ILLINOIS POLLUTION CONTROL
BOARD
January
10,,
1985
tLLINOIS
ENVIRONMENTAL
PROTECTION
AGENCY,
)
Complainant,.
V.
PCB
83—22
sTANr)~RD
SCRAP METAL
CO.~,,
)
Respondent.
PHILIP
L~ WILMAN,
ASS:ISThNT
ATTORNEY
GENERAL,
APPEARED
ON
BEHALF
OF
COMPLAINANT;
AND
ERICA
TINA
HELFER
(ROSETHAL
AND
SCHARFIELD)
APPEARED
ON
BEHALF
OF
RESPONDENT
OPINION
AND
ORDER
OF
THE
BOARD
(~byJ.
Anderson)i
This
matter
comes
before
the
Board
upon
a
complaint
filed
on
February
23,
1983,
by
the
Illinois
Environmental
Protection
Agency
(Agency)
against
Standard
Scrap
Metal
Co.
(Standard
Scrapj.
The
Agency
alleges that Standard Scrap violated Sections 9(a),
(b).
and
(c)
of
the
Environmental
Protection
Act
(Ill.
Rev.
Stat,
1983,
oh.
111½,
pars.
1009)
(.he~einafter“Act”),,
and
Rules 1~i3,
1.05,
202,
203
and
502
of
chapter
2:
Air
Pollution,
of
the
Bo~ard~s
regulations.*
Hearing
was
held
on
February
29,
1984,
at
which
the
parties
presented
a
Stipilation
of
Facts
and
a
Proposal
for
~ertia1
Settlement,
The
settlement
agreement
was
conditioned
up;n
the
Board~
s
acceptance
of
all
the
terms
of
settlement.
2~c~.:cuO
fag
to
Standard
Scrap,
the
testimony
and
exhibits
offered
during
the
remainder
o~fthe
hearing
were
for
the
p~rpose of
mitigating
any
penalty
imposed
based
on
the
“economic
reason-
ableness
of
compliance
and
the
financial
ability
of
the
company.
(P.
12
On
November
2z1,
1984,
the
Board
entered
an
Interim
Order
reecting
the
settlement
“unless
the
parties
.
S
request
the
Board
to
determine
the
case
based
on
the
merits
as
contained
in
t:he
record
presently
before
it”
(Interim
Order,
p.
2).~
The
basis
for
that
order
was
that
the
Board
believed
that
the
parties
had
reserved
the
right
to
have
a
full
evidentiary
hearing
on
the
*Chapter
2
has
been
codified
since
this
Complaint
was
filed..
For
convenience
in reviewing the record,
the former numbering
system
is
used
in
this
Opinion
and
Order.
The
rules
as
codifed
as
sections
in
35
Ill.
Adm.
Code
are:
Rule
103(b~2)—--Section
20L144,
Appendix
C;
Rule
105(a)—Section
201.149;
Rule
202(b)——
Section
237~,102~
62-241
—2—
penalty imposed after
the
Board
had
determined
that
penalty*.
On December
6,
1984,
Standard Scrap and the Agency filed
a
joint motion
for clarification which indicates that the “full
evidentiary hearing
on the
penalty” referred
to
in the settlement
was
the
February 29,
1984 hearing and not a hearing after Board
decision.
The fact that the
referenced hearing was the February
29,
1984 hearing removes
the
Board’s concerns about the
procedural
propriety of the settlement.
Therefore,
the Interim Order
is
hereby vacated, the motion
is in
turn
denied as moot,
and the
Board will
decide the case
on the record before
it,
including the
Stipulation, the record
of
hearing,
and
the briefs.
The
parties waived
closing
arguments at hearing
and
agreed
to
file briefs
(R.
207).
The Agency filed
a written Closing
Argument and Brief
on
April
20,
1984.
Standard Scrap filed its
brief on May
18,
1984,
to
which the Agency replied on June 1,
1984.
Although Standard
Scrap,
at hearing,
framed the isa~eto
he
one involving the penalty,
in its brief
it
argues
that Counts
II through V of the Complaint
should be dismissed.
Therefore,
to
comply with Section 33 pf
the
Act,
the Board
will,
also have
to
decide whether the Agency,
based on the Stip~lationand the
hearing record,
proved that Standard
Scrap caused or
threatened
to cause
air pollution
as alleged in the Complaint,
and,
if
so,
whether Standard
Scrap demonstrated that compliance with the
Board~sregulations would
impose arbitrary and unreasonable
hardship (Ill.
Rev.
Stat.
1983,
ch.
111½,
par.
1031).
Standard Scrap,
an
Illinois corporation, owns and operates
a
facility at 4004
S. Wentworth
Avenue,
Chicago,
Illinois for the
reclamation of scrap metals,
such
as aluminum and
copper.
The
reclaimed scrap metal
is
sold primarily to steel
smelters and
refiners.
The facility
contains a gas-fired boiler,
a wire
burning
incinerator and two aluminum sweat furnaces,
one of
which
is currently inoperable
(Paragraph
3**),
The facility
is located
in
an
area
devoted
to industry,
bat also includes residential
property and public housing.
The
area where Standard Scrap’s
*The settlement left the determination
o~a penalty to the
Board
since
‘the parties, apparently,
were
unable to reach
agree-
ment
on
that issue.
**T1~lereferences to Paragraphs are
those contained in the
Stipulation
of Facts.
62-242
—3—
..:acility is located
is designated as nonattainment
for
the
National
Ambient
Air
Quality
Standards
for
total
suspended
particulates
pursuant
to the Clean Air Act,
42 U.S.C.
7.401 et seq.,
in the
State
of Illinois’ Air Implementation Plan
at
40
CFR
52.720
et
secj~
(1983),
(Paragraph 8).
