V.

ESG WATTS, INC.,

an Iowa

corporation,

SEP

2 32003

STATE OF ILLINOIS

Pollution

Control Board

)

)

PCB NO.

01-167

)

)

)

)

)

NOTICE OF FILING

To:

Lisa Madigan, Attorney General

Attn:

Tom

Davis

Assistant

Attorney

General

Environmental

Bureau

500 S. Second Street

Springfield,

IL 62706

Carol Sudman

Board Hearing Officer

Illinois Pollution

Control Board

600 S.

Second Street, Suite 402

Springfield,

IL 62704

PLEASE TAKE

NOTICE that on

this date

I

mailed for filing with

the

Clerk of the

Pollution

Control

Board

of

the

State

of

Illinois,

RESPONDENT’S

POST-HEARING

BRIEF and MOTION

FOR LEAVE TO

FILE INSTANTER and MOTION

FOR LEAVE TO

SUPPLEMENT THE

RECORD, a copy of which

is attached

hereto and herewith

served

upon you.

4W

Lar

A. Woodward, Attorney for Respondent

BEI

RECEIVED

CONTROL BOAR~7

ERK’S

OFFICE

ILLINOIS

)

)

)

Complainant,

Respondent.

---

RECEIVED

CLERK’S

OFFICE

-~

SEp

2

3

2003

I

hereby certify that

~mber,

2003,

oI~.gfJ~efore

4:30

p.m.

send by Express Mail,

Lid, by ~

mails a true

and correct copy of the

following

instruments entitled

NOTICE

b~”Pf(~1t4~ard

and

RESPONDENT’S

POST-HEARING

BRIEF

and

MOTION

FOR

LEAVE

TO

FILE

INSTANTER

and

MOTION

FOR

LEAVE

TO

SUPPLEMENT

THE

RECORD to

the

following persons addressed as follows:

Lisa Madigan, Attorney General

Carol Sudman

Attn:

Tom

Davis

Board

Hearing Officer

Assistant

Attorney

General

Illinois Pollution Control

Board

Environmental

Bureau

600 S.

Second

St., Suite 402

500

S. Second Street

Springfield,

IL 62704

Springfield,

IL 62706

and the original

of said foregoing

instruments and ten

copies thereof by

Express Mail

with postage thereon fully prepaid to the following person addressed as follows:

Dorothy Gunn, Clerk

Pollution Control

Board

State of Illinois Center

Suite 11-500

100 West Randolph

Chicago, IL 60601

Lar

.

Woodward, Atto

ey for Respondent

Larry A.

Woodward, Corporate Counsel

ESG

Watts,

Inc.

525 17th

Street

Rock

Island,

IL 61201

Dated: September 22, 2003

---

CONTROL BOARDR~

CEIVED

ILLINOIS

LERK S

OFFICE

SEP

2

3

2003

PEOPLE OF THE

)

STATE OF ILLINOIS

)

POllUtj~flControl Board

)

v.

)

PCBNO.

01-167

)

(Enforcement)

ESG WATTS, INC.,

an

Iowa

)

corporation,

)

)

Respondent.

)

RESPONDENT’S POST-HEARING

BRIEF

Respondent,

ESG

WATTS,

INC.,

acting

by and

through

its

Corporate

Counsel

Larry A. Woodward,

hereby files its

Brief subsequent to the hearing conducted

on June

3, 2003,

and provides the following argument:

Argument

The People’s position

in this case has been concisely stated.

In People’s

Exhibit

9, the Tom Davis

letter to Richard

Kissel,

Mr.

Davis states as follows:

ESG Watts was required

by

Permit

No.

1996-136-SP

to implement

the closure

plan in July 1999.

*

*

*

*

*

In

my

view,

there

exist

(sic)

no

legal

or

technical

impediment

to

the

relocation of the overfilled wastes within the previously

permitted contours of the

landfill.

*

*

*

*

*

*

I anticipate that ESG Watts may tell you that it cannot initiate or implement

stormwater control

because the closure

plan must be revised to modify the final

contours

and/or

the

sig

mod

permit

must

be

issued

before

any

work

may

proceed.

I would disagree with such contentions.

*

*

As

to

Count

II, and

the continuing

gas emissions

and odor

problems,

my

position is similarto the December 1999 finding of the Rock Island County Circuit

Court:

“Although

ESG

Watts

has

a

contract

with

Resource

Technology

Corporation

(“RTC”)

regarding

an

energy

recovery

system,

and

RTC

may

not

have

satisfied

its

contractual

obligations

to

ESG Watts,

this

Court

FINDS

that

ESG

Watts

remains

responsible

as

the

permittee

for

all

aspects

of

landfill

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1

of 12

Complainant,

I

---

operations

and

compliance

requirements.

This

Court

FINDS

that

these

uncontrolled emissions

have

unreasonably interfered

with

the enjoyment

of life

and

property

by

neighboring

residents

by

preventing

or

disrupting

outdoor

activities,

and

by

invading

or

penetrating

their

homes

and

disrupting

indoor

activities.”

