rendering an owner/

opcrntor "ineligible to seek paymcnt j(lr thc subsequent pcrti..mnanee of a

corrective action using conventional technology" when prior approval fiJI'

implementing an alternative technology is not first attained?

Would the owner/operator be considered ineligible to seek payment for the

subsequent performance of an alternative technology as well?

40.

Pursuant

section

734.320(b)(3)(A-D)

and

734.325(b)(2)(A-D)

owner/operator is required to produce one (I) or more maps, however, no limit is

placed on the number of maps which may be required. [s it assumed thaI map

preparation costs are to be included within the primary reporting lump sum task

for eaeh phase (ex. EA-$4800, 81-$1600/$3200, CA-$5120)'?

so, how can a lump sum amount be detem1inecl if the scope of work (one (I) or

more maps) cannot he detcrmined?

41. Pursuant to 734.835 Sample Handling and Analysis, costs associated with

transportation, delivC1Y, preparation, analysis and rcporting of samples are

5i3i20{)5

Page \) of 10

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, MAY 3,2005

rl'imbursahk cosls :lIld

,.,Ih\uid

he' hilkd in ;Iccprdnncc \i ilh the

ntll',~

listed in

734,;\PPENDIX D,

II the Agcncy's inlent that the per sample

r~lles

listed Illay

be divided

Lip between the entity doing Ihe tnmsportation. deli\'er. annly::is. etc,?

4:: When det<:rtnining acceptuble depths Ii)r well installation activities. what cntity,

Agency or consultant, decides whilt depth

is sufficient'!

4,\

Are Subpart H unit rute reimbursable mnounts billahle within all applicable

plwses

of w\lrk')

4,+, Pursuant to 734,315 Stage I SitL' InVl'stigation, 734,3::0 Stage 2 Site

IIl\Tstigation, and

734,325 Stilge 3 Site Investigation,

;lll

owncr/operator may be

required

advance soil borings in an allemptl() Itilly delincate soil contamination

prescnt on-site,

As a result. what con,tilL11cS ;1 "soil boring"? I.c, ilre minimum

depths required or must specillc tooling be utilized?

45,

PursW1I1t to

734,R 15

Free Product or CJroul1llwater Removal and Dispos;ll and

734,i:\30 Drum Disposal, an own<:r/operator may be reimbursed

((H'

costS

associated with disposal

of petroleum c(lntmninatcd soil :lillI/or gl'Oundwatcr as ,1

result of drilling activities, Who detelmines, however, whether media should

drummed

or disposed of in bulk')

46. Pursuant

to 734,845 Professional Consulting Services, hovv' Illany submittals arc

included

in each unit rate reporting pay item?

47, Have all rates associated with Subpurt H pay items been historically evaluated

against actllal reimbursemcnt submittals?

5iJi20o)

Page 10 01'10

RECEIVED

CLERK'S OFFIOE

BEFORE THE ILLINOIS POLLUTION CONTROL

BOARD

IN THE MATTER OF:

PROPOSED AMENDMENTS TO:

REGULATION OF

PETROLEUM LEAKING

UNDERGROUND STORAGE TANKS 35

ILL. ADM. CODE

732

THE MATTER OF

REGULATION OF PETROLEUM LEAKING

UNDERGROUND STORAGE TANKS

PROPOSED

NEW IlL. ADM. CODE 734

Proposed Rule. First Notice

MAY 042005

)

STATE OF ILLINOIS

) R04-22

Pollution Control Board

) (UST Rulemaking)

)

) R04-23

) (UST Rulemaking

)

Consolidated)

)

PRE-FILED QUESTIONS FROM Jay P. Koch FOR THE ILLINOIS POLLUTION

CONTROL BOARD'S 1

NOTICE OF AMENDMENT TO 35 ILL. ADM. CODE 734

AND 35 ILL. ADM. CODE

732.

Below are questions proposed by Jay P. Koch in response to the Illinois Pollution Control

Board'srequest for pre-filed questions. These questions are presented in order to gain a

. better tmderstanding ofthe Agency'sintent and approach to the implementation and

administration

of the proposed rules and the UST program subsequent thereto

order to

facilitate the preparation and development of accurate, factual and meaningful testimony

for the hearing(s)

to be held this summer in the above referenced matters.

Questions:

1. In Mr. Clay'stestimony, he stated that groUndwater remediation is, by definition,

considered to be an alternative technology. Some, but not all, IEPA technical reviewers

require that a Corrective Action Plan,

order to be acceptable, address both soil and

grotmdwater remediation. In a situation where the owner/operator is proposing a

corrective action to the agency for both soil and groundwater remediation and assuming

that the proposed method

ofsoil remediation would be excavation, transportation and

disposal, how would the Agency administer the Subpart H maximum payment amounts?

Would this

be treated as a c.onventional cap (maximum lump sum payment amount) or an

alternative technology CAP (Time

Materials) or would it be a hybrid?

2. Several consultants have recently mentioned that it is very difficult to have alternative

technology CAPS (for soil remediation) approved

by the Agency. If an alternative

Page

of7

Electronic Filing, Received, Clerk's Office, September 12, 2007

teclmology CAP is submitted to the Agency and it is not approved, how does the Agency

intend to deal with associated reimbursement issues under Subpart H? Specifically,

if an

alternative teclmology CAP is rejected one or more times, but is eventually approved by

the Agency, will the Agency reimburse all professional service hours that are reasonable

and justified so long as the rates for professional services are consistent with Appendix

the alternative teclmology Corrective Action Plan was rejected by the Agency

reviewer on one or more occasions, and as a result the owner/operator elects to

subsequently submit a CAP for a conventional teclmology, will the costs associated with

the development

ofthe alternative teclmology CAP be paid pursuant to Subpart H on a

time and materials basis with the costs ofthe subsequently prepared conventional

teclmology CAP being reimbursed on a maximum lump sum payment basis in

accordance with 734.845

3. How does the Agency intend to administer the "extraordinary circumstances"

provision?

order to avoid the landslide ofquestions and conflicts that are almost

certain to arise after the implementation

of any rule changes ofthe magnitude represented

by Subpart H, is the Agency, prior to the final implementation ofthe rule, willing to

publish on a regulation

by regulation basis, examples ofthe types of situations that it

believes will warrant a claim for "extraordinary circumstances"?