In
Count
I of the Complaint the Agency
alleges
that
Standard
Scrap
operated its emission sources,
i.e.
the boiler,
the incin-
erators,
and the sweat furnaces, without the operating permits
required
under Section 9(b)
of the
Act and Rules 103(b)(2)
of
Chapter
2:
Air Pollution.
The Complaint
alleges
that
since
February
7,
1974,
and specifically on March
30,
1979;
January
18,
February
26,
June
11, July
16, July 29
and December 30,
1980;
November
10
and
20,
1981;
and March
16 and May
14,
1982,
Standard
Scrap
has
operated
emission
sources,
as
defined
under
Rule
101,
without
operating
permits.
The
parties
stipulated
that
Standard
scrap
never
had
operating
permits
for
the
wire
barning
incinerator
or
the
two
aluminum
sweat
furnaces
(
Paragraphs
1.0
and
.11).
The
parties
further
stipilated
that
since February ~7,1974 until
April
16,
1983,
Standard Scrap did not
have
an
oper~atingpermit
for tee
gas—fired
boiler
at the Wentworth facility (Paragraph 9),
and that the
boiler
was operated on
March
30,
.1979, December
30,
1980 and
January
21,
1983 (Paragraph 16).
It
is further
stipilated that Standard
Scrap ope ates one of
the
sweat
furnaces
an
average
of
eight
hours
a
day~,
three days
a
week
and
40
weeks
per
year,
and
that
at
a
maximum
it
operates on
furnace eight
hours
per
day,
five days
a
week and
~2 weeks
per
year
(Paragraph
4).
It
is
also
stipilated
that
Standard
Scrap
operates
the
incinerator
on
the
average
and
at
the
maximum
for
the
same
amount
of
time
as
the
sweat
furnace
(Paragraph
5).
The
inspection
report
for
a
February
26,
1980
Agency
visit
states that
the sweat furnace was in operation (Ex.
1).
~iring
a
June 11,
1980
inspection,
the incinerator was observed to be
operating
(Cx,
2)~
At
a
July
16,
1980 inspection,
both the
incinerator
and the
sweat furnace were reported to be operating
(Cx.
3).
The
report
for
a
November
20,
19 81
inspection
attribated
to Ronald Kanter,
an
officer
oe
Standard
Scrap,
a
statement
that
one
aluminum sweat
furnace
is
used
when
the
other
was
under
repair~
The
inspector
also
noted
that
Mr.
Kantet
responded
in
the negative when
asked
whether
the
facility
had
any
boilers
or
incinerators,
but
that
the
Agency
files
on
the facility indicated
otherwise
(Cx.
13).
After
taking
opacity
readings
of
the
incine—
rator~s stack
on
May
14,
1982,
the Agency field inspector visi~ed
the
site and
was informed that the smoke was caused
by not allowing
the incinerator
to pre-heat sufficiently
(Ex.
4).
The parties
stipulated
to these
Exhibits
1,
2,
3,
4
and
13
being made
a part
of the record.
(Paragraphs
12,
13,
15,
25.)
62-243
—4—
The Agency also sent letters dated March
17,
May
19,
1980,
June
6,
July
17,
1980;
August
22,
December
21,
1981;
May
17,
1982
warning the Respondent of the need to obtain operating permits
(Ex.
5,
6,
31,
7,
8,
9,
14,
16).
The parties stipilated that an
Agency
inspector
delivered permit application forms to Mr. ~Zanter
on March
23,
1982
(Ex.
15,
Paragraph 29).
The enforcement notice
letter,
required under Section 31(d)
of
the
Act,
was
sent
on
or
about December
2,
19~82 (Ex.
17).
The parties sti~ilatedthat
these
Exhibits should be made
a part of the record.
(Paragraphs
17,
18,
19,
20,
21,
26,
29,
30,
31.)
Standard
Scrap
argues that Mr.
Kanter was not aware that
the Agency required
operating
permits
until
1980
(R.
202,
Resp.
Brief
at page
8)
and that during the time of violation Standard
Scrap had
permits
from the City of Chicago
(Resp.
Ex.
A).
How-
ever,
on February
7,
1974 the Board
issued
an
Opinion and Order
that Standard
Scrap
achieve compliance through the installation
of
an
afterburner by June
1,
1974.
That Opinion
was based
on an
agreement by Standard Scrap to install them “subject to the
issuance
of the necessary permits by the
Agency and the City of
Chicago
.
.
“
(Pets
Ex.
B).
Since the same directors as those
stipulated
in this action (Paragraph 2), were the Respondents in
that complaint brought by the Agency on May 9,
1973 for the same
facility,
IEPA v Sam Kanter, Sam Cohen,
Benjamin Kanter~d/b/a
Standard Metal Company,
PCB 73—200;
11 PCB 171,
the argument that
the current Secretary and Treasurer
and
a
Director
of
Standard
Scrap was ignorant of the law until
1980
is neither
a proper
defense nor does
it
mitigate
the
offense.
Standard Scrap admits that
it does not have operating
permits
for
its incinerator or
sweat furnaces,
However,
it argues that
it
applied twice
for permits,
but
was twice denied the necessary
permit
(Exs,
10,
12,
20
and 23),
and that the Agency denied
the
permits because operation
of the emission
sources might cause
violation
of
the
Act,
The permit denial
letters recite more than
the
Agency~s
authority
under
Section
39
of the Act
and
Rule
103(b) to deny permits
on that basis.
In response to the first
permit application,
dated
August
8,
1980
(Ex.
10),
the Agency
sent
a letter
requesting
Respondent to provide data on the type,
amount and condition
of the material to be sweated
and
incinerated
(Ex.
11).