I

acknowledge that the contract between ESG Watts and

RTC is part

of

the

bankruptcy

estate

as

an

interest

regarding

potential

future

revenues.

However,

I do not consider the accumulation

of landfill gas to be an

asset of the

bankruptcy estate.

The

real

issue, of course,

is

the extent to which

ESG Watts

has

control

over the

premises.

RTC has connected

only 30

of the 88 extraction

wells to the flare; emissions are uncontrolled as to the remaining 58 wells.

In

my

view,

ESG

Watts

must

take

action

to

control

these

emissions

as

soon

as

possible

and

such

action

would

not

necessarily

violate

the

automatic

stay

or

bankruptcy

prohibitory

restriction.

Neither

the

contract

nor

the

pending

bankruptcy may constitute an affirmative defense to the allegation of continuing

air pollution.

As to

Count lIthe Attorney General’s

Office demands that the gas wells

not presently connected to the flare

must either be temporarily capped to prevent

emissions

or

be

connected

to

the

existing

flare

or

a

new flare

no

later

than

October 1, 2001.

The People in its Post-Hearing Brief then goes on to state as follows:

The

evidence

has

clearly

shown

that

closure

has

not

been

completed

because

the

overfill

has

not

been

relocated;

that

the

overfill

has

not

been

relocated

because the

closure plan has

not been

revised; that the closure

plan

has

not

been

revised

because

the

pending

sig

mod

application

has

not been

approved.

Similarly, the

runoff problems and

the adverse off site impacts to

Mr.

Whitley’s property

have not

been corrected

because the stormwater control

plan

has

not

been

implemented

because final cover

has

not been

installed

because

the overfill has not been

relocated.

The odor

problem

and the

nuisance

caused

to Mr. Whitley

are just as bad

as

in

1996 because Watts has failed

to properly

operate the

gas collection

system,

which

had

been

installed

by

December

12,

1996;

the

single flare,

which

was

connected

to

only

30

of the

88

wells

on

or

before April 3,

2000,

has not been operational since January 27, 2003.

As to the

reporting

violations,

these

are

admitted

as

alleged;

in

addition,

Ms.

Munie

indicates that no reports were submitted for the subsequent three quarters.

Evidence

in

aggravation

has

been

presented

to

demonstrate

previously

adjudicated violations,

lack of due diligence,

and

economic

benefit.

The

gravity

and duration

of the

violations

are well

supported

by the

proof.

The

remaining

Section 42(h) factor pertains to “the amount of monetary

penalty which will serve

to

deter

violations

by

the

violator.

.

.

.“

First,

the

previously

imposed

Board

penalties

in PCB 96-107 as well as PCB 96-233 and 96-237 have not been

paid;

and

secondly,

it

is

obvious

that

those

penalties

($100,000;

$658,787;

and

$256,000,

respectively)

were

inadequate

to deter

these

subsequent violations.

Therefore,

it

stands to

reason

that the

amount

of monetary

penalty

which

will

serve to deter further violations by the violator

must

be

increased to achieve

the

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12

---

statutory objective

and

thus

the

Board

must

impose

a

significantly

higher civil

penalty

upon

ESG Watts....

Unfortunately, the People ignore their own evidence and

refuse to recognize that

it

plays

a

role

in

the

continuing

of

this

controversy.

The

People

seem

to

draw

no

distinction between the facts in this case and those

in the Viola

landfill case and deduce

that,

since

ESG

Watts

relocated

overfilled

waste

at

Viola

without

a

significant

modification permit or other permit,

ESG Watts should

do exactly the same

thing

at the

Taylor

Ridge

landfill.

However,

there

are

differences

in

the

facts

between

the

two

cases.

At

Viola,

99

CH

10,

a court order

is entered

ordering

ESG

Watts to

relocate

overfilled waste in accordance with parameters

identified

in paragraphs B.2,

3,

4, and

5

of the

order.

(See

People’s

Exhibit

12.)

This

court

order

provided

ESG

Watts

the

protection

it needed to proceed with waste relocation

—

without it

ESG Watts would have

had

to

proceed

with

waste

relocation

at

its

own

risk

and

be

subject

to

redoing

the

relocation

if

the

result

was

not

acceptable

to

the

Illinois

Environmental

Protection

Agency

(“IEPA”) but with it

ESG Watts could proceed with

waste relocation safe

in the

knowledge that,

if

it

complied with the

parameters set forth

in the court’s

order,

it

could

not be required to redo

its efforts and

could not be

prosecuted for proceeding

without a

permit.

In addition, the landfill at Viola was an

isolated facility;

odor, dust, transportation

noise,

and other adverse effects of relocating waste would

not be easily experienced

by

third

parties.

However, at Taylor Ridge, the

landfill

abuts neighbors who are especially

concerned with

the activities

of the

landfill

(see

Page 77,

Transcript) and

would easily

be disturbed

by the adverse aspects of waste relocation.

