Microsoft Word - PCB 03-191 09-11-07 pollution .txt

ILLINOIS POLLUTION CONTROL BOARD

3 PEOPLE OF THE STATE OF

)

ILLINOIS,

)

Complainant, )

)

-vs-

) No. PCB 03-191

)

COMMUNITY LANDFILL COMPANY, )

7 INC., and CITY OF MORRIS, )

an Illinois corporation, )

)

Respondents. )

Proceedings held in the above-mentioned

11 cause taken before Tamara Manganiello, Registered

12 Professional Reporter and Notary Public, at 1320

13 Union Street, Morris, Illinois, on the 11th day of

14 September, A.D., 2007, commencing at 9:02 a.m.

L.A. REPORTING (312) 419-9292

A P P E A R A N C E S:

ILLINOIS POLLUTION CONTROL BOARD,

100 West Randolph Street

Suite 11-500

Chicago, Illinois 60601

(312) 814-3461

MR. BRADLEY P. HALLORAN, HEARING OFFICER

OFFICE OF THE ATTORNEY GENERAL,

STATE OF ILLINOIS, ENVIRONMENT BUREAU,

69 West Washington Street

Suite 1800

Chicago, Illinois 60602

(312) 814-5388

BY: MR. CHRISTOPHER J. GRANT and

MS. JENNIFER A. TOMAS,

Appeared on behalf of the Complainant;

ILLINOIS ENVIRONMENTAL PROTECTION AGENCY,

101 North Grand Avenue East

P.O. Box 19276

Springfield, Illinois 62794-9276

(217) 782-8858

BY: MR. MICHAEL S. ROUBITCHEK,

Appeared on behalf of the Illinois

Environmental Protection Agency;

HINSHAW & CULBERTSON, L.L.P.,

100 Park Avenue

P.O. Box 1389

Rockford, Illinois 61105-1389

(815) 490-4900

BY: MR. RICHARD S. PORTER,

Appeared on behalf of the Respondent, City

of Morris;

L.A. REPORTING (312) 419-9292

1 A P P E A R A N C E S

LAW OFFICES OF SCOTT M. BELT & ASSOCIATES, P.C.,

105 East Main Street

Suite 206

Morris, Illinois 60450

(815) 941-4675

BY: MR. SCOTT M. BELT,

Appeared on behalf of the Respondent, City

of Morris;

LaROSE & BOSCO, LTD.,

200 North LaSalle Street

Suite 2810

Chicago, Illinois 60601

(312) 642-4414

BY: MS. CLARISSA CUTLER GRAYSON,

Appeared on behalf of the Respondent,

Community Landfill Company, Inc.

L.A. REPORTING (312) 419-9292

HEARING OFFICER HALLORAN: Good

morning, everyone. My name is Bradley

Halloran. I'm a hearing officer with the

Illinois Pollution Control Board. I'm also

assigned to this matter entitled People of

the State of Illinois, Complainant, versus

Community Landfill Company, Inc., and City of

Morris, an Illinois municipal corporation,

Respondents. It's docketed with the Board as

PCB 03-191 and it's an enforcement matter.

It is September 11, 2007. It's

approximately 9:03 a.m. This hearing was

noticed up for September 10th, 11th, 12th and

13th. The record was open yesterday,

September 10th, but due to some unforeseen

circumstances with the Complainants, it was

continued until today.

This hearing was scheduled in

accordance with the Illinois Environmental

Protection Act and the Pollution Control

Board rules and procedures. It will be

conducted according to procedural rules found

at Sections 101 and 103 of the Board's rules.

I don't really see any people of

L.A. REPORTING (312) 419-9292

the -- citizens of the public or anybody out

there not related to the proceeding. But if

there were, they'd be allowed to speak when

the time allots them.

As most of you guys know, I don't

make the ultimate decision in the case. The

Board does that. I'm just here to rule on

evidentiary matters and make sure the hearing

goes smoothly.

When this is finished, they'll

look at the record, the transcript and the

post-hearing briefs and render a decision.

In this matter, the Board rendered

a decision on February 16th, 2006. They

granted Complainant's motion for summary

judgment in part and directed the parties to

present evidence on a specific issue of

remedy including penalty, costs and

attorneys' fees, if appropriate. The parties

are only to present evidence that is relevant

under Sections 33C, 42F and 42H of the Act.

The Board directs the parties to

provide specific figures and justifications

of any proposed penalty. And I'm reading

L.A. REPORTING (312) 419-9292

that from the February 16th, 2006 Board

order, Page 16.

With that said, would the parties

like to introduce themselves? Mr. Grant?

MR. GRANT: Yes. My name is

Christopher Grant and I'm an assistant

attorney general with the Attorney General's

Office.

MS. TOMAS: Jennifer Tomas. The last

name is spelled T-O-M-A-S. I'm also an

assistant attorney general with the Illinois

Attorney General's Office.

MR. ROUBITCHEK: Michael Roubitchek.

I'm assistant counsel with the Illinois EPA.

HEARING OFFICER HALLORAN: Thank you.

We're going to have to all remember to try to

speak up or turn our mics on so that Tammi

can hear us. Ms. Grayson?

MS. GRAYSON: Clarissa Grayson,

counsel for Community Landfill Company with

LaRose & Bosco, Limited.

HEARING OFFICER HALLORAN: Thank you.

Mr. Porter?

MR. PORTER: Good morning, Mr.

L.A. REPORTING (312) 419-9292

Halloran. Rick Porter on behalf of the City

of Morris.

MR. BELT: Good morning, your Honor.

Scott Belt on behalf of the City of Morris,

as well.

HEARING OFFICER HALLORAN: Good

morning, Mr. Belt.

Before we go any farther and the

Complainant presents his case in chief, it

appears that Community Landfill Company, CLC,

filed a request on September 6th, I believe.

I didn't find it until yesterday. I had to

go into the office after this hearing. It's

a request to incorporate documents. I

believe they're the testimony from another

case. And that case was PCB 01-170. Ms.

Grayson, would you like to address that?

MS. GRAYSON: Yes, your Honor. We

think that it's appropriate for the issue of

remedy and penalty to incorporate this

testimony and the documents that were related

to the testimony pursuant to Board rule

Section 101.306, which allows the

incorporation of documents by reference upon

L.A. REPORTING (312) 419-9292

the written request of any person on its own

initiative.

The Board or hearing officer may

incorporate materials from the record of

another Board docket into any proceeding.

The Board is then allowed to give the

incorporated matter the appropriate weight

upon review.

And we feel that these documents

are appropriate and also to save -- in the

interest of judicial economy, to save the

time of having these people testify. We felt

that since the Board has promulgated this

rule, that it was an appropriate use of it.

HEARING OFFICER HALLORAN: Thank you,

Ms. Grayson. I'll go first to Mr. Grant.

MR. GRANT: Mr. Halloran, prior to

seeing this, I was unfamiliar with the rule

and was prepared to file a response and

objection on the basis of hearsay and

relevance and that sort of thing.

But after looking at the rule,

it's obvious that it seems to be at the

hearing officer or the Board's discretion do

L.A. REPORTING (312) 419-9292

review this. And, certainly, this is sort of

the last in a long line of Board proceedings

that are related to financial assurance at

the Morris Community Landfill Company.

So, although, I don't think it's

particularly relevant to this case since the

issues were different, in other words in the

2001 case it was a question of whether the

Frontier bonds were valid financial

assurance, that's been decided and has gone

up through the Third District Court of

Appeals. I'm not going to formally object

but rather just, you know, point out to the

Board that we don't think it's particularly

relevant, but not make a formal objection to

the use of that section.

HEARING OFFICER HALLORAN: Thank you,

Mr. Grant. Mr. Porter?

MR. PORTER: We have no objection. As

a matter of fact, we would join in the

motion. And as to Mr. Grant's point, I just

want to make a brief record. Part of this

hearing, if not one of the primary bases for

this hearing is to show the reasonableness of

L.A. REPORTING (312) 419-9292

the conduct, particularly my client, City of

Morris.

And if, indeed, there was a good

faith basis believing the Frontier bonds were

valid, that certainly explains my client's

conduct and reasonableness of that conduct,

therefore, it is certainly relevant to this

hearing and we have no objection to the

admission of the documents.

HEARING OFFICER HALLORAN: Okay.

Thank you. CLC and the City of Morris has

just recently joined in. Their request is

granted. The documents and the testimony

that was filed on September 6th will be

incorporated into the record. Thank you.

Mr. Grant, do you want to give an

opening?

MR. GRANT: Well, yes. But I have one

preliminary matter. I'm going to request

that our witness list be amended to add

Robert Prium as a witness. And I apologize

for doing this at such a late date.

It was my intention last week to

reach agreement on a few facts that were

L.A. REPORTING (312) 419-9292

contained in Community Landfill Company's

interrogatory responses. I was unable to do

that. And, you know, frankly, a lot of that

was my fault that it didn't happen.

However, I think it's important

that the Board get all of the pertinent

facts. We have interrogatory responses that

were verified by Mr. Prium on behalf of

Community Landfill Company. And I've

discussed it with counsel. Mr. Porter

doesn't have an objection to just admitting

those interrogatories responses, but

Ms. Grayson understandably needs to consult

with Mr. LaRose before she can agree to that.

MS. GRAYSON: If I may interrupt a

moment? I have consulted with him and we

will stipulate to the amounts that --

THE COURT REPORTER: I can't hear you.

MS. GRAYSON: I'm sorry. We will

stipulate to the amounts that are in the

interrogatories.

HEARING OFFICER HALLORAN: I'm sorry.

Ms. Grayson, I didn't hear again. You will

stipulate to the amounts?

L.A. REPORTING (312) 419-9292

MS. GRAYSON: Isn't that what --

MR. PORTER: Can we go off the record

for a moment?

HEARING OFFICER HALLORAN: Sure.

Let's go off the record.

(Whereupon, a discussion

was had off the record.)

HEARING OFFICER HALLORAN: Before I

forget, I'm going to mark Hearing Officer

Exhibit A the documents I just accepted into

evidence regarding the incorporation of

materials. So that will be labeled Hearing

Officer A. Mr. Grant?

MR. GRANT: Mr. Halloran, we've

reached a stipulation which I think will

solve my witness problem. We've agreed to

stipulate as admissible Community Landfill

Company's interrogatory responses. And,

specifically, it's Community Landfill's

response to Complainant's first set of

interrogatories, Community Landfill Company's

first supplemental response to Complainant's

first set of interrogatories and request for

the production of documents, this is also

L.A. REPORTING (312) 419-9292

identified as CLC Exhibit No. 2, and also

Respondent, Community Landfill Company's

response to complainant's second set of

interrogatories and the request for

production of documents.

All except for CLC Exhibit No. 2

are contained as part of Complainant's

Exhibit No. 13 and the stipulation is that we

can admit them as what Robert Prium would

have testified to had he been called as a

witness.

MR. PORTER: So stipulated.

MS. GRAYSON: So stipulated.

HEARING OFFICER HALLORAN: Do you want

to present those now, Mr. Grant?

MR. GRANT: Yes, your Honor. I offer

the documents that I just described, which

include portions of Complainant's Exhibit

No. 13, specifically Respondent, Community

Landfill Company's response to complainant's

first set of interrogatories and requests for

the production of documents.

HEARING OFFICER HALLORAN: Do you have

it physically with you?

L.A. REPORTING (312) 419-9292

MR. GRANT: I do. As a matter of

fact, we should probably give you an exhibit

book.

HEARING OFFICER HALLORAN: Ms. Tomas

did.

MR. PORTER: Mr. Halloran, may we go

off the record for one more moment, please?

HEARING OFFICER HALLORAN: Sure.

We're off the record.

(Whereupon, a discussion

was had off the record.)

HEARING OFFICER HALLORAN: Back on the

record.

MR. GRANT: Counsel for the parties

have met and we've agreed to stipulate to the

admissibility of exhibits from all three

parties.

MR. PORTER: Exhibits 1 through 14 of

yours, I think, correct?

MR. GRANT: Yes, Plaintiff's Exhibits

1 through 14.

HEARING OFFICER HALLORAN: You know, I

do have this binder and this is going to be

presented and taken into evidence.

L.A. REPORTING (312) 419-9292

MR. GRANT: Yes.

HEARING OFFICER HALLORAN: What I

think I will do is label it Complainant's

Group Exhibit A.

MR. GRANT: And then we'll have A1

through A14?

HEARING OFFICER HALLORAN: Right. I

think might be easier. I don't know.

MR. GRANT: Yeah.

MR. PORTER: And the state and CLC has

agreed to stipulate to the foundation

necessary for my Exhibits 1 through 10, which

I have tendered to Mr. Halloran along with

that exhibit list. I will have the exhibits

marked at lunch.

HEARING OFFICER HALLORAN: And do we

want to name this City of Morris Group

Exhibit A?

MR. PORTER: Sure. A1 through 10.

HEARING OFFICER HALLORAN: Okay.

Ms. Grayson?

MS. GRAYSON: Yes. We have agreed to

the admissibility of CLC's exhibits. Now, 2

was previously admitted, so these are

L.A. REPORTING (312) 419-9292

Exhibits 3 through 18.

MR. GRANT: I don't believe that we

got to the point of admitting CLC No. 2. We

were just in the process of that.

MS. GRAYSON: All right. We were in

the process of that. So we have Exhibits 3

through 18 for CLC that have been agreed to.

MR. GRANT: And, also, CLC Exhibit 2,

which is the first supplemental interrogatory

responses.

MS. GRAYSON: So it would be 2 through

18?

MR. GRANT: Yes.

HEARING OFFICER HALLORAN: When we get

this all fleshed out, we're going to have to

address them individually for the record so

the Board knows what we're talking about.

MS. GRAYSON: I'm going to tender a

set of our documents to the hearing officer.

HEARING OFFICER HALLORAN: I think

I'll wait and do all these exhibits together

before lunch or before the close of the day

just to make sure it's in the record.

The exhibits talked about are

L.A. REPORTING (312) 419-9292

admitted into evidence pursuant to the

stipulation. Any other housekeeping

so-to-speak activities?

MR. GRANT: I believe we'd like to

maybe deal with the City of Morris' motion

that was filed last week, at least discuss

it.

HEARING OFFICER HALLORAN: Sure.

MR. GRANT: We were served with the

motion. I think you mentioned it was

directed to the Board. Should we present

this motion at this -- or should they present

the motion at this time or should we --

HEARING OFFICER HALLORAN: This is the

motion for leave to file amended affirmative

defense?

MR. GRANT: Yes.

HEARING OFFICER HALLORAN: Okay. That

is directed to the Board. And, secondly, it

involves a substantive type ruling, so I

cannot do that. But you may make your

argument on record and the Board will take a

look at it or you can make a written

response, as well.

L.A. REPORTING (312) 419-9292

MR. GRANT: I think we filed a

response, at least a brief response just to

have something on the record. Maybe we'll

supplement that response. We can talk about

it. But I just wanted to know if that was

something that you wanted to treat today.

HEARING OFFICER HALLORAN: I have no

preference.

MR. GRANT: That's it. I'm ready to

proceed.

HEARING OFFICER HALLORAN: Do you want

to do an opening?

MR. GRANT: Yes. Just for the record,

I'm going to do an opening statement.

My name is Christopher Grant with

the Attorney General's Office. This hearing

is set to provide evidence to the Board on

the penalty factors from Section 33C and 42H

of the Illinois Environmental Protection Act,

which I will refer to as the Act.

The Board has already determined

that the Respondents, Community Landfill

Company and the City of Morris, have violated

Section 21D(2) of the Act and two sections of

L.A. REPORTING (312) 419-9292

the Board's financial assurance regulations.

This case is all about financial

assurance, foreclosure and post-closure care

of the Morris Community Landfill, Morris,

Grundy County, Illinois.

Financial assurance assures that

existing landfills will be properly closed at

the end of their working life and monitored

thereafter to prevent harm to local residents

and to prevent pollution from causing harm to

the environment. It's provision is a

condition of the privilege of conducting

landfill operations.

The City of Morris and Community

Landfill Company wanted to continue operating

a waste disposal at the Morris Community

Landfill. This required them to post more

than $17 million of compliant financial

assurance.

The evidence will show that the

City and CLC agreed to this condition and

posted over $17 million using surety bonds

issued by the Frontier Insurance Company.

More than half of this amount was posted by

L.A. REPORTING (312) 419-9292

the City of Morris.

We will show that soon afterward

these bonds were determined to be inadequate

under the Board's regulations.

We will also show that despite the

requirements of the Act and Board

regulations, Community Landfill Company and

the City of Morris did not replace these

bonds with any other legally sufficient

financial assurance. Despite this, they

continue to dispose of waste at the landfill

they own and operate.

The Board has found that these

actions institute violations of the Act and

the Board's own regulations. The State,

after this hearing, will ask that the Board

provide an effective and permanent remedy.

The State will request that the Respondents

be required to post at least $17.4,

compliant, legally sufficient financial

assurance for proper closure and post-closure

care of the Morris Community Landfill. This

relief is a the minimum necessary to protect

the public.

L.A. REPORTING (312) 419-9292

The State will also ask the Board

to impose a significant penalty. The State

will ask that the Board recoup via penalty

all of the economic gain realized by the

Respondents during the period of violation,

some seven years.

The State will ask the Board to

increase this penalty to reflect the duration

and gravity of these violations and impose a

penalty sufficient to deter those similarly

situated from these significant violations.

Finally, the State will show that

these violations were willful and knowing.

We'll ask the Board to award it fees and

costs incurred through prosecution of this

matter.

HEARING OFFICER HALLORAN: Thank you,

Mr. Grant. Ms. Grayson, would you like to

give an opening?

MS. GRAYSON: Could we go off the

record for a moment, please?

HEARING OFFICER HALLORAN: Sure.

We're off the record, Tammi.

(Brief pause.)

L.A. REPORTING (312) 419-9292

HEARING OFFICER HALLORAN: Thank you.

You may proceed.

MS. GRAYSON: Thank you. At issue in

this matter are three bonds. Community

Landfill is the principal for two of the

bonds, which issued by Frontier Insurance

Company on June 14th, 1996, and May 31st,

2000. The two bonds issued to CLC were in

the amounts of -- or totaling $7,345,736.

The third bond that's at issue

is -- has the City of Morris as the principal

and was issued by Frontier on May 31st, 2000.

That bond is in the amount of $10,081,630.

These bonds were purchased, paid

for and issued to the Illinois Environmental

Protection Agency in good faith based on the

Agency's express approval of the bonds as

conforming with the regulation.

The State is still holding CLC's

collateral hostage and is making claims on

the very bonds it later rejected as

non-conforming.

Without an operating permit to

dispose of waste, CLC has no funds available

L.A. REPORTING (312) 419-9292

to substitute financial assurance. Under

these circumstances, any penalty would be

inappropriate.

Procedure work like this from June

to August 2000, a procedure was established

between CLC's counsel, John Taylor, and

Agency lawyer, John Kim, whereby CLC would

tender copies of the bonds that have been

issued to Petitioners by Frontier Insurance.

Taylor would review the bonds to

see if they were acceptable. And if

acceptable, the parties would have a closing

whereby CLC and the City would tender the

original bonds and the Agency would tender

the permits.

On August 4th, 2000, these bonds

were accepted by the Agency pursuant to the

recommendation of its own financial assurance

expert, John Taylor, who on August 3rd, 2000,

wrote, Community Landfill has tendered three

acceptable performance bonds totaling

$17,427,363. The bonds appear to comply with

the relevant regulations in all respects,

signed, John P. Taylor.

L.A. REPORTING (312) 419-9292

When the bonds were approved on

August 4th, 2000, John Taylor, John Kim and

then Bureau of Land permit manager, Joyce

Munie, all knew that Frontier had been

removed from the Department of Treasury 570

list on June 1st, 2000. They all also

understood that if the bonds were found to be

unacceptable, no permit would issue and no

additional financial assurance would be

tendered.

John Taylor testified that Joyce

Munie was aware that if the bonds were not

accepted, no additional financial assurance

would be tendered and the Agency would be

left with only one 1.4 million in financial

assurance covering the entire site.

Taylor testified that Joyce Munie

directed him to, quote, find a way to accept

the bonds and put the operators on the hook

for 17 million, unquote, in financial

assurance.

Taylor also testified that he

recommended the bonds be accepted in

August 2000 because they complied with even

L.A. REPORTING (312) 419-9292

the most stringent interpretation of the

regulations.

When all three of the bonds were

issued, Frontier was both licensed by the

Illinois Department of Insurance and was on

the U.S. Department of Treasury's 570 list of

approved sureties.

Taylor further testified that he

had specific discussions with the Illinois

Department of Insurance and received

sufficient assurance that Frontier was still

licensed and that its bonding operations were

viable, sound and well run.

Taylor testified there is no law,

rule or regulation that allows the Agency to

take any action to disprove a bond that was

valid when issued, but when the bonding

company is later removed from the U.S.

Department of Treasury's 570 list of approved

sureties.

CLC then filed a supplemental

permit application to receive approval for

the construction of a separation layer and to

receive authorization for the acceptance of

L.A. REPORTING (312) 419-9292

waste for disposal in a newly constructed

area.

In spite of the absence of any

law, rule or regulation, however, Agency

employee, Blake Harris, recommended on May

9th, 2001, that the Frontier bonds be denied

because Frontier was no longer on the 570

list. Harris testified he made this

determination without even looking at the

bonds or determining their effective dates.

Harris' recommendation was

accepted without question by permit manager,

Joyce Munie.

On the contrary, John Taylor's

opinion was that the bonds still conformed

with the most stringent reading of the Act

and regulations as of May 2001 since, one,

they were issued when Frontier was listed on

the 570 list and, two, there is no

requirement -- there's no provision of the

Act's rules or regulations that requires or

even allows the Agency to deny permits based

on subsequent removal from the list.

On May 11th, 2001, the Agency

L.A. REPORTING (312) 419-9292

denied CLC's supplemental permit in part on

the grounds that CLC had failed to comply

with Section 811.712(b) of the Illinois

Administrative Code which requires that the

surety company that guaranties the bond or

other financial assurance for a permit be

licensed by the Illinois Department of

Insurance and approved by the U.S. Department

of Treasury in the Circular 570 even though

the Agency knew the Frontier had been

delisted at the time it pre-approved the

bonds in August of 2000.

The agency got them. CLC and the

City of Morris had done exactly what the

Agency had told them to do. They trusted the

Agency to keep up their end of the bargain.

Instead, in the words of Joyce Munie, they

were on the hook. The resulting harm to CLC

and the City of Morris was obvious.

It's uncontradicted that if the

Frontier bonds had not been approved in

August 2000, no additional financial

assurance would have been tendered by CLC or

the City. In that case, CLC would have been

L.A. REPORTING (312) 419-9292

responsible for one year's premium on only

$1.4 million or $26,850.

Instead, thanks to Joyce Munie's

directive to Taylor, find a way to accept the

bonds and the Agency's acceptance of the

bonds, CLC and the City tendered an

additional is $15.6 million in financial

assurance bonds with a five-year commitment

to pay annual premiums totaling more than

$200,000 per year or more than a million

dollars over five years.

CLC made payments for the bond

premiums in 2001 and -- through 2000 and 2001

for the following amounts: For the two bonds

for which CLC is the principal, CLC paid

$174,532 in fees and premiums. For the bonds

for which the City of Morris is the

principal, CLC paid $252,040 in fees and

premiums for a total of $426,572.

At the same time, because the

permit was denied, CLC was unable to accept

ways to which, quote, would certainly

eventually shut the facility down in the

words of CLC engineer, Mike McDermott.

L.A. REPORTING (312) 419-9292

After litigating this matter all

the way up to the Supreme Court of Illinois,

the People of the State of Illinois filed the

present enforcement action on April 17th,

2003.

The story of the bonds isn't over,

however. This is where the story picks up

with information that is new to the Board and

which must be heard in order for the Board to

fully understand exactly what it is the State

has and continues to try to accomplish.

On January 23rd, 2003, Frontier

Insurance Company demanded that CLC pay its

premium for bond number 158465 in the amount

of $73,825.

By letter dated March 20th, 2003,

counsel for CLC explained the foregoing

situation to Frontier and asked Frontier to

consider its nonpayment of the premiums on

the bonds against that backdrop stating that

the landfill has been effectively shut down

because the agency rejected the Frontier

bonds rendering CLC unable to generate the

necessary income to pay the premium on the

L.A. REPORTING (312) 419-9292

bonds. Even if CLC had the money, it would

be difficult to imagine paying premiums on

the bonds that the IEPA claims are worthless.

In fact, on April 7th, 2003,

Frontier agreed with CLC that no further

billing premiums were warranted on the bonds

since the permit application was denied on

May 11th, 2001. Frontier reversed all

renewal billings for the above bonds and

closed their file based on they May 11th,

2001 date.

On April 16th, 2003, CLC made a

demand to Frontier for the return of its

collateral. When Frontier confirmed on May

30th, 2003, that Frontier was unable to

refund any premiums until authorized by the

State Department of Insurance, Frontier and

counsel for CLC began exchanging drafts of a

proposed release of collateral. CLC sent its

proposed form of release to Frontier on

June 19th, 2003.

On July 2nd, 2003, however,

Frontier sent a form to the IEPA to be

executed for the release of CLC's collateral.

L.A. REPORTING (312) 419-9292

However, it was not until November 5th, 2003,

some three or four months later, that

Frontier informed CLC it would be unable to

proceed with the return of any collateral

based on the August 21st, 2003 letter from

Agency employee, Blake Harris.

