Microsoft Word - PCB 03-191 09-12-07 pollution .txt

ILLINOIS POLLUTION CONTROL BOARD

2 PEOPLE OF THE STATE OF ILLINOIS,)

Complainant,

)

vs.

) No. PCB 03-191

5 COMMUNITY LANDFILL COMPANY, )

6 INC., and CITY OF MORRIS, an )

7 Illinois municipal corporation, )

Respondents.

)

TRANSCRIPT OF PROCEEDINGS had in the

12 above-entitled cause on the 12th day of September,

13 A.D. 2007, at 9:00 a.m.

15 BEFORE: BRADLEY HALLORAN, Hearing Officer.

1 APPEARANCES:

OFFICE OF THE ATTORNEY GENERAL

STATE OF ILLINOIS,

69 West Washington Street

Suite 1800

Chicago Illinois 60602

312-814-5388

MR. CHRISTOPHER GRANT,

MS. JENNIFER A. TOMAS,

and

ILLINOIS ENVIRONMENTAL PROTECTION AGENCY,

1021 North Grand Avenue East

P.O. Box 19276

Springfield, Illinois 62794-9276

217-782-8858

MR. MICHAEL S. ROUBITCHEK,

appeared on behalf of the Complainant;

1 APPEARANCES (cont'd.)

LaROSE & BOSCO, LTD.,

200 North LaSalle Street

Suite 2810

Chicago, Illinois 60601

312-642-4414

MS. CLARISSA CUTLER GRAYSON,

appeared on behalf of the Respondent,

Community Landfill Company;

HINSHAW & CULBERTSON, LLP,

100 Park Avenue

P.O. Box 1389

Rockford, Illinois 61105-1389

815-490-4900

MR. RICHARD S. PORTER,

and

1 APPEARANCES (cont'd.)

SCOTT M. BELT & ASSOCIATES, PC,

105 East Main Street

Suite 206

815-941-4675

MR. SCOTT M. BELT,

appeared on behalf of the Respondent,

the City of Morris.

23 REPORTED BY: SHARON BERKERY, C.S.R.

CERTIFICATE NO. 84-4327.

I N D E X

Page

3 WITNESS

DX CX RDX RCX

4 WILLIAM CRAWFORD

By Mr. Porter........16.......65

By Mr. Grant.............38

8 DEVIN MOOSE

By Mr. Porter........66

By Mr. Grant.............110

12 EDWARD PRUIM

By Mr. LaRose.......150......178

By Mr. Grant............169.......181

By Mr. Porter.......176......183

E X H I B I T S

2 NUMBER

MARKED FOR ID RECEIVED

4 Respondent Exhibit

5 No. 11..................22...........24

6 No. 12..................23...........24

8 Hearing Officer Exhibit

9 Exhibit E..............193

THE HEARING OFFICER: Good morning

everybody. My name is Brad Halloran. I'm a

hearing officer with the Illinois Pollution

Control Board.

I'm also assigned to the matter,

the People of the State of Illinois,

Complainant, versus Community Landfill

Company Inc., and the City of Morris. It's

docketed at PCB 03-191 with the Board.

This hearing is continued from

yesterday, September 11th, 2007. The State

yesterday rested in its case in chief. The

respondents will be proceeding, CLC and the

City of Morris, with theirs.

Counsels, would you like to

introduce yourselves?

MR. GRANT: Yes, Mr. Halloran.

My name is Christopher Grant, and

I'm with the Attorney General's office.

MS. TOMAS: General Jennifer Tomas,

last name spelled T-O-M-A-S. I am assistant

attorney general also with the Illinois

Attorney General's office.

ROUBITCHEK: Michael Roubitchek,

assistant counsel with the Illinois EPA.

MS. GRAYSON: Clarissa Grayson,

counsel for Community Landfill Company, with

LaRose and Bosco.

MR. PORTER: Good morning. Richard

Porter on behalf of the City of Morris.

MR. BELT: Good morning. Scott Belt,

also on behalf of the City of Morris.

THE HEARING OFFICER: Good morning,

Counselors. Before we begin, I wanted to do

a little housekeeping, reading in some of the

exhibits that were offered and accepted in

evidence yesterday.

Without further adieu, the first

one is hearing officer Exhibit A, which was

the request to incorporate materials from a

prior proceeding. And that was filed with

the Board on September 6, 2007. There was no

objection.

The People's exhibits -- there's a

list and I'm going to read them off -- they

were offered and accepted into evidence

yesterday, September 11th, 2007. First of

all, it's entitled People's Group Exhibit A.

But within there is:

Exhibit 1, Illinois Pollution

Control Board Financial Assurance

Regulations, 35 Ill Adm Code, 811.700.

Exhibit 2, People Versus Community

Landfill Company and City of Morris,

PCB 03-191, February 16th, 2006 Board order.

Exhibit No. 3, People Versus

Community Landfill Company and the City of

Morris, PCB 03-191, June 1, 2006 Board order.

Exhibit 4, Community Landfill

Company and City of MOrris versus the IEPA,

PCB 01-170 December 6th, 2001 Board order.

Exhibit 5, Community Landfill

Company and City of Morris versus Pollution

Control Board and Illinois Environmental

Protection Agency, No. 3-02-0024. 311 Ill.

App. 3d, 1056. That's obviously an opinion.

Exhibit 6 is Community Landfill

and City of Morris versus IEPA, PCB 1-48,

1-49. And that matter was consolidated.

It's an April 5th, 2001, Board order.

Exhibit 7, Illinois EPA Inspector

Mark Retzlaff's June 26th, 2007 inspection

report.

Exhibit 8, Illinois EPA Inspector

Mark Retzlaff's August 29th, 2007 inspection

report.

Exhibit 9 includes the Frontier

Bonds. A is Bond No. 91507, B is Bond

No. 158465, C is Bond No. 158466.

Exhibit 10, Violation Notice to

the City of Morris.

Exhibit 11, Violation Notice to

Community Landfill.

Exhibit 12, permits for Morris

Community Landfill: A, Parcel A SigMod, and

B, Parcel B SigMod.

Exhibit 13, Community Landfill

Company's Interrogatory Responses and

Production Requests, City of Morris'

Interrogatory Responses and Production

Requests.

And finally, Exhibit 14,

Affidavits from Mayor Richard Kopczick.

That concludes the State's

exhibits that were submitted and accepted

September 11th, 2007.

We're moving on to CLC's exhibits

that were offered yesterday and accepted into

evidence. And, by the way, none of them were

objected to.

CLC's exhibit list starts with

Exhibit 1 as Hearing Officer Exhibit A.

So CLC's list starts off with

Exhibit 2, CLC's First Supplemental Response

to Complainant's First Set of Interrogatories

and Request for the Production of Documents

dated September 28th, 2004.

Exhibit 3, a letter from Frontier

to CLC, dated January 23rd, 2003.

Exhibit 4, a letter from CLC to

Frontier dated March 20th, 2003.

Exhibit 5, a letter from Frontier

to CLC, dated April 7th, 2003.

Exhibit 6, a letter from CLC to

Frontier, April 16th, 2003.

Exhibit 7, a letter from Frontier

to CLC, dated May 30th, 2003.

Exhibit 8, a letter from CLC to

Frontier, dated June 19th, 2003.

Exhibit 9, a letter from Frontier

to CLC, dated July 2nd, 2003.

Exhibit 10, a facsimile from

Frontier to CLC, dated November 5th, 2005,

with a copy of Exhibit 11 attached.

Exhibit 11, a letter from IEPA

Blake Harris through Frontier, August 21st,

2004.

Exhibit No. 12, a letter from IEPA

to Frontier, dated January 27th, 2004.

Exhibit No. 13, a letter from IEPA

to Frontier, dated May 27th, 2005.

Exhibit No. 14, a letter from IEPA

to Frontier, dated May 26th, 2005.

Exhibit No. 15, Bond No. 91507,

Continuation Certificate.

Exhibit No. 16, Bond No. 158465

Performance Bond.

Exhibit No. 17, Bond No. 158466

Performance Bond.

Exhibit No. 18, a letter from

Emerald Insurance Services to CLC, dated

April 15th, 2003. And that ends, at least

this far, CLC's exhibits.

And now, we get to the City of

Morris' exhibits that were tendered and

accepted into evidence without objection on

September 11th, 2007. And I want the Board

to disregard -- originally I labeled it as

City of Morris' Group Exhibit A, but I think

that may be a little confusing. So we're

just going to go as follows:

City of Morris' Exhibit 1, July

12, 2007, Updated Closure and Post-Closure

Costs Prepared By Shaw Environmental.

Exhibit No. 2, July 12th, 2007,

Updated Closure and Post-Closure Costs

Prepared by Shaw Environmental for the Morris

Community Landfill, Parcel B.

If I can back up to Exhibit 1,

that was updated closure and post-closure

costs prepared by Shaw for Parcel A.

Exhibit No. 3(a.) The first one

is June 29th, 1982, Application For Permit

Transfer.

Exhibit No. 3(b.), July 20th,

1982, a letter from IEPA granting operating

permit to CLC.

Exhibit No. 3(c.), A 1974 letter

from IEPA granting permit for the initial

development of the landfill.

Exhibit No. 4, City of Morris

Independent Auditor's Report, April 2006.

Exhibit No. 5, City of Morris

Independent Auditor's April of 2005.

Exhibit No. 6, a January 27th,

2004, letter from IEPA to Frontier Insurance

Company.

Exhibit No. 7, a lease agreement

between the City of Morris and CLC dated

July 1st, 1982.

And subsequent amendments and

addenda as follows:

Exhibit No. 7(a.), Addendum to

Lease Agreement.

Exhibit No. 7(b.), Amendment to

1982 Lease Agreement.

Exhibit No. 7(c.), an

October 26th, 1987, Amendment to the 1982

Lease Agreement.

Exhibit No. 7(d.), an October 1st,

1990, Addendum to the 1982 Lease Agreement.

Exhibit No. 7(e.), a July 20th,

1999, Addendum to the 1982 Lease Agreement.

Exhibit No. 7(f.), December 13th,

1999, Addendum to the 1982 Lease Agreement.

Exhibit 8, August 5th, 2002,

SigMod Permit Parcel A.

Exhibit 9, August 5th, 2002,

SigMod Permit Parcel B.

Exhibit No. 10, June 7th, 2006,

Closure Plan Drafted By Shaw Environmental.

And that sums it up so far of what

the City of Morris tendered and were

accepted, the exhibits yesterday,

September 11th, 2007.

With that said, does Community

Landfill or the City of Morris want to

proceed, and who is first?

MR. PORTER: The City of Morris is

willing to go first, as CLC, I understand

their witness is going to be here this

afternoon, so we will go first.

THE HEARING OFFICER: If that's okay,

Mr. Porter?

MR. PORTER: Thank you.

THE HEARING OFFICER: Proceed.

MR. PORTER: And we would call

William Crawford.

THE HEARING OFFICER: Mr. Crawford,

the hot seat is up here.

Raise you right hand and Sharon

will swear you in.

WILLIAM CRAWFORD,

8 called as a witness herein, having been first duly

9 sworn, was examined and testified as follows:

DIRECT EXAMINATION

11 BY MR. PORTER:

Q. Please state your name for the record.

A. William J. Crawford.

Q. And, Mr. Crawford, how are you

15 employed?

A. I am self-employed. I've owned my own

17 business since 1995.

Q. And what is that business?

A. It's a certified public accounting

20 firm.

Q. And, I take it, then -- are you a

22 certified public accountant?

A. That's correct.

Q. And you, obviously, hold a

1 professional license with the EPA; is that correct?

A. That's also correct.

Q. And how long have you been an

4 accountant ?

A. I'm been an accountant since 1983.

Q. And how -- strike that.

Have you had the opportunity to

8 perform any work for the City of Morris?

A. Yes, I've performed the annual audit

10 since 1986, with the exception of the years 2003 and

11 2004.

Q. And what is an annual audit?

A. The purpose of an annual audit is to

14 express an opinion of the fairness of the financial

15 statements and to provide that in an independent

16 external way.

Q. And let me show you some documents

18 that have been marked Exhibits 4 and 5 for the City

19 of Morris.

First, let me show you what has

21 been marked as City of Morris Exhibit 4. What is

22 that document?

A. This is the 2005 annual audit report.

Q. And is that a true and accurate copy?

A. It appears to be.

Q. And Exhibit 6 -- I'm sorry, Exhibit 5,

3 what is that document?

A. That's the 2006 annual audit report.

Q. And is that a true and accurate copy?

A. It appears to be also.

Q. And have you done -- strike that.

When you say it's the 2006 annual

9 report, it's actually for the fiscal year ending

10 April 30, 2006; is that right?

A. That is correct.

Q. And, likewise, the 2005 annual report

13 is for the fiscal year ending April 30, 2005; is

14 that correct?

A. Yes.

Q. Were you hired to do the 2007 annual

17 report?

A. Yes, I have been.

Q. And is that completed?

A. I do have a draft copy of the report,

21 it's not completed at this time. There are some

22 minor items that need to be cleared, and I'm waiting

23 for the letter from the attorneys regarding

24 commitments and contingencies, which I do need, to

1 complete the audit.

Q. While conducting these -- strike that.

Are you an employee of the City of

4 Morris?

A. No, I'm not.

Q. And you've mentioned that it's an

7 independent auditor's report. What is the import to

8 it being independent?

A. Independent is very important. In

10 fact, it's the foundation of our profession, as far

11 as auditors are concerned.

You want to be an independent, you

13 don't want to have any ties to the city. You want

14 to be able to give an opinion without any

15 influences.

Q. Now, during your time performing these

17 audits, have you had occasion to review any of the

18 Illinois regulations concerning financial assurance?

A. Yes, I have.

Q. In particular, have you reviewed

21 Sections 811716 and 717?

A. Yes.

Q. What are those sections?

A. Those are relating to the financial

1 assurance for a landfill and also the guarantee for

2 a landfill.

Q. And, in particular, 811716 is entitled

4 Local Government Financial Test; is that correct?

A. Yes.

Q. And 811717 is entitled Local

7 Government Guarantee; is that correct?

A. Yes.

Q. Now, does 811717 incorporate 716?

A. How did you mean that?

Q. Well, Exhibit No. 1, I believe, of the

12 State's exhibits are in that white binder in front

13 of you.

A. Uh-huh.

Q. You may want to open that up and take

16 a look at 811717, but let me reask the question

17 while you're doing that.

Isn't it true that in order to

19 comply with 811717 one component of that is

20 complying with the financial test referenced in

21 811716?

A. Yes, that is true.

Q. So, in other words, 717 actually

24 incorporates 716; is that correct?

A. Yes.

Q. Now, is it your understanding that a

3 municipality may, under 811717, guarantee that it

4 will perform closure and post-closure activities for

5 a third party who happens to conduct a waste

6 disposal operation if that third party fails to do

7 so?

A. Yes.

Q. And 811716 is a financial test that a

10 municipality, who wants to provide a guarantee, has

11 to meet; is that correct?

A. Yes.

Q. Section 811716 may also be used by a

14 municipality that is conducting an operation itself,

15 and that, if they meet that test, they meet

16 financial assurance; isn't that right?

A. Yes.

Q. What provoked you to review 811716 and

19 717?

A. I was requested by the City.

Q. And when did you do that?

A. I did that for a deposition that I did

23 in July of 2006.

Q. Section 811716 contains a financial

1 test; correct?

A. Correct.

Q. And have you performed that financial

4 test for the year ending -- fiscal year ending 2007?

A. Yes, I have.

MR. PORTER: May I approach the

witness?

THE HEARING OFFICER: Yes, you may,

Mr. Porter.

10 BY MR. PORTER:

Q. Let me show you a document I have had

12 marked Morris Exhibit No. 12.

(WHEREUPON, a certain document was

marked Morris Exhibit

No. 12 for identification, as of

9/12/07.)

17 BY MR. PORTER:

Q. What is that document?

A. This is a worksheet that an auditor

20 would prepare for a solid waste financial assurance

21 calculation. It's provided by our service that I

22 use to prepare audits.

Q. And is that a worksheet for the year

24 ending 2007, fiscal year 2007?

A. April 30th 2007; that's correct.

Q. Before I get into that, I remembered

3 one administrative thing I wanted to do earlier.

4 Let me show you what I have had marked as Morris

5 Exhibit No. 11.

(WHEREUPON, a certain document was

marked Morris Exhibit

No. 11 for identification, as of

9/12/07.)

10 BY MR. PORTER:

Q. What is that document?

A. Basically, that's my resume, my

13 listing of experience and education.

Q. And is that true and accurate?

A. Yes, it is.

Q. And likewise, Exhibit 12, is that a

17 true and accurate copy of the worksheet that you

18 did?

A. Yes, it is.

Q. And are Exhibits 11 and 12 documents

21 that you keep in the normal course of business?

A. I'm sorry, can you repeat --

Q. Are Exhibits 11 and 12 documents you

24 keep in the usual course of your business as a CPA

1 performing audits?

MR. GRANT: The State will stipulate

to a --

THE HEARING OFFICER: Thank you,

Mr. Grant.

MR. PORTER: Move for admission of 11

and 12.

MS. GRAYSON: I will --

THE HEARING OFFICER: Morris Exhibits

11 and 12 are admitted into evidence. Thank

you.

(WHEREUPON, said document,

previously marked Morris Exhibit

Nos. 11-12, for identification, was

offered and received in evidence.)

16 BY MR. PORTER:

Q. Does the financial test primarily

18 involve two major components?

A. Yes, two ratios.

Q. And what are those two ratios?

A. Well, the one ratio is in regards to

22 marketable securities in comparison to expenditures.

23 And that ratio must be greater than .05.

Q. Would you call that a liquidity ratio?

A. Yes.

Q. And have you computed -- well, strike

3 that. You jumped ahead on me there a little bit.

In order to meet the financial

5 test, the municipality must have a liquidity ratio

6 that is greater or equal to what number?

A. .05.

Q. And have you computed the liquidity

9 ratio for the City of Morris fiscal year ending

10 2007?

A. Yes, I have.

Q. And what is the liquidity ratio?

A. The liquidity ratio computes to 2.295

14 for the fiscal year ending April 30th of 2007.

Q. Now, as I understand it, you've done

16 financial audits for the City of Morris for decades,

17 since the '80s; correct?

A. That's correct.

Q. And now, I understand that you,

20 obviously, weren't performing this financial test

21 each of those years; is that right?

A. That is correct, I was not.

Q. But from your experience in doing

24 those audits, do you have a suspicion as to whether

1 or not the City of Morris would meet the liquidity

2 test since you've been doing the audits?

