ILLINOIS POLLUTION CONTROL BOARD
April 4, 2002
ESG WATTS, INC., (Sangamon Valley
Landfill), an Iowa corporation,
Petitioner,
v.
ILLINOIS ENVIROMENTAL PROTECTION
Agency,
Respondent.
)
)
)
)
)
)
)
)
)
)
)
PCB 01-62
(Permit Appeal - Land)
LARRY A. WOODWARD, CORPORATE COUNSEL, APPEARED ON BEHALF OF
PETITIONER; and
DANIEL MERRIMAN, ASSISTANT COUNSEL, ILLINOIS ENVIRONMENTAL
PROTECTION AGENCY, APPEARED ON BEHALF OF RESPONDENT.
OPINION AND ORDER OF THE BOARD (by G.T. Girard):
On October 10, 2000, ESG Watts, Inc. (ESG Watts) filed a petition for review of a
September 11, 2000 decision by the Illinois Environmental Protection Agency (Agency). The
Agency had denied a request by ESG Watts to release any existing financial assurance tendered
by ESG Watts for the Sangamon Valley landfill located in Sangamon County. This case was
consolidated for hearing with ESG Watts, Inc. (Viola Landfill) v. IEPA
, PCB 01-63 and ESG
Watts, Inc. (Taylor Ridge/Andalusia Landfill) v. IEPA, PCB 01-64 as the cases involved similar
facts and denial reasons. ESG Watts, Inc. v. IEPA, PCB 01-62, 01-63, and 01-64 (consld.) (Oct.
18, 2001). The Board will not consolidate PCB 01-62 with PCB 01-63 and PCB 01-64 for
decision because, although the issues are similar, the unique facts surrounding this case require a
separate opinion and order.
On December 10, 2001, a hearing was held in Springfield before Board Hearing Officer
Steven Langhoff. On January 25, 2002, ESG Watts filed a brief (Pet. Br.) in this proceeding. On
February 19, 2002, the Agency filed a brief (Resp. Br.) and a motion for extension of time to file
the brief (Mot.). On March 7, 2002, ESG Watts filed a motion to strike the respondent’s brief
(Mot.S.), a response to the motion for extension of time, and a reply brief (Reply). On March 25,
2002, the Board received the Agency’s response to the motion to strike (R.Mot.S.). The Board
will discuss the motions below.
For the reasons given in the opinion, the Board affirms the Agency’s refusal to release
existing financial assurance.
2
MOTIONS
Before considering the merits of this case, the Board must first address the outstanding
motions relating to the filing of the Agency’s brief. First, the Agency filed a motion for an
extension of time to file the brief. The Agency acknowledges the lateness of the brief but asserts
that there was no “intention to willfully disregard the Hearing Officer’s scheduling order, cause
any undue delay or any material prejudice to any party” nor was there “any bad faith” on the part
of the Agency. Mot. at 2. Furthermore, the Agency stated that the attorney for the Agency
became aware of “a significant development” in this matter “on or about February 7, 2002.”
Mot. at 1. The Agency “felt” that the “significant development” should be brought to the
Board’s attention and a new section needed to be added to the brief to do so.
Id
.
ESG Watts argues that the Agency’s brief should be stricken. First, with regards to the
“significant development” the Agency discusses, ESG Watts argues the Agency did not support
the allegations in the motion with an affidavit or any other sworn testimony. Mot.S. at 1.
Furthermore, the dated information provided by the Agency demonstrates that the materials
would have been available at the hearing in this matter if the Agency had exercised due
diligence.
Id
. Also, the information was discussed in the presence of the Agency in December
of 2001.
Id
. Finally, ESG Watts asserts that the information is not material to any issue in PCB
01-62, PCB 01-63, or PCB 01-64 as the materials deal with United Capitol Insurance Company,
and the policies at issue in those cases were issued by Frontier Pacific Insurance Company.
Mot.S. at 1-2.
ESG Watts also argues that the brief was filed “to introduce prejudicial bias” into this
proceeding. Mot.S. at 2. Specifically, ESG Watts maintains that the Agency is suggesting that
the release of surplus financial assurance would leave the State of Illinois without financial
assurance when the Agency “knows that the policies have been replaced by other policies for the
time period beginning January 26, 1998 to January 25, 2002 and by policies covering the period
January 26, 1998 to January 25, 2003.” Mot.S. at 2.
