ILLINOIS POLLUTION CONTROL BOARD

March

21,

1996

ESG WATTS, INC., an Iowa Corporation,

)

PCB

94-243

Petitioner,

)

94-306

)

94-307

)

94-308

)

94-309

ILLINOIS ENVIRONMENTAL

)

95-133

PROTECTION AGENCY,

)

95-134

)

(Consolidated)

Respondent.

)

(Permit Appeal

Land)

CHARLES J.

NORTHRUP APPEARED ON BEHALF OF THE PETITIONERS;

DANIEL P. MERRIMAN AND JOHN BURDS APPEARED ON

BEHALF OF

RESPONDENT.

OPINION AND ORDER OF THE BOARD

(by C.A.Manning):

This matter is

before the Board on seven consolidated permit appeals filed by ESG

Watts, Inc.

(Watts).

These permit appeals were consolidated by

a June

1995

order of the

Board because they involve a common issue of law:

whether the Illinois

Environmental

Protection Agency

(Agency) appropriately denied these permits

based upon Section 39(i) of the

Environmental Protection Act (Act).

Section 39(i) requires the Agency

to conduct an

evaluation of the prior waste management

operational experience of landfill operators in

Illinois and

allows the Agency to deny waste management permits to

an operator who has a

history of,

among other things,

“repeated violations of federal,

State or local laws,

regulations,

standards, or ordinances in the operation of refuse disposal

facilities or sites.”

(415 ILCS 5/39(i) (1994).)

Watts

is the operator of three landfills

in Illinois:

landfill in Viola, Illinois

(Viola

Landfill) which is

in closure; a landfill in Springfield,

Illinois

(Sangamon Valley Landfill)

which is

temporarily closed; and a landfill in Rock Island County, Illinois,

(known as the

Taylor Ridge or Andalusia landfill) which

is currently in operation.

The seven

instant permit

appeals all relate to permit denials for the Rock Island

County

facility.’

The Agency’s

‘Of the seven permit appeals at issue,

one relates to the Agency’s August 18,

1994 denial ofa

generic waste stream for nine waste streams (PCB 94-243).

The other six appeals relate to

separate waste streams permit denials for disposal ofspecific types ofwaste:

wastewater

treatment sludge decided October 7,

1994 (PCB 94-306); waste sulfur cement decided September

22,

1994 (PCB

94-307); button dust decided September 22,

1994 (PCB 94-308); paint sludge

decided October 7,

1994 (PCB 94-309); calcium sulfite cake decided March 23,

1995

(PCB

95-

133); and buffing dust waste decided February 28,

1995 (PCB 95-134).

decisions for each of the permit applications were made within the statutory

time frames for

Agency decision and

all seven appeals were timely filed with the Board within 35

days of the

Agency’s decisions.

In all

seven permit denial letters,

the Agency stated as a denial reason:

“(b)ased on ESG Watts, Inc.’s prior history of repeated violations of State laws, regulations

and standards concerning the operation of refuse disposal facilities or sites,

the Agency,

by the

authority granted in Section 39(i) of the Act and

to avoid violating

35 Ill.

Adm.

Code

807.207(a) and

(b),

is denying these permit applications.”

While the Agency additionally

set forward several technical grounds for the denial of

six of the seven permits at issue,

it is clear from the record and arguments of this proceeding

that the major thrust of the Agency’s denial is

the application of Section 39(i).

The Agency

itself admits that these technical denial points were,

in large part, the result of minor errors

and omissions in

the permit application which, but for the fact the permit would be denied

anyway based on the Section 39(i)

issue,

the permit reviewer would have contacted the

permittee to correct.2

Additionally, it is

clear from our review of the record that most of the

information

missing from the applications could have been deduced from the application in

general.

For

these reasons, the Board

finds

that the technical denial reasons are neither

appropriately supported by the record nor dispositive of the Section 39(i)

issue.

Therefore,

the

Board

finds

the technical denial reasons to be insufficient to warrant denial and they will not

be examined further in this opinion.

On December

1995

a hearing was held before Board

Hearing Officer Deborah

Frank.

There were no members of the public present at that hearing.

Watts filed its post-

hearing brief on January

12,

1996.

The Agency filed a brief on February

1996.

The Board

granted a motion to file the brief instanter and denied a motion to exclude the brief in an order

of February

15,

1996.

The reply brief was timely filed by Watts on February 23,

1996.

For

the following reasons, the Board hereby affirms the Agency’s permit denial

as to all seven

permit

appeals.

LEGAL FRAMEWORK

The Permitting Process

The Environmental Protection Act establishes a

system of checks and

balances integral

to the Illinois

system of environmental governance.

Concerning the permitting function,

it is

the Agency who has the principal administrative role under the law.

Specifically, the Agency

has the duty to establish and administer a permit process as required by the Act and

regulations, and the Agency

has the authority

to require permit applicants to

submit plans,

specifications and reports regarding actual or potential

violations of the Act, regulations or

At hearing, the permit reviewer, Krishna Brahmamdam, testified that in this case, he probably

would have contacted the applicant to have Watts repair the minor deficiencies; however, he did

not do so because the permit would be denied anyway. (Tr. at 137-138.)

permits.

(Landfill,

Inc.

v. IPCB

(1978) 74 Ill. 2d 541;

25 Ill. Dec.

602,

607,

citing,

415

ILCS

5/4.)

Further,

the Agency has the authority to perform technical,

licensing and enforcement

functions.

has the duty to collect and disseminate information, acquire

technical data, and

conduct experiments.

It has the authority

to cause inspections of actual or potential pollution

sources and the duty to

investigate violations of the Act,

regulations and

permits.

(Id.

at 606)

Regarding permits,

the Act provides that it

“shall be the duty of the Agency to

issue

such a permit upon proof by the applicant that the facility will not cause a violation of this

Act

or ofregulations hereunder.”

When the Agency makes a decision to deny a permit,

the Act

provides

that it must transmit to the applicant a detailed statement as to the reasons for the

denial.

The statement shall include,

at a minimum, the sections of the Act or regulations

which

may be violated if the permit were granted; the specific type of information,

if any,

which the Agency deems the applicant did not provide the Agency;

and

a statement of specific

reasons why the Act and the regulations would be

violated if the permit were granted.

(415

ILCS

5/39 (a)(1)-(4)(1 994).)

Finally,

the Act charges that the Agency

“shall adopt such

procedures as are necessary to carry out its

duties under this

the

permitting

section.”

(415

ILCS 5/39

(a)(1994).)

After the Agency’s final decision on the permit is

made, the permit applicant may

appeal that decision to

the Board.

(415 ILCS

5/40(a)(1)(1994).)

The Board then holds

hearing between the parties at which the public may appear and offer comment.

The question

before the Board in a permit appeal

whether the applicant has met its burden ofproving that

operating under the permit as issued would not violate the Act or regulations.

(Oscar Mayer

IEPA,

PCB 78-17, 30 PCB

397,

398

(1978);

John

Sexton Contractors

Company v.

Illinois

(Sexton),

PCB 88-139, February

23,

1989;

Browning-Ferris Industries of Illinois,

Inc.

Pollution Control Board,

179 Ill.

App.

598,

534 N.E. 2d 616,

(2nd Dist.

1989).)

It is

well-settled that

our review in most types ofpermit appeals,

including this one,

is not

de novo

but is

limited to information submitted to 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.

(See Alton Packaging

Corporation

v.IPCB,

(5th Dist.

1987) 162

Ill. App. 3d.

731;

516

N.E. 2d 275, 280.)

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

Corporation

IPCB

(5th Dist.

1989)

162 Ill. App. 3d 731;

114 Ill.

Dec.

120,

quoting JEPA

IPCB,

115

Ill.

2d at 70.)

Under the Act, both the Agency and the Board operate under tight statutory decision

time frames.

The Agency’s statutory time to

issue a permit decision is

90 days and for the

Board,

it is

120

days unless

waived by the petitioner.