A. Almost assuredly.

Q. Upon what do you base that?

A. Based on the fact that it's -- that

6 the ratio is .05 for the City to have less cash than

7 expenditures, I would have noted that. I would have

8 noticed that if it were in that great of a ratio.

So I don't believe -- you know, I

10 can't say for certain because I don't have all those

11 audits in front of me, but it has never been a

12 problem.

Q. In other words, the -- today, as we

14 sit here, they so easily meet that first component

15 in the financial test that you believe they probably

16 met it the entire time you were doing audits?

A. I believe so.

Q. Now, what is the second ratio that a

19 municipality must meet in order to meet the

20 financial test?

A. That would be the annual debt service

22 ratio.

Q. And for those of us who don't have a

24 clue, can you explain when an annual debt service

1 ratio is?

A. That is a comparison of the amount of

3 expenditures for debt service, which include

4 principal and interest in one year, compared to,

5 again, the total expenditures of the City. And that

6 ratio must be less than .2.

Q. And have you computed the ratio for

8 the -- strike that.

Have you computed the annual debt

10 service ratio for the City of Morris fiscal year

11 ending April 30th, 2007?

A. Yes, I have.

Q. And what is it?

A. It is .0133.

Q. So several -- or a couple hundred

16 times, at least, lower than it needs to be?

A. Suffice to say, it's considerably

18 less.

Q. And so, again, does the City of Morris

20 easily meet that second ratio?

A. Yes.

Q. And, again, though I understand you

23 haven't actually done the financial test for every

24 year that you have been an auditor, do you have a

1 suspicion as to whether or not they made it in the

2 past? At least -- let's say, through at least 2000,

3 which is the date of the beginning of this

4 situation.

A. I would say that is probably a

6 definite. Now, prior years, I would assume that's

7 the case.

However, I really cannot recall

9 where the expenditures would have been in those

10 years. So it would be much more difficult for that

11 ratio for me to recall.

Q. You have no reason to believe that,

13 since the year 2000, they would have failed to meet

14 that Ratio; is that right?

A. No, I do not.

Q. So the punch line here is that the

17 City of Morris does meet two necessary ratios for

18 the financial test; is that right?

A. Yes.

Q. Now, does the financial test then

21 provide how much a municipality can guarantee once

22 they've met those two ratios?

A. Once they've met those ratios, there

24 is a computation that is done, and it is 43 percent

1 of revenues according to generally accepted

2 accounting principles. Basically, total revenues

3 times 43 percent.

Q. And what were the -- well, strike

5 that.

Do you know what the total

7 revenues were for fiscal year ending 2007? I

8 understand, though, it's not completed yet.

A. It is not complete. I do not

10 anticipate any changes in the revenue figures for

11 the audit. And 43 percent of the total annual

12 revenue is $9,146,954.

Q. So let's be sure we have a clear

14 record.

What are the total revenues for

16 the year 2007, fiscal year ending April 30th, 2007?

A. Twenty-one million, two hundred

18 sixty-nine thousand, six hundred sixty-two.

Q. And that comes out to -- 43 percent of

20 that is about 9.1 million; is that correct?

A. Approximately.

Q. All right. Have you had the

23 opportunity to review the most recent cost estimates

24 that have been filed by Shaw Environmental?

A. Yes, as part of the audit process, a

2 letter is sent to the engineering firm that is in

3 charge of the landfill to get those most recent

4 estimates. And I do have those figures.

Q. So you have in front of you -- let me

6 show you what we have marked previously as Morris

7 Exhibits 1 and 2. Are those the revised cost

8 estimates that you have reviewed?

A. Yes.

Q. And, if you know, what is the cost

11 estimate for closure activities?

A. It appears, from my analysis of that,

13 that the closure costs were $7,347,572. And this is

14 based on a financial person looking at an engineer's

15 report.

Q. Right. So as to closure, would you

17 agree the City of Morris can simply provide, if it

18 is ordered to do so, its financial assurances by

19 meeting the financial test?

A. Strictly according to the calculation,

21 if you were to take out the post-closure figures,

22 according to the calculations, yes, the City would

23 meet that.

Q. Now, there are also some post-closure

1 numbers in those cost estimates, as well; is that

2 correct?

A. Yes.

Q. And how much is the proposed closure?

A. Two million, seven hundred fourteen

6 thousand, forty-seven dollars.

Q. And, by the way, those numbers you

8 just gave us, seven million and the two plus

9 million, those were for Parcels A and B combined; is

10 that right?

A. That's correct.

Q. So the total closure, post-closure

13 cost estimate is what?

A. Ten million, sixty-one thousand, six

15 hundred nineteen.

Q. Now, as I recall, you indicated that,

17 using the financial test, the City is free to

18 guarantee $9.1 million; is that right?

A. Yes.

Q. Is there any fund available that could

21 meet that $900,000 difference?

A. The City has moneys in three other

23 funds. There is the Sanitary Landfill Contingency

24 Fund, the Solid Waste Tax Fund and the Garbage Fund.

I believe at the end of my current

2 audit, they have approximately $2.7 million in those

3 funds. However, some of the moneys in the solid

4 waste are used to pay for the City's recycling, and

5 the moneys in the garbage fund are used to pay for

6 their refuse costs for the year.

And the total cost of those in the

8 year that I have just completed is about $777,000.

Q. Now, you mentioned some things that

10 those funds are earmarked toward. Does the City

11 have other major unusual obligations coming up in

12 the near future or that they have recently incurred?

A. As far as capital projects; is that

14 what you're --

Q. That's what I'm trying to get at.

A. Okay.

Q. Thank you. A much better way to put

18 it.

Do they have any other recent

20 capital projects or future capital projects that are

21 on the horizon?

A. Yes.

Q. And what are those?

A. Recently the City purchased land for

1 airport expansion in the amount of $2.2 million.

2 They are also in the process of going out for bids

3 on a new municipal building, which, I believe, the

4 estimates are ten to $12 million dollars, due to the

5 lack of space for their police department and their

6 city hall.

And they're also in the process of

8 a major water and sewer operation -- or capital

9 improvement, which includes a new sewer treatment

10 plant, trunk lines, water flow, out flow and some

11 water main work in that project. Now, that project

12 is 14 to $15 million, and it was begun in the year

13 that I'm auditing.

MR. PORTER: Mr. Halloran, I need to

take a break for a moment.

THE HEARING OFFICER: Very well.

Thank you.

Off the record.

(WHEREUPON, a recess was had.)

THE HEARING OFFICER: Back on the

record, Mr. Porter.

22 BY MR. PORTER:

Q. How are those obligations and capital

24 projects going to be funded?

A. The future capital projects, for

2 instance, the sewer project, the City had to do a

3 bond issue of $7.4 million. And the city hall

4 project is being funded from several places, the TIF

5 fund, it's in the TIF district, and general

6 city moneys to fund that.

Q. Now, in order -- strike that.

When a municipality meets the

9 financial test, you understand that even if the

10 individual or company conducting the waste operation

11 fails to close, that doesn't mean that the

12 municipality automatically has to plop down the full

13 closure costs; isn't that correct?

MR. GRANT: I'm going to object. This

is something outside of his area of

knowledge.

THE HEARING OFFICER: You know, if he

can answer, a little latitude. Overruled.

MR. GRANT: Could I ask -- I'm sorry,

I didn't hear Mr. Crawford. Can I ask,

Mr. Halloran, the court reporter repeat the

question, please?

MR. PORTER: I'm going to withdraw the

question and reask it.

THE HEARING OFFICER: All right.

2 BY MR. PORTER:

Q. You understand that after a

4 municipality provides its initial guarantee fee,

5 even if the third party conducting the waste

6 operation fails to close, that does not mean that

7 the municipality has to immediately pay all of the

8 financial assurance. Do you understand that?

A. From my reading of the regulation,

10 that's what I understand.

Q. And as a matter of fact, the

12 municipality can guarantee that itself will perform;

13 is that right?

A. Yes.

Q. And performance -- well, strike that.

You said you've reviewed the

17 documents from Shaw Environmental regarding their

18 cost estimates. Do you understand those estimates

19 involve closure activities over a number of years?

A. Yes.

Q. And that those closure activities are

22 paid as the activities arise over these numbers of

23 years; is that right?

A. Yes.

Q. Do you also -- well, strike that.

When a municipality proposes its

3 own guarantee or meets the financial test, does that

4 cost the municipality anything? Do they pay for

5 that?

A. It's strictly -- as far as I'm

7 concerned, as an auditor and a financial person,

8 it's strictly a test that is required to be met by

9 them. As for further -- going further with that, I

10 don't believe I could.

Q. If they were to go out and buy a bond

12 from a third party or an insurance vehicle from a

13 third party, would that cost money?

A. Obviously.

Q. Would you then agree that if the City

16 of Morris had known it was going to be required to

17 post financial assurance, arguably, since the year

18 2000, that it could have done so for free by using

19 the financial test?

A. Well, I can say that they would have

21 used that test first, that's what the City would

22 have done.

Q. And that would not have cost them

24 anything?

MR. GRANT: I'm going to object on the

basis of leading.

THE HEARING OFFICER: Sustained.

4 BY MR. PORTER:

Q. And would that have cost them

6 anything?

A. The financial --

Q. I will reask the question slightly

9 differently. Would that have cost them anything?

A. The financial assurance calculation

11 would not have cost them anything.

Q. So looking back, in hindsight, if we

13 assume that somehow the City had an obligation to

14 post financial assurance since 2000, did they

15 sustain any economic benefit by not posting their

16 own guarantee?

A. Thinking in terms of a historical

18 nature here, as that's what I am as an auditor, I

19 don't see that. But that's not my expertise here.

MR. PORTER: I have nothing further.

Thank you.

THE HEARING OFFICE: Thank you.

Mr. Grant and Ms. Tomas?

MR. GRANT: Thank you.

CROSS-EXAMINATION

2 BY MR. GRANT:

Q. Good morning, Mr. Crawford.

A. Good morning.

Q. I took your deposition in July of

6 2006.

A. Yes.

Q. I appreciate it.

I'm sort of curious as to where

10 you get the information for the audits that you

11 perform. And rather than go through the entire

12 audit, specifically, as far as the ongoing

13 litigation, you're aware that this case has been on

14 file since 2003 -- or maybe not that, but this case

15 has been ongoing; correct?

A. Yes.

Q. And are you also aware that the City

18 has attained judgment on liability against the State

19 as they obtained judgment on liability against the

20 City of Morris and Community Landfill Company

21 jointly and severely; are you aware of that?

A. I'm aware, but not of the particulars.

MR. PORTER: I'm going to object to

the extent I believe that mischaracterizes

the order that's been entered already.

THE HEARING OFFICER: As far as the

interim order?

MR. PORTER: Correct.

THE HEARING OFFICER: Well, I think

the question was liability.

MR. GRANT: Yes, I just said liability

and --

THE HEARING OFFICER: I'm going to

overrule it.

MR. GRANT: Okay.

12 BY MR. GRANT:

Q. I don't know if you're aware it's a

14 matter of record, but that they obtained that order

15 from the Pollution Control Board of February 16th,

16 2006. And the City and Community Landfill

17 companies' motion for reconsideration was denied on

18 June 1st, 2006. So just so you're aware of time

19 frame of it.

And, as you (sic) mentioned, I

21 took your deposition in July of 2006; isn't that

22 correct?

A. Yes.

Q. And at your deposition, you actually

1 had prepared one of these financial tests, a similar

2 document. Do you remember that?

A. Yes.

Q. And do you happen to remember the

5 amount -- the bottom line amount, rather than all

6 the numbers?

A. I believe it was $7.1 million.

Q. And what changed between last year

9 when the figure was 7.1 and now it's, you know, nine

10 million-something?

A. It's strictly a function of revenues.

12 I mean, it's 43 percent of revenues.

Q. All right.

A. The City has taken in more revenues.

15 And it is a two-year period we're talking about.

16 The period that we talked about in the deposition

17 was for fiscal year ending April 30th, 2005?

Q. That's correct. I believe that you

19 did not have the 2006 audit at the time?

A. Yes.

Q. Have the revenues -- the relevant

22 period here is, basically, from 2000 until the

23 present.

Have the revenues of the City of

1 Morris increased each year from 2000 to 2007?

A. I would say yes.

Q. So that, if you did perform that

4 calculation for the years 2000 all the way through

5 2000, you would expect that to increase every year.

6 And with the recent 2007 audit figures, that would

7 be the highest that it's been over that period?

A. Yes.

Q. Isn't that correct?

A. Yes, it is.

Q. The reason I ask the question about

12 the audit that we have -- and I'm going to refer to

13 the April 30th, 2006, auditor's report.

I'm going to ask you to turn to

15 Page 39 of --

MR. PORTER: Exhibit 4, year ending

April 30, 2006 is Exhibit 4.

MR. GRANT: Correct.

19 BY MR. GRANT:

Q. And at the top of the page it -- in

21 the first paragraph, you'll notice the second or

22 third sentence where it says, "The City vigorously

23 disputes any determination that it has conducted a

24 waste disposal operation or acted in any capacity as

1 an operator of a landfill" -- et cetera.

Do you see that sentence?

A. Yes, I do.

Q. The date on the top says April 30th,

5 2006; correct?

A. Yes.

Q. Are you aware that on February --

8 well, I just mentioned it. But does it change your

9 opinion that on February 16th that same year, the

10 Illinois Pollution Control Board found, in fact,

11 that the City was liable, had conducted a waste

12 disposal operation and was liable for closure,

13 post-closure financial assurances -- it's a long

14 question.

My question is, does it change

16 your opinion that they had been found -- that the

17 opposite had, in fact, been found?

A. Does it change my opinion on the

19 financial statements? No.

Q. Yes.

A. No, it would not.

Q. So --

A. It is disclosed -- it is disclosed in

24 the financial statements.

Q. Can you show me where it was

2 disclosed?

MR. PORTER: I'm sorry, I object.

Where what was disclosed? Vague.

5 BY MR. GRANT:

Q. Where it was disclosed that the City

7 had been found liable -- on February 16th, 2006,

8 when the Board issued summary judgment --

A. No, I was discussing the financial

10 side of it.

Q. Okay.

A. I mean, this is not a legal document,

13 it does not discuss the legal terms. It is prepared

14 by the City, it is verified through the attorneys

15 for the City.

Q. So the way that you get the

17 information -- and I understand I'm not -- believe

18 me, I'm not attacking your integrity. As I

19 understand it, especially when you're dealing with

20 lawyers, you're going to have to rely on what you're

21 told.

But with -- as an auditor -- you

23 know, in other words, you know, I suppose it's a

24 fact that the City vigorously disputes. But the

1 fact that after an administrative process the City

2 was found, in fact, to be conducting a waste

3 disposal operation and to be liable, albeit, not

4 necessarily knowing what the remedy is, that's what

5 this hearing is for.

But does that change -- you know,

7 should that be reflected somewhere in this report?

A. It is reflected -- the figures are

9 reflected in the report. And in the balance sheet

10 for the City, there is a potential liability listed

11 there for the City.

Q. And how much is listed? Do you

13 remember, or should we look at it?

A. I believe $7.6 million, which it

15 states in the next paragraph.

Q. Right. I was going to ask about the

17 next paragraph, too.

A. Uh-huh.

Q. In the second sentence -- we're

20 talking -- it essentially refers to $10.2 million of

21 financial assurance that's required for leachate

22 treatment. Are you familiar with that whole issue?

In other words, if it's from seven

24 to 17, what is that number?

A. I'm sorry?

MR. PORTER: I'm sorry. Objection.

MR. GRANT: I'll restate.

4 BY MR. GRANT:

Q. Are you familiar -- the first sentence

6 says, Approximately $10.2 million constitutes the

7 present value of 100 years of leachate collection

8 and treatment by a third party for the landfill."

Okay. You're familiar with that?

A. I'm -- yeah.

MR. PORTER: Objection. Are you

asking him if that's what the document

provides?

MR. GRANT: It's just really

foundation. I'm going to ask him a question

about 17 point, whatever, versus seven.

MR. PORTER: Okay. My objection is

the question is vague.

Are you familiar with what?

MR. GRANT: I'll restate the question.

THE HEARING OFFICER: Thank you,

Mr. Grant.

1 BY MR. GRANT:

Q. In the first paragraph -- I'm sorry,

3 the second paragraph, first sentence -- it says,

4 "Approximately $10.2 million of the $17.8 million

5 total constitutes the present value of 100 years of

6 leachate collection and treatment by a third party

7 for the landfill." Okay.

What does that statement mean to

9 you?

A. It means exactly what it says, it's

11 the treatment of the leachate. Of course, I am a

12 financial person here, and I'm relying on the

13 information that is provided me.

But I don't understand what else

15 you would want me to say about that.

Q. That's fine.

And the second sentence begins

18 with, "This amount is in dispute, because the City

19 is presently treating, and plans to treat in the

20 future, all leachate collected from the landfill at

21 its own facilities with no cost to the State."

A. That's what it says.

Q. So the number that you have been using

24 in your financial statement says the potential

1 liability is 7.6 not 17 million?

A. The 7.6 is disclosed and actually

3 booked in the financial statements. However,

4 because the other amount is listed here, it is being

5 remitted to people who might rely on this to say

6 that this is in dispute.

There is no specific number for

8 this, it's in dispute, it could be this, it could be

9 that, but it's there. And it's a possibility.

So it is disclosed there as a

11 possibility, however, there is no specific number

12 that we can assign to that.

Q. Now I understand. And, again, please

14 understand, I'm not challenging your auditing,

15 because this is -- I mean, we have ongoing

16 litigation here, obviously.

But are you aware that in 2001,

18 after an evidentiary hearing, the Pollution Control

19 Board found that the City's treatment of its own

20 leachate was not sufficient, and that it did, in

21 fact, have to put the additional $10-plus million up

22 as financial assurance?

A. I would be not be party to that.

Q. So you were not advised that the

1 Pollution Control Board had already decided that

2 issue against the City?

A. It would have to be through the legal

4 opinion that I would receive.

Q. With that, in fact, the case, isn't it

6 true that using the financial test and the City's

7 own revenues, the City cannot use the financial test

8 or the local government guarantee to guarantee over

9 $17 million in financial assurance? That's true;

10 isn't it?

MR. PORTER: Objection.

THE HEARING OFFICER: Excuse me.

Mr. Porter?

MR. PORTER: It's compound.

THE HEARING OFFICER: Yeah. Can you

rephrase, restate...

MR. GRANT: Sure, I'll try.

18 BY MR. GRANT:

Q. Using the financial test with the 2005

20 figures, you arrived at a maximum value that the

21 City could guarantee of, approximately, $7 million

22 dollars; isn't that true?