The Agency’s response argues that the information included in the brief, “while
admittedly outside the record” is relevant to the Agency’s argument that the appeal is moot.
R.Mot.S. at 3-4. Furthermore, the Agency argues that the brief had attached to it a Verification
of Facts Not of Record by Certificate.” R.Mot.S. at 4. The Agency tenders a “correction” by
stating that the certificate applies to the motion for extension of time.
Id
.
The Agency also responds to the ESG Watts argument that the Agency attempted to
introduce prejudice by asserting that the assertions of fact are not accompanied by an affidavit.
R.Mot.S. at 9. Further, the Agency asserts such information is outside the record of the
proceeding.
Id
. Finally, the Agency states that there has been no approval of financial assurance
by insurance policies for ESG Watts.
Id
.
The Board grants the motion for extension of time to file the brief. The Board believes
that accepting the brief will allow for a more comprehensive discussion and resolution of the
issues in the case. However, the Board does agree with ESG Watts in part and therefore the
Board will strike the following portions of the Agency’s brief from this record.
3
First, the Agency’s brief addresses arguments and issues from ESG Watts, Inc. v. IEPA,
PCB 01-139 (PCB 01-139), which was not consolidated for hearing with the instant case.
1
PCB
01-139 involves similar issues as the instant case; however the facts are different. Specifically,
United Capitol Insurance Company issued the Pollution Liability Insurance policies at issue in
PCB 01-139 whereas in this case Frontier Pacific Insurance Company issued the policies.
Mot.S. at 1-2. Thus, arguments concerning policies issued by United Capitol Insurance
Company are not relevant in this matter. Therefore, the portions of the brief that address
arguments relating to United Capitol Insurance Company are stricken.
Second, the Agency included in the brief a court order from the Circuit Court of Cook
County that was entered on November 14, 2001. The court order was not before the Agency
when the Agency’s decision was made. Therefore, the Board cannot now consider that court
order. The Board also strikes the attachment from the brief and any argument relating to the
attachment.
See
West Suburban Recycling and Energy Center, L.P. v. IEPA, PCB 95-199 and
95-125 (Oct. 17, 1996); Panhandle Eastern Pipe Line Company v. IEPA, PCB 98-102
(Jan. 21, 1999); Alton Packaging Corp. v. PCB, 162 Ill. App. 3d at 738, 516 N.E.2d at 280 (5th
Dist. 1987).
FACTS
At hearing, the parties introduced Joint Exhibit A (J.Exh. A) which is a stipulation by the
parties to certain facts in this case. The following discussion summarizes the pertinent facts from
the stipulation and adds additional facts from the hearing transcripts and the record of the case
where necessary. Included in the summary of facts are facts surrounding the financial assurance
for Taylor Ridge/Andalusia landfill and the Viola landfill. These facts are necessary to
understand the interrelated nature of the financial assurance for all three of the ESG Watts
facilities.
On February 18, 2000, ESG Watts was approved for transfer of operation and ownership
of the Sangamon Valley landfill. J.Exh. A at 1. ESG Watts had not been released by the Agency
from the obligation to supply financial assurance.
Id
. ESG Watts was the licensed operator for
the Taylor Ridge/Andalusia landfill and Viola landfill and had an obligation to provide financial
assurance for the closure/post-closure care of those two facilities. J.Exh. A at 1. On July 7,
2000, ESG Watts submitted a request to approve substitute financial assurance for the Taylor
Ridge/Andalusia landfill and the Viola landfill in the form of surplus lines “Pollution Liability
Policies” bearing the Surplus Line Association Stamp dated April 13, 2000.
Id
. ESG Watts
further requested that excess financial assurance, in the form of a trust,
2
be released for all three
landfills.
Id
.
1
The hearing officer did allow the filing of a single brief in this case, the cases consolidated for
hearing and PCB 01-139.
2
ESG Watts argues that there are three separate trusts while the Agency maintains there is only
one trust account. The Board will address those arguments later in the opinion and in this section
refer to a single trust.