4. Market research and analysis performed by USI indicates that nearly ninety-five

percent

ofthe owners/operators that are currently engaged in LUST clean-ups in Illinois

are individuals

or very small businesses. Many of these individuals and small businesses

do not belong to the organizations that are listed as being the parties that will appoint the

Members

ofthe LUST Advisory Committee. Will the IEPA consider allowing an

additional seat or seats

on the LUST Advisory Committee in order to assure the

representation

ofthis category of owner/operator?

5. The Agency is proposing revisions that would allow the Agency to remotely monitor

alternative technologies? Is reimbursement for these activities to be handled

on a time

and material basis?

6. Subpart H, Appendix D provides rates for Sample Handling and Analysis. Section

734.835 indicates that these rates are for transportation, delivery, preparation, analysis

and result reporting. Often times analytical samples are transported

to a central shipping

location

by one party, delivered to the laboratory by another and then analyzed by the lab

(a third party). Are the rates provided in Appendix D to cover the activities

of all three

parties described above?

7. In numerous instances in the Agency'stestimony, the Agency testified that the

proposed rules were being presented in order

to "reform the budget and reimbursement

process" and to "streamline the approval

ofbudgets and the processing ofreimbursement

claims".

additional goal stated by the Agency was to "streamline the UST

remediation process". Does this mean that the Agency's intentions are to improve upon

(reduce to the greatest extent practicable) the amount oftime that it takes for the various

reviews, approvals and/or reimbursements?

Page 2

of7

1)..1

Electronic Filing, Received, Clerk's Office, September 12, 2007

8. The Agency testified that the rates are generally consistent with the rates the Agency

currently approves. The Board accepted the Agency'sposition on this matter as part

the rule thatwas published at 1st notice. The consulting community, on the other hand,

believes that the rates that are provided in the proposed regulations are not consistent

with those that have historically been reimbursed. Instead the consulting community is

confident that the amount

oftime that has been allowed for various professional service

tasks and by extension the maximum lump sum payment amounts are substantially below

those which have been historically reimbursed

by the Agency. This has been a

significant point

ofcontention during this rulemaking and represents a conundrum. A

simple answer to this conundrum would be

to have a qualified and reputable independent

third party audit the historical reimbursement records

ofthe Agency with regard to the

average costs for professional services per hour as well

as the average number of

professional service hours incurred per labor classification per task and to allow the audit

report to be published, available to the public and placed on the record in this rulemaking.

Is the Agency willing to allow an independent auditor to perform a statistically valid

review

ofthe Agency'shistorical files and to provide the results of that audit to be

entered into the record in this proceeding?

9. The Board has acknowledged that the method that the Agency used to establish the

rates provided in Subpart H was not based upon scientific or statistically valid means.

The Board has further acknowledged that it is largely relying upon the experience

ofthe

Agency and that the Board finds the rates proposed by the Agency in Subpart H to be

reasonable. I would generally agree with the Board's assessment and opinion with the

exception that I believe that the number

ofhours that have been allotted for professional

and consulting service tasks that are subject to the maximum lump sum payment amounts

and therefore,

by extension the maximum lump sum payment amounts themselves are

substantially inaccurate. for those services the rates that have been established for

professional services and consulting.

appears that the number ofhours that the

Agency has allotted to professional service tasks is woefully inadequate.

Since the

Board has acknowledged that the Agency did not use statistically valid means to establish

the rates, what independent validation steps has the Board taken, or does it plan to take,

in order to assure that the number

ofhours that the Agency has allotted for professional

and consulting services is sufficient to allow a reasonably proficient professional to

complete each

of the necessary tasks?

10. Can the Agency please provide a list ofthe governmental fees and permits that it is

considering not being eligible for reimbursement? Can the Agency provide a list of

examples ofthe types ofpayments to other persons that it considers to be ineligible for

reimbursement?

11. Because this rulemaking is likely to be the most momentous in the history of the

Illinois LUST program and is likely to have a profound financial impact on numerous

owners/operators and consultants across the State oflllinois, is the Board willing to make

a second request for the Illinois Department

of Commerce and Community Affairs to

perform an economic impact study

ofthese proposed regulations?

is my understanding

Page 3

of7

that, when requested to do so last year, the DCEO declined to provide this assessment for

budgetary reasons.

12. In their 2004 testimony, the Agency indicated that 375 consultants performed work

on LUST Sites in the last three years. Can the Agency provide a list of the names of the

consulting firms that,

in the aggregate, submitted fifty percent (50%) ofthe work plans,

budgets and reports

to the Agency from the period January 2003 to the present?

13. The Agency objected to the notion ofproviding a "Defined Scope of Work" for the

Subpart H payment items. The Board, at first notice, agreed with the Agency'sposition

on this matter. On page 78, the Board seems

to suggest that the consulting COrl1mumty

wanted a defined scope ofwork to be separately developed for each project and also

suggest that such a requirement would result in a highly cumbersome rule. I agree with

the Board in that regard. As a point

of clarification it has not been usrs desire that a

detailed scope

ofwork be prepared for each project. Rather, USI would like some

definition to be set forth, on a task

by task or regulation by regulation basis, that will help

everyone understand what

is to be considered "typical" and what is to be considered

"extraordinary". Would the Agency consider publishing, in advance

of the effective date

of this rule, some broad guidelines as to what is "typically required" on a task by task or

regulation

by regulation basis?

14. Is it the Agency's intention that upon satisfaction ofthe deductible, and provided

that the limitations on total payments provided for

734.620 have not been exceeded,

that the LUST Fund reimburse all corrective action costs that are eligible under 734.625?

15.

Iffunds are not available under the LUST Fund program, or as a result of the

implementation

of Subpart H, the Agency is unable to pay for all ofthe eligible (pursuant

to 734.625) corrective action costs incurred by an owner/operator in excess

of the

deductible, does this in any

way relieve the owner/operator ofthe responsibility to

comply with IEPA regulations and remediate the site?

16. Ifthe answer to the above question is "no" then, does the Agency intend to enforce

the Act and the LUST regulations, including the levying

of fines and penalties, against

owners/operators that are unable to comply?