Section 39(i)

as a Basis for Permit Denial

The permit denials pending before the Board are based on Section 39(i) ofthe Act

which

specifically provides:

Before issuing

any RCRA permit or any permit for the conduct of any waste-

transportation or waste-disposal operation,

the Agency

shall conduct an evaluation of

the prospective operator’s prior experience in waste management

operations.

The

Agency may deny such a permit if the prospective operator or any employee or officer

of the prospective operator has a history of:

repeated

violations of federal,

State, or local laws, regulations, standards,

ordinances in the operation of refuse disposal facilities or sites; or

conviction in this or another State of any crime

which is

a felony under the laws

of this State or conviction of a felony in a federal court; or

proof of gross carelessness or incompetence in handling,

storing, processing,

transporting or disposing of any hazardous waste.

(415 ILCS

5/39(i)(1994).)

The legislative history of Section 39(i) reveals that the legislature wished to give the

Agency an opportunity

to examine a permit

applicant’s background and,

in the case ofrepeat

problems, to deny that

permit applicant a permit.

The legislative

debate also makes clear that

the legislature thought it was important to provide this

opportunity

at the

“hearing” level

and

that it not be mandatory for the Agency

to deny the permit when it found repeated violations

exist.

The legislative

debates provide the following discussion about Section 39(i):

Senator Joyce:

This amendment.

currently the problem with this

as we read in

the papers,

and are hearing about that we’re having trouble identifying unscrupulous

dumpers or operators of waste disposal

sites that.

in the permit process.

What this would do,

is let the people who are granting the permits go

into the

applicant’s background for possible previous violations,

they’re not a part of the

application proceedings right now.

A case in point, the Metropolitan Sanitary

District’s, Pollution Control Chief has pointed out

that one of the main

problems

is that existing law makes no mention of an applicant’s background,

or possible previous

violations during the application process.

What this

would

do is.

let them go into the application.

applicant’s background and

check on him, and if he has been creating a problem for many times,

they

would.

they could not give him the.

the permit.

(P.A.

81-1484.

Senate

Tr.

June 19,

1980.)

Senator Joyce:

Mr. President and members of the Senate, this

amendment goes along with the

amendment I offered the other day.

It says that no permit for refuse collection

or refuse

disposal operator shall be issued

by the EPA until background for

applying the operator has been evaluated.

The amendment I put on

the other

day

went along.

said that the EPA could refuse the operator certification on

this basis.

Well, it turns

out that the EPA is

not certifying at the present time;

they intend

to in the future, but this would

let them do the same thing with the

permit.

Just say, that for repeated violation of Federal, State and local

regulations,

convicted of a felony or proof of carelessness or incompetence in

dealing with hazardous waste.

(P.A.

81-1484 Senate Tr.,

June 23,

1980.)

Senator Grotberg:

Yes, Senator Joyce represents it exactly the way it is.

The only reason I am not

violently opposing this

amendment is

it’s permissive,

and they may deny,

not

shall deny; but it does make sense at a hearing level to have something like

this

in the Statute,

and I have no objection to

it.

(P.A.

81-1484 Senate Tr.,

June 23,

1980.)

The Agency has not had much experience in

making decisions pursuant to Section

39(i),

neither has the Board had an opportunity to review a

Section 39(i) denial.

The first time

the Agency

attempted to exercise its

authority pursuant

to this section,

its decision was quickly

challenged in the district court on constitutional

grounds as it had

attempted to deny permits

for mere allegations of wrongdoing instead of adjudicated violations.

The federal district

court,

Martell

Mauzy,

511

F. Supp. 729

(N.D.

Ill.

1981), entered an

injunction against

the Agency prohibiting the Agency from applying

Section

39(i) to a permit application on the

basis of alleged violations.

The court stated that the history ofpast violations

must be based

upon adjudicated violations, not

violations in the eye ofthe Agency alone.

The court further

held that a permit holder possesses certain property and liberty interests in the renewal ofa

permit,

and is

therefore entitled to certain due process protections.

(Martell,

511

F. Supp. at

729.)

In a similar vein, this

Board, on October 29,

1992 rejected a prior Agency attempt to

deny

seven permits

to this very operator, Watts, also based upon mere allegations as opposed

to adjudicated violations.

(ESG Watt, Inc.

v. IEPA

(October 29,

1992) PCB 92-54,

aff’d,

IEPA

v. IPCB

(3rd Dist.

1993) 252 Ill.

App.

828,

624 N.E. 2d 402.)

As the court held

before us in

Martell,

we found that it was improper to deny operating permits

on the basis

alleged violations rather than adjudicated ones. (PCB 92-54, Slip op.

at 9.)

While we do not

believe the present case presents any

issues of constitutional infirmity, we are nonetheless

cognizant that permit

applicants have a great stake in the Agency’s Section 39(i) decisions.

Because this

is an

issue of first impression before the Board, we must

first determine

whether the traditional standard of review normally reserved for permit denials

appropriate

for analyzing a Section 39(i) denial.

The parties urge the Board to adopt a very different

standard of review for the portion of the Agency’s decision denying the permit based on

Section 39(i).

The parties ask that we adopt the exceptionally deferential

“arbitrary and

capricious” standard of review, which we note

is normally reserved forjudicial review of the

Board’s decisions when we are performing a quasi-legislative function.3

(Pet.

Br.

6-7;

Ag.

Br.

at 11-12.)

Under an arbitrary

and capricious standard, our scope of review would be

severely limited and

we could not reverse the Agency’s decisions absent a

“clear error of

judgment, or unless the Agency’s decision

is so implausible that it could not be ascribed to

difference in view or even the product of agency expertise.”

(Greer v.

Illinois Housing

DevelopmentAuthority,

122

Ill.2d 462;

524 N.E.2d 561,

581;

120 Ill. Dec.

531,

551

(Ill.

1988),

citing, Motor Vehicle Manufacturers Association of the United States, Inc.

State

Farm Mutual Automobile Insurance Co.

(1983), 463

U.S.

29,

43,

103

S.Ct.

2856,

2866-67.)

The parties’ reasons for supporting this

standard are obvious.

The Agency

believes that the

arbitrary and capricious standard is

consistent with its

ability to make a purely “discretionary

decision”

with only limited Board review,

while the petitioner believes the standard would

require the Board to reverse the Agency’s decision based on the Agency’s lack of adopted

rules or procedures for analyzing a prospective operator’s prior conduct.

We decline to

adopt the arbitrary

and capricious

standard and instead we will review

the Agency’s Section 39(i) decision applying the same level of deference normally accorded

the Agency in permit appeals.

Section 40 of the Act specifically mandates that the Board

review Agency

decisions made pursuant to Section 39

of the Act.

Agency decisions to deny

permit pursuant to Section 39(i) are thus also reviewable by the Board pursuant to

Section 40

and 35 Ill. Adm.

Code

Section

105.102(a).

Thus

it is the petitioner’s burden to prove both

that he is

entitled to the permit and that

the Agency’s stated denial

reasons are either

insufficient or improper.

Importantly,

we wish to emphasize that the Pollution Control Board and the Agency,

together,

are an

“administrative continuum” particularly in the area of permit issuance and

appeals.

Permitting decisions made by

the Agency are not subject to judicial

scrutiny until

such time as we enter a final administrative

decision.

At that time the Board’s decision is

reviewed under the

“manifest weight of the evidence” standard.

(IEPA

IPCB,

(3rd Dist.

1985)

138

Ill. App. 3d

550,

486

N.E. 2d 293,

294;

aff’d, IEPA

IPCB

(Ill.

1986)

115

Ill.

65,

503

N.E. 2d

343.)

We do not review the Agency’s decision pursuant to the manifest

weight standard because ofthe special administrative

review relationship set forward in the

Act.

(IEPA

v. IPCB,

(3rd Dist.

1985) 138 Ill. App. 3d

550,

486 N.E. 2d 293,

294;

aff’d IEPA

v. IPCB

(Ill.

1986) 115

Ill. 2d

65,

503

N.E. 2d 343.)