4
Frontier Pacific Insurance Company (Frontier) of La Jolla, California offered the
pollution liability coverage. Vol. II R. at 00194-00195. Frontier was not then and is not now
licensed to transact business in Illinois but was approved to provide insurance as an “excess or
surplus lines insurer” by the insurance department in one or more states. J.Exh. A at 1. Frontier
had issued the policies to ESG Watts in accordance with the insurance laws regulating surplus
insurance in Illinois.
Id
. The policies provided for financial assurance for closure/post-closure
in the amount of $2,031,549 for Taylor Ridge/Andalusia landfill and $397,080 for Viola landfill.
J.Exh. A at 2.
Until January 18, 1994, the Agency had treated the trust agreement submitted by ESG
Watts as a unified trust. On January 18, 1994, the Agency transmitted trust agreement forms to
ESG Watts. J.Exh. A at 2. On March 9, 1994, ESG Watts submitted four trust agreements on
file with the Agency: one dated February 28, 1985 (Vol. II R. at 0316-0319) and three dated
March 9, 1994 (Vol. II R. at 0336-0339, Vol. II R. at 0344-0347 and Vol. II R. at 0352-0355).
The Agency never indicated that the trust agreements submitted on March 9, 1994 failed to
establish a trust for each individual landfill. J.Exh. A at 2. On January 19, 1996, the Agency
stated that there were separate trusts for each individual landfill and that funds could not be
transferred from one trust account to another without complying with administrative regulations
relating to excess funds. J.Exh. A at 1-2. On July 7, 2000, the trust account had $1,412,517.22.
J.Exh. A at 2.
The original trust agreement dated February 28, 1985, provides that the trust “may be
amended by an instrument in writing executed by” ESG Watts, the trustee and the Agency. Vol.
II R. at 0318. The record also includes a letter from the trustee dated October 31, 1991, to the
Agency which states that the original trust has not been “dissolved, terminated or amended.”
Vol. II R. at 0326. The trustee indicated that the “sub-accounting for each site is strictly for
internal recordkeeping purposes only.”
Id
.
On September 11, 2000, the Agency issued a decision refusing to accept the offered
policies as substitute financial assurance for Taylor Ridge/Andalusia landfill and Viola landfill.
3
Vol. II R. at 0236-0237 and Vol. II R. at 0308-0312. The Agency’s denial letter indicates that
the offered policies did not meet the requirements of the Board’s regulations, as the insurance
provider was not licensed in Illinois. The Agency cited to 35 Ill. Adm. Code 807.665 for
support. Further because the policies did not meet the requiements of the Board’s regulations,
the Agency’s denial letter stated that the policies did not meet the requirements of the
Environmental Protection Act (Act) (415 ILCS 5
et seq.
(2000)). Finally, the Agency’s letter
indicated that “regardless of the acceptability” of the policies, the Agency “has reason to
believe” that the cost of closure/post-closure care will be greater than the offered policies. Vol.
II R. at 0236 and R at 0308.
3
Today the Board also rules on the appeals filed in those two cases. ESG Watts, Inc. (Viola
Landfill) v. IEPA, PCB 01-63 and ESG Watts, Inc. (Taylor Ridge/Andalusia Landfill) v. IEPA,
PCB 01-64. In both those cases the Board affirmed the Agency’s refusal to accept substitute
financial assurance.
5
On September 11, 2000, the Agency also issued a denial letter which did not address the
tendered financial assurance for Sangamon Valley landfill. Vol. II R. at 0141. In addition, the
denial letter for Sangamon Valley landfill indicated that the Agency “refuses to release any
existing financial assurance instrument tendered by ESG Watts, Inc., including any funds from
the ESG Watts, Inc trust.” Vol. II R. at 0141. The denial letter notes that the trust fund
established by ESG Watts on February 28, 1995, “includes no language apportioning the trust
assets to the operator’s specific waste disposal sites.” Vol. II R. at 0142. The letter states that
the “corpus of this trust provides financial assurance for” all the landfills.
Id
.