Added to this

is

the fact that

the Taylor

Ridge landfill

has never

been

adjudicated

as

having exceeded its

permitted

height, and the fact that the permits issued to ESG Watts for the Taylor Ridge landfill by

THIS FILING IS SUBMITTED ON RECYCLED PAPER

PAGE 3 of 12

---

the

IEPA

have

consistently

contained

the

condition

reading

as

follows:

“any

modification to the facility shall be the subject of an application for supplemental permit

for site modification submitted to the

Illinois EPA.”

(See People’s Exhibit 2, ~j1.15

and

¶1

lV.4 and

¶

IV.5;

People’s Exhibit

3,

¶

C.1

and ¶C.5;

Respondent’s Exhibit 21,

¶1

C.1

and

¶C.5; and

Respondent’s Exhibit

22,

ITC.1

and

¶

C.5.)

Also, the previous order in 98 CH

20 (see

People’s Exhibit

1) provides as follows:

2.

The

Defendant ESG

Watts

shall undertake

and complete

closure

and

post-closure

care

of

the

landfill

as

required

by

its

previously

approved

Closure

Plan.

The

Defendant

shall

obtain

approval

of

and

comply

with

all

permits

and

modifications

thereof,

regarding

any

necessary

revisions

to

the

Closure

Plan,

as

may

be

required

to conform

final

contours for

proper closure

and post-closure care.

The

Defendant shall obtain

a significant

modification to

its

permits

in

order to

comply with

the

regulations

in

effect

at

the time disposal

operations ceased

in March 1998.

The Defendant shall not accept any waste for

disposal during closure activities.

*

*

*

*

7.

The

Defendant shall

undertake

all activities

in compliance with the

permits issued

by the

Illinois EPA.

.

All

of these

differences

would

place

anybody on

notice that the

approval

of the

EPA

would

be

required

to

protect

ESG

Watts

from

redoing

waste

relocation

and

from

prosecution for proceeding without permit.

It

is

interesting

to

note

that

the

December

29,

1999

order

is

silent

about

the

overfilled

waste,

which

the

People

attempted

to

add

to

PCB

96-107

but

were

unsuccessful in doing

so.

The

People had to have a reasonable factual

basis to attempt

adding

the overheight to PCB 96-1 07 or the

attorneys committed

an ethical violation

in

making

the pursuit.

Since

1994 ESG Watts’ submittals to the IEPA show the maximum

height

within

the

limits

of waste

to

be

775.2

above

mean

sea

level

and

the

original

permit show that the

maximum

height of waste to

be

758 feet above

mean

sea

level.

The

1996

sig

mod

application

prepared

by

CH2M

Hill

and

submitted

to

the

IEPA

on

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PAGE 4 of 12

I

---

November

11,

1996 contained a drawing

prepared

by The

Noble

Earth Corporation and

it

is

a

landfill cover certification dated

10/16/96.

It clearly shows overfill above the 758

mean

sea

level elevation.

Therefore, there can be no doubt that

IEPA knew that there

was

overheight clearly

in

1999.

When

the

People

pursued

ESG

Watts

in

the

Rock

Island Circuit Court in 98 CH 20,

it could

have raised the overheight issue but it failed to

do

so.

As the

People

have

already

admitted

in

its

Post-Hearing

Brief,

res judicata

includes not only issues that were

raised

but also

issues that could

have been

raised.

Therefore,

any violation

of

overheight waste occurring

prior

to

December

29,

1999

is

precluded by the doctrine of

res

judicata.

ESG

Watts

has

produced

evidence

showing

that

in

1999

and

through

July

5,

2001

it was

attempting

to

obtain

approval

of plans from

the

IEPA to

allow

overfilled

waste

to

remain

in

place without relocation.

(See

Respondent’s

Exhibits

14,

15,

and

16.)

ESG Watts and

its engineers thought that the IEPA and Attorney General’s Office

looked

upon

said efforts favorably.

(See Page 2, Respondent’s Exhibit 33:

“A proposal

to

leave

the

waste

in

place

or

relocate the

waste

to other

areas

of the

landfill

as

an

alternative

was

discussed

with

representatives

of

the

IEPA

and

AGO.

Both

options

were discussed

in favorable terms.”)

Once it was learned that keeping overfilled waste

in place would

not be approved,

ESG Watts began to seek approval of a Closure/Post-

Closure

Plan

providing

for

waste

relocation

while

awaiting

approval

of

a

significant

modification

permit.

(See

Respondent’s

Exhibit

17.)

However,

the

IEPA

reused

to

approve

the

limited

objective

of

a

waste

relocation

plan.

Thereafter,

ESG

Watts

combined

waste

relocation

and

significant

modification

applications

since

35

IllAdmCode

§811.1 10(d)(2)

specifically identifies

a

revision

to the

closure/post-closure

THIS

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PAGE 5 of 12

---

care

plan

as

a

significant

modification.

However,

as

Ken

Liss

has

testified

(see

Respondent’s Exhibit 33),

reviews of ESG Watts’

applications are

reviewed under more

conservative interpretations of the

regulations than applications from other persons are

reviewed.