Instead, as part of this administrative

continuum,

we hold hearings and allow for a development of the issues which may not

have

been adequately developed

in the short 90-day decision deadline imposed on the Agency’s

permitting decisions.

Since there was no hearing below, we would be abdicating our

statutory

~Examples are the Board’s promulgation of rules

(Granite

City

v. IPCB,

(Ill.

1993)

155

Ill. 2d

149,

613 N.E.2d 719,

184 Ill.Dec.

402); interpretation of rules

and defining scope of emission

standards

(IEPA

v. IPCB

(1st Dist.

1983) 118

Ill. App.

3d 772,

455

N.E.

188;

IEPA v.

IPCB

(Ill.

1981) 86 Ill. 2d 390,

427 N.E.

162,

167);

and, fashioning remedies

enforcement actions

(Discovery South

Group,

LTD et al.

v. IPCB and

Village ofMatteson

(1st

Dist.

1995), 275 Ill. App.

547,

656

N.E.

2d 51.)

responsibility if we were to examine this case with the narrow review dictated by the arbitrary

and capricious

standard.

However, because the information reviewed by the Agency

in denying a permit

pursuant to Section

39(i) is

different from the information considered by the Agency

imposing conditions or denying a permit based on the merits of a permit application,

the

Board’s review of such a denial is

necessarily different in certain respects.

Unlike our review

of other permitting decisions wherein the Board must determine whether there will be

prospective compliance with the Act and/or Board regulations,

reviews of Section 39(i)

decisions look solely at the operating history of the prospective operator and what has already

transpired.

It is

therefore not necessary for the Board to analyze whether issuance of the

permit will cause a violation of the Act or Board

regulations

in relation to a Section

39(i)

denial.

Additionally, Section 39(i) requires the Agency to conduct an evaluation of the

prospective operator’s prior experience in waste management

operations and to apply the

legislatively-defined criteria to the waste management record ofthe operator.

Therefore,

it is

not only the operating history of the permit applicant but the Agency ‘s analysis thereof, which

fonns the record which we review in

Section

39(i)

decisions.

In reviewing Section

39(i)

decisions, the Board must determine whether the applicant’s operating

history

warrants denial

ofthe requested permit due to:

1) repeated violations of federal,

State,

or local laws or

regulations; 2) conviction of a felony in this or any other state; or 3) proof of gross

carelessness or incompetence

in handling,

storing, processing, transporting, or disposing of

any hazardous waste.

The burden is

on petitioner to show that the Agency

incorrectly

determined that denial of the permit

warranted in considering the above factors.

FACTUAL AND PROCEDURAL BACKGROUND

History of Adjudicated Violations

In denying the seven permits at

issue here, the Agency cited only the first of the three

possible

statutory reasons for denial:

the repeated

violations of State, federal and local laws

and

regulations.

It relied upon numerous adjudicated violations wherein Watts had been found

guilty,

over a period of some seven years,

of violating various provisions

of the Act.

Clearly,

the most important and egregious of those violations

involved the circuit court’s adjudication

of numerous violations

by Watts in

its operation of the Sangamon Valley Landfill.

Additionally, there are some

different administrative citations which had been adjudicated

against Watts by the Illinois Pollution Control Board,

concerning operations at all three of the

Watts-operated landfills.

In this

section, the Board will examine the facts contained in the

record and in the relevant proceedings concerning these matters.

The Sangamon Valley Landfill Adjudication

One ofthe single, highest penalties assessed against a

landfill operator in the

State of

Illinois

was levied against Watts for its operation ofthe Sangamon Valley Landfill.

The

circuit court of Sangamon County found Watts in

violation ofthe Act and corresponding

regulations just six

months prior to the Agency’s first permit denial of theses instant permit

appeals.

(People v.

Watts

Trucking,

et al,

No.

91-CH-242 (Cir.

Ct.

Sangamon Cty

Feb.

1994);

94-243 at 128-131.)

On February

1994 the circuit court assessed penalties of

$350,000 and found Watts liable for violating the Act and regulations

on all

twelve counts of

amended complaint filed by the Agency

and the Illinois Attorney General and later joined

by the Sangamon County

State’s Attorney.

The complaint alleged substantial violations ofthe

Act and regulations,

and alleged facts concerning disregard of the legal requirements for

operating a

landfill for a period of over three years.

The violations ranged from Watts’

exceedence of the vertical and horizontal permit

limitations for placement ofwaste in the

landfill, to

Watts’ failure to construct a clay liner in certain portions of the landfill as required

by the permit and the regulations,

to Watts’ actual allowance of leaching, which in turn,

impacted the groundwater at the site and eventually caused water pollution.

A list of the violations included 44 violations of Section 21(o)(5) and (o)(6) concerning

daily and

intermediate cover;

35 violations of Section 21(o)(12) of the Act and the regulations

35 Ill.

Adm.

Code

Section 807.306 concerning litter;

36 violations of Sections

(o)(l),

21(o)(2), 21(o)(3) and

the regulations at Section 807.3 14 concerning

leachate flow;

continuing

violations

of 12(a) for water pollution,Section

2 1(d) and Section 807.3 13,

Section 620.301(a)

for groundwater violations,

Section

12(a) and

12(f) for NPDES violations

concerning water

pollution,

Section 9.1(d) for asbestos NESHAP violations,

Section 24 of the Act and Section

901.102 for noise

violations; and

additionally,

violations

concerning financial assurance and

various

fee payment provisions.

(R.

94-243 at 83-127.)

While denying the complainants’ request for permanent injunctive

relief from further

violations of the Act, the court felt that the $350,000

in penalties was necessary in order to

insure Watts would bring the landfill in compliance.

The court directed Watts to undertake

eight specific actions in “strict compliance with Agency permits”:

The excavation and proper construction and/or repair of all sections ofthe liner

that have not been certified.

The construction of berms

as required by permit.

The installation of best available technology for noise control on all heavy

equipment.

The implementation of the groundwater remediation program as required by

permit.

The excavation and appropriate disposal of all refuse

previously deposited in

unpermitted lateral and vertical areas of Area

The initiation of closure of

Area

including (but not limited to)

the provisions

of final cover in accordance with approved contours

and the control of all

leachate

seeps, in

compliance with the approved closure and post-closure care

plan.

The implementation of the surface water control system as required by

permit

unless,

in the determination of the Agency, such project is

superseded by

closure activities.

The removal from adjacent properties of all

silt, debris and refuse attributable to

the landfill’s operations.

(R.

94-243 at

129-131.)

Administrative Citation Adjudications

The Agency further cited

separate administrative citations as supporting permit

denial on the basis of Section 39(i).

The adjudicated violations concerned operational

deficiencies at all three of Watts’ landfills in Illinois

over a seven-year period from

1987

through 1994.

The most recent citation concerned operational deficiencies which occurred at

the Sangamon Valley Landfill three months prior to the Agency’s first of the seven permit

denials in August of 1994.

In these

cases,

the Board,

which is

the only jurisdiction

authorized under Section 31.1 of the Act to decide

administrative citation cases,

found Watts

liable for 44 separate

violations of Section 21(o) of the Act.

Section 21(o)

is the Act’s general

prohibition against operation of a sanitary landfill in an unlawful manner and this section lists

several possible violation points from Section 21(o)(1) through (o)(13).4 Pursuant to the

administrative citation process set forward in Section

and Section 31.1,

these final decisions

were made based either on a hearing on the merits

or as a result of Watts having defaulted on

the cases.

In addition to finding Watts liable for 44 separate violations, the Board

additionally

assessed Watts a

total of $22,000 in penalties.

These penalties are statutorily provided for in

Section 42(b)(4) and

upon a determination of liability, the Act requires the Board to

impose a

pre-set $500 fine for each of the 44 adjudicated violations of the Act.