17. A practice, which has become common in the industry in Illinois, and which is

necessitated

by long reimbursement cycles, is for consultants and/or contractors to

perform corrective action work for the owner/operator and to generally wait for payment

for their services until such time that the owner/operator has been reimbursed

by the

LUST Fund. What is the Agency'sopinion on consultants/contractors deferring payment

for their services

in excess of the deductible until such time that the owner/operator is

reimbursed? What is the IPCB's opinion on this issue? Do the Agency and the Board

believe that the proposed regulations, or any portion thereofhave any bearing on this

practice

on the part of the consultant's/contractors?

Page 4

of7

. \

18. In the late 1980'sand the early 1990'sthe Agency administered a Joint Payment

Program whereby the Agency would make joint reimbursement payments to the

Owner/Operator and their primary consultant/contractor. Why did the Agency do away

with this program?

19.

Mr. Chappel'stestimony, he indicated that the activities conducted by a

consultant in each step

of the LUST process and the estimated personnel time required

for each activity were provided to the Agency by ACECI. Who, at ACECI or from other

organizations, participated in this process? What are their qualifications and credentials?

How much experience, do they have in Illinois LUST work and in what capacity? What

scope

of work was given to them in order for them to determine what was required at

each step in the process? After receiving the estimated personnel titles and the estimated

number

ofhours from ACECI did the Agency make any modifications or additions to the

information provided by ACECI before incorporating the information into the proposed

rule?

Why in this instance did the Agency rely on a third party to estimate the

appropriate staffing and level

of effort required instead ofusing information from its

historical experience? When was the information provided to the Agency

by ACECI?

20. Is the Agency familiar with a USEPA initiative referred to as TRIAD?

21. Is it the Board or the Agency's intention that personnel that do not meet the degree,

licensing or experience requirements

ofAppendix E. but that have been previously

employed in their respective positions prior to the effective date ofthe rules, be

grandfathered into their current positions?

the alternative will these personnel be

disqualified from their positions and subject to layoff? If a person does not meet the

degree, licensing and experience requirements for the Project Manager labor category,

but can demonstrate that it has been able to successfully develop work plans and budgets,

gain Agency approval

of those work plans and budgets and successfuHymanage the

project with a high level

ofreimbursement by the Agency, can is it the intent of Subpart

H and the Agency that this person will no longer

be considered qualified to perform their

job and therefore

be subject to potential layoff by their employer?

22. If a person does not strictly meet the degree, licensing or experience requirements of

Appendix E how would the Agency go about determining what T&M billing rate would

be applicable to the individual?

23. 734.850 indicates that the reimbursement ofpersonnel costs will be based upon the

work being performed and not the classification or title

ofthe person performing the

work. Can the Agency provide a list

ofthe classifications/titles that it considers to be

appropriate to the various tasks/regulations? ,

24. Does the Agency consider consulting/professional services to be subject to the

bidding requirements

in Subpart H 734.855 as an alternative means of establishing the

maximum payment amount? I assume the bidding requirement only pertains to

contractors since the rule clearly delineates that consultants will be paid for bid

Page 5

of7

solicitation preparation and bid review on a time and materials basis. Please clarify the

Agency's intentions with regard to this matter.

25. If the answer to the question above is "yes" what scope of work should be usedin the

bid solicitation since the scope of work associated with professional services is usually

unknown at the time that the owner/operator hires the consultant?

26. By what means is the owner/operator and his or her consultant required to solicit

bids?

If a bid solicitation results in less than three bids, how many rounds of solicitation

are required?

27. As an example, an owner/operator has an approved budget for a corrective action to

excavate, transport and dispose of2,000 yards of contaminated soil. One evening during

the corrective action work it rains two inches and the excavation fills with water which

becomes contaminated when it comes into contact with soils in the excavation. The costs

of the water disposal was not in the budget. How would the Agency administer this type

of situation, assuming that the owner/operator makes a claim for reimbursement of the

water disposal costs from the LUST Fund?

28. As an example, an owner/operator hires a consultant to perform consulting and

professional oversight services at its LUST site. The consultant performs the work

required to obtain Agency approval

of a Corrective Action Plan for conventional

technology. The consultant bills the owner/operator for the service and the

owner/operator is reimbursed. The owner/operator pays the consultant. After the

completion

ofthe excavation work stipulated in the approved CAP, the Agency reviewer

requests a groundwater remediation to be performed. How will Subpart H be applied to

this situation? Will the time necessary

to develop the groundwater CAP be reimbursed on

a time and materials basis.

29. In calculating the maximum lump sum payment amounts for the various plans and

reports required as part

ofEarly Action, Site Investigation and Corrective Action phases

of a project, did the Agency assume that the various plans and reports would be approved

by the Agency reviewer on the I

st submission? I assume this is the case since $640 is

provided for Amended Plans and Amended Reports?

30. 734.845

(f) provides $640 for the amendment of a plan or report.

would appear

that this amount could be excessive in some instances and insufficient

other instances.

Because the degree

ofmodification or amendment to a plan or report can vary widely, it

seems more appropriate and cost effective for the LUST Fund for this task to be

performed on a time and materials basis. Would the Agency consider the use of a T&M

billing method for the development

of amended plans and reports?

31. 734.800 (b) states that only some

ofthe costs associated with each task are provided

in Section 734.810 through 734.850 and that they are not intended as an exclusive list

all ofthe costs associated with each task for the purposes ofpayment from the Fund.

734.800 (c) goes on to state that Subpart H sets forth only the methods that can be used to

Page 6

of7

determine the maximum amounts that can be paid from the Fund for eligible corrective

action costs.

The rules go on to state that whether a particular cost is eligible for payment

must be determined

in accordance with Subpart F. If a cost item that is typically

incurred

ana LUST project has been accidentally omitted from Subpart H, how would

the owner/operator go about seeking reimbursement for that costs?

32.

If an owner/operator engages the services of a professional consultant and the

consultant,

in good faith, initiates the development of a corrective action plan, only to

find

out after the work was initiated and a substantial amount oftime, energy and money

had been expended that the project conditions warrant a level ofeffort that is likely to

cause its charges for the professional/consulting services to greatly exceed the

maximum

payment amount provided in Subpart H. In this instance, does the Agency prefer to be

notified immediately ofthe potential "extraordinary circumstance"? It seems as though

all parties involved would

want to know whether the Agency would consider the situation

to be extraordinary or not before continuing to proceed with the work. In the example

provided above,

how should the owner/operator and his or her consultant handle this

situation with the Agency?