The
subsequent denial
letter ci-tes Standard Scrap’s
failure
to provide this minimal information required under Rule
103(b)(3)
as the reason
for
denial
(Ex.
12).
Standard Scrap did
not appeal the
Agency’s
decision,
and
did not apply for permits
for
a
second time until March
9,
1983,
after this enforcement
action
had been
filed
(Ex.
21),
At that time the Agency issued
an operating permit for the boiler
(Ex.
23),
bit denied
the
operating permits
for
the other emission sources
because the
information submitted about the incinerator was insufficient to
determine compliance with Rule 203(a),
and that submitted about
the
sweat
furnace
indicated
emissions
in
amount
exceeding
the
allowable
under
Rule
203(a).
Again,
Respondent
did not appeal
(Ex.
23).
62-244
—5—
Although
the
parties
have
in
effect
stipilated
to
violation
of
the operating permit requirements
of
the
Act
and
regulations,
the Board believes
it
necessary
to
recite
the
facts
to
support
the
penalty,
to
find
violations,
and
to
order
Standard
Scrap
to
obtain
the
necessary
operating
permits.
The
Board
finds
that
Standard
Scrap
operates
its
emission
sources
routinely
as
sti1xilated,
and
that
at
least
on
June
11
and
July
16, 1980,
and
on
May
14,
1982,
Respondent
operated
its
incinerator
without
the
necessary
operating
permit;
that
it operated one aluminum
sweat
furnace
on
February
26
and
July
16,
1980
without
the
necessary
operating permit;
and
that
it
operated
its
gas—fired boiler
without
the
necessary operating permit between February 7,
1974,
and until
April
16,
1983,
specifically on March 30,
1979,
December
30,
1980
and
January
21,
1983.
Since
Standard
Scrap
is
in the business of reclaiming
metal,
and
has
stipilated
that
it
routinely
operates
its
incinerator
and
one
aluminum
sweat
furnace,
the Board
finds that
these emissions sources were operated on
days
additional
to those
listed.
Since
Standard
Scrap
has
been
issued
an
operating
permit
for
its
boiler,
the
Board need only
order
that
the
Respondent
cease
and
desist
operation
of
the
operable
sweat
furnace
and
the
incinerator
until
the
necessary
operating
permits
are
issued
by
the
Agency.
Count
II
alleges
that
Standard
Scrap
violated
Section
9(a)
of
the
Act, which prohibits causing or threatening
to “allow the
discharge or emission of
any contaminant into the environment
•
.
.
so as to violate the regulations or standards
adopted by
the Board under
this Act”
Ill.
Rev.
Stat.
1983,
ch.
111½, par.
1009(a)J,
in that emissions of smoke
and particulate matter from
Standard
Scrap’s
sources
exceeded
the
30
percent
opacity
standard
contained
in
Rule
202(b)
of
Chapter
2.
Rule
202(b)
provides
in
pertinent
part
that:
No
person
shall
cause
or
allow
the
emission
of
smoke
or
other
particulate
matter
from
any
other
emission
source
into
the
atmosphere
of
any
opacity
greater
than
30
percent.
On
July
16,
1980
two
Agency
engineers
stopped
to
inspect
the
Standard
Scrap
facility
on
their
way
to
a
scheduled
inspection
at
another
facility
because
while
driving on the Dan Ryan Expressway
they
observed
heavy,
voluminous
smoke
being
emitted
from
a
stack,
which
at
first
they
had
thought
to
be
caused
from
a
fire.
Upon
arrival,
Mr.
Kanter
explained
that
the
incinerator’s
afterthrner
had
malfunctioned.
Photographs
taken
by
the
inspectors
clearly
depict
smoke
being
emitted
from
Standard
Scrap’s
incinerator
stack at an opacity greater than 30 percent (Ex.
3).
On May 14,
1982,
another Agency inspector took visible emission
readings of
the
incinerator stack between 8:00 and 8:15
A.M.
During this
time the opacity ranged between
0 and 100 percent.
Pictures
taken by
the
inspector again clearly depict the heavy smoke and
particulates
being
emitted
from
the
stack,
further
documenting
the readings contained in the Visible
Emission
Recording
Form
62-245
—6—
(Ex.
4).
This
inspector
visited
the
facility
after
taking
the
ceadings.
While
traveling
from
the observation point to the
facility,
the
inspector
continued
to
observe
smoke being emitted.
Upon
arrival,
the
inspector
was
informed
by
Mr.
Kanter
that
the
smoke
was
caused
because
the
incinerator
had
not
been
‘pre-heated
for
a
long
enough
period”
(P.
103).
At
hearing
Erica
Karp,
a
professional
social
worker,
testi-
fied that while driving southbound
on
the Dan Ryan Expressway on
the morning of January 18,
1980,
her
vision
was
so
obstructed
by
black
smoke coming from the west
side of the highway that she was
blinded by it and could only hope not to be
in
a car collision.
When
she cleared the smoke,
she observed the smoke to be coming
from
a stack and observed Standard Scrap’ s name
on
a building
right by the stack.
She admitted
to not being
able to ascertain
or
certain whether the stack was Standard Scrap’s
(R. 38—42).
Another witness, Philip Vadeboncoeur,
an executive
at another
company located diagonally across the street from the Standard
Scrap facility, observed black
smoke coming from Respondent’s
incinerator
stack
at
about 8:30 in the morning
on December 14,
1983
(P.
19).
The witness further testified that his company’s
employees have
been
made
ill by the smoke sucked into his building
due to breezes or the doors being opened
for ventilation
in the
summer,
and
that he
has had
to send some
of them home.
He could
not count the number
of times over the last ten years that this
has occurred
(P.