The total number of violations committed by Watts at the three landfills consisted of

nine violations of Section 21(o)(1) for refuse

in standing or flowing

waters; two violations of

Section 21(o)(2)

for leachate

flows entering the waters of the state;

two violations of Section

21(o)(3) for leachate flows exiting the landfill confines; 20 violations of Section

21(o)(5) for

uncovered refuse remaining from any previous operating day or at the conclusion of any

operating day;

two

violations of Section

21 (o)(1 1) for failure to

submit reports required by

permits or Board regulations and eight

violations of Section 21(o)(12) for failure to collect and

contain litter from the site by the end ofeach operating

day.

Specifically for each landfill, the

Board found that

Watts had committed 31

violations at the Sangamon Valley Landfill for the

period from 1987 through 1994;~four violations

at Viola in

1988;6 and eight violations at

Taylor Ridge from

1988 to 1990.~

~ Section 21(p) has been subsequently amended to Section 2 1(o) and therefore the administrative

citations at issue show violations of Section 21(p) in the record.

~ Specifically,

at the Sangamon Valley Landfill,

Watts was found liable for seven violations of

Section 21(o)(1), two

violations of Section 21 (o)(2), two violations of Section

21 (o)(3),

violations of Section 21(o)(5),

two violations of Section 21(o)(1 1) and

five violations of

Section

21(o)(12).

Watts committed two

violations of Section 21(o)(5) and two

violations of Section 21(o)(12).

The Agency’s Permit Review Process

According to the testimony presented at hearing in this matter, the Agency has different

procedures for reviewing different types of permit applications.

(Tr.

at 34-37.)

Initially,

the

permit is date stamped,

sent to a

log-in clerk and

assigned to a permit reviewer,

who makes a

recommendation to

his

or her immediate supervisor.

(Tr.

at 33.)

If the permit applied for

is a

supplemental generic permit

(PCB 94-243), various administrative

sections within the Agency

may be

notified and comments

may be solicited.

(Tr.

35,

102.)

Comments are not

mandatory,

and the permit reviewer may not always

receive comments.

(Tr.

at 39-41.)

comments are received, the permit reviewer would consider those comments

in making his or

her recommendation on the denial or the issuance of a permit.

(Tr.

at 97.)

It is the permit

reviewer’s decision whether or not to

seek out comments if none are received.

(Tr.

at 40-41,

107.)

If the permit

is a special

waste stream permit (PCB 94-306 through PCB 94-309 and

PCB 95-133 and 95-134), the Agency does not routinely

notify other administrative sections

within the Agency that a permit

application has been received.

(Tr.

at 36.) A final Agency

decision “is based upon the record of the applications under review, the recommendations of

the reviewer and the reviewer’s supervisor, as well as the collective input of any

others

who

may have been involved

in the review process, or who may have made comments

in response

a notification of pending Agency permit action.”

(Ag.

Br.

at 28;

Tr.

at 57-58, and 83.)

The seven permit applications at issue were

assigned by Agency Bureau of Land Permit

Section Manager, Edwin C.

Bakowski,

to Agency permit reviewer Krishna Brahmamdam for

technical review.

(Tr.

at 81.)

Mr. Brahmamdam recommended denial of the permit

applications.

(Tr.

96 and

130.)

Each recommendation to deny a permit was passed to Mr.

Brahmamdam’s supervisor for review and

then given to Mr.

Bakowski

(Tr.

57,

133-134.)

Mr.

Bakowski signed the Agency

denial

letters which

set forth the reasons for each permit

denial.

(R.

94-243 at 2-3;

94-306 at 61-63;

94-307 at 61-63;

94-308 at 61-63;

94-

309 at 61-63;

95-133 at 60-62;

95-134 at 60-62.)

Other

administrative sections

within the Agency were

notified about the application in

PCB 94-243.

(R.

94-243 at

3 1-48.)

Mr. Brahmamdam received

comments from the field

operations

section (FOS)

on the permit application in PCB 94-243.

(R.

94-243

at 61-69.)

Mr.

Brahmamdam considered the FOS

comment,

in his review ofthe remaining permits.

(Tr.

98,

102.)

During the technical review process,

the permit reviewer may

in contact with the

permit applicant to

solicit additional

information or seek clarification on certain points.

(Tr.

~Watts committed two violations of Section 21(o)(l),

five violations of Section 21(o)(5) and

one violation of Section 21(o)(12).

107 and 117.)

The permit reviewer generally determines whether or not to

call an applicant.

(Tr. at 110-111.)

In

Wells Manufacturing

Company v.

IEPA,

195

Ill. App.

593,

 142 Ill. Dec. 333,

552

N.E. 2d

1074 (1st Dist.

1990)

(Wells)

the court held that it is

improper for the Agency to

deny a permit based upon potential

violation of the Act

without providing the applicant an

opportunity to

submit information which would disprove the potential violation.

As a result of

the

Wells

decision, the Agency

provides permit applicants an opportunity to respond to

potential denial reasons prior to issuance of the denial letter.

This letter is commonly referred

to as a

“Wells

letter”.

The

Wells

letters were

sent on February

22,

1995

and the Agency

received Watt’s response on March

1995.

(Pet.

Br.

at 21.)

The Agency’s one common denial reason for each of the seven permit applications was

Watts’ history of repeated

violations pursuant to Section 39(i) of the Act.

The Agency’s denial

of the permits pursuant to

Section 39(i) of the Act cited to

adjudicated

administrative

citation cases wherein Watts had been found in violation of the Act and a Sangamon County

circuit court case

People v.

Watts

Trucking et al.,

91-CH-242.

In this

case, Watts Trucking

and Watts were found in

violation of several sections of the Act and Board

regulations for

activities at the Sangamon Valley Landfill.

ARGUMENTS OF THE PARTIES

Sangamon Valley Landfill Adjudication

Watts maintains that the Agency’s reliance on the Sangamon Valley Landfill litigation

improper because that adjudication relates to that

specific landfill only,

and not to Taylor

Ridge.

Watts argues that with multi-site operators, it is

“inappropriate” to consider the

problems of other facilities as conclusive judgment of operations at Taylor Ridge when the

only relationship is common ownership by a corporate entity.

Watts asserts that landfill

personnel are different,

operational requirements are different,

permitting

requirements are

different,

local conditions

are different and State or county inspectors may be different.

(Pet.

Br. at 10.)

Additionally,

Watts argues

that during the time the Agency was reviewing the permit

applications at issue in this appeal,

significant discussions were ongoing between the Agency

and Watts concerning the Sangamon Valley Landfill.

(Pet.

Br.

at 14-15.)

Watts

asserts that

the Agency was cognizant of the Sangamon Valley Landfill progress, yet at the same time the

Agency denied the permit application at issue in this

matter.

(Pet.

Br.

15-16.)

Watts asks,

“Is the Agency

taking the position that once a “bad actor”

always

a “bad actor”

without any

opportunity

to revive

its

reputation?”

(Id.)

In response, the Agency

argues that the plain statutory language of Section 39(i) is

not

facility-specific and allows the Agency to deny a permit if the prospective operator has a

history of repeated violations

in the operation of refuse disposal

“facilil

or sites

 plural.”

12

(Ag. Br. at

14-15.)

 The Agency claims that

if its

inquiry into a prospective operator’s

“history of

repeated violations” was limited

to the facility for which

 the permit is sought, then

any operator for a new facility could get a permit regardless of the operator’s prior history.

 (Ag. Br. at 14-15.) The Agency states that it did consider Watts’ efforts to come into

compliance along with the

efforts that were expended by the State in bringing about that

compliance.

 (Ag. Br. at 25.)

 The Agency believes that Watts should not be

afforded

“special

deference” because,

Watts took

 steps to comply with a court order. (Ag. Br. at

25-26.)

Administrative

Citation Adjudications

Watts asserts that,

in citing the

19 administrative citations, the Agency

failed to

consider that

they do

not relate whatsoever to the activities for which these permits are sought.

(Pet.

Br.

at 9.)

Watts argues

that only five ofthe

citations being considered are for

violations at Taylor Ridge,

despite 32

inspections by

Agency personnel since

1989,

and even

those range from six to ten years in age.

(Pet.

