ILLINOIS POLLUTION CONTROL BOARD
May
19,
1988
CITIZENS UTILITIES COMPANY
OF ILLINOIS,
Petitioner,
v.
)
PCB 86—185
ILLINOIS ENVIRONMENTAL
PROTECTION AGENCY,
Respondent.
SUPPLEMENTAL OPINION AND ORDER OF THE BOARD
(by 3.
Anderson):
This matter comes before the Board on an April
27,
1988
motion by Citizens Utilities Company of Illinois
(Citizens)
for
modification
of
the Board’s March
24,
1988 Opinion and Order.
In
that Opinion and Order,
the Board granted a
two year variance,
rather than the three years requested by Citizens,
from
restricted status imposed
for violations
of the Board’s
radium
standards
in Citizens well water supplies.
The n~otionalso requests rehearing,
although Citizens
believes that the record as
it now stands supports the full
request.
(Citizens motion
p.
4).
Attached
to the Citizens’
motion is
an affidavit
of
a vice—president of Citizens containing
additional testimony
that would be offered were rehearing
to be
granted.
On May
9,
1988,
the Illinois Environmental Protection agency
(Agency) filed
a
response
in opposition.
On May 13,
1988,
Citizens filed
a reply
to the Agency’s response.
Citizens motion
for rehearing
is denied.
Citizens motion
for modification
is granted;
upon reconsideration the Board
vacates
its March
24,
1988 Opinion and Order granting variance
and denies Citizens petition for variance for
the reasons
expressed
below.
Citizens
is,
of course,
free to file
a new
petition for variance.
The fundamental reason
for the Board’s denial
is that
Citizens’
motion makes
clear
for the first
time
in this
1
1/2
year proceeding
the answer
to
a threshold issue
in this matter:
whether Citizens was
in fact committing
to achieve compliance by
a definable date certain.
It
is now absolutely clear
that
Citizens intends
to take no further compliance
steps unless and
until certain litigation
is concluded
in Citizens favor and
all
89—233
—2—
opportunities for appellate review
of any decisions
in
that
litigation
are exhausted.
There
is no longer factual
basis
for
the Board
to reach
a conclusion
that compliance can be
reached
in
two years, three years,
five years or
any other number
of
years.
Citizens’
compliance plan
is too speculative
to support
grant of variance,
an assertion consistently made by the Agency.
In order
to better clarify the Board’s action
,
the Board
will repeat verbatim information from the Board’s prior variance
opinion,
and from the
instant motion.
The time—frame
at issue
is embodied
in the first
12 months
of Citizens’
proposed compliance schedule.
The compliance plan
submitted prior
to entry of the Board’s March
24 Opinion and
Order provided:
Total Elapsed Time From
Date
of Board Order
Event
Granting Petition Request
1.
Satisfying conditions precedent
12th month
to
the Glenview Lake Michigan
water supply agreement including
ICC approval of agreement
and
associated tariff
revisions
2.
Citizens and Glenview initiate
12th month
design of facilities
for
Glenview supply.
3.
Citizens and Glenview complete
18th month
design of facilities for
Glenview supply.
4.
Citizens and Glenview receive
24th month
necessary permits and easements,
bonding, complete advertisement,
bid and aware construction
contract.
5.
Start of construction of
24th month
facilities
for Glenview supply.
6.
Complete construction and begin
36th month
supply from Glenview.
In its instant April
27 motion, Citizens appears to be
proposing the same compliance plan, except
that
it would apply
for permits
in
21 months,
but with no date set for receipt of
permits.
In its March 24 ruling,
the Board disallowed
the first
89—234
—3—
12 months,
since
the record
indicated that Citizens’
had already
initiated facility design.
The variance petition was originally submitted on October
23,
1986.
The compliance plan was first proposed
as one of three
options
in
a second amended petition on April
2,
1987,
and
included
a request
for expedited consideration.
The same
compliance
plan, with the same time—frame, was submitted on
January 20,
1988,
with Citizens committing
to the single
compliance plan.
However, Citizens also then stated that “this
revised compliance schedule,
assuming timely action by the
regulatory authorities and absent delays due to causes beyond
Citizens’
reasonable
control, allows for completion of
a Lake
Michigan water supply from Glenview within three years of the
date
of the Board’s order granting the requested variance”.
Board Opinion,
p.
7—8,
citations omitted, emphasis added.
The Agency
insisted throughout
this proceeding
that the
compliance plan proposed by Citizens was unacceptably
speculative,
focusing particularly on the conditions precedent
in
the agreement with Glenview.
By December,
1987,
only one
condition precedent remained,
as ICC approval was obtained
in
November,
1987.
The remaining condition precedent
is as follows:
The
only
condition
still
unresolved
is
in
Article
V,
Section I—Conditions Precedent,
#3:
The awarding
of
a declaratory judgment
by
a
court
of
competent
jurisdiction,
and affirmation
of
that
declaration
by
a
court
of
last
recourse
if
an
appeal
is
taken,
that
the
June
6,
1977
purchase
agreement
between
Northfield
Woods
Water
and
Utility
Co.,
Inc.