A. That is true.

Q. And with your most recent calculation,

1 using the 2007 audit, you arrived at a maximum

2 amount that the City of Morris could guarantee at,

3 approximately, $9 million dollars; that's true?

A. Yes.

Q. Do you have any information that the

6 City of Morris could, at any time between 2000 and

7 2007, have used this same calculation to guarantee

8 over $17 million dollars?

A. My function --

MR. PORTER: I'll object. They don't

have to guarantee over $17 million dollars.

MR. GRANT: Okay.

THE HEARING OFFICER: Mr. Grant?

MR. GRANT: Well, you know, for the

record, we tried PCB 0148 and 0149, where

that was decided, that's been decided.

There's been no --

MR. PORTER: This hearing is what we

are here to decide.

MR. GRANT: No, it isn't. That's not

what we're here to decide.

We're here to decide the remedy

for a violation. This hearing is not a

hearing -- this hearing is not for setting

the amount of financial assurance.

That's done through Illinois EPA.

And if Illinois EPA adopts it, then you file

a permit appeal.

That was done in 2001. But,

essentially, in two cases, by the end of the

case, PCB 01-48 combined with 01-49, the

amount of financial assurance was challenged.

And, specifically, the City of

Morris said that it could guarantee $10

million in financial assurance by treating

the leachate for free. The Board heard

testimony on that and rejected that opinion.

And if you have any question about

that, we have this attached as Exhibit 4.

MR. PORTER: Mr. Halloran, we have not

even broached this subject yet, so I'm not

sure what we're making a record on. My

objection is that counsel is stating, as a

fact, that somehow the City of Morris is

obligated to post financial assurance of

$17 million.

That is not the case. That is

part of what is to be decided here today, is

what is the cost estimate for which financial

assurance has to be posted by some entity.

And if the question is, does the

financial test result in an ability to

guarantee $17 million, I don't have any

problem with that question. But when it's

posed as it was posed, as if it's a fact that

we have to meet that number, that's what I

have an objection to.

THE HEARING OFFICER: You know, I tend

to agree with Mr. Porter. So, you know,

either rephrase or restate, but --

MR. GRANT: I thought that I had. And

I understand that there may be a difference

of opinion about this.

16 BY MR. GRANT:

Q. But, you know, Mr. Crawford, based on

18 your information, the information available to you

19 in the audits you performed and the information that

20 you reviewed, could the City of Morris have

21 guaranteed $17 million or more of financial

22 assurance at any time between 2000 and 2007?

THE HEARING OFFICER: I will accept

that question.

1 BY THE WITNESS:

A. Based on my calculation, the figures

3 that I am sure of are the 43 percent of revenues.

4 Those figures you have. Those are accurate.

I have no idea, as far as what

6 you're going to agree as, to what the closure,

7 post-closure costs are.

8 BY MR. GRANT:

Q. Well, let's not worry about -- let's

10 not worry about those costs.

A. In answering your question --

Q. No, you're not really. I think you're

13 anticipating my question.

A. No, I'm not.

MR. PORTER: No, I object. I'd like

him to allow the witness to finish his answer

and then do a follow-up.

MR. GRANT: I move to strike the

response so far as nonresponsive.

THE HEARING OFFICER: You know, don't

do this legal -- okay.

Mr. Grant?

23 BY MR. GRANT:

Q. Mr. Crawford, my question is this:

1 And I'm afraid to give you any background, because I

2 don't want to confuse it. But you did testify that

3 revenues had increased from 2000 through 2007.

And 2007 is the highest revenues

5 during that period; correct?

A. I assume that, yes.

Q. And twice you've prepared this

8 financial test. And based on the highest revenues,

9 I think the 2007 revenues, you've come up with a

10 figure of $9 million, approximately, that it could

11 be guaranteed, at a maximum?

A. That's correct.

Q. So my question is, could the City of

14 Morris have, based on its financial condition at any

15 time between 2000 and 2007, used this guarantee for

16 $17 million or more of financial assurance?

A. Obviously, $9.1 million would be the

18 maximum.

Q. I wonder if you can give me a yes or

20 no answer to that question.

MR. PORTER: He's answered it

appropriately, Mr. Halloran.

THE HEARING OFFICER: Yes or no,

Mr. Crawford.

MR. GRANT: Repeat the question.

THE HEARING OFFICER: Sharon?

(WHEREUPON, the record was

read by the reporter.)

5 BY THE WITNESS:

A. No.

7 BY MR. GRANT:

Q. Thank you.

In general -- let's see. I think

10 your audit practice is largely local governments;

11 isn't that correct, and municipalities, in general?

A. That is correct.

Q. Would you say that the City of Morris

14 is in a pretty strong financial condition?

A. Yes.

Q. As far as the other -- are you aware

17 of the other ways of providing financial assurance

18 for closure, post-closure?

A. I'm aware of the different methods.

20 I'm not aware of how they can be combined.

Q. I understand.

Are you aware of the surety bonds?

A. (No audible response.)

Q. And just -- you know, I'm not sure of

1 how much of this case you've been, but are you aware

2 of the Frontier surety bonds that were posted by --

3 one by the City of Morris and two by the Community

4 Landfill Company?

A. That was discussed in the deposition.

Q. Are you aware of the annual fee for

7 the surety bonds?

A. No. The City -- if the City had been

9 paying the fee, I would have seen what it was. I

10 have no idea what the fee for those bonds are.

Q. Based on your knowledge of the City's

12 financial affairs, could the City afford to put up

13 surety bonds totaling $7.4 million, for example?

A. Well, why would they?

MR. PORTER: I --

THE HEARING OFFICER: Mr. Porter?

MR. PORTER: I'm sorry, I need that

read back.

THE HEARING OFFICER: Sharon?

(WHEREUPON, the record was

read by the reporter.)

THE HEARING OFFICER: Mr. Porter?

MR. PORTER: No objection.

1 BY THE WITNESS:

A. Well, my first question is why would

3 they. And my second is, I'm not aware of what the

4 fees for these bonds are, so I would not be able to

5 answer that.

6 BY MR. GRANT:

Q. Hypothetically, in you assume an

8 annual premium rate of two percent of the face value

9 of bonds per year, could the City afford to -- so,

10 essentially, you know, say, approximately, $350,000

11 a year. Could the City afford to pay that?

A. I really don't know if I can answer

13 that. Because the City -- I'm not involved with the

14 decisions of the City, and I don't know what their

15 future plans are and how they are going to be

16 spending the moneys, especially with the capital

17 projects. So I really can't answer that.

Q. What are the net assets of the City of

19 Morris as reported in your 2006 report?

A. The net assets are $35 million.

21 However, you have to understand that a good part --

22 part of that is invested in capital assets,

23 basically it's not available.

Q. Could they be used to finance -- in

1 other words, could you borrow against those capital

2 assets?

A. Again, I don't --

Q. And how -- what sort of change in the

5 total amount of assets was there between 2005 and

6 2006?

A. Four million, nine hundred forty-six

8 thousand.

Q. And that was a positive?

A. Yes.

Q. So a little over a $4 million increase

12 in net assets between 2005 and 2006?

A. That is correct.

Q. Again, indicative of a fairly strong

15 financial position of the City of Morris?

A. A strong financial position but may

17 not always be indicative of a strong cash position.

Q. There's a -- yeah, I understand.

There was an issue that came up in

20 our deposition regarding the State's lending limit.

21 I think that was the term we used. Is that

22 accurate?

MR. PORTER: I'm going to object.

That there's a question that we want to pose

here today, fine. But we keep referring back

to the deposition without impeachment.

THE HEARING OFFICER: Mr. Grant?

4 BY MR. GRANT:

Q. Can you tell me what the State's --

6 I'm sorry, what the City's lending limit is or

7 borrowing limit?

A. For the year ending 2006?

Q. Yes, please.

And also, if you can, tell me

11 where you would find that on Exhibit 4.

A. Page 91 of the 2006 audit. This

13 schedule is prepared by the City, it is not audited

14 by me. But the bottom line legal debt margin on

15 this schedule is $18,351,000.

Q. It says, Legal debt margin." Is that

17 somehow set by a statute?

A. Yes, the statutory debt limitation is

19 8.625 percent of the assessed valuation.

Q. If the City was to take out surety

21 bonds, would that have to be reflected against the

22 legal debt limit?

A. I don't know.

Q. As far as the capital project that you

1 were discussing -- in other words, the city hall and

2 the sewer project and that sort of thing -- would

3 those be reflected against the legal debt margin?

A. The recent capital project that was

5 financed through bonds, originally we did not know

6 for certain. Now it is an alternate revenue bond,

7 and the City is planning on paying that with user

8 fee -- part of the user fees.

So I would assume that it would

10 not affect the debt margin.

Q. What sorts of -- well, my guess is,

12 you've got some of the stuff right here in Debt

13 Outstanding. You show -- but, again, indicative of

14 the City's strong financial condition, you show a

15 statutory limit of a little less than $20 million

16 and a total net of only $1.6 million.

A. Yes.

Q. Is that accurate?

A. Yes.

Q. Has that changed in the 2007 audit?

A. The debt has changed.

Q. What's happened with the debt?

A. They did these revenue bonds for

24 $7.4 million, and that was completed in the physical

1 year ending April 30th, 2007.

Q. And when were those bonds issued?

A. I can look it up, if you would allow

4 me to do that.

Q. If you could. If you have it with

6 you, sure.

(WHEREUPON, the witness complies.)

8 BY THE WITNESS:

A. September 5th of 2006.

10 BY MR. GRANT:

Q. In your direct testimony, Mr. Porter

12 asked you if you realized that closure of

13 landfill -- the funds to be expended could take --

14 would be done over a period of years. Do you recall

15 that?

A. Yes.

Q. Are you aware of the fact that for

18 parcel -- well, do you know what Parcel A and

19 Parcel B of the landfill are? Are you aware that

20 there are two of them?

A. I am aware that there are two of them.

Q. Are you aware that one parcel closure

23 is overdue, that really it should have been closed a

24 long time ago, and closure would have to be done

1 immediately?

A. No. That's not relevant to my audit,

3 so...

Q. Well, as far as the City's ability

5 to -- you know, to guarantee closure, in that

6 instance -- you know, what I'm saying is, that this

7 is something that wouldn't be years down the road,

8 it would be, essentially, due immediately.

Are you aware of Illinois

10 Pollution Control Board regulations that require

11 closure to be performed within six months?

A. That's not my function. I'm not...

Q. Would the City be able to perform

14 closure and spend the money -- which you have listed

15 here in Paragraph 13, $7.347 million. Would the

16 City be able to expend those funds over a six month

17 period?

A. Not with funds available.

Q. And I think we discussed it, but

20 you're also aware that the State does not agree with

21 the estimated cost of post-closure that you have

22 listed in your calculation sheet?

A. Yeah, as I've stated, the figure that

24 I provide, the 43 percent of revenue, is certain.

1 The other figure is what you are discussing at this

2 time, so...

Q. Right. Is it --

A. I'm going with the most recent

5 estimate because the other estimate was seven years

6 old.

Q. And the estimate was provided to you

8 by counsels; is that true?

A. No, it is not. As part of my audit, a

10 letter is sent to the engineers for the landfill --

Q. Okay.

A. -- to get the most recent information.

Q. And that was Shaw Environmental?

A. I'm sorry?

Q. That was Shaw Environmental?

A. That is correct.

Q. Were you aware that that figure had

18 not been approved by Illinois EPA or by the State of

19 Illinois?

A. Yes, at this time I am aware of that.

Q. I'd like to ask you to look at the

22 financial assurance regulations. And

23 specifically -- it's in my binder, it's Page No. 1.

And, unfortunately, it doesn't

1 have a page number, but it's in the third page of

2 11716.

Do you see Subparagraph B, Public

4 Notice Component?

A. Yes.

Q. Subparagraph 1 under B refers to,

7 essentially -- well, I will read it.

It says, "The unit of local

9 government, owner or operator, must place a

10 reference to the closure and post-closure tier costs

11 assured through the financial test into the next

12 comprehensive annual financial report or prior to

13 the initial receipt of waste of the facility,

14 whichever is later."

Do you understand it would be the

16 obligation of the City -- if it was to use the

17 financial test or the financial guarantee for

18 closure, post-closure, this would have to be listed

19 in the financial statements?

A. Yes, when it determined that they use

21 that test, I understand that.

Q. Would this have any effect on your

23 ability to borrow funds or the City's ability to

24 borrow funds?

A. Again, I've answered that before. I

2 wouldn't know.

Q. Okay.

When will the 2000 report be

5 finalized and made available to the public?

MR. PORTER: 2007.

7 BY MR. GRANT:

Q. 2007?

A. As soon as possible.

Q. Does it normally come out before the

11 end of the year?

A. Yes.

Q. Okay.

MR. GRANT: If I could, just one

minute.

That's all I have.

THE HEARING OFFICER: Thank you.

Ms. Grayson, any questions?

MS. GRAYSON: I do not have any

questions.

THE HEARING OFFICER: Thank you.

Mr. Porter, any redirect?

MR. PORTER: Very briefly.

REDIRECT EXAMINATION

2 BY MR. PORTER:

Q. Counsel was mentioning that in 2005,

4 2007 the revenues had increased. The expenditures

5 have also increased; is that correct?

A. Yes.

Q. The counsel -- there was also some

8 reference to an alternative bond that had to be

9 issued for a combined water and sewer project. Do

10 you remember that testimony?

A. Yes.

Q. Are you aware that that project was,

13 in part, necessitated due to the treatment of the

14 leachate for the site of this facility?

A. Yes, I am.

Q. And --

MR. PORTER: Nothing further. Thank

you.

THE HEARING OFFICER: Thank you.

Mr. Grant, any re-cross?

MR. GRANT: No, thank you.

THE HEARING OFFICER: Thank you.

You may step down. Thank you,

Mr. Crawford.

(WHEREUPON, the witness was

excused.)

THE HEARING OFFICER: We can go off

the record for a second.

(WHEREUPON, a recess was had.)

THE HEARING OFFICER: All right. We

are back on the record.

We took about a 35-minute break.

The City of Morris is about to call their

second witness, I believe.

MR. PORTER: That is correct. We call

Devin Moose, please.

THE HEARING OFFICER: Mr. Moose, will

you please raise your right hand and Sharon

will swear you in.

(WHEREUPON, the witness was duly

sworn.)

DEVIN MOOSE,

19 called as a witness herein, having been first duly

20 sworn, was examined and testified as follows:

DIRECT EXAMINATION

22 BY MR. PORTER:

Q. Please state your name for the record.

A. Devin Moose.

Q. And what your is your address?

A. 1150 North 5th Avenue, St. Charles,

3 Illinois.

Q. How are you employed?

A. I'm sorry, I moved. I'm 1607 East

6 Main. Sorry about that.

I'm the director of the

8 St. Charles office for Shaw Environmental.

Q. And do you hold any professional

10 licenses?

A. Yes. I am a registered professional

12 engineer in Illinois and nine other states.

Q. If you would, briefly describe for us

14 your educational background.

A. I have a bachelor of science degree

16 from University of Missouri at Rolla in civil

17 engineering.

Q. And, please, briefly describe your

19 work history.

A. Okay. I graduated with a degree in

21 civil engineering, emphasis in geotechnical and

22 geological engineering. I began work in the late

23 '70s for a geotechnical firm, doing mostly soils and

24 foundation work.

I got involved in solid

2 waste-related work in about 1983, helping facilities

3 with construction-related problems, construction

4 dewatering, slope stability-type issues, for large

5 landfills across the country. And I eventually

6 found myself more and more immersed in solid waste.

In probably about '87, '88, I,

8 pretty much, switched full-time to environmental

9 engineering. I focused initially on solid

10 waste-related projects.

I've designed dozens upon dozens

12 of landfills, worked on compliance problems at

13 dozens of landfills, designed and permitted many

14 transfer stations. I have written or participated

15 in authorship of over 60 solid waste management

16 plans.

I've worked in over 60 counties in

18 Illinois, I've worked for nearly 75 municipalities

19 within Illinois. I was elected for several years as

20 the chairman of the environmental committee for the

21 Consulting Engineer's Council in Illinois,

22 representing 200 -- at the time -- 23 private

23 consultants in Illinois.

My position as chairman of the

1 environmental committee was to rewrite --

2 participate with a lot of other groups, but

3 representing the engineers in the rewrite of the

4 underground storage tank regulations, commonly

5 referred to as LUST, L-U-S-T, regulations. I also

6 participated very heavily in the SRP program and

7 TACO program, T-A-C-O, rewriting those regulations.

I am a diplomat, awarded the level

9 of diplomat by the American Academy of Environmental

10 Engineers, which is a higher level of accreditation

11 with specialty in solid waste. And, currently, I'm

12 working in ten states, throughout the United States

13 today on landfills, transfer stations, remediation

14 projects and planning.

Q. That covers it very nicely. But I

16 guess I'd like you to also, off the top of your

17 head, just list some of the landfills that you

18 personally have consulted about in Illinois.

A. Woodland Landfill in South Elgin,

20 Settler's Landfill in Geneva, Zion Landfill, CID

21 Landfill, Mallard Lake Landfill, Settler's

22 Hill Landfill. Let's go over to Ogle County, Davis

23 Junction Landfill, Rochelle Landfill, Winnebago

24 Landfill in Winnebago County, Lee County Landfill,

1 Land Comp Landfill in LaSalle County, Streator

2 Landfill in Livingston County, Pontiac Landfill in

3 Livingston County, Kankakee Landfill in Kankakee

4 County.

Let's go down to southern

6 Illinois. The Saline County Landfill, Metropolis

7 Landfill, Herrin Landfill down in the southern

8 portion of the state.

Q. I'm going to interrupt here. That's

10 very impressive.

How many times, approximately,

12 have you testified concerning environmental issues

13 on landfills?

A. Dozens.

Q. Was your firm -- strike that.

Has your firm done any work

17 concerning the Community Landfill in Morris

18 Illinois?

A. Yes.

Q. And how did that come about?

A. We were contacted initially by Chuck

22 Helston in 2003 to inquire about what our knowledge

23 of the facility was, whether we had done any work on

24 that facility. We had not been involved in that

1 facility prior to that time.

And he engaged us on behalf of the

3 City of Morris to do some preliminary work, some

4 fairly limited work. And then in about October,

5 November of 2004, late 2004, as a result of an

6 October inspection that the mayor received and Chuck

7 received, our involvement on behalf of the City of

8 Morris increased significantly in late 2004.

Q. Now, was the City of Morris conducting

10 a waste operation?

A. No.

MR. GRANT: I'm going to object. That

calls for a legal conclusion.