Br.

11-12.)

To bolster

its

argument,

Watts

points to

City ofEast Moline v.IPCB,

136 Ill. App.

3d 687,

Ill.Dec. 296,

483 N.E. 2d 642

(3rd Dist.

1985), wherein the appellate

court held

that the age of violations could be a

minimizing or eliminating factor in penalties.

(Id.)

Watts also asserts that the severity of the

violations adjudicated in

the administrative citations should be examined.

(Pet.

Br.

at 11.)

Watts maintains that even the Board has

recognized the

“minor nature of administrative

citations and has often referred to them as being analogous to

traffic tickets.”

(Pet.

Br.

12,

citing, In the Matter of: Lincoln Chamber of Commerce,

89-26 (May 25,

1988) and

In the

Matter of: John R.

Vander,

AC 88-99 (March 9,

1989).)

Watts points out that

even the

Agency does not believe that administrative citations inand ofthemselves warrant refusal of

permits.

 (Pet. Br. at 12,

citing,

Tr.

at 65.)

Watts also argues

that the Agency’s own rationale as to why the administrative citations

were considered is without merit.

(Pet.

Br.

at 13.)

Watts points

to the testimony of the

Agency’s solid

waste

branch manager,

Mr. Bakowski,

who testified that in considering the

administrative

citations,

“I guess you look at the way they’re considered is

the quantity

and the

severity collectively.”

 (Tr. at 63; Pet. Br. at 13.) Mr. Bakowski went on to testify that with

regard to severity,

the Agency

would

look to the “willful

intents”

and the “environmental

jeopardy.”

(Tr.

at 63-64;

Pet.

Br.

at 13.)

Watts asserts the quantity of the administrative

citations should

be mitigated by the age of the administrative citations.

(Pet.

Br.

at 13.)

Using the two components defined by the Agency’s testimony,

Watts notes that neither

willfulness nor environmental jeopardy are discussed or adjudicated

in the

19 administrative

citations.

(Pet. Br.

13.)

For these reasons, Watts argues

that the Board

should

find that

administrative

citations do

not form the basis for denial pursuant

to Section 39(i) ofthe Act.

(Pet.

Br.

at 12.)

The Agency disagrees with Watt’s interpretation of Section

39(i)(1) that would

classify

the administrative

citations as “too minor” to warrant a denial of a permit pursuant to

Section

39(i) of the Act.

(Ag.

Br.

at 19.)

The Agency points

to the language

in subsections (2) and

(3),

and notes

that both refer to a singular event;

whereas in

subsection (1) the statute refers to

13

“repeated violations” of several legal requirements all ofwhich relate to the operation of a

refuse disposal

facility.

(Id.)

The Agency concedes that it is

the cumulative effect of the

“many adjudicated” administrative citations

“over time,

that made them relevant to the

Agency’s considerations ofWatts’

‘history of repeated violations”

and that there is

set

number which automatically triggered the Agency’s denial pursuant to

Section 39(i).

The Agency further disagrees that the violations relied upon by the Agency bear no

relationship to the permit

applications.

(Ag.

Br.

at 21.)

The Agency

states that the legislature

requires that the repeated

violations must pertain to the

“operation of refuse disposal

facilities

or sites”

without any other limitations upon

the relationship between the repeated

violations

and the permits being sought.

(Id.)

Accordingly, the Agency believes that to impose any

other restrictions

to go beyond

the requirements of the Act

itself.

(Ag.

Br.

at 22.)

Further,

the Agency asserts that the arguments by

Watts that many of the violations were for other

facilities, goes to the weight the violations were given by the Agency.

(Ag.

Br.

at 16.)

Regarding the “age” of the citations, the Agency

points

out that even though some of

the administrative

citations for Taylor Ridge are over

six years

old today, the first decision to

deny

a permit based

on those administrative

citations was made in

1994.

(Ag. Br.

at 17.)

Secondly, the Agency maintains there is

no age requirement in Section 39(i) regarding the

history of repeated violations.

(Id.)

 Finally, the Agency asserts that

the arguments by Watts

ignores the “very concept ofexamining a ‘history” which would

require the Agency to

examine things in the past.

(Ag.

Br.

at 17.)

Th~

Agency maintains that in relying on

East

Moline,

Watts

seeking to have the Board inappropriately adopt enforcement principles to the

discretionary Section 39(i)

denial process.

(Ag. Br.

18.)

The Agency

asserts that the goal

in enforcement is future compliance; while the goal in the Section 39(i) denial

is future

cessation ofwaste

management operations.

(Ag. Br.

at 18.)

Other Considerations

The

WellsLetters

Watts asserts that

the Agency had determined to deny the seven permit applications

prior

to sending the

Wells

letters

making the

Wells

letters

a “sham,”

without any

“real

opportunity” for Watts to respond.

(Pet.

Br.

at 20.)

In support of this argument,

Watts

points

to the chronology of events in PCB 95-133 and PCB 95-134 which

indicates that the

reviewer knew the applications would be denied even before the

Wells

letters

were

sent,

addition to the reviewer’s testimony that

“(s)ince the application is being denied anyway

due to

past

adjudicated violations, I included this deficiency as a denial point.”

(Pet.

Br.

at 20-21;

Pet.

Exh.

and 4.)

Watts contends that

this is not

a “thought”

that the permit might be

denied; but a statement that

the permit would be denied.

(Id.)

Further, the permit reviewer

testified that he believed

this case may have been one where there was some fatal

defect which

was not going

to be corrected prior to the decision due date, therefore it did not make sense to

contact them to repair the minor deficiencies if the permit was going to

be denied anyway.

(Tr.

137-138; Pet.

Br.

at 21.)

14

The Agency claims that the responses to the

Wells

 letters were considered.

 (Ag. Br. at

33.)

The permit reviewer testified that he looked at the responses to the

Wells

 letters,

discussed the responses with others at the Agency and considered the responses in making his

recommendation.

(Tr.

at 13 1-132.)

The Agency

contends that Watts’ responses to the

Wells

letters

did

not contest the history of past violations,

“nor did they describe measures that

Watts

had taken to ensure the non-recurrence of such violations.”

(Ag.

Br.

at 31.)

Rather, the

responses to the Wells letters informed the Agency why Watts believed the Agency should

ignore the past history of violations.

(Id.)

Interpreting the reviewer’s notes in PCB 95-133

and PCB 95-134, the Agency states that the permit reviewer’s

notes

do not constitute the

Agency’s final decision, but at best the reviewer’s thoughts ofdenial.

(Id.

at 32.)

The

Agency contends that at best the notes

indicate that the reviewer “thought”

the permit

would

denied, and with five other applications denied based on repeated

violations,

“any surmise

by the permit

reviewer” that the permits

would be denied

“does not seem patently

unreasonable.”

(Id.)

Unadjudicated Violations

Watts asserts that in this matter the Agency did in fact rely on factors “not envisioned

by Section 39(i)” of the Act.

(Pet.

Br.

at 16.)

Specifically, Watts asserts that the Agency

considered the failure of Watts to timely apply for a significant modification permit for the

Taylor Ridge facility even though at the time of these permit denials no violation had been

adjudicated for the failure

to file a significant modification permit.

(Pet.

Br.

at 17.)

support ofthis

argument,

Watts points to

the

“Compliance Unit

Evaluation” form in

PCB 94-

243

and to the comments ofthe Agency’s field operations section (FOS).

(Id.)

 The FOS

noted:

FOS Peoria offers the following comments:

Watts landfill has failed

to submit

their significant modification as outlined

in Supplemental Permit No. 2993-267-

SP.

Also, the owner

in apparent non-compliance

with Section 39(i) of the

Act.

Based on these facts, the application should be denied.

(R.

94-243 at 60-

69.)

The Agency contends that the real focus of the Board is not what the permit reviewer

“may or may nothave

known or considered”

but rather the stated basis for denial of the

permit.

(Ag.

Br.

at 29-30.)

The denial letters do not include,

as a

stated denial

reason,

failure

to timely file the application for significant permit modification.