STATUTORY AND REGULATORY BACKGROUND
A municipal solid waste landfill (MSWLF) is an area that receives household waste and
may also receive commercial waste. 415 ILCS 5/3.85 (2000). MSWLFs are subject to the
Board’s rules at 35 Ill. Adm. Code Subtitle G, which include requirements for closure and post-
closure care of the units. The rules also require that adequate financial assurance be in place to
insure that if the operator cannot do so, proper closure and post-closure care can be undertaken
without cost to the State. Section 21.1 of the Act provides in part:
(a) Except as provided in subsection (a.5), no person other than the State of
Illinois, its agencies and institutions, or a unit of local government shall
conduct any waste disposal operation on or after March 1, 1985, which
requires a permit under subsection (d) of Section 21 of this Act, unless
such person has posted with the Agency a performance bond or other
security for the purpose of insuring closure of the site and post-closure
care in accordance with this Act and regulations adopted thereunder.
(a.5) On and after the effective date established by the United States
Environmental Protection Agency for MSWLF units to provide financial
assurance under Subtitle D of the Resource Conservation and Recovery
Act, no person, other than the State of Illinois, its agencies and
institutions, shall conduct any disposal operation at a MSWLF unit that
requires a permit under subsection (d) of Section 21 of this Act, unless that
person has posted with the Agency a performance bond or other security
for the purposes of:
(1) insuring closure of the site and post-closure care in accordance with
this Act and its rules; and
(2) insuring completion of a corrective action remedy when required by Board
rules adopted under Section 22.40 of this Act or when required by Section
22.41 of this Act.
The performance bond or other security requirement set forth in this Section may
be fulfilled by closure or post-closure insurance, or both, issued by an insurer
licensed to transact the business of insurance by the Department of Insurance or at
6
a minimum the insurer must be licensed to transact the business of insurance or
approved to provide insurance as an excess or surplus lines insurer by the
insurance department in one or more states. 415 ILCS 5/21.1(a) and (a.5) (2000).
THE PERMITTING PROCESS
After the Agency’s final decision on a permit is made, the permit applicant may appeal
that decision to the Board. 415 ILCS 5/40(a)(1)(2000). The question before the Board in permit
appeal proceedings is whether the applicant proves that the application, as submitted to the
Agency, demonstrated that no violation of the Act would have occurred if the requested permit
had been issued. Panhandle Eastern Pipe Line Company v. IEPA (Jan. 21, 1999), PCB 98-102;
Joliet Sand & Gravel Co. v. PCB, 163 Ill. App. 3d 830, 833, 516 N.E.2d 955, 958 (3rd Dist.
1987), citing IEPA v. PCB, 118 Ill. App. 3d 772, 455 N.E. 2d 189 (1st Dist. 1983). Furthermore,
the issues on appeal are framed by the Agency’s denial letter. ESG Watts, Inc. v. IPCB, 286 Ill.
App. 3d 325, 676N.E.2d 299 (3rd Dist. 1997).
Section 39(a) of the Act also allows the Agency to impose conditions on permits:
In granting permits the Agency may impose such conditions as may be necessary
to accomplish the purposes of this Act, and as are not inconsistent with the
regulations promulgated by the Board hereunder. * * * If there is no final action
by the Agency within 90 days after the filing of the application for permit, the
applicant may deem the permit issued. * * * 415 ILCS 5/39(a) (2000).
Section 40(a)(1) of the Act provides that:
If the Agency refuses to grant or grants with conditions a permit under Section 39
of this Act, the applicant may, within 35 days, petition for a hearing before the
Board to contest the decision of the Agency. 415 ILCS 5/40(a)(1)(2000).
Standard of Review
It is well-settled that the Board’s review of permit appeals of this type is limited to
information before the Agency during the Agency’s statutory review period, and is not based on
information developed by the permit applicant, or the Agency, after the Agency’s decision.
Alton Packaging Corp. v. PCB, 162 Ill. App. 3d 731, 738, 516 N.E.2d 275, 280 (5th Dist. 1987).
However, it is the hearing before the Board that provides a mechanism for the petitioner to prove
that operating under the permit as granted would not violate the Act or regulations. Further, the
hearing affords the petitioner the opportunity “to challenge the reasons given by the Agency for
denying such permit by means of cross-examination and the Board the opportunity to receive
testimony which would ‘test the validity of the information (relied upon by the Agency)’.” Alton
Packaging Corp. v. PCB, 162 Ill. App. 3d at 738, 516 N.E. 2d at 280, quoting IEPA v. PCB, 115
Ill. 2d 65, 70 (1986).