The

upshot of all

this

is

that

ESG Watts

has

expended

at

least

$657,620.24

in

engineering fees to gain approval of a significant modification permit to allow

it to close,

has

used

four

different

engineers

—

CH2M

Hill,

Envirogen,

in-house

engineer

Tom

Jones,

and Andrews Environmental

Engineering, Inc. in seeking this approval.

To date

it

has nothing to show for its efforts but loads of rejected plans, prosecutions,

and fines.

But

the

facts

hardly

describe

a

recalcitrant

in

need

of

further

huge

fines

to

force

compliance.

In

fact,

if

anything the

facts

describe a

People

more

concerned

about

being

punitive

and

thereby

siphoning

off

funds

needs

for

compliance

and

little

concerned in cooperating with ESG Watts to achieve

the closure

all

desire.

In

addition

it

is

clear

that there

are

legal

impediments

to just

relocating

waste

and

modifying

a

stormwater plan without benefit of a

permit.

There are also sever

legal consequences

to

being

wrong

inadvertently

or

arguably

if

one

is

to

believe

the

testimony

of

the

People’s witness

Gary

Styzens.

Unfortunately,

ESG Watts,

with

no source

of income

since

1998,

does

not

have

$102,000

(see

People’s

Exhibit

4)

to

risk

in

relocating

overfilled waste without protection that

it will not be wrong

inadvertently or arguably and

that it will not be ordered to redo the waste relocation or prosecuted for doing

so.

The

above

discussion

has

relevance to

the

issue

of whether

ESG

Watts

has

effectuated

closure

activities

in

a

timely

manner also.

People’s

Exhibit

3,

the

July 2,

1999

supplemental

permit states that

“3.

Operator shall

initiate

implementation

of the

THIS FILING IS SUBMITTED ON RECYCLED PAPER

PAGE 6 of 12

---

closure plan within 30 days after the site receives

its final volume of waste.”

Ms.

Munie,

in

People’s

Exhibit

5, testifies that

ESG was

required to

implement the

closure

plan

in

July

1999;

however,

she

goes

on

to

testify

that the

threat

of leachate

discharges to

surface

or

ground

waters

will

be

mitigated

by

proper

disposal

and

that

“foJnce

the

wastes

are

relocated,

final

cover

and

stormwater

control

measures

may

be

installed

to

also mitigate

the threat of leachate discharges.

“Emphasis

added.

Ms.

Munie also testifies as follows:

The

Illinois EPA

has

never issued

a

permit for the

significant modification

of the Taylor Ridge Landfill; such a permit would have required closure and post-

closure

care

including

providing

adequate

final

cover,

installing

groundwater

monitoring

wells,

addressing landfill gas emissions and monitoring groundwater.

This testimony would

seem to support that

until the permits were issued for relocation of

the

overfill

and the

overfill was relocated

and until the permit was

issued for significant

modification,

ESG Watts

could

not know what closure

activities would

be required

and

to proceed without the permit approving waste relocation

and closure would

place ESG

Watts at risk to have to do

it all over again.

In

the

People’s

Post-Hearing

Brief,

it

is

stated

that

Respondent’s

Exhibit

29

relating to the RTC

bankruptcy case file docket sheet is completely meaningless.

ESG

Watts understands

that the

People

want to rely upon

the

order in

98 CH

20 (People’s

Exhibit 1) in which the court on December 29, 1999 finds that RTC’s failure to perform

in

accordance with its contract with ESG Watts does not relieve ESG Watts at the operator

to

control

air

pollution.

However,

in

People’s

Exhibit

9

the

People

acknowledge

that

there

is

some

prohibitory

restriction

resulting

from

RTC’s

bankruptcy.

Respondent’s

THIS FILING IS SUBMITTED

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PAGE 7 of 12

I

---

Exhibit 29 clearly demonstrates that since the entry of the Court Order on December 29,

1999,

the RTC

bankruptcy was converted from

a Chapter 7 bankruptcy to a Chapter

11

bankruptcy.

(See Docket Entry 15 dated

1/13/00.)

This event was very

important to the ability of ESG Watts to control

its

premises

as far as air pollution

is

concerned.

Under

11

USC §701

et seq. RTC would have been

ousted

from

possession of its

assets such as leases and executory contracts.

However,

as

a

Chapter

11

bankruptcy,

RTC

retains

possession

of such

assets

under

11

USC

§~1107(a)and

1108.

11

USC §365

requires

RTC

to

elect to

assume

or

reject such

leases and contracts.

ESG Watts

entered

its appearance in the

RTC bankruptcy (see

Docket Entry 97)

but RTC obtained extensions of time to make the

required

election to

assume or reject

until

9/28/00 (see

Docket

Entries

171,

194,

221,

267,

367,

and

368)

and finally obtained an order that gave

RTC until the earlier of the date that RTC obtains

an order confirming

a plan of reorganization or 60

days

after the

date that an

order

is

entered

converting the

case

back to a Chapter

7 bankruptcy.