THE HEARING OFFICER: I'll allow it.

15 BY MR. PORTER:

Q. So why is it that Shaw was hired by

17 the City of Morris?

A. Well, it -- the mayor had received an

19 inspection report and consulted with Chuck Helston,

20 Mayor Dick Kopczick. And there were concerns about

21 whether the environment was being negatively

22 impacted, whether it was an actual threat to the

23 public health, safety and welfare.

And I got a call, I think

1 within -- you know, fairly soon after they received

2 that report, I think within a day or so, asking me

3 to start investigating the allegations within that

4 inspection report.

Q. That inspection report was the third

6 quarter of 2003?

A. I think it was 2004.

Q. And what work did your company do to

9 determine if there was some type of an imminent

10 threat?

A. We did numerous things. First, we did

12 visit the site, did a visual site inspection. That

13 really only allows an engineer to evaluate the

14 threat to the environment to a certain limited

15 degree.

We also filed a Freedom of

17 Information request and obtained the entire IEPA

18 file on the site, which at the time consisted of

19 over 35 lineal feet of submittals and records and

20 files.

Q. Why did you do that?

A. I wanted to understand the design of

23 the facility, I wanted to understand how the

24 facility had been operating, I wanted to see how the

1 monitoring results of the facility had shown the

2 performance of the facility. So it was important to

3 understand the infrastructure, if you will, of the

4 facility, not just the visual observations of the

5 facility.

Q. And what else did you do, initially,

7 after receiving the phone call from Mr. Helston and

8 Mayor Kopczick?

A. Well, besides the site visit and

10 inspecting the file, we made recommendations to the

11 City on additional things that ought to be completed

12 to really evaluate the question of whether this was

13 posing a threat to the environment.

Q. And what were those additional things?

A. We recommended that the leachate

16 collection system be evaluated, that the landfill

17 gas system be evaluated and the groundwater

18 monitoring system be evaluated.

Q. And did the City of Morris authorize

20 you to make those evaluations?

A. Yes, they did.

Q. And were those evaluations done?

A. Yes, they were.

Q. And, ultimately, did you come to some

1 conclusion as to whether there was some imminent

2 threat posed by the Community Landfill?

A. We did come to a conclusion. If we --

4 we also recommended and were approved to begin some

5 monitoring, groundwater monitoring, landfill gas

6 monitoring and leachate monitoring at the facility.

What we found in those evaluations

8 of the three systems is that all three of those

9 systems were in disrepair, or in some cases, never

10 constructed. And that those systems were vital to

11 help measure those issues.

We also found from the groundwater

13 monitoring system that there were measurable -- or

14 no significant impacts to the groundwater that

15 caused any immediate threat to the public health,

16 safety and welfare. We also found that -- and I

17 think this is -- I wish it was more scientific than

18 this -- I didn't really notice any significant

19 presence of landfill gas.

And you can pretty much tell --

21 beyond the facility limits, you can pretty much tell

22 that by odors.

Q. In other words, you didn't smell a

24 significant amount of landfill gas; is that right?

A. Not beyond the facility limits.

Q. And, obviously, you have smelled

3 landfill gas in your career; isn't that correct?

A. Yes.

Q. So you know what it smells like, you

6 didn't see it there?

A. Yes.

MR. GRANT: I wonder if I could ask

for a clarification of what time we're

talking about?

MR. PORTER: Okay.

12 BY MR. PORTER:

Q. What time span did it take to complete

14 this evaluation that you performed?

A. We had visited the sights, being

16 either myself or staff working under my direction,

17 numerous times. I want to say, probably, a dozen

18 times between early 2005 and presently.

We had conducted gas monitoring in

20 the atmosphere, we had conducted gas monitoring in

21 the gas probes surrounding the facility and had

22 received some minor hits at certain locations. But

23 that doesn't necessarily mean that there's an

24 immediate threat to the public health, safety and

1 welfare.

What I'd really like to understand

3 is whether we're getting odors that leave the limits

4 of the facility, putting a gas probe or PID meter

5 three feet from the edge of the waste that had

6 broken off a leachate head or a ravine that has, you

7 know, exposed its refuse, isn't necessarily

8 indicative of what people are exposed to.

Q. Understood.

And I think the question then was,

11 when did this evaluation that's been done -- strike

12 that.

Would you agree that all those

14 evaluations and tests that have been performed are a

15 necessary precursor to a closure, post-closure plan?

A. Well, on this particular facility, it

17 does, yeah. And it was clear from my first

18 inspection of the file and first inspection of the

19 field that the actual field conditions didn't --

20 were not congruent with what was originally

21 permitted.

So that the closure plan -- well,

23 at least partially that was in the application,

24 which was approved, in some instances, didn't

1 represent on the ground real-world conditions of

2 what existed out there at the time.

MR. GRANT: I'm going to object a

little bit. Just on the basis that he's

testifying in a narrative fashion.

Which is fine with me, as long as

maybe you can be a little more specific. I

don't know want to object to every little

thing, but, for example, if he's talking

about a permit application, I'm not sure

which one it was.

THE HEARING OFFICER: I agree,

Mr. Porter.

MR. PORTER: Okay.

15 BY MR. PORTER:

Q. All right. Which permit application

17 or report are you referring to?

A. I'm referring to permits issued by the

19 IEPA on August 4th, 2000, 2000155-LFM for Parcel A

20 and 2000155-LFM, same date, for Parcel B.

Q. During your review of this mass amount

22 of records, did you have the opportunity to review

23 the cost estimates that had been filed with those

24 applications?

A. Yes.

Q. And those cost estimates totaled,

3 approximately, $17.4 million dollars; is that right?

A. Yes.

Q. Did those cost estimates give you any

6 concern?

A. I didn't think they were reflective of

8 the field conditions at the time. And I don't think

9 that they represented -- I think they were a

10 manifest of improper modeling, or probably better

11 said, the incapability of the modeler, the person

12 conducting the model, to actually get the model to

13 meet the regulations, as opposed to what's actually

14 best for that particular piece of ground.

Q. Can you elaborate as to what you felt

16 was improper or erroneous about the modeling?

A. One of the examples is -- regulations

18 require that the model demonstrate that there is no

19 impact to the groundwater 100 feet from the edge of

20 the waste 100 years after closure. Over a period of

21 several years, the modeler, a man by the name of

22 McDermott, had continuously submitted, received

23 denials, submitted additional information, received

24 denials from the IEPA, trying to get the model to

1 pass.

When I looked at the model, I

3 believe that the inputs in the modelings were

4 completely wrong and inappropriate. And it appears

5 to me that after several years of attempting to get

6 the model to pass, that the modeler agreed to -- or

7 suggested, I'm not sure how it came about, it's not

8 clear in the record -- that instead of getting the

9 model to pass, we will pump the groundwater within a

10 hundred feet of the landfill for a hundred years.

So we will pump the groundwater

12 out, we will treat it for a hundred years, and,

13 therefore, we will meet the regulation and, pretty

14 much, skip the modeling altogether.

Q. Do you believe that was a reasonable

16 solution to one's ineffectiveness in performing

17 modeling?

A. It's a ridiculous approach.

Q. And what was the result of that

20 approach to the cost estimates?

A. It was a significant impact, that

22 alone was on the order of $10 million.

Q. And, specifically, what do you mean

24 that alone was --

A. Pumping and treating the groundwater.

Q. And is there any necessity to pump and

3 treat the groundwater at the site for that extended

4 period of time?

A. I don't think so, no.

Q. Has your company, Shaw Environmental,

7 had the opportunity to provide revised cost

8 estimates?

A. Yes.

Q. I'd like to direct your attention to

11 Morris Exhibits 1 and 2, which I believe are in

12 front of you, and I will come up there and show you.

MR. GRANT: I'm going to object at

this point to introduction of these on the

basis of relevance. I know we stipulated to

their admissibility, but on the basis of

relevance, I don't believe this testimony is

relevant to this matter.

This is a hearing to determine the

remedy for or failure to supply financial

assurance, and this is not the place where

we're going to be deciding what future work

needs to be done at the landfill. I believe

an objection to that question was sustained

by the Hearing Officer when Mr. Russ Lawton

was on the stand.

And I don't think we ought to go

through, you know, a new closure plan or a

new permitting plan. That's the province of

Illinois EPA and really is outside the scope

of this hearing.

THE HEARING OFFICER: Mr. Porter?

MR. PORTER: Well, I simply disagree.

The Pollution Control Board has ordered that

the parties discuss the appropriate remedy to

be issued in this case, assuming that the

City of Morris is responsible for posting

financial assurance, that is what we are here

to do, to determine what that remedy should

be.

Our position is that a remedy

should be -- if you're going to pose one on

the City of Morris, that the most recent cost

estimates be utilized. And, you know, the

goal here is to protect the public health,

safety and welfare, which is exactly what

Mr. Moose and his plan proposes to do.

THE HEARING OFFICER: You know,

Mr. Grant, yesterday I gave great latitude to

both sides regarding the testimony of the

witnesses and also regarding the 42 age and

33(c) factors. As I stated, I found it to be

relevant in exploring these factors and it

may assist the Board in doing so.

I found that much of the testimony

regarding the remedy or penalty somewhat

overlapped the liability portion. You know,

the Board can so choose to disregard it, your

objection is noted.

But, again, and I state, I gave

great leeway to both parties yesterday and

this morning. So objection is overruled.

Do you have something else to say,

Mr. Grant?

MR. GRANT: No.

THE HEARING OFFICER: All right.

Thank you, sir.

THE WITNESS: Mr. Hearing Officer, can

I -- I left my glasses over there?

THE HEARING OFFICER: Oh, certainly.

23 BY MR. PORTER:

Q. If you would, Mr. Moose, what is the

1 cost estimate for closure of Parcel A? Not

2 post-closure, just closure of Parcel A.

A. Which documents are you referring to

4 specifically? I want to make sure I'm not grabbing

5 the wrong ones, because these do not have an exhibit

6 number on them.

THE HEARING OFFICER: Just as an

aside, Mr. Grant, you mentioned that I did

sustain one -- your first witness. I think

that was on the topic of settlement. And it

was an offer of proof.

But, in any event, I know you're

shaking your head, Ms. Tomas, but we can look

on the record, and my ruling stands.

MR. GRANT: Okay.

THE HEARING OFFICER: Thank you.

MR. GRANT: Just for clarification, I

have two documents that look to be identical,

and I just wanted to --

MR. PORTER: Actually, I'm going to

withdraw that question.

22 BY MR. PORTER:

Q. What was the cost estimate for closure

24 of Parcels A and B combined?

A. Ten million, sixty-one thousand

2 dollars, six hundred nineteen.

Q. And that's for closure and

4 post-closure care; is that correct?

A. Correct.

Q. Now, you're aware that the original

7 cost estimates done by Andrews Engineering was for

8 $17.4 million dollars; is that right?

A. That's correct.

Q. Why the difference?

A. If I can refer to my notes, please?

Parcel A on the Andrews' estimate,

13 was for $11,103,346. That included groundwater

14 treatment, which equaled $10,117,800.

The cost did not include cost for

16 repair and/or installation of leachate, gas

17 collection and groundwater monitoring, which our

18 investigations revealed were necessary on Parcel A.

19 Parcel B, the Andrews' cost estimate, totaled

20 $1,927,680. That included, approximately, $900,000

21 for waste relocation, taking waste from an overfill

22 area on the -- and relocating it to the other

23 parcel.

The cost did not account for

1 leachate gas and groundwater monitoring, repair and

2 installation. And it also included pumping and

3 treating ground -- I'm sorry -- leachate for a

4 hundred years also. And that accounted for over a

5 million dollars.

Q. And how did your cost estimates

7 differ?

A. Well, our cost estimate took into

9 account that the leachate collection, gas collection

10 and groundwater monitoring systems were not

11 sufficient at the given time, and we incorporated

12 into our closure costs the necessary cost to go in

13 and repair those facilities. It also included -- or

14 did not include groundwater pumping and treating for

15 a hundred years, and it also did not include

16 leachate pumping and treating for a hundred years.

17 And it also did not include relocation of waste.

Q. Why didn't it include relocation of

19 waste?

A. Because I think that will cause

21 potentially more environmental harm than it will

22 potentially save. The portion of the landfill is

23 overfilled.

I've got to keep referring to my

1 notes so I don't screw this up.

The Section B -- Parcel B, which

3 is located on the west side, is overfilled. And the

4 plan was to relocate that to the Parcel A on the

5 east side.

The problem with that is the

7 overfill as it exists -- because of the overfill,

8 relocation would not reduce the footprint of the

9 waste, it really provides no additional

10 environmental protection at Parcel B by picking up

11 that elevated waste and moving it over. Moreover,

12 by picking it up and moving it over, although

13 there's no specific plan, it's actually more likely

14 that you're going to increase the waste footprint,

15 or the boundary over on Parcel A as a result of that

16 relocation.

And Parcel A was the parcel that

18 couldn't get them out of the past. So we would be

19 taking waste from an area of the landfill of

20 Parcel B that was overfilled in the model passed and

21 placing it over into Parcel A, the east side, where

22 the model failed.

You know, at least, as an

24 engineer, it's intuitively obvious to me that that's

1 not a good thing, that's not what we ought to be

2 doing. And relocation of waste, in and of itself,

3 is not always without risk.

And especially in this particular

5 case, where we're going to be taking the waste out

6 into the public right of way, crossing it over the

7 road, I just didn't think that was an appropriate

8 course of action.

Q. Did you notice any mistakes or errors

10 concerning the characterization of the groundwater

11 in the Andrews' cost estimates?

A. Well, in the model I did.

Q. And what were those

14 mischaracterizations?

A. Well, again, because we did look at

16 the model and some of the inputs, I -- it became, at

17 least in my opinion, that the modeler -- it was some

18 kind of disconnection, either between the facts of

19 the case or inexperience on the part of the modeler.

20 Two instances -- the groundwater in the model,

21 certain parameters, the groundwater modeler utilized

22 a Class II groundwater.

But, in fact, the groundwater in

24 and around the site is a Class IV groundwater, which

1 created a higher standard for the modeler to pass

2 than is necessary. Sticking just to the class of

3 groundwater, this is an abandoned coal mine, strip

4 mine area.

The water is not potable, in and

6 around the immediate vicinity of the landfill.

7 There are no potable wells in the immediate vicinity

8 of the landfill.

The landfill -- or the area around

10 there being strip mined for the last 40 years or

11 more has been filled, and it's just an old

12 industrial strip mine area. So the water is of very

13 low, poor quality.

We also looked at the Darcy

15 velocity below the site.

Q. What do you meany by that?

A. The rate at which groundwater moves

18 below the site.

And within the model, the modeler

20 selected or assumed a Darcy velocity that is off by

21 a factor of 40,000 compared to what I measured at

22 the site during our period of 2006. So I have -- I

23 don't have much faith in the model.

Q. With your revised cost estimates, did

1 Shaw Environmental draft a schedule of closure

2 activities -- a closure plan?

A. Yes.

MR. PORTER: And if I may approach,

Mr. Halloran?

THE HEARING OFFICER: Yes, you may,

Mr. Porter.

8 BY MR. PORTER:

Q. Let me show you what was previously

10 marked and admitted into evidence as Exhibit 10.

It's that the closure plan of Shaw

12 Environmental?

A. It's the closure schedule, the

14 schedule of closure activities.

Q. And attached to that document is a

16 draft letter?

A. Yes.

Q. Was -- first of all, why don't you

19 briefly describe for us what your proposed schedule

20 is for closure activities?

A. It includes a series of investigations

22 and repairs to existing facilities out there so that

23 we can more accurately focus in and refine the

24 precise amount of work that needs to be done. And

1 then, over a period of five to six years, take

2 incremental steps to close out both Parcels A and B.

Q. And, if you would, what are those

4 incremental steps?

A. Well, there are dozens and dozens

6 here. But, generally, what we want to do is get the

7 leachate collection system, gas collection system

8 and groundwater monitoring system repaired and fully

9 functional. We want to go out and perform what we

10 call cover probes.

Portions of the facility have a

12 significant amount of cover over the waste. Our

13 cost estimate assumes that we're going to put cover

14 over the entire landfill.

If our cover probes demonstrate

16 that there is a portion of the landfill where there

17 is sufficient cover of sufficient low permeability,

18 those areas can be certified in place, we can save a

19 significant amount of money and utilize the soils

20 that are in place. That investigation will help us

21 define the amount of soil that we need at the site.

The covering of the landfill is

23 one of the largest cost items that we have in our

24 cost estimate -- Shaw. And it is a little bit of a

1 fuzzy number, because we're assuming that all of the

2 soil needs to be brought in when, in fact, that may

3 not be the case.

We're also assuming that the soil

5 is going to arrive on the site for free. We don't

6 have a source identified and established for cover

7 of this facility yet. So that soil does not exist

8 on-site.

Q. Excuse me for interrupting. Has the

10 City recently approved Shaw's request to do a cover

11 assessment?

A. The City has done two things. One,

13 they've passed ordinances within the municipality

14 that requires any development project within the

15 City of Morris to bring excess fill and start

16 stockpiling at the landfill.

So they've been proactive trying

18 to bring soil at various series of construction

19 projects from the City to the site so that we can

20 reduce our ultimate costs. The City has also

21 approved Shaw to go out and perform the soil cover

22 study where we have, I think, 48 or 46 -- no, I'm

23 sorry that's wrong.

I think it's literally hundreds of

1 different probe locations, to probe the cover,

2 measure the permeability of that cover so that we

3 can more accurately predict, not only the final

4 contours, but the precise volume of soil that we're

5 going to need to get.

Q. And then I interrupted you. You were

7 continuing with the closure plan?

A. And then it's -- you know, it works

9 its way down through hooking up the gas and repair

10 of the storm water ditches. The big cost item is

11 the cover at issue.

Q. Why six years?

A. A couple reasons. One is, I don't

14 know where I'm going to get the soil from.

Soil for these types of projects,

16 usually it comes in, and a facility is usually

17 closed as the facility is developed. Landfill

18 developers that are working on soil-poor sites --

19 sites that don't have a lot of soils -- are

20 constantly soliciting for soil and working out deals

21 with contractors to bring soils to the site.

We haven't started that yet. I

23 guess, arguably, we started it within the last

24 couple of months or a year or so. But that process

1 of finding a large amount of soil needs to be

2 embarked on, and I don't want to get myself on a

3 schedule that we can't meet because of lack of soil,

4 or alternatively, pay an extreme premium for soil at

5 the cost of the taxpayers.

There are also things that need to

7 be done sequentially. It doesn't make any sense for

8 us to start covering the facility until we've

9 completed the soil cover study. It doesn't make any

10 sense then for us to design a final cover of the

11 system until we get the results from the cover study

12 back.