In that letter, Mr. Harris

informed Frontier the Agency could not

release Frontier from claims on bonds

numbered 191507, 158465 and 158466 because

alternate financial assurance had not been

received.

The Board should find that because

the Agency has already rejected the bonds as

invalid and, in fact, filed the present

enforcement action to that effect, it is

inevitable for the Agency to at the same time

refuse to release the bonds simply because

alternate financial assurance has not been

received.

The story is not over yet,

however. Apparently, the Agency was not sure

of the situation. On January 27th, 2004,

Beverly Anderson, an accountant in the

L.A. REPORTING (312) 419-9292

Compliance Unit of the IEPA Bureau of Land

wrote to surety underwriting manager,

Frontier, and stated, our records indicate

that Morris Community Landfill is providing

financial assurance for closure and

post-closure costs through three Frontier

performance bonds.

CLC has offered the collateral

numerous times to the State if it will only

agree to release that, which it will not.

On May 27th, 2005, the Agency,

through its former director, Renee Cipriano,

made a demand on bonds for which CLC is the

principal, specifically demanding that

Frontier pay the Agency the penal sum of the

bond, $7,345,736.

Similarly, on May 26th, 2006, the

Agency, through its director, Douglas Scott,

made a demand on the bonds for which the City

of Morris is the principal, demanding that

Frontier pay the Agency the penal sum of the

bonds, $1,081,630.

The Board should consider the

Agency has already elected its remedy, which

L.A. REPORTING (312) 419-9292

in this case is making a demand on Frontier

for the sum of the bonds. Bonds which, by

the way, determined were no good more than

six years ago.

In summary, CLC should not be

penalized for simply doing in good faith what

it was told to do by the Agency. These bonds

were purchased and paid for by CLC and issued

to the Environmental Protection Agency in

good faith based on the Agency's express

approval of the bonds as conforming with the

regulation.

The State is still holding CLC's

collateral hostage and is making claims on

the very bonds that it later rejected as

non-conforming.

Without an operating permit to

dispose of waste, CLC has no funds available

to substitute financial assurance. And,

therefore, under these circumstances, any

penalty assessed to CLC would be unfair and

inappropriate.

HEARING OFFICER HALLORAN: Thank you,

Ms. Grayson. Mr. Porter?

L.A. REPORTING (312) 419-9292

MR. PORTER: Thank you, Mr. Halloran.

Good morning. My name Richard Porter and I

and Mr. Scott Belt and Charles Helston

represent the respondent, City of Morris.

The Pollution Control Board has

directed a hearing be held to discuss whether

to impose a remedy, if any, considering the

Section 33(c) factors, and to address a civil

penalty, and I'll quote, if any, considering

the 42(h) factors.

In this case, the State alleges

that Community Landfill Company, CLC, and the

City of Morris failed to provide adequate

financial assurance for closure and

post-closure operations. CLC and the City of

Morris have filed motions for summary

judgment in this matter.

The City of Morris hereby adopts

and incorporates all the pleadings and

arguments associated with those summary

judgment motions by way of reference into

this record.

In its order regarding those

motions for summary judgment, the Illinois

L.A. REPORTING (312) 419-9292

Pollution Control Board found that Morris

Community Landfill is approximately 119 acres

and divided into two parcels designated as

Parcel A consisting of 55 acres and Parcel B

consisting of approximately 64 acres.

The Board also found that CLC --

and, again, I will quote, CLC operates the

Morris Community Landfill and manages the

day-to-day operations of both parcels at the

site. Therefore, the City of Morris is not

responsible for implementation of a fine

remedy.

In addition to those arguments

stated in the summary judgment motion, the

City of Morris will present a post-hearing

brief establishing that under the Tort

Immunity Act, the City is immune from

liability from penalties and attorneys fees,

which are being sought by the state of

Illinois.

Furthermore, because the PCB has

relied upon certain permits given by a prior

city official who was never authorized to

obligate the City of Morris to pay for

L.A. REPORTING (312) 419-9292

closure and post-closure care, said acts were

done ultra vires and cannot be the basis for

imposition of final remedy against the City

of Morris.

Nonetheless, we will present

evidence during this hearing that the

$17 million closure/post-closure cost

estimates that the government is utilizing to

formulate its proposed remedy are excessive

and unnecessary.

We'll present testimony from Shaw

Environmental, which is a highly reputable

environmental consultant experienced in the

landfill industry, that the closure and

post-closure costs will total about

$10 million, not $17 million.

Furthermore, we'll present

testimony from an independent auditor,

William Crawford, that the City of Morris may

avoid posting any bond or paying any

insurance vehicle by merely posting a

municipal guaranty.

Therefore, the evidence will be,

unlike what Mr. Grant indicated earlier, that

L.A. REPORTING (312) 419-9292

the City of Morris enjoyed absolutely no

financial gain or realized any economic

benefit from failing to post financial

assurance.

The evidence will be it could

have -- or it could do so by merely posting a

municipal guaranty, but it's been the

position of the City of Morris and continues

to be the position of the City of Morris that

closure and post-closure is the

responsibility of CLC.

We'll also present evidence of the

impracticability of purchasing a bond or

insurance vehicle at this stage, as the

government -- the state of Illinois is of the

position that Parcel B of the landfill must

be closed immediately. And from what I heard

in opening statements, it appears that the

government has taken the position that the

entire landfill must be closed immediately.

Well, if we have to close the

landfill now, it makes absolutely no sense to

be spending money on an insurance vehicle or

a bond. Rather, any funds that are available

L.A. REPORTING (312) 419-9292

from any source ought to be used to close the

landfill.

Logic dictates that the money

shouldn't be given to an insurance company or

a bonding company and instead it should be

used to protect the environment.

It would simply be detrimental to

the public health, safety and welfare to

impose the remedy that the State is

suggesting. The posting of financial

assurances should have occurred in the

30 years that the landfill was in operation.

And, indeed, it was the

understanding of the City of Morris that it

was being accomplished by Community Landfill

Company, which was the only entity that had

the operating and developing permits for the

landfill.

It was entirely reasonable for the

City to believe that it bore no

responsibility for the posting of financial

assurances, as the State has never indicated

a difference until these proceedings

commenced. And it wasn't until June 1 of

L.A. REPORTING (312) 419-9292

2006 that the PCB has ruled that financial

assurance must now be accomplished by the

City of Morris.

Therefore, the City of Morris has

not had the opportunity to establish a fund

that can even come close to paying for the

financial assurances, which the State says

must be posted in this case.

Furthermore, the government has

indicated that Parcel B at a minimum of the

landfill should have been closed within

90 days of reaching its allowable height.

That was over a decade ago. Therefore, the

State should have required the timely closure

of the landfill by CLC, its operator and

developer. And if CLC had failed to do so

ten years ago, the Frontier bonds could have

been utilized at that time to pay for closure

and post-closure.

It wasn't until 2000 or 2001 that

we came to the conclusion that the Frontier

bonds were no longer valid. Therefore, the

City sitting on its -- excuse me, therefore

the State sitting on its rights is what got

L.A. REPORTING (312) 419-9292

us to the position we are today.

Further, if the State had required

closure of Parcel B and it became apparent

that CLC wasn't accomplishing it, that at

least would have alerted my client of the

issue and perhaps we could have established a

fund at that time to pay for closure and

post-closure a decade later.

Of course, we did not have an

opportunity to do so because, again, the

State sat on its rights.

Therefore, the State should be

barred and estopped from now trying to impose

this liability upon the City of Morris.

However, if the Pollution Control

Board is going to demand the City fund this

remedy, that remedy should only utilize the

most reliable and recent closure/post-closure

numbers which have been submitted by Shaw

Environmental and, further, it should allow

the City to post its municipal guaranty of

closure/post-closure. That way, funds are

not siphoned away from closing and rather

we'll post a guaranty. And if we have funds

L.A. REPORTING (312) 419-9292

available, they could be used and actually

fund the closure.

The State should further assign

any of its right under the Frontier insurance

to the City of Morris and allow the City of

Morris to continue to operate Parcel A, which

has not yet met its height and, thereby, use

those proceeds from said parcel to defray any

closure costs. That's the most reasonable

remedy that could be accomplished here if

they're going to impose one against the City

of Morris, which it should not.

Section 33(c) requires the PCB to

consider the technical practicability and

economic reasonableness of requiring the City

to post financial assurance now.

It would be completely

unreasonable at this stage to require the

City to use its funds to buy an insurance

bond or buy an insurance vehicle.

Section 33(C) also requires the

PCB to consider that the City has been

spending its assets on closure activities

since February of 2006.

L.A. REPORTING (312) 419-9292

Once it became apparent that the

State was taking the position that it was,

indeed, our responsibility, the City has

since then been moving toward closure and has

hired Shaw Environmental at a substantial

expense to perform the initial tests required

to determine what has to be done at the

landfill.

In conclusion, no remedy should be

imposed against the City of Morris. The only

party responsible for closure/post-closure

here is Community Landfill Company.

If the State was of the position

it was the City of Morris's problem to close

this landfill, it should have alerted the

City of Morris to that fact ten years ago.

However, if any remedy is allowed

or ordered by the Pollution Control Board,

the City of Morris should be able to use

whatever funds it has available to actually

close the facility, thereby protect the human

health, safety and welfare and our

environment.

Using those funds to buy an

L.A. REPORTING (312) 419-9292

insurance vehicle or a bond makes absolutely

no sense. And, as a matter of fact, the

course of such a vehicle is likely to be the

entire cost of closure because the State is

taking the position that we have to close

now. So any insurance company is going to

say, well, in order for us to give you a

$10 million insurance vehicle, you've got to

pay a $10 million premium. That makes

absolutely no sense to give that money to

insurance companies instead of protecting the

environment.

I have nothing further. Thank

you.

HEARING OFFICER HALLORAN: Thank you,

Mr. Porter. It's my turn. We're going to go

off the record for five minutes for a break.

Thanks.

(Whereupon, after a short

break was had, the

following proceedings

were held accordingly.)

HEARING OFFICER HALLORAN: We're back

on the record. We just finished with opening

L.A. REPORTING (312) 419-9292

statements. Ms. Tomas?

MS. TOMAS: We'd like to call our

first witness, Mark Retzlaff.

MR. PORTER: Mr. Halloran, before that

commences, we would make a motion to exclude

witnesses.

MS. GRAYSON: And we would join in

that motion.

MR. GRANT: No objection.

HEARING OFFICER HALLORAN: Okay.

(Whereupon, a discussion

was had off the record.)

MR. GRANT: This lady is not our

witness.

HEARING OFFICER HALLORAN: And you

are, ma'am?

UNIDENTIFIED SPEAKER: I work for the

solid waste department here.

HEARING OFFICER HALLORAN: Okay.

Thank you. So there's nobody to sequester.

Okay.

If you would just raise your right

hand, sir, and Tammi will swear you in.

(Witness sworn.)

L.A. REPORTING (312) 419-9292

HEARING OFFICER HALLORAN: Thank you.

You may have a seat.

3 WHEREUPON:

MARK RETZLAFF

5 called as a witness herein, having been first duly

6 sworn, was examined and testified as follows:

DIRECT EXAMINATION

By Ms. Tomas

Q. Could you please state your name for

10 the record?

A. Mark Retzlaff. It's R-E-T-Z-L-A-F-F.

Q. And where do you live, Mark?

A. Lombard.

Q. And where how long have you lived in

15 Lombard?

A. Approximately 12 years.

Q. What is your highest level of

18 education?

A. Bachelor's of science.

Q. And where did you get that from?

A. Eastern Illinois university.

Q. When did you graduate?

A. 1982.

Q. Where are you currently employed?

L.A. REPORTING (312) 419-9292

A. State Environmental Protection Agency.

Q. And that's commonly known as Illinois

3 EPA?

A. That's correct, yes.

Q. How long have you been with the

6 Illinois EPA?

A. About 18 years.

Q. And what is your title there?

A. Inspector.

Q. And how long have you held the

11 position of inspector?

A. Eighteen years.

Q. Okay. Since you began with the

14 Illinois EPA?

A. Yes.

Q. And is that with the Bureau of Land?

A. That's correct. Yes.

Q. If you could please describe your

19 duties as a Bureau of Land inspector?

A. To conduct RCRA hazardous waste and

21 solid waste inspections in facilities for compliance

22 with the Act, the Environment Protection Act and

23 Regulations.

Q. Are sanitary landfill inspections part

L.A. REPORTING (312) 419-9292

1 of your duties?

A. Yes.

Q. And you said you inspect those

4 landfills for compliance with the Illinois

5 Environmental Protection Act, the Illinois EPA and

6 Illinois Pollution Control Board Regulations,

7 correct?

A. Yes.

Q. Do you also inspect for compliance

10 with terms and conditions of Illinois EPA issued

11 landfill permits?

A. Yes.

Q. Is the Morris Community Landfill

14 within your inspection region?

A. Yes.

Q. And are you the primary field

17 inspector for the Morris Community Landfill within

18 the Bureau of Land?

A. Yes.

Q. If you could please just give me a

21 general description of the Morris Community

22 Landfill?

A. It's situated in a semi-rural area

24 adjacent and across the street from another

L.A. REPORTING (312) 419-9292

1 landfill, EnvironTech Landfill. It consists of two

2 parcels; Parcel A, which is what I consider the

3 newer section and Parcel B, which is the older,

4 historical section.

Q. Do you know approximately when the

6 last time Parcel B took in waste?

A. I've been told approximately 2002.

MR. PORTER: Objection, hearsay.

HEARING OFFICER HALLORAN: Ms. Tomas?

10 BY MS. TOMAS:

Q. Who told you that?

A. James Pelnarsh, Sr., the site

13 operator.

MR. PORTER: Same objection,

Mr. Hearing Officer.

HEARING OFFICER HALLORAN: Ms. Tomas?

17 BY MS. TOMAS:

Q. And who do you know --

MR. PORTER: I guess I'll move to

strike. He did testify to something and it

turned out it was something that somebody

told him, so I'll move to strike that

testimony.

MS. GRAYSON: I'll join in that

L.A. REPORTING (312) 419-9292

motion.

MS. TOMAS: And we would state that

Mr. Pelnarsh is -- it's an admission by a

party deponent. And we will show that

through the (inaudible).

THE COURT REPORTER: You need to

repeat that. I can't hear you.

MS. TOMAS: We will show that Mr.

Pelnarsh is -- it's an admission by a party

deponent and we will show that through his

direct testimony of his understanding of who

Mr. Pelnarsh is.

HEARING OFFICER HALLORAN: Mr. Porter?

MR. PORTER: Unless there's a

foundation that Mr. Pelnarsh is a member of

the control group of CLC, which we all know

he is not, it is not an admission of a party

deponent. The party is CLC.

MS. TOMAS: Control group has nothing

to do with it. He is an agent of CLC and

authorized to speak on behalf of the company.

MS. GRAYSON: And I'll object --

HEARING OFFICER HALLORAN: Okay. I'm

going to sustain the City and CLC's

L.A. REPORTING (312) 419-9292

objection, however, I'm not going to strike

it. The Board will take note. You may

proceed.

4 BY MS. TOMAS:

Q. What surrounds the area near the

6 Morris Community Landfill?

A. Additional landfill, some commercial

8 and very little residential. Primarily rural.

Q. Would you say that the Morris

10 Community Landfill is suited to the area in which

11 its situated?

A. Yes.

Q. And do you know if the Morris

14 Community Landfill has any land permits?

A. Yes, they do.

Q. Do you know who owns the Morris

17 Community Landfill?

A. It's my understanding, based on

19 documents, the City of Morris.

Q. Okay. And you do you know who

21 operates the Morris Community Landfill?

A. Yes.

Q. Who is that, please?

A. Community Landfill --

L.A. REPORTING (312) 419-9292

MR. PORTER: Well, I'm going to object

to the relevancy, Mr. Halloran. If we're

going to get into whether or not we are the

owner/operator of the landfill, that's going

to make this hearing a heck of a lot longer.

I thought we were trying to limit

this to the 33(c) and 42(h) factors. If we

want to open that door, I'm willing to walk

through it, but my understanding is that's

beyond the scope of this hearing.

HEARING OFFICER HALLORAN: Ms. Tomas?

MS. TOMAS: Your Honor, I'll just move

on.

HEARING OFFICER HALLORAN: Okay.

Sustained.

16 BY MS. TOMAS:

Q. When was the first time you inspected

18 the Morris Community Landfill?

A. Approximately 2000. Spring of 2000.

Q. How do you know it was in 2000?

A. A document review.

Q. What would be included in that

23 document review?

A. My inspection reports.

L.A. REPORTING (312) 419-9292

Q. Okay. Do you recall giving a

2 different first inspection date on other occasions?

A. Yes.

Q. Can you please explain that?

A. On a previous hearing that I

6 participated in, I believe I stated that my first

7 time out there was 2002. And upon file review, I

8 realized it was 2000.

Q. So would you like to correct those

10 prior statements to reflect the fact that you

11 discovered an earlier inspection report that

12 confirms your first inspection of the Morris

13 Community Landfill was in 2000?

A. Yes.

MR. PORTER: Mr. Halloran, I realize

that this is an administrative hearing but

we've got to have some -- I object to

leading.

HEARING OFFICER HALLORAN: Okay. You

know, I'm going to ask Tammi to read the

question back. I'm having a hard time

following you, Ms. Tomas you have slow down.

Tammi might be able to understand, but...

L.A. REPORTING (312) 419-9292

(Whereupon, the requested

portion of the record

was read accordingly.)

HEARING OFFICER HALLORAN: You know,

I'll overrule it for now and I think the

witness answered.

7 BY MS. TOMAS:

Q. Approximately how many times have you

9 inspected the Morris Community Landfill since 2000?

A. Approximately 18 times.

Q. And how many of those times did you

12 inspect it in 2007?

A. Twice.

Q. Did you inspect both Parcels A and B

15 every time you inspected the site?

A. No.

Q. When was your first inspection in

18 2007?

A. June 26th.

Q. And did you inspect both parcels

21 during that inspection?

A. No.

Q. What parcel did you inspect?

A. Parcel A only.

L.A. REPORTING (312) 419-9292

Q. When you arrived at the landfill, was

2 anyone there?

A. Yes.

Q. Who was that?

A. An employee by the name of Tricia

6 Banks, I believe, is the last name.

Q. And who do you know Tricia Banks to

8 be?

A. She's an employee of Community

10 Landfill Company that I would describe as

11 administrative-related, clerical, take tickets and

12 so forth.

Q. Do you know who she works for?

A. I assume Community Landfill Company.

Q. Did she accompany you as you made your

16 inspection?

A. No.

Q. Did you speak with anyone else during

19 your inspection?

A. I spoke with James Pelnarsh, Sr., via

21 telephone.

Q. And who was Jim Pelnarsh?

A. The site operator of the landfill.

Q. And do you know who he works for?

L.A. REPORTING (312) 419-9292

A. Community Landfill Company.

Q. If you could please describe what you

3 observed at the landfill during your June 2007

4 inspection.

MR. PORTER: Objection, irrelevant.

MS. GRAYSON: Objection.

MS. TOMAS: Mr. Halloran, it goes

directly to 42(h) and 33(c) factors as to

diligence and gravity and duration.

HEARING OFFICER HALLORAN: I agree.

Overruled.

MR. PORTER: May I make a brief

record, Mr. Halloran?

HEARING OFFICER HALLORAN: You may,

Mr. Porter.

MR. PORTER: My understanding is the

issue here today is whether or not financial

assurances should have been posted by CLC and

the City of Morris.

We're now getting into apparently

physical inspections of the property and, I

guess, alleged violations concerning other

environmental regulations. That goes beyond

the scope of whether or not 33(c) -- the

L.A. REPORTING (312) 419-9292

33(c) and 42(h) factors as applies to posting

of financial assurance.

HEARING OFFICER HALLORAN: Ms. Tomas?

MS. GRAYSON: And I would also like to

make a record, Mr. Halloran. The testimony

of the current condition of the landfill

should be irrelevant here. It's not a

defense to not have financial assurance if

the landfill is beautiful. It doesn't make

any difference whether you have -- whether

the landfill is a beautiful landfill or not

in terms of whether there's adequate

financial assurance posted.

Any testimony regarding the

condition of the landfill should be reserved

for a separate enforcement action. It's a

whole separate matter.

MR. GRANT: May I respond?

HEARING OFFICER HALLORAN: Mr. Porter,

go ahead.

MR. GRANT: This is Mr. Grant.

HEARING OFFICER HALLORAN: Mr. Grant,

go ahead.

MR. GRANT: The issue here isn't

L.A. REPORTING (312) 419-9292

whether or not there's financial assurance.

That's already been determined. It's really

the case that there is no compliant financial

assurance and that the Respondents have both

violated the sections of the Act in the

complaint.

The 33(c) factors and the 42(h)

factors deal with the gravity of the offense.

We will show at this hearing that there is no

financial assurance that's been posted at any

time and that the condition of the landfill

is degrading significantly.

If financial assurance had been in

place, the State would be able to trigger the

financial assurance and these problems that

will be described with Mr. Retzlaff's

testimony would have been taken care of.

The fact that there is no

financial assurance is directly related to

the failure of the Respondents to take any

responsibility for maintaining the landfill

and for the current conditions of the

landfill.

HEARING OFFICER HALLORAN: Mr. Porter,

L.A. REPORTING (312) 419-9292

you know, under 42(h), duration and gravity

and presence or absence of due diligence,

those are two of the factors that the Board

will look at. My understanding is they're

talking about the 2007 inspection and I find

it relevant. So objection overruled. You

may continue.

MR. PORTER: Mr. Halloran, I've

noticed somebody entered the room.

HEARING OFFICER HALLORAN: We have

sequestered and excluded witnesses, so exit

stage left or stage right.

(Whereupon Mr. Blake Harris

left the proceedings.)

HEARING OFFICER HALLORAN: You may

proceed, Ms. Tomas.

17 BY MS. TOMAS:

Q. Can you please describe the

19 observations you made at the landfill during your

20 June 2007 inspection?

A. In Parcel A, there was a freshly

22 disposed load of waste consisting of demolition

23 debris, remodeling materials, general refuse,

24 wastewater treatment sludge apparently from the city

L.A. REPORTING (312) 419-9292

1 and the other assorted materials.

Q. Did you observe these materials during

3 any prior inspection of Parcel A?

A. No.

Q. Is Parcel A currently permitted to

6 accept construction demolition debris waste?

A. No.

Q. Is Parcel A currently permitted to

9 accept general refuse?

A. No.

Q. Did you include these observations in

12 your inspection report?

A. Yes.

Q. At this time I'd like to turn to

15 Complainant Group Exhibit A, Exhibit No. 7. If you

16 can look at the narrative section of your inspection

17 report, which is I believe the third page, the

18 second to last sentence says, no new apparent

19 violations were cited.

Can you please explain that

21 statement given your observations?

A. Basically, that the violations are

23 documented via photographs and through the narrative

24 that new violations aren't cited because in our

L.A. REPORTING (312) 419-9292

1 opinion or my opinion the existing violations that

2 are on the books are there, so they're ongoing

3 violations versus new violations. The same old

4 violations.

Q. And did you take any pictures while

6 you were inspecting Parcel A?

A. Yes.

Q. Are they attached to your inspection

9 report?

A. Yes, they are.

Q. At this time I'd like to -- it's, I

12 believe, Page 4. Looking at exposure number one,

13 could you please describe what this picture is

14 depicting?

A. That's a freshly disposed load of what

16 I described as demolition debris and general refuse

17 approximately 20 feet by 10 feet by 6 feet in size

18 at the southeastern slope, south end of the site.

Q. Again, this is just Parcel A?

A. Yes.

Q. Is exposure number two the same?

A. Yes, it is. It's just a close-up.

Q. Exposure number three?

A. That's an additional area at the outer

L.A. REPORTING (312) 419-9292

1 edge of the slope where soils have been partially

2 pushed on it to cover it up. So it's an additional

3 disposal area.

Q. So that is a separate area from the

5 pile depicted in pictures number one and two?

A. Yes. That's correct.

Q. What about picture number four?

A. That's an additional area extending to

9 the southeast along the outer slope of general

10 refuse and debris.

Q. Exposure number five?

A. A close-up. Another additional photo

13 of that same area as depicted in four -- photo four.

Q. And exposure number six?

A. Wastewater treatment sludge from the

16 City of Morris.

Q. Exposure number seven?

A. Kind of an overview of that southern

19 slope looking to the east.

Q. And exposure number eight?

A. This was just a pile of what I -- I'm

22 assuming they're water meters. I can't say, but

23 it's some sort of meter device that were just

24 disposed of on the ground to the side of the road.

L.A. REPORTING (312) 419-9292

Q. Exposure number nine?

A. A close-up of one of the meters.

Q. And exposure number ten?

A. It's an overview looking to the

5 southwest of kind of the active area, but it's being

6 secondary use for like a brick salvage operation.

Q. And when was your most recent

8 inspection of the Morris Community Landfill?

A. August 29th of 2007.

Q. Did you inspect both Parcels A and B

11 at that inspection?

A. Yes.

Q. When you arrived at the landfill, was

14 anyone there?

A. Yes.

Q. Who was that?

A. James Pelnarsh, Sr.

Q. Did he accompany you as you made your

19 inspection?

A. Yes. On B only.

Q. On Parcel B only?

A. Yes.

Q. What did you observe at Parcel A

24 during your August 2007 inspection?

L.A. REPORTING (312) 419-9292

A. Again, general refuse strewn on the

2 surface, refuse that was partially exposed through

3 the soil on the southern slope, what I described as

4 a leachate seep on the south end, erosion cuts,

5 areas that lack vegetation, appropriate cover and so

6 forth, exposed refuse.