(See Docket Entry 434.)

Docket Entry

1098

shows

that

on

3/31/03

ESG Watts was still

pursuing

its attempt to

compel RTC to make

an election to assume or reject the contracts between

ESG Watts

and

RTC

and that said

matter was

continued to

5/7/03 for status

hearing.

There is

no

docket

entry

for

5/7/03

pertaining

to

such

motion

to

compel

by

ESG

Watts.

It

is

uncontroverted

testimony

(see

Page

168,

Transcript) that

RTC’s

contract gives

it

the

exclusive right to extract landfill gas from the Taylor Ridge landfill.

Short of terminating

RTC’s

rights

the

odor

problems

could

only be

alleviated

by fixing

the

flare

(see

Page

170,

Transcript),

by

preventing

emissions

from

escaping

from

an

extraction

well

not

connected to

the flare

or to connect said

58 wells

to the flare

or to a

new flare.

(See

THIS FILING IS SUBMITTED

ON RECYCLED PAPER

PAGE 8 of 12

---

People’s Exhibit 9.)

However,

it is uncontroverted that the 58 wells not connected to the

flare

have

shutoff

valves

affixed

to

them

and

that

gas

does

not

escape

from

an

extraction well not connected to the flare

if the shutoff valve is in the proper position.

In

addition

it

is

uncontroverted that the 58

gas extraction

wells could

not be connected

to

the existing flare

because of condensate buildup

blocking

the gravity

lines.

While

it

is

true that the existing flare was not operational from January 27,

2003 to June

17,

2003,

the date

it

was

repaired and

became operational

(see the

affidavit of Joe

Chenoweth

contained

in

the

Supplement

to the

Record),

it

is

also

true

that

the

Monthly

Status

Reports for February

2003

and

April

2003

reflect that ESG

Watts notified

RTC

of the

nonoperational status

of the flare

and

ordered

the

part

necessary to

repair same

but

was waiting

on

delivery.

(See People’s

Exhibits 7 and

8)

While the first part

ordered

was

being

installed,

it

was

determined

that

a

motor

was

also

required

and

it

was

immediately ordered

and installed

on June

17,

2003, when

it arrived.

(See the affidavit

of Joe Chenoweth

contained in the Supplement to the

Record.)

While the People

may

not

see

the

relevance

that

a

bankruptcy

court

stay

has

on

interfering

with

RTC’s

exclusive right to mine landfill gas from the Taylor Ridge landfill,

ESG Watts sees

it as a

major

hurdle to

resolving

the

odor

problems

identified

in the

testimony

and sees

it

as

putting ESG Watts between a rock and

hard

place

—

the superior authority of federal law

versus the

right

of the

State

of Illinois

to enforce

its

laws.

ESG Watts

has

diligently

sought to force a decision

in the bankruptcy court

on the status of RTC’s rights while in

the interim working to keep

landfill gas from escaping from

the Taylor Ridge landfill.

In

People’s Exhibit

9,

Mr.

Davis

states,

“ESG Watts was required

by Permit

No.

1996-136-SP

to

implement the closure

plan

in July

1999.”

ESG Watts has

presented

THIS FILING

IS SUBMITTED ON

RECYCLED PAPER

PAGE 9

of 12

---

evidence

in

Respondent’s

Exhibits

18,

19,

and

20

that

the

closure

schedule

for

the

activities

required

would

require

50

weeks

after

receipt

of

approval.

There

is

no

indication

in IEPA comments about these

submittals that the schedule was found to

be

inappropriate or

must

be revised.

However,

Mr.

Styzens testified

that

IEPA attorneys

gave

him

information

and

he

relied

upon

that

information to conduct

his

analysis

that

closure

activities were required

to implemented

in April

1998 and that there was a 211-

day period to implement the closure, “so that is the reason

it went from

March of ‘98 up

through

October and

brought the noncompliance

period

up to

October

16th

of ‘98

and

then performed

our analysis through May

31st

of 2003.”

(See Pages 28-30,

Transcript.)

Therefore,

ignoring the

problem

that

ESG Watts

did

not know

what

closure

activities

were

required

or

the

manner

in

which

they

should

be

performed

to

meet

IEPA

requirements,

Mr.

Styzens

testimony

is

based

upon

flawed assumptions and adds

610

days or 20 months to the period of alleged noncompliance.

Add to this the fact that

Mr.

Styzens

whole

analysis

is

based

upon

a

going

concern

and

he

admits

(Page

70,

Transcript) that “it’s

difficult to deal with a situation if it’s

not even a going concern” and

the fact that the evidence

is

uncontroverted that ESG Watts has no landfills in operation

and

has no

source of

income

except for

meager monthly

royalty payments from

RTC

(Pages

185-186,

Transcript)

and

one

conclusion

is

evident;

the

analysis

of supposed

economic benefits obtained by ESG Watts performed by Mr. Styzens is worthless.

This points out another area where the People cavalierly ignore the evidence

in

the record.

The evidence, as aforementioned,

is uncontroverted that ESG Watts has no

source of income.

