ILLINOIS POLLUTION CONTROL BOARD

July 10, 2003

PEOPLE OF THE STATE OF ILLINOIS,

Complainant,

ALLOY ENGINEERING AND CASTING

COMPANY,

Respondent.

)

PCB 01-155

(RCRA Enforcement – Air, Water)

OPINION AND ORDER OF THE BOARD (by M.E. Tristano):

On December 11, 2001, the Office of the Attorney General, on behalf of the People of the

State of Illinois (People), filed an amended complaint against Alloy Engineering and Casting

Company (Alloy). The eight-count complaint concerns Alloy’s facility at 1700 W. Washington

Street in Champaign, Champaign County, where Alloy manufactures stainless steel castings for

industrial and automotive uses. The People allege Alloy violated requirements on air pollution,

hazardous waste disposal and storage, and water pollution. The parties now seek to settle. For

the reasons below, the Board accepts the parties’ stipulation and proposed settlement. The Board

describes the complaint by way of background before turning to the settlement.

BACKGROUND

Counts I through III of the complaint concern alleged air pollution. Count I alleges Alloy

caused or allowed air pollution in violation of Section 9(a) of the Environmental Protection Act

(Act) (415 ILCS 5/9(a) (2002)) and Board regulations (35 Ill. Adm. Code 201.141, 212.301) by

emitting particulate matter and not controlling fugitive dust. Count II alleges Alloy failed to

keep records required by its air permit, violating 415 ILCS 5/9(b) (2002). Count III alleges

Alloy constructed and operated equipment without air permits in violation of 35 Ill. Adm. Code

201.142, 201.143. Comp. at 1-9.

Counts IV and V concern alleged hazardous waste disposal and storage. Count IV

alleges Alloy failed to analyze hazardous waste in violation of Board regulations (35 Ill. Adm.

Code 722.111, 725.113) and that Alloy disposed hazardous baghouse waste as non-hazardous

waste in violation of Sections 21(e), (f), and (i) of the Act (415 ILCS 5/21(e), (f), (i) (2002)) and

35 Ill. Adm. Code 808.121. Count V alleges Alloy failed to have a Resource Conservation and

Recovery Act (RCRA) permit to store hazardous waste and failed to meet requirements for

hazardous waste training, inspecting, recordkeeping, emergencies, and closure, violating Section

21(f) of the Act (415 ILCS 5/21(f) (2002)) and Board regulations (35 Ill. Adm. Code 703.121(a),

703.150(a), 722.134, 725.115(a), (b), 725.116, 725.133, 725.137, 725.151(a), 725.153, 725.155,

725.173(a), 725.212(a), 725.242(a), 725.243(a), 725.274)). Comp. at 9-19.

Counts VI through VIII of the complaint concern alleged water pollution. Count VI

alleges Alloy discharged manufacturing process water into the City of Champaign’s storm sewer

system, which ultimately enters a water of the State, causing or tending to cause water pollution

and a water pollution hazard in violation of Section 12(a) of the Act (415 ILCS 5/12(a) (2002)).

Count VII alleges Alloy discharged the process water without an industrial storm water National

Pollutant Discharge Elimination System (NPDES) permit, violating 415 ILCS 5/12(f) (2002) and

35 Ill. Adm. Code 309.102(a). Lastly, count VIII alleges Alloy operated without an industrial

storm water NPDES permit in violation of 415 ILCS 5/12(b) (2002). Comp. at 19-24.

STIPULATION

The People and Alloy filed a stipulation and proposed settlement on February 11, 2003.

Though Alloy does not admit the alleged violations, the stipulation states that Alloy “has

resolved the circumstances leading to the alleged emissions and waste disposal violations and

has several months ago applied for the appropriate process water discharge permit.” Stipulation

at 6, 10. The stipulation further provides that after the Illinois Environmental Protection Agency

(Agency) notified Alloy of “noncompliance,” Alloy “worked with Illinois EPA” and

“implemented control measures” to “resolve compliance issues”

. at 7-8.

According to the stipulation, the alleged violations were “distinct in nature” and occurred

from 1999 through 2001. Stipulation at 8. The stipulation provides that Alloy has not been

previously found in violation of the Act.

. at 9. The People maintain that a civil penalty of

$152,501 would serve to deter further violations and aid in voluntary compliance. This amount

is reduced by a “penalty offset” of $77,501 based on three Supplemental Environmental Projects

(SEPs) Alloy would perform at an estimated total cost of approximately $85,000.

. at 9-10.

Alloy therefore agrees to pay a civil penalty of $75,000 to the Environmental Protection Trust

Fund and to perform three SEPs approved by the Agency:

1. Add electronic photohelic controls to improve the pulsing cleaning system of air

emission control devices (must complete by September 1, 2003);

2. Repair and replace air emission control ducting within two years; and

3. Install broken bag detectors in exhaust stacks of emission control devices within

two years.

. at 10.

Alloy must submit a project completion report, including a summary of actual costs, to the

Agency within 90 days after (i) completing each SEP or (ii) the deadline for completing each

SEP. Alloy also must “continue to operate the SEPs for at least ten years after completion.”

If Alloy fails to perform the SEPs as required, it agrees to pay an additional civil penalty of

$77,501 to the Environmental Protection Trust Fund.

PUBLIC HEARING

On March 25, 2003, the Board held a public hearing in the Champaign City Council

Chamber to gather testimony and comment on the stipulation and proposed settlement.