Q. Okay. What is a leachate seep?

A. Leachate is contact water, rain water,

9 groundwater that comes in contact with refuse or

10 garbage/waste that seeps out of a landfill that

11 isn't contained.

Q. What does a leachate seep tell you

13 about the landfill?

A. That it's not being maintained

15 properly.

Q. Were there any other observations you

17 made that indicated the lack of maintenance?

A. Yes.

Q. What were those?

A. Just on the eastern slope, erosion

21 cuts, areas that lacked vegetative cover that

22 contribute to the erosion and then the exposed

23 refuse.

Q. Did you include those observations in

L.A. REPORTING (312) 419-9292

1 your inspection report?

A. Yes.

Q. I'd like to turn now to Complainant

4 Group Exhibit A that's marked as Exhibit 8. And

5 we'll go again to your narrative section, which is

6 Page 2 of the narrative.

Again, you note no apparent

8 violations. Is that for the same reason as in your

9 June inspection report?

A. Yes.

Q. Did you take any pictures while you

12 were at Parcel A in August 2007?

A. Yes.

Q. Turning now to Page 9 of 13 of Exhibit

15 A, Exhibit No. 8, could you please explain what's in

16 exposure number 17?

A. That's Parcel A. That's a photograph

18 of leachate at the southeastern slope, outer edge.

Q. How do you know it's leachate?

A. From 18 years experience inspecting

21 landfills.

Q. And what is exposure number 18?

A. Eighteen is the southeastern slope

24 showing exposed refuse that lacks cover.

L.A. REPORTING (312) 419-9292

Q. Exposure number 19?

A. It's just an overview of the general

3 area, again, showing the brick salvage operation.

Q. Have you noticed any changes to this

5 area from your June 2007 inspection?

A. Yes.

Q. What were those?

A. Again, additional refuse that wasn't

9 previously observed was observed on the 29th.

Q. And exposure number 20?

A. That's the top portion looking

12 northwest just showing lack of vegetative cover.

Q. Number 21?

A. It's a photograph of the eastern slope

15 looking north/northeast showing pretty decent cover

16 established.

Q. Number 22?

A. On top of the landfill, northeastern

19 section, just showing uncovered refuse, exposed

20 refuse.

Q. Number 23?

A. Again, that general area looking

23 northeast on top of the landfill showing exposed

24 asphalt shingles, refuse.

L.A. REPORTING (312) 419-9292

Q. And number 24?

A. That's back to the Parcel A again.

3 The southeastern slope. Just newly deposited refuse

4 that's exposed.

Q. Number 25?

A. That's the southeastern slope of

7 Parcel A, sandbags that apparently came from the

8 Morris Hospital from the previous week's flooding.

Q. How do you know that?

A. James Pelnarsh, Sr., told me. In

11 addition, there's drywall and other, like,

12 demolition type debris there.

MS. GRAYSON: Objection to hearsay.

HEARING OFFICER HALLORAN: Ms. Grayson?

MS. GRAYSON: Objection as to how does

he know, because Mr. Pelnarsh told him.

HEARING OFFICER HALLORAN: Ms. Tomas?

MS. TOMAS: Your Honor, it's an

admission of a party deponent.

MS. GRAYSON: He's not a party.

Mr. Pelnarsh is an employee of the landfill.

He is not a party.

MS. TOMAS: He is an agent of CLC

authorized to speak on their behalf at the

L.A. REPORTING (312) 419-9292

landfill.

HEARING OFFICER HALLORAN: Ms. Grayson?

MS. GRAYSON: We stand on our

objection that it's hearsay testimony.

HEARING OFFICER HALLORAN: Overruled.

You may answer.

7 BY MS. TOMAS:

Q. You said Mr. Pelnarsh?

A. Yes. James Pelnarsh, Sr.

Q. And exposure number 26?

A. That's, again, the southeastern slope

12 of Parcel A with what appears to be a sofa or a

13 related item, some drywall, plastic tubing, wood

14 exposed.

Q. Are there any other observations you

16 can recall on Parcel A from your August 2007

17 inspection?

A. Not that I can recall. No.

Q. Let's move to your inspection of

20 Parcel B in August of 2007. You stated that Jim

21 Pelnarsh accompanied you on the inspection of this

22 particular parcel, correct?

A. Yes.

Q. And what were your observations on

L.A. REPORTING (312) 419-9292

1 Parcel B during your August 2007 inspection?

A. Again, Parcel B, there were some

3 significant erosion cuts, areas that weren't

4 properly vegetated, there were noticeable gas odors,

5 leachate collection wells were not properly covered

6 allowing gas to escape. The southeastern corner of

7 the slope, based on Mr. Pelnarsh's words, had a

8 significant collapse. It was -- you could see

9 erosion and the area lacked vegetation, as well --

10 there was leachate seeps, as well, at that location.

Q. You stated that you noticed odors

12 while you were inspecting Parcel B?

A. Yes.

Q. Did you use any instruments while you

15 were inspecting that parcel to determine the

16 composition of those odors?

A. Yes.

Q. And what was that?

A. It's a Foxboro TVA 1000.

Q. What does TVA stand for?

A. Toxic vapor analyzer.

Q. Can you please explain what that is

23 and how it works?

A. Well, it's an instrument that -- it

L.A. REPORTING (312) 419-9292

1 analyzes organic vapors. So if a gas were to be

2 generated, it would potentially read that gas and

3 give you readings on parts per million.

Q. Did you take any background readings

5 prior to your inspection on Parcel B?

A. Yes.

Q. Where did you take those?

A. At the entrance of the facility.

Q. Do you remember what they were?

A. There were two readings. The TVA has

11 two components, a PID and FID. And I believe one

12 was six-point-something and the other was

13 two-point-something.

Q. What is PID?

A. Photo ionization detector.

Q. What does that mean?

A. It just -- it reads for vapors,

18 organic vapors. There's different -- I can't get

19 into it too much. I don't know all the technical

20 aspects. But there's different bulbs that they use

21 or lamps that can read different vapors.

Q. So the PID would read a different

23 vapor than an FID?

A. Yes.

L.A. REPORTING (312) 419-9292

Q. Did you take any pictures while you

2 were at Parcel A?

A. Yes.

Q. I'm sorry. Parcel B?

A. Yes.

Q. Are they attached to your inspection

7 report?

A. Yes, they are.

Q. At this time I'd like to look at

10 Complainant's Group Exhibit A, Exhibit No. 8,

11 beginning Page 1 of 1 of the pictures. And can you

12 please explain exposure number one?

A. That's a leachate collection well that

14 was identified as L104 and it's uncovered.

Q. And did you take a TVA reading at this

16 location?

A. I believe so. I don't have -- I'm not

18 looking at my narrative. I don't recall. I do

19 recall odors were noted and I indicated that in the

20 photo description.

Q. In exposure number two?

A. That's an erosion cut on Parcel B at

23 the northern slope and about two feet wide by

24 three feet deep.

L.A. REPORTING (312) 419-9292

Q. Did you take a TVA reading at this

2 location?

A. Yes, I did.

Q. And what were the results of that?

A. Thirty parts per million.

Q. What does that tell you?

A. It tells me that there's gases being

8 generated and escaping and odors were noticeable.

Q. Okay. Exposure number three?

A. Again, that's Parcel B on the north

11 slope. It's just an additional erosion cut, a

12 gully.

Q. Did you take a TVA at this location?

A. Yes. I didn't -- no reading.

Q. I'm sorry. What was your answer?

A. There were no readings at that

17 location.

Q. Exposure number four?

A. It's an additional erosion cut along

20 the northern slope. And these were about 50 to

21 100 feet apart in some areas.

Q. For each, if you made a TVA reading,

23 would you have noted it in the notes that

24 accompanied the photographs?

L.A. REPORTING (312) 419-9292

A. Yes.

Q. Okay. Exposure number five?

A. Again, that's Parcel B, the northern

4 slope. It's just showing another erosion gully and

5 lack of vegetative cover.

Q. Is erosion number six the same?

A. Exposure number six?

Q. Exposure number six.

A. Yes. That's an additional area along

10 the northern slope of Parcel B.

Q. Exposure number seven?

A. That is a leachate collection well

13 identified as L103. Again, with the lid off.

Q. You note that -- in your notes next to

15 the exposure, can you tell me whether or not you

16 took a TVA reading?

A. Yes, I did.

Q. And what were the results of that?

A. It's hard to say because the device

20 started to climb rapidly because of the strong gas

21 that was being generated and it flamed out. It

22 knocked it out.

Q. What does that tell you?

A. That it was -- the concentrations of

L.A. REPORTING (312) 419-9292

1 gas were higher than oxygen. That it displaced the

2 oxygen.

Q. Exposure number eight?

A. Number eight is Parcel B, the

5 southwest slope that apparently had a slope collapse

6 and some significant erosion.

Q. Exposure number nine?

A. Parcel B, that's identified as

9 leachate collection well L102. It's been damaged

10 and it's uncovered.

Q. Exposure number ten?

A. Ten is the -- is, again, Parcel B, the

13 southern slope now as we're coming around. Just an

14 erosion gully starting on the edge of the road.

Q. Exposure number 11?

A. Parcel B, southern slope showing a

17 leachate seep along the road.

Q. Exposure number 12?

A. That's the south slope looking to the

20 east just showing some erosion issues and lack of

21 maintenance.

Q. Exposure number 13?

A. Parcel B, it's just a gas collection

24 well on the southern slope.

L.A. REPORTING (312) 419-9292

Q. Do you know if that was operating?

A. I can't say. No.

Q. Exposure number 14?

A. Parcel B, south slope, a leachate seep

5 along the road and additional seeping.

Q. Exposure number 15?

A. Parcel B side, that's the gas flare

8 which was operating at the time of the inspection.

Q. And exposure number 16?

A. That's a sign that's affixed to the

11 side of the maintenance building, general office for

12 the landfill.

Q. Are there any other observations that

14 you can recall on Parcel B from your August 2007

15 inspection?

A. No.

Q. Based on your observations of the

18 Morris Community Landfill for the past seven years,

19 what in your opinion needs to happen at Parcel A to

20 come into compliance with the Act and Board land

21 regulations?

A. Stop taking --

MR. PORTER: Objection, irrelevant.

MS. GRAYSON: Objection.

L.A. REPORTING (312) 419-9292

HEARING OFFICER HALLORAN: I'm sorry.

Mr. Porter?

MR. PORTER: Objection, irrelevant.

HEARING OFFICER HALLORAN: Ms. Tomas?

MS. TOMAS: Mr. Halloran, again, it

goes to duration, gravity, what exactly that

site looked like and what needs to be done to

get it to a position to close.

HEARING OFFICER HALLORAN: Mr. Porter?

MR. PORTER: That question wasn't

asked. The question that was asked is over

the past seven years, in your observations

there, what violations have you seen.

HEARING OFFICER HALLORAN: Sustained.

Ms. Tomas, do you want to rephrase?

MS. TOMAS: Absolutely.

17 BY MS. TOMAS:

Q. Based on your observations at the

19 Morris Community Landfill for the past seven years,

20 what do you believe needs to happen in the future to

21 get this landfill into compliance?

A. Stop taking in refuse.

MR. PORTER: I'm going to object to

the question being vague and unanswerable.

L.A. REPORTING (312) 419-9292

HEARING OFFICER HALLORAN: I agree,

Mr. Porter. Sustained. Ms. Tomas, can you

rephrase. That is rather vague and general.

4 BY MS. TOMAS:

Q. Are you familiar with the Illinois

6 Environmental Protection Act and Illinois Pollution

7 Control Board regulations as they relate to

8 landfills?

A. Yes.

Q. And during your observations of

11 sanitary landfills, do you observe -- make

12 observations based on the Act and the Board

13 regulations and requirements?

A. Yes.

Q. Based on the Act and the Board land

16 and pollution regs and your understanding of them,

17 what does Morris Community Landfill need to do to

18 come in compliance with the Act and Board land

19 regulations?

MR. PORTER: Again --

MS. GRAYSON: Objection.

HEARING OFFICER HALLORAN: Ms.

Grayson?

MS. GRAYSON: Well, I'm going to

L.A. REPORTING (312) 419-9292

object on the basis that it hasn't been

established that he's an expert on the Board

regulations nor has he been identified as an

opinion witness to testify about those

regulations or about the Act.

HEARING OFFICER HALLORAN: Okay. I'm

going to overrule that objection. I think he

is well versed in the Act and regulations.

He's been an inspector for 18 years, so I

think he's probably pretty familiar with it.

He can give his opinion on any acts. In any

event, Mr. Porter?

MR. PORTER: My position is similar.

One, it's overbroad. It's still vague. I

don't know what violation she's asking about

and it's just an open-ended, give us a

discussion question.

Beyond that, if it's intended to

elicit testimony as to what needs to happen

from a design perspective to close Parcel B,

he is not qualified and they have not laid

the qualifications to provide that testimony.

He is not an engineer or at least

I haven't heard that he's an engineer with

L.A. REPORTING (312) 419-9292

the expertise of designing a closure plan for

a landfill.

So the problem starts with the

question being so broad that I'm not entirely

certain as to where we're going with it. But

if it is elicit -- if the object is to elicit

testimony which he's not qualified to opine,

I object.

HEARING OFFICER HALLORAN: With that

explanation, I understand Ms. Grayson's

objection a little better, I think.

Ms. Tomas?

MS. TOMAS: Your Honor, I am trying to

elicit testimony as to regards to compliance

with the Board regulations and the acts. It

has nothing to do with closure or what needs

to be done for closure or design capacity at

all. It's just what needs to be done to fix

the problems that he observed at the

landfill, in his opinion.

HEARING OFFICER HALLORAN: You know,

I'll allow a little latitude. It is rather

open-ended. And Ms. Grayson and Mr. Porter

already objected, so it was noticed. Thank

L.A. REPORTING (312) 419-9292

you.

MS. TOMAS: Thank you, Mr. Halloran.

3 BY MS. TOMAS:

Q. Based on your observations of Parcel B

5 (sic) and your familiarity with the Illinois

6 Environmental Protection Act and Board regulations,

7 what would you say needs to be done to remedy the

8 violations that you noted at Parcel A?

A. Based on my observations, I would

10 say --

MR. PORTER: I'm sorry, but I have to

object. I did not hear him testify as to

what Board regulations he believes were

violated.

I heard him describe a bunch of

photos of which may or may not depict a

violation, but I certainly didn't hear any

particular regulation that he identified as

having been violated. And so the fact -- the

question assumes facts which are not in

evidence, I guess, is my objection.

HEARING OFFICER HALLORAN: Ms.

Grayson?

MS. GRAYSON: I would agree with

L.A. REPORTING (312) 419-9292

Mr. Porter's objection.

HEARING OFFICER HALLORAN: I somewhat

agree and I think that the Board -- I ask the

Board to take notice of those objections.

However, I am going to overrule them. And,

again, this is a little latitude I'm leaving

the Complainant and the witness. But we may

proceed.

MS. TOMAS: Can you please read back

the question?

(Whereupon, the requested

portion of the record

was read accordingly.)

THE WITNESS: Parcel B or A?

15 BY MS. TOMAS:

Q. As to Parcel A.

A. Cease taking in waste and get adequate

18 cover in place and vegetate the area that needs to

19 be vegetated.

Q. And based on your observations, what

21 in your opinion needs to happen at Parcel B to come

22 into compliance with the Act and Board land and

23 pollution regulations?

A. Again --

L.A. REPORTING (312) 419-9292

MR. PORTER: Same objection.

HEARING OFFICER HALLORAN: Overruled.

You may answer.

4 BY THE WITNESS:

A. Again, get proper cover in place,

6 prevent erosion, get the appropriate areas properly

7 vegetated, keep the gas wells covered.

Q. Do you know why this work hasn't been

9 completed to date?

MR. PORTER: Objection, conjecture.

HEARING OFFICER HALLORAN: Sustained.

MS. TOMAS: That's it.

HEARING OFFICER HALLORAN: Thank you.

Ms. Grayson, do you want CLC to go first

since you're the first on the caption if you

so choose to cross?

MS. GRAYSON: That would be fine.

Could I take a couple of minutes?

HEARING OFFICER HALLORAN: Sure.

We're off the record.

(Brief pause.)

HEARING OFFICER HALLORAN: Back on the

record. Ms. Grayson is going to cross the

witness.

L.A. REPORTING (312) 419-9292

MS. GRAYSON: Mr. Retzlaff, I'm

Clarissa Grayson and I represent Community

Landfill Company. I have a few questions for

you.

CROSS EXAMINATION

By Ms. Grayson

Q. Regarding your inspection report on

8 Page 2 where you state -- and this is Exhibit 1

9 for -- this is Exhibit 8, which would be your

10 inspection report of August 29th, 2007. This is the

11 People's Exhibit A/8. When you say that no new

12 apparent violations were cited, is there a reason

13 why you don't describe that as continuing violations

14 as the way that you said to Ms. -- in response to

15 Ms. Tomas' questions?

A. No. It's just the way we phrase --

17 the way I phrased it.

Q. So no new apparent violations were

19 cited is your statement, though, however --

A. Correct. Yes.

Q. -- correct?

How much time did you spend at the

23 landfill on August 29th, 2007?

A. If I may look at my front sheets, I

L.A. REPORTING (312) 419-9292

1 can tell you approximately.

Q. You may.

A. About three hours for both sites

4 total.

Q. Three hours for both sites total?

A. Yes.

Q. How did you travel from one end of the

8 landfill to the other?

A. On Parcel A?

Q. Well, let's start with Parcel A.

11 Parcel A is how big did you say? Earlier you

12 testified as to its size.

A. I don't believe I did testify to the

14 size --

Q. I thought you did.

A. -- on Parcel A.

Q. Do you have an approximate idea of how

18 large Parcel A is?

A. I believe somebody threw out the

20 figure of 51 acres, possibly on A. I'm guessing.

Q. And how much time did you spend on

22 Parcel A?

A. Probably about an hour.

Q. So 1 hour for 50 acres; is that

L.A. REPORTING (312) 419-9292

1 correct -- approximately 50 acres?

A. That's correct.

Q. And how did you -- what was your mode

4 of transportation?

A. Foot and vehicle.

Q. Can you describe a little bit of what

7 your travels were like on that day in Parcel A?

A. Very difficult. I did not go

9 throughout the entire site because of the

10 difficulty.

Q. What was difficult about it?

A. The weeds were very high and thick,

13 erosion cuts and so forth, mud, standing water.

Q. So you were on Parcel A for about

15 one hour and then what did you do?

A. Well, actually, that was the second

17 phase of my inspection. I then left.

Q. So you started at Parcel B?

A. That's correct. Yes.

Q. And how much time did you spend at

21 Parcel B?

A. I would say approximately two hours.

Q. And, again, what was your mode of

24 transportation?

L.A. REPORTING (312) 419-9292

A. Vehicle and foot.

Q. How do you know something is leachate?

A. Based on experience from something

4 that's coming out of a landfill, emitting from a

5 landfill.

Q. Does it have an odor to it?

A. It may have an odor at times.

Q. And what were the wind conditions on

9 that day.

A. I don't recall.

Q. Did you make a note of that in your

12 report as to what the weather was?

A. Probably temperature and maybe soil

14 conditions or clarity of the cloud coverage. I

15 don't believe I got into wind issues.

Q. Would it make a difference if you --

17 if there was wind and the wind was blowing and you

18 weren't exactly sure of where the odor -- an alleged

19 odor was coming from?

A. It's possible. Yes.

Q. So that would make a difference?

A. It could, yes.

Q. Isn't Community Landfill -- didn't you

24 testify that Community Landfill is adjacent to

L.A. REPORTING (312) 419-9292

1 another landfill?

A. Yes.

Q. Is it possible that any of the odors

4 that you detected actually came from another

5 landfill site?

A. Not all of them. No.

Q. Is it possible that some of them did?

A. It's possible. Yes.

Q. And but without knowing what the

10 condition of the wind was that day, you can't be

11 sure?

A. That's correct. Yes.

Q. So you can't be absolutely sure that

14 any of the odors that you detected were coming from

15 Community Landfill?

A. Some I could. Yes.

Q. But not all of them?

A. That's correct. Yes.

Q. And would that be the same for the

20 previous inspection report -- inspection that you

21 conducted -- was that Exhibit 7, June 21st, 2006?

A. Yes.

Q. I'm sorry. That would be Exhibit 8.

24 We're talking about Exhibit --

L.A. REPORTING (312) 419-9292

HEARING OFFICER HALLORAN: Exhibit 7,

perhaps?

MS. GRAYSON: Yes. Okay. I'm sorry.

I'm looking at the wrong date.

5 BY MS. GRAYSON:

Q. We have June 26th, 2007. How much

7 time did you spend at the landfill on that day?

A. Approximately, based on this,

9 two hours.

Q. And could you describe what your --

11 what the sequence of events was on that day?

A. I checked in at the front office. I

13 believe I met with Tricia Banks. Identified, you

14 know, why I was there, to conduct an inspection and

15 so forth.

Then I went over to Parcel A,

17 drove on and got out of the vehicle and walked what

18 I perceived as the active area, the area of recent

19 dumping.

Q. And you did not go to Parcel B on that

21 day; is that correct?

A. No.

Q. Parcel A only. And I'll ask you just

24 the same question about why wouldn't you put in

L.A. REPORTING (312) 419-9292

1 there -- or your statement is that no new apparent

2 violations were cited; is that correct?

A. Correct.

Q. So you chose not to make note of any

5 new apparent violations?

A. The violations, by simply having

7 photographs and describing them, technically are

8 there, I just am not engaging it into a new

9 enforcement action.

Q. And that would be the same for the

11 inspection that was conducted on August 29th,

12 correct?

A. That's correct. Yes.

Q. And do you have any idea of the

15 financial condition of Community Landfill?

A. Not specifically. No.

Q. Do you know whether or not they're

18 intentionally not providing financial assurance or

19 whether it's not providing and it's simply because

20 it can't afford it?

A. No.

Q. Are you aware of the fact that a

23 permit was denied for a new cell --

A. Yes.

L.A. REPORTING (312) 419-9292

Q. -- some years ago?

A. Uh-huh.

Q. How do you think that they make any

4 money?

A. I would guess that they don't make any

6 money.

Q. Would you think that not being able to

8 dispose of waste would hamper their ability to make

9 money?

A. Yes.

MS. GRAYSON: I have nothing further.

HEARING OFFICER HALLORAN: Thank you,

Ms. Grayson. Mr. Porter?

MR. PORTER: Thank you, Mr. Halloran.

CROSS EXAMINATION

By Mr. Porter

Q. You've never seen anyone from the City

18 of Morris take waste to the Community Landfill, have

19 you?

A. Not physically, no.

Q. And you've never spoken with anyone

22 from the City of Morris indicating that they've

23 taken waste to Community Landfill, correct?

A. No. Not that I recall.

L.A. REPORTING (312) 419-9292

Q. You are aware that the operating and

2 development permits for the Community Landfill were

3 transferred from the City of Morris to CLC back in

4 the early 1980s, right?

A. Yes.

Q. You're aware that that was approved by

7 the Illinois EPA, correct?

A. Yes.

Q. The landfill still has an operating

10 permit; isn't that right?

A. It's my understanding that they do not

12 have an operating permit.

Q. Well, on what do you base that

14 understanding?

A. The May of '01 denial.

Q. Well, they were denied the right to

17 start a new cell, but that did not destroy their

18 previously permitted rights, correct?

A. That's correct, yes.

Q. And do you know if they have met --

21 strike that.

Do you know if they have gotten to

23 their allowable height on Parcel A?

A. I really don't know.

L.A. REPORTING (312) 419-9292

Q. Let me ask you this way: Isn't it

2 true that there is substantial height left and

3 available for Parcel A?

A. It's possible.

Q. And so isn't it true that they can

6 accept waste, they just can't build a new cell?

A. I would say yes.

Q. So you would agree then that your --

9 strike that.

So you would agree that they have

11 not violated any permit condition or regulation

12 concerning the acceptance of waste, correct?

A. Yes, they have.

Q. All right. I'll bite. How so if they

15 can take waste and they're allowed to take waste

16 under their current permit have they violated such a

17 right?

A. It would appear based on years of

19 going out there that they've exceeded the permitted

20 area by filling to the southeastern slope. The

21 materials that I observed on June 26th and

22 August 19th would be outside of that permitted area.

Q. Have you had a survey done to

24 determine whether or not it's outside of the

L.A. REPORTING (312) 419-9292

1 permitted area?

A. No.

Q. So have you done anything to

4 corroborate your eyeball opinion that it's outside

5 of the permitted area?

A. No.

Q. Do you have any information that

8 the City of -- strike that.

You're aware the City of Morris

10 has leased the premises to Community Landfill

11 Company, correct?

A. I'm not sure on the details.

Q. Well, you're not aware of any rights

14 that the City of Morris would have to come onto

15 Community Landfill's property and dictate to them

16 what waste they can take and shouldn't take, right?

A. Right.

Q. You would agree that in order to close

19 a landfill, the operator has to take waste to meet

20 the appropriate slopes and stability, correct?

A. It's possible, yes.

Q. Now, you intimated that there may have

23 been violations on this June and August 2007

24 instances by taking us through a litany of

L.A. REPORTING (312) 419-9292

1 photographs. But you're not indicating that each

2 one of those photographs depicts a violation, are

3 you?

A. Yes. Not every one, but some do, yes.

Q. Well, okay. There are some

6 photographs that depict some areas that have erosion

7 issues, correct?

A. Correct.

Q. Well, it's understood and allowable

10 for land to erode, right?

