ILLIIJO

POLLUTION

CONTROL

BOARD

October

~3,

1977

D~:RBY NIEADOWS

UTILITY

COMPANY,

Petitioner,

and

HOMEOWNERS’ ASSOCIATION OF

PHEASANT HOLLOW

&

DERBY HILLS,

)

PCB 77-153

Intervenor,

v.

ILLINOIS ENVIRONMENTAL PROTECTION AGENCY,

Respondent.

Ns.

Percy

L.

Angelo

and

Mr.

LOUiS

R.

Bertani appeared for

Petitioner.

Mr.

Theodore

E.

Cornell,

III appeared for Intervenor.

Mr.

Arthur

B.

Muir,

Assistant

Attorney General, appeared for

Respondent.

OPINION

OF

THE

BOARD

(by Mr. Young):

This Opinion sets forth the facts and reasons supporting

the Board Order of September 15,

1977, entered

in this matter

which substantially granted the variances requested subject

to a number of conditions.

Derby Meadows Utility Company filed a petition with the

Board on June

7,

1977, seekinq

(1)

a variance from Rule 404(f)

of Chapter

3;

(2)

a variance to allow the issuance of sewer

construction and operating permits for

35

connections

in three

named subdivisions

in

Homer Township, Will County,

Illinois;

and

(3)

a variance to allow the issuance of additional sewer

construction and operating permits

in certain named

subdivisions

until the design capacity of the existing treatment works

(750

homes;

3000 P.E.)

has been reached.

The Petitioner also filed a Motion for Expedited Considera-

tion on June

7,

1977,

citing imminent bankruptcy and foreclosure

resulting

from inability

to make interest or principal payments

on a mortgaqe of $500,000.00 since January of

1977.

Petitioner

requested

the

Board

to order the Agency

to file their response

to

the

Petition tor Variance within 10 days and to file any

28-43

---

—2—

objections

to the pet:ion within 10 days.

O~June

9,

1977, the

Board declined entry of the requested order because such order

would conflict with the

provisions

of

Section

37

of

the

Act;

the

petition was accepted and heid

for

Agency

rec~rnmendation

pursuant

to Procedural Rule 407(h).

An Objection to the Petition for Variance was filed by the

Agency on June 27, 1977;

on June

28,

1977,

the Board ordered a

hearing set as soon as possible consistent with Rule 408(b) and

appointed

a Hearing Officer the same day.

Hearing on the petition

was

set

for

July

22,

1977.

On July

7,

1977, the Agency filed a recommendation to allow

the

variance

from

Rule

404(f)

of

Chapter

3 subject to certain

conditions and to deny all other relief requested by the Petitioner.

On July

28,

1977,

an Application for Intervention was filed

by the Homeowners’

Association of Pheasant Hollow and Derby Hills

pursuant to Procedural Rules 310(a)

and

310(d); under the facts

set forth,

intervention

is allowed as a matter of right under

Rule 310(d).

Hearing,

originally

set

for

July

22,

1977,

was

continued

to

August

3,

1977,

by the Hearinq Officer after Motion of July 13

by the Respondent and pro-hearing conference was held on July 26,

1977.

On

August

3,

1977,

a

limited

hearing

was

held

and

the

hearing

then

continued

until

August

11,

1977,

on

request

of

Petitioner and Respondent.

Hearings were subsequently held on

August 11,

12,

15 and 18,

1977.

The Agency read an amended recommendation into the record

(R.

671—675)

at the hearing on August 18,

1977;

the amended

recommendation was also filed with the Board on August 24,

1977.

Petitioner waived the 90-day decision requirement of Section

38

of the Act until September 29,

1977.

On September 15,

1977,

the

Board entered

an Order granting

in part the relief requested

subject to a number of conditions and continuing Board jurisdiction

until satisfactory completion of the expansion of the Petitioner’s

sewage treatment plant.

The Petitioner,

Derby Meadows Utility Company,

located in

Will

County,

Illinois,

is

a

privately-owned,

public

utility

company

regulated

by

the

Illinois

Commerce

Commission

which

pro-

vides

sewer

and

water

services

to

residential

subscribers

in

Orland

and

Homer

Townships

in

Will

and

Cook

Counties

(R.

p39).

The Utility owns and operates

a sewage treatment plant located

near

139th

and

Will-Cook

Road

in

an

unincorporated

area

of

Will

County and Homer Township.

The plant presently has

a hydraulic

capacity of approximately 300,000 gallons per day

(0.3 MGD)

(R.

41)

and is undergoing expansion from the present 0.3 MGD to 0.6

MGD to be completed

in October of 1977

(R.