33. Does the Agency intend to develop internal standard operating procedures to help

improve and ensure uniformity, consistency and objectivity

in its technical review of

work plans, budgets and reports?

34. The time to prepare and submit an application for reimbursement

is an eligible cost

under 734.625 (a) (14).

No maximum lump sum payment amount is provided for these

activities.

Will a maximum lump sum payment amount be provided for this activity?

35. Under 734.445 (c) the Agency may require additional investigation ofpotable water

supply wells.

From reading this provision within the regulations, this requirement is

contingent and at the discretion

ofthe individual Agency reviewer. Does the Agency

consider wells surveys conducted pursuant to this paragraph to

be typical or

extraordinary?

36. Historically, the Agency has reimbursed on a time and materials basis the costs for

field instrumentation, equipment, materials and supplies (field purchases), materials and

supplies (stock items)

and subcontractors related to professional and consulting services.

Subpart H provides Appendix D which deals with acceptable rates for sample handling,

transportation, delivery, analysis and reporting and Appendix

which provides personnel

titles, qualifications and acceptable hourly rates. However, Subpart

does not provide a

list

of field instrumentation, equipment and materials and supplies that are acceptable in

situations where the rules call for time and materials billing. Will the Agency be

providing time and materials rates for field instrumentation, equipment and materials and

supplies that will

be considered to be the maximum payment amounts for those items

when

the work is associated with

time and materials task?

Page 7

of7

ILLINOIS POLLUTION CONTROL BOARD

February 17,2005

IN THE MATTER OF:

)

PROPOSED

AMENDMENTS

TO:

)

REGULATION OF PETROLEUM LEAKING)

UNDERGROUND STORAGE TANKS (35

)

ILL. ADM.

CODE 732

)

IN THE MATTER OF:

)

PROPOSED AMENDMENTS

TO:

)

REGULATION OF PETROLEUM LEAKING)

UNDERGROUND STORAGE TANKS (35

)

ILL. ADM.

CODE 734

)

Proposed Rule. First Notice.

R04-22

(UST Rulemaking)

R04-23

(UST Rulemaking)

Consolidated

OPINION

AND ORDER OF THE BOARD (by G.T. Girard):

Today the Board will proceed to first notice under the Illinois Administrative Procedure

Act (5 ILCS 100/1-1

et. seq.

(2002)) with a rulemaking proposed by the Illinois Environmental

Agency (Agency). The Agency originally proposed amendments to

the regulations concerning

the leaking Underground Storage Tank (UST) program in January 2004. The Board has held

seven days

of hearings and received substantial comment on the Agency's proposal. The Board

received comments from industry, trade groups, and professional organizations including a group

formed as a result

of the proposal called Professionals of Illinois for the Protection of the

Environment (PIPE). The

Board has evaluated the comments in this proceeding and the

additional language changes suggested by both the Agency and the participants. The first-notice

proposal adopted by the Board today reflects

the Board's consideration of all the comments and

testimony the

Board has received.

During this process, which began over a year ago, the Agency has submitted three

errata

sheets reflecting changes based on the questions and comments at the hearings. In addition,

PIPE and other participants have suggested changes to

the proposal. Based on all the

suggestions and the record

of this proceeding, the Board proposes for first notice a rule that

includes lump

sum maximum payments for certain tasks, but not a scope of work for those tasks.

The Board is proposing the maximum payment amounts proposed by the Agency in most cases.

The Board is cognizant that the methods used to develop the rates by the Agency were not

scientifically

or statistically recognized methods. However, the Agency's experience in the UST

program is also an element to be taken into consideration. In addition, the first-notice proposal

will include provisions for bidding, extraordinary circumstances, and

an annual inflation

adjustment. The Board is convinced that the first-notice proposal, as a whole, will allow for

reimbursement

of reasonable remediation costs.

also proposes amendments to subsection (h) to require the Agency to provide notice of the UST

Fund's balance to owners and operators.

ld.

Section 732.6011734.605

The Agency'sproposes changes to this section are necessary because of changes made

throughout Part 732. R04-22Prop. at 21. For example, references

to "materials, activities, or

services" are deleted because pursuant to the proposed Subpart

H, payment from the UST Fund

will generally no longer

be made based on "materials, activities, or services".

ld.

The Agency

proposed new subsections

(b)(9) and (b)(1 0)2 requiring certain information be a part of the

application for reimbursement.

ld.

The Agency seeks amendment of subsection

(f)

to require

the submission

of a budget plan prior to the Agency's review of a corresponding application for

payment.

ld.

Subsection (g) is amended to include a general reference rather than a reference to

revised budget plans. R04-22Prop. at 22. The Agency recommends the addition of subsection

(i) and

as well.

ld.

Subsection (i) would prohibit submission of applications for payment of

deferred costs prior to the submission of a completion report.

ld.

Subsection

would require

the submission

of applications for payment of corrective action costs no later than one year after

the issuance

of a no further remediation (NFR) letter.

ld.

Section 732.602/734.610

The Agency proposes revisions to this section in combination with other changes

proposed in Part 732. For example, the Agency proposes amendments to reflect that: (1) the

Agency performs "full" reviews

of all applications for payment; (2) budget plans are not required

for early action other than free product removal; and (3) line item estimates are

no longer

required as a part

of the budget plan. R04-22Prop. at 22.

Section 732.603/734.615

The Agency proposes changes for consistency and also language

to provide that the

Board or a court may order payment from the UST Fund. R04-22Prop. at 22-23.

Section 732.604

Because

of changes made in P.A. 92-0554, the Agency undesignated subsections (a) and

(b) as statutory language; but retained the wording

in the rule for releases reported prior to the

effective date

ofP.A. 92-0554. R04-22Prop. at 23.

Section 732.605/734.625

2The Agency in the original proposal included a new subsection

(b)(11); however, in the third

errata

sheet, the Agency withdrew subsection (b)(11). Exh. 87 at 20.