A. Correct.

Q. The issue is whether or not there's

13 sufficient cover over the waste, correct?

A. Correct.

Q. And the vast majority of your

16 photographs don't depict any waste, they just show

17 some erosion, right?

A. Correct.

Q. And did you do any tests to determine

20 whether or not there were 12 inches of cover over

21 the existing waste?

A. No.

Q. And that's the magic number, right?

A. Not necessarily. No.

L.A. REPORTING (312) 419-9292

Q. Okay. But whatever the magic number

2 may be, you did not make any determination of

3 whether or not that number had been reached or not

4 reached, correct?

A. Correct.

Q. So there were no borings done to tell

7 us whether or not there's sufficient cover?

A. No.

Q. My statement was correct, right?

A. Yes.

Q. We heard earlier some, in opening

12 statements, testimony concerning a $17 million

13 figure for closure/post-closure. That figure was

14 determined way before your June and August

15 inspections, correct?

A. I would assume, yes.

Q. So your inspections have absolutely no

18 import upon the dollar figure that the government is

19 seeking, correct?

A. I would assume that also.

Q. You have no information that the City

22 of Morris in any way willfully or intentionally

23 violated any regulation, correct?

A. I suppose, yes.

L.A. REPORTING (312) 419-9292

Q. I'm sorry. My statement was correct?

A. Yes.

Q. Okay. Do you even know when financial

4 assurances were last posted and acceptable to the

5 Illinois Environmental Protection Agency?

A. No.

Q. So you don't know if there's an

8 ongoing violation concerning financial assurance

9 then, correct?

A. I only know through letters that I

11 have seen in the file.

Q. Okay. But it's not your job to make

13 that determination, right?

A. No.

Q. That's somebody else's job?

A. Correct. Yes.

Q. So you have no opinions on whether or

18 not there are financial assurances presently posted,

19 correct?

A. That's correct. Yes.

Q. Now, you're not suggesting that the

22 City of Morris has sustained any economic benefit

23 from the violations you may or may not have seen,

24 correct?

L.A. REPORTING (312) 419-9292

A. Correct.

Q. If I heard you right, you agree that

3 this is a good place for a landfill, right?

A. Correct, yes.

Q. You also agree that landfills

6 themselves have -- are positive as far as providing

7 a benefit to the public, correct?

A. Yes.

Q. If I heard you right, your proposed

10 solutions for Parcel A were to stop taking in waste

11 and that was based upon your conclusion that they

12 weren't permitted, but we're no longer sure about

13 that, right?

A. In that contested southeastern area,

15 that's correct, yes.

Q. So they can keep taking in waste in

17 Parcel A, so are you now amending your proposed

18 solution for Parcel A?

A. Not completely, no.

Q. If I understand, then your solution is

21 you can take in waste, but don't do it beyond your

22 permitted area?

A. Correct. Yes.

Q. Okay. You mentioned get adequate

L.A. REPORTING (312) 419-9292

1 cover, and in the photos I didn't see many

2 depictions of the lack of adequate cover. Would you

3 agree with that, first of all?

A. No. I don't agree.

Q. Well, over 50 acres I saw one or two

6 instances of some erosion issues. But were there

7 specific instances of a lack of adequate cover?

A. Yes.

Q. And did you quantify that?

A. I took a couple token photos, but the

11 cover, the weeds were so thick, it doesn't show up

12 in the photos.

Q. Well, let's talk about that for a

14 minute. There's certainly nothing wrong with a

15 landfill having weeds, right?

A. In my opinion, yes.

Q. Well, are you aware of any description

18 under the regulations for a landfill having weeds?

A. No.

Q. And as a matter of fact, weeds

21 actually can and do maintain the soil, keep it in

22 place, right?

A. Not in this case.

Q. Well, as a general statement, you

L.A. REPORTING (312) 419-9292

1 would agree with that, right?

A. It's not a very good cover source.

Q. Well, let's put this way: It's better

4 to have some weeds there than just have blank soil,

5 right?

A. I guess, yes.

Q. I mean, if you've got blank soil,

8 you're going to have much more erosion than if you

9 had weeds?

A. That's true.

Q. Okay. Did you -- do you have any

12 opinion as to what it would cost to provide adequate

13 cover, whatever that may mean, as to Parcel A?

A. No.

Q. And as for vegetation, do you have any

16 opinion as to what it would cost to get rid of the

17 weeds or provide what you believe is appropriate

18 vegetation?

A. No.

Q. And, again, you have no opinion that

21 my client sustained any economic benefit from the

22 alleged failure to have adequate cover if there is a

23 failure, right?

A. That's correct. Yes.

L.A. REPORTING (312) 419-9292

Q. And, likewise, you have no opinion my

2 client sustained any economic benefit for the

3 alleged failure to have appropriate vegetation on

4 Parcel A if, indeed, there isn't appropriate

5 vegetation, right?

A. Correct.

Q. Now, as to Parcel B, you don't have

8 any evidence or see any evidence that waste has been

9 taken there, correct?

A. Recently?

Q. Right.

A. No.

Q. Now, are you aware that -- strike

14 that.

Do you believe Parcel B is over

16 height?

A. Just based on what I've been told or

18 read in letters.

Q. You don't have any personal

20 information of that?

A. No.

Q. And you've never been asked to

23 determine that, correct?

A. No.

L.A. REPORTING (312) 419-9292

100

Q. Do you have any knowledge or opinion

2 as to when height was initially reached as to Parcel

3 B?

A. No.

Q. Now, you mentioned, again, that the

6 things that you think should happen at Parcel B are

7 proper cover, prevent erosion, vegetate and keep gas

8 wells covered. Proper cover and prevent erosion are

9 the same thing, right?

A. They're tied in.

Q. And, again, you don't have any

12 specific instance where cover was less than the

13 mandated depth, correct?

A. It's not a matter of depth. It's

15 whether cover is there or not. Inadequate cover is

16 inadequate cover and that can mean vegetative or

17 erosion cuts, whether it's a foot or two feet.

Q. Well, there has to be a certain amount

19 of depth of cover over the refuse, correct?

A. That's correct. Yes.

Q. And you don't know if that depth was

22 reached as to Parcel B, correct?

A. No. But I'm talking vegetative cover,

24 greenery versus soil depth.

L.A. REPORTING (312) 419-9292

101

Q. Okay. So you have no opinion that

2 there's inadequate soil out on Parcel B, you're

3 talking about vegetation, right?

A. It's both. If you have an erosion

5 cut, it's inadequate cover, period.

Q. Okay. Well, let's talk about the soil

7 first.

A. Okay.

Q. Again, you have no specific soil

10 borings or tests to show a lack of the regulatory

11 mandated amount of cover over the refuse, correct?

A. That's correct. Yes.

Q. Now, as to vegetation, you can't point

14 us to any particular regulation that requires there

15 to be no weeds in a landfill, correct?

A. That's correct, that I'm aware of.

Q. And is there any specific regulation

18 that you're aware of -- strike that.

Overall, you would agree that

20 there is greenery over the vast majority of Parcel

21 B, correct?

A. Yes.

Q. And were there any areas where you did

24 not see some type of greenery on the soil on Parcel

L.A. REPORTING (312) 419-9292

102

1 B?

A. Yes.

Q. And did you quantify or determine how

4 much it would cost to plant sufficient greenery on

5 those areas?

A. No.

Q. So, again, you have no evidence of the

8 economic benefit to either CLC or the City of Morris

9 concerning the purported lack of vegetative cover,

10 correct?

A. Correct.

Q. Now, you mentioned keeping gas wells

13 covered. That's a pretty simple matter, just

14 picking up the lid and sticking it on the gas well,

15 right?

A. Correct.

Q. And you saw one that was uncovered?

A. All were uncovered.

Q. Do you know why?

A. Don't know.

Q. There are times when it's necessary to

22 uncover the gas wells, correct?

A. Possibly. Yes.

Q. All right.

L.A. REPORTING (312) 419-9292

103

(Brief pause.)

2 BY MR. PORTER:

Q. Co-counsel has reminded me you saw

4 evidence of leachate wells uncovered, not gas wells,

5 correct?

A. That's correct, yes.

Q. All right. And there are times when

8 one needs to uncover a leachate well; is that right?

A. That's correct.

Q. Okay. And as far as cost, we're

11 talking negligible to go around and put the cap back

12 on the well cover, right?

A. I would think so. Yes.

Q. Now, I believe the purpose of your

15 testimony was to somehow indicate that things are

16 getting worse out there. Isn't it actually true

17 that --

MR. GRANT: I object. I think that

improperly mischaracterizes testimony. He

hasn't said that that was his purpose for

testifying.

HEARING OFFICER HALLORAN: I will

allow him to answer.

L.A. REPORTING (312) 419-9292

104

1 BY MR. PORTER:

Q. Isn't it true that since the fall of

3 2006 the gas flare has been in operation?

A. Yes.

Q. Isn't it true since the summer of 2005

6 monthly sampling of perimeter gas probes has

7 occurred?

A. Yes.

Q. Isn't it true that since January of

10 2007 quarterly sampling of surface -- there has been

11 quarterly sampling of the surface stands?

A. Surface?

(Brief pause.)

14 BY MR. PORTER:

Q. Would you agree that since January

16 of 2007 there has been quarterly sampling of surface

17 methane?

A. That's my understanding. Yes. I

19 haven't seen any reports.

Q. Since 2005 there has been sampling of

21 groundwater monitoring wells, right?

A. Yes.

Q. Since March of '07 there's been

24 sampling of landfill gas extraction wells, correct?

L.A. REPORTING (312) 419-9292

105

A. I've heard, yes.

Q. All of this work, by the way, has been

3 performed by Shaw Environmental; is that right?

A. Correct.

Q. And to your knowledge, that's been at

6 the expense of the City of Morris; isn't that

7 correct?

A. I believe so. Yes.

Q. You would agree that the involvement

10 of Shaw Environmental has been a very positive

11 development as it's concerning this landfill; is

12 that right?

A. Absolutely. Yes.

MS. GRAYSON: If I could just

interrupt one minute? I would just like to

clarify testimony that the gas flare was

actually provided by (inaudible).

THE COURT REPORTER: I didn't hear

you.

MS. GRAYSON: I'm sorry. I just

wanted to clarify that the gas flare was

actually paid for, purchased and installed by

Community Landfill Company.

MR. GRANT: I object to -- you know,

L.A. REPORTING (312) 419-9292

106

without a witness, to putting that into

evidence.

MR. PORTER: I'll just ask the

question. That will make it easier.

5 BY MR. PORTER:

Q. Do you know who paid for the gas

7 flare?

A. No. I don't.

Q. Okay. That could have been paid by

10 CLC, not the City of Morris; is that right?

A. It's possible. Yes.

Q. Okay. And I have no knowledge one way

13 or the other. I'm asking you.

A. I don't know.

Q. Since summer of 2005 there's been an

16 evaluation done of the leachate management system by

17 Shaw; is that right?

A. I believe so. Yes.

Q. Since summer 2005 there's been an

20 evaluation of all monitoring systems; is that right?

A. Yes.

Q. There's also been an evaluation of the

23 landfill gas systems in February of '06; is that

24 correct?

L.A. REPORTING (312) 419-9292

107

A. Yes.

Q. And, as a matter of fact, Shaw

3 Environmental drafted and devised and developed a

4 revised closure plan and any cost estimates; is that

5 correct?

A. Yes.

Q. And those cost estimates have been

8 submitted to the EPA; is that right?

A. I believe so. Yes.

Q. And the EPA has not responded to those

11 cost estimates; is that correct?

A. I don't know.

MR. PORTER: I have nothing further.

HEARING OFFICER HALLORAN: Thank you,

Mr. Porter. Ms. Tomas, any redirect?

MS. TOMAS: Yes. Thank you,

Mr. Halloran.

RE-DIRECT EXAMINATION

By Ms. Tomas

Q. Mr. Retzlaff, can CLC or the City of

21 Morris dispose of waste without an operating permit?

A. No.

Q. Do they currently hold an operating

24 permit for Parcel A?

L.A. REPORTING (312) 419-9292

108

A. No.

Q. And the waste accumulations you noted

3 in your photographs, are those being used for

4 contouring?

A. Well, in an unorthodox way, yes.

Q. And is daily cover required for

7 contouring?

A. Yes.

Q. Are they -- is CLC or the City of

10 Morris providing daily cover on the contouring waste

11 piles?

A. No.

MR. PORTER: I'll object to the extent

it calls for a conclusion that the City of

Morris has any responsibility to do so. They

don't have a permit to do so.

HEARING OFFICER HALLORAN: Ms. Tomas?

MS. TOMAS: They are listed as the

owner of the landfill on multiple permits.

MR. PORTER: They do not have an

operating or developing permit for this

landfill. They can't provide for cover.

HEARING OFFICER HALLORAN: I'm going

to allow the witness to answer. Overruled.

L.A. REPORTING (312) 419-9292

109

If he's able.

THE WITNESS: Restate the question,

please.

MS. TOMAS: Can you please repeat the

question?

HEARING OFFICER HALLORAN: You can ask

me and then I'll ask the court reporter.

Just a bit of a formality. Thanks.

MS. TOMAS: I apologize,

Mr. Halloran. I request to have it read

back.

(Whereupon, the requested

portion of the record

was read accordingly.)

15 BY THE WITNESS:

A. No.

17 BY MS. TOMAS:

Q. Do landfills that are unable to take

19 in waste provide a benefit to the community?

A. To the community?

Q. Yes.

A. No.

Q. And in your opinion, is there a

24 difference between weeds and vegetative cover?

L.A. REPORTING (312) 419-9292

110

A. Yes.

Q. And is adequate vegetative cover

3 required by the regulations?

A. Yes.

Q. Okay. Are leachate seeps prohibited

6 by the regulations?

A. Yes.

Q. And is exposed waste in areas not

9 covered by an operating permit prohibited by the

10 regulations?

A. Yes.

MS. TOMAS: That's all.

HEARING OFFICER HALLORAN: Thank you.

Mr. Grayson, re-cross?

MS. GRAYSON: I have nothing further.

HEARING OFFICER HALLORAN: All right.

Thank you. Mr. Porter, I'm sure you have

re-cross questions.

MR. PORTER: A couple.

RE-CROSS EXAMINATION

By Mr. Porter

Q. Vegetative cover is required after

23 closure, right?

A. It's during operation as well.

L.A. REPORTING (312) 419-9292

111

Q. Well, to your knowledge, is there

2 insufficient vegetative cover on Parcel B assuming

3 it's still an operating landfill?

A. Is there a lack of proper vegetation?

Q. Let me ask it this way: Final

6 vegetative cover happens after closure, correct?

A. It occurs after the receipt of the

8 final load of refuse. There's clocks that kick in.

Q. And so in Parcel A we haven't had

10 receipt of the final load of refuse yet, as a matter

11 of fact, we're far from that, correct?

A. Well, it's a little different in

13 Parcel A if they lack the operating permit and yet

14 still continue to take in refuse, you know.

Q. Well, again, you don't have any

16 information they lack an operating permit, right?

17 They have an operating permit?

A. Not for -- to operate that parcel to

19 take in waste. It was denied in 2001.

Q. But, again, you haven't -- strike

21 that.

You don't have any opinions that

23 they've started a new parcel, do you?

A. It appears that they have. Obviously,

L.A. REPORTING (312) 419-9292

112

1 that's being contested, but it appears that they're

2 outside the historical area.

Q. And not to retread it, but you have

4 not done any survey or taken any measurements to

5 determine if they're outside the historical area?

A. That's correct. Yes.

Q. So you would agree you don't have the

8 basis as you sit here today to make that conclusion,

9 correct?

A. Technically, no.

Q. Assuming that the government is

12 correct that Parcel B is over height, you would

13 agree that technically there may need to be some

14 waste relocation, correct?

A. Yes.

Q. And then, obviously, you don't want to

17 have your final cover down -- final vegetative cover

18 down at a time if you're going to have to remove it,

19 right?

A. Correct.

MR. PORTER: Nothing further,

Mr. Halloran. Thank you.

HEARING OFFICER HALLORAN: Thank you,

Mr. Porter. Ms. Tomas?

L.A. REPORTING (312) 419-9292

113

MS. TOMAS: Nothing further,

Mr. Halloran.

HEARING OFFICER HALLORAN: Thank you.

You may step down. Thanks a lot. Off the

record.

(Whereupon, a discussion

was had off the record.)

HEARING OFFICER HALLORAN: We're going

to adjourn until noon.

(Whereupon, after a lunch

break was had, the

following proceedings

were held accordingly.)

HEARING OFFICER HALLORAN: We're back

on the record. It's approximately 12:06,

September 11th, 2007. The State just

finished with their first witness and I

believe they're ready to proceed to call

their second witness.

MR. GRANT: Yes, Mr. Hearing Officer.

The State calls Blake Harris.

HEARING OFFICER HALLORAN: Mr. Harris?

(Witness sworn.)

L.A. REPORTING (312) 419-9292

114

1 WHEREUPON:

BLAKE HARRIS

3 called as a witness herein, having been first duly

4 sworn, was examined and testified as follows:

DIRECT EXAMINATION

By Mr. Grant

Q. Mr. Harris, would you state your name

8 and spell your name for the record, please?

A. Blake Olin Harris, B-L-A-K-E, O-L-I-N,

10 H-A-R-R-I-S.

Q. Where are you employed?

A. Pardon me?

Q. Where are you employed?

A. Illinois EPA.

Q. How long have you been employed with

16 Illinois EPA?

A. Since June of '93.

Q. Can you give us some idea of your

19 educational background?

A. A business degree, Illinois College,

21 '92. I've done some graduate work at SIU

22 Edwardsville, environmental studies, taken a couple

23 masters classes out at UIS in Springfield in

24 geology, that kind of thing.

L.A. REPORTING (312) 419-9292

115

Q. What is your current position?

A. I work for air monitoring. I'm an

3 environmental protection specialist. We do

4 forecasting for ozone and particulates for people

5 who are asthmatics and have similar conditions.

HEARING OFFICER HALLORAN: Could you

speak up, please?

THE WITNESS: Okay. I'll try. I have

a cold. I'll try.

HEARING OFFICER HALLORAN: Thanks.

11 BY MR. GRANT:

Q. And what was your position before the

13 one you have?

A. I was an accountant with the Bureau of

15 Water. Worked with low interest loans for

16 wastewater, drinking water improvement projects.

Q. And what sorts of things would you do

18 working with the low interest loans?

A. People would come in with bids. We

20 would issue them a loan. Along the process they

21 would do change orders when things would change in

22 the project if they had to add additional meters or

23 something like that to extend out water service.

24 And eventually we would close those loans out at the

L.A. REPORTING (312) 419-9292

116

1 end of the project.

Q. And prior to being with the Bureau of

3 Water, were you with the Bureau of Land?

A. Yes. I worked with financial

5 assurance, Bureau of Land from February or March of

6 '99 up through the end of '03.

Q. What were your responsibilities, sir?

A. I reviewed financial assurance

9 instruments for landfills, hazardous waste

10 facilities, underground injection wells, tire

11 reclamation facilities to determine compliance with

12 the regulations.

Q. Are you familiar with this case, that

14 is this Pollution Control Board case?

A. Yes.

Q. Have you been deposed by the City of

17 Morris and Community Landfill Company in this case?

A. Yes.

Q. Did you also testify before regarding

20 financial assurance issues for the Morris Community

21 Landfill?

A. Yes.

Q. And can you describe that testimony?

24 Or rather, what case or what matter was it given in?

L.A. REPORTING (312) 419-9292

117

A. My recollection there was a permit

2 appeal back in 2001 I think it was. They just

3 wanted to know the status of the financial

4 assurance.

Q. Are you familiar with the financial

6 assurance regulations pertaining to municipal solid

7 waste landfills?

A. Yes.

Q. If you can turn to Exhibit 1, I ask

10 you to take a look at what's there.

A. Okay.

Q. Are these the financial assurance

13 regulations pertaining to municipal solid waste

14 landfills?

A. Yes.

Q. And it's at 35 Illinois Administrative

17 Code 811.707?

A. Yes.

Q. Okay. You mentioned tires and

20 underground injection, that sort of thing. Are

21 there other financial assurance requirements not

22 pertaining to municipal solid waste landfills?

A. Correct. They apply to underground

24 injection facilities, people who have shredded,

L.A. REPORTING (312) 419-9292

118

1 like, tires, that kind of thing and hazardous waste

2 disposal. They all require financial assurance.

Q. Does Illinois EPA consider financial

4 assurance to be important?

A. Yes.

Q. Why?

A. Well, it's kind of like a safety net.

8 If the owners don't clean up the facilities or close

9 them properly, we have the ability to pay a third

10 party to go in and properly clean up and close the

11 facility.

Q. Are you familiar with the financial

13 assurance requirements at the Morris Community

14 Landfill?

A. Yes.

Q. How did you become involved with

17 financial assurance issues for this landfill?

A. Initially, I was not working on this.

19 I worked with another person and he had his sites

20 and I had mine and we just tried to evenly divide

21 them out.

I started working at this facility

23 because he was not in the office one day and the

24 permit section -- someone there had asked me what

L.A. REPORTING (312) 419-9292

119

1 the current status was on the financial assurance

2 for this site.

HEARING OFFICER HALLORAN: Mr. Harris,

can you turn this way just a tad and move the

mic kind of over my way little so we can see

you, as well.

THE WITNESS: Sure.

HEARING OFFICER HALLORAN: Thank you.

You have a great profile, but...

THE WITNESS: My mother says thank

you.

(Brief pause.)

13 BY MR. GRANT:

Q. You mentioned that you worked at --

15 you were working on -- or there was a division of

16 the work. Can you estimate how many separate

17 facilities you've evaluated the financial assurance

18 for?

A. Hundreds.

Q. Specific to the Morris Community

21 Landfill at the time you became aware of it, did the

22 Bureau of Land permit section advise you of the

23 amount of financial assurance required?

A. Prior to when I started working with

L.A. REPORTING (312) 419-9292

120

1 them?

Q. No. At the time when you first became

3 involved with the Morris Community Landfill.

A. Yeah. It was when we worked with the

5 permit section. They would just want to know if we

6 had adequate financial assurance that was posted to

7 cover whatever the cost estimate was. So their

8 reviewers would come to me and say, you know, do

9 they have a million dollars, whatever it might be.

10 We would make sure they had adequate financial

11 assurance to cover that.

Q. Now, when you say the cost estimate,

13 can you describe what that is?

A. The cost estimate would be for closing

15 and doing post-closure care on a landfill, in this

16 case. It's a permit requirement to have a cost

17 estimate.

Q. Now, does the permit section come up

19 with the cost estimate or approve the cost estimate?

A. No. The facility provides the cost

21 estimate --

Q. Okay.

A. -- to the permit section. They

24 approve it or disapprove it or tweak it, whatever

L.A. REPORTING (312) 419-9292

121

1 they have to do.

Q. Did you have any involvement with

3 actually coming up with a specific amount of

4 financial assurance required, in other words, the

5 dollar amount?

A. Did I come up with a cost estimate?

7 Is that what you're --

Q. Yeah. As part of your responsibility?

A. No.

Q. How did the City of Morris and

11 Community Landfill Company provide financial

12 assurance for the Morris Community Landfill?

A. From what I recall, at one point they

14 had used a trust fund or something like that. But

15 at the point when I became involved with it, they

16 were using performance bonds.

Q. Can you turn to Exhibit No. 9, please?

18 Are these the financial assurance instruments that

19 were posted by Community Landfill Company and the

20 City of Morris for the Morris Community Landfill?

A. Yes.

Q. And what type of estimates are these?

A. These are performance bonds.

Q. And how do these bonds work? In other

L.A. REPORTING (312) 419-9292

122

1 words, how do they work as far as the Agency is

2 concerned?

A. Well, like I was saying earlier,

4 they're sort of a safety net. It's really the

5 owner's ideal responsibility for them to close and

6 do the post-closure care.

But if you go to the second page

8 on the bottom there are triggers there that if they

9 don't do that, if they abandon the site, if they're

10 adjudicating, bankrupt, that type of thing, we have

11 the money then to pay a third party to go do the

12 clean-up work. Is that your question?

Q. Yeah. Basically, I was wondering, you

14 know, how they function. Do the financial assurance

15 regulations for landfills, specifically the ones we

16 have in Exhibit 1, do they specify conditions of

17 performance bonds?

A. Conditions of when those would be

19 used? Is that what you're --

Q. Or the sort of performance bonds that

21 may be used. Do the regulations, you know, have

22 requirements for what types of performance bonds can

23 be used?

A. In types, what do you mean?

L.A. REPORTING (312) 419-9292

123

Q. As far as what the requirements are

2 for a compliant performance bond.

A. Yes. They do state that. They have

4 to be on the forms that are within the regulations,

5 that are part of the regulations.

Q. Can you turn in Exhibit No.1 to

7 811.712?

A. Okay.

Q. Is that the specific section that

10 pertains to performance bonds?

A. Yes.

Q. Let me ask you -- I'm sorry to bounce

13 you around. Let me ask you to turn back to number

14 nine.

MR. GRANT: And for the record, that's

Complainant's A(9).

HEARING OFFICER HALLORAN: Group A,

Exhibit 9?

MR. GRANT: Group A, Exhibit 9. Thank

you.

21 BY MR. GRANT:

Q. Now, I think you stated that you had

23 seen these -- you'd reviewed these bonds before?

A. Yeah.

L.A. REPORTING (312) 419-9292

124

Q. Based on your review of the bonds, can

2 you determine the amount that the Respondents,

3 specifically the Community Landfill and the City of

4 Morris paid for the bonds?

A. Yeah. The premium is listed on the

6 second page there. It's 2 percent of this current

7 amount.