(R.

94-243 at 3; R.94-306 at

61-62;

94-307 at 62;

R.94-308 at 62;

94-309 at 62;

95-133 at 60-61;

95-134 at

60-61.)

The testimony at hearing of the permit reviewer and Mr. Bakowski also indicate that

the failure to

timely file the application for significant permit modification was not

relied upon

for the denial of the permits.

(Tr.

at 87 and 98-99.)

While the Agency

admits that the

comments from the FOS did refer to the failure to timely file the application for significant

permit modification, the Agency

contends that

the mere fact that the permit reviewer had

knowledge ofthe alleged violation does not mean the denial was based on the alleged

15

violation.

(Ag.

Br.

at 27

and 29.)

Anything a reviewer learns may subjectively enter into the

reviewer’s thought processes and this potential

subjectivity according to the Agency

is why the

Agency is

required to list the specific denial reasons in writing and then “stand behind” the

actual selected denial

reasons.

(Id.)

Finally,

Watts argues that the Agency’s reliance on the Sangamon Valley Landfill

adjudication was prematurebecause the matterwas

on appeal and Watts would have been

prejudiced had the matter been

reversed.

 In response, the Agency argues that the

decision in

Sangamon County

was clearly a final decision and

there

no statutory

 requirement that all

possible avenues

of appeal be exhausted before the Agency can rely on an adjudicated

violationunder

Section 39(i).

 (Ag. Br, at 24.) The Agency states that due process

considerations were satisfied by the bench trial

on the violations.

(Id.)

Agency’sLack of Procedures

Watts argues that the use of Section 39(i) of the Act is

“drastic measure designed to

prevent

‘bad actors’ from engaging in the waste disposal industry”

and only

significant

violations should beconsidered in applying Section 39(i) as a denial reason.

 (Pet. Br. at 8-9.)

Watts believes that the Agency

“advocating complete, total,

and unreviewable discretion to

deny permits under Section 39(i)”

of the Act.

(Pet.

Rep.

19.)

Watts maintains that the

Agency’s denial of these permits

based on Section 39(i) of the Act is

improper because it is a

discretionary process not conducted on all permit applications and without any written or

unwritten policy,

guidelines,

or procedures relating to

Section 39(i).

(Pet.

Exh.

 13 par 10;

Pet.

Br.

at 23.)

Therefore Watts claims the Agency is not fulfilling Section 39(i).

(Pet.

Br.

and 23;

Pet.

Exh.

13, par.

11.)

In response,

the Agency

asserts that there

is no evidence in the record to

support the

conclusion that its lack of written procedures specific

to Section 39(i) prevents it from

evaluating a prospective operator’s prior experience or that the evaluation was not done

in this

case,

(See

Ag.

Br.

at 36.)

The Agency contends that the existing permit

procedures are

sufficient to ensure that

a relevant evaluation is

conducted prior to permit

issuance.

(Id.)

The

Agency

asserts that Watts is attempting to add

“restrictions

and conditions”

the Agency’s

discretionary right to deny

a permit pursuant to

Section 39(i) of the Act,

contradicting the

intent of the legislation beyond any judicially imposed requirements of

due process.

(Ag.

Br.

 at 13.)

ANALYSIS

The legislature has placed an affirmative responsibility on the Agency to perform an

evaluation ofanyprospective landfill operatorwho submits a waste managementpermit

application to ascertain whether that

operator has a history of repeated violations,

convictions,

or is otherwise responsible for gross carelessness or incompetence

relating to the management

of waste.

 Relying on the results of the evaluation, the Agencymay accordingly deny the

permit application if the prospective operator’s historical information reveals any of the types

16

information delineated in Section

39(i)(1)-(3).

Notably,

this evaluation is

not necessarily

limited

to information submitted on the permit application, and because the Agency must

“conduct”

the evaluation, the Agency may gather information from either within the Agency

or outside the Agency.

In this case, the petitioner is not disputing that the Agency did in fact conduct an

evaluation as required pursuant to

Section 39(i).

It is

clear from the record that

the permit

reviewer did conduct a review of the permit for technical

sufficiency

and compliance with

Section 39(i).

For the generic waste

stream permit

(PCB 94-243), the reviewer internally

solicited comments

from other sections within the Agency

on both the technical information in

the permit application and on any pending enforcement or other significant issues relating to

the facility or the operator.

 (Tr. at 97-102, 129.)

 In response, the permit reviewer received

Section 39(i)-responsive comments which he considered regarding the generic permit and

which he determined applied equally to the six special waste stream permits.

 received

written comments from both the FOS and the Division of Legal

Counsel (DLC).

While

some

of the written comments addressed matters

the permit

reviewer could not use in denying the

permit,

the DLC

and the FOS brought to Brahinamdam’s

attention petitioner’s history of

violations of the Act and the regulations which eventually served as the basis

for the permit

denials.

(Tr.

at 111.)

Accordingly,

in this case, the Agency clearly satisfied

its

duty to

conduct an evaluation of the operator’s prior experience pursuant to Section 39(i).

Here, petitioner challenges the results of that

evaluation, which

show a cumulative

history of a circuit court adjudication based on

12 separate

counts for statutory

and regulatory

violations concerning the Sangamon Valley Landfill and

repeated administrative citation

violations relating to Watts’ management of waste disposal operations at three Watts-operated

landfills.

Watts disputes the Agency’s conclusion that these violations demonstrate a history of

repeated violations such that permit denial is warranted.

Watts additionally challenges the

method by which the evaluation was conducted,

disputing whether it was performed fairly and

whether the Agency has a practice of conducting the evaluation consistently on all

solid waste

disposal-related permits.

As there are no

administrative

rules adopted by the Agency

govern the Agency’s

processing of solid waste disposal

permit applications or to

govern the mandatory Section 39(i)

evaluation, and since the Agency

has not proposed rules to the Board for adoption, we find it

helpful to

examine other relevant portions of the Act and Board

regulations in

analyzing this

case.

In particular, Section 22.5 of the Act,

which was adopted in the same Public Act (P.A.

81-1484) as Section 39(i), has the same apparent legislative purpose.

These sections were both

adopted to provide the Agency with an opportunity

to review an operator’s prior experience

for repeated violations or other egregious acts in order to control who

is operating waste

disposal

sites in Illinois.

In the case of Section

22.5,

the Board was specifically

directed to

adopt rules governing prior

conduct certification implementing the statutory criteria for

operating personnel certification.

Virtually

identical

to Section 39(i),

Section 22.5 of the Act

provides:

17

The Board

may provide for denial of certification if the prospective operator or

anyemployee or officer of the prospective operator has a history of:

1.

 repeated violations of federal, State, or local laws, regulations, standards, or

ordinances in the operationof refuse disposal facilities or sites; or

2.

 conviction in this or another State ofany crime which is a felony under the laws

ofthis State or conviction of a felony in a federal court; or

3.

 proof of gross carelessness or incompetence in handling, storing, processing,

transporting or disposing ofany hazardous waste.

The Board adopted regulations

implementing Section 22.5 pursuant to the Illinois

Administrative Procedures

Act in

Prior

Conduct Certificationfor Waste Disposal Site

Personnel.’

35111.

Adm.

Code

745,

(September 4,

1987) R81-18,

PCB

101.

In addition to

adopting procedures for the processing of prior conduct certifications of such applications by

the Agency, the Board also set specific standards for denial ofthese applications and

articulated mitigating factors that the Agency may rely upon to determine whether to grant

certification. Although the regulations at 35 Ill. Adm. Code 745 do not apply specifically to

 Section 39(i) decisions, we find the regulations provide helpful guidance to our decision.

In

pertinent part, Section745.141 (a)(1) provides that the Agency shall deny prior conduct

certification to any person who has been repeatedly found, after opportunity for an adversarial

proceeding before any judicial or administrativebody, to be in violationofany federal, State

or local laws, regulations or ordinances governing the operation ofwaste disposal sites in any

state. As for factors in mitigation, Section 745.141(b) provides:

The Agency may, in its discretion, grant prior conduct certification if mitigating

factors exist such that certification should issue. Mitigating factors include:

The severity of the misconduct;

2.