42).

The estimated

28-44

---

—3—

cost of construction

~maininq

to be complet~

as ot August 11,

1977, was approximat.~~y ~0,000,O0

(It.

42),

~

of July

1,

1977,

the plant was serving

506 homes utilizing ab~ittwo—thirds of

plant capacity

(R.

43)

caLc

:t~cdassuming a

iverage of four

persons occupying each indivaduci

home and

aL. average daily

wastewater discharge of 100 gaalons for each person

CR. p42).

The present plant does not havc ~n operating i~owmeter;

a

flow meter was on the plant site and was

to ne installed

within a week or two of the hearing

(R.

199).

Permits issued by the Agency from 1965 ~u i966 through

June of

1977

CR.

103—104) allow the connection of 715 homes

to the sewers tributary

to the tieatment pla

(R.

62).

The

sewage treatment plant underwent an original expansion from

0.1 MGD to 0.3 MGD under Agency Permit of February 19,

1975;

effluent quality standards for the facility established by the

permit were

4 mg/i, BOD5

5 mq/i, suspended solids;

and 200/

100 ml,

fecal coliform

(Pet.

Exh.

12; Resp.

Gr. Exh.

4).

Cost

of the expansion to 0.3 MGD wa~approximately $800,000.00

(R.

120);

the expansion began shorLLy after

issucilice of the permit

in February 1975;

the 0,3 MGD p u~itwas put on line December

3,

1976

CR.

102).

The current u~pansionof the plant from 0.3

MGD

to 0.6 MGD is estimated to cost approximdtely $500,000.00

CR.

135).

Financing of the expansion to 0.3 MGD was obtained

from a loan

(R. 124)

and a mortgage for $500,000.00

(R.

27),

later reduced by $150,000.00 borrowed from the estate of the

father of the President of the Utility

(R. 86).

No financing

has

been

obtained

for

the

construction

of

the

current

plant

expansion

to

0.6

MGD,

the work is underway

under

a

contract

for approximately $500,000.00 with Migliore Contracting Corpora-

tion who have been paid only

a very small percentage of the total

cost,

the balance

is expected to he paid from future connection

fees

CR.

136-138).

Evidence concerning the financial condition

of the Utility

(Exh.

C, Petition;

Pet. Exh.

1;

Pet.

Exh.

18);

the testimony of the supervising partner of the accounting firm

preparing financial statements for the Utility for the past

three years

(R. 13—37;

220—254);

and the testimony of the

President of the Utility

(P.

85—88;

115—168; 260—270)

clearly

establishes

that the Utility is under considerable financial

pressure.

Derby Meadows was financially unable to make a

$25,000.00 semi-annual interest payment in June of this year

to their mortgage-holder

CR.

87); suffered

a net loss from

operations of $49,981.69

in 1976

(Pet.

Exh.

1); has no money

to

pay Migliore Contracting Corporation periodic payments due on

a $500,000.00 contract

CR. 163-164); and efforts

to obtain ad-

vance payment of sewer connection

fees from the developers

of

the various subdivisions served had been unsuccessful

(R.

145—

146).

In addition to the financial hardship experienced by the

Utility resulting from Agency denial of permits

to extend service

to additional subdivisions, Intervenor Homeowners~ Association of

28-45

---

—4—

Pheasant

Hollow

and

:by

Hills

presented

eicht.

witnesses

who

testified

concerning

.~.ndividuai

hardship

occasioned by the

necessity

to

secure

interim

housing

CR.

311-401).

The

testimony

of each witness disclosed severe family and economic consequences

resulting from the inability of Derby Meadows Utility Company

to provide sewer service.

A statement was also entered

into

the

record

on

behalf

of

the

developer

of

Orland

Trails

detailing

the

financial

hardshin

experienced

by

Orland

Trail,

Inc.

as

a

result

of

the

denial

of

a

permit

to

construct

and.

operate

sewers

tributary

to

the

Derby

Meadows

Utility

Company

plant

CR.

309-311).

The President of the Utility testified that the Utility

had connected sewers to the plant which had

eon installed under

construct only permits prior to the receipt of operating permits

CR.

10 3-105)

,

and had constructed sewers

in Pheasant Hollow South

Unit

2,

Derby

Hills Unit One and Orland Trails without construction

permits

(R.

89-90).

Evidence

in the record also indicates that a

compliance conference was held on April

14,

1977,

by the Agency

with the President of Derby Meadows

CR.

55-56)

and that

a followup

letter containing an agreed schedule of compliance was addressed

to the President of Derby Meadows Utility dated April 19, i977

(Pet.