Section 732.612/734.660

The Agency proposes amendments to clarify that payment of an ineligible cost

constitutes an "excess payment" from the UST Fund. R04-22Prop. at 28.

Section 732.614/734.665

The Agency'sproposal adds this new section to set forth record retention requirements

and auditing procedures. R04-22Prop. at 28. In both the second and third

errata

sheets the

Agency suggests changes to the proposed language. Exh.

15 at 11; Exh. 87 at 22.

Section 732.701/734.705

The proposal amends this section to correct a cross-reference and to reference reports

submitted pursuant to Section 732.202(h)(2). R04-22Prop. at 28.

Section 732.702/734.710

The Agency proposes amending this section to clarify that an owner or operator

is not

relieved

of the responsibility for cleaning up contamination that migrates off-site where a NFR

letter has been issued. R04-22Prop. at 28.

Section 732.703/734.715

The Agency's amendment would ensure that attachments to a

NFR letter are filed with

the letter. R04-22Prop. at 28. In addition, the amendatory language would allow a site located

along a right-of-way

of any highway authority to perfect a NFR letter via a Memorandum of

Agreement with the highway authority. R04-22Prop. at 29.

Section 732.704/734.720

The Agency proposes clarifying language to this section

as well as requiring owners or

operators to complete groundwater-monitoring programs prior to the issuance

of a NFR letter.

R04-22Prop. at 29.

Subpart H

The Agency proposes a new subpart that proposes maximum amounts that will be paid

from the UST Fund for certain activities. R04-22Prop. at 29. The Agency proposes the new

subpart to "streamline payment from the UST Fund."

Id.

The Agency proposes lump sum or

unit rates for some activities while other rates will be determined on a time and materials basis.

Id.

The following paragraphs will more completely summarize the Agency's proposed new

subpart.

Section 732.800/734.800. This section explains what the subpart contains and noted that

the subpart enumerates only the "major costs" associated with a task. R04-22Prop. at 30. The

section clarifies that the maximum payment amount is intended to include all costs associated

with

an activity and the subpart does not enumerate eligible costs.

Id.

Section 732.810/734.810. This section establishes the maximum payment amounts for

costs involved in removing or abandonment

of a UST. R04-22Prop. at 30.

Section 732.815/734.815. The maximum payment amounts for removal of free product

are set forth in this section. R04-22Prop. at 30; Exh.

87 at 23.

Section 732.820/734.820. The maximum payment amounts for costs of drilling, well

installation, and well abandonment are set forth

in this section. R04-22Prop. at 30. The Agency

proposes the addition

of direct-push platform drilling in the first

errata

sheet. Exh. 1 at 4.

Section 732.825/734.825. The maximum payment amounts for costs of soil removal,

transportation, and disposal are set forth in this section. R04-22Prop. at 31.

Section 732.830/734.830. The maximum payment amounts for costs associated with

disposal of material using 55-gallon drums are set forth in this section. R04-22Prop. at 31.

Section 732.835/734.835. This section addresses the cost associated with handling and

laboratory analysis

of samples. R04-22Prop. at 31. The specific maximum payment amounts

are set forth in Appendix D

of the proposal.

Section 732.840/734.840. The maximum payment amounts for costs

of replacement of

concrete, asphalt, and paving are set forth in this section. R04-22Prop. at 31. The maximum

payment for dismantling

of concrete, asphalt, or paving is also included.

Id.

In the second

errata

sheet the Agency proposes language to increase the maximum payment for replacement.

Exh.

15 at 9.

Section 732.845/734.845. In the proposal, the Agency included this section setting forth

maximum payment amounts for consulting services. R04-22Prop. at 31-32. The Agency

recommended several changes to the proposal in the third

errata

sheet. Exh. 87 at 24-25.

Section 732.850/734.850. The language

of this section delineates the procedure for the

Agency to determine rates based on time and material. R04-22Prop. at 32. Personnel costs

cannot exceed the rates included in Appendix E and are determined based on the work being

done, not the title

of the person performing the work.

Id.

The Agency suggests an amendment

to reflect other changes proposed

in the third

errata

sheet. Exh. 87 at 35-36.

Section 732.855/734.855. In the proposal, the Agency proposed language to address the

circumstance where the costs associated with an activity exceeded the maximum payment

amount. R04-22Prop. at 32. In the third

errata

sheet, the Agency suggests renumbering this

section to Section 732.860 and adding a new Section 732.855. Exh. 87 at 36-38.

Mr. Clay testified that the provisions in Section 732.614/734.665 are based upon other

Board and Agency rules addressing retention and inspection

of records. Exh. 3 at 9. Mr. Clay

stated that the Agency plans

to perform periodic audits of owners, operators, and consultants.

Id.

Mr. Clay further testified that the Agency does not intend to look at a company's financial

statements; rather the Agency will review documents related

to payments from the UST Fund.

Exh.

88 at 26. Mr. Clay explained that the Agency needs to ensure that records related to

reimbursement are retained for a certain period

of time in case the Agency needs to review the

records.

Id.

Response to Testimony by Participants. Mr. Clay testified that PIPE submitted

agendas from meetings between the Agency and PIPE. Exh.

88 at 3. Mr. Clay wanted to clarify

that the agendas were prepared

by PIPE and did not necessarily reflect what was actually

discussed at the meetings.

Id.

Mr. Clay also sought to clarify the reason the Agency has

proposed these revisions to the UST rules.

!d.

Mr. Clay emphasized that the changes were

brought about because

of statutory change and in order to streamline the preparation and review

of budgets and applications for payment. Exh. 88 at 3-4. In addition, the Agency believes the

proposal will allow for more efficient use

of consultant, Board, and Agency resources while

improving consistency

in the Agency's decisions. Exh. 88 at 4. Mr. Clay stated that the Agency

further believes that the proposed changes could help control cleanup costs, expedite cleanups,

and ultimately allow owners and operators to be reimbursed in a more efficient and timely

manner.

Id.

Regarding the economic savings that may be expected because of this proposal, Mr. Clay

stated that the Agency has not performed a formal economic analysis to determine the savings

that may be generated by the proposal. Exh. 88 at 4. Mr. Clay noted that based on recent data,

$25 million more a year

is being paid out from the UST Fund than is being received and if this

difference

is not reduced, delays in payments could occur.