Typically, evidence that was not before the Agency at the time of its decision is not
admitted at hearing or considered by the Board. West Suburban Recycling and Energy Center,
7
L.P. v. IEPA (Oct. 17, 1996), PCB 95-199 and 95-125; Panhandle Eastern Pipe Line Company v.
IEPA (Jan. 21, 1999), PCB 98-102; Alton Packaging Corp. v. PCB, 162 Ill. App. 3d at 738, 516
N.E.2d at 280. Additionally, Section 105.214(a) of the Board’s procedural rules states:
Except as provided in subsection (b), (c) and (d) of this Section, the Board will
conduct a public hearing, in accordance with 35 Ill. Adm. Code 101.Subpart F,
upon an appropriately filed petition for review under this Subpart. The hearing
will be based exclusively on the record before the Agency at the time the permit
or decision was issued, unless the parties agree to supplement the record pursuant
to Section 40(d) of the Act. If any party desires to introduce evidence before the
Board with respect to any disputed issue of fact, the Board will conduct a separate
hearing and receive evidence with respect to the issue of fact. 35 Ill. Adm. Code
105.214(a).
ESG WATTS ARGUMENTS
ESG Watts puts forth two arguments to support its position in this case. First, ESG Watts
argues that the substitute financial assurance for Sangamon Valley landfill for the period for
January 26, 2000 to January 26, 2001 provided by ESG Watts to the Agency has been approved
by operation of law. Pet. Br. at 6. Second, ESG Watts maintains that there were separate trust
funds for the Taylor Ridge/Andalusia landfill, the Viola landfill and the Sangamon Valley
landfill. Pet. Br. at 14-15.
Approval by Operation of Law
ESG Watts asserts that the substitute financial assurance for Sangamon Valley landfill for
the period for January 26, 2000 to January 26, 2001 provided by ESG Watts to the Agency has
been approved by operation of law. Pet. Br. at 6. ESG Watts argues pursuant to Section 39(a) of
the Act (415 ILCS 5/39(a)(2000)) the financial assurance is approved by operation of law.
Id
.
ESG Watts cites Illinois Power Co. v. PCB, 112 Ill. App. 3d 457, 445 N.E.2d 820 (5th Dist
1983) and Marquette Cement Manufacturing Co. v. IEPA, 84 Ill. App. 3d 434, 405 N.E.2d 512,
514 to further bolster the argument.
Id
.
ESG Watts maintains that the legislature has “already assessed the risk of administrative
delay and placed the risk squarely on the shoulders of the Agency.” Pet. Br. at 7. Section 39(a)
clearly states that if there is no final decision within 90 days after the filing of the application, the
applicant may deem the permit issued, argues ESG Watts.
Id
. ESG Watts concludes that if the
Board were to remand the nondecision to the Agency the Board would be allowing the Agency
to engage in the administrative delay prohibited by Section 39(a) of the Act.
Id
.
Separate Trusts
ESG Watts asserts that the record contains evidence that there are separate trusts for the
three landfills. Pet Br. at 14-15. Because there are three separate trusts, ESG Watts maintains
that the funds in the trust for Sangamon Valley should be released as excess funds. Pet. Br. at
14.
8
AGENCY ARGUMENTS
The Agency puts forth three arguments
4
in support of the Agency’s refusal to release
financial assurance funds and the failure to “approve” financial assurance for Sangamon Valley
landfill. First, the Agency argues that there was no need to approve substitute financial
assurance, as ESG Watts was no longer responsible for providing financial assurance. Resp. Br.
at 14-15. Second, the Agency argues that even had approval been required, the provisions of
Section 39(a) of the Act do not apply to the approval of financial assurance mechanisms.
Id
.
Finally, the Agency argues there is only one trust fund and therefore there is no “excess”
financial assurance. Resp. Br. at 28-31. The Board will summarize each of the arguments
below.