So there are certain things that

14 need to be done in sequence in order to spend

15 people's money efficiently. And then, there is also

16 the construction season.

We're not going to -- the ability

18 to actually do stuff out in the field isn't 12

19 months a year, 52 weeks a year. We are interrupted

20 by winter and we are interrupted by months, like

21 August, where very little earth work would have

22 gotten done.

Q. Thank you very much.

Now, are you familiar with the

1 regulations concerning the -- to have financial

2 assurance?

A. Yes.

Q. Briefly, if you would, describe what

5 those regulations accomplish?

A. They require an engineer to develop

7 premature closure, closure and post-closure care

8 cost estimates. Those cost estimates are then

9 reviewed by the IEPA, and ultimately a permit is

10 issued. It also requires that the operator of the

11 facility post financial assurance equal to those

12 amounts in one of a given number of approved

13 financial mechanisms before the facility is allowed

14 to operate.

Q. Were your revised cost estimates

16 submitted to the Illinois Environmental Protection

17 Agency?

A. Yes.

Q. And to whom were they sent?

A. I think it was Christine Rokay.

Q. And has the EPA responded?

A. Not on that particular issue.

Q. Has the EPA given you an explanation

24 as to why they did not respond before today?

A. I have not -- I'm not aware of that.

Q. If I may, I'd like to direct your

3 attention to Sections 811716 and 811717. And

4 notice, right in front of you, there is a white

5 binder, Mr. Moose?

A. Okay.

THE HEARING OFFICER: Up on top of

the --

9 BY MR. PORTER:

Q. And regulations are contained in

11 Exhibit 1.

A. I have them in front of me, 715 and

13 716.

Q. 716 and 717. 716 would be the

15 financial test.

A. Okay.

Q. And 717 would be the local municipal

18 guarantee.

A. All right.

Q. Is it your understanding that if a

21 municipality meets the financial test, it can post a

22 guarantee of a third-party operator? I'll withdraw

23 it and ask again.

Is it your understanding that

1 under Section 717, if a municipality meets the

2 financial test, it can guarantee that closure and

3 post-closure care will be performed by the

4 municipality or the municipality will pay a third

5 party to so perform?

A. That's my understanding, yes.

Q. In your experience -- well, strike

8 that.

You have had the opportunity to

10 deal with the posting of financial assurance

11 throughout years; is that correct?

A. Correct.

Q. Is there any cost -- hard financial

14 cost to a municipality in merely posting its own

15 guarantee?

A. No, I don't believe so.

Q. Therefore, assuming that -- strike

18 that.

You would, therefore, agree that

20 there is no cost savings in failing to provide your

21 own municipal guarantee; is that correct?

A. The municipal guarantee demonstrates

23 that the financial worth of the municipality is

24 strong enough to guarantee the performance if

1 they're the operator, and they are liable for those

2 costs. And so, since there is no cost, I don't see

3 where there would be a cost savings.

Q. Are you aware that the City has been

5 performing some leachate maintenance concerning the

6 landfill?

A. Leachate treatment or leachate

8 maintenance?

Q. Treatment.

A. Yes.

Q. And is that part and parcel -- well,

12 strike that.

Do you know how long it's been

14 going on?

A. For quite some time. I don't recall

16 the precise number of years.

Q. Do you have -- well, strike that.

Do you believe that the City

19 should be required to purchase some type of bond or

20 insurance vehicle rather than using its funds toward

21 closure, if ordered to do so?

A. No.

Q. Why?

A. I don't -- I think it's a waste of

1 money. If the -- especially if the municipality

2 meets the 81117, if they meet the government's test,

3 the self-guarantee test. Producing a bond does

4 nothing but give money to some insurance company or

5 some bonding agency and directs vital resources --

6 directs vital public resources from this facility to

7 some suit sitting down on LaSalle Street.

I don't think that's where we

9 ought to be spending the money. The money needs to

10 be spent on this piece of ground.

Q. Are you aware that the State has taken

12 the position that this landfill needs to be closed

13 now?

A. I am.

Q. Do you believe that would have an

16 impact on what it would cost to even purchase a bond

17 or insurance vehicle now?

A. Of course it would.

Q. How so?

A. If the insurance company or the

21 bonding agency understood that the bond would be

22 called or the insurance would be called upon to pay

23 the cost immediately after issuance, of course it's

24 going to affect the rate -- it's going to affect the

1 rate significantly.

Q. Have you ever even heard of such a

3 situation where someone had to purchase, or try to

4 purchase, a bond that was going to be called

5 immediately?

A. Not that I'm aware of, no.

Q. Do you believe that that is a

8 practical solution?

A. No.

Q. And again, why not?

A. We should -- we're spending -- if

12 Morris is going to be spending money as opposed to

13 the operator, we're spending public money. I work

14 for a lot of units of government, and people are

15 pretty stingy.

The truth of the matter is, all

17 governments today have a lot of needs to spend

18 money, public health and safety, police, fire,

19 sewage treatment, water supply. There is precious

20 little public money to squander on stuff.

And we all agree -- at least I

22 certainly agree, that this landfill needs some

23 attention. Morris does not have a bottomless pit of

24 money, and we ought to -- if Morris is going to be

100

1 spending the money, spend it as wisely and as

2 efficiently as possible to protect the public

3 health, safety and welfare, as opposed to giving it

4 to bankers and financiers down on LaSalle Street.

Q. The government has -- excuse me, the

6 State of Illinois has suggested that the City of

7 Morris should pay some type of penalty. Do you have

8 an opinion as to whether or not that's reasonable?

A. I do.

MR. GRANT: I'm going to object.

That's not really the subject for any

testimony.

THE HEARING OFFICER: Yeah. I will

sustain it.

15 BY MR. PORTER:

Q. You are aware that Community

17 Landfill -- strike that.

I want to direct your attention,

19 if I may, to Defendants' Exhibits 3A, B and C.

A. That's in this book here (indicating)?

Q. I'll bring it to you.

THE HEARING OFFICER: When you say

Defendants' Exhibits 3A, B and C, that's

Respondent Morris' Exhibits 3A, B, C?

101

MR. PORTER: Yes.

THE HEARING OFFICER: Thank you. Just

to clarify.

4 BY MR. PORTER:

Q. Do you recognize those documents to be

6 the transfer of the operating and developing permit

7 for the Community Landfill from the City of Morris

8 to CLC?

A. Yes.

Q. And that transfer of both the

11 operating and development permit was accomplished in

12 1982; is that right?

A. That's when it was granted by Tom

14 Cavanaugh, manager of the land permit section.

Q. Of the Illinois Environmental

16 Protection?

A. Correct.

Q. Do you have an opinion as to whether

19 or not it was reasonable in light of

20 that transfer -- strike that.

Were you aware that there's also a

22 lease on the real property at issue in this case?

A. Yes.

Q. And that also occurred in 1982?

102

A. I have to refer to the lease. I don't

2 recall the date.

Q. That would be, by the way, Morris

4 Exhibit 7. And I can bring you a copy, if it will

5 help.

A. I have a copy. It's July 1st, 1982.

Q. Do you have an opinion as to whether

8 or not it was reasonable, up until the motion to

9 reconsider was denied by the Pollution Control

10 Board, for the City of Morris to take the position

11 that it was not responsible for posting financial

12 assurance?

A. Yes.

Q. Why?

A. The lease agreement specifically

16 requires the operator, or in this case CLC, to --

17 for that obligation. And there's a contract between

18 the two parties that specifically requires that bond

19 to be purchased by CLC.

Including all closure and

21 post-closure responsibility for the site shall be

22 the response -- are also the lessee's

23 responsibility. Those are all laid out in the lease

24 agreement.

103

The City is not experienced at

2 operating. They never operated the landfill in the

3 last 20 years or so.

They don't have any licensed

5 landfill operators, to my knowledge, on their

6 payroll. And I just don't -- I think they've leased

7 that out, decided to, if you will, get out of the

8 landfill business by leasing the operations out.

Q. Mr. Moose, is there anything that you

10 would like to add regarding the State's claim that

11 $17.4 million worth of financial assurances should

12 now be posted, plus penalties and attorneys fees,

13 against the City of Morris?

MR. GRANT: I object. I mean, he's

just asking for him to be able to say

whatever he wants. If he has questions, he

can ask them. But he's asking him do you

have anything that you want, just invites him

to make a speech.

THE HEARING OFFICER: Mr. Porter?

MR. PORTER: He's an expert witness in

his field, and I am, admittedly, asking him

if there is any area that he believes I

should have covered that has not been

104

covered.

THE HEARING OFFICER: Well, I've

already sustained the State's objection to

his opinion about the penalties, and I don't

think attorney fees are in his field either.

So that just leaves maybe just one question,

and that is, do you have any opinions --

8 BY MR. PORTER:

Q. Is there anything else that you would

10 like to add concerning the State's assertion that

11 $17.4 million in financial assurances should now be

12 posted by the City of Morris?

MR. GRANT: I object again. This is

not -- this is just giving him the

opportunity to talk on and on, and --

THE HEARING OFFICER: Well, let's see.

MR. GRANT: -- we've pretty much

covered the subject, I think.

THE HEARING OFFICER: Overruled.

Mr. Moose?

21 BY THE WITNESS:

A. I don't see any substantiation for the

23 $17.4 million, other than the closure cost estimate

24 that was put in the application. If the work is

105

1 executed the way it's permitted to, in accordance

2 with the 17.4, I don't think it's protective of the

3 public health, safety and welfare. I don't think

4 that's where we ought to be spending the money.

5 BY MR. PORTER:

Q. And you don't believe it's protective

7 because it doesn't even include any monitoring of

8 what?

A. It doesn't include repair to the

10 leachate collection system for one. It doesn't

11 include repair and installation of the gas

12 collection system, which is flooded. Over 50

13 percent of it is not functioning.

It also takes money and spends it

15 where it ought not to be spent. There's no reason

16 to pump Class IV ground water from an abandoned

17 strip mine and send it to a sewage treatment plant.

18 I don't think that's what we ought to be doing with

19 anybody's money.

And it also doesn't -- it also

21 doesn't, you know, really address the problems that

22 are really out there as they exist today. And if

23 you look at the amount of money compared to other

24 closures that I'm familiar with, if you look at the

106

1 amount of money compared to what the State spends to

2 close landfills within its program, it's very high

3 on a per acre basis.

So the amount of money, just

5 compared empirically to other facilities, is twice

6 what it ought to be. And the way it's dictated in

7 the closure plan, is not the best for this

8 particular piece of ground.

Q. Do you agree that it's reasonable for

10 the City of Morris to have not agreed to guarantee

11 or post financial assurance of a cost estimate that

12 doesn't protect the health, safety and welfare --

MR. GRANT: I --

14 BY MR. PORTER:

Q. -- and includes costs that are

16 incurred unnecessarily?

MR. GRANT: I object to his testimony,

he is an opinion witness. He can't testify

as to what the City of Morris did.

I mean, he's not an employee to

the City of Morris, he's not a representative

of the City of Morris, he's a paid consultant

to City of Morris. I don't think he can

answer that question.

107

THE HEARING OFFICER: Mr. Porter?

MR. PORTER: I'm asking for his expert

opinion.

THE HEARING OFFICER: I'm not going to

fight on that. If you want to ask it within

an offer of proof, that's fine.

MR. PORTER: Can you read it back as

an offer of proof, please?

(WHEREUPON, the record was

read by the reporter.)

11 BY THE WITNESS:

A. Sure. These are elected officials

13 that take their own oath of office. They have a

14 responsibility to the elected people.

They live in this community.

16 They're the ones that are actually living here and

17 responsible.

If they received advice from

19 technical experts, including myself, that says, I

20 don't think you ought to be spending the money this

21 way and here's why, and we're able to articulate we

22 shouldn't be digging up an overfill and sticking

23 it -- and driving it across the street and sticking

24 it in another area that's failing, I think -- you

108

1 know, that's pretty self-explanatory. We have

2 limited public funds and we ought to spend them to

3 do good things.

MR. PORTER: That's it for the offer

of proof.

THE HEARING OFFICER: Thank you.

7 BY MR. PORTER:

Q. Have you advised the City of Morris

9 that they should not be spending their money as

10 identified in the cost estimates that are being

11 advocated by the State of Illinois?

A. No, I didn't. The City spends their

13 money through their typical approval process.

What I advised the City is that we

15 should not conduct the work plan that's permitted

16 out there for closure, Because it doesn't address

17 the actual field conditions out there today, and

18 it's not the best course of action for that

19 particular piece of ground.

Q. We touched earlier briefly upon what

21 the cost of a bond or insurance vehicle would be

22 now. Do you have an opinion as to how much

23 collateral would have to be designated by the City

24 of Morris to get a $17 million bond that's going to

109

1 be called up immediately?

A. As part of the process, the engineer

3 has to produce a cost estimate. A cost estimate has

4 to be done with full disclosure.

You have to disclose everything to

6 the company or to the bank or whomever -- whatever

7 institution you're dealing with. I have not been in

8 this situation, but I can't imagine anybody not

9 requiring full collateralization of the bond if it's

10 going to get called immediately.

MR. PORTER: I'm sorry. Could you

read that back? Just the last sentence.

(WHEREUPON, the record was

read by the reporter.)

15 BY MR. PORTER:

Q. So it's your opinion that the bonding

17 company would require full collateralization. In

18 other words, we have a $17 and a half million

19 figure, they're going to require it to collateralize

20 $17 and a half million?

A. If it's going to get called

22 immediately.

Q. I have nothing --

A. It's a risk-based business.

110

MR. PORTER: Nothing further. Thank

you.

THE HEARING OFFICER: Mr. Grant or

Ms. Tomas?

MR. PORTER: Can I suggest maybe a

minute break, just to get some water before

we start? Or do you want to keep going?

THE HEARING OFFICER: By all means,

take a break. We're off the record.

(WHEREUPON, a recess was had.)

THE HEARING OFFICER: All right. We

are back on the record.

Mr. Grant, cross?

CROSS-EXAMINATION

15 BY MR. GRANT:

Q. Mr. Moose, we've been through a couple

17 depositions together, one, I think, this year, in

18 January or February, and one last July. But the one

19 last July was the one we took in this case.

But, I guess, my question to start

21 off with is, you have had these figures, which were

22 recently submitted to Illinois EPA for more than a

23 year?

A. Yes.

111

Q. I mean, the $10 million closure

2 figure, for example, which you testified to really

3 in some detail at your deposition. Obviously, those

4 numbers were available at the time?

A. At what time is this?

Q. At -- last summer when we had the

7 deposition in this case.

A. Yes.

Q. Why didn't you submit those to

10 Illinois EPA as a revised cost estimate at that

11 time?

A. We were working in concert with the

13 counsel, and based on their recommendation, we

14 revised the existing permitted cost estimates in

15 lieu of submitting a different closure plan.

Q. Did you submit a closure plan -- a

17 revised closure plan -- let's see -- with this --

18 July is when you submitted the revised cost

19 estimate; is that correct?

A. I believe so.

Q. Did you submit a revised closure plan

22 with that?

A. Just the cost estimates and a summary

24 of the closure plan. But we did present the closure

112

1 plan to the EPA in a meeting in Morris, probably a

2 year before that, maybe -- you know, some -- quite a

3 few months before that.

Q. Well, that was just Mr. Bill Chadde

5 (phonetic), wasn't it, from EPA?

A. Yes.

Q. And I think he's -- I'm not even sure,

8 but I know he's very senior in the Bureau of Land,

9 but he's not in the permit section?

A. You know, they work for him.

Q. Did you give him a written closure

12 plan at that time?

A. We gave him the same plan that, I

14 believe, is the subject of your questions.

Q. Now, what I'm trying to get at is -- I

16 mean, permit applications are pretty extensive

17 documents?

A. Yes.

Q. Have you provided Illinois EPA with

20 the form of revised closure plan for approval that

21 you would, for example, for a new landfill?

A. No.

Q. And why wouldn't you -- would it be

24 more extensive, less extensive?

113

A. It would be different.

Q. How --

A. I think the scope of work that we

4 would recommend is the same. It would be formatted

5 different to try and approach -- or try and address

6 each specific section of the regulations.

You know, up until June of '06,

8 the City didn't believe it was liable for closures,

9 so I don't think they were willing to even pay us to

10 do that. We're really interested in working with

11 the City.

The City was really interested in

13 us focusing on things that we can assess whether

14 there was a threat to the public health, safety and

15 welfare.

Q. So, you know, has the City supplied a

17 sufficiently detailed revised closure plan to

18 Illinois EPA?

A. We've supplied two. We supplied one,

20 we received comments back, we resubmitted that and

21 we've recently submitted another one, which we have

22 not received comments on.

Q. I think -- were you involved in the

24 permit renewal for the SigMod that I think was done

114

1 in 2005?

A. Yes.

Q. Was that Shaw's responsibility?

A. Some of it, yes.

Q. Which portions did Shaw --

A. I don't know what all was submitted.

Q. At what --

A. The ones that are on Shaw letterhead

9 are the ones that were responded to.

Q. Okay. Well, the reason --

A. I don't know what else was submitted.

Q. But who else was involved besides Shaw

13 in submitting that permit application, what other

14 engineer?

A. Well, why don't you -- I don't know

16 what you're talking about.

Q. Well, I don't really --

A. Are you talking about the file

19 generally or are you talking about something

20 specifically that was done by Shaw?

Q. The 2005 renewal application for the

22 SigMod permits, did Shaw participate in that?

A. Shaw did permit SigMod applications, I

24 don't know if other stuff was submitted to the

115

1 agency that you're referring to, we had nothing to

2 do with it.

Q. Are you aware of any other engineering

4 firm, whether Andrews or Mr. McDermott or anybody

5 else, who contributed to that 2005 permit renewal

6 application?

A. I guess you need to be more specific

8 about what application.

Q. Well, I was -- this -- my information

10 was really that I was told that there had to be

11 renewal application in 2005, and that was submitted

12 in -- and, in fact, what you submitted to Illinois

13 EPA on July, whatever -- July of this year, was not

14 a new permit application, it was an addendum to a

15 renewal application.

A. We did submit something this summer

17 that was an addendum to a renewal, yes.

MR. PORTER: Mr. Grant, may I approach

the witness and allow him to have this file

regarding the rule applications?

MR. GRANT: Sure.

22 BY MR. GRANT:

Q. That's the only question I have about

24 that, so you don't have to look it up.

116

A. Okay. My point was, we did this work

2 product, but I don't know if there was other stuff

3 that you were referring to.