Id.

Under this proposal, the Agency

believes there will be significant savings in cleanup costs with reasonable rates being established

in regulations.

Id.

Mr. Clay testified that there will be less time needed for consultants to

prepare budgets and reimbursement packages and less time required for Agency review.

Id.

Mr.

Clay also stated that limiting reimbursement to Tier 2 remediation objectives and requiring use

of groundwater ordinances "will significantly reduce" the cost of cleanup. Exh. 88 at 4-5.

In response to testimony concerning the time the Agency takes to make a decision under

the UST program, Mr. Clay pointed out that the Act provides the Agency with 120 days to

respond

to submittals. Exh. 88 at 5. Mr. Clay opined that "any change to that timeframe would

need to

be a statutory change" and a reduction of that timeframe would impact the Agency's

administration

of the UST program.

Id.

Secondly, Mr. Clay noted that the Agency'sactual time

for review

is often less than 120 days. Exh. 88 at 6. In the period from May 2003 through May

2004, the Agency completed review

of more than half the submittals within sixty days. Exh.88

at 6. Mr. Clay further pointed out that 25% of the submittals were decided within thirty days.

Id.

Mr. Clay opined that the amount of time the Agency takes to review a submittal is largely

based on the quality

ofthe submittal.

Id.

The Agency is also opposed to the concept of requiring the Agency to prepare a draft

denial letter prior to the Agency decision. Exh.

88 at 13. Mr. Clay testified that such a process

For Section 732.840/734.840(b), Mr. Bauer indicated that the limit has been established

at $10,000 per occurrence. Exh. 9 at

12. For reimbursement the activities must be submitted on

a time and materials basis to the Agency.

Id.

Mr. Bauer testified concerning the rates for professional consulting services in Section

732.845/734.845. Exh. 9 at 12-15. Mr. Bauer stated that after consultation, the American

Consulting Engineers Council

of Illinois

(ACECI), the Agency determined that fieldwork

should be billed on a half-day rate, which is five hours billed at $80 per hour. Exh. 9 at

12. The

Agency included additional expenses for vehicles

or mileage, photo ionization detector (PID),

and miscellaneous supplies to develop the maximum

of$500 per half-day. Exh. 9 at 12-13. Mr.

Bauer testified that maximum half-day increments had been established for oversight

ofUST

removal, removal of contaminated soil, soil borings, line release repair, free product removal,

and groundwater sampling event. Exh. 9 at 13-15.

Mr. Bauer testified that Section 732.Appendix E/734.Appendix E establishes personnel

titles and rates to be used when submitting activities on a time and materials basis. Exh. 9 at 15.

The titles must be used and the consultant'spersonnel must be able to meet the title

requirements.

Id.

The rates are based on the task performed and not the title of the person

performing the task.

Id.

Mr. Bauer stated that the consolidation of titles is essential to maintain

consistency in Agency reviews and to expedite the review process.

Id.

Mr. Bauer indicated that

the maximum hourly rates are based on the average rate the Agency has seen on budgets and

reimbursement claims. Exh. 9 at 16.

Harry Chappel

Mr. Chappel is a unit manager in the leaking UST section within the Bureau of Land and

has been in his current position since 2002. Exh.

11 at 1. Mr. Chappel was previously employed

by the Agency from 1976 to

1995 and was in private practice from 1995 to 2002.

Id.

Since

1979, Mr. Chappel has been a registered professional engineer.

Id.

Mr. Chappel'stestimony

supports the proposed language

in Subpart H. Mr. Chappel testified that the proposal is a result

of modifications to the Act and "the need to reform the current reimbursement procedures."

Id.

Mr. Chappel testified that Section 732.800/734.800 specifies all reimbursable tasks will

be limited to the maximum amounts set forth

in Subpart H. Exh. 11 at 2. The Agency grouped

reimbursable activities into eleven categories.

Id.

Mr. Chappel'stestimony includes several

attachments in support

of the proposed maximum allowable rates. Exh. 11 at 3.

For Section 732.825/734.825, Mr. Chappel testified that the rate for soil excavation,

transportation and disposal was developed using randomly selected projects. Exh.

II at 3. The

maximum rate for the cost to excavate, transport, and dispose (ETD)

is the sum of costs for each

activity plus one standard

of deviation rounded up to a whole dollar amount.

Id.

The result is

$57 per cubic yard.

Id.

Mr. Chappel indicated that the rate for backfill would be $20 per cubic

yard.

Id.

This maximum rate was developed by using the sum of the costs to backfill plus one

3 On July 1, 2004, the Consulting Engineers Council of Illinois became the American Consulting

Engineers Council

of Illinois. Tr.6 at 7-8.

Use of Phrase "Maximum Payment Amounts"

PIPE argues that the Agency's use of the phrase "maximum payment amount" is

inconsistent with Section 732.860/734.860 and Section 734.800(b). PC 6 at 9. PIPE notes that

those sections

of the proposal indicate that the amount in Subpart H may be exceeded and are not

exclusive.

Id.

PIPE suggests that the phrase "reasonable costs" or "usual and customary costs"

as alternatives. PC 6 at 10.

The Board agrees that "maximum payment amount" is a phrase which denotes the

highest amount payable for a task. However, the Board believes that

in the context of the rules,

the phrase

is appropriate and the Board declines to make a change.

Compaction (Section 732.606/734.630(w))

PIPE raised the issue of compaction and backfill in PIPE'spublic comment. PIPE

suggests that compaction

of backfill material should be an eligible cost. The Board disagrees

with PIPE. Section 732.606(w), which

is identical to Section 734.630(w), is existing language.

The Board

is not convinced that this record supports removing compaction of backfill material

from the list

of costs which are currently ineligible for reimbursement.

CONCLUSION

The Agency originally proposed amendments to the regulations concerning the leaking

UST program in January 2004. The Board has held seven days

of hearings and received

substantial comments on the proposal. The Board has evaluated the comments

in this proceeding

and the additional language changes suggested by both the Agency and the participants. The

first-notice proposal adopted by the Board today reflects the Board'sconsideration of all the

comments and testimony the Board has received.

