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STATE OF ILLINOIS

)

SS.

COUNTY OF LAKE

)

BEFORE THE POLLUTION CONTROL BOARD

OF THE STATE OF ILLINOIS

ENVIRONMENTAL PROTECTION AGENCY,

)

Complainant,

)

 PCB 78—139

)

VICKERY MANOR SERVICE CORP., an

)

Illinois Corporation,

Respondent.

STIPULATION AND PROPOSAL FOR SETTLEMENT

Statement of

Pacts

1.

 Respondent VICKERY MANOR SERVICE CORPORATION

 (VMSC)

is a corporation duly organized and existing under the laws of

the State of Illinois until December,

 1977, at which time it was

involuntarily dissolved pursuant to the provisions of the then

Illinois Business Corporation Act

 (I1l.Rev.Stat.,

 1975, ch.

32,

Section 157.1,

 et seq.).

 Subsequently VMSC was issued a certifi-

cate of reinstatement effective May 31,

 1978,

 which reinstated

VMSC as a corporation retroactively to the date of its

dissolution.

2.

 Since at least June 9,

 1975,

VMSC

owned

and

operated

a sewage treatment plant

 (STP)

 located on U.S. Route 45, two

(2)

miles north of the Village of Nundelein, County of Lake,

Illinois.

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3.

 On or about June 9,

 1975, the Agency issued

VMSC

NPDES

Permit

No.

IL

0032239, which authorized

VNSC

to discharge

pollutants from its STP to a ditch tributary to Bull Creek,

a

water of the State of Illinois,

 in accordance with the terms and

conditions set forth therein.

 Said Permit further set forth a

compliance schedule for upgrading the STP to a proscribed opera-

tional level.

4.

 On May 10,

 1978, the Agency filed a four count com-

plaint against VMSC and one Harold Halpern, its President, alleg-

ing various violations of the Act, PCB Rules and Regulations,

Ch.

3:

 Water Pollution Rules

 (WPR), and the NPDES Permit.

 With the

reinstatement of

VMSC

as a corporation, Harold Halpern was dis-

missed as a Respondent

 (see Board Order dated October 4,

 1978),

and an Amended Complaint naming

VNSC

as the sole respondent was

filed November 1,

 1978; the Amended Complaint further added new

violations against VMSC which were alleged to have occurred

during the period between

VMSC’s

dissolution and reinstatement as

well as subsequent to the reinstatement.

5.

The

Amended

Complaint alleged the following

violations:

(a)

 Count

I:

 failure to comply with the compliance

schedule for upgrading its STP set forth in its NPDES Permit,

thereby causing or allowing violations of its NPDES Permit, WPR

901, and Sections 12(a),

 (b), and

(f)

 of the Act;

(b)

 Count II:

 failure to submit Discharge Monitoring

Reports for its STP to the Agency, thereby causing or allowing

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violations of its NPDES Permit, WPR 901, and Sections 12(a),

 (b),

and

 (f) of the Act;

(c)

 Count III:

 exceeding certain effluent limitations

for its STP, and failure to properly collect and analyze samples

for other such limitations as well as not reporting such viola-

tions to the Agency, thereby causing or allowing violations of

its NPDES

Permit,

WPR 901, and Sections 12(a),

 (b), and

 (f) of

the Act; and

(d)

 Count IV:

 failure to provide adequate safeguards

to prevent the discharge of untreated or inadequately treated

wastes from its STP, thereby causing or allowing violations of

its NPDES Permit, WPR 901 and 601(a), and Sections 12(a),

 (b),

and

 (f) of the Act.

(NOTE:

 Subsequent to the filing of the Amended Com-

plaint, Section 12 of the Act has been amended, and the WPR are

now codified and appear at 35 Ill.Adin.Code, Chapter

 I, Subtitle

C, Section 301.101 et seq.

 (1984).

 For continuity, the parties

will continue to refer to the provisions of the Act and the WPR

as set forth in the Amended Complaint.)

6.

 Hearings were held on the Amended Complaint on

February 24, March 4, and March 20,

 1981, where at the Agency and

VMSC presented evidence.

 Closing arguments were preserved for

written briefs; on May 19,

 1981, the Agency filed its Brief, and

on June 23,

 1981, VMSC filed its brief,

 a copy of each of which

is attached hereto as Exhibits A and B respectively.