Q. Okay. So you mean 2 percent of the

9 face value of the bond?

A. Two percent of the amount guaranteed

11 by the bond, the face value.

Q. Is that your understanding that that

13 is an annual premium?

A. Yes.

Q. And based on your experience with

16 other financial assurance instruments, including

17 surety bonds, is that a representative rate?

MR. PORTER: (Inaudible.)

19 BY THE WITNESS:

A. That's the lowest rate I --

HEARING OFFICER HALLORAN: Excuse me.

Mr. Porter?

MR. PORTER: I'm going to object to

foundation. I don't believe there's been

L.A. REPORTING (312) 419-9292

125

sufficient foundation laid that he knows the

various rates paid on these financial bonds.

HEARING OFFICER HALLORAN: Mr. Grant?

MR. GRANT: He testified that he

reviewed hundreds of financial assurance

instruments and it was part of his job, he

was familiar with doing it and -- well, I can

ask one more question.

9 BY MR. GRANT:

Q. Did you look at other -- during the

12 instruments, did you see bonds that were not issued

13 by the Frontier Insurance Company?

A. Yes.

Q. In other words, from other companies?

A. Yes.

HEARING OFFICER HALLORAN: I'm going

to overrule Mr. Porter's objection. You may

proceed. Thanks.

20 BY MR. GRANT:

Q. And just to finish up that question,

22 did those bonds also show the annual premium on the

23 face of the bond?

A. Yeah.

L.A. REPORTING (312) 419-9292

126

Q. Did there come a time in 2000 when the

2 Illinois EPA determined that the Frontier bonds were

3 no longer acceptable for closure/post-closure

4 financial assurance?

A. Yes. It was -- they were delisted

6 from the Federal 870 circular, June 1 of 2000. And

7 soon after that I met with my supervisor and the

8 section manager and legal counsel, as well, to see

9 if they concurred with my interpretation of the

10 regulations that said that they needed that as well

11 as the Department of Insurance listing. So sometime

12 after June 1 of 2000 we made that determination.

Q. Did other landfills besides the Morris

14 Community Landfill have Frontier bonds as surety?

A. Yes.

Q. Approximately how many?

A. We sent out violation notices to

18 approximately 30 landfills that were regulated under

19 811 regulations. The 807 regulations did not

20 specify that the circular -- the 570 Circular was a

21 requirement. But of the 811s, there was

22 approximately 30 that used Frontier.

Q. Okay. After making this

24 determination, what action -- you sort of partially

L.A. REPORTING (312) 419-9292

127

1 answered this question, but what action did Illinois

2 EPA take?

A. Once we had basically come to the

4 conclusion that everyone agreed that they did not

5 meet the requirements of the regulations, we sent

6 out violation notices to all of those facilities.

Q. Do you recall when the violation

8 notices were sent out?

A. Sometime around late October I think

10 they started. Maybe towards of end of November. In

11 that one month period. That was quite a few to get

12 out in a short period of time, so...

Q. And that was 2000 -- in the year 2000?

A. That was 2000, yes.

Q. Okay. Can you please turn to Exhibits

16 10 and 11 and take a look at them. Let's do one at

17 a time. Why don't we just go to Exhibit 10. Can

18 you identify this document?

A. It's a violation notice.

Q. And who was it sent to?

A. City of Morris.

Q. Okay. What date was this violation

23 notice sent out?

A. November 14th, 2000.

L.A. REPORTING (312) 419-9292

128

Q. And does it refer to what -- the

2 violation that Illinois EPA was considering? In

3 other words, what is the violation? What violation

4 is it noticing?

A. On Attachment A, it's a violation of

6 811.700(f) and 21(d)(2) of the Environmental

7 Protection Act.

Q. And does it relate to the Frontier

9 bonds?

A. Yes.

Q. And does it provide a suggested

12 resolution?

A. Yes, it does.

Q. And what does it suggest as the

15 resolution?

A. To provide adequate financial

17 assurance in the amount that equals or exceeds the

18 current closure, slash, post-closure cost estimate.

Q. Okay. Please turn to Exhibit No. 11.

20 And can you identify this document?

A. It's a violation notice.

Q. And who was it sent to?

A. Community Landfill Company.

Q. And is this violation notice also

L.A. REPORTING (312) 419-9292

129

1 related to the Frontier bonds?

A. Yes.

Q. And does it also have a suggested

4 resolution?

A. Yes, it does.

Q. Okay. Are these violation notices,

7 Exhibits 10 and 11, similar to the violation notices

8 that were sent out to all of the landfills that had

9 Frontier surety bonds?

A. As far as I recall, they were all

11 identical as far as the attachment because it was

12 all the same violation. The only thing that was

13 different was the contact on the front page.

Q. Did they all have a similar suggested

15 resolution?

A. Yes.

Q. Okay. Of the 30 landfills or

18 approximately 30 landfills that you referred to, how

19 many of them subsequently replaced the Frontier

20 bonds with compliant financial assurance?

A. All of them did. There was one

22 exception from what I remember. A little landfill

23 called Dowty. And as far as I know, they're now on

24 the state's list of abandoned landfills.

L.A. REPORTING (312) 419-9292

130

Q. But the Dowty location did not?

A. They did not substitute alternate

3 financial assurance.

Q. Did Community Landfill Company or the

5 City of Morris ever replace the Frontier bonds with

6 compliant financial assurance?

A. No.

MR. GRANT: That's all I have.

HEARING OFFICER HALLORAN: Thank you,

Mr. Grant. Ms. Grayson, cross?

MS. GRAYSON: Mr. Harris, my name is

Clarissa Grayson. I'm the attorney for

Community Landfill Company. I have a few

questions for you.

CROSS EXAMINATION

By Ms. Grayson

Q. Who was working on the Morris

18 Community Landfill before you started working on it?

19 You mentioned that you took it over from someone

20 because that person wasn't there that day.

A. I answered the questions for the

22 permit section because that person wasn't there that

23 day. It was John Taylor.

Q. John Taylor. You also testified that

L.A. REPORTING (312) 419-9292

131

1 everyone agreed with the decision that Frontier

2 bonds were no longer good? Was that your testimony

3 before?

A. I believe I said everybody I spoke

5 with as far as Hope Wright, my supervisors, Dave

6 Walters and legal counsel agreed with that.

Q. Did you speak with John Taylor?

A. Yes. John did not agree with them.

Q. So, in fact, everyone did not agree

10 with the decision that the Frontier bonds were no

11 longer any good; is that correct?

A. Correct.

Q. John Taylor, in fact, disagreed with

14 that decision?

A. John Taylor felt that the 570 Circular

16 from what I recall, while it was a requirement, that

17 Frontier was in receivership, they had some medical

18 malpractice claims or something to that effect and

19 that they would be eventually put back on that list.

20 And my opinion was it doesn't really matter if they

21 are eventually put back on. The regulations say it

22 requires it.

Q. Didn't he, in fact, believe that there

24 was no law, rule or regulation that allowed the

L.A. REPORTING (312) 419-9292

132

1 Agency to take the actions to disprove a bond that

2 was valid when it was issued, but when the bonding

3 company was later removed from the U.S. Department

4 of Treasury's list?

A. Could you repeat that, please?

Q. Sure. Didn't he believe that there

7 was no law or rule or regulation that allowed the

8 Agency to take the action to disprove the bond

9 because it was valid when the -- it was issued, but

10 then only simply because the company later was

11 removed from the Treasury's 570 list of approved

12 sureties?

MR. GRANT: I'm going to object to

that question. First off, it's a multiple

question. Second off, I think that, as a

whole, it's vague.

17 BY MS. GRAYSON:

Q. Did he originally recommend --

HEARING OFFICER HALLORAN: Yeah. I

sustain and overrule. So just rephrase it.

Thank you.

MS. GRAYSON: I'll rephrase it.

23 BY MS. GRAYSON:

Q. Did he recommend -- do you know

L.A. REPORTING (312) 419-9292

133

1 whether he recommended that the bonds be accepted?

A. At what point?

Q. In August of 2000.

A. I don't know. I recall there was some

5 note that he had handwritten to Joyce or someone

6 from the permit section that said he thought they

7 should be exempted.

Q. In Exhibit --

MS. GRAYSON: Let's see. That would

be in our Exhibit 1 or is that that Hearing

Officer Group Exhibit?

HEARING OFFICER HALLORAN: Hearing

Officer Exhibit A incorporated --

14 BY MS. GRAYSON:

Q. In Hearing Officer Exhibit A --

MS. GRAYSON: If I could? It will

take me a second to locate it.

(Brief pause.)

HEARING OFFICER HALLORAN: I was going

to use that as my copy.

MS. GRAYSON: I have a copy. I'm

sorry. I can give this back to you.

(Brief pause.)

MS. GRAYSON: I'll try to direct

L.A. REPORTING (312) 419-9292

134

everyone's attention to where this particular

document is. After the deposition testimony

excerpts is a group marked Exhibit 1

excerpts. Does everyone have that?

MR. GRANT: It's at my offices.

MS. GRAYSON: Well, I can pass it

around.

HEARING OFFICER HALLORAN: I gave

Mr. Harris a copy of mine.

MS. GRAYSON: He has a copy. Okay.

Just for the record, it is part of Hearing

Officer Exhibit A, the group marked Exhibit 1

excerpts and it's the last page of that

exhibit with the numbers 214 and 0053 marked

in the lower right-hand corner.

16 BY MS. GRAYSON:

Q. Could you describe what this document

18 is, Mr. Harris?

A. I don't know what this is. It looks

20 like maybe John typed these on a page or something

21 like that to list out their bond numbers. And then

22 it says opinion and then it says the bonds appear to

23 comply with the relevant regulation in all respects.

Q. That's correct.

L.A. REPORTING (312) 419-9292

135

MR. GRANT: I'm going to object at

this point, basically, as to the relevance of

this testimony.

It's -- the invalidity of the

bonds has already been decided in the '01

permit appeal and that was upheld on appeal.

In this case, the Pollution

Control Board has affirmed the fact that the

Frontier bonds are not compliant. So as far

as, you know, evidence that goes to the

contrary, I think it's irrelevant. It's

also, you know, barred by collateral

estoppel.

HEARING OFFICER HALLORAN: Ms.

Grayson?

MS. GRAYSON: My point in this would

simply be that the witness testified that

everybody agreed that the bonds weren't any

good and I was simply trying to make -- and

it was his testimony that brought this up,

otherwise, I wouldn't have raised it.

HEARING OFFICER HALLORAN: Okay. I

think he clarified that and then we went on

to this exhibit.

L.A. REPORTING (312) 419-9292

136

MR. PORTER: Mr. Halloran, may I

comment?

HEARING OFFICER HALLORAN: Sure,

Mr. Porter.

MR. PORTER: Part, if not the heart of

the issue here is deciding the reasonableness

of everyone's conduct. And how the City of

Morris and even CLC acted depends greatly

upon what the beliefs were as to the validity

of the Frontier bonds. And even though we

finally had a final decision on that in June

of 2006, clearly, the conduct up to that time

is relevant in this proceeding when the State

is seeking penalties and attorneys fees.

HEARING OFFICER HALLORAN: I

understand that, Mr. Porter. I'm just

stating that Ms. Grayson has already brought

it out that, in fact, everybody did not

agree, and then Ms. Grayson went on to cite

these incorporated documents, which was John

Taylor's handwritten note.

But given the fact that -- you

know, I will allow a little latitude. And

given the fact that the State did not object

L.A. REPORTING (312) 419-9292

137

to the incorporation, I'll allow a little

latitude and let the answer stand.

Were you in the middle of a

question?

5 BY MS. GRAYSON:

Q. Just that -- just wanted to -- if you

7 can just read the notes that are on here and the

8 date on there?

A. August 3, 2000, Community Landfill has

10 tendered three acceptable performance bonds totaling

11 17,427,366. The bonds appear to comply with the --

MR. PORTER: Mr. Halloran, I can't

hear the witness.

14 BY THE WITNESS:

A. The bonds appear to comply with the

16 relevant regulations in all respects.

17 BY MS. GRAYSON:

Q. Thank you. Didn't the Agency accept

19 and then later reject the bonds?

A. I don't know if the bonds were

21 actually accepted. I wasn't really working on the

22 financial assurance review at the time. I mean --

Q. Do you have knowledge of what the

24 procedure was that was established by which the CLC

L.A. REPORTING (312) 419-9292

138

1 would provide the bonds for the review of the IEPA

2 who then agreed with them and so CLC went ahead and

3 purchased the bonds and then at that point the bonds

4 were rejected? Is that your understanding?

A. Well, typically, with financial

6 assurance, they -- whoever, landfill, hazardous

7 waste facility would purchase the bonds, submit them

8 to the Agency and then we would approve them.

9 Although, I don't know because I didn't work on it.

10 Back then I didn't work on this when this note was

11 written. Does that make sense to you? I wasn't the

12 one who said this. I don't know.

Q. Okay. Are you aware of the financial

14 condition of Community Landfill --

A. No.

Q. -- Company?

Do you know whether CLC had any

18 intent to not provide financial assurance?

A. No.

Q. Do you have any knowledge as to

21 whether CLC can afford financial assurance?

A. No.

Q. Do you have any idea how CLC makes

24 money?

L.A. REPORTING (312) 419-9292

139

A. I can guess, as they're a landfill, by

2 accepting waste. But I don't know what they do to

3 make money.

Q. And do you think that their ability to

5 make money has been hampered by the fact that

6 they're not permitted to put waste in certain areas,

7 yet are required to post significant --

MR. GRANT: I'm going to object to

this question. I think it calls for him to

speculate in areas. He already testified he

has no knowledge.

HEARING OFFICER HALLORAN: He can

answer if he's able. Overruled.

14 BY THE WITNESS:

A. I don't know.

16 BY MS. GRAYSON:

Q. Well, you said that you had an idea of

18 how they made money?

A. I have an idea of how landfills in

20 general make money, but I don't know if that's

21 hampered their ability to make money.

Q. But do you think that their ability to

23 make money would be hampered by not being allowed to

24 deposit waste that would allow them to make money in

L.A. REPORTING (312) 419-9292

140

1 order to come up with the financial assurance that

2 is required?

A. I don't know if it would or not. I

4 mean, I suppose a landfill could accept waste

5 illegally and they would still make money.

Q. I'd like to draw your attention to CLC

7 Exhibit 11. I believe you have a copy of that or

8 perhaps the Hearing Officer?

A. Is it a violation notice?

Q. No. It's CLC's Exhibit 11.

MR. GRANT: It's not in the book.

Mr. Halloran, do you have a copy of the

exhibit?

HEARING OFFICER HALLORAN: I do have a

copy. Thank you.

16 BY MS. GRAYSON:

Q. Do you recall writing this letter,

18 Mr. Harris?

A. I can see what I've written here but,

20 no, I don't really remember writing that letter.

Q. Do you recall the circumstances of

22 this letter?

A. Well, by reading it, it appears that

24 they were requesting that alternative assurance had

L.A. REPORTING (312) 419-9292

141

1 not been received and we couldn't release their

2 bonds.

Q. Maybe I should start with a different

4 exhibit to --

A. Yeah. I haven't looked at this for a

6 long time.

HEARING OFFICER HALLORAN: What

exhibit were we just on?

MS. GRAYSON: This was CLC's Exhibit

11.

HEARING OFFICER HALLORAN: Thank you.

(Brief pause.)

13 BY MS. GRAYSON:

Q. I'll give you a slightly better chain

15 of events. Let -- I have two documents marked CLC

16 Exhibit 9 and CLC Exhibit 10.

MS. GRAYSON: If I could approach and

give this to you?

HEARING OFFICER HALLORAN: You may.

(Brief pause.)

MS. GRAYSON: Do you have Exhibits 9

and 10?

HEARING OFFICER HALLORAN: Yes. Thank

you.

L.A. REPORTING (312) 419-9292

142

1 BY MS. GRAYSON:

Q. Mr. Harris, Exhibit 9 is a letter from

3 Deborah Monforte of Frontier Insurance Company --

4 and this is just by way of background information

5 for you -- wherein she sent a form to be executed by

6 the IEPA, Dave Jansen, she sent it to the Bureau of

7 Land, to release the collateral that Frontier

8 Insurance Company was holding on behalf of CLC.

A. Okay.

Q. And Exhibit 10 is a fax coversheet

11 from Ms. Monforte at Frontier Insurance Company,

12 which attaches a copy of your letter?

A. Where are we at now? Which exhibit?

Q. Exhibit 10 is a fax coversheet from

15 Ms. Monforte of Frontier Insurance Company and

16 attached to the fax coversheet is a copy of your

17 letter which is marked Exhibit 11.

A. Okay.

Q. So your letter is here twice. Once

20 as an attachment to the fax coversheet and then the

21 second time as an individual exhibit. But as you

22 can see, it's the same letter. Do you have any

23 recollections surrounding this?

A. To be honest, no. But what it looks

L.A. REPORTING (312) 419-9292

143

1 like to me is they're just requesting we release

2 their bonds.

Q. Can you read the letter -- Exhibit 9,

4 can you read the first paragraph of that?

A. Enclosed please find New York State

6 Department of Insurance form to be executed by your

7 department for release of collateral, Frontier

8 Insurance Company, in rehabilitation is in

9 possession of for the above-mentioned. And I don't

10 know -- it says enclosed. What was enclosed?

Q. Well, enclosed was a release of

12 collateral, but it's not attached to this exhibit.

13 It's just the letter.

A. Just curious what it said.

Q. It's a form to release the collateral.

16 Is that the same thing as far as you're concerned as

17 release the bond?

A. That's what it appears to be to me.

Q. So do you have any recollection of why

20 you would have written this letter on August 21st?

A. However, alternate financial assurance

22 of the above-mentioned bonds has not been received.

23 So if we didn't have anything in our possession to

24 replace the bonds, we would not have released their

L.A. REPORTING (312) 419-9292

144

1 financial assurance.

Q. Does it matter that the bonds already

3 had been determined -- didn't you previously testify

4 the bonds had been determined to be no good?

A. Well, they don't comply with the

6 regulations. I didn't say they were no good.

Q. How is there a difference?

A. Well, I guess it doesn't mean maybe

9 that they would not pay on the bonds, you know, but

10 it still doesn't really satisfy the requirements of

11 regulation. That's what I am saying.

The bonds did not meet the

13 requirements of the regulations, so they were not

14 acceptable from that perspective.

Q. Then what would be the rationale

16 between not refunding the collateral? If the bonds

17 were not any good, as you're saying, that they don't

18 comply with the regulations, why wouldn't you give

19 the collateral back?

A. Well, we would have absolutely nothing

21 then. So I guess if there's a potential that we

22 could really still get something out of these bonds,

23 if we were to release them without having any

24 alternate financial assurance at all, we would have

L.A. REPORTING (312) 419-9292

145

1 nothing. What would be the replacement?

Q. Well, that's the point is that if the

3 bonds are no good, you don't have anything to begin

4 with.

A. Well --

Q. How can you collect --

A. I wouldn't --

Q. How can the Agency collect on

9 something --

A. I wouldn't agree with that. I would

11 say if the bonds don't meet the regulations, they're

12 not acceptable financial assurance. But from a

13 practical perspective, if we have to clean up an

14 abandoned landfill, you know, maybe we could get

15 something out of these bonds. That would have been

16 our way of thinking at the time with any landfill.

Q. Your way of thinking at the time?

A. With any landfill. If somebody -- a

19 landfill comes in and says, oh, just give us back

20 our financial assurance, what would we have to clean

21 it up if they skipped the state?

Q. But if -- you're talking about bonds

23 that -- I mean, normally, the bonds are in place and

24 there is not a reversal of a determination that the

L.A. REPORTING (312) 419-9292

146

1 bonds are good; is that correct? That's the -- it's

2 not normal what happened in this situation?

A. It hadn't happened before that I know

4 of.

Q. So in this situation there really

6 aren't any regulations -- there's no regulation that

7 says that the State may keep the collateral for

8 bonds that are determined to not be compliant; is

9 that correct?

A. I don't know that.

Q. Are you familiar with any regulation

12 that allows the State to do that?

A. Without looking back through all the

14 regulations, I don't know.

Q. In your experience as with a number of

16 years in financial assurance and with reviewing the

17 numbers of financial assurance documents that you

18 did and with the work that you did with the number

19 of landfills, are you familiar with any regulation

20 that would allow the State to keep -- or to prohibit

21 release of collateral when bonds have been

22 determined to not be compliant?

A. I think within the regulations there

24 is a section that does say that they have to provide

L.A. REPORTING (312) 419-9292

147

1 acceptable alternate financial assurance before we

2 release the mechanism.

Q. And what regulation is that?

A. Somewhere in 811, which I haven't

5 looked at for four years.

Q. So there's something that you think

7 may require that, but you're not sure?

A. I think there is something within the

9 regulations that requires we have alternate

10 financial assurance before we release a mechanism,

11 yes.

MS. GRAYSON: I have nothing further.

HEARING OFFICER HALLORAN: Thank you,

Mr. Grayson. Mr. Porter?

MR. PORTER: Thank you, Mr. Halloran.

CROSS EXAMINATION

By Mr. Porter

Q. You don't know whether or not CLC or

19 City of Morris has failed to perform any closure or

20 post-closure activities, correct?

A. Correct.

Q. Do you know what closure activities

23 the City has performed since June of 2006?

A. No.

L.A. REPORTING (312) 419-9292

148

Q. Are you aware the City has expended

2 substantial funds in hiring Shaw Environmental to

3 conduct several closure activities?

A. No.

Q. Do you know if Frontier Insurance

6 Company is licensed to transact the business of

7 insurance by the Department of Insurance?

A. Currently, no, I don't know that.

Q. Do you know if they ever lost their

10 license to transact business of insurance by the

11 Department of Insurance?

A. I seem to recall that they did.

Q. Isn't it true that as of June 1, 2000,

14 Frontier Insurance Company indeed had a license to

15 transact business of insurance by the Illinois

16 Department of Insurance which is now handled by the

17 Illinois Department of Financial and Professional

18 Regulation?

A. Yes.

Q. So at the time that you are asserting

21 that Frontier Insurance Company -- strike that.

So at the time that you're

23 asserting CLC first failed to provide financial

24 assurance, Frontier was actually licensed to

L.A. REPORTING (312) 419-9292

149

1 transact business, correct?

A. With the Illinois Department of

3 Insurance?

Q. Let me ask it again otherwise our

5 record is difficult. I should have completed the

6 question.

You would agree that at the time

8 the State is alleging that CLC first failed to

9 provide financial assurance, Frontier Insurance

10 Company was licensed to transact business by the

11 Illinois Department of Insurance, correct?

A. Correct.

Q. And you don't know when they lost that

14 license, correct?

A. I don't know the exact date or even if

16 they have at this point.

Q. Now, if you would, take a look at

18 811.712(b) for me, which is one of the exhibits that

19 the State has given you which is in front of you.

A. Okay.

Q. Now, 712(b) actually provides, does it

22 not, that a surety company that is licensed to

23 transact the business of insurance by the Department

24 of Insurance may provide a bond, correct?

L.A. REPORTING (312) 419-9292

150

MR. GRANT: I'm going to object on the

basis of relevance because it seems we're

going to whether or not the Frontier bonds

are valid, adequate financial assurance and

that's been decided. And it was decided, you

know, through denial asserted by Illinois

Supreme Court in 2002.

I guess maybe I'm asking

Mr. Porter to explain where he's going with

this because if we're going to get into

whether or not the Frontier bonds are valid,

that issue is gone.

HEARING OFFICER HALLORAN: Mr. Porter?

MR. PORTER: My response -- and I

somewhat sound like a broken record, but part

of this -- the major part of this is

determining the reasonableness of the conduct

of the parties involved.

And I will prove through this

witness that not only is it reasonable for

the City of Morris to believe the Frontier

bonds were sufficient and CLC to believe it

was sufficient, intelligent minds clearly

have reason to disagree with any contrary

L.A. REPORTING (312) 419-9292

151

conclusion that may have been reached by the

Pollution Control Board or even a court of

further jurisdiction.

We're getting now into penalty and

remedy and it has to do with reasonableness

of conduct.

HEARING OFFICER HALLORAN: You know, I

agree with Mr. Porter. Reliability and the

remedy portions, especially to 33(c) and

42(h) some what overlap. I do find it

relevant and I will give the Respondents a

little latitude like I gave the Complainant

latitude on their first witness. So

objection overruled.

15 BY MR. PORTER:

Q. I'm going to get to it a different

17 way. You mentioned that there was a meeting that

18 was had where a decision was made that not only did

19 Frontier Insurance Company have to have a license,

20 but they also had to be on the 570 Circular?

A. Yes.

Q. And so who was that meeting with?

A. It's been over seven years, but I

24 remember Bill Ingersoll was there, myself and I

L.A. REPORTING (312) 419-9292

152

1 think it was Chris Perzan at the time. And they

2 worked for the legal department.

Q. Now, isn't it true that that meeting

4 was necessitated because the language of 811.712(b)

5 arguably provides that the company need only be

6 licensed to transact business or it may be an excess

7 carrier and be beyond the circular?

A. Could you rephrase that question? I

9 don't quite understand what you're saying.

Q. Let me try to attack it this way. I'm

11 trying to avoid having to read the whole paragraph

12 into the record, but maybe that's where we're going

13 to have to go.

If you can take a look at

15 811.712(b). It provides a variety of requirements

16 for the bonding company, right?

A. Yes.

Q. And as a matter of fact, the first

19 requirement is that the surety company issuing the

20 bonds shall be licensed to transact the business of

21 insurance by the Department of Insurance pursuant to

22 the Illinois Insurance Code, right?

