STATE OF
OFFICE OF
ADMINISTRATIVE HEARINGS
FOR THE
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In
the Matter of the Appeal of the Denial of the Application for Reimbursement
of Service Oil Company, MPCA Leak No. 6899 |
FINDINGS OF
FACT, CONCLUSIONS
AND RECOMMENDATION |
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Administrative Law
Judge James E. LaFave conducted a hearing in this contested case proceeding
beginning at
Michael J. Tostengard,
Assistant Attorney General,
This Report is a recommendation,
not a final decision. The
Commissioner of the Minnesota Department of Commerce will make the final
decision after reviewing the hearing record.
The Commissioner may adopt, reject or modify these Findings of Fact,
Conclusions, and Recommendation. Under
Minnesota Law,[1]
the Commissioner may not make his final decision until after the parties have
had access to this Report for at least ten days. During that time, the Commissioner must give
each party adversely affected by this Report an opportunity to file objections
to the report and to present argument.
Parties should contact the office of Glenn Wilson, Commissioner,
Minnesota Department of Commerce,
STATEMENT OF
THE ISSUE
Whether Service Oil’s application and
testimony to the Board established that it is entitled to additional
reimbursement for the cost of preparing the Annual Report?
Based on the evidence in the hearing record, the
Administrative Law Judge makes the following:
FINDINGS OF
FACT
1.
The Board
reimburses eligible applicants for certain costs incurred in the clean up of
petroleum releases pursuant to Minn. Stat. Chap. 115C (2004).
2.
Responsible
persons are obligated to contract for the cleaning of spills. The Board can only reimburse costs that it
determines “were actually incurred and were reasonable.”[2]
3.
Applicants
generally receive reimbursement of 90% of all eligible costs under the statute.[3]
4.
Service Oil operates
a retail gasoline station in
5.
Service Oil
suffered a release of petroleum products and has been conducting clean-up
operations pursuant to a MPCA order.[5]
6.
In October of
2004, Service Oil submitted its Annual Report.[6]
7.
On
8.
On
9.
Among the reasons
set forth in Service Oil’s May 9, 2005, appeal were “MPCA requested an Annual
Monitoring Report be submitted in their March 31, 2004 letter (item 7)”[9],
“Additional information requested by MPCA, including an expanded receptor
survey, was included with the Annual Monitoring Report”[10]
and “A substantial amount of additional data was requested by the MPCA in
letters dated 4/1/2003, 8/11/2003, 11/26/2003, 3/31/2004 including as updated
well receptor.”[11]
10.
On
11.
The Board failed to
approve $2,725.50 in annual report writing costs.[13] The Board determined the annual report
writing costs were unreasonable since they exceeded the maximum charges listed
under Minnesota Rules.[14]
12.
On
13.
These Findings are based on all of the evidence in the record. Citations to portions of the record
are not intended to be exclusive references.
14.
The Administrative Law Judge adopts as Findings any Conclusions that
are more appropriately Findings.
Based upon these Findings of Fact, the Administrative Law
Judge makes the following:
CONCLUSIONS
1.
The Board gave Service Oil proper and timely notice of the hearing, and
it also fulfilled any other procedural requirements of law and rule so that
this matter is properly before the Administrative Law Judge.
2.
Service Oil has the burden of proving by a preponderance of the evidence
that it is eligible for reimbursement for the extra costs in preparing the
annual report.[17]
3.
Costs for preparing an annual report that exceed the maximum labor
charges allowed are unreasonable.[18]
4.
Minnesota Rules,
however, allow for deviation from the maximum cost requirements when they are
approved, in writing, by the agency. The
Rule states:
… costs
for tasks performed that are different than or in addition to those specified in a proposal for a step of services
… are not prima facie unreasonable when the agency states in writing before performance of those tasks that the performance
of those tasks is necessary and appropriate … [Emphasis added}[19]
5.
By letter dated
6.
Twice in its
Application for Reimbursement, Service Oil put before the Board the information
and tasks required by the Minnesota Pollution
Control Agency. First in the
7.
Service Oil has established by a preponderance
of the evidence that by letter dated March 31, 2004 the Minnesota Pollution
Control Agency requested additional information be included in the October 2004
Annual Report and
that they are therefore eligible to receive reimbursement for the additional
cots in preparing the annual report.
8.
The
Administrative Law Judge adopts as Conclusions and Findings more appropriately
described as Conclusions.
Based upon these
Conclusions, and for the reasons set forth in the accompanying Memorandum, the
Administrative Law Judge makes the following:
IT IS HEREBY RESPECTFULLY RECOMMENDED: That the Commissioner
of the
|
JAMES E. LAFAVE |
|
Administrative Law Judge |
Reported: Tape-recorded, 1 tape
No
transcript prepared
Service Oil seeks $2,725.50 in additional costs for the preparation of
the October 2004 Annual Report. In this
proceeding Service Oil must demonstrate by a preponderance of the evidence that
the information submitted to the Board, that served as the basis for its
decision, established that Service Oil is eligible for the reimbursement.
The
Board denied the additional reimbursement.
It claimed Service Oil did not prove that the additional costs were
necessary and the there is nothing in the record to establish a deviation under
Minnesota Rules. The Administrative Law
Judge disagrees.
Minnesota
Rules list the maximum charges allowed for submissions to the agency.[23] The Rules, however, also allow for deviation
from those maximum charges when the applicant can show that the agency, before
the performance of the additional task, approved in writing, that the task was
necessary and appropriate.[24]
In
Service Oil’s Petrofund application it presented evidence to the Board that the
by letter dated
The
Board had the evidence in Service Oil’s Pertofund application, the October 2004
Annual Report and the testimony from the hearing when making its
determination. The Board failed to
consider Service Oil’s evidence concerning the additional tasks required by the
MPCA. Service Oil’s submissions while
admittedly not as complete as one would like, still meet its obligation to demonstrate
by a preponderance of the evidence it is eligible for additional reimbursement.
For the
reasons listed above the ALJ respectfully recommends the Commissioner REVERSE
the Board’s decision and AWARD Service Oil $2,725.50 in additional costs for
the preparation of the October 2004 Annual Report.
J. E. L.
[1]
[2]
[3]
[4] Testimony of Dirk Lenthe.
[5] Ex. 1.
[6] Ex. 4.
[7] Ex. 2.
[8] Ex.1.
[9] Ex. 2.
[10] Ex. 1.
[11] Ex.1 on page 15 of 16 Consultant Change Order Form.
[12]
Ex. 3 Tape of
[13] Ex. 3.
[14]
[15] Ex. 2.
[16]
[17] Minn. R. 1400.7300 subp. 9.
[18]
[19]
[20] Ex. 1, Ex. 2, see also Ex. 6.
[21] Ex. 1.
[22] Ex. 1.
[23]
[24]