24-25),
On cross examination,
the witness
testified to having observed smoke emitted from other facilities
in
the
neighborhood
and
that
on
occasion
has
complained
to
the
neighboring
facilities
and
the
City
of
Chicago
Department
of
Air
Pollution
(B,
26—29),
According to Respondent’s own admissions
to
Agency
inspectors,
heavy
smoke,
which was visible from the Dan Ryan
Expressway, was
emitted
from the incinerator’s stack
on
at least two
occassions.
Mr.
Vadeboncoeur’s
testimony
also
supports
a
finding
that
at
least
on December
14,
1983,
the incinerator’s
stack emitted black
smoke.
Respondent’s argument that other neighboring
facilities
emitted black
smoke does not change the fact that its
stack’s
emissions
were greater
than allowed by regulation,
and
endangered
the health of persons
in the vicinity,
The
facility’s
proximity
to
the Dan Ryan Expressway and the fact
that.
Standard
Scrap’s
emissions threaten to obscure the
driving
visibility
as
documented
by
the pictures
(Exs.
3 and
4),
and
most
:Likely as testified to
by
Ms.
Karp,
further
aggravates
the
violations,
Respondent
cannot diminish the effect of these
incidences
by
claiming
that
the facility is
in
a heavy
industrialized
area.
The
Board
finds
that
in
operating
its
incinerator,
Standard
Scrap
has
violated
Rule 202(b)
and Section 9(a)
of
the
Act,
Count
III of
the
Complaint
alleges that
Standard
Scrap
violated
Section 9(a)
of the Act and Rule 105(a)
o~Chapter
2.
In
pertinent part,
Rule 105(a)
prohibits:
62-246
—7--
the
continued
operation
of
an
emission
source
during
malfunction
or
breakdown
of
the
emission
source
or
related
air
pollution
control
equip-
ment
if
such
operation
would
cause
a
violation
of
the
standards
or
limitations
set
forth
in
Part
2
of
this
Chapter,
unless
the
current
Operating
Permit
granted
by
the
Agency
provides
for operation during
a malfunction
or break-
down,
No person shall cause
or allow
violation
of
the
standards
of
limitations
set
forth
in
Part 2
ci this Chapter during startup unless
the
currcnt.
Operating
Permit
granted
by
the
Agency
pcccrides
for
violation
of
such
standards
or
limitetions
during
startup.
The Agency alleges
chat
in
allowing
the
continued
operation
of
the incinerator
on July 16,
1980 and May 14,
1982,
when
on both
occasions
Mr.
Ranter
admitted to the Agency inspectors that the
afterburner
had malfunctioned or had not
been
sufficiently pre-
heated prior
to
starthp,
the resulting emissions caused the
opacity rule,
Rule 202(b),
and
Rule
203(a)
(discussed under Count
IV,
infra
p.
8)
to
be
violated.
As
already
discussed
under
Counts
I
and
II
(supra,
pp.
4
and
5),
Mr.
Ranter
informed
the
respective
Agency
inspectors
on
July
16,
1980,
and May 14,
1982,
that the black
smoke
was
due
to
the
afterburner
malfunctions
on
the
first
date,
and
insufficient
pre-heating
on
the
second
date
(Ex,
3
and
4),
On
both
occasions,
the inspectors described opacity greater
than
30
percent,
and
the
Board
has
held
these
to
be
in violation
of Rule
202(b).
Further-
more,
the incidence of black
smoke
observed and
experienced by
Mr. Vadehoncoeur and
his
employees
have
been found
to
be
in
violation
of
Rule
202(b).
The Respondent
argues that on the first occasion,
the incin-
erator
was shut down
and the wire
was
removed
to
burn
outside
of
the incinerator;
the
second
incident is not explained.
On
the
first
occasion,
the inspectors observed the
violation
at
the
minimum
for ten minutes,
the
approximate
length
of
time
it
took
to
take
pictures.
The lnspectors
also
documented
significant
amounts
of
fugitive
smoke
being
emitted
from
the
doors,
sides,
and
back
of the
incinerator,
as
well
as
from
the
stack
(Er.
3).
On
the
second
occasion,
the
inspector
observed
black
smoke
while
driving
to
the
facility,
and
that
he
observed
the
thick
smoke
to
have cleared while
at
the facility’s office
(R.
102,
Ex.
4).
The
Board
finds that the Respondent did continue
to
operate
the
incinerator on both dates during
its malfunction and during
startup
which
caused
violations
of
Rules
202(h)
and
203(a),
and,
therefore,
finds Respondent to have violated Rule 105(a).
62-247
—8—
Count
IV
of
the
Complaint
alleges
that
Respondent violated
Rule
203(a)
of
Chapter
2
which
prohibits
emissions
of
particulate
matter
in
any
one
hour
period
to
exceed
the
allowable
emission
rates
contained
in
that
rule.
At
Paragraph
6
and
7
of
the
Stipi-’
lation
presented
by
both
parties,
it
was
agreed
that
the
actual
emission
rate
fran
the
sweat
furnace,
as
calculated
on
or
about
November
16,
1982,
was
0.815
pounds
per
hour
(lbs/hr).
The
allowable
rate
under
Rule
203(a)
is
0.55
lbs/hr.
The
actual
emission
rate
from
the
incinerator,
as
calculated
prior
to
September,
1982
was
4.85
lbs/hr
(Paragraph
7);
the
allowable
is
0.68
lbs/hr.
The
parties
have
stipalated
that
both
emissions
sources
are
operated
routinely,
and
have
stipilated
to
actual
emissions
greater than allowable under mile 203(a).
Therefore,
the
Board
must
conclude
that Respondent violated Rule 203(a)
on
those
dates
the
inspectors
observed
the
sources
operating
February
26
and
July
16,
1980,
and
on
the
dates
the
incinerator
malfunctioned--July
16,
1980
and
May 14, 1982,
and
whenever
else
the
Respondent
operated
these
sources.