Exh.

8).

The Utility hes complied with the schedule of

items necessary to achieve eor:pliance except for certain property

fencing delayed by difficulties in laying

a trunk line in the

same location

CR.

57-61).

Although there is conflicting testimony

in. the record re-

garding

the date that the

0.3 MCD plant began to meet the permitted

effluent limitations

of

4 mg/i BOD5 and

5 mg/i suspended solids,

operating permits to allow connection of subdivision sewers

to the

treatment works were issued in June,

1977,

on determination by the

Agency that the plant was meeting the 4/5 effluent limitations

CR.

753)

On August

1A,

1977,

the final day of hearing in this matter,

the hearing began with a statement by the Attorney for the Respondent

that the Agency would file an amendment

to the recommendation pre-

viously

filed.

In the ensuing statement,

and later in the amended

recommendation

filed August

24,

1977,

the

Agency recommended that

tlie

Petitioner

be allowed

to connect no more than 750 homes

to the

0.3 MCD plant on condition that Petitioner post

a $100,000.00 bond

to assure adherence to the 750 home connection limitation,

in lieu

of the performance bond requested as a condition of the prior recom--

rnendation to ensure completion of the expansion of the plant to

0.6 MGD.

Irrespective of any proof or lack of proof regarding prior

unsatisfactory history of compliance and performance by Derby

Meadows,

the Board is without authority

to require such bond.

Section

36 Ca)

of the Act specifies the basis upon which the Board has

authority to impose a bond as a condition in

the grant of

a variance;

that basis

is not found

in this

case.

28-46

---

—5—

Respondent

offered

a

number

of

documentary

exhibits

and

proffered

testimony

relative

to

the

operation

of

the sewage

treatment

plant

prior

to

the

expansion

to

0.3

MCD;

objections

were

duly

made

and

sustained,

and

offers of proof were made.

Considering

the

stated

purpose

of

the

offers,

the

Board

finds

that

the

exhibits

and

testimony

were

properly

excluded

by

the

Hearing

Officer.

In

view of the testimony in the record,

it

is not necessary

for

the

Board

to

find

that

compliance

would

work

an

arbitrary

or

unreasonable

hardshin

upon

the

Petitioner

before

granting

a

variance

to

allow

the

connection

of

additional

homes

outside

of

the subdivisions presently permitted.

The Board

finds that failure

to

allow

such

connections, not to exceed in total

of

all

connections

the 0.3 MCD capacity of the existing treatment works, would con-

stitute

an arbitrary and unreasonable hardship as

to the Intervenors

in this case.

In order to make certain that the capacity of the

existing

plant

is

not

exceeded,

the

Board

will

require

that

an

appropriate

flow

meter

be

immediately

installed

at

the

plant;

that

Derby Meadows Utility Company immediately prepare and deliver a

listing

of

all

persons

currently

connected

to

the

collecti

o

system

to

the

Respondent

and

the

Intervenor;

that

future

connections

be

allocated

in

accordance

with

Exhibit

B

to

Petitioner’s

Exhibit

14

herein;

and

Derby

Meadows

Utility

Company

shall

not

authorize

connection

of

any

home

to

collection

sewers

tributary

to

the

treat-

ment works unless

a written request to connect has been delivered

to, and approved by,

the Agency.

Finally,

in this regard, the

Board

shall

not

allow,

nor

shall

Petitioner

be

authorized

to

connect,

more

than

750

homes

to

the

collection

system,

or

allow

influent volume to exceed 0.3 MGD, whichever

is least, without a

further

Order

of

the

Board.

Despite

the

granting

of

this

variance

to

allow

the

connections

in

the

previously

unpermitted

subdivisions,

the

Board

ratifies

the

action

of

the

Agency

in

their

refusal

to

permit

the

construction

and

operation

of

sewers

which

are

designed

and

intended

to

eventually

serve

an

equivalent

population

greater

than

the

present

permitted

operating capacity of the existing sewage

treatment

works

to

which

t:he sewers wi 1

1

be tributary

-

such

action

i

~~enc

I s

Lent

with the

applicable provisions of the Act and the Board regulations.

Al-

though there was testimony to the effect that doing so does not

take into account normal subdivision developmental practices

CR.

70),

the

Board

believes

that

no

development

should

be

undertaken

until capacity has been provided

to handle the total potential

volume of waste

to be generated.

In considering the petition for variance from Rule 404(f),

the

Board

is

confronted

with

an

unusual

set

of

circumstances

and

several

issues

of

first

impression.