The

People argue that there has

been

no evidence

presented

upon

ESO Watts’

ability

to

pay fines

or

pay for

compliance.

The

People

argue

that

ESG

THIS FILING IS SUBMITTED

ON RECYCLED

PAPER

PAGE lOof 12

---

Watts has refused to pay prior fines when the supplement to the record

shows that the

Attorney

General’s

Office

acknowledges

payment

of

these

fines

just

as

agreed

to

between the

parties

as shown

by

Respondent’s

Exhibits 27 and

28.

Now

the

People

cannot

be faulted for arguing that the fines were not paid since that had

not been done

when the

People’s Post-Hearing Brief was submitted, but the

People can be faulted for

failing to

introduce the

agreement between the

parties to

pay the fine

out

of a special

source

of funds.

The

People

did

not

introduce

that

agreement

because

it

is

more

interested in being punitive than

in achieving closure.

The People did not introduce the

fact

that

ESG

Watts

inquired

about

using

the

monies

in

the

trust

fund

posted

as

approved

financial

assurance

to

pay

for

closure

costs,

which

request

was

rejected

outright, because it

is

more important to the People to continually paint ESG Watts as a

recalcitrant who

has the

ability

but

not the

desire to

comply with

the

law

and

who

is

always

crying

foul at the hands of the People.

ESG Watts hopes that a close look at the

record

in

this case

and

the

arguments

made

by the

People

in

its

Post-Hearing

Brief

dispel this perspective on the facts.

Remember that it takes two to tango

and, when the

People,

through

the

IEPA

and

the

AG’s

office,

interpret

laws

and

regulations

more

conservatively when ESG Watts

is

involved and continue to seek punitive solutions that

take away from

ESG Watts’ ability to achieve compliance, the question will

be asked if it

is

ESG Watts or the

People who are preventing closure and preventing

a resolution to

this long-running controversy.

Section 42(h) of the Act (415

ILCS 5/42(H) provides:

In

determining

the

appropriate

civil

remedy

to

be

imposed,

the

Board

is

authorized

to

consider

any

matters

of

record

in

mitigation

or

aggravation

of

penalty,

including,

but not limited to the following factors:

THIS FILING

IS SUBMITTED ON

RECYCLED PAPER

PAGE

11 ofl2

---

(1)

The duration and gravity of the violation;

(2)

The

presence

or

absence

of

due

diligence

on

the

part

of

the

violator

in

attempting to comply

with the

requirements

of this Act

and

regulations

thereunder

or

to

secure

relief

therefrom

as

provided

by this Act;

(3)

Any economic benefits accrued

by the

violator because of delay in

compliance with requirements;

(4)

The

amount

of

monetary penalty which

will

serve

to

deter further

violations

by

the

violator

and

to

otherwise

aid

in

enhancing

voluntary compliance with this Act by the violator and other persons

similarly subject to the Act;

and

(5)

The

number,

proximity in time, and gravity of previously adjudicated

violations of this Act by the violator.

ESG Watts believes

that

it

has

shown that

no economic benefit

has been obtained by

ESG Watts from the alleged

activities,

it

has shown that it has acted

with due

diligence

to

obtain

the

necessary

permits to

relocate

waste

and

proceed

with

closure

activities

and to be relieved of the burden of the automatic stay enforced

by the bankruptcy court

in the RTC case so that

it can proceed with making any necessary correction to the gas

management system and that a monetary

penalty

is

not needed to deter violations or to

otherwise

aid

in

enhancing

voluntary

compliance.

ESG

Watts

believes

that

it

has

shown that what

is

need to obtain

the desired closure

is the

cooperation of the

IEPA in

the issuance ofthe necessary permits.

While the positions and defenses raises by ESG

Watts

may not

in each

instance

constitute a complete defense to

the charges

alleged

against

it

and some of which

it

has admitted, the evidence

presented

and the positions

espoused

by ESG Watts

surely provide mitigation to those violations that are found

to

exist.

Res

ctf

ly submitted by,

ar

A.

oodward, Cor

orate Counsel

ATt~RNEY

FOR RESPONDENT

THIS FILING

IS SUBMITTED

ON

RECYCLED PAPER

PAGE l2of 12

---

CLERK’S

OFFICE

SEP

2

32003

STATE OF IWNOIS

Pollution

Control Board

v.

PCB NO.

01-167

ESG WATTS, INC., an Iowa

corporation,

Respondent.

MOTION

FOR LEAVE TO

FILE POST-HEARING BRIEF

and

MOTION

FOR LEAVE TO SUPPLEMENT RECORD INSTANTER

NOW

COMES

Respondent,

ESG

WATTS,

INC.,

acting

by

and

through

its

Corporate

Counsel

Larry

A.

Woodward

and

moves

the

Board,

pursuant

to

35

IllAdmCode §~101

.522

and

101.500(a),

for

leave to file

its

Post-Hearing

Brief and

its

motion

for leave

to supplement the

record

instanter and shows the

Board

as

grounds

therefor the following:

1.