A. Yes.

Q. And then there is an "or". The next

L.A. REPORTING (312) 419-9292

153

1 word is "or" and there's discussion of how else an

2 insurance company can meet the requirement, correct?

A. Correct.

Q. And that "or" is that they may provide

5 a minimum -- at a minimum, the insurer must be

6 licensed to transact the business of insurance or to

7 provide insurance as an excess or surplus lines

8 insurer and be on the circular. So there are two

9 ways. One, they can be licensed to transact

10 business or, two, it can be an excess carrier and on

11 the circular, right?

A. That's not how we interpreted that

13 because it's any of those first combination of

14 things, comma, and approved by the U.S. Department

15 of the Treasury as an acceptable surety.

And part of the basis for -- I

17 mean, not only does reading it how it appeared to us

18 that it was requiring both things, but the Board

19 rulemaking when 811 was being, you know, put

20 together specifically mentioned that as a

21 requirement, the 570 Circular.

Q. Again, the 570 Circular is a

23 requirement if, indeed, it's just an excess or

24 surplus line and isn't licensed to transact in

L.A. REPORTING (312) 419-9292

154

1 Illinois, right?

A. I don't know how to answer that

3 question.

Q. Let me ask it this way: You would

5 agree that that section is susceptible to different

6 interpretations as to what's required, correct?

A. Sure.

Q. As a matter of fact, you had to have a

9 meeting with several individuals to decide, okay, do

10 they have to be licensed to transact and on the

11 Circular or do they just have to be licensed to

12 transact?

A. Yes. I agree with that.

Q. And, ultimately, you guys came to the

15 conclusion you had to be both?

A. Correct.

Q. But you understand that the statute

18 can be read a different way, right?

A. I'm sure you could interpret it that

20 way.

Q. And it's perfectly reasonable for the

22 City of Morris or CLC to interpret it that way,

23 correct?

A. I don't know how to answer that. I

L.A. REPORTING (312) 419-9292

155

1 mean, I guess someone could have a different

2 opinion. They don't -- you know, if you disregard

3 the comma, it doesn't seem like that's --

Q. I mean, we're not making a big stretch

5 here. It says "or". It doesn't say "and", right?

A. Well, it has all these first parts you

7 were talking about and then it says, comma, and

8 approved by the U.S. Department of the Treasury as

9 an acceptable surety.

Q. Okay. But before all that --

A. It's any of those first things, comma,

12 plus this second component, which is the 570

13 Circular.

Q. Okay. So you're reading the last

15 clause, the "and" as applying to all of the language

16 in that entire paragraph, including that that comes

17 before the first "or", right?

A. I'm reading that this is an additional

19 requirement to any of the first things.

Q. Now, did you ever take a different

21 position on that issue?

A. Did I believe that it could be

23 interpreted that they don't need the 570 Circular

24 requirement?

L.A. REPORTING (312) 419-9292

156

Q. Right.

A. I don't even remember back at the

3 time. I mean, I wanted to meet with, you know --

Q. Who in the room took the position that

5 you only had to be licensed to transact business in

6 Illinois?

A. I don't know if anyone in the room

8 when we had that meeting took that position.

Q. You don't know when or if the City of

10 Morris has ever been informed that Frontier

11 Insurance Company is not licensed to transact

12 business in Illinois, correct?

A. Correct.

Q. Isn't it true that the bonds that were

15 issued in this case were valid, at a minimum,

16 through the end of May 2005?

A. What exhibit is that?

Q. Well, I don't have a particular

19 exhibit. If I need to, I'm going to refresh your

20 recollection with your affidavit.

But right now my question is

22 simply would you agree that the Frontier bonds were

23 valid through, at a minimum, May of 2005?

MR. GRANT: I object.

L.A. REPORTING (312) 419-9292

157

1 BY THE WITNESS:

A. If I could see the bonds and see when

3 they were issued, I could tell you that.

MR. GRANT: I think -- Actually, I

think there was a mistake. I think you meant

2000, didn't you, not 2005?

MR. PORTER: No. I meant 2005.

8 BY THE WITNESS:

A. Can I look at the bond?

10 BY MR. PORTER:

Q. Absolutely. I don't know what

12 exhibit --

A. Which exhibit are we on?

Q. -- Counsel has marked that as.

MR. GRANT: Exhibit 9.

16 BY MR. PORTER:

Q. In other words, as you sit here today,

18 you don't recall but you need to look at something

19 to refresh your recollection; is that right?

A. I would need to look at this to

21 refresh my recollection, yes.

Q. Okay. Please feel free to look at

23 whatever you need to.

HEARING OFFICER HALLORAN: I'm looking

L.A. REPORTING (312) 419-9292

158

at the last page of Exhibit 9. I'm not sure

if there's more in there regarding the

expiration date.

4 BY THE WITNESS:

A. Expiration date amended to 6/14/05

6 through this rider, yes.

7 BY MR. PORTER:

Q. Okay. So you would agree that those

9 bonds are valid through 2005 at a minimum, right?

A. Yeah.

Q. And as a matter of fact, and I believe

12 Ms. Grayson has pointed this out, the government has

13 filed a claim under those bonds, correct?

MR. GRANT: I'm going to ask that

Mr. Porter either say "state" or -- I mean,

we're dealing with two governments here. One

is city government and --

MR. PORTER: I agree and will withdraw

the question.

HEARING OFFICER HALLORAN: Sustained.

21 BY MR. PORTER:

Q. Furthermore, as Ms. Grayson has

23 pointed out, you would agree that the state of

24 Illinois has filed a claim under those bonds,

L.A. REPORTING (312) 419-9292

159

1 correct?

A. I don't know if they have or not.

Q. Okay. You have no reason to dispute

4 that, right?

A. I don't have enough information to

6 dispute that.

Q. You have not been called upon to give

8 any counsel regarding the claim that the state of

9 Illinois has filed concerning those bonds?

A. No.

Q. Now, you would agree, would you not,

12 that one of the methods for providing financial

13 assurance of closure/post-closure activities is for

14 a local governmental entity to provide its guarantee

15 that closure will occur?

A. Is the question can they use a local

17 government guarantee?

MR. PORTER: I don't normally do this.

Mr. Halloran, can I have the question read

back, please?

HEARING OFFICER HALLORAN: Yes, you

may. Tammi?

(Whereupon, the requested

portion of the record

L.A. REPORTING (312) 419-9292

160

was read accordingly.)

2 BY THE WITNESS:

A. Are you speaking of the local

4 government guarantee, the mechanism for financial

5 assurance?

6 BY MR. PORTER:

Q. Do you not understand that question?

A. I guess I don't.

Q. A local governmental entity can

10 provide a guarantee that closure/post-closure

11 activities will occur and that's one of the approved

12 methods for posting financial assurance, correct?

A. Yeah. And then I was asking you are

14 you speaking of the local government guarantee in

15 the regulations? Yes.

Q. And as a matter of fact, that appears

17 I believe under 811.717; is that right? You might

18 want to take a look at Exhibit 1, the State's

19 Exhibit 1.

A. So 716?

Q. No. 717.

A. Okay.

Q. That section is actually entitled

24 Local Government Guarantee, correct?

L.A. REPORTING (312) 419-9292

161

A. Right.

Q. And what that provides is that if a

3 local municipality meets the financial test, that

4 all they need to do then to post financial assurance

5 is to guarantee that the local government itself

6 will perform or pay a third party to perform

7 closure/post-closure care or corrective action as

8 required, right?

A. And they have to also meet the

10 requirement 811.716.

Q. I think I prefaced that. Let's do it

12 again.

A. Okay.

Q. They have to meet a financial test

15 that's referenced in 811.716, correct?

A. Well, that or a bond rating.

17 There's -- I think there's options.

Q. Okay. They have to meet certain

19 financial requirements before they're going to be

20 allowed to post --

A. Correct.

Q. -- their own guarantee?

A. Right.

Q. And assuming that they meet those

L.A. REPORTING (312) 419-9292

162

1 requirements, then all they have to do is say we

2 will perform or we'll pay a third party to perform

3 any closure and post-closure or corrective action

4 that might be required, right?

A. I guess is the question could any

6 community who's got the bond rating or the financial

7 wherewithal do this test; is that right?

Q. I want you to assume a hypothetical --

A. Okay.

Q. -- that the local municipal entity

11 meets the financial test of 811.716.

A. Okay.

Q. Once they've met that, all they have

14 to do is say we will guarantee performance or we'll

15 pay a third party to perform, right?

A. I think they additionally have to

17 submit the form and their financial statements, all

18 that stuff, but yeah.

Q. Right. The form is where they would

20 indicate that they'll perform?

A. That's where they would indicate that,

22 correct.

Q. Now, you are aware, are you not, that

24 the City of Morris long ago offered to provide a

L.A. REPORTING (312) 419-9292

163

1 guarantee, correct?

A. No.

Q. You would agree that assuming the City

4 of Morris meets the financial test, we spoke about

5 811.716, that there is no cost savings for failing

6 to give a local municipal guarantee, right?

A. I guess could you please rephrase that

8 question?

Q. Well, you don't have to pay any money

10 to get a local guarantee, correct?

A. Correct.

Q. And you don't have to go to a bonding

13 company, you don't have to go to an insurance

14 company, you don't have to shell out hundreds of

15 thousands of dollars a year as a municipality if you

16 meet the financial test; all you have to do is say

17 we'll perform if the operator fails to, right?

A. Correct. If you're assuming they

19 could meet the test, yes.

Q. Now, have you done the analysis to

21 determine if the City of Morris meets the financial

22 test?

A. No.

Q. And at any time from the time that the

L.A. REPORTING (312) 419-9292

164

1 violation notices were sent out through today have

2 you ever done that analysis?

A. No.

Q. So, again assuming that the City of

5 Morris does meet that test and they for some reason

6 believe that they were responsible for posting

7 financial assurance, they could have done so by

8 merely issuing this municipal guarantee, right?

A. Yes.

Q. So had the City of Morris known that

11 it was going to be called upon to post financial

12 assurance, they could have done so for free,

13 correct?

A. I don't know if I would consider it

15 free, but they could have done so.

Q. Well, they could have -- you would

17 agree that they have not enjoyed any financial

18 benefit for failing to post their own guarantee,

19 right?

A. If they would have posted the

21 guarantee, would they have been coming up with money

22 to do that; is that sort of the question?

Q. That's another way to look at it. You

24 would agree that they would not have to come up with

L.A. REPORTING (312) 419-9292

165

1 any money to post their own guarantee?

A. Correct.

Q. And so they didn't save any money by

4 failing to post their own guarantee, right?

A. Well, I guess I don't know how to

6 answer that. I mean, they didn't do it, so I don't

7 know. I mean, if they had done that, would they

8 have had to pay any money? No.

Q. Okay. You would agree that there have

10 been no savings to the City of Morris for allegedly

11 failing to post financial assurances for 2000 to the

12 present, correct?

A. If they would have used that guarantee

14 you mean, right?

Q. (Nodding.)

A. If they had used that guarantee, I

17 guess there would be no savings.

Q. You're not aware of the City ever

19 having any history of environmental violations, are

20 you?

A. Well, the violation notices. Is that

22 what you're speaking of?

Q. Other than this case with the

24 violation notices arising out of financial

L.A. REPORTING (312) 419-9292

166

1 assurance, you're not aware of the City having any

2 history of being an environmental violator, are you?

A. Correct. I am not.

Q. You don't have any reason to believe

5 the City has not been diligent in attempting to

6 comply with closure/post-closure once they found out

7 in June of 2006 they were going to be required to do

8 so, correct?

MR. GRANT: I object to the date. I

don't think -- you're assuming that 2006 was

when they found out. I think this witness

has testified it was November 14th, 2000 that

Illinois EPA notified them.

HEARING OFFICER HALLORAN: You can

re-direct him on that, Mr. Grant. He may

answer if he's able.

17 BY THE WITNESS:

A. Could you please state the question

19 another way then? I just didn't understand.

20 BY MR. PORTER:

Q. I guess I want you to be aware of

22 where I'm coming up with that date. June of 2006 is

23 when the Pollution Control Board decided a motion to

24 reconsider filed by the City concerning the

L.A. REPORTING (312) 419-9292

167

1 financial assurance issue.

You're not aware of any failure in

3 diligence of the City of Morris since July of 2006

4 in effectuating closure and post-closure of the

5 landfill itself, are you?

A. I don't know anything about it.

Q. You're not aware of any environmental

8 damage or damage to personal health, safety or

9 welfare caused by the lack of alleged posting of

10 financial assurance, are you?

A. No.

Q. You're not aware of any discharge or

13 emissions caused by the alleged failure to post

14 financial assurance, correct?

A. Correct.

Q. You would agree that the landfill is

17 in a suitable location, right?

A. That it is in a suitable location?

Q. Right. We've heard today it's in a

20 rural area by other landfills. You'd agree that

21 that's an appropriate place for a landfill, correct?

A. Sure.

Q. And you would agree landfills have

24 great social and economic value, in general?

L.A. REPORTING (312) 419-9292

168

A. Yes.

Q. You would agree that it's reasonable

3 for the City of Morris to take the position that if

4 it's going to be required to pay any money, it ought

5 to be used for closure/post-closure rather than

6 buying some bond or insurance vehicle at this time?

A. I missed the first part of that

8 question.

Q. You would agree -- strike that.

Are you aware that the government

11 has taken the position that the landfill should be

12 closed now?

A. No.

Q. All right. Then I'm not going to

15 bother asking the next question.

Earlier on in Ms. Grayson's

17 testimony there was a reference to a Mr. John

18 Taylor. Who is that?

A. Somebody who worked at the EPA in the

20 solid waste section.

Q. Well, actually, he's an attorney that

22 advises concerning compliance with financial

23 insurance; isn't that right?

A. He is now; is that what you're saying?

L.A. REPORTING (312) 419-9292

169

Q. Well, wasn't he that at the time that

2 he issued that letter?

A. No. I don't believe --

Q. Okay. He became an attorney after

5 that date; is that right?

A. I think so.

Q. Okay. At the time, he was tasked or

8 responsible for giving advice concerning compliance

9 with financial assurance, and since then he got his

10 law degree?

A. Yes.

Q. Have you seen the updated

13 closure/post-closure costs prepared by Shaw

14 Environmental?

A. No.

Q. You don't have any opinion as to

17 whether or not the $17 million figure that the State

18 is advocating is reasonable, do you?

A. No.

Q. Let me direct your attention, if I

21 may, to City of Morris Exhibit Number A6, which I

22 will hand you a copy. It is the January 27, 2004

23 letter from Beverly Anderson to Frontier Insurance

24 Company.

L.A. REPORTING (312) 419-9292

170

THE COURT REPORTER: What was the date

on that?

MR. PORTER: January 27th, 2004.

MR. GRANT: May I see it?

MR. PORTER: Sure. Let me show

Counsel for a minute.

(Brief pause.)

MR. PORTER: Mr. Halloran, do you mind

if I stand here because that's my only copy

right now.

HEARING OFFICER HALLORAN: That's

fine.

(Witness peruses document.)

14 BY MR. PORTER:

Q. I really only have one question on it.

A. Okay.

Q. You would agree that as recent as

18 January 27, 2004, the Bureau of Land for the

19 Illinois Environmental Protection Agency was taking

20 the position that Frontier Insurance Company was

21 providing financial assurance for closure and

22 post-closure costs, correct?

A. That's what it says.

Q. And so you would agree that it was

L.A. REPORTING (312) 419-9292

171

1 reasonable for the City of Morris to believe that

2 financial assurance was being provided at least as

3 late as 2004, right?

A. Do I agree that they were providing

5 financial assurance?

Q. You would agree that it was reasonable

7 for City of Morris to believe that financial

8 assurance was being provided at least as late as

9 2004, correct?

A. Well, I would agree that it would be

11 reasonable for them to say they were providing

12 financial assurance, not that it satisfies the

13 requirement of the regulations, but...

Q. And, also, as a matter of fact, those

15 bonds were valid through 2005. We heard that

16 earlier on the expiration date, right?

A. Right.

Q. And isn't there a rule that there's a

19 way that they can be extended for 12 months if

20 there's no alternative vehicle employed?

A. Correct.

Q. And so you would agree that it was

23 reasonable for the City of Morris to believe

24 financial assurances were still in place through the

L.A. REPORTING (312) 419-9292

172

1 end of 2006, correct?

A. Yes.

MR. PORTER: Nothing further.

HEARING OFFICER HALLORAN: Thank you.

Mr. Grant, re-direct?

MR. GRANT: Yes.

RE-DIRECT EXAMINATION

By Mr. Grant

Q. Mr. Harris, you testified that the

10 violation notices were sent to the City of Morris on

11 November 14th, 2000; do you recall that?

A. Yes.

Q. After November 14th, 2000, until the

14 time that you left the financial assurance job with

15 the Bureau of Land in 2003, did the City of Morris

16 ever offer any other compliant financial assurance

17 for the Morris Community Landfill?

A. No.

Q. In fact, I think you mentioned that

20 you testified at that permit appeal that was related

21 to financial assurance in 2001; do you recall that?

A. Could you say that again, please?

Q. I believe you testified earlier that

24 you -- or that you stated earlier that you actually

L.A. REPORTING (312) 419-9292

173

1 testified at a permit appeal that was held in 2001

2 regarding financial assurance for the Morris

3 Community Landfill --

A. Yes.

Q. -- is that correct?

A. Yes.

Q. And in that permit appeal, were the

8 City of Morris and Community Landfill Company still

9 attempting to defend the compliance of the Frontier

10 Insurance bonds?

A. Yes.

Q. And do you recall the outcome of that

13 permit appeal?

A. I believe the permit was not granted

15 or was denied.

Q. Do you believe that it would be

17 reasonable after receiving a violation notice from

18 Illinois EPA after losing a permit appeal on the

19 basis of the same Frontier bonds and after failing

20 to supply any other financial assurance for the

21 Morris Community Landfill for the City of Morris to

22 believe that financial assurance was effective and

23 in place for the landfill?

A. I guess they could believe it was in

L.A. REPORTING (312) 419-9292

174

1 place, but I don't know how they could think it was

2 acceptable.

Q. Okay.

MR. GRANT: That's all I have.

HEARING OFFICER HALLORAN: Ms. Grayson?

MS. GRAYSON: I have nothing further.

HEARING OFFICER HALLORAN: Thank you

Mr. Porter?

MR. PORTER: Very briefly. Thank you.

RE-CROSS EXAMINATION

By Mr. Porter

Q. That permit appeal was regarding

13 opening a new cell at the landfill; is that right?

A. I don't know.

Q. Okay. You don't know if it was the

16 understanding of CLC and the City of Morris that

17 financial assurance that had been in place for the

18 existing landfill was still in place, correct?

A. Could you say that again?

Q. Actually, no.

MR. PORTER: I'm go going to withdraw

the question. I have nothing further. Thank

you.

HEARING OFFICER HALLORAN: Thank you.

L.A. REPORTING (312) 419-9292

175

Mr. Grant?

MR. GRANT: Nothing.

HEARING OFFICER HALLORAN: Thank you.

You may step down, Mr. Harris. Thanks.

We're taking a short five-minute break.

(Whereupon, after a short

break was had, the

following proceedings

were held accordingly.)

HEARING OFFICER HALLORAN: We're back

on the record. It's approximately 1:26. I

believe the State is going to direct their

third witness.

(Witness sworn.)

15 WHEREUPON:

BRIAN WHITE

17 called as a witness herein, having been first duly

18 sworn, was examined and testified as follows:

DIRECT EXAMINATION

By Ms. Tomas

Q. Could you please state and spell your

22 name for the record?

A. Sure. It's Brian, B-R-I-A-N, White,

24 like in the color or absence thereof, W-H-I-T-E.

L.A. REPORTING (312) 419-9292

176

Q. And, Brian, where do you live?

A. I live in Chatham, Illinois.

Q. How long have you lived there?

A. Approximately ten years.

Q. And what was the last year of

6 education that you completed?

A. I've got 44 hours towards a master's

8 in public administration. I have a bachelor's from

9 Illinois State University in environmental health in

10 1983.

Q. And how many hours do you have left

12 before you get your master's degree?

A. Four hours.

Q. And what is that in?

A. Public administration.

Q. Where are you currently employed?

A. I'm employed by the Illinois

18 Environmental Protection Agency, Bureau of Land.

Q. And how long have you been with the

20 Illinois EPA?

A. Since 1988.

Q. What's your title and the Illinois

23 EPA?

A. My working title is compliance unit

L.A. REPORTING (312) 419-9292

177

1 manager.

Q. Okay. And that's within the Bureau of

3 Land?

A. Yes, it is.

Q. And how long have you held that

6 position?

A. Since January of 1991.

Q. So approximately 16 of the 19 years?

A. Yes.

Q. And could you please describe your

11 duties as a compliance unit manager?

A. As compliance unit manager, I've got

13 two programs. A compliance program which is

14 involved with compliance enforcement tracking up

15 until the point of formal enforcement and the

16 financial assurance program.

Q. Are you familiar with the Morris

18 Community Landfill?

A. Yes, I am.

Q. And please tell us how you're familiar

21 with that particular landfill.

A. Through the ongoing enforcement case,

23 reviewing their permits, reviewing their violation

24 notice and on-site visit.

L.A. REPORTING (312) 419-9292

178

Q. Are you familiar with the financial

2 assurance obligations of the landfill?

A. Yes, I am.

Q. And do you know who is responsible for

5 the financial assurance obligations of the Morris

6 Community Landfill?

MR. PORTER: Objection, calls for a

legal conclusion.

HEARING OFFICER HALLORAN: I'm sorry.

Could you read the question back, Tammi?

(Whereupon, the requested

portion of the record

was read accordingly.)

HEARING OFFICER HALLORAN: Mr. White

can answer. Overruled.

16 BY THE WITNESS:

A. The owner or operator would be

18 responsible for the financial assurance obligations.

19 BY MS. TOMAS:

Q. And do you know who the owner of the

21 Morris Community Landfill is?

A. The owner would be the City of Morris.

Q. And do you know who the operator of

24 the Morris Community Landfill is?

L.A. REPORTING (312) 419-9292

179

A. Community Landfill. CLC.

Q. Please explain the financial assurance

3 obligations for the Morris Community Landfill.

A. The financial assurance obligations

5 are required by a statute in the regulations and

6 then the permit covers. And it would be the August

7 of 2000 permit is the one I reviewed with the costs

8 and the permit for the landfill.

Q. Would that 2000 permit be the

10 significant modification known as a SIGMOD?

A. Yes.

Q. And there was SIGMOD for Parcel A; is

13 that correct?

A. Yes.

Q. And there was also one for Parcel B?

A. That is correct.

Q. And how much -- what amount of

18 financial assurance was listed within those SIGMODs?

A. I would have to take a look at the

20 permit, but the total was somewhere around 17.4

21 million.

Q. How is the amount of financial

23 assurance determined?

A. The owner or operator submits a permit

L.A. REPORTING (312) 419-9292

180

1 application and it's reviewed by our permit section.

Q. Can an owner or operator request to

3 change the amount of financial assurance required

4 for a landfill?

A. Yes.

Q. So that is the obligation of the owner

7 or operator?

A. Yes.

Q. Are there any regulations related to

10 maintaining financial assurance for a landfill?

A. Yes. In the case of the Morris

12 Community Landfill, it's under 35 Illinois

13 Administrative Code, Part 811, Subpart G.

Q. Okay. And are you familiar with the

15 Board financial assurance regulations?

A. Yes.

Q. What sections of Section 811.700

18 require the City and CLC to maintain financial

19 assurance for the Morris Community Landfill?

A. If I could look at the --

Q. It would be Complainant's Exhibit --

22 the big binder -- Exhibit 1.

A. All right. We have 811.700(f) and

24 811.701(a).

L.A. REPORTING (312) 419-9292

181

Q. Okay. Let's start with 811.701(a).

2 The regulation requires the owner or operator shall

3 maintain financial assurance. What do you take the

4 term owner or operator to mean?

A. That is, it's the obligation of the

6 owner and the operator to maintain financial

7 assurance.

Q. So if the operator of a landfill did

9 not maintain financial assurance, who would be

10 required to maintain it?

MR. PORTER: Objection. Again, this

calls for a legal conclusion. The statute

speaks for itself. The Pollution Control

Board is in a much better position to decide

what that language means than this witness.

HEARING OFFICER HALLORAN: Mr. White

can give his opinion, if he's able. He's

been a manager for how long, 16 years?

THE WITNESS: Yes.

HEARING OFFICER HALLORAN: Overruled.

21 BY THE WITNESS:

A. Could you repeat the question, ma'am,

23 please?

L.A. REPORTING (312) 419-9292

182

1 BY MS. TOMAS:

Q. If the operator of a landfill did not

3 maintain financial assurance, who would be required

4 to maintain it?

A. It would be the owner.

Q. And vice versa if the owner did not

7 provide it?

A. The operator, yes.

Q. Okay. And what does section -- if we

10 turn to Section 811.706, what does that provide?

A. These are the various mechanisms that

12 an owner or operator can use to provide financial

13 assurance.

Q. Have either CLC or the City ever

15 utilized any one of these ten mechanisms for

16 financial assurance at the Morris Community

17 Landfill?

A. The only one I'm aware that they've

19 ever used was a performance bond.

Q. Okay. And do those bonds still comply

21 with the Board financial assurance regulations?

A. No, they haven't. They don't comply

23 with the Board regulations and haven't since 2000.