 How recently the misconduct took place; and

3.

 The degree of control exerted over waste disposal

operations at a site by the applicant at the time misconduct

described in subsection (a)(3) was committed.

The Sangamon Valley Landfill Adjudication

In denying the permit,

the Agency

concluded that the circuit court’s

Sangamon Valley

Landfill decision coupled with the

19 administrative citations was sufficient reason to justify

denying the seven permits pursuant to Section 39(i). The Agency’s Bureau ofLand Permit

Section Manager, Mr. Bakowski,

indicated at hearing that

the Sangamon Valley Landfill

litigation was a major factor in the Agency’s decision. He further testified thatthe Agency not

only considered that

the court had found this

Watts-operated landfill in violation,

but that the

State had to expend considerable effort to bring about compliance at the site. Bakowski

testified that the Agency specifically considered:

the seriousness of the violations and the efforts by the applicant beforeand

after the case

 ofhow reasonable his efforts were before, how reasonable his

efforts wereafterwards, and then the reasonableness ofwhat level the Agency

had to go through to promote that sort of compliance or efforts to comply.

 (Tr.

at 74.)

Our reading of the order shows that while the court found Watts had taken some steps

to abate the violations at the site, the court determined

it

was

 still necessary to assess a

$350,000penalty ($250,000 to the State of Illinois and$100,000 to SangamonCounty) to

bring Watts in compliance with the Act and regulations.

 Additionally, the court mandated a

series of eight specific actions that Watts was to perform to immediately bring about “strict

compliance with Agency permits.” These actions included repairing the clay liner,

constructing berms, addressing noise control problems, implementing a groundwater

remediation

program,

excavating and

disposing ofrefuse

from the unpermitted portions of the

landfill and initiating closure for certain areas of the landfill, implementing a surface water

 control system, and finallyremoving debris from neighboring properties.

 In the event that

Watts could not bring the landfill into compliance as directed in the order by May 31, 1994,

Watts was to advise the

court as to its

status and present

 justification for noncompliance.

Additionally, the Agency was directed in the order to keep the court informed as to Watts’

progress,

We believe the seriousness of the violations that occurred at the Sangamon Valley

Landfill, together with the 19 adjudicated administrative citations against Watts, are sufficient

cause to justify the Agency’s denials in this case.

 It was appropriate for the Agency to factor

in the repeated violations present at Sangamon Valley Landfill in order to make a

determination on the propriety of Watts’ continuance as an operator at other landfills in the

State.

None

 of the mitigating factors raised by Watts, nor any of the mitigating factors

delineated in Section 745.141(b), persuade us to question the Agency’s reliance onSangamon

Valley Landfill litigation to deny the permits.

 The violations are severe, very recent and,

significantly, Watts exerted control as the operator over the Sangamon Valley Landfill.

 It is

uncontested that Watts was primarily responsible for making the

management decisions which

brought about theproblems at the Sangamon Valley Landfill. We find it relevant that in order

to provide Watts with an “incentive” to come into compliance at the site, the court found

it

necessary to assess a $350,000 penalty. Under the facts of the Sangamon Valley Landfill

circuit

court case,

 there is nothing inappropriate about the Agency considering that

litigation,

particularly

in light of the Agency’s difficulty in bringing about compliance with the Act and

regulations.

It is

noteworthy that Watts does not raise

any

argument that the types of violations that

occurred at the Sangamon Valley landfill are not severe.

Watts does not argue that the

violations were not

within the control of Watts as the operator.

Instead,

the petitioner argues

that there are different personnel at the Sangamon Valley Landfill than the Taylor Ridge

Landfill,

and that it

is improper for the Agency to consider historical information stemming

from

any

landfill other than the one at issue in the permit applications pending before the

Agency.

We do not find either of the petitioner’s arguments meritorious.

Section 39(i)(1)

19

clearly contemplates that the Agency mayneed to look outside of the current facility for

information relating to the operator’s prior experience at other disposal sites and it was proper

in this case to do so.

 Section 39(i)(1) is clearly operator-specific and not facility-specific.

The 19 Administrative Citation Adjudications

The Agency additionally denied the seven permits based on Watts’ having been found

 in violation of the administrative citation provisions of the Act in 19 separate cases adjudicated

by the Board from 1987 to 1994. TheAgency witnesses testified that the Agency considered

the citations as adjudicated violations, and additionally considered both the “quantity and

severity” of the citations. Bakowski stated at hearing that no single citation was given special

consideration or particular weight, rather it was the cumulative effect of the many adjudicated

citations which was relevant to the Agency’s consideration.

(See

Tr.

62-65.)

While

single administrative citation, nor any handful, is sufficient to warrant denying a

RCRA

or

solid waste management-related permit based on Section 39(i), we believe the Agency’s

consideration ofthe citations

“in the aggregate” coupled with the factually-egregious

Sangamon Valley Landfill adjudication, together,

sufficient to

invoke Section 39(i).

We disagree withWatts that the citations are too minor in this case to be considered by

the Agency. While the administrative citation process is designed to be a simpler mechanism

for achieving enforcement and it avoids the lengthy and complex litigation which may

accompany a

traditional enforcement action,

administrative

citation violations can range from

litter control problems to more serious concerns such as with leachate flow. The Agency is

specifically charged in Section 39(i) with evaluating the operator’s prior experience in

managing these waste disposal facilities

and the administrative

citations are

telling in that they

give the Agency a picture of Watt’s operational control over the three landfills managed

Watts.

In this case, the seven years of administrative citations show a

history of nine

violations for refuse

in standing or flowing

waters;

two violations for leachate

flow entering

the waters of the State;

two violations for leachate

flow exiting

the landfill confines;

violations

for uncovered refuse

remaining from any previous

operating day or at the

conclusion of any

operating day; two

violations for failure

to submit reports required by

permits or Board

regulations and eight violations for failure

to collect and

contain litter from

the site by the end of each operating day.

Watts argues

that,

because the citation process is

designed to be a

simpler mechanism

for enforcement, it is,

therefore,

inappropriate to consider administrative citations in relation

to waste

management operating permits.

We, however,

find this

argument without merit.

the case of the Sangamon Valley Landfill litigation and

as part of assessing the $350,000 in

penalties, the court found Watts in

violation of several of the same statutory provisions of the

Act (Sections 21(o)(1)-(3),

(5)

(9), (11) and (12)) which were also

at issue

in the administrative

citation cases before the Board.

Clearly the court found these violations significant enough to

serve as a factor in assessing a $350,000 penalty; therefore,

we are hard pressed to conclude

that the same violations are unimportant merely because they were prosecuted via the

administrative

citation route.

Additionally, it is particularly relevant that the court ordered

Watts to pay $3,000 in administrative citation penalties which Watts had failed to pay and

which were assessed in the citation cases before the Board.

(See

 Sangamon Cty Cir. Ct. Order

of February 2,

1994,

94-243 at

130.)

Watts also raises as a “mitigating” factor the fact that the administrative citations are

not recent enough to be relevant to any consideration of the Watts’ operational and

management history.

 While we are not persuaded that the “staleness” ofthe citations is

enough to warrant a reversal of the Agency’s decision, we do believe that ordinarily, the age

of the violations

may be an important consideration.

It is

the responsibility of the Agency to

ensure that when it is decided an operator’s history of repeated violations warrants terminating

operating rights via the permit denial, that the basis for the decision bears a rational

 relationship to the Agency’s concerns.

 It is not reasonable to deny an operator either prior

conduct certification (“age of the violation”

 is listed as a mitigating factor in Section

745. 141(b)(2)) or a wastemanagement permit based on ancient history without there being

additional reasoning for the decision.

 In this case, when we examine the historical record of

Watts’ landfill operations across the State, we find a record replete with operational violations

and noncompliance.