Based on the record

of this proceeding, the Board proposes for first notice a rule that

includes lump sum maximum payments for certain tasks, but not a defined scope

of work for

those tasks. The Board

is proposing the maximum payment amounts proposed by the Agency in

most cases. The Board

is cognizant that the methods used to develop the rates by the Agency

were not scientifically or statistically recognized methods. However, the Agency's experience

the UST program is also an element to be considered.

addition, the first-notice proposal will

include provisions for bidding, extraordinary circumstances, and an annual inflation adjustment.

The Board is convinced that the first-notice proposal, as a whole, will allow for reimbursement

of reasonable remediation costs.

As noted above the proposal includes a provision for bidding, and further, the proposal

allows for the preparation

of a request for bids and the review ofthe bids to be reimbursed on a

time and materials basis. The Board

is also proposing that Stage 3 investigations be reimbursed

based on time and materials. The Board will also propose for first notice a definition for

"financial interest" and language prohibiting reimbursement for handling charges when the

primary contractor has a financial interest in the subcontractor. The Board will also retain the

ILLINOIS POLLUTION CONTROL BOARD

August 9, 2004

IN THE MATTER OF:

PROPOSED AMENDMENTS TO:

REGULATION OF PETROLEUM

LEAKING UNDERGROUND STORAGE

(35 ILL. ADM. CODE 732)

IN THE MATTER OF:

PROPOSED AMENDMENTS TO:

REGULATIONS OF PETROLEUM

LEAKING UNDERGROUND STORAGE

(35 ILL. ADM. CODE 734)

TANKS

R04-22

(UST Rulemaking)

R04-23

(UST Rulemaking)

The following proceedings were held before the Illinois

Pollution Control Board, August 9, 2004, at the Department

of Natural Resources Building, One Natural Resources Way,

Springfield, Illinois, before Ann Marie Hollo, CSR, RMR.

Keefe Reporting Company

11 North 44th Street

Belleville, Illinois 62226

(618) 277-0190

(800) 244-0190

Keefe Reporting Company

(618) 244-0190

APPEARANCES:

OFFICE OF THE ILLINOIS POLLUTION CONTROL BOARD

James R. Thompson Center, 100 W.

Randolph Street, Suite 11-500

Chicago, Illinois 60601

By: Marie Tipsord, Esq.

Hearing Officer

ILLINOIS POLLUTION CONTROL BOARD MEMBERS:

G. Tanner Girard, Ph.D, Thomas E. Johnson, Esq.,

AND

Alisa Liu, P.E., Technical Staff Member

ILLINOIS ENVIRONMENTAL PROTECTION AGENCY

1021 North Grand Avenue East

Spingfie1d, Illinois 62794

By: M. Kyle Rominger, Esq.

Posegate & Denes, P.C.

III

North Sixth Street, Suite 200

Springfield, Illinois 62701

By:

Claire A. Manning, Esq.

On behalf of PIPE

Keefe Reporting Company

(618) 244-0190

is not consistent with the Act.

A few issues have been raised regarding

the applications for payment. One is that the

requirement that applications for payment

include proof of payment to subcontractors.

There has been requests to strike this

requirement because of hardship of obtaining

canceled checks. Canceled checks are not the

only proof of payment that may be submitted.

Applications for payment may also contain lien

waivers or affidavits from subcontractors. One

of these methods of proof of payment should be

reasonably obtained.

Proof of payment of subcontractors' costs

is necessary to show the consultant is entitled

to handling charges. Handling charges, by

definition, means administrative insurance and

interest costs as -- and the reasonable profit

for procurement, oversight and payment of

subcontractors and field purchases.

If the

consultant paid the subcontractor's bill, he or

she is entitled to handling charges. However,

many consultants have the owner/operator pay

the subcontractors directly, and therefore are

Keefe Reporting Company

(618) 244-0190

HEARING OFFICER TIPSORD:

You have a

follow-up on that?

BOARD MEMBER JOHNSON:

No.

HEARING OFFICER TIPSORD:

Go ahead.

BOARD MEMBER JOHNSON:

I was looking over

this, Doug, the new Section 855, which bothers

me. I was used to calling it ordinary,

extraordinary, an unusual expenses 855.

But I assume that that was going to be the

addition that was going to engender the most

interest or most questions.

QUESTIONS BY BOARD MEMBER JOHNSON:

The biggest question I had was in Section

C, in part, in 855, your proposed language is the

maximum payment amount for the work bid shall be the

amount of the lowest bid, unless the lowest bid is

less than the maximum payment amount set forth in

Subpart H, in which case the maximum payment amount

set forth in Subpart H shall be allowed.

And this goes back, I guess, to

essentially our first hearing when we talked about

your Subpart H maximum payments is

to me this

implies that no longer is going to be -- I mean,

it's implying that regardless of what the bids are,

Keefe Reporting Company

(618) 244-0190

you get three of them, they're all under the amount

that you've defined as the maximum number, payment

allowed.

We're going to get the maximum payment

allowed.

I reading that right?

(By Mr. Clay) Yes.

Do you recall the question somebody asked

in the first hearing that these are maximum amounts,

and if in fact the amount comes in underneath that,

that's what's going to be reimbursed, rather than

the amount delineated in Subpart H?

Because someone could, without bidding, go

in and do the work for the amounts in Subpart H, we

put it in C that way to allow them to go ahead and

use Subpart

And I would have to agree with you;

that would be reasonable to take the lowest bid,

since we've also stated in testimony that someone

who's conducting this bidding has already

predetermined or prequalified these bidders as

someone that would be acceptable to them.

And you're going to require not only if I

get five bids, I'm going to want all five of them so

I can't pick and choose which ones I submit to you,

then this seems to imply as well that if I go out

Keefe Reporting Company

(618) 244-0190

You do a cleanup for 200,000.

You get

done Monday.

You went to submit the reimbursement

on a Friday for your reimbursement. Obvious

you

haven't paid the trucker, you haven't paid the

landfill, you haven't paid anybody yet. So you're

not going to have the waiver or anything.

MS. DAVIS:

That is a problem.

HEARING OFFICER TIPSORD:

Excuse me,

excuse me. We're drifting into testimony.

MS. DAVIS:

Okay.

HEARING OFFICER TIPSORD:

Please stick to

questions.