Q. Can you please explain why?

L.A. REPORTING (312) 419-9292

183

A. Yes. They used a performance bond

2 from Frontier Insurance Company. And in 811.712(g)

3 it requires that the bonds be on the U.S. Department

4 of Treasury Circular 570, and Frontier was

5 terminated from that circular back in June of 2000,

6 therefore, it no longer complies with the

7 requirements of 811.

Q. So is it your opinion that CLC and the

9 City had non-compliant financial assurance since

10 June of 2000?

MR. PORTER: Objection, leading.

HEARING OFFICER HALLORAN: Mr. Porter?

MR. PORTER: Objection, leading.

HEARING OFFICER HALLORAN: Yes, it was

leading. Sustained.

16 BY MS. TOMAS:

Q. Do you know who the beneficiary of the

18 Frontier bonds was?

A. The beneficiary would be the Illinois

20 Environmental Protection Agency.

Q. And do you know if any claim has been

22 made by the Illinois EPA on those Frontier bonds?

A. Yes.

Q. And what does it mean to make a claim

L.A. REPORTING (312) 419-9292

184

1 on those bonds?

A. Well, on a performance bond,

3 there's -- we first have to give the surety an

4 opportunity to perform closure or post-closure.

And if they don't perform closure

6 or post-closure, then they have to pay the penal sum

7 of the bonds.

Q. Will Frontier be performing closure

9 and post-closure at the Morris Community Landfill?

A. No.

Q. And do you know if Frontier will be

12 paying on those claims then?

A. I've received information that

14 Frontier has offered to settle the case at $400,000.

MR. PORTER: Object, Judge. It's

hearsay. It wasn't offered --

HEARING OFFICER HALLORAN: I agree.

Sustained.

(Brief pause.)

20 BY MS. TOMAS:

Q. Has Frontier offered to pay on a

22 claim, to your knowledge?

A. Yes, they made an offer.

Q. Okay. Do you know how much that offer

L.A. REPORTING (312) 419-9292

185

1 was for?

MR. PORTER: Well --

3 BY THE WITNESS:

A. The offer was for --

MR. PORTER: Same objection.

MR. GRANT: This is personal

knowledge. He has personal knowledge of

this.

HEARING OFFICER HALLORAN: I agree.

The question is phrased differently.

MR. PORTER: I still have a problem

with, I guess, two things. Number one, I'm

thrilled to hear that the government agrees

that the Frontier bonds are valid and

enforceable and they're trying to settle on

them. But, number two, how they're

negotiating in a lawsuit and whether or not

that's going to settle is irrelevant and

inadmissible in these proceedings. That's

settlement negotiations for another lawsuit.

HEARING OFFICER HALLORAN: How is that

relevant, Ms. Tomas?

MS. TOMAS: I can answer. It's

relevant in the fact that Frontier is in

L.A. REPORTING (312) 419-9292

186

rehabilitation and what is being negotiated

in settlement is substantially less than what

would be required for closure and

post-closure.

MR. GRANT: I think it goes to gravity

and also goes to our common benefit. The

position of CLC and the City of Morris is

that we have made a claim on the bonds or the

bonds are valid, and I think it's highly

relevant as to how valid are the bonds.

I mean, frankly, if we can claim

on these bonds for the full amount of closure

and post-closure care, then that limits our

penalties substantially.

However, if nothing more than a

de minimis settlement offer has been made on

these bonds, it shows, you know, the amount

of damage to the State, the gravity of the

violation. The only financial assurance

that's ever been provided for $17.4 million

is now worth $400,000.

I mean, we've heard testimony that

it's been -- that it's not compliant

financial assurance at which point, you know,

L.A. REPORTING (312) 419-9292

187

the Respondents have challenged us --

HEARING OFFICER HALLORAN: Excuse me,

Mr. Grant. I kind of do find it somewhat

relevant. But the problem is that this

settlement is still up in the air and it's

heavy in conjecture and there's nothing that

I don't think from what I've heard so far is

substantive.

So I'm going to sustain

Mr. Porter's objection. However, I will let

it in as an offer of proof, if you so choose,

and the Board can consider it in their own

way.

MR. GRANT: Yes. We'd like to

continue on as an offer of proof.

HEARING OFFICER HALLORAN: Okay. Let

me know when the offer of proof is finished.

Thank you.

MS. TOMAS: Do you know if Frontier

will be paying on those claims?

THE WITNESS: I don't know if Frontier

will be paying on those claims, no.

MS. TOMAS: To your knowledge, have

they made an offer to pay on those claims?

L.A. REPORTING (312) 419-9292

188

THE WITNESS: Yes.

MS. TOMAS: And what was that amount?

THE WITNESS: 400,000.

MS. TOMAS: That's the end of the

offer of proof.

HEARING OFFICER HALLORAN: Thank you.

7 BY MS. TOMAS:

Q. If CLC or the City provided compliant

9 financial assurance tomorrow with one of the ten

10 mechanisms listed within Section 811.706, would the

11 Illinois EPA still be able to make a claim on the

12 Frontier bonds?

A. No.

Q. And why is that?

A. Because we'd have substitute alternate

16 financial assurances. And, basically, that's what

17 we're looking for is that we have money that's

18 obligated to close and to go through post-closure of

19 the landfill.

Q. Okay. But as we sit here today, have

21 either CLC or the City ever provided compliant

22 financial assurance since those bonds?

A. No.

Q. To your knowledge, are they currently

L.A. REPORTING (312) 419-9292

189

1 violating their SIGMOD permits and Board financial

2 assurance regulations as they relate to financial

3 assurance?

A. Yes.

Q. We're going to look now at

6 Section 811.706, Subsection 8, the local government

7 guarantee.

A. Okay.

MR. PORTER: That's 716.

MS. TOMAS: It's listed as 706.

MR. PORTER: I'm sorry. Excuse me.

12 BY MS. TOMAS:

Q. Do you know if the City of Morris

14 could provide a local government guarantee to meet

15 the financial assurance regulations?

A. I don't -- as the local government, it

17 doesn't really make a lot of sense for them to.

Generally, the local government

19 guarantee is designed for a situation where the

20 local government is neither the owner or the

21 operator. But they do have to pass the local

22 governmental financial test, which is 811.716 as

23 part of the local government guarantee. So they

24 need to comply with both -- in order to do that,

L.A. REPORTING (312) 419-9292

190

1 they would need to comply with both 811.716 and 717.

Q. And do you know if they currently meet

3 those requirements?

A. No, I do not.

Q. Has the City ever submitted

6 information to the Illinois EPA, to your knowledge,

7 for an evaluation of the local government guarantee

8 for the Morris Community Landfill?

A. To my knowledge, they have not.

Q. And has the City provided any

11 information for any of the ten mechanisms since the

12 Frontier bonds were deemed non-compliant?

A. No, they have not.

Q. Has CLC provided any information for

15 any of the ten mechanisms since the Frontier bonds

16 were deemed non-compliant?

A. No, they have not.

Q. So is it your opinion as of today's

19 date that no compliant financial assurance exists

20 for the Morris Community Landfill?

A. Yes.

Q. And what would either the City or CLC

23 need to do to provide compliant financial assurance

24 for the Morris Community Landfill?

L.A. REPORTING (312) 419-9292

191

A. They would need to provide financial

2 assurance that is compliant with the Act and the

3 regulations in the amounts of the most recent

4 approved closure cost estimate and post-closure cost

5 estimate and they would need to use one of the ten

6 mechanisms that are applicable to them that are

7 listed in 811.706.

Q. And the most up-to-date financial

9 assurance closure/post-closure amount was for 17.4

10 million?

A. Yes.

Q. Okay.

MS. TOMAS: I'm finished.

HEARING OFFICER HALLORAN: Thank you,

Ms. Tomas. Ms. Grayson?

MS. GRAYSON: Could I take a couple

minutes? Just a few.

HEARING OFFICER HALLORAN: Sure.

Two minutes. Off the record.

(Whereupon, after a short

break was had, the

following proceedings

were held accordingly.)

HEARING OFFICER HALLORAN: We're back

L.A. REPORTING (312) 419-9292

192

on the record. Mr. Porter has volunteered to

cross first. Thank you, Mr. Porter.

CROSS EXAMINATION

By Mr. Porter

Q. Are you aware that there have been

6 revised cost estimates provided to the state of

7 Illinois?

A. No.

Q. Assume hypothetically those were

10 provided in July of this year, have you had any --

11 strike that.

Have you had any discussions as to

13 why the State has not responded to those revised

14 cost estimates?

MS. TOMAS: Objection, your Honor. He

said he's not aware of them.

HEARING OFFICER HALLORAN: Sustained.

18 BY MR. PORTER:

Q. You would agree, would you not, that

20 if the City of Morris meets the financial tests and

21 had they posted their municipal guarantee, that

22 would not have cost them anything?

A. I have really no opinion on that, I

24 mean, if it would affect their bond rating, for sure

L.A. REPORTING (312) 419-9292

193

1 if they did something -- if they were to -- if they

2 were to give the financial test -- local government

3 financial test.

Q. Well, you said affect their bond

5 rating. Do you mean it might affect their bonding

6 authority?

A. Their ability to borrow. I'm sorry.

Q. And you don't know whether or not the

9 City of Morris has adequate bonding authority to

10 also meet the financial tests, correct?

A. I'm not sure what the City of Morris

12 has because I haven't received anything from them.

Q. Now, whether or not it affects the

14 bonding authority might be an interesting topic, but

15 that doesn't mean it would cost the City of Morris

16 any money to give their financial guarantee, right?

A. I'm not sure about that.

Q. In your experience, have you ever

19 heard of any municipality paying itself, I guess, to

20 post a financial guarantee?

A. Once again, I'm not aware of the

22 municipality's innerworkings.

Q. You're not aware of any financial gain

24 that the City of Morris has enjoyed for failing to

L.A. REPORTING (312) 419-9292

194

1 post its own financial guarantee assuming they had a

2 responsibility to do so, right?

A. Could you repeat the question?

Q. Well, are you aware that it wasn't

5 until June of 2006 that we had a final ruling that

6 would suggest the City of Morris is responsible now

7 for posting financial assurance?

A. I have -- I'm not familiar with that.

Q. Now, assuming that the City of Morris

10 meets the financial test and could have posted its

11 own financial guarantee, you would agree that it did

12 not enjoy any cost savings for failing to do that,

13 right?

A. I don't have an opinion on that.

Q. So, likewise, you don't have any

16 opinion that there's been any economic benefit to

17 the City of Morris for failing to post financial

18 assurance, correct?

A. Well, the only thing I can think of,

20 it might affect their ability to borrow because I

21 have to list the financial obligation of $17.4

22 million in their comprehensive annual financial

23 report filed with the comptroller's office of the

24 state of Illinois.

L.A. REPORTING (312) 419-9292

195

Q. Well, that's assuming, number one,

2 that the 17.4 is the most recent cost estimate,

3 right?

A. It is the most recent approved cost

5 estimate. Yes.

Q. Okay. How do you know that?

A. From reviewing the most recent

8 approved permit.

Q. And when did you do that?

A. The last time I looked at the permit

11 was this week.

Q. And when you went to look at the

13 permit, did you speak to Ms. Roque about it?

A. I spoke with Ms. Roque regarding

15 access to the August 4, 2000 permit because the

16 files were in her office.

Q. And the files were in her office

18 because a revised cost estimate had been sent to

19 her, right?

A. I'm not sure.

Q. Did you tell her you were looking at

22 it to determine whether or not financial assurance

23 had been posted for the most recent cost estimate?

A. I just asked her to see the

L.A. REPORTING (312) 419-9292

196

1 August 4th, 2000 permit.

Q. Okay. You personally had no

3 involvement in the issuance of violation notices in

4 this case, right?

A. With the violation notice, in my other

6 part as a compliance unit manager, we track the

7 notice going out and any subsequent actions after

8 the notice.

Q. Well, the individual who actually

10 reviewed the financial assurance records and issued

11 the notice of violation was Blake Harris, right?

A. That is correct.

Q. You had no part in that, correct?

A. Well, I had no part in actually

15 issuing that particular notice. As far as doing the

16 reviews, no comments on it.

Q. Okay. So my statement is correct, you

18 had no part in issuing the notices here for

19 violation, right?

A. Once again, we track the violation

21 notice. In other words, we put the violation notice

22 into our tracking system.

Q. All right. Do you recall I took your

24 deposition in 2005, the 20th day of September of

L.A. REPORTING (312) 419-9292

197

1 that year?

A. I recall doing a deposition, yes.

Q. And you told the truth in that

4 deposition, correct?

A. Yes.

Q. As a matter of fact, your recollection

7 back in 2005 of the events around the year 2000

8 would have been fresher than they are today,

9 correct?

A. Reasonable to assume.

Q. And isn't is it true at Page 30, Line

12 5 I asked you: So you had absolutely no input of

13 whether or not that notice of violation should be

14 issued; is that correct? And you responded: That

15 is correct.

A. I have to see my deposition.

Q. Okay. Do you recall making that

18 answer to that question?

A. No, I do not recall.

Q. Have you ever been to the site?

A. Yes.

Q. And when you were at the site, you

23 didn't notice any violations, correct?

A. That -- I'm not there to evaluate the

L.A. REPORTING (312) 419-9292

198

1 site for compliance at that time.

Q. Well, you certainly have no opinion as

3 to whether closure/post-closure activities which

4 need to be performed were or were not being

5 performed at that time, correct?

A. Once again, that is not my

7 responsibility with the Agency to make that

8 determination.

Q. My statement is right?

A. Could you repeat the question?

Q. So you have no opinion as to whether

12 closure/post-closure activities which allegedly need

13 to be performed were or were not being performed,

14 correct?

A. No, I don't have an opinion -- an

16 official opinion on that.

Q. While you were there, you didn't see

18 any waste being taken at the facility; is that

19 right?

A. I did not see any waste that day, no.

Q. To your knowledge, the City of Morris

22 has never been the permitted operator; is that

23 correct? Strike that.

To your knowledge, the City of

L.A. REPORTING (312) 419-9292

199

1 Morris has not been the permitted operator since

2 1982; is that correct?

A. I'm not sure because I haven't

4 reviewed the file that far back.

Q. You've never seen anywhere where the

6 City of Morris was the permitted operator then,

7 right?

A. I have not seen that, no.

Q. The statute actually provides that the

10 operator or owner shall post financial assurance; is

11 that correct?

A. The regulations say the owner or

13 operator shall provide financial assurance. The

14 statute says the same.

Q. And as the owner or operator of the

16 facility; is that right?

A. The responsibility would be the

18 owner's and the operator's to make sure that it's

19 provided one or the other or both.

Q. Okay. My question now is it's the

21 owner or operator of the facility, correct?

A. It's, yes, the owner or operator.

Q. And you would agree then that if the

24 operator posts financial assurances, there's no

L.A. REPORTING (312) 419-9292

200

1 responsibility of the owner to do so, correct?

A. One or the other has to provide it.

3 It doesn't matter which one does. Either one can do

4 it or both can do it.

Q. And at least through when we took your

6 deposition at all times Community Landfill Company

7 had indeed posted financial assurance; isn't that

8 right?

A. Once again, without seeing the

10 deposition, I know that the bonds were issued, that

11 a bond came -- one of the bonds was with the City of

12 Morris and two of them were with CLC from Frontier,

13 so both had provided financial assurance.

Q. Well, actually, the City of Morris

15 guaranteed the leachate collection; isn't that

16 correct?

A. Not to my knowledge.

Q. Now, you would agree the bonds were in

19 full force and effect through at least 2006,

20 correct?

A. No, I would not agree.

Q. When did the bonds no longer become in

23 effect, in your opinion?

A. The bonds ceased to be considered

L.A. REPORTING (312) 419-9292

201

1 acceptable financial assurance when Frontier was

2 terminated from the U.S. Department of Treasurer's

3 Circular 570, which would have been June of 2000.

Q. Okay. But the bonds were in full

5 force and effect through the end of 2006? I'm not

6 talking now about whether or not you believe that

7 they were not adequate as far as the EPA is

8 concerned.

A. That would probably be a question

10 better answered by the Department of Insurance and

11 the State of New York.

Q. Well, don't the bonds have a date on

13 them by which they're effective?

A. I would have to see the bonds. But

15 the bonds did have an expiration date, yes.

Q. And that expiration date was sometime

17 in 2005, right?

A. I believe so.

Q. And there's a statutory provision that

20 allows for that expiration date to be extended by

21 12 months if there is no alternative financial

22 assurance posted; is that correct?

A. That is correct.

Q. So the bonds were good through 2006,

L.A. REPORTING (312) 419-9292

202

1 correct?

A. Once again, that's something that the

3 Department of Insurance and state of New York are

4 probably better suited to answer.

Q. You don't know?

A. I don't know the Frontier case.

Q. That isn't what I asked you. You

8 don't know if the bonds were valid in 2006, correct?

A. I do not know.

Q. All right. Do you know when

11 Frontier -- strike that.

Do you know when or if Frontier

13 Insurance Company ever lost or had its license

14 suspended by the Illinois Department of Insurance?

A. I'm not aware of their dealings with

16 the Illinois Department of Insurance.

Q. So it's possible that they still have

18 a license with the Illinois Department of Insurance?

A. I have no opinion on that.

Q. Wouldn't you agree that Section 712 of

21 the financial assurance regulations provides that a

22 bonding company is acceptable if it's licensed by

23 the Illinois Department of Insurance?

A. There is more to the statement than

L.A. REPORTING (312) 419-9292

203

1 that. There's a conjunction in there. It says that

2 the -- and approved by the U.S. Department of

3 Treasury is an acceptable surety.

Q. All right. Let's take a look at it.

5 Section 811.712 says if you're licensed by the

6 Department of Insurance or, and then it provides the

7 language that you were talking about, correct?

A. Yes.

Q. Okay. But you've never determined

10 whether or not Frontier Insurance Company is indeed

11 licensed by the Illinois Department of Insurance,

12 right?

A. I personally have not.

Q. Do you know if anybody has at the

15 state of Illinois?

A. I'm not sure.

Q. You are aware that the City at one

18 time offered or discussed with the state of Illinois

19 that it would post financial assurance by providing

20 its guarantee of performance, correct?

A. I'm not sure that you mean by that,

22 guarantee of performance.

Q. Well, you know what a municipal

24 guarantee is, right?

L.A. REPORTING (312) 419-9292

204

A. A local government guarantee.

Q. Okay. Do you know what a local

3 governmental guarantee is, correct?

A. Yes.

Q. And that is a guarantee that the local

6 governmental body will either perform or see to it

7 that a third party performs, right?

A. Could you repeat that, please?

Q. And what that provides -- what that

10 means is a local governmental body will guarantee

11 that the body itself will perform or see to it that

12 a third party performs, correct?

A. For the local government guarantee --

14 once again, I explained before with the local

15 government guarantee, this is an unusual case

16 because generally that's designed for somebody

17 that's neither the owner or operator to use the

18 guarantee because they have to qualify under the

19 local government financial tests first.

And if they qualify under the

21 local government financial tests and they are an

22 owner or operator -- in this case, they're the

23 owner -- it really wouldn't make a whole lot of

24 sense to use the local government guarantee, just

L.A. REPORTING (312) 419-9292

205

1 complete the necessary work for the local government

2 financial test, which is 811.716.

Q. You're saying it wouldn't make sense

4 for a local governmental entity to post its own

5 guarantee that it will perform. Upon what do you

6 base that?

A. The local government guarantee

8 requires that they guarantee for an owner or

9 operator that they'll put up the money or they'll

10 insure an owner or operator and, generally, they are

11 not the owner or operator of the situation and that

12 they have to comply with 811.716, which is the local

13 government financial test first. And then as part

14 of that, they provide the local government

15 guarantee.

Q. You would agree that the City of

17 Morris, had it known that it was going to be

18 responsible for posting financial assurance, could

19 have provided its own guarantee, correct?

A. I'm not really sure what the City of

21 Morris' financial situation is.

Q. Okay. Assuming the City of Morris

23 meets the financial test, you would agree that they

24 could post their own financial guarantee, correct?

L.A. REPORTING (312) 419-9292

206

A. I can't assume that they'd meet the

2 local government financial test.

Q. I'm asking you to assume. It's a

4 hypothetical for the purpose of this question.

Assume that the City of Morris

6 meets the financial test. If, indeed, they meet

7 that, they could post a local municipal guarantee,

8 correct? It doesn't matter that they are the owner,

9 according to the PCB, of the facility, right?

A. Well, if they meet the local

11 government financial tests, they could stop there

12 much. They wouldn't need to provide the guarantee

13 because --

Q. Upon what do you base that?

A. Because the local government guarantee

16 generally is used for somebody when a local

17 government guarantees something for which they are

18 neither the owner or the operator because they have

19 to meet the local government financial tests first.

If they meet local government

21 financial tests, it doesn't make any sense to go for

22 the guarantee after that. I mean, they meet all the

23 requirements by that point.

Q. Okay. We clearly had a

L.A. REPORTING (312) 419-9292

207

1 miscommunication. You're indicating that financial

2 assurance can be met merely by the City of Morris

3 meeting the financial tests; is that right?

A. If they meet the local government

5 financial tests, they could post that as acceptable

6 financial assurance. That's one of the ten items

7 listed in 811.706.

Q. And do you know if they meet that

9 financial test?

A. I don't know because they haven't

11 provided us with anything to evaluate them on.

Q. You are aware that early on in this

13 case there was discussion of the City of Morris

14 providing its own municipal guarantee, which was

15 rejected, correct?

A. I have no knowledge of that because,

17 to my knowledge, they've never submitted anything

18 for us to evaluate.

Q. You're aware that there was talk of

20 it; is that right?

A. I know they had talked about a local

22 government guarantee, yes.

(Brief pause.)

MR. PORTER: Nothing further. Thank

L.A. REPORTING (312) 419-9292

208

you.

HEARING OFFICER HALLORAN: Thank you.

Ms. Grayson?

MS. GRAYSON: Yes. A few questions.

Mr. White, I'm Clarissa Grayson, counsel for

Community Landfill Company.

CROSS EXAMINATION

By Ms. Grayson

Q. Are you aware of the financial

10 condition of Community Landfill Company?

A. No, I'm not.

Q. Do you know whether CLC had any intent

13 to not pay the financial assurance?

A. The only thing I know is that there

15 isn't financial assurance by the owner or operator

16 at this time that complies with the statutes or the

17 regulations.

Q. Do you know how much in premiums that

19 CLC has paid over the years for financial

20 assurance --

A. No, I do not.

Q. -- for the Frontier bonds?

Do you have any knowledge as to

24 whether Community Landfill Company can afford to

L.A. REPORTING (312) 419-9292

209

1 provide financial assurance?

A. I have no knowledge.

Q. Do you think that the company's

4 ability to make money and generate income is

5 hampered by the fact that they're not allowed to

6 deposit waste in certain parts of the landfill?

A. I have no opinion on that.

Q. When did you visit the landfill?

A. I would have to look back at the

10 records to say with any certainty.

Q. Who were you with?

A. I was with Mark Retzlaff, Chris

13 Liebman, who is with our permit section. Mark is

14 with our field operations section. And Beverly

15 Anderson was there.

Q. What was the purpose of the visit?

A. Because Mark was going up there to

18 evaluate the landfill. Chris Liebman, from our

19 permits section, went up there to -- and somebody

20 else might have been up there, too, I don't really

21 recall -- as a permit reviewer to get a better idea

22 and we just came along with him, the financial

23 assurance folks.

Q. The financial assurance folks just

L.A. REPORTING (312) 419-9292

210

1 came along?

A. Yes.

Q. And did you have a reason to go?

A. Just become familiar with where the

5 landfill was, get a little better idea about the

6 landfill.

Q. Do you normally go and visit

8 landfills? Is that part of your job?

A. It certainly could be part of the job.

10 Do we normally do it? No.

Q. And why did you do it this time?

A. Because there was an ongoing

13 enforcement case.

Q. Do you ever visit other landfills

15 where there are ongoing enforcement cases?

A. There is the possibility that we

17 would, yes.

Q. Have you ever?

A. No, I have not.

MS. GRAYSON: I have nothing further.

HEARING OFFICER HALLORAN: Thank you.

Mr. Grant or Ms. Tomas?

MS. TOMAS: Nothing further.

HEARING OFFICER HALLORAN: All right.

L.A. REPORTING (312) 419-9292

211

Sir, you may step down. Thank you so much.

We're off the record.

(Brief pause.)

HEARING OFFICER HALLORAN: We're back

on the record. It's approximately 2:20. I

believe the State will call their fourth

witness.

MR. GRANT: Yes, Mr. Halloran. This

is our final witness.

(Witness sworn.)

11 WHEREUPON:

CHRISTINE ROQUE

13 called as a witness herein, having been first duly

14 sworn, was examined and testified as follows:

DIRECT EXAMINATION

By Mr. Grant

Q. Ms. Roque, would you please state your

18 name and spell it for the record, please?

A. My name is Christine Roque,

20 C-H-R-I-S-T-I-N-E, R-O-Q-U-E.

Q. And where do you reside?

A. I reside in Springfield, Illinois.

Q. And who are you employed with?

A. I'm with the Illinois Environmental

L.A. REPORTING (312) 419-9292

212

1 Protection Agency.

Q. How long have you been with the

3 Agency?

A. I started in July 1992.

Q. Can you give me a description of your

6 educational background, please?

A. I received my bachelor of science in

8 industrial engineering management from U of I in

9 Chicago in 1991.

Q. And what is your current position at

11 Illinois EPA?

A. My current title is environmental

13 protection engineer III.