Approval by Operation of Law
The Agency maintains that the substitute financial assurance offered for Sangamon
Valley landfill was not approved by default. Resp. Br. at 14. The Agency opines that since
closure had not been initiated prior to the operating permit transfer, ESG Watts is no longer
responsible for financial assurance for closure/post-closure care after the transfer. Resp. Br. at
14. The transfer was approved on February 18, 2000. J. Exh. A at 1. The Agency asserts that
ESG Watts was no longer the owner or operator after the transfer and was released from the
responsibility for providing financial assurance. Resp. Br. at 14. The Agency argues that since
ESG Watts had no obligation to provide financial assurance the Agency had no obligation to
review the offered financial assurance.
Id
.
The Agency’s second argument is that the time limitations of Section 39(a) of the Act
(415 ILCS 5/39(a) (2000)) do not apply to Agency decisions on financial assurance. Resp. Br. at
14. The Agency argues that the time limitation as set forth in Section 39(a) of the Act apply only
to “instances where ‘there is no final action by the Agency within 90 days after the filing of the
application for permit’. (Emphasis supplied).” Resp. Br. at 14, citing 415 ILCS 5/39(a) (2000).
The Agency opines that while certain financial assurance decisions are appealed to the Board
under Section 40(a)(1) of the Act (415 ILCS 5/40 (2000)) “financial assurance mechanisms do
not become permits by virtue thereof.” Resp. Br. at 14-15.
The Agency further argues that Part 807 describes permit applications and financial
assurance mechanisms are not permit applications. Resp. Br. at 15. The Agency maintains that
financial assurance may be required as a condition of a permit, but the financial assurance
mechanisms and the Agency decisions regarding the mechanisms are not permits.
Id
. The
Agency maintains that accordingly the time limitations of Section 39(a) of the Act do not apply
to Agency decisions on financial assurance mechanisms.
Id
.
4
The Board notes that the Agency puts forth an argument regarding financial assurance offered
by ESG Watts for a time period prior to January 26, 2000. However, ESG Watts, in its brief,
only addresses financial assurance for the period of January 26, 2000 to January 26, 2001.
Therefore, the Board need not address the Agency’s argument, as ESG Watts has not pursued the
issue.
9
Separate Trusts
The Agency argues that under Illinois law when a method of exercising a power to
modify or terminate is described in a trust agreement, the power may only be exercised in the
manner described. Resp. Br. at 28 citing Parish v. Parish, 29 Ill. 2d 141, 193 N.E.2d 761 (1963);
Dallinger v Abel, 199 Ill. App. 3d 1057, 557 N.E.2d 936 (3rd Dist. 1990); Williams v
Springfield Marine Bank, 131 Ill. App. 3d 417, 475 N.E.2d 1122 (4th Dist. 1985). The Agency
asserts that any attempt to modify or terminate a trust in a manner other than the one described in
the trust agreement is void. Resp. Br. at 29, citing Dallinger. The Agency claims that the trust
agreement from February 28, 1985 prescribed a manner for modifying or terminating the trust
and the trust agreement has never been amended or terminated in accordance with the trust
agreement. Resp. Br. at 29, citing Vol. II R. at 0316-0319.
In further support of this position, the Agency points to a letter from the trustee for the
ESG Watts trust. Resp. Br. 29. In that letter (Vol. II R. at 0326), the trustee indicated that ESG
Watts had not “dissolved, terminated or amended the original trust.” Resp. Br. at 29. The letter
indicated that “the sub-accounting for each site is strictly for internal recordkeeping purposes
only.” Vol. II R. at 0326. The Agency argues that the successor trustee cannot receive more
than the predecessor trustee had to give. Resp. Br. at 31. Therefore, the Agency asserts the
original financial assurance trust has not been amended or terminated.
Id
.
DISCUSSION
There are only two issues that need to be addressed in this proceeding. The first issue is
whether the Agency’s failure to decide on the substitute financial assurance offered by ESG
Watts results in the financial assurance being acceptable by operation of law. The second issue
is whether ESG Watts had one trust agreement or three. The Board will discuss each of these
issues below.