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7.

 The Agency, on its behalf, presented evidence which

tended to show that the actions of VNSC resulted in the viola-

tions alleged in the Amended Complaint.

8.

 VMSC,

 on its behalf, presented evidence which tended

to show the economic impossibility of compliance due to such fac-

tors as the neglect of the STP by its independent contractor,

and

the failure of the developer whose development

VMSC

was to ser-

vice to complete the development as originally proposed, which,

in conjunction with certain alleged bad faith conduct by the Vil-

lage of Mundelien,

 left VMSC without sufficient customers for its

STP.

 VNSC also contested the sufficiency of Agency evidence on

certain violations.

9.

 Prior to resolution of the matters alleged in the

Amended Complaint,

 VMSC

filed a Petition for Variance for its STP

on July 23,

 1981,

 seeking relief from certain requirements of its

NPDES Permit.

 On October 28,

 1981, the Agency filed its Recom-

mendation,

 recommending that VMSC’s Petition be denied.

The

Variance is docketed as PCB 81—122; to date, PCB 81—122

 is pend-

ing,

 and no hearings have yet been held.

10.

 On December 21,

 1981,

VMSC

petitioned the Illinois

Commerce Commission

 (ICC)

 to permit it to abandon services.

 (ICC

Docket No.

 81—0866).

 Therefore,

 the Agency and a citizens group

representing a number of VMSC customers intervened in the ICC

proceeding.

 On January 26,

 1983, the ICC issued an Interim Order

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refusing to allow abandonment.

 Hearings before the ICC have

subsequently continued on a number of other issues within the

jurisdiction of the ICC.

11.

 In early 1985 it became apparent that resolution of

the ICC proceeding and this action could be accomplished by a

takeover of the

VMSC

STP by the customers of V14SC

 (who have

formed an Illinois not-for-profit corporation entitled North

Hills Mutual Sewer Association

 (NBMSA).

 Representatives of both

entities thereafter negotiated a Takeover Agreement,

 a draft copy

of which is attached as Exhibit C.

12.

 Pursuant to Section 2., Consideration for Transfer

of the Physical Assets, the NHMSA agrees to be substituted for

VMSC

in this proceeding and PCB 81-122 upon signing of the Take-

over Agreement by the parties and correlatively, to be bound by

any order(s)

 issued by the PCB thereunder

 (See Sections

2.2

and

2.3).

 The Takeover Agreement must be approved by the ICC before

it becomes legally effective; however, the Agreement further pro-

vides that before submission for approval to the ICC the IPCB and

the Agency must consent to the substitution of NHMSA for VMSC in

this action and PCB 81—122, and that the PCB shall further ap-

prove a settlement agreement that terminates all liability of

NHMSA

and

VMSC

for all claims alleged in the complaint that ac-

crued prior to the date of the Board Order approving the settle-

ment agreement.

 (See Section 8.3).

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Proposal for Settlement

A.

 Since

VNSC

believes that termination of this pro-

ceeding without further litigation is to all parties’ best inter-

est, VHSC admits to each of the allegations contained in Counts

I

to and including IV of the Amended Complaint, notwithstanding its

evidence in mitigation and defense.

B.

 VMSC

further agrees to pay a monetary penalty in the

amount of $250.00

 for the said violations.

 VMSC and the Agency

both agree that said penalty is necessary in this matter to pro-

mote enforcement of the Act.

The Penalty shall be paid within thirty

 (30)

 days of the

order of the Board accepting this stipulation.

 Payment shall be

made by certified check or money order payable to the Environmen-

tal Protection Trust Fund and delivered to:

Wayne Wiemerslage

Illinois Environmental

Protection Agency

Enforcement Programs

2200 Churchill Road

Springfield, Illinois

62706

C.

 NHMSA, by its attorney, hereby enters its appearance

in this proceeding and PCB 81-122, and further moves that it be

allowed to intervene as a party—respondent herein and party-

petitioner in PCB 81-122.

 As of the date of the Board Order ap-

proving this settlement agreement, all liability of NHSC and VMSC

will terminate for all claims alleged in the complaint that

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accrued prior to the date of such Board Order approving the

agreement.

D.