Notice

of the hearing appeared in the

Champaign News-Gazette

on February 21, 2003. Ten members of

the public challenged the parties’ proposal and the Environment Law Society of the Illinois

College of Law filed an

amicus curiae

brief disputing the adequacy of the proposed civil penalty.

According to public testimony and comment, Alloy emitted large amounts of silica sand,

iron particles, and other metals causing property damage (Tr. at 26, 27, 34-35, 50, 52, 59, 94),

had fugitive emissions forcing residents to keep children indoors and shut windows (Tr. at 26,

96), and discharged wastewater contaminating the sediment of Copper Slough with metals (Tr. at

46-47, 85-86). Members of the public and the

amicus curiae

brief argued that the proposed

$75,000 civil penalty is insufficient to deter further violations of the Act by Alloy or other

companies. Tr. at 52, 67, 71, 76, 87-88; Brief at 2-7;

see also

PC 3.

Assistant Attorney General Tom Davis appeared at hearing on behalf of the People. He

stated that Alloy had come into compliance and that with the SEPs, Alloy would “go beyond

compliance” and “greatly enhance the environmental controls.” Tr. at 7, 10-11, 121-22. Davis

emphasized that $75,000 is only the “payment portion” of the roughly $152,000 penalty that the

People calculated—Alloy will spend about $85,000 on SEPs. Tr. at 121, 125. He also stated

that the economic benefit to Alloy from delayed compliance was calculated by the Agency as

$2,501 and that the People minimized litigation costs by settling. Tr. at 120, 126. Davis added

that a report on contaminants in the sediment does not suggest any immediate hazard and that the

contamination is likely typical of an urban watershed. Tr. at 122, 132. According to a

supplemental comment filed by Alloy on April 28, 2003, data reveal most of the water

discharged by Alloy was non-contact cooling water, and the Agency’s concerns have been

addressed without the Agency asking Alloy to “make any changes to its process wastewater

discharges.” Supp. Comment at 1-2.

DISCUSSION

The Board finds that the record adequately addresses the factors of Sections 33(c) and

42(h) of the Act (415 ILCS 5/33(c), 42(h) (2002)), which bear on, among other things, the

reasonableness of the circumstances surrounding the alleged violations and the need to deter

future violations. The Board further finds that the stipulation and proposed settlement meet the

content requirements of the Board procedural rules at 35 Ill. Adm. Code 103.302. Alloy has

addressed the problems leading to the alleged violations and must pay $75,000 to the

Environmental Protection Trust Fund. Alloy also must perform three SEPs designed to go

beyond legal requirements or else pay another civil penalty of $77,501.

The “the law generally favors the encouragement of settlements” (Chemetco, Inc. v.

IPCB, 140 Ill. App. 3d 283, 288, 488 N.E.2d 639, 643 (5th Dist. 1986)) and:

The hearing transcript is cited as “Tr. at _.”

[T]he public interest is better served by a procedure which encourages

respondents to enter into settlement discussions and negotiations by which

respondents may avoid the stigma of a finding of violation, and assist the State in

effectuating the goals of the Act in those cases where the proof is tenuous or

difficult to establish. By allowing the State and the respondents to reason

together, the result will conserve resources which would otherwise be expended in

litigation. People v. Archer Daniels Midland Corp., 140 Ill. App. 3d 823, 489

N.E.2d 887, 888-89 (3d Dist. 1986).

The Board finds that the parties’ proposal furthers the “enhancement of the

environment,” which is the “primary goal of the Act.” Chemetco, 140 Ill. App. 3d at 288, 488

N.E.2d at 643. After considering the record, including testimony and comment, and the Section

33(c) and 42(h) factors, the Board finds appropriate and accepts the stipulation and proposed

settlement. This opinion constitutes the Board’s findings of fact and conclusions of law.

ORDER

1. The Board accepts and incorporates by reference the stipulation and proposed

settlement, including Alloy’s obligation to perform the three SEPs.

2. Alloy must pay a civil penalty of $75,000 no later than October 8, 2003, which is

the 90th day after the date of this order. Alloy must pay the civil penalty by

certified check or money order, payable to the Illinois Environmental Protection

Agency, designated to the Environmental Protection Trust Fund. The case

number, case name, and Alloy’s federal employer identification number must be

included on the certified check or money order. If Alloy does not perform the

SEPs as required, Alloy must likewise pay an additional civil penalty of $77,501.

3. Alloy must send the certified check or money order to:

Illinois Environmental Protection Agency

Fiscal Services Division

1021 North Grand Avenue East, P.O. Box 19276

Springfield, Illinois 62794-9276

4. Penalties not timely paid will accrue interest under the Act (415 ILCS 5/42(g)

(2002)) at the rate in the Income Tax Act (35 ILCS 5/1003(a) (2002)).

IT IS SO ORDERED.

Section 41(a) of the Environmental Protection Act provides that final Board orders may

be appealed directly to the Illinois Appellate Court within 35 days after the Board serves the

order. 415 ILCS 5/41(a) (2002);

see also

35 Ill. Adm. Code 101.300(d)(2), 101.906, 102.706.

Illinois Supreme Court Rule 335 establishes filing requirements that apply when the Illinois

Appellate Court, by statute, directly reviews administrative orders. 172 Ill. 2d R. 335. The

Board’s procedural rules provide that motions for the Board to reconsider or modify its final

orders may be filed with the Board within 35 days after the order is received. 35 Ill. Adm. Code

101.520;

see also

35 Ill. Adm. Code 101.902, 102.700, 102.702.

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

adopted the above opinion and order on July 10, 2003, by a vote of 7-0.

Dorothy M. Gunn, Clerk

Illinois Pollution Control Board