Q. I think that -- well, one of the

5 things I think that's --

A. If it has Shaw's name on it, I did it,

7 it was under my responsibility and control.

Q. And you're not aware of any other

9 engineering firm being involved in that?

A. Not if it had Shaw's name. Something

11 else was submitted to the agency, I'm not aware --

Q. I understand.

Now, as far as submission of the

14 revised cost estimate that you submitted in July,

15 have you submitted -- I mean, do the regulations

16 require cost estimates for landfills, don't they,

17 for closure, post-closure?

A. It was biannual.

Q. Biannual? Okay.

Have you prepared those yourself?

A. They were done under my direction and

22 control, people within my office.

Q. Is a document that you submitted to

24 Illinois EPA in July, does it, essentially, meet the

117

1 standards of the revised cost estimate, in your

2 opinion?

A. I haven't heard back from the agency

4 yet.

Q. I'm thinking as far as testing data

6 that you might have to provide or something like

7 that.

A. Testing data that we had to --

Q. If you had to supply test data or --

10 in other words, it wasn't --

A. The cost estimate doesn't require test

12 data.

Q. Does the cost estimate require

14 verification of the third-party costs?

A. Yes.

Q. Did you submit this application based

17 on third-party cost estimates?

A. Yes.

Q. Are you aware that the cost estimate

20 that you supplied in July of this year is the first

21 one -- the first revised cost estimate that's been

22 provided since the SigMod was granted?

A. I don't think that's accurate.

Q. What -- the SigMod I'm talking about

118

1 is the one that was -- that was issued in 2000?

A. Correct.

Q. Are you saying that a revised cost

4 estimate was submitted by some party between then

5 and the time that you submitted this one in July?

A. Yes.

Q. Well, can you tell me what -- when

8 that was?

A. I believe Shaw submitted a previous

10 cost estimate prior to July.

Q. Do you know when that was?

A. August of 2005. And it was --

13 received comments on it from the IEPA, and we

14 resubmit filed it in November of 2005.

Q. Was that a request to change -- in

16 other words, was it a request to modify the closure,

17 post-closure costs?

A. Yes.

Q. And it was substantially different

20 from the one that you provided in July of this year?

A. What do you mean by "substantially"?

Q. The costs. You know, ten percent or

23 more different?

A. Yes, it was different.

119

Q. Was the 2005 submittal a higher

2 estimate or a lower estimate?

A. The November 2005 estimate utilized,

4 approximately, the same work plan that was approved

5 in the 2000 SigMod, and, essentially, just updated

6 the costs, the unit costs, based on what we believe

7 are more accurate numbers. It had a closure cost

8 for Parcel A of approximately $5.7 million, and for

9 Parcel B approximately $9.4 million, for a total of

10 about 15.1 or $15.2 million.

Q. Did that include post-closure care, as

12 well?

A. Yes. Including waste relocation, a

14 hundred years of groundwater pumping.

Q. Let's talk about the leachate.

A. And it's just -- I think that's just

17 still pending with the agency.

Q. And as far as permit applications or

19 requests for approval of estimates, it's common with

20 Illinois EPA permit applications to go back and

21 forth a few times before they're finally granted;

22 isn't it?

A. Yes.

Q. I mean, are you troubled at all by the

120

1 fact that Illinois EPA hasn't given you a final

2 answer on your July submittal? Is that unusual?

A. You're asking me if I'm troubled that

4 I haven't heard from the agency today?

Q. No. Let me modify the question --

A. No, I'm kidding.

Q. It's too much from me and not a lot

8 from them.

A. You know, this is a unique case. I

10 think it's a challenge for all people involved in

11 it.

People at the agency are very

13 professional and very thorough and do work in many

14 states. They're a pleasure to work with, they are

15 burdened.

And not only are the burdened by

17 just the amount of work and time to do it, I think

18 this case, in particular, has got us all going down

19 a little bit of a new path. So I'm not burdened by

20 it.

Q. You don't see -- for example, the fact

22 that you haven't gotten a final answer yet to be

23 unusual or out of the ordinary for these types of

24 permits submissions; is that accurate?

121

A. That's accurate.

Q. Have you seen the recent inspection

3 reports? I know that you mentioned that you've seen

4 the 2004 inspection reports, but have you seen the

5 recent inspection reports?

A. I have them in my possession. I have

7 to be honest with you, the most recent one I believe

8 was at the end of August.

And the copy of the one that I

10 have is not the best copy, but I have deciphered as

11 much of it as I can, given the quality of the copy

12 that I have.

THE HEARING OFFICER: I think it's

also in the State's exhibit. Was it

Exhibit 8 -- 7 or 8?

MR. GRANT: I'm not going to use them

extensively. But, yeah --

18 BY THE WITNESS:

A. I think I have a fax of a fax kind of

20 thing.

21 BY MR. GRANT:

Q. And I'm not going to take you through

23 the inspection reports. But perhaps --

A. Yeah.

122

Q. -- I will ask if you agree with it,

2 that they demonstrate that the landfill needs to

3 have some work done on it?

A. Oh, I agree.

Q. You, several times -- and this was in

6 response to Mr. Porter's questions -- you stated

7 that this was or was not an imminent and substantial

8 endangerment or an imminent threat to the

9 environment, or that sort of thing. You understand

10 that this case is about violation of the

11 regulations; don't you?

A. I understand.

Q. And you understand that -- as an

14 engineer, we've discussed this in depositions, I

15 know -- you know, I have a lot of confidence in your

16 ability -- whatever else you do, it's never

17 permissible to violate the regulations of the Act;

18 is that correct?

MR. PORTER: Objection.

THE HEARING OFFICER: Sustained.

21 BY MR. GRANT:

Q. If something does not pose an imminent

23 endangerment to the environment but is a violation

24 of the regulations, is it acceptable for a landfill

123

1 to do that?

MR. PORTER: Same objection.

Acceptable to whom?

4 BY MR. GRANT:

Q. We've had --

MR. PORTER: My objection is, is it

acceptable to whom? And I believe the

unspoken word is acceptable under law, which

clearly calls for a legal conclusion.

THE HEARING OFFICER: Well, there's

been a lot of legal conclusion earlier. So

Mr. Moose can answer if he can.

Overruled.

14 BY THE WITNESS:

A. Can you restate the question?

16 BY MR. GRANT:

Q. I'll try, although, I'm sure it won't

18 be the same question.

THE HEARING OFFICER: I just want the

parties to know I have full faith and

confidence in the Board that they can

interpret the writings in the Act. So

proceed, Mr. Grant.

MR. GRANT: Thank you.

124

1 BY MR. GRANT:

Q. In your business you consult landfills

3 on landfill issues, and you said you design

4 landfills. You obviously work with owners and

5 operators of landfills.

You've also prepared landfill

7 siting hearings, you participated extensively in all

8 those sorts of things. So based on your experience

9 with landfills and deciding what needs to be done,

10 what can be done and what is acceptable and what is

11 not acceptable, is it acceptable to violate one of

12 the Bureau of Land regulations, even if it doesn't

13 cause an imminent threat environment?

MR. PORTER: Again, acceptable to

whom? Calls for conjecture.

16 BY MR. GRANT:

Q. In your opinion --

MR. GRANT: He is an opinion witness

who testified broadly about everything,

including, you know, policies of Illinois

EPA.

THE HEARING OFFICER: Mr. Porter, go

ahead.

MR. PORTER: My point is you're --

125

acceptable to whom? I mean, he -- clearly

you're asking him to give conjecture about

some unknown individual.

4 BY MR. GRANT:

Q. Is it acceptable to you, Mr. Moose?

A. I think there are numerous occasions

7 where the regulations don't squarely fit with the

8 situation at hand. And I have participated in other

9 projects where consent decrees have been negotiated

10 to put the public health, safety and welfare, in

11 practicality of the solution, above a particular

12 code within a regulation.

So we always try to design and

14 operate a facility to be in complete compliance with

15 the regulations. This facility, to some degree, in

16 my opinion, has legally fallen into the category

17 almost of an abandoned landfill, in my opinion.

And if you were to look at the

19 closure of the 33 landfills that the State conducted

20 themselves, I don't think you'll find every

21 particular landfill regulation was adhered to in the

22 closure of those 33 landfills. I don't think this

23 is much different.

We have a situation here that

126

1 needs to be cleaned up, and that's what we -- you

2 know, that's how I approached the problem. And

3 that's what I was asked to do by the City.

Q. Sure. And I appreciate your answer.

In reviewing your permit

6 applications, including the application that you

7 just submitted to Illinois EPA, the burden is on the

8 applicant to prove that the granting of the permit

9 is not going to cause a violation of the

10 Environmental Protection Act or the regulations.

11 That's true, isn't it?

A. Yes.

Q. So that's the standard that Illinois

14 EPA will use in evaluating --

A. Yes.

Q. -- your application?

I'm not going to go into too much

18 detail. Obviously, you said work needs to be done

19 on the landfill.

We have another case -- and I

21 don't want to mix the cases up, but we have another

22 case coming to trial in October, the end of October

23 of this year, regarding the landfill gas situation.

24 I believe you testified that 50 percent of the wells

127

1 don't work or things to those -- and you have been

2 providing reports, which Mr. Porter has passed on to

3 me.

But one of the things I wanted to

5 ask you about was about the methane content in the

6 gas probes. That's a serious -- potentially serious

7 problem; isn't it?

A. It can be, depending on the frequency,

9 the concentration, the location of the probes

10 relative to a sensitive receptor, as well as the

11 location of the probes and the geology groundwater

12 surrounding it. So you can't just look at a data

13 point, look at concentration and say we have a

14 serious problem.

You may have regulatory opinions,

16 but you don't necessarily pose a threat to the

17 public health, safety and welfare.

Q. And it also depends on the site of the

19 landfill, if it's adjacent to residences or

20 businesses?

A. That's part of the -- that's part of

22 what, I guess, I was referring to.

Q. All right. And you know and I know

24 that you represented a company adjacent to the

128

1 Congress Landfill in Hillside, Illinois?

A. Yes.

Q. And subsurface migration of gas from

4 that landfill was causing a threat to --

MR. GRANT: Objection. Irrelevant.

This is -- now you've gotten off the present

landfill, and we're talking about a whole

other landfill.

THE HEARING OFFICER: Mr. Grant, have

you got any response before I sustain

Mr. Porter's --

MR. GRANT: No. I'll move on.

THE HEARING OFFICER: Okay. Thank

you.

15 BY MR. GRANT:

Q. I have a recent report that I don't --

17 that we haven't used as an exhibit or anything like

18 that -- but let me take a quick look. Okay.

Has Shaw done testing that shows

20 that you have had exceedances of approximately 300

21 percent on methane LEL and gas probes recently, or

22 probe? If you have the document I'm looking at, the

23 August 23rd, 2007 letter to Mayor Kopczick.

MR GRANT: While he's looking,

129

Mr. Halloran, do you want to continue through

312 or --

THE HEARING OFFICER: We can go off

the record for a minute.

(WHEREUPON, a recess was had.)

THE HEARING OFFICER: Back on the

record.

8 BY THE WITNESS:

A. I'm sorry, the date of that?

10 BY MR. GRANT:

Q. It was August 23rd, 2007. If you

12 like, I can refresh your recollection with a copy

13 that I have.

A. I believe I have it.

I've got it.

Q. Do you see the reference to, I think,

17 it's Probe 118, with a lower exposure limit of

18 300 percent?

A. Yes.

Q. What remedial action did the City take

21 in response to that?

A. Well, it's fairly recent. We are

23 watching the gas probe information closely.

I plot the gas probe information

130

1 as we get it on a regular basis and look for trends

2 in a particular probe or probes over time. They're

3 plotted on a graph, such as this, so that I can

4 monitor what I believe is a good device to see if

5 there's a threat or a trend. I do not see any

6 threat or trend from this particular one at this

7 time.

We also look at the aerial extent,

9 where this probe is located and what potential

10 mitigating factors there might be to prevent that

11 probe from moving on -- that gas from moving out,

12 such as a storm water conveyance device, like a

13 ditch or something that may interrupt the flow of

14 gas.

On this particular one, we're

16 watching it closely at this time. It has not over

17 time had that kind of level, and we just haven't

18 been out there -- or I haven't seen the results

19 since August.

So we went out there in September,

21 but I just haven't -- or if we haven't, we will.

THE HEARING OFFICER: I'm sorry,

Mr. Grant, was that the exhibit that

Mr. Moose was referring to?

131

MR. GRANT: It was not what I -- what

I wanted to ask him is whether Shaw had found

test results at this level. I was just going

to use it to refresh his recollection, but he

had the document himself.

THE HEARING OFFICER: Thank you,

Mr. Grant.

MR. GRANT: And we don't want to

necessarily enter it into the testimony at

this time.

11 BY MR. GRANT:

Q. You mentioned a lot about the studies

13 and testing, reporting. What has the City done to

14 fix the landfill since Shaw has been involved? And

15 I mean physical activities at the landfill.

A. Well, they're not the operator of the

17 landfill.

Q. Well --

A. So I don't think they can go out there

20 and operate the landfill, because they don't have --

21 they're not a licensed operator. I believe that

22 they are funding, to a certain degree, some minor

23 cover repairs at the facility.

They're spending a significant

132

1 amount of money with Shaw to monitor the health of

2 the landfill, if you will, to see and take

3 deliberate, precise steps, as we recommended to

4 them, to kind of make sure this thing isn't creeping

5 beyond its facility limits.

Q. Sorry. Just to clarify, is the City

7 taking the position that they're not going to do any

8 work themselves or they're not going to hire any

9 contractors themselves to go out, but rather fund

10 operations by Community Landfill Company?

MR. PORTER: Objection. Conjecture.

And, furthermore, Mr. Moose is not an

employee or direct agent of the City.

14 BY MR. GRANT:

Q. Let me ask you to clarify your

16 response to my question.

I believe that you stated that the

18 City is not the operator of the facility, and you

19 eluded to the fact that they, therefore, don't have

20 any access; is that correct?

A. I didn't mean that they didn't have

22 access. What I meant is they're not a licensed

23 operator, they can't go out there and run around

24 with equipment, as I understand it.

133

They can probably go into closure,

2 but I think -- you know, I think that's who pays

3 what, where and how that occurs as part of the

4 results of these proceedings.

Q. And Community Landfill Company hasn't

6 denied them access to fix problems; have they?

A. I don't know.

Q. So let's talk about actual work

9 performed by the City in the year 2007. Has the

10 City itself, whether through their employees or

11 through contractors they hire at your direction or

12 at somebody else's direction, gone on to the

13 landfill to repair anything?

A. I believe that they've funded repair

15 activities that were conducted by CLC.

Q. So the answer to my question, which

17 was related to the City itself doing it, it would be

18 no; is that true?

A. Well --

Q. I'm not talking about funding.

A. You mean City employees, and, you

22 know --

Q. City employees --

MR. PORTER: I object. Mr. Grant is

134

talking over the witness.

MR. GRANT: Okay. I apologize.

THE HEARING OFFICER: Yeah, let's be a

little more --

5 BY THE WITNESS:

A. Do you mean sending public works

7 employees out, kind of thing?

8 BY MR. GRANT:

Q. Okay. Listen closely, because I'm not

10 talking about paying for CLC to do things. Start

11 with the City itself.

Either through its employees or

13 through Shaw's contractors or contractors that they

14 hire, is the City itself gone onto the landfill and

15 repaired anything during year 2007?

A. I can't be sure on the date, but,

17 certainly, we've done some monitoring, repair.

18 We're monitoring the gas, we're keeping an eye on

19 the groundwater, leachate treatment obviously is

20 occurring.

I believe that the City is funding

22 repair activities to CLC to do on a limited basis.

23 But we, Shaw, I do not have any knowledge where the

24 City has authorized us to hire a contractor to go

135

1 out and actually do repair of cover materials.

They have authorized us to go out

3 and do the probe cover study, which is the, you

4 know, the most appropriate next step as it pertains

5 to the cover.

Q. Do you know how much money they

7 provided to CLC during year 2007?

A. I do not.

Q. Mr. Moose, you testified generally to

10 the fact that you thought the current cost estimate

11 of $17.4 million was excessive?

A. Yes.

Q. Are you aware that the City put that

14 number in its application back prior to the permits

15 granted in 2000? In other words, that was the

16 City's number; wasn't it?

A. I'm not aware that's --

Q. Let me correct that. The City and

19 CLC's number, that was in the application that they

20 sent to Illinois EPA?

A. It was in the application that CLC

22 sent as the operator. The City signed that permit

23 as the owner.

It was prepared by Andrews under

136

1 the direction of the operator, is my understanding.

Q. And was signed by the City of Morris?

A. As an owner.

Q. So you're saying they didn't submit

5 it?

A. I'm saying all they did was sign the

7 application as an owner.

Q. The legal effect of that is the City

9 and CLL were applying for the permit; wasn't it?

MR. PORTER: Objection. Not only

calling for the opinion, you're asking him to

be the judge now.

THE HEARING OFFICER: Mr. Grant, we

are kind of going askew. I would agree with

Mr. Porter.

16 BY MR. GRANT:

Q. Have you determined the cost of

18 treating leachate from the landfill?

A. I have investigated it, yes.

Q. And have you come up with a number for

21 how much it costs -- it will cost the City to treat

22 leachate?

A. Yes.

Q. And is there a way of -- I mean, when

137

1 you -- you know, currently the process calls for

2 100 years of leachate treatment.

Have you calculated the cost of

4 leachate treatment for an extended period of time?

A. Yes.

Q. Is that 30 years?

A. Well, it depends on which application

8 you're looking at. If you're looking at the

9 applications that were done in '05, we've done it

10 for 30 years plus or 100 years for leachate

11 treatment and 100 years for groundwater treatment,

12 in accordance with the currently approved closure

13 plan.

Q. Do you understand the purpose of

15 financial assurance?

A. I do.

Q. And it's provided -- I mean, it's

18 provided to the State?

A. Correct.

Q. And how would you describe the purpose

21 of financial assurance?

A. I think the purpose of financial

23 assurance, especially on newer facilities, is to

24 provide the State a means to go in and effectively,

138

1 responsibly close the facility, in premature

2 closure, that an operator would walk away --

3 literally walk away from a site at the least

4 opportune time. At closure, it would be when the

5 facility has achieved it's, you know, virtually

6 everything but capping and closure.

And post-closure is to take care

8 of the facility after closure has been completed.

Q. Do you consider it to be a requirement

10 of conducting a waste disposal operation -- in other

11 words, if you -- today, if you were -- I'll

12 withdraw that question.

Today, if you were going to -- if

14 you wanted to open up a landfill and you wanted to

15 be in the waste disposal business, one of the

16 conditions is you have to post financial assurance;

17 is that correct?