Count
V
alleges
that
Respondent
violated
Rule
502(a),
which
prohibits
open
burning,
and violated
Section
9(c)
of
the
Act
which
states
that
no
person
shall:
Cause
or
allow
the
open
burning
of
refuse,
conduct
any
salvage
operation
by
open
burn-
ing,
or
cause
or
allow
the
open
burning
of
any
refuse
in
any
chamber
not
specifically
designed
for
the
psrpose
and
approved
by
the
Agency
pirsuant
to
regulations
adopted
by
the
Board
under
this
Act
.
.
On
July
16,
1980,
the
Agency
inspector
reported
seeing
a
load
of
burning
wire
insulation
outside
of
the
incinerator
(Ex.
3).
Respondent
argues
that
the
wire
was
removed
due
to
the
mal func—
ticm
of
the
incinerator,
and
squelched
within
Ra
matter
of
seconds
(R. 181-182).
If
it
took
such
a
short
period
of time to douse
the burning wire, it is surprising that it was still burning when
the
inspectors
arrived
at
the
site,
or
that
the
inspector
reported
the
incident.
Nevertheless,
the
Board
finds
that
Respondent
did
not
violate
the
open
burning
prohibitions
contained
in
Rule
502(a)
and
Section
9(c)
of
the
Act,
because
the
incident
was
not
for
the
parpose
of
red
aiming
or
disposing
of
the
wire
•
The
intent
of
the
Act
is
to
prohibit
intentional
or
negligent
actions.
The
Agency
asked
the
Board
to
assess
a
penalty
of
$50,000
for
the
violations
found
to
aid
in
the
enforcement
of
the
Act
(Agency
Brief,
p.
1).
To
support,
in
part,
that
amount,
the
Agency
introduced
testimony
that
the
Respondent
had
saved
at
proximately
$104,500
as
of
December
of
1983
by not
installing
the
afterburner
required
by
the
Board’ s
1974
order
(R.
49).
This
figure
was
arrived
at
based
on
a
compiter
program
developed
and
adopted
by
the
United
States
Environmental
Protection
Agency
(40
62-248
:t
67,
App.
A).
According
to
the
Agency’switness
the
compiter
program used
is
designed
to take
financial
data
and
perform
calculations
to
demonstrate
the
difference
between
installing
pollution
control
equipment by
one
date
and
installing
the
same
equipment
at
a later date
(R.
51-52).
The
data
used
is
as
followst
the
initial date
that
installation
of the afterburner was to take
place;
the estimated cost
of
the
afterburner
~t
that
time;
the
prevailing rate
of
inflation
for the
relevant
time
period;
the
discount
rate,
based
on
Standard
Scrap’s average return on stock-
holder’s
equity;
the
interest
rate
on
Standard
Scrap’s
long-term
debt;
Standard
Scrap’s
marginal
income
tax
rate;
the
investment
tax credit
rate;
St~ndard
Scrap’s
capital
structure;
and
the
depreciation
life
ci
the
afterburner
equipment
(R.
52—59).
Three
sources
provided
the data used:
Stipulated
documents,
such
as
Standard
Scrap’s
financial
statements;
information
reasonably
relied
on by
economists
toperform
this type of calculations,
such
as
interest
rates
found
in Moody’ s
Bond
Record;
and
informa-
tion
supplied
by the Agency~sfield
officers
(R.
56:
91—94;
Ex.
29A-29I;
Comp,
Ex. A).
The
$104,000
estimate
was
offered
as
cost
savings,
not
as “a measure
of economic reasonableness
of
ability
to
pay”
(R,
74),
The witness
acknowledged
that
he
never
determined
respondent’s
financial
ability
to
install
the
afterburner
agreed
to
under
the
1974
stipulation
and
order,
or
Respondent’s
financial
ability
to
pay
a
penalty
(R,
75).
Respondent
argues
that
this
figure
was
based
on
theoretical
figures
and
unsubstantiated
costs.
Respondent
claimed
that
the
$30,000 cost
of
an
afterburner
reduced
to $13,000
in 1974 dollars,
used
by
the
witness
“as
theoretical”
because
the
witness
did
not
ascertain
what
an
afterburner
would
have
actually
cost
in
1974
(Resp,
~rief
p.
11)
The
witness
explained
that
obtaining
a
1974
cost
figure
would
have
been
difficult,
since
most
vendors
are
reluctant
to
quote
today’s
costs
(R.
77),
The $30,000
figure
used
was,
however,
the
lower
of
two
cost
estimates
obtained
by
the
Respondent
from
a
vendor
in
July
of
1983.
Notably this and
the other
cost
estimates
were
obtained
after
this
action
was
brought
(Exs.
24~23;
A.
s3~’54),
The
Agency
cannot
be
faulted
for using
reasonable
methods
for
determining
the
actual
cost
in
1974,
the year
Eecoondent~s
directors
had
agreed
to
install
the
afterburners,
If
the
Respondent
had
information
indicating
the
$13,000
figure
was
incorrect!
it
was
not
offered
into
evidence.
The Respondent
also
corn
lamed
that
the
witness
did
nothing
to
verify
the
actual
cost
of
oneration
and
maintenance.
The
witness
stated
that
he
had
used
figures
given him by
an Agency
field officer
purnortedly
representing
reasonable
operationand
costs,
a range of $23 to $25
an hour
in
1975
adjusted
down
to
1974
dollars
(R,
77,
54),
The
Respondent
did
not
offer
any
different
figures.
Respondent
also
argues that
the
witness
did
not
use
the
actual
useful
life
figure
for the afterburner.