Without

embarking

on

a

dis--

cussion of the extensive

testimony in the record,

the Board will

take notice that the Environmental Protection Agency has proposed

28-47

---

--6—

to the Board that Rule 404(f) be deleted

(Pet.

Exh.

48).

The

stated justification ior

the

proposal is that the 4

mg/l

BOD5

and

5 mg/l suspended solids effluent limitation requires

a level

of treatment well beyond th~capabilities of conventional tertiary

treatment nor has any other economically reasonable process been

developed which can consistently produce that effluent quality

within the averaging allowances of Rule 404(h)

(Pet. Exh.

49 p8).

The Board will grant a variance from Rule 404(f)

for a period

of two years or until earlier terminated by the adoption by the

Board of any modification of that Rule which

is now in hearing,

Docketed as P77-12.

An interim limitation to

10 mg/l BOD5 and

12 mg/l suspended solids will be imposed during the period of

the variance.

The record raises a substantial issue regarding the effect

of the discharge on the quality of the waters receiving effluent

from

the

treatment

works.

Both

the

Petitioner

and

Respondent

agree that based upon the discharge of 0.6 MGD of effluent con-

taining

10 mg/i BOD5 and

12 mg/l suspended solids,

no dissolved

oxygen water quality violation

is likely in Long Run Creek as

predicted by application of

the

modified Streeter-Phelps Equation

(Resp. Exh.

5 p9) for the influence of domestic sewage effluent

on the dissolved oxygen profile of a stream

CR.

439;

P.

855).

The parties disagree on the deoxygenating effect of the discharge

in

that

reach

of

the

Illinois

and

Michigan

Canal

from

the

con-

fluence

with Long Run Creek downstream to the discharge of the

I

& M Canal to the Chicago Sanitary and Ship Canal.

No water

quality

sampling

data

or

biological

stream

survey

results

of

the

impacted reach of the

I

& M Canal appears

in the record.

There

was testimony from an Agency professional engineer that on May 20,

1977, he observed the

I

& M Canal

at several

locations, one being

the confluence with Long Run Creek and several points downstream

and the Canal was

a turbid,

greenish, muddy color with gas bubbles

surfacing from the bottom and splotches of oil floating on the

surface

(R.

861-862).

Based upon the testimony in the record

(P.

430—463;

499—503;

842—941)

and

the

exhibits

(Pet.

Exh.

33—43;

Resp.

Exh.

28-32),

Petitioner has not established that the projected

0.6

MCD

discharge

w.i1.

not

cause

a

violation of the dissolved

oxygen water quallty standard

in the

I

&

M Canal.

Because of the

difficulty

in applying WPC—i

Ckesp.

Exli.

5)

as detailed by the

Agency

(Pet.

Exh.

49,

p8-9)

and because Petitioner has been granted

a variance from Rule 404(f)

for a period of two years,

a variance

will be granted from Rules

203(d)

and 402 of Chapter

3

for the

same period.

The variance shall apply only to the general standard

for dissolved oxygen in the Illinois and Michigan Canal downstream

of the confluence with Long Run Creek.

The Board will direct the

Petitioner to perform dissolved oxygen monitoring during the

period of the variance and would expect that effort to be supplemented

by additional Agency monitoring and biological survey.

28-48

---

—7—

In granting this

~ria~ce,

the Board

is n~ excusing the

past practices of the

~itiiity,~hich,

in some instances, have

admittedly

been

deliberate

violations

of

the

hct

and

Board

regulations.

Much of the fi~ncialhardship c: the

Utility

is

self—imposed and the relief prenred

is

predicated

largely

on

the hardship established by

the: intervenor insofar

as sewer

connections

in the unpermitted s~ndivisions are concerned.

Our Order of September 15,

i977,

should provide the safeguards

necessary to ensure that the present hardship of the individual

home purchasers

is eliminated and that the load on the present

treatment works does not exceed the design capacity.

The Order

should also make it abundantly clear that the

oard will not

allow any further connection

to the

treatment

works

until

the

expansion to 0.6 MGD has been completed and is being operated in

accordance with permit,

Board regulations and the Act.

Toward

those ends the Board will retain jurisdiction until it is clearly

demonstrated that the conditions of the Board Order have been

performed.

This Opinion constitutes rn~±3oardtsfindings of fact and

conclusions of

law in this mafte~-~

I,

Christan L.

Moffett, Clerk of the Illinois Pollution Con-

trol

Board,

hereby~c

rtify

the

above

Opinion

was

adopted

on

the

(~~‘

day

of

_________________,

1977

by

a

vote

of~j~O

Christan

L.

Moffe

~/\~erk

Illinois Pollution ~~trol

Board