Approval by Operation of Law
ESG Watts argues that because the Agency failed to make a decision within 90 days on
the acceptability of the policy offered as substitute financial assurance for Sangamon Valley
landfill, the financial assurance is acceptable as a matter of law. The Agency asserts that there
was no need to make a decision on the financial assurance because ESG Watts no longer bore the
responsibility for supplying financial assurance. The Board agrees with the Agency. Financial
assurance for proper closure/post-closure care is the responsibility of the owner or operator of a
landfill. 415 ILCS 5/21.1, 35 Ill. Adm. Code 807.600, 811.701. Once the operating permit for
the Sangamon Valley landfill was transferred to another owner and operator, ESG Watts was no
longer required to provide financial assurance. Therefore, the Board finds that the Agency was
not required to make a decision on the acceptability of the financial assurance. Because the
Board has accepted the Agency’s position that a decision on the financial assurance was not
necessary, the Board need not address the applicability of the time limitation in Section 39(a) of
the Act (415 ILCS 5/39(a)).
10
Separate Trusts
ESG Watts maintains that the record demonstrates that there are three separate trust
funds, one for each landfill. The Agency disagrees and argues that only one trust instrument
exists with sub-accounting for each landfill. Again the Board agrees with the Agency. By the
explicit terms of the February 28, 1985 trust, the only way to amend the terms of the trust was
“by an instrument in writing executed by the Grantor [ESG Watts], the Trustee, and the IEPA
Director.” Vol. II R. at 0318. Although the record does contain three separate trust agreements
from the successor trustee dated March 9, 1994 (Vol. II R. at 0303-0339, Vol. II R. at 0344-
0347, Vol. II R. at 0352-0355) the record does not contain an “instrument in writing executed
by” ESG Watts, the director of IEPA and the trustee which amends the trust agreement. Absent
such an amendment, the trust cannot be modified and the original terms of the trust remain the
same. Therefore, there is only one trust fund.
In a separate opinion and order, the Board today affirmed the Agency’s refusal to accept
substitute financial assurance for Taylor Ridge/Andalusia landfill and Viola landfill. See ESG
Watts, Inc. (Viola Landfill) v. IEPA, PCB 01-63 (Apr. 4, 2002) and ESG Watts, Inc. (Taylor
Ridge/Andalusia Landfill) v. IEPA, PCB 01-64 (Apr. 4, 2002) (consl.). Specifically in those
cases, the Board found that the Pollution Liability Policies offered by ESG Watts as substitute
financial assurance for Taylor Ridge/Andalusia landfill and Viola landfill did not meet the
requirements of the Board’s rules at 35 Ill. Adm. Code 807.665(c) and (e). Thus, the only
financial assurance for those landfills is the trust fund. In this case the Board has found that the
trust provided as financial assurance for all three landfills in 1985 is one trust and not a separate
trust for each landfill. Even though ESG Watts need not provide financial assurance for the
Sangamon Valley landfill, the Board finds that there are no excess funds available for release by
the Agency because there is only one trust fund to provide financial assurance for all three
landfills. Therefore, the Board affirms the Agency’s decision refusing to release the corpus of
the trust.
CONCLUSION
The Board affirms the Agency’s refusal to release the corpus of the trust fund tendered by
ESG Watts in February 1985. The trust fund represents the only financial assurance for the
Taylor Ridge/Andalusia landfill and the Viola landfill. Therefore, even though ESG Watts is no
longer required to maintain financial assurance mechanisms for Sangamon Valley landfill, the
trust fund is not excess financial assurance and cannot be released.
ORDER
The Board affirms the Agency’s refusal to release any existing financial assurance
tendered by ESG Watts for the facilities owned by ESG Watts.
IT IS SO ORDERED.
Section 41(a) of the Environmental Protection Act provides that final Board orders may
be appealed directly to the Illinois Appellate Court within 35 days after the Board serves the
11
order. 415 ILCS 5/41(a) (2000);
see also
35 Ill. Adm. Code 101.300(d)(2), 101.906, 102.706.
Illinois Supreme Court Rule 335 establishes filing requirements that apply when the Illinois
Appellate Court, by statute, directly reviews administrative orders. 172 Ill. 2d R. 335. The
Board’s procedural rules provide that motions for the Board to reconsider or modify its final
orders may be filed with the Board within 35 days after the order is received. 35 Ill. Adm. Code
101.520;
see also
35 Ill. Adm. Code 101.902, 102.700, 102.702.
I, Dorothy M. Gunn, Clerk of the Illinois Pollution Control Board, certify that the Board
adopted the above opinion and order April 4, 2002, by a vote of 6-0.
Dorothy M. Gunn, Clerk
Illinois Pollution Control Board