The
witness
acknowledged
that
he
could
not obtain the same
for
this
particular company!
and
used
an average
contained
in
an
IRS
62-249
—10—
sruent,
as
reconimended
by
the
USEPA
(R.
82).
Finally,
the
Respondent
argues
that
the
witness
did
not
use
the
tax
bracket
Standard
Scrap was
in
during
the
relevant
years,
ár
the
actual
o’~:~-~od
of
calculating
depreciation
used
by
Standard
Scrap.
(Resp.
Brief,
p.
11;
R.
69;
58—59.)
However,
the witness
did
use
the
top
rate
over
the
last
ten
years
for
corporate
income,
48
percent
(R.
78),
and used seven years depreciation life,
the
minimum
allowed to take the maximum investment tax credit.
This
coupled
witha
10 percent
tax credit represented the minimal
of
savings
(R.
81).
Aside from Respondent’s objection that the
estimated
cost
savings
do
not
take
into
account
Standard
Scrap’
s
financial
ability
to install
the afterburner,
Respondent’s argu-
ments
serve only
to
indicate
that
the
cost
savings
estimated
was
conservative.
As
for
Standard
Scrap’s
ability
to
pay
for
the
afterburner,
the
Agency
does
not
have
a
duty
to
prove
that
in
the
affirmative
or
the
negative.
That
burden
falls
to
Repsondent,
and
would
serve
only
to
mitigate
any
penalty
for
findings
of
violation
of
a
1974
Board
Order
and
subsequent
violations
of
the
Act
and
Board
regulations.
Respondent presented testimony that it could not afford
to
install
pollution control equipment due to the severe
financial
condition
of
the
company (Exs.
29,
30;
R.
130—138,
183).
Presum-
ably
this
evidence
was offered to prove that compliance
would
impose
arbitrary
or
unreasonable
hardship
in
accordance
with
Section
31(c)
of
the
Act.
While
the
Board
accepts
that
it
may
now
be
or
may
have
been
in
the
recent
past
difficult
for
Standard
Scrap
to
finance
installation
of
the
necessary
controls
at
the
sweat
furnace,
there
is
no
evidence
that
was
the
case
in
1974
when
Standard
Scrap
agreed
to
and
was
ordered
to
install
the
equipment.
Furthermore,
the
cost
of
pollution
control
equipment
is
recognized
as
a
necessary
cost
of
doing
business
when
the
business
utilizes
sources from which the uncontrolled emissions
endanger
public
health
and
safety.
The
Respondent
did
not
prove
that
operating
these
sources
without or with malfunctioning
pollution
control
equipment
does
not
endanger
the
same,
or
that
uncontrolled
emissions
do
not
contribute
to the nonattainment
status
for
the
ambient
air
quality
standards,
which
are
established
federally
and
by
the
state
to
protect
public
health.
Therefore,
the
Respondent
did
not
prove
that
installing
and
maintaining
proper
controls,
i.e.
compliance
with
the
applicable
regulations,
imposes
an
arbitrary
or
unreasonable
hardship
on
Respondent.
Since
there
is
no
evidence
that
the
control
reonirements
are
unnecessary
in
this
case
to
serve
the
purposes
of
the
Act,
the
regulations,
including
the
national
and
state
ambient
air
quality
standards,
Respondent
has
failed
to
prove
why
S~andard Scrap
should
not
he
required
to
comply
with
the
same.
As
requested
by the Respondent,
and
in
accordance
with
Sec-
tion
33(c)
of
the
Act,
the
floard
in
making
its
determination
will
consider
the
criteria
net
~-~t:
therein.
First,
the
fact
that
Responderi-~ ha~ failed
to
hn~n operating
permits
for
its
three
~
—11—
scion
sources
between
1974
and
1983,
does
not
merely
evidence
t~atRespondent violated the permitting requirements
o~ the
Act
~cd
Roarcl
regulations,
which
are
one
mechanism
for
monitorinq
~
lsn~o~,
but
also
demonstrates
that
Respondent
ignored
a
Board
~Ln:
adopted
in
1974
pursuant to Respondent’s agreement
with
the
Iqency.
In
so
doing,
Respondent
continued
to
operate
its
emission
sources
with
malfunctioning
equipment
and
without
controls
and
in
c
manner
as
to
emit
pollutants
on
at
least
three
occasions
which
endangered the public’s health and safety.
Secondly, while
a concern such as Standard Scrap does have
social
and
economic
value
in
that
it
employs
persons
and
serves
the
steel
manufacturing
industry, those communities
are
better
served by
a facility
utilizing
controlled
emission
sources.
Likewise,
while
the
area
where
Standard
Scrap
is
located
is
populated
with
heavy industry and,
therefore,
well
suitable to
such
concern, this is
not
to
say
that
it can
he operated
without
proper pollution controls.
In
fact,
one neighboring
employer
testified that
Standard
Scrap’s
emissions
interfered
with
the
health
of its
employees
to
the
extent
that
work
was
interrupted.
While
the operation may be
suited to the area,
if
properly operated,
it is not so suited if
it
is
operated
without
controls.
Finally, afterburners are technically feasible
and
economically
reasonable methods of controlling sweat furnaces and
incinerators.
No evidence
to
the
contrary
was presented.
The
Respondent
only proved that for
it,
it poses a difficult
financial
burden
to
install
and
maintain
the
equipment
necessary
to
comply
with
the regulations adopted
to protect public health
hnd
wel
fare
Rb
page
24
of
its
Brief,
the
Respondent reminded
the Board
the
functions
cf
the
Agency
and
the
Board
are
not
only
to
determine
“~se ex~.stence
of
pollution
hut
more
so
to
render
advice
and
assistance
to
polluters
end
cotential
~oiluters
to assist them
to
000rDly
with
the
remiiroments
of the
Act”.