 In return for VMSC’s admissions and agreement to pay

a monetary penalty,

 and the appearance and intervention of NHMSA,

the Agency agrees to consent to the substitution of NHMSA for

VNSC in this proceeding and PCB 81—122.

E.

 On November 4,

 1985, the Agency conducted an inspec-

tion of the NHNSA/VMSC STP.

 Based upon that inspection and prior

negotiations between the Agency and NHMSA,

 NHMSA and the Agency

agree that the items listed in Paragraph F are those that are

necessary to bring the STP into compliance with the requirements

of the Act.

 A copy of the inspection report is attached hereto

as Exhibit D.

 At the Board hearing in this matter, the parties

will report the results of an Agency site inspection conducted

subsequent to the filing of this settlement agreement.

F.

 NHMSA agrees that it will undertake the following

actions in accordance with the compliance schedule at the STP:

1.

 Within

 (14) days after entry of an Order by the PCB

approving this document, NHMSA will apply to the Agency for an

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72-10

NPDES Permit for the STP

 (or request the transfer of VMSC current

permit if in force).

2.

 Within six months after the entry of an Order by the

Board approving this document, NHMSA will have installed an ef-

fluent sampling manhole at the STP and will have taken represen-

tative effluent samples and forwarded same for analysis to a

laboratory certified by the Agency for sampling analysis.

3.

 The sample analysis results shall be sent by N1~NSA

to the IEPA, Division of Water Pollution Control,

 1701 S.

 First

Avenue, Maywood,

 Illinois,

 60153, Att:

 Theodore N. Denning,

Region II Manager, immediately upon their receipt by NHMSA.

4.

 After its review of the sample analysis and consul-

tation with NHMSA, the Agency by letter shall advise NBSC of the

priority to be given to the following actions:

A.

 Repairing

the sludge collection system

and air heads, and obtaining a blower or

repairing the existing blower

 (On Septem-

ber 12,

 1985 VMSC installed a new motor

for the existing blower).

B.

 Removing sludge from the lagoon

 (prior to

the removal of any sludge, NHMSA shall

apply and secure all necessary permits

required under the Act.)

The Agency will determine the priority of completion of

 (A) and

(B) based upon its review of the sampling analysis.

 That item

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72-11

determined by the Agency as of a higher priority will be complet-

ed by NBMSA within ten months after the entry of an order by the

Board approving this document; that which the Agency determines

as a lower priority will be completed within 22 months after the

entry of an order by the Board approving this document.

5.

 Overhanging trees around the lagoon must be removed

within four months after the entry of an order by the Board ap-

proving this agreement.

P.

 NHMSA

agrees to check the integrity of the berms

around the lagoon every six months and repair them as necessary

within 30 days of discovering need for repair.

G.

 NHMSA acknowledges that all provisions of this pro-

posal for settlement are in addition to, and not in lieu of, all

other requirements of the Act.

H.

 NHNSA hereby moves that PCB 81-122 be dismissed.

I.

 This proposal is submitted to the Board for approval

under Section 103.180 as one integral package, and the parties

respectfully request the Board to enter its final order approving

the entire settlement.

 All admissions and statements made herein

are void before any Judicial or Administrative body if the fore-

going Proposal for Settlement agreed to by the parties is not

approved by the Board or if VMSC and NHMSA fail to close on the

Takeover Agreement.

 If the Board should reject any portion

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72-12

thereof, the entire Stipulation and Settlement shall be termi—

nated arid be without legal effect,

 and the parties shall be res-

tored to their prior position in this litigation as if no Settle-

ment and Stipulation had been executed, without prejudice to any

parties’ position as to any issue or defense.

DATE:_________

DATE:

jLi~~

i9ñ

DATE:

/?&~

VICKERY MANOR

SERVICE CORPORATION

BY:

ROBERT

KNUTI

Lord, Bissell

 & Brook

Attorneys for

VNSC

NORTH HILLS

MUTUAL

SEWER

ASSOCIATION

BY:

njrplo9m

ILLINOIS ENVIRONMENTAL PROTECTION

AGENCY

BY:

H. At

 ~7RYAN,

Chief

Assistant Attorney General

Environmental Control Division

100 W. Randolph St., 13th Fl.

Chicago,

 Illinois

60601

(312)

 917—2512

Crowley

rs for NHMSA

BY:

rer

~ntPrograms

linois Environmental

Protection Agency

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