(Northfield
Woods)
and Glenview
does
not
require
a
connection
fee
to
be
paid
to
Northfield Woods
if
a connection
is made at
either
of
the
following
transmission
connection
point
locations:
a.
The
intersection
of
Robin
Lane
and West
Lake
Avenue.
b.
The
intersection
of
Joy
Lane
and
East
Lake
Avenue.
Glenview will seek
the declaratory judgment on
behalf
of
Citizens.
Citizens
will
pay
all
expenses
associated
therewith
and
select
the
attorney.
A declaratory judgment action will
not be
required
if Northfield Woods agrees,
in
writing,
that
a connecfJon fee
is not required
at either
of the transmission connection point
locations.
89—23 5
—4—
(Pet.
post hearing
submittals
of
January
22,
1987,
Board Opinion,
p.
6,
emphasis added)
Citizens
states
that
the
status
of
this
case
is
as
follows:
The village
of
Glenview commenced
the declaratory
judgment action referred by the Agency on March
18,
1987,
in
the case entitled Village
of
Glenview,
v.
Northfield
Woods Water
and Utility
Co.,
Inc.,
Case
No.
87
CH
02577,
Circuit
Court
of
Cook
County,
Illinois.
Discovery
has
been
in
progress,
and
Glenview
is expected
to
seek summary judgment
or an
expedited
trial.
(Pet.
Resp.,
January
20,
1988,
p.
5,
Board Opinion,
p.
6)
Regarding
the present status
of
the March 18,
1987
litigation, Citizens states:
“Realistically, Citizens needs
to have the first 12
months
of
its time table,
as
proposed,
to complete
efforts
already
under
way
to
satisfy
this
condition.
This
is
because
the
remedies
being
sought,
either summary judgment
or expedited trial,
require
that
additional
time.
The
parties
also
have
engaged
in
ongoing
set~lernent discussions,
which
have
not
been
successful.
as
of
this
date.”
(Citizens Motion,
April
27,
1988,
p.
3).
Citizens was quite unclear
in the variance proceeding
concerning
the litigation
in relation to the compliance
schedule.
However, since Citizens
insisted that its compliance
schedule was not speculative,
and had committed
in the same first
year
to initiate facility design, and the record indicated that
facility design had been initiated,
the Board gave Citizens
the
benefit
of the doubt,
stating:
“The
Board
believes
that
this
remaining
condition
need
not
cause
the Board
to
reject
the compliance
plan
as
too
speculative.
While
it
is
true
that
this
condition
precedent
could
arguably
cause
the
whole compliance plan
to
unravel,
it
is unclear
in
this
record
whether
this
result
would
inevitably
occur
where
there
to
be
an
adverse
court
decision.
No
costs
of
the
connection
fees
were
included
in
this
record;
the
ICC
Order
does
not
indicate
whether
recovery
of
such
fees
has
been
factored
into
Citizens’
approved
compensation
for
the
incremental
costs
of providing
Lake water;
and
89—236
—5—
Citizens has not made clear
whether this condition
precedent
is
an
essential
element
of
its proposed
timetable.”
(Board Opinion,
p.
8,9.)
Having said this,
the Board also cautioned Citizens
regarding the condition precedent:
“However, while
the Board may hypothesize as
to why
Citizens
does
not wish
to state
precisely
at
this
time, regardit~gthe condition precedent,
its course
of
action
should
the
Court decision
be
adverse
to
Citizens,
the
Board
cautions
Citizens
that
any
subsequent
petition
to
lengthen
or
alter
its
compliance plan will be carefully reviewed.”
(Board
Opinion,
p.
8)
Having made this leap of faith,
the Board
then addressed its
understanding from the
record concerning
the initiation of
engineering design:
“The
Board
will grant variance,
but
only
for
two,
not
three
years.
The
Board
is
not persuaded
that
Citizens
still
needs
the
one
year
lead
time
to
initiate
engineering
design.
In
the
amended
compliance plan on p.
7 of this Opinion, when first
filed last April
2,
1987, Citizens asserted that it
needed
one
year
to initiate design £ollo~ing~oard
action,
for
which
it
requested
expedited
consideration.
(Second
Amend.
Pet.
p.
4,6)
The
Board
notes
that
at
the
earlier
January
13,
1987
hearing
Citizens
testified
that
it
would
initiate
design
and construct
the
facilities
following
the
ICC
approval
of
the
Wilmette/Glenview
contract,
which
approval
occurred
in
November,
1987.
Citizens
also
testified
at
hearing,
however,
that
it
and
Glenview
had
already
contracted
with
an
engineering
firm
to
do
the
design
work.
(R.
28,150,151).
In
addition,
the
compliance
plan
proposes
initiation
of
design
to
run concurrently
with seeking ICC approval.
Finally, Citizens again
proposed the same one year lead time in its January
20,
1988 response.
Given
the less
than precise
record
concerning
the
status of Citizens’ engineering design efforts,
the
Board will
assume
that Citizens
does
not need
the
one
year
lead
time
to
initiate design.