That the Post-Hearing Brief of Respondent was due on September 19, 2003.

2.

That

Respondent’s counsel

had oral argument before the

4th

District Court of

Appeals on September 16, 2003,

which

required

more preparation time than

originally

contemplated

and

caused

Respondent’s

Counsel to

be

out

of

his

office for

1.5 days.

3.

That Respondent’s counsel

had to prepare an answer due

in the

U.S.

District

Court,

Central

District

of

Illinois,

Rock

island

Division

and

file

same

on

September 17, 2003.

4.

That the

record

in this matter

is

quite lengthy and

its

review and cataloguing

required more time than originally contemplated.

PEOPLE OF THE STATE OF

Complainant,

)

)

---

5.

That

the filing

of the

Post-Hearing

Brief was done

on

September

22,

2003,

and was filed by the use of U.S.

Express mail thereby guaranteeing

its

actual

receipt only one after the

day

it

would

have

been

received

if filed timely and

mailed

by regular U.S.

Mail and the tardiness of the filing

is

not done for the

purpose of delay.

6.

That

on

September

17,

2003,

the

Illinois

Attorney

General

issued

a

press

release

(as

shown

by

the

affidavit

of

counsel

attached

hereto

and

incorporated

herein)

acknowledging

Respondent’s

payment

of

fines

and

penalties

which

the

nonpayment

of

which

was

the

subject

of

evidence

admitted

into

evidence

at

the

hearing

of

this

matter

and

is

referred

prominently in

Complainant’s Post-Hearing

Brief.

The

payment of said fines

and

penalties

came

after the

filing of Complainant’s

Post-Hearing

Brief so

it

was impossible for the Complainant to set the record straight prior hereto.

7.

That after the

hearing

in

this matter the

parts

ordered

by ESG Watts,

Inc.

in

order

to

repair

the

flare

and

make

it

operational

again

arrived

and

was

installed

on

June

17,

2003

(as shown

by the

affidavit

of Joseph

Chenowith

attached hereto and incorporated herein).

8.

That

the

interest of justice

and

avoidance

of the

appearance

of

prejudicing

Respondent by the presentation of information that is now untrue requires the

supplementation of the record in this matter.

WHEREFORE, for good cause shown Respondent hereby requests leave to file

its

Post-Hearing

Brief instanter

and for leave to file

its

motion for

leave

to supplement

the record of the proceedings.

---

ESG WATTS, INC.,

RESPONDENT

By

I~ari~JA.

Woodward, C

rporate Counsel

---

BEFORE THE ILLINOIS POLLUTION CONTROL BOARD

ROCK ISLAND

COUNTY,

ILLINOIS

PEOPLE OF

THE

STATE OF ILLINOIS,

)

)

Complainant,

)

V.

PCB NO.

01-167

(Enforcement)

ESG

WAITS,

INC., an

Iowa

corporation,

)

Respondent.

)

STATEOFIOWA

)

)

ss

COUNTY OF SCOTT

)

AFFIDAVIT

The undersigned,

being

first

duly

sworn,

upon

oath

deposes

and

states

as

follows:

1.

That he went

to

the

official web

site

of the

Illinois

Attorney

General

(httD://www.ag.state.

il.uslpressreleaselo91603.htm) on September 18, 2003,

after

he

had

been

contacted

by a

reporter for comment

on

a

press

release

from the Illinois Attorney General dated September 16, 2003.

2.

That

he

found

the

attached

press

release posted

on

said

site and

printed

a

copy of same.

3.

That same constitutes an

admission

against

interest concerning the

payment

of the fines and

penalties

upon

which evidence

was presented

at heanng in

this

matter

and

came

after

the

close

of

the

record

in

same

and

the

nonpayment of which

is

featured

in

Complainant’s

Post-Hearing

Brief

in this

matter.

4.

That

he presents

same to the

Board in

order to prevent the

Board’s decision

from

being

based upon

incorrect factual

basis and to prevent injustice to ESG

Watts,

Inc. that would result from such decision.

5.

That

the

payment

of

said

fines

and

penalties

was

made

after

the

filing

of

Complainant’s Post-Hearing

Brief but

pursuant to the agreement

reached

by

the

parties

at

the

September

12,

2002

hearing

in

00-CH-0239

in

the

Sangamon Circuit

Court and, therefore,

Respondent does

not intend

to imply

that Complainant has intentionally attempted to mislead the Board.

---

6.

That the afflant saith further not.

La

.

Woodward

SUBSCRIBED AND SWORN to before me this

19th

day of September, 2003.

~

~tjke~J2

Notary

blic

---

Ut

Ui~

IIL1ItUL~

r~uiJiu~y

~Jcu~La1

-

I

&~b

LL~U.~S

I

UI

Z.