Q. And do you work in the permit section?

A. Yes, I do.

Q. Okay. What are your responsibilities?

A. I work in the solid waste unit of the

18 permit section. I review applications for

19 development, operation and closure of non-hazardous

20 waste facilities.

Q. Okay. Approximately how many

22 non-hazardous solid waste facilities have you been

23 responsible for?

A. Over the course of 15 years, probably

L.A. REPORTING (312) 419-9292

213

1 around 30 I've worked on.

Q. And are you familiar with the

3 Environmental Protection Act and the Board

4 regulations pertaining to municipal solid waste

5 landfills?

A. Yes, I am.

Q. Do you refer to the Environmental

8 Protection Act and these regulations on a regular

9 basis?

A. Yes, I do.

Q. Are you familiar with the Morris

12 Community Landfill?

A. Yes, I am.

Q. Are you responsible for that landfill

15 in the permit section?

A. Yes, I am.

Q. How long has it been your

18 responsibility?

A. I believe I started working on it in

20 1996.

Q. Can you tell me who the permitted

22 owner and permitted operator of the Morris Community

23 Landfill is?

A. The permitted owner is the City of

L.A. REPORTING (312) 419-9292

214

1 Morris and the permitted operator is the Community

2 Landfill Company.

Q. Approximately how many Bureau of Land

4 permits have been issued to the City of Morris as

5 owner -- strike that.

Approximately how many land

7 permits have been issued to the City of Morris for

8 the landfill?

A. Approximately, around 50 or 55.

Q. And, likewise, approximately how many

11 permits have been issued by Illinois EPA to

12 Community Landfill Company for the Morris Community

13 Landfill?

A. As operator, I believe around 50.

Q. Okay. And I'm going to ask you to

16 turn in that binder in front of you to Exhibit

17 No. 12.

A. Exhibit 12?

Q. Yes.

A. Okay.

Q. Can you take a look. They're

22 separated by a gold sheet. There's actually two

23 documents there. Can you take a look at them?

A. Okay.

L.A. REPORTING (312) 419-9292

215

Q. Can you just briefly describe what

2 they are?

A. One document is the permit number

4 2000-156 LFM for Parcel B and the other permit is

5 permit number 2000-155 LFM for Parcel A.

Q. And these are the two parcels of the

7 Morris Community Landfill?

A. Yes.

Q. And do the permits themselves identify

10 the owner and the operator?

A. Yes.

Q. And what does it list?

A. The owner is City of Morris and the

14 operator is Community Landfill Company.

Q. Did the City of Morris and Community

16 Landfill Company apply for these permits?

A. Yes.

Q. Do the permits identify the amount of

19 closure/post-closure financial assurance required

20 for the Morris Community Landfill?

A. Yes.

Q. Okay. And about how much is that

23 approximately?

A. The total for both is 17.4 million,

L.A. REPORTING (312) 419-9292

216

1 approximately.

Q. Okay. How are figures for the amount

3 of closure and post-closure financial assurance

4 arrived at?

A. The applicant will propose the cost

6 estimate in an applications and the EPA will review

7 it and approve it eventually.

Q. Okay. Can these amounts be modified?

A. Yes.

Q. How would you modify the amount of

11 financial assurance? How would somebody who had a

12 permit modify of amount of financial assurance?

A. The applicant needs to submit a

14 significant modification application revising the

15 cost estimate, then we will review it, meaning the

16 IEPA will review it.

Q. Do these permits require annual

18 updates of closure and post-closure costs?

A. Yes.

Q. For the cost estimate I think is the

21 term?

A. Yes.

Q. Okay. And are annual updates also

24 required under the Pollution Control Board

L.A. REPORTING (312) 419-9292

217

1 regulations?

A. Yes.

Q. Have the City of Morris or Community

4 Landfill Company ever submitted annual updates?

A. No.

Q. Between the time that the permit was

7 issued and July of 2007, did either of the City of

8 Morris or Community Landfill Company ever seek a

9 permit modification for reduction in financial

10 assurance?

A. July of 2007?

Q. Yes. Up to July of 2007.

A. No.

Q. Has the City of Morris now submitted a

15 new estimate of closure and post-closure costs?

A. There is an addendum to the renewal

17 application for a revised cost estimate.

Q. Do you know when the renewal

19 application was submitted, the application itself?

A. The original submittal was in 2005, I

21 believe. Around April 2005.

Q. So just so we're clear, though, there

23 has been a new cost estimate for

24 closure/post-closure submitted this year as an

L.A. REPORTING (312) 419-9292

218

1 addendum to 2005 renewal application; is that

2 accurate?

A. Yes.

Q. And is this new estimate of

5 closure/post-closure costs currently under review by

6 Illinois EPA?

A. It's under review.

Q. Okay. And is that under review in the

9 permit section?

A. With the permit section.

Q. Okay. If Illinois EPA was to accept a

12 new cost estimate, how would it become effective?

A. If we were to accept a new cost

14 estimate, then we -- it will be reflected in the

15 permit that will be issued.

Q. So you would issue a new permit?

A. Yes.

Q. Okay. And until that new permit was

19 issued, would the old -- the former cost estimate

20 still be effective?

A. Yes.

Q. Looking at Exhibit 12, which is the

23 permits, and specifically permit number 156 for

24 Parcel B, at the time that it was issued, what did

L.A. REPORTING (312) 419-9292

219

1 this permit approve?

A. Permit 2000-156 LFM for Parcel B

3 approved the development and closure of Parcel B.

Q. Okay. And does it also deal with

5 overhead issues at Parcel B?

A. Yes.

Q. Okay. To the best of your knowledge,

8 has closure of Parcel B been accomplished?

A. Not to my knowledge.

Q. To the best of your knowledge, has the

11 over-height issues before been resolved pursuant to

12 the permit's terms?

A. Not to my knowledge.

Q. Based on your knowledge, is closure

15 now due for Parcel B?

A. I believe so.

Q. Are any operating permits in place now

18 for disposal of waste in Parcel A at the landfill?

A. We have not issued any new operating

20 permits for Parcel A.

Q. Okay. Did the City of Morris and

22 Community Landfill Company apply for an operating

23 permit for Parcel A back in 2001?

A. Yes, they did.

L.A. REPORTING (312) 419-9292

220

Q. Okay. Was that permit denied?

A. Yes.

Q. Did they appeal that denial?

A. Yes.

Q. Did you testify at the Board hearing

6 on that permit appeal?

A. Yes.

Q. Does a permit for Parcel A allow the

9 acceptance of hazardous, non-petroleum contaminated

10 soil -- I'm sorry -- non-hazardous petroleum

11 contaminated soil?

MR. PORTER: I'm sorry. I need that

read back.

MR. GRANT: Let me withdraw the

question and restate it.

16 BY MR. GRANT:

Q. Does the permit -- and, specifically,

18 I'm taking about the permit that's in Exhibit 12 for

19 Parcel A. Does it allow the acceptance of

20 non-hazardous petroleum contaminated soil?

MR. PORTER: Objection, irrelevant.

HEARING OFFICER HALLORAN: Mr. Grant?

MR. GRANT: I think we're talking

about continuing waste disposal. It's -- I'm

L.A. REPORTING (312) 419-9292

221

going to go on to show that they have been

disposing of non-hazardous petroleum soil and

some other substances without a permit which

shows continued waste disposal.

The continued violation we've

alleged is operating -- is conducting a waste

disposal operation in violation of the

financial assurance regs. And where we're

going with this is to show continued waste

disposal, so a continual operation of a waste

disposal operation.

HEARING OFFICER HALLORAN: That pretty

much coincided with my ruling earlier. Mr.

Porter?

MR. PORTER: And I'm going to stand by

the same objection I made earlier. But this

one and another one. No foundation. We

haven't heard that this witness was ever at

that site.

MR. GRANT: I'm asking about the

permit.

MR. PORTER: But this is the last

witness and he's now -- you know, we don't

have any evidence that any of this is

L.A. REPORTING (312) 419-9292

222

happening that he's alluding to. And this

witness -- we haven't laid the foundation

he's ever been there or a witness to any of

this.

MR. GRANT: And, actually, now that

you mention it, I don't think that came into

testimony today.

MR. PORTER: I didn't hear it.

MR. GRANT: There was -- in the

inspection reports that were admitted as an

exhibit, there was a report of a disposal of

sewage sludge from the City of Morris. I

think that was testified to today.

HEARING OFFICER HALLORAN: I think

Mr. -- the first witness.

MR. GRANT: Yes. Mr. Retzlaff

testified to that. And so the question is is

this allowed? In other words, are they

disposing of waste -- the permit itself --

there's sort of a question of what is waste

and what isn't waste because the permit

itself does allow under certain circumstances

this material to be brought in and disposed

of.

L.A. REPORTING (312) 419-9292

223

You know, what we're going to show

is that those conditions were not met and so,

therefore, what they brought in and discarded

there was waste. So it goes to show

continuing waste disposal. My question was

about petroleum-contaminated soil and I'm

going to withdraw that --

MR. PORTER: Okay.

MR. GRANT: -- specifically.

HEARING OFFICER HALLORAN: Go ahead,

Mr. Grant.

12 BY MR. GRANT:

Q. Onto the next one. Does the permit

14 for Parcel A allow the acceptance at Parcel A of dry

15 sewage sludge?

MS. GRAYSON: Objection.

MR. PORTER: Same objection. Counsel,

I know we've stipulated to some documents. I

don't recall seeing any document that

referenced dry sewage sludge, therefore, I

don't believe there's the foundation

necessary to get into this. If you could

quickly show it to me, I might be able to --

MR. GRANT: Yeah. Sure. And I

L.A. REPORTING (312) 419-9292

224

appreciate the stipulation. But I think

Mr. Retzlaff also testified that when he

was -- it could have been the June inspection

that he saw an accumulation of sewage sludge

that had been deposited at the face of the

landfill. So it's not just a matter of --

it's somewhere in the exhibits we stipulated

to.

MR. PORTER: I don't recall it,

Mr. Halloran. I'll just object.

HEARING OFFICER HALLORAN: You know,

I think I do recall that, Mr. Porter. And

I've allowed latitude so far and I will

continue to allow a little latitude. So

overruled. Mr. Grant?

MR. GRANT: And just for the record,

this is the June 26th, 2007 inspection

report, which is People's Exhibit 7 and it's

exposure number six. I believe that when we

were going through the photographs that

Mr. Retzlaff testified that he saw sewage

sludge there.

HEARING OFFICER HALLORAN: Proceed.

MR. GRANT: Okay.

L.A. REPORTING (312) 419-9292

225

1 BY MR. GRANT:

Q. Ms. Roque, does the permit for Parcel

3 A allow for the acceptance of sewage sludge at the

4 landfill for Parcel A?

A. The permit for Parcel A allows for

6 acceptance of municipal waste and non-hazardous

7 special waste, which includes sewage sludge and

8 petroleum-contaminated soil.

Q. Okay. I think you testified that

10 there's no current operating permit at the

11 landfill -- or, I'm sorry, for Parcel A of the

12 landfill?

A. We haven't issued any new permit for

14 any new area to place waste.

MR. GRANT: Okay. That's all I have.

HEARING OFFICER HALLORAN: Thank you.

Ms. Grayson, do you need a few minutes? Do

you want Mr. Porter to proceed?

MS. GRAYSON: I wouldn't mind a few

minutes.

HEARING OFFICER HALLORAN: Take your

time. Mr. Porter, are you ready?

MR. PORTER: Sure.

L.A. REPORTING (312) 419-9292

226

CROSS EXAMINATION

By Mr. Porter

Q. Your duties don't normally involve

4 determining whether or not any permit condition has

5 been violated; isn't that correct?

A. No.

Q. My statement was right?

A. Your statement was right.

Q. That's normally a job for the Bureau

10 of Land inspectors; is that right?

A. Yes.

Q. At this time, you don't have any

13 opinion as to whether or not adequate financial

14 assurances have been posted, right?

A. No.

Q. So my statement is correct, you don't

17 have any opinion whether or not or not adequate

18 financial assurance has been posted? Let me ask it

19 this way. It's easier. Do you have any opinion

20 that adequate financial assurances have not been

21 posted?

A. I have an opinion.

Q. Okay. Do you recall when we took your

24 deposition in -- I'm sorry. I have to get it out.

L.A. REPORTING (312) 419-9292

227

1 I actually don't have it right in front of me. I

2 believe it was 2005 we when took your deposition.

3 Do you remember giving a deposition in this case?

A. Yes.

Q. And at that time do you remember

6 telling me you had no opinion as to whether or not

7 adequate financial assurance had been posted at Page

8 96, Line 24?

A. In 2005, I mean, I have an opinion,

10 but now too.

Q. Okay. You understand that the

12 violation notices went out in 2000?

A. I believe so.

Q. And so something has happened since

15 2005 that has changed your opinions regarding this

16 case?

A. Yes.

Q. What was it that happened?

A. I've read my transcript of my -- I

20 read about the case.

Q. You don't have any opinion today, do

22 you, that there's been any environmental damage or

23 endangering of health, safety or welfare by an

24 alleged failure to comply with any environmental law

L.A. REPORTING (312) 419-9292

228

1 at issue in this case; is that correct?

A. Can you repeat your question?

Q. You don't have any opinion that

4 anything the City of Morris has done has in any way

5 caused any environmental damage or endangering of

6 health, safety or welfare, do you?

A. No.

Q. You don't have any opinion that the

9 City has enjoyed any cost savings concerning the

10 alleged violations identified in this case, do you?

A. As far as cost savings? No.

Q. Now, there was a mention of a revised

13 cost estimate that apparently was issued in July of

14 2007. Do you recall that testimony?

A. Issued in July 2007 or submitted in

16 July of 2007?

Q. Understood. Let me show you what

18 we've had marked as City of Morris Exhibits Nos. 1

19 and 2.

(Document tendered to the

witness.)

22 BY MR. PORTER:

Q. Are those the revised cost estimates

24 that were submitted on July 12 of 2007?

L.A. REPORTING (312) 419-9292

229

A. Maybe.

Q. Isn't it true that those were sent

3 directly to you?

A. Yes.

Q. And you do have a recollection of

6 having reviewed those cost estimates, right?

A. Preliminary. I have not reviewed the

8 whole technical review.

Q. Okay. When was it that you learned we

10 were going to hearing today?

A. About a week ago.

Q. All right. And at that time -- strike

13 that.

You got the cost estimates on or

15 about July 12, 2007, but haven't yet reviewed them;

16 is that correct?

A. That's correct.

Q. And at least a week ago you knew that

19 the State was going to be presenting a case

20 asserting that the cost of closure/post-closure care

21 in this matter was $17.4 million, right?

A. Right.

Q. So isn't it true that you should have

24 looked at the revised cost estimates and determined

L.A. REPORTING (312) 419-9292

230

1 if they were reasonable?

A. I looked at them.

Q. You don't have any reason -- strike

4 that.

You would agree that those cost

6 estimates submitted by Shaw on July 12, 2007 are

7 reasonable, correct?

A. I cannot make a determination today if

9 they're reasonable or not.

Q. Well, what process is involved in

11 making a determination of reasonableness of a cost

12 estimate?

A. For this revised cost estimate

14 submitted as part of the renewal, it involves us

15 reviewing a revised closure plan that corresponds to

16 the cost estimate.

Q. Okay. And the closure plan was also

18 provided; is that right?

A. No.

Q. Okay. Have you requested a closure

21 plan from CLC or Shaw or the City?

A. In one of the draft denials that was

23 sent to them, we requested an operational plan and,

24 consequently, a closure plan that would support the

L.A. REPORTING (312) 419-9292

231

1 cost estimate.

Q. No denial has been sent, has it?

A. It's a draft denial.

Q. Okay.

A. For this pending application. The

6 renewal application.

Q. And so if I understand correctly then,

8 it's your intent to deny the revised cost estimates?

A. I'm not intending to deny cost

10 estimates. We are reviewing it. I'm not the only

11 one reviewing this cost estimate. The groundwater

12 section also has to review the groundwater

13 monitoring portion of that cost estimate.

Q. When do you expect to get a

15 determination on the revised cost estimate?

A. I don't know.

Q. Is there any statutory requirement as

18 to when you're supposed to provide a review of the

19 cost estimate?

A. We have a 90-day review period for

21 each application.

Q. And do you expect to at least meet the

23 90-day review period?

A. Before the 90-day period is up, we

L.A. REPORTING (312) 419-9292

232

1 will make a determination whether it's going to be

2 approved or we will send them a draft denial letter

3 allowing them to respond or correct the deficiency.

Q. Wouldn't you agree that it would be

5 reasonable to await your determination before we try

6 to craft a remedy in this case?

A. Could you repeat that, please?

Q. Wouldn't you agree that it would be

9 reasonable for the Pollution Control Board, this

10 body, to await your determination on the revised

11 cost estimates before we try to craft a remedy?

A. I don't know.

Q. Now, you did say you preliminarily

14 reviewed the cost estimates. Was there anything in

15 those that jumped out at you as unreasonable?

A. Just there's no operational plan

17 submitted with the renewal application. We

18 cannot -- the cost estimate should be based on and

19 consistent with the current operation of the

20 landfill, current condition. We're not -- we don't

21 have that information right now.

Q. Let me direct your attention to what

23 we've had marked as Morris Exhibit No. 10.

MR. PORTER: May I see yours to make

L.A. REPORTING (312) 419-9292

233

sure I marked them correctly?

HEARING OFFICER HALLORAN: Yes.

(Brief pause.)

4 BY MR. PORTER:

Q. Let me show you what we've had marked

6 as Exhibit 10, which is a schedule of closure

7 activities at the Morris Community Landfill, Parcels

8 A and B, drafted by Shaw Environmental and a draft

9 letter also drafted by Shaw Environmental that is

10 admittedly own in draft form at this time. Have you

11 seen either of these documents before today?

A. I don't remember.

Q. Are you aware that those documents

14 have been shared with the state of Illinois well

15 before this day?

A. I don't know.

Q. Other than the failure to have an

18 operational plan -- well, strike that. Let me cut

19 to the chase.

The revised cost estimates are

21 $7 million less than the previous cost estimates.

22 Did you notice that?

A. Yes.

Q. And did that reduction in amount give

L.A. REPORTING (312) 419-9292

234

1 you any pause or concern?

A. Yes.

Q. And has it been explained to you as to

4 how it is that that reduction has occurred?

A. Not through the application.

Q. Well, that wasn't my question. Has it

7 been explained to you how that reduction has

8 occurred?

A. No.

Q. Have you been informed that there has

11 now been the testing to determine that the leachate

12 monitoring system that was included in the prior

13 cost estimate was actually amended in this cost

14 estimate because the groundwater is a Class IV

15 rather than Class I and there's a different system

16 to be employed by Shaw? Has any of that been

17 explained to you?

A. No.

Q. Are you familiar with Shaw

20 Environmental?

A. Yes.

Q. And you would agree that they are a

23 highly reputable organization when it comes to

24 designing and implementing closure/post-closure

L.A. REPORTING (312) 419-9292

235

1 plans?

A. I don't know.

Q. You would agree that they are one of

4 the, if not the common engineering firm utilized for

5 that purpose in Illinois?

A. I don't know.

Q. Do you have any reason to not trust

8 Shaw Environmental's cost estimates?

A. No.

Q. When is it -- strike that.

Counsel brought up to you some

12 statements in the SIGMOD permit concerning

13 over-height. Do you remember that testimony?

A. Yes.

Q. And in particular -- strike that.

When is it that you believe

17 over-height was reached in regard to Parcel B?

A. When was it reached?

Q. Correct.

A. I don't know when exactly it was

21 reached. But during the review of the initial

22 SIGMOD in 1996, that's when I questioned them.

Q. So as early as 1996 the EPA was aware

24 or believed anyway that Parcel B was at over-height,

L.A. REPORTING (312) 419-9292

236

1 correct?

A. Yes.

Q. At any time did you or anybody at the

4 EPA direct CLC to close the landfill in 1996 or

5 1997?

A. I informed or questioned the

7 application in 1996 -- that's the application

8 submitted by CLC's consultant at the time -- in

9 question about the over-height.

Q. Okay. But you would agree, would you

11 not, the regulations call for the closure of a

12 landfill once it meets its height? As a matter of

13 fact, it's supposed to be closed in 90 days; isn't

14 that correct?

A. Correct.

Q. And at any time did you direct CLC to

17 close Parcel B?

A. No. It was proposed in their

19 application.

Q. And do you or did anybody at the EPA,

21 to your knowledge, ever direct the City of Morris

22 that it should somehow close the landfill as early

23 as 1996?

A. No.

L.A. REPORTING (312) 419-9292

237

Q. You would agree that the EPA had the

2 authority to direct CLC to close that landfill as

3 early then as 1996, correct?

A. Could you repeat your question?

Q. You would agree that the EPA had the

6 authority to direct CLC to close Parcel B of the

7 landfill as early at 1996, correct?

A. I believe so.

Q. And to your knowledge, the EPA never

10 did that, correct?

A. I'm not aware.

Q. Okay. Would you agree, therefore,

13 that the environment would be better protected by

14 closing the landfill now rather than buying some

15 insurance or a bond?

A. I don't know.

MR. PORTER: Nothing further.

HEARING OFFICER HALLORAN: Thank you,

Mr. Porter. Ms. Grayson?

MS. GRAYSON: Yes.

CROSS EXAMINATION

By Ms. Grayson

Q. Did you work on reviewing the -- did

24 you work on the permit review for the significant

L.A. REPORTING (312) 419-9292

238

1 modification in August 2000?

A. Yes.

Q. And do you have any knowledge as to

4 why CLC was required to post $17 million in

5 financial assurance back in August 2000?

A. That was the cost estimate that they'd

7 come up with.

Q. And what was included in that cost

9 estimate? Do you have any recollection?

A. Closure of Parcel A. Pretty much a

11 closure of Parcel A, closure of Parcel B, removing

12 of -- there's some waste relocation costs and

13 post-closure monitoring costs for up to 100 years.

Q. Part of the reason why that

15 significant modification was granted, however, was

16 because they posted the adequate financial assurance

17 at the time; is that correct?

A. At the time, yes.

Q. In August 2004?

A. Yes.

Q. The permit was granted because there

22 was adequate financial assurance?

A. Yes.

Q. I'm sorry. In August 2000. Not

L.A. REPORTING (312) 419-9292

239

1 August 2004.

A. 2000.

Q. It was August 4th, 2000, just to

4 clarify the record.

Did you then later review the

6 supplemental permit application for the separation

7 layer in the new cell that CLC submitted after that?

8 It was sometime after that. Sometime before May

9 of 2001.

A. It's the significant modification

11 application for operating permit, Parcel A.

Q. Correct?

A. Yes.

Q. And you reviewed that. And do you

15 know why that permit was denied?

A. One of the reasons is the financial

17 assurance, they didn't have adequate -- or the right

18 financial assurance document.

Q. So at the time that the permit was --

20 the permit. I'm sorry significant modification was

21 issued in August 2000, the financial assurance was

22 adequate, and then nine months later it was not

23 adequate; is that correct?

A. That's correct.

L.A. REPORTING (312) 419-9292

240

Q. And do you know how much financial

2 assurance was posted by CLC prior to the issuance of

3 the significant modification permit in August 2000,

4 just roughly?

A. Okay. I'm not -- I don't remember the

6 exact amount.

Q. Was it less?

A. I don't know.

Q. Okay. Do you have any knowledge of --

10 are you aware of the financial condition of

11 Community Landfill Company?

A. No.

Q. And do you know whether Community

14 Landfill Company ever had any intention to not pay

15 for financial assurance?

A. No.

Q. Do you have any knowledge as to

18 whether CLC can afford financial assurance?

A. No.

Q. Do you think that the ability of the

21 landfill -- of the company to make money has been

22 hampered by the fact that they're not able to accept

23 waste pursuant to the supplemental permit

24 application?

L.A. REPORTING (312) 419-9292

241

A. Can you repeat that?

Q. Sure. Do you think that the company's

3 ability to generate income has been hampered by the

4 fact that that supplemental permit application was

5 denied?

A. I don't know.

Q. Okay.

MS. GRAYSON: I have nothing further.

HEARING OFFICER HALLORAN: Is that

all, Ms. Grayson?

MS. GRAYSON: That's it.

HEARING OFFICER: Mr. Grant, redirect?

MR. GRANT: No.

HEARING OFFICER HALLORAN: Okay. You

may step down. Thank you so much. We can go

off the record for a second.

(Brief pause.)

HEARING OFFICER HALLORAN: We're back

on the record. Mr. Grant, do you have

anything to say?

MR. GRANT: Mr. Halloran, the State

has presented all of its evidence and rests

its case in chief.

HEARING OFFICER HALLORAN: Thank you

L.A. REPORTING (312) 419-9292

242

very much. I think what we'll do is we'll

adjourn today. It's approximately 3:00

o'clock. We'll resume tomorrow at 9:00 a.m.,

September 12th. Thank you. Drive safely.

(Which were all the

proceedings had in the

above-entitled cause

on this date.)

L.A. REPORTING (312) 419-9292

243

1 STATE OF ILLINOIS )

) SS.

2 COUNTY OF WILL )

I, Tamara Manganiello, RPR, do hereby

5 certify that I reported in shorthand the proceedings

6 held in the foregoing cause, and that the foregoing

7 is a true, complete and correct transcript of the

8 proceedings as appears from my stenographic notes so

9 taken and transcribed under my personal direction.

______________________________

TAMARA MANGANIELLO, RPR

License No. 084-004560

SUBSCRIBED AND SWORN TO

17 before me this ____ day

of _______, A.D., 2007.

_______________________

20 Notary Public

L.A. REPORTING (312) 419-9292