 Notably, the mostrecent adjudicated violations occurred in the

administrative citation cases inMay of 1994 (three months prior to the Agency’s first permit

denial) and in the Sangamon Valley Landfill litigation, in February of 1994 (six months prior

to the Agency’s permit denials).

 Therefore, there is nothing inappropriate about the 19

administrative citations, in the “aggregate,” togetherwith the Sangamon Valley Landfill

litigation, serving as the basis for the Agency’s decision to deny the seven permits pursuant to

Section

39(i).

Other Considerations

The

Wells Letters

Watts argues that the Agency’s use of the

Wells

letters is

evidence that the Agency did

not give appropriate consideration to Watts’ operational history when it made the decision to

deny the permits.

 Watts believes the

Wells

 letters merely show that the Agency had already

determined the permits would be denied, and that

the

 Agency provided no “real opportunity”

for Watts to respond to the letters. The Board finds that the Agency appropriately used the

Wells letter in these seven permit applications.

 In the

Wells

 case, the

court held that the

Agency should allow an applicant the opportunity to respond to allegations that the issuance of

the permit may violate the Act or Board regulations.

 It is undisputed that

Wells

 letters were

sent to Watts citing various adjudicated violations as potential rationale for denial of the

permits.

 It is further undisputed that Watts replied to those letters. The dispute arises over

how the

Agency

 evaluated the Watts’ reply to the Wells letters. The Agency

permit reviewer

testified that he reviewed

 theresponse received from Watts and discussed the response with

others

at the Agency.

Therefore, the record establishes that the Agency considered the

responses to the Wells letters.

Unadjudicated Violations

Watts also alleges that the Agency improperly relied on

unadjudicated violations when

deciding to deny the permits.

 The Board finds that the record does not support Watts’

allegation. The FOS did, in fact, recommend to the permit reviewer that the permit be denied

 because Watts had failed to submit a timely application for significant permit modification.

However,

the FOS

is not responsible for making a recommendation

on whether to

grant or

deny the permits.

The permit reviewer may have

“considered” the fact that

the application for

significant permit modification had

not been filed; however,

the permit reviewer testified that

“considered” several matters

in recommending denial.

The Agency’s denial letters

articulate the specific

reasons for denial which included

Watt’s past

history and certain

technical

deficiencies.

The denial letter does not state among the list of violations the failure

to timely

file the significant modification permit.

It is

well settled

that the Agency denial letter

frames the issues in a permit

appeal.

(Pulitzer Community

Newspapers, Inc.

v IEPA,

PCB 90-

142,

(December 20,

1990);

Centralia Environmental Services,

Inc.

IEPA,

PCB 89-170,

at 6

(May

10,

1990);

City of Metropolis v IEPA,

PCB 90-8 (February 22,

1990).)

Additionally, Watts argues

that it

somehow unfair that

the Agency considered the

Sangamon Valley Landfill litigation when the case was clearly on appeal during the pendancy

of the permit applications before the Agency.

The Board

disagrees with the petitioner’s

argument

in this

regard.

For purposes of the Section 39(i) and

in satisfaction of

Martell,

all

that is necessary

that an

adversarial hearing be

held where the permit applicant had an

opportunity to

contest the alleged violations and

that the violations

be adjudicated as a result of

that hearing.

This requirement has become

the

“adjudicated violations” requirement in

Martell.

In this case, Watts received a hearing before the Sangamon County

circuit court and

received

added due process protection in a hearing before the Board concerning

the Agency’s

permit denials.

Perhaps if the circuit court’s order been reversed

the appellate court, then

we may have a different

case at bar on the issue

of the severity of the Sangamon Valley

Landfill violations;

however,

the circuit court was affirmed on

all counts

including the

$350,000 penalty.

(People and County o,f Sangamon

Watts

Trucking Service,

Inc.

and ESG

Watts,

Inc.

(July

14,

1995) No.

4-94-0414 (Rule 23

Order).)

Agency’s Lack of Procedures

We agree with Watts that

the

 Agency’spractices might lead to an inconsistent application

of Section 39(i). There areno adopted

rules

 for routinely conducting 39(i) evaluations in the

context ofthe Agency’s permit review process. Equally obvious is the fact that seeking

and

offering “past history” comment in the context oftheAgency’s

permit

 review process involves a

discretionarycase-by-casejudgment on the

part ofAgency personnel.

 note that the lack of

consistent 39(i)procedures is amost troublesome aspect for the Board in itsreviewofthis case

and, indeed, is largely responsible fora division within theBoard as to the outcome.

Nonetheless, we do

 not believe that the method

by which the Agency conducted the evaluation of

Watts’

prior violations rises to a level which warrants reversal under the facts ofthis particular

case.

Rather, we are persuaded that the history ofpast violations contained in

this record so

clearly demonstrates an example ofan appropriate use of Section 39(i), that Watts’ argument

concerning unfair treatment begsthe real issues concerning the extentand contextofits past

violations.

The Agency’s decision in this case is, quite simply, supported by a clear record of

 severe andrepeated violations ofthe Act

and

 regulationson the

part of Watts.

 In a less obvious

case, theAgency’s Section 39(i) denial might have

warranted reversal had the Agency employed

the same procedures used in this case.

While we agree that

 it would behoove the Agency, if it

expects to prevail upon review ofa Section

3 9(i) decision in the

 future before this Board, to

develop amore consistent process andmore specific standards to evaluate permittees for prior

history of violations (such as the Section 745.141

factors that we relied upon)

 we cannot agree

that

the procedures utilized in this

case call for a reversal ofthe Agency’s decision.

COSTS

In an order of February

15,

1996,

 the Board accepted the Agency’s late-filed brief and

imposed sanctions against the Agency for the late-filing.

 The Board imposed the reasonable

costs of Watts’ attorney in preparing the motions and responding to the late-filed brief. The

Board directed Watts to file such costs with the reply brief. On February 23, 1996, the Board

received an affidavit ofcosts fromWatts.

 Watts asks for $125 per hour for ten hours totaling

$1,250 for costs. The cost of$125 is reasonable here and the Board directs the Agency to pay

to Watts the sum of $1,250.

CONCLUSION

In denying a permit pursuant to Section 39(i) of the Act, the Agency is to evaluate the

 operator’s history

and

determine if there

 are repeated violations which warrant the denial of a

permit.

 In this case, the Agency properly considered 19 administrative citations and a circuit

court case in finding that the operator has a history of repeated violations.

 Therefore, the

Board affirms the Agency’s denial of these seven permits.

The Agency also listed several technical denial point on six of the seven permit

applications. The Board finds that the six applications which weredenied for technical denial

reasons were sufficient to establish that no violations of the Act or Board regulations would

occur if the permits were issued.

This opinion constitutes theBoard’s findings of fact and conclusions of law in this

matter.

ORDER

1)

 TheBoard finds that the Illinois Environmental Protection Agency properly

denied ESG Watts the seven

permits in

the following cases:

PCB 94-243

PCB 94-307

PCB 94-306

PCB 94-308

PCB 94-309

PCB 95-133

PCB 95-134

All dockets are closed.

The Illinois

Environmental Protection

Agency is

hereby ordered to pay

the sum

of $1,250 as sanctions for the late filing of its brief to the Charles J. Northrup,

attorney of record forESG Watts within60 days of the date of this order.

IT IS

ORDERED.

J.T.Meyer, G.T.Girard and E.Dunham dissented.

Section 41 of the Environmental Protection Act (415 ILCS 5/41 (1994)) provides for

the

 appeal of final Board orders within 35 days ofthe date of service of this order. The Rules

of the Supreme Court of Illinois establish filing requirements.

(See

 also 35

 Ill. Adm. Code

101.246 “Motions for Reconsideration.”)

I, Dorothy M. Gunn, Clerk of the Illinois Pollution Control Board, hereby certify that

the above opinion and order was adopted on the~?/-~”~

 day of

146-’~_.~J~”

1996,

by a

vote

of

Clerk

)fl

Control Board

Illinois

Pollui