If you want to comment on this at

the end of the day, I'll be more than happy to

let you testi

MS. DAVIS:

That was my -- that was the

end of the question.

QUESTIONS BY MS. DAVIS:

And the next question I have is, in the

case of a drilling aspect where I own my own

drilling company, and let's say a particular site I

can't do a drilling for the set price. So I go out

and I get three bids as the Agency has allowed me.

And it also allows me that if I wanted to, I could

do the work for the lowest bid. How do I get paid

Keefe Reporting Company

(618) 244-0190

for my handling for my time to go get those bids for

the scope of work? Because I'm a person who is

using a subcontractor with the indirect financial

interest.

I mean, how do I get paid?

(By Mr. Clay) In that case, I think you

would be entitled to that lump sum as if the owner

and operator were paying for the subcontractor. And

then, you know, that's sort of a business decision.

That's a decision you're making, that you want, in

your case, your company to do the work as opposed to

the low bidder.

MS. DAVIS:

Okay.

HEARING OFFICER TIPSORD:

Go ahead.

MR. SCHUMACHER:

Brad Schumacher.

QUESTIONS BY MR. SCHUMACHER:

I didn't get an answer. If I sent in my

reimbursement claim, I am not going to have any

waivers, cancelled checks, affidavit, because I

haven't paid my contractor yet.

So are you going to

deny my claim? Or how does that work? Obviously,

we're going to pay our subcontractor, but what if my

terms are 90 days, I submit a claim, and you're

going to not process the claim because I don't have

the waivers? Or backups that I'm paying the

Keefe Reporting Company

(618) 244-0190

BEFORE THE ILLINOIS POLLUTION CONTROL BOARD

ECEIVED

CLERK'S OFFICE

SEP 23 2004

IN THE MATTER OF:

)

PROPOSED AMENDMENTS TO:

)

REGULA

nON OF PETROLEUM

)

LEAKING UNDERGROUND STORAGE )

TANKS (35 ILL. ADM. CODE 732)

)

IN THE MATTER OF:

)

PROPOSED AMENDMENTS TO:

)

REGULA

nON OF PETROLEUM

)

LEAKING UNDERGROUND STORAGE )

TANKS (35 ILL. ADM. CODE 734)

)

R04-22

(Rulemaking - Land)

R04-23

(Rulemaking - Land)

STATE OF ILLINOIS

Pollution Control Board

ILLINOIS ENVIRONMENTAL PROTECTION AGENCY'S

POST HEARING COMMENTS

NOW COMES the Illinois Environmental Protection Agency ("Illinois EPA"),

and through one of its attorneys, Kyle Rominger, and submits the following post-hearing

comments:

The Illinois EPA would like to thank the Board, Hearing Officer Tipsord, and the

Board staff for their attention and patience in this rulemaking proceeding. The Illinois

EPA would also like to thank all of the parties that contributed to this proposal through

discussions with the Illinois EPA and through comments and testimony provided to the

Board.

As stated in the hearings held in this rulemaking, a portion of the outreach process

that the Illinois EPA normally conducts prior to submitting proposed rules to the Board

did not occur in this rulemaking due to anti-trust concerns expressed

by outside parties.

This uncommon curtailment ofthe Illinois EPA'soutreach meant that many issues

usually discussed and settled prior to the submission ofrules to the Board were raised in

investigation statute up to date." Id. Copies of the legislative transcript pages cited

above are provided in Attachments A, B, and C of this document.

As noted in the legislative record, Public Acts 92-0554 and 92-0735 were passed

to amend Title XVI for distinctly different reasons. There is not such total and manifest

repugnance between the two Public Acts that they cannot stand together. Because the

two Public Acts make changes to Title XVI that do not irreconcilably conflict, they must

be construed together in a manner that gives each its full effect. Specifically, the site

classification system was replaced with the site investigation and remediation

requirements

ofPublic Act 92-0554, and Licensed Professional Geologists were added to

the Licensed Professional Engineer supervision and certification requirements as

provided in Public Act 92-0735.

After the Public Acts were signed into law, the Illinois EPA carefully researched

and studied how the amendments to Title XVI must be interpreted and applied. The

Illinois

EPA has been very careful to ensure that both its proposal and its implementation

ofTitle XVI

arecon~istent

with the changes made by the Public Acts and the

legislature's intent.

The Proposed Maximum Payment Amounts.

As explained in the hearings, the Illinois EPA believes the maximum amounts set

forth in its proposal are reasonable for the work being performed, unless a higher amount

is justified through bidding

or because ofunusual or extraordinary circumstances.

Several questions were raised about the Illinois EPA'sdevelopment of the proposed.

maximum amounts. Many

ofthese questions concerned the use of historical information

and whether the amounts developed from such information reflect current market prices.

Although the Illinois EPA used historical information in its development of some of the

maximum amounts, the amounts set forth in the proposal are generally consistent with the

amounts owners and operators request for reimbursement and the amounts the Illinois

EPA approves for payment from the Underground Storage Tank Fund ("UST Fund").

See, e.g., Exhibit 4 at.3; Exhibit 10 at 2; Exhibit 12 at 6. The Illinois EPA believes the

maximum amounts set forth in its proposal are not out of date and do not need to be

increased by any inflationary rate to make them consistent with current market prices.

The amounts proposed are already consistent with the current market.

While there has been much discussion about the development

ofthe proposed

maximum amounts, very little has been said about the amounts themselves. Some

evidence has been presented to show that the maximum amounts should be something

other than what the Illinois EPA proposes. So far, however, neither alternative amounts

(other than personnel and lab rates listed in the appendices) nor adequate justification for

alternative amounts have been submitted to the Board. While the Illinois EPA has

remained open to discussing alternative amounts with interested parties as long

as the

amounts can be justified, it too has not been provided with alternative amounts (other

than personnel and lab rates listed in the appendices) or adequate justification

for

alternative amounts.

Although the proposed rules set forth maximum amounts that will be paid for

certain tasks, owners and operators are not constraine{f by these amounts. These

"default" maximum amounts can be exceeded through bidding

or through site-specific

approval when unusual or extraordinary circumstances are encountered. The addition of

bidding, which the Board suggested as an option, is one ofthe most significant changes