Lonza,
Inc.
V.
Illinois
1?enllution
Contrcl
Board,
21
Iii,
App.
3d
468,
315
N.E.
2d
~52, 653
(3rd Diet,, 1974).
The settlement agreement
ceached by Respondent’s fttrectors and the
Agency in1974
and the
subsequent Board order
of 3’&runry
7,
3974 ordering the installa—
tion of the afterburner end
mDosng
a penalty
of $200,
as
agreed
Là
by
the
parties,
were
the
~Se~inn5ings
of
a
series
of
efforts
“to
advise”
the
Respondent
of
the
means
of
preventing
pollution,
The
tccr~ond~nt
did
not
abide
by
the
agreement
and
Board
order;
did
not
thereafter
comply
with
the
regulations
adopted by the Board
io~ the
nr:ecific
purpose
of uniformly establishing the means
for
achieving
end
maintaining
healthy air quality;
and did not become
involved
in
the
rermitting
scheme
established
by
the
Act
and
Eoacd regulations until
1980,
and even then
did
not
satisfac-
torily
inform
the
Agency
of the type
and
amount
of
pollution
emitted
from
its
sources to
obtain
the
necessary
permits.
The
permitting
program
is
a
principal
method
of
informing
owners
and
operators
of
pollution
sources
about
what
is
required
by
them
to
62-251
—12—
~5~Iepiy
with the regulations intended to prevent pollution.
Therefore,
failure
to
have
permits
is
more
than
a
technical
viol ation,
Not
only
did
Respondent
fail
to
independently
comply
with
the
regulations,
but
Standard
Scrap
also
continually
ignored
the
Agency’s
efforts
to
bring
the
facility
into
compliance.
Over
a
period
of
three
years,
the
Agency
repeatedly
warned
the
Respondent
of
the
possible
violations.
In
addition
to
letters
pertaining
to
pending
permit
applications,
letters
were
sent
to
the
Respondent
dated
March
17,
1980
(Ex,
5),
May
19,
1980
(Ex,
6),
July 17,
1980
(Ex.
7),
December
21,
1981 (Ex,
14),
and
January
20,
1983
(Ex,
19)
outlining
the
problems.
The
Agency
twice
met
with
Respondent
to
discuss
compliance,
first
on
June
20,
1980
(Paragraph
19)
and
next
on
January
18,
1982
(Ex.
18),
after the Section 31(d) notice
of
violations
letter
had
been
sent.
Respondent
did
not
act
on
this
meeting
or
the
letter
sent
on
January
20,
1983
summarizing
the
same
until
after
this
action
had
been
filed.
According
to
the
Stipulation,
an
Agency
inspector
told
Mr.
Kanter
that
he
was
willing
to
help
the
Respondent
gather
the
information
necessary
for
the permit applications
on December
30,
1980 (Paragraph
24),
Another
Agency
employee
sent
the
application
forms
at
Respondent’s
request
on December 23,
1981 (Paragraph 27),
and delivered
forms
in
person
on
March
23,
1982
(Paragraph
29;
Ex.
15).
Respondent
asserts
that
the
Agency
is
improperly
concerned
with
punishment,
quoting
the
Court
in
Loriza:
The
Act’s
purpose
is
to
protect
the
environment
of
the
State
of
Illinois.
It
was
not
enacted
primarily
to
punish
polluters
but
rather
to pro-
tect,
enhance and restore
the environment by elim-
inating, lessening and preventing pollution
(315
T~I.E.
2d
at
653).
(Reep.
Br,
p.
25.)
The
Board
rejects this
argument.
In
spite of extensive
Agency notification, warnings,
and assistance,
there was
little
or no corrective
response from Standard Scrap after the Board
decision
in
1974
on
the
first
complaint
and
before
this
action
was
filed
in
1983.
Not
only
did
Respondent’s
refusal
to
comply
with
the
Board’s
order
of
1974
and
failure
to
diligently
pursue
the
necessary permits frustrate the Act’s
purpose
quoted
above,
hut Respondent’s operations endangered the health and property
of
those
persons
in and passing through the
vicinity
of
its
facility.
taving
found
that
installation
of
the
necessary
control
measures
and
obtaining
the
necessary
permits
is
not
arbitrary
or
unreasonable,
and
having
considered the factors
set
out
in Sec-
tion
33(c)
of
the
Act,
the
Board
will
order
Respondent
to
cease
and
desist
operating
the
incinerator
and
operable
sweat
furnace
until
it
has
complied
in
full
with the
February
7,
1974
Board
order
involving
this
same
facility
and
obtained
the
necessary
operating
62-252
—13—
~rmits from the Agency for
its incinerator and operable
sweat
~nsnace...Posting~aperformance bond
as provided in
Section
33(h)
the
Act
will
not
be
required
because
that
Respondent
will.
not
~
~
able
to:oper~ate the sources until
the defects are
cured.
Finallyj~hav~ing held
Respondent
guilty
on
Count
I
since
1974,
on
CounttII:
at
leastthree
times,
on
Count
III
at
least
twice,
an5d
orrCount
IV,
Respondent
is
liable
under
Section
42(a)
of
the Actfurc
a
civil
penalty
of
no
more
than
$10,000
for
each
violation,and~additional5maximum5of;$1,000 for each day the
violatiäncontinued,
Ratherthan~impose
a
penalty
of
$10,000
for
each
of
the
violations
and
assessing$1,~O00
for
each
day
Respondent
operated withbutpermits,
the Boardwill require the Respondent
to
pay
$3O,0O0~
This
amount
is
based
on:
the
facts
that
the
Respondent
admittedly
operated
its
emission
sources
without
operating~perndts
since
1974;
operatedroutinely
both the incinera~
tot
and
the aluminum
sweat
furnace
at
more
than
the
respective
allowable
-emission
rates;
and routinely operated the aluminum
sweat
furnace
without
the
pollution:control
equipment
it
agreed
and
was
orde-red~
to
install
in
1974.