ILtANO~SATfORNEY GErIERAL

LISA MADIGAN

PRESS~

RELEASE

For Immediate Release

Contact: Melissa Merz (AG)

312-814-2518

877-844-5461

(TTY)

mmerz@atg.state.il.us

MADIGAN SAYS LANDFILL OWNER PAYS $1 MILLION IN

PENALTIES, FINES

ESG WATTS OPERATED

INSANGAMON,

MERCER

AND

ROCK

ISLAND COUNTIES

Chicago

—

Following a payment of$1.04 million in penalties and fines,

Attorney General Lisa Madigan today said ESG Watts is getting closer to

resolving its differences with the state over environmental violations at three

landfills the waste disposal giant formerly

operated in

illinois.

Since 1991, the Attorney General’s office has prosecuted 11 separate cases

in the courts or before the Illinois Pollution Control Board

(IPCB)

involving

Watts’ landfills in Sangamon, Mercerand Rock Island counties.

The payment by Watts stems from an October 2000 order ofthe Sangamon

County Circuit Court to collect civil penalties and fees imposed by the JPCB

in three contested enforcementproceedings involving the Sangamon Valley

Landfill near

Spnngfleld,

TaylorRidge Landfill in Rock Island County and

Viola Landfill in Mercer County. In all three cases, Watts refused to pay

judgements against it and

filed

appeals. In the case ofTaylorRidge, Watts

even continued to operate the facility until the Attorney General’s office

went to court and obtained an

injunction.

“In the past, Watts has failed to comply with the

numerous

judgements

against it, butwe’re making progress,” Madigan said. “While Watts is not

yet in full compliance, I commend

Environmental

Bureau ChiefThomas

Davis for his years ofdiligence in holding Watts’ feet to the fire andforcing

it to pay the citizens ofIllinois what it owes for breaking the law.”

The Illinois

Environmental

Protection Agency (IEPA) had

cited Watts

for

problems including

groundwater contamination, exceeding

permitted

disposal limits

and closure violations at all three landfills. In addition,

complaints against Watts involved recurring odor violations, creationofa

public nuisance and

surface

waterpollution problems atthe Rock Island and

Sangamon County landfills.

http://www.ag.state. il.us/pressrelease/091603 .htm

9/18/2003

---

‘.JLLt~,’.~

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UI’..

LtUhLUI~ L~tLLUti1’..J

‘.J’..IA..LCLL

—

J.

~

J.’.LI..a.~~

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Ut

S.

During the time that Watts refused to pay its fines and penalties, Watts

claimed that its ability to pay the $1.04 millionjudgement depended on its

sellingthe company’s former SangamonValley Landfill. The sale ofthat

landfill recently was finalized and theJEPA has grantedthe new owner, a

subsidiary ofAllied Waste Systems, a permit to reopen the Sangamon

Valley Landfill.

Madigan saidthattwo cases are still pending with Watts. A penalty of $1

million was recommended at aJune hearingbefore the IPCB over continued

closure violations at Taylor Ridge. While Viola is no longer accepting

refuse, a court order was entered in earlyAugust over Watts’ f~ilure

to

comply with groundwater remediation requirements at the site. A penalty of

more than $284,000 was imposed.

Return to September 2003 Press Releases

http:/iwww.ag.state.il.us/pressrelease/09 1603.htm

9/18/2003

---

BEFORE THE ILLINOIS

POLLUTION CONTROL BOARD

ROCK ISLAND COUNTY, ILLINOIS

PEOPLE OF THE STATE OF ILLINOIS,

)

)

Complainant,

)

)

v.

)

PCBNO.

01-167

)

(Enforcement)

ESG WATTS, INC., an

Iowa

)

corporation,

)

)

Respondent.

)

STATE OF ILLINOIS

)

)

ss

COUNTY OF ROCK ISALND

)

AFFIDAVIT

The

undersigned,

being

first

duly

sworn,,

upon

oath

deposes

and

states

as

follows:

1.

That

he

is

employed

by ESG

Watts,

Inc.

and

is

in

charge of the day to

day

activities at the Taylor Ridge Landfill.

2.

That

he

noticed

and

reported the

nonoperational

status

of the flare

on

said

landfill on January 27, 2003 to Resource Technology Corporation (“RTC”).

3.

That

he began immediately to

investigate the problem and determined that

it

was a 50-amp breaker used by the flare

to collect gas.

4.

That

he

began

contacting

parts

suppliers

immediately

after

making

said

determination

and

was

told

that

no

one

had

said

part

in

stock;

he

began

making inquiry as to where such part

could be obtained and finally on May

14,

2003, Republic Electric Company indicated that it

had found a supplier of said

part and

it could

be ordered.

It was ordered

immediately, and

it

arrived on

or

about June

3, 2003.

5.

That

Farlow

Electric Co.

was engaged

to install the

50-amp breaker,

Farlow

Electric

informed

me

that

the

motor

had

burn

out

when

the

amp

blew;

I

authorized the ordering of a new motor and

it arrived on June

17,

2003 when

it was installed

and the flare became operational

again.

6.

That the affiant saith further ~

~

SUBSCRIBED AND SWORN to befor

me this 22~x~

day of September,

2003

I

ARBARA

J BURApj~~