A. Yeah, you can do a corporate guarantee

19 or a municipal guarantee. There's five or six

20 different mechanisms that you're allowed to use.

Large companies are allowed to use

22 their corporate bigness, if you will. And

23 municipalities are allowed to use, you know, their

24 ability, their financial strength, as opposed to

139

1 just putting up a bond or some other type of

2 mechanism.

Q. Are you aware of the Frontier

4 Insurance Company bonds that were posted for this

5 landfill?

A. Generally aware.

Q. And are you aware of the fact that at

8 the time, in 2000, there were 30 municipal solid

9 waste landfills in Illinois that were using Frontier

10 bonds?

A. I didn't know the -- I knew it was a

12 large number, I didn't know it was 30.

Q. Were you doing any work for any of

14 those companies at that time?

A. I may have been, I don't know.

Q. Were you involved in replacing any of

17 the financial assurance for a company who had

18 Frontier bonds at the time?

A. I don't recall.

Q. Are you aware of the fact that of

21 those 30 -- or approximately 30 companies, all but

22 the Morris Community Landfill and I think the Dowdy

23 Landfill replaced the Frontier bonds?

A. Were there other municipalities?

140

Q. I don't know. But just to testify

2 myself, I think Envirotech and Morris was one of the

3 ones.

MR. PORTER: I object. Move to

strike.

THE HEARING OFFICER: Sustained.

MR. GRANT: I'll strike that.

8 BY MR. GRANT:

Q. You said -- based on the lease that

10 you reviewed, you said that you considered it

11 extremely unfair for the City to be stuck with

12 closing it when they had a lease with the Community

13 Landfill Company, or words to that effect; is that

14 accurate?

A. I think so. I'd have to go back and

16 read -- I'm not sure -- you know, I have to look at

17 the transcript. I'm not sure unfair was the best

18 characterization.

I think we were talking about --

20 well, I'll leave it at that.

Q. Well, you agree that the regulations

22 themselves apply to owners or operators? In other

23 words, that owners or operators must provide

24 financial assurance?

141

We can get it out and look at the

2 regulations specifically if you'd like.

MR. PORTER: I have been subjected to

numerous objections on the topic of whether

or not we're going to get into the issues of

alledgedly are they going to be decided by

the Pollution Control Board, that's the exact

issue is, you know, was the owner or

operator.

MR. GRANT: Well, no --

MR. PORTER: And I'm also going to

voice an objection, it's beyond the scope.

THE HEARING OFFICER: I will sustain

based on Mr. Porter's objection of beyond the

scope.

16 BY MR. GRANT:

Q. The law requires owners or operators

18 to obtain financial assurance if you're going to be

19 in the landfill business, essentially; right?

A. Correct.

Q. And you can't assign that away by

22 designing a contract with another party; can you?

MR. PORTER: Objection. Calls for a

legal conclusion and it's beyond the scope.

142

THE HEARING OFFICER: Well, you know,

what's good for the goose is good for the

gander. And I think -- I think it's within

the scope and he may proceed. Overruled.

MR. PORTER: Let me make one more

statement.

THE HEARING OFFICER: Yes, sir.

MR. PORTER: We're going now beyond

the expertise, for which I've -- we all know

Mr. Moose has. We're actually asking a

general contract question as to whether or

not a term in a contract is effective.

I mean, that's clearly a question

for a lawyer and not necessarily one

practicing in the environmental field.

THE HEARING OFFICER: Sharon, can you

read the question back, please?

And off the record.

(WHEREUPON, discussion was had

off the record.)

(WHEREUPON, the record was

read by the reporter.)

THE HEARING OFFICER: You know what,

that is way into legal conclusion, and beyond

143

his education and experience, so...

MR. GRANT: I'll restate it when we

come back. I think that I will find a way to

tie into the question that was asked on

direct.

THE HEARING OFFICER: All right.

Thank you.

We're taking a break until 1:00.

(WHEREUPON, a recess was had.)

144

ILLINOIS POLLUTION CONTROL BOARD

2 PEOPLE OF THE STATE OF ILLINOIS,)

Complainant,

)

vs.

) No. PCB 03-191

5 Community Landfill Company, )

6 INC., and CITY OF Morris, an )

7 Illinois municipal corporation, )

Respondents.

)

DATE: 9/12/07

TIME: 1:00 p.m.

145

1 APPEARANCES (p.m. session):

OFFICE OF THE ATTORNEY GENERAL

STATE OF ILLINOIS,

69 West Washington Street

Suite 1800

Chicago Illinois 60602

312-814-5388

MR. CHRISTOPHER GRANT,

JENNIFER A. TOMAS,

and

ILLINOIS ENVIRONMENTAL PROTECTION AGENCY,

1021 North Grand Avenue East

P.O. Box 19276

Springfield, Illinois 62794-9276

217-782-8858

MR. MICHAEL S. ROUBITCHEK,

appeared on behalf of the Complainant;

146

1 APPEARANCES (cont'd.)

LaROSE & BOSCO, LTD.,

200 North LaSalle Street

Suite 2810

Chicago, Illinois 60601

312-642-4414

MR. MARK A. LaROSE,

MS. CLARISSA CUTLER GRAYSON,

appeared on behalf of the Respondent,

Community Landfill Company;

HINSHAW & CULBERTSON, LLP,

100 Park Avenue

P.O. Box 1389

Rockford, Illinois 61105-1389

815-490-4900

MR. RICHARD S. PORTER,

and

147

1 APPEARANCES (cont'd.)

SCOTT M. BELT & ASSOCIATES, PC,

105 East Main Street

Suite 206

815-941-4675

MR. SCOTT M. BELT,

appeared on behalf of the Respondent,

the City of Morris.

23 REPORTED BY: SHARON BERKERY, C.S.R.

CERTIFICATE NO. 84-4327.

148

THE HEARING OFFICER: Back on the

record from a lunch break. We're in the

middle of Mr. Grant's thorough

cross-examination.

Mr. Grant, you may proceed.

MR. GRANT: Thank you, Mr. Halloran.

7 BY MR. GRANT:

Q. Mr. Moose, to your knowledge, did the

9 City ever take any action to enforce its contract

10 and compel Community Landfill Company to provide

11 financial assurance?

A. I have no knowledge of that.

Q. Is the City of Morris willing to close

14 Parcel B at the landfill?

MR. PORTER: Objection. Mr. Moose

does not speak for the City of Morris.

MR. GRANT: Okay.

18 BY MR. GRANT:

Q. To your knowledge, is the City of

20 Morris willing to close Parcel B of the Morris

21 Community Landfill?

A. I don't know.

Q. How long do the Board regulations

24 allow for the closure of a missile silo waste

149

1 landfill once it's initiated?

A. I don't recall if there's a time

3 limit.

Q. Are you aware that the City of Morris

5 is now denying that it owns the landfill?

A. I'm not aware of that, no.

MR. GRANT: That's it.

THE HEARING OFFICER: Thank you,

Mr. Grant.

Mr. LaRose?

MR. LaROSE: Nothing, Mr. Halloran.

THE HEARING OFFICER: Nothing, okay.

Mr. Porter, any redirect?

MR. PORTER: None, thank you.

THE HEARING OFFICER: Thank you.

Mr. Moose, you may step down.

THE WITNESS: Thank you.

(WHEREUPON, the witness was

excused.)

THE HEARING OFFICER: We're off the

record.

(WHEREUPON, a recess was had.)

THE HEARING OFFICER: All right. Back

on the record.

150

Mr. Porter informs me that the

City of Morris has rested in their case in

chief.

MR. PORTER: That is correct.

THE HEARING OFFICER: Thank you,

Mr. Porter.

It's CLC's turn.

MR. LaROSE: Mr. Halloran, we would

call Ed Pruim.

THE HEARING OFFICER: Mr. Pruim, it's

good to see you out and about, sir.

MR. PRIUM: It's good to be up and

about, sir.

(WHEREUPON, the witness was duly

sworn.)

EDWARD PRUIM,

17 called as a witness herein, having been first duly

18 sworn, was examined and testified as follows:

DIRECT EXAMINATION

20 BY MR. LaROSE:

Q. Mr. Pruim, I'm going to ask you to try

22 to keep your voice up. It's a big room, just so

23 that everybody can hear your testimony; okay?

A. It might be hard to do, but I'll try.

151

Q. Can you state your name for the

2 record, please.

A. My name is Edward H. Pruim, P-R-U-I-M.

Q. And what is your affiliation with the

5 Community Landfill Company?

A. Secretary Treasurer of Community

7 Landfill.

Q. And have you held that position since

9 the inception of the Community Landfill Company?

A. Yes, I have.

Q. Just as a matter of background, this

12 is the hearing on the penalty and remedy phase for

13 the Pollution Control Board case where Community

14 Landfill was adjudicated to have not provided

15 adequate financial assurance for the landfill.

Do you understand that?

A. Yes, I do.

Q. Do you think that a penalty should be

19 imposed by the Board in this case?

A. No.

Q. Why not?

A. Community Landfill at this time has no

23 funds available, we have no business going on there.

24 So we don't have the cash flow that we did at one

152

1 times, years ago.

Q. Any other reasons why you think a

3 penalty would be inappropriate in this case?

A. We feel that we complied with all the

5 regulations when we -- that we were, you know,

6 required to do when we got the bonds back in 2000.

7 And then the EPA said the bonds were no good after

8 we went and, you know, got the bonds.

Q. Let's back up and walk through that a

10 little bit.

Before Community Landfill Company

12 applied for the first significant modification

13 application, how much financial assurance was in

14 place for the landfill?

A. I think our bond at that time for

16 closure and post-closure was about $1.4 million.

Q. And that was a bond issued to

18 Community Landfill Company; is that right?

A. Yes, that is correct.

Q. In 1999, CLC first proposed a SigMod

21 application to the EPA. In that application, what

22 was the amount of the financial assurance that was

23 proposed, if you remember?

A. It was about $7 million.

153

Q. And that was going to be posted by

2 whom?

A. By Community Landfill.

Q. As part of the closure and

5 post-closure on that application, was there an

6 additional task, if you will, that was going to be

7 taken care of by the City of Morris?

A. The City had agreed to handle the

9 collection and treatment of all the waste water and

10 leachate coming off the landfill.

Q. And pursuant to, at least, that permit

12 application that was issued at that time, how much

13 was that going to cost over the post-closure life of

14 the landfill?

A. I believe the requirement was,

16 approximately, $10 million dollars.

Q. And the City agreed to do that?

A. Yes, they did.

Q. As far as you know as you sit here

20 today, has the City lived up to that agreement?

A. They have lived up to all the

22 agreements we have had with them up to this point.

Q. And other than actually performing the

24 treatment of the groundwater, leachate and the

154

1 condensate, were you looking to -- in the landfill,

2 looking to the City of Morris for any other

3 financial obligations for the closure or

4 post-closure of the landfill?

A. I believe originally they were just

6 going to handle the waste but then the EPA required

7 a bond to be in place for that.

Q. And we'll go over that in a second,

9 but let's leave that bond aside. Other than

10 handling the leachate and condensate, that's what

11 you wanted the City to do; right?

A. That's correct.

Q. The original application for

14 significant modification filed in 1999 with the

15 proposed 7 million in financial assurance, what

16 happened to that?

A. We filed the application. The EPA, I

18 believe, rejected it at that time, and we

19 appealed --

Q. Let's back up for a second. Do you

21 know -- do you remember when they rejected it?

A. I believe that there was a time --

23 there was a time element that we didn't get it --

24 get the application in at a certain time. The

155

1 reason being, we did not have a lease from the City

2 at that time for the expansion.

Q. I think we're getting a little bit

4 confused here. You actually went back to a prior

5 application where we had to take it up to the

6 Appellate Court. Are you recalling that now?

A. Yes.

Q. When you finally got the Appellate

9 Court to allow you to file the SigMod application

10 and you filed it with the $7 million financial

11 assurance, what did the EPA say about that, if you

12 remember?

A. Well, they said we had to fund the

14 $7 million with a bond, which we did at that time.

Q. Did they say anything about the

16 additional $10 million at that time?

A. They said they were requiring a bond

18 to be in place for the $10 million.

Q. So they rejected the $7 million

20 proposal and wanted a bond for the whole $17

21 million; right?

A. That's right.

Q. At that time, did you approach the

24 City to make some type of arrangement with respect

156

1 to the additional $10 million in bonding?

A. Yes, we did.

Q. And do you remember what that

4 arrangement was?

A. The arrangement with the City, we

6 would have the bond for the $7 million in the name

7 of Community Landfill. We would fund it. The $10

8 million bond would be in the name of the City.

And we worked out an agreement

10 with the City that would we would pay the annual

11 premium on that bond for five years.

Q. And was the five year time period --

13 did that correspond to the life of the bond?

A. Yes. We expected to have the landfill

15 closed within five years.

Q. Did the City agree to that?

A. Yes, they did.

Q. But -- now back to the point we talked

19 about earlier. Other than them putting their name

20 on the bond, were you looking for them to provide

21 any other financial support for the bond?

A. No.

Q. So the deal was, if I can summarize,

24 CLC would take out a $7 million bond and pay the

157

1 premiums on that; right?

A. Correct.

Q. And the City would take out a

4 $10 million bond and CLC would pay the premiums on

5 that, too?

A. That's correct.

Q. Do you remember, Mr. Pruim, what the

8 approximate annual premiums were for the two bonds

9 put together, the $17 million worth of bonds?

A. I think it was slightly more than

11 $200,000 per year.

Q. Was there any other cash requirements

13 from Frontier in order for them to get you the bond?

A. They required collateral, a little bit

15 short of $200,000, I believe.

Q. So you were proposing to -- you being

17 CLC, was proposing to pay a little bit short of

18 $200,000 in cash collateral as well as a little bit

19 more than $200,000 a year for five years in

20 premiums?

A. That's correct.

Q. Do you know whether or not this

23 concept of the $17 million in bonds from Frontier

24 was presented to the IEPA?

158

A. Yes, it was.

Q. Do you know whether or not the IEPA

3 actually reviewed drafts of the bonds before they

4 were issued?

A. It's my understanding they did.

Q. And was the concept -- correct me if

7 I'm wrong -- that you would purchase the bonds, give

8 them to the EPA in exchange for the SigMod program?

A. That's correct.

Q. Did the EPA approve those bonds before

11 you committed to purchasing them?

A. Yes. We -- I don't recall who

13 presented them, if it was the engineer or an

14 attorney, but they were presented to the EPA, to

15 make sure they met their requirements.

Q. And did they approve them?

A. Yes.

Q. There was an issue about Frontier as a

19 company being removed from the treasury's approved

20 surety list; do you remember that?

A. Yes.

Q. Do you remember whether at the time

23 the EPA approved the bonds, they knew that fact?

A. It's my understanding from testimony

159

1 at various times since then, that the EPA did know

2 that.

Q. At the time that you were presenting

4 these bonds to the EPA, what was the financial

5 assurance that was posted on the landfill?

A. The $1.4 million we talked about

7 earlier.

Q. If the EPA had rejected the bonds,

9 what would you have done?

A. We would have closed the landfill,

11 done all the closure, you know, requirements we had

12 per our permits, gone on into a post-closure mode at

13 a given time after we met all those requirements,

14 and our $1.4 million bond would have been reduced

15 to -- and I don't recall what that number was.

Q. After the EPA -- IEPA approved the

17 bonds, did you then go ahead and purchase the bonds?

A. Yes, we did.

Q. And by purchase the bonds, do you

20 remember initially what you had to pay?

A. Well, we put up the collateral money,

22 and we had to purchase the bonds for the $200,000

23 for the first year premium.

Q. So you get the bonds, you get the

160

1 SigMod permit, what happens then?

A. Well, we worked with the engineer,

3 proceeding to build and develop the cell that we

4 were going to open, you know, per the application.

5 That process took us probably close to a year.

Q. What happened next?

A. We approached the EPA about a permit

8 to operate that cell. And at that time the EPA --

9 and I don't remember the exact date -- told us that

10 the bonds were no good, that we had to get other --

11 you know, other financial bonds.

Q. Were these the same Frontier bonds

13 that they had approved some months before?

A. Yeah, it could have been a year prior

15 to, but they were the same bonds.

Q. So what did the EPA do with the

17 request to approve opening the new cell so that you

18 could accept waste?

A. They turned down the application for

20 the expansion of the new cell.

Q. What did you do at that time with

22 respect to the permit denial?

A. We presented our case to the Pollution

24 Control Board at that time.

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Q. Did you go further than the Pollution

2 Control Board, if you remember?

A. Yes, we went to the Appellate Court

4 also.

Q. And, ultimately, the appeals in that

6 case were not favorable to you. In other words, the

7 Pollution Control Board and the Appellate Court

8 sustained the agency's denial of the permit?

A. That's correct.

Q. In the meantime, did you have to pay

11 additional money to Frontier?

A. Yeah, the time frame after that first

13 year, in mid-2000, when our first one-year premium

14 came due, we were into a second-year premium, so we

15 paid another $200,000 plus.

Q. So, in rough numbers, by this time CLC

17 has paid either in premiums or in cash collateral,

18 roughly, $600,000?

A. Correct.

Q. And the EPA is telling you that was a

21 waste of money?

A. Yes. And they're telling us we

23 couldn't operate the landfill.

Q. After you were advised that the

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1 Frontier bonds, at least in IEPA's opinion, were no

2 good, what, if anything, did Community Landfill do

3 to investigate the possibility of obtaining

4 substitute financial assurance?

A. Well, we had the broker that acquired

6 or helped us acquire the Frontier bonds search

7 through other bonding companies, and then the period

8 of time lapsed from when we originally did the

9 Frontier bonds. We found out that the collateral

10 was going to be in the range of 70, 80 percent of

11 the bond value.

Q. So in order to obtain a $17 million

13 bond, Community Landfill would have had to post cash

14 of 70 to 80 percent of it?

A. Yeah, that number was -- I don't

16 remember exactly, but somewhere in the 14,

17 $15 million range.

Q. Did Community Landfill have funds

19 anything like that at that time?

A. No, not at all.

Q. Did -- strike that.

Did you ask the broker to exhaust

23 the possibilities of financial assurance that

24 Community Landfill could possibly afford?

163

A. Yeah, I believe at the time we -- you

2 know, the only way we could have done it was through

3 a bond. We didn't have the collateral, and we asked

4 them if there was any other type of bond that the

5 EPA would accept, and there was none.

Q. After the EPA said that you couldn't

7 operate the landfill, denied the operating permit

8 for the new cell, what happened to the operating and

9 financial condition of Community Landfill Company?