ThC~Agency established
that
the
Responden~tsaved
in
theran-ge~of~$100,000
by
not fulfilling
its agreement,~wh~ich
may
have
only
costit
$13,000
at
the
time.
Finally,-
th
et-h~etit~tes-the
:Agency~inspectors
and
a
citizen
witnessed
the~-incinerator
malfunctioning
in
and
of
themselves
could
justify~a
$30,000
penalt~
Sthce
these
violations
were
incidentally-
wi*n~essed
by
the
Agencyinspectors
in
passing
on
the
Dan
Ryan. anVd~-tocomplãirit~
iti~
1 ikély
that
mal functioning
occurred
niore~-often,
asrtestified
to
bythe
citizen
witness,
Mr.
Vadehoncoeuz~c
the
Board
recognizes
that
Respondent
may
now
have
financial
probi
ents,
thiãh~:on
the
whole,
are
~unrel
ated-
to
the
environmental
requiremnentsand
costs
for
operating
such
a
business.
That
unfortunate predicament
can
only
serve
to
mitigate
the
size
of
the
~
Those
problems
can
neither
excuse
Respondent’ s
repeatedviolations
of
the
law
resulting
in
harm
to
public
health
and
environment~: nor
obviate
the
need to correct the
environmental
viol ations~
TheOrdè~r~reguires
payment
of
the
penalty
within
90 days
of
the
date ~of~this
Order.
However,
the
Board
will consider
moditicatior~
of-the
payment
date
upon
receipt
of
an
agreed
motion
from :thé-~partiesspecifying
an extended payment
plan.
This
Opthión
constitutes
the
Board’s
findings
of
fact
and
conclusions~oflaw in this matter.
ORDER
The
Board
finds
Respondent,
Standard Scrap Metal
Co.,
62-253
—14—
In
violation
of
the
Board
Order,
Paragraphs
2
and
3,
iii
the
matter
of
IEPA
v.
Sam Kanter,
Sam Cohen,
and
Benlamin
Kanter,
cl/b/a
Standard
Scrap
Metal
Company,
PCB
73-200
(11 PCB
171).
That
Opinion
and
Order
is
Attachment
t
to
this
Order;
2)
In violation of Section 9(b)
of the Environmental
Protection Act
(Ill.
Rev.
Stat.
1983,
ch.
111½,
par,
1001 et. ~
(Act)
and Rule
103(b)(2)
of Chapter
2:
Air
Pollution
in
that
it
operated its gas—fired boiler
without
an
operating
permit
since
February
7,
1974
until
April l~, 1983,
and operated its incinerator
and
aluminum
sweat
furnace
without
operating
~rmits
since
February
7,~ 1974
at
least
up
to
and
including
February
2~,
1984;
3)
In violatiou
of
Section
9(a)
of
the
Act
and
Rule 202(h)
of Chapter
2:
Air Pollution on July
16,
1980
and
May
14,
1982,
and
December
14,
1983;
4)
In violation
of Section 9(a)
of the Act and Rule 105(a)
of
Chapter
2:
Air Pollution on July 16,
1980 and
May
14,
1982;
5)
In violation of Section 9(a)
of the Act~and Rule
105(a)
of
Chapter
2
as
related to the emissions
for its incin-
erator
and
aluminum
sweat
furnace;
and
6)
Not
in
violation
of
Section
9(c)
of
the
Act
and
Rule
502(a)
of
Chapter
2:
Air Pollution
as alleged
in Count
V of the Complaint.
?1ie
Board,
therefore,
orders
that
Respondent,
Standard
Scrap
Metal
Co,,
shall
a)
Cease and desist from
operation
of
its
incinerator
until
the necessary operating permit
is obtained
from
the
Illinois
Environmental
Protection
Agency;
b)
Cease
and desist operating
either
of its aluminum
sweat
furnaces
until
Paragraph
3
of Attachment
A
is
complied
with
and
until
the necessary permits
are
obtained
from
the
Illinois
Environmental
Protection
Agency;
and
per-
manently
shut
down
the
inactive
aluminum
sweat
furnace
by
January
21,
1985;
c)
Install
temperature
gauges
on
each
afterburner
with
an
interlock
that
orevents
operation
unless
the
afterburner
temperature
is
at
least
1400
degrees
Fahrenheit,
and
take
all
steps
necessary
to
ensure
adequate
pre—heating
of
each
afterburner
prior
to
charging.
These
respire—
ments
are
to
be
made
conditions
of
the
operating
permits
issued
by
the
IEPA;
and
62-254
—15—
0)
Within
90
days
of
the
date
of
this
Order
pay
a
penalty
of
$30,000
for
the
violations
of
the
Act
and
Regulations
as
described
in
this
Opinion
and
Paragraphs
(1)
through
(5)
of
this
Order.
Payment
shall
be
by
certified
check
or
money
order
made
payable
to
-the
State
of
Illinois,
Fiscal
Services
Division,
Illinois
Environmental
Protection
Agency,
2200
Churchill
Road,
Springfield,
Illinois,
62706.
IT
IS
SO
ORDERED.
1.
Theodore
Meyer
concurred.
I,
Dorothy
M.
Gunn,
Clerk
of
the
Illinois
Pollution
Control
Board
hereby
certify
that
the
above
Opinion
and
Order
was
adopted
on the
____~/~t~___day
of
_________________
,
19
85
by
a vote
of
~
____.
/
~?_~
~
~
~
Dorothy M.
~unn, Clerk
Illinois
Pollution
Control
Board
62-255