The Board
notes
that
it
has
not
shortened
the
six
months
Citizens requested to complete facility design.”
It
is apparent from the instant motion that Citizens
intended something quite different.
David E. Chardavayne, Vice
89—237
—6—
President of Citizens,
stated
in part
in
a sworn affidavit
attached as Exhibit A to the
instant motion:
“However,
Citizens
cannot
initiate
substantive
engineering
design
work
on
the
interconnection
facilitjes
until
the
Northfield
Woods
litigation
condition
precedent
is
satisfied.
The
major
portion
of
the
interconnection
mains
and
pumping
facilities
required
for
a
Lake
Michigan
water
supply
are
to
be
designed
and
constructed
by
Clenview.
This work
by Glenview
will
not proceed
until
the
condition
precedent
is
satisfied.
Citizens
cannot
commit
Glenview
to
proceed
with
Glenview’s
work
unless
the
condition
is
satisfied.
It would not be reasonable
for Citizens
to
proceed
with
design
and
construction
of
its
minor
portion
of
the
interconnect
mains
until
Glenview also proceeds with work on
its portion.
The
full
first
twelve
months
of
the
thirty—six
months
is
estimated
to
be required
to satisfy this
condition.
This
is
because
the
matter
involves
court
proceedings,
including
summary
judgment
proceedings
and/or
trial,
the
timing
over
which
Citizens has no control.
(emphasis added).
Given this
record,
no
rational person
can now conclude other
than that Citizens’ co~pliar~ceschedule
is driven by
the
condition precedent,
which on its face is not only open ended,
but unresolvable should
there
be
a court decision adverse to
Citizens.
The information in the variance proceeding given
to this
Board
by Citizens regarding the effect
of the pending litigation
on Citizens’
intent to
initiate and complete design of the
facilities was vague and contradictory.
Citizens gave
the Board
little
information on this subject,
and what
it did give was
misleading.
The compliance schedule
itself is most misleading
of
all.
By its terms Citizens committed to initiating engineering
design during
the first year.
Citizens testified at hearing on
January 13,
1987,
well over
a year ago,
that
it had contracted
for design work,
and that
it would proceed to design and
construct facilities
following ICC approval.
During the second
and third year,
the compliance schedule committed
to construct
its facilities and hook—on to Lake water, without any mention
of
the condition precedent.
It was not unreasonable
of the Board to
focus
on the compliance plan and conclude that facility design
would proceed,
and appeared
to have already been initiated apart
from the litigation.
Had the litigation and initiation of design
been framed
in explicit sequential increments
of time,
as they
should have
been,
and had Citizens not made misstatements
in its
89—238
—7—
testimony,
the speculative nature of Citizens compliance plan
would have left no room for doubt.
Now, of course, Citizens
is stating that the start—up of
design and
the whole compliance plan are inextricably linked
to
the litigation concerning connection fees;
that the first year
was set aside solely
to accommodate the time estimated to resolve
the litigation;
that the condition precedent is clearly open—
ended
in terms
of time, and that it appears unresolvable
if
Citizens gets an adverse decision
(although Citizens still
has
not addressed this facet
of the condition precedent.)
The Board also notes
that Citizens still
is pushing
its same
compliance plan, except that now, according to the affidavit, no
time
is set aside
in the first year to initiate facility design.
It
is clear that Citizens has a
right
to pursue
its own
interests,
and that
it intends to do so.
It
is just as clear,
however,
that Citizens is not committing,
and cannot commit,
to
either
a two year,
or
a three year,
or
any year compliance
schedule until the litigation
is resolved, and resolved
in
Citizens favor.
The compliance plan
is completely speculative
as
long
as the connection fee
issue both remains a condition
precedent and as an essential element of the
timing of the
compliance plan.
The Board appreciates
that Citizens would like to be removed
from restricted status.
However,
the Board also wishes
to
emphasize that
it agrees with
the Agency that Citizens has been
less than clear about
its intentions.
The Board notes
that
it
gave Citizens the benefit of
the doubt about noncompliance with
its first variance (PCB 82—63),
and again had given Citizens the
benefit of the doubt
about
the nature of
its commitment to
a
compliance plan
in this variance proceeding.
The Board cautions
Citizens that it will not look with
favor on any new variance
petition on information that is as unenlightening as has occurred
throughout this proceeding.
This Supplemental Opinion and Order contains the Board’s
supplemental findings of fact and conclusions
of law in this
matter.
ORDER
The Board’s Opinion and Order
of March
24,
1988 in
this
matter are hereby vacated.
Variance is hereby denied.
IT
IS SO ORDERED.
3.
D. Dumelle and B. Forcade concurred.
89—239
—8—
I, Dorothy M.
Gunn, Clerk
of the Illinois Pollution Control
Board, hereby certify that the above Supplemental Opinion and
Order was adopted on the /9~ day of
a_~~
,
1988,
by a
vote of
_________.
Dorothy M.
Gunn,
Clerk
Illinois Pollution Control Board
89—240