A. Well, there was a time that we had to

11 a let all our people go. We had, I think, seven or

12 eight employees out there at the time.

We had 150 operators, and we had

14 clean-up people and part-time people doing

15 maintenance on the equipment. We kept the general

16 manager there just to oversee and to maintain the

17 landfill while we hoped we could resolve some of

18 these issues. And then we had a secretary that

19 worked part-time.

Q. What about the income?

A. There was minimal income. We did

22 accept some soils in there. There was a little

23 revenue, but that was -- it was hard making our

24 payments.

164

We had insurances, maintenance on

2 the equipment, fuel, labor. It's been a struggle.

Q. When you compare the -- what you

4 characterized as minimal revenue to your expenses,

5 was there even anything left over for financial

6 assurance?

A. No, absolutely not.

Q. In fact, did the income even pay the

9 bills?

A. A lot of times it didn't. At this

11 point even, we have a lot of outstanding bills that

12 we can't pay.

Q. You said that you continued to take

14 contaminated soil at the landfill. What did you use

15 that for?

A. To dress up the top of the fill where

17 there was voids from settlement and various, you

18 know, things, just to dress the landfill up.

Q. Do you continue to do that

20 periodically today?

A. Yes, we do.

Q. At this time, you were no longer

23 paying -- you being CLC -- no longer paying the

24 premiums for Frontier bonds; right?

165

A. No.

Q. And you -- no, meaning you're no

3 longer paying them; right?

A. No, we're no longer paying -- the last

5 payment, I believe, was in 2001.

Q. So you didn't make any more payments

7 after the second year's premium?

A. That's correct.

Q. And after the EPA said the bonds were

10 no good, did you talk to Frontier about the premiums

11 that you had paid?

A. We had various conversations with them

13 about releasing the collateral money, and I believe

14 there was even a question about some of the premium

15 could be released to us because the dates that fell

16 in place when the EPA said the bonds were no good,

17 Frontier was willing to release the money to us.

18 But they contacted the EPA, and the EPA said the

19 funds could not be released until this thing was

20 resolved.

Q. When you say "release the funds," are

22 you talking about the cash collateral?

A. Yes.

Q. But what's your understanding -- the

166

1 cash collateral is a little less than $200,000, but

2 was it your understanding that that money was to be

3 invested by Frontier and to grow over time?

A. That's correct.

Q. What's your understanding of what the

6 status of the amount of those funds are today, just

7 in round numbers?

A. I don't know the exact number, but

9 it's somewhere between three and $400,000, I

10 believe.

Q. And that's the money that Frontier

12 said you were entitled to get released?

A. That's correct. And they would

14 release it if the EPA said that it would be okay.

Q. And what did the EPA say?

A. They said they wouldn't release the

17 funds.

Q. So have you received any of the cash

19 collateral back?

A. No.

Q. What about the premiums, did you get

22 any of that back?

A. No.

Q. Even though Frontier agreed that you

167

1 were probably entitled to that, they haven't paid

2 you any of that money?

A. No, they said they would if they could

4 get the EPA to say it would be okay to sign off on

5 it.

Q. So the $600,000 or so cash out of

7 Community Landfill's pocket for these Frontier

8 bonds, none of that's ever come back?

A. No.

Q. If the Pollution Control Board said to

11 the Community Landfill Company today that it had to

12 find a way to substitute $17 million in financial

13 assurance, could you do that?

A. I don't believe we could have at this

15 time, no.

Q. If it said that you had to fund

17 the $7 million portion of the bonds that you guys

18 had, that the Community Landfill had issued to do,

19 could you do that?

A. No.

Q. If the Board chose to impose a penalty

22 against Community Landfill Company for not

23 substituting other financial assurance for the

24 Frontier bonds, could it pay the penalty?

168

A. No.

Q. With respect to your turning back the

3 clock to the 1999 time frame when you first applied

4 for the SigMod, what was Community Landfill's intent

5 for the landfill going forward?

A. Prior to the SigMod?

Q. Yeah.

A. Or after the SigMod?

Q. Well, when you were applying for the

10 SigMod, your plan was what?

A. Well, our plan was, we estimated we

12 could close the landfill in four to five years, with

13 the capacity there and what we felt would be a waste

14 strain coming in. That was the reason we talked

15 about the five-year bond, because we felt by 2005 or

16 2006 everything would be closed and we'd go into a

17 post-closure mode.

Q. What was your intent, with respect to

19 posting adequate financial assurance, pursuant to

20 your application?

A. Well, there was our reason to work

22 with Frontier with the bond, they agreed to the

23 amount that we were required to put up for a bond.

24 And we explained to them that it would be a

169

1 five-year bond and then we'd be done and go into

2 post-closure.

Q. Was it ever the intent, Mr. Pruim, of

4 Community Landfill Company to run or operate this

5 landfill without proper financial assurance?

A. Absolutely not.

MR. LaROSE: That's all I have.

THE HEARING OFFICER: Thank you,

Mr. LaRose.

MR. LaROSE: Thank you, Mr. Halloran.

THE HEARING OFFICER: The State?

CROSS-EXAMINATION

13 BY MR. GRANT:

Q. Mr. Pruim, do you recall that -- Mr.

15 Pruim, the Frontier bonds were issued by Frontier on

16 May 31st, 2000; is that correct?

A. I know it was 2000, I thought it was a

18 little later in the summer. I'm not sure on the

19 date.

Q. Let me -- rather than make you guess,

21 we've got the bonds admitted as an exhibit, why

22 don't I just have you take a look at them.

A. Okay.

THE HEARING OFFICER: They're up there

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on your right, Mr. Pruim.

2 BY MR. GRANT:

Q. It's Exhibit 9.

A. Okay.

Q. The first one, I think, was a

6 continuation of the bond that was in place at the

7 time. So I've got -- let's see.

You have to go about halfway

9 through, it's -- Surety Bond 158465 is the one I'm

10 looking at.

MR. LaRose: Mr. Halloran, we'd

stipulate that two of the bonds were issued

on May 31st, 2000. And the third on, I think

the $1.4 million one, was issued on June

14th, 2000.

THE HEARING OFFICER: So stipulated.

17 BY MR. GRANT:

Q. Mr. Pruim, did you know at the time

19 that the bonds were issued that Frontier was going

20 to be removed from the treasury circular 570 list

21 the next day?

A. No.

Q. Are you aware of other landfills that

24 used Frontier bonds about the same time that you

171

1 acquired yours in 2000?

A. Not personally, no.

Q. If you can turn to Exhibit 11 please.

4 Do you recognize -- are you there yet?

A. Yes.

Q. Do you recognize that -- this

7 document?

A. I might have seen it. I don't

9 recognize it.

Q. It was a few years ago. It's a

11 violation notice; isn't it?

A. Yes, it is.

Q. And can you tell from looking at it if

14 it was a violation notice related to the Frontier

15 bonds?

A. Do you want me to read through it to

17 answer that?

Q. Yeah, or maybe --

MR. GRANT: Mark, are you willing to

stipulate that it was a DM for the Frontier

Bonds?

MR. LaROSE: I've just got to take a

quick look at it.

MR. GRANT: Okay.

172

MR. LaROSE: Yes. So stipulate -- I

would stipulate that.

THE HEARING OFFICER: So stipulated.

MR. GRANT: A date of November 14th,

2000 on the document?

MR. LaROSE: Yeah.

7 BY MR. GRANT:

Q. Mr. Pruim, if you turn to the third

9 page, Attachment A. On the bottom it has Suggested

10 Resolution. And, you know, is it, basically,

11 Illinois EPA asking you to replace the Frontier

12 bonds with another method of financial assurance?

A. Yes, that's what that first paragraph

14 states.

Q. And do you know of any other landfills

16 that received violation notices for Frontier bonds

17 about this same period?

A. No.

Q. Now, you applied for the operating

20 permit for Parcel A sometime in early 2001, I

21 believe; isn't that correct?

A. No, I believe it was in 2000.

Q. I'm not talking about the SigMod, I'm

24 talking about the operating permit for Parcel A --

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A. After the work was completed.

Q. Correct, yeah.

A. Correct.

Q. To start a waste disposal of Parcel A?

A. I'm not sure of the dates, but I

6 believe you're --

Q. Would you agree that it was after you

8 received this violation notice?

A. Well, I -- again, I said I don't

10 recall receiving it.

Q. After the date of the violation

12 notice.

A. Yeah, the dates are different.

Q. Now, in the process -- I'm going to

15 change permits, I'm going to try not to confuse you

16 because there's been so many I know. But when you

17 were in the process of applying for the SigMod

18 permit and obtained the SigMod permit, didn't you

19 have to -- didn't you arrive at a cost estimate for

20 closure, post-closure of $17.4 million?

A. At the time --

Q. Through the process, I mean, isn't

23 that why the bonds that were required totaled $17.4

24 million?

174

A. The engineer calculated those numbers.

Q. Right. I understand.

But did you understand that to be

4 a number the Illinois EPA was willing to accept as

5 the cost of closure and to take care of post-closure

6 care?

A. Yes.

Q. You mentioned that you -- you obtained

9 five-year bonds because you expected five years of

10 continued waste disposal, at which point you'd close

11 the landfill; correct?

A. Well, I'm not sure that's the reason

13 we got the five-bond. But it's my -- if I remember,

14 we anticipated a four to five-year closure.

And I don't know who plugged that

16 five year number in, if it was us or the bond

17 people, why we didn't get a ten or a 20 year-bond.

18 It was a five-year bond, I believe, because we

19 intended on closing the landfill within five years.

Q. Now, based on your knowledge of the

21 finances when you obtained the SigMod permit, was it

22 logical that once the bonds expired in five years,

23 that you actually were going to have $17.4 million

24 in cash to replace those and close the landfill and

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1 perform post-closure care?

A. Well, when you go into post-closure,

3 the bond requirements are different than

4 $17 million.

Q. Once you close the landfill, then that

6 would come off of the amount right away. In other

7 words, you wouldn't need to secure something that's

8 already been done?

A. Correct.

Q. But for long-term care of the

11 landfill -- I mean, was CLC -- did you expect that

12 CLC, say, in 2005, would have sufficient resources

13 to perform long-term land care of the landfill?

A. I'm sure we did. I don't remember

15 what the requirements were for post-closure.

Q. Now, the SigMod application that

17 you -- for the permit that was awarded in -- strike

18 that. I'll ask another question.

How much money does CLC have

20 available to it at the present time?

A. I don't have the checkbook. I know

22 it's a struggle every month just to pay our bills,

23 and I know there's a lot of payables that have not

24 been paid.

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So I would say at the present

2 time, if you paid out what would happen to be in the

3 checking account, it would be zero, and there still

4 would be bills to pay.

Q. Will CLC allow the City of Morris to

6 take over the landfill?

A. Yeah, we've talked about that. We've

8 haven't got into any negotiations about it.

We even brought people in to take

10 our place if the City would -- you know, would allow

11 that.

Q. But would you allow the City of Morris

13 to actually perform closure of the landfill, I mean,

14 beginning at any time, today or?

A. Yes.

THE HEARING OFFICER: Thank you,

Mr. Grant.

Mr. Porter, any questions of

Mr. Pruim?

MR. PORTER: Yes.

DIRECT EXAMINATION

22 BY MR. PORTER:

Q. If I understand correctly, you agreed

24 that the financial responsibility of closure,

177

1 post-closure was to always be borne by Community

2 Landfill Company, not the City of Morris; correct?

A. That's correct.

Q. You never informed the City that

5 Community Landfill Company did not have funds

6 sufficient to pay for closure, post-closure; did

7 you?

A. I didn't personally, no.

Q. You never expected the City to amass a

10 fund to pay for closure, post-closure; did you?

A. No.

Q. Isn't it true that it was presented to

13 the City of Morris that the only thing CLC was

14 asking of it was to assure that they would accept

15 the leachate from the landfill into its water

16 treatment facility and the value of that, according

17 to your cost estimates, was about $10 million?

A. Yes, that was an estimated number.

19 I'm -- I don't have those figures in front of me.

Q. The City never agreed to pay

21 $10 million worth of closure costs; did it?

A. The City agreed to treat the water for

23 a period of time, that was the agreement.

Q. Right. But it never agreed to pay

178

1 $10 million to CLC or the State or anyone for

2 closure costs; right?

A. No, I don't believe so.

Q. To your knowledge, the City counsel

5 never authorized Mayor Feeney to agree to pay

6 $10 million of closure costs; correct?

A. I don't know that.

MR. PORTER: I have nothing further.

Thank you.

THE HEARING OFFICER: Mr. LaRose, any

redirect?

MR. LaROSE: Just a couple.

REDIRECT EXAMINATION

14 BY MR. LaROSE:

Q. Mr. Grant, asked you whether on May

16 31st you were aware that Frontier was going to be

17 delisted the next day and your answer was no; right?

A. Correct.

Q. You did find out sometime between that

20 date and the issuance of the SigMod that Frontier

21 did get delisted; right?

A. That's correct.

Q. Didn't the EPA tell us that?

A. I believe that's correct.

179

Q. And during that period of time, with

2 the knowledge that Frontier had, in fact, been

3 delisted, isn't that when we approached the EPA and

4 asked them for their approval of the bonds?

A. Yes. Sometime in that period we did,

6 yes.

Q. And they approved the bonds with the

8 knowledge that Frontier had already been delisted?

A. It's my understanding they did.

Q. Mr. Grant asked you about posting the

11 $17 million in financial assurance as something that

12 the EPA wanted in order to issue the SigMod; right?

A. Correct.

Q. Wasn't it Community Landfill's

15 position at that time, even though it posted the

16 $17 million that you really didn't meet that much?

A. Well, the question was -- and the

18 problem we had with the amount of the bond was the

19 $10 million for the water treatment end of it. The

20 City had agreed to treat the water.

The reason to have a bond, that's

22 my understanding, is so in case the company goes out

23 of business, there's somebody to step up and pick up

24 the cost of whatever your bonding for. Well, I

180

1 don't believe the City of Morris is going to go out

2 of business in the next few years, so their water

3 treatment plant is always going to be there.

Q. Is it true, Mr. Pruim, that you issued

5 the $17 million in order to get the permit but

6 intended to dispute whether or not that amount was

7 necessary?

A. Yes.

Q. And, in fact, you did that; right?

A. Yes.

Q. You took that back to the Pollution

12 Control Board and ultimately up to the Appellate

13 Court; right?

A. That's correct.

Q. And, again, the decision was

16 ultimately not favorable to CLC, but at no time did

17 you agree that the $17 million was the appropriate

18 amount of financial assurance?

A. That's correct.

Q. Back to Mr. Porter's question, very

21 briefly. Even though you weren't looking for the

22 City to provide any cash for closure or

23 post-closure, were you, in fact, looking for them to

24 provide the treatment of the leachate and the

181

1 condensate from the landfill?

A. Yes.

Q. And when Mr. Grant asked you whether

4 or not you would let the City perform closure and

5 post-closure activities, that's not really for you

6 to say, you don't own the landfill; do you?

A. The City owns the landfill, we operate

8 under a lease.

Q. And while you might allow them to do

10 that, have you ever asked them to take those

11 actions? Have you ever asked the City to actually

12 come in and take closure or post-closure care

13 responsibilities, except for treating the leachate?

A. No, we did not.

MR. LaROSE: That's all we have.

THE HEARING OFFICER: Mr. Grant, any

recross?

MR. GRANT: Just a little bit.

RECROSS-EXAMINATION

20 BY MR. GRANT:

Q. Mr. Pruim, doesn't the -- let's see.

22 You signed a lease agreement with the City, or CLC

23 did, in 1982, I believe. Wasn't that when you took

24 over?

182

A. I'm sorry, what date did you say?

Q. In 1982, I'm sorry.

A. Approximately. I'm not sure of the

4 date.

Q. Doesn't your contract call for the

6 City of Morris to set aside at least $5,000 a year

7 from the royalties that you paid them for closure of

8 the landfill?

A. I don't know that. I don't recall,

10 it's been a long time since I looked at the lease.

MR. GRANT: I wonder if this is --

it's not an unsubstantial issue, I believe

the lease is in evidence. And I also want to

make sure I -- did you put the lease in?

MR PORTER: (No audible response.)

MR. GRANT: Do you have a copy of it?

I have a copy of it if you put it in.

MS. GRAYSON: Exhibit 7.

MR. GRANT: Mr. Hearing officer, I'm

sorry, I'm going to withdraw my question.

THE HEARING OFFICER: Thank you,

Mr. Grant.

23 BY MR. GRANT:

Q. Mr. Pruim, it was your understanding

183

1 that without obtaining the $17 million plus

2 financial assurance, you would not have gotten the

3 SigMod permits; is that correct?

A. Yes.

Q. And at that time both CLC and the City

6 of Morris wanted that landfill to continue

7 operating; is that correct?

A. Yes.

MR. GRANT: Thanks. That's it.

THE HEARING OFFICER: Thank you.

Mr. Porter?

REDIRECT EXAMINATION

13 BY MR. PORTER:

Q. Before Mayor Feeney signed a document

15 that CLC was going to give to Frontier Insurance in

16 order to secure some bonds for CLC, was he informed

17 that Frontier was about to be delisted?

A. I don't believe he was.

MR. PORTER: Thank you. Nothing

further.

THE HEARING OFFICER: Mr. LaRose,

any --

MR. LaROSE: No, sir. I'm done.

THE HEARING OFFICER: You may step

184

down, Mr. Pruim. Thank you so much.

(WHEREUPON, the witness was

excused.)

THE HEARING OFFICER: We can go off

the record for a second.

(WHEREUPON, discussion was had

off the record.)

THE HEARING OFFICER: We're back on

the record. We've been discussing a couple

of things.

The first, is a briefing schedule,

a post-hearing briefing schedule. The way I

calculate, the transcript is due on or before

September 26th. With that in mind, it was

agreed that the complainant's brief is due on

or before October 19th.

The respondents', both CLC and the

City of Morris, responding brief is due on or

before November 20th. The complainant's

reply, if any, is due on --

MS. GRAYSON: Mr. Halloran, it was

November 30th.

THE HEARING OFFICER: Oh, November

30th, you're right. Excuse me.

185

Respondents' brief is due on or

before November 30th. Complainant's reply,

if any, due December 7th. I set

public comment due by -- written public

comment due by October 9th, 2007.

And there was some discussion off

the record regarding attorney fees. And,

Mr. Grant, would you like to address that and

I'll let the respondents respond?

MR. GRANT: Yes, Mr. Halloran. It's

the State's intention to file a verified

petition for attorney's fees and costs,

pursuant to Section 42(f) of the Act, along

with our post-hearing brief.

I did not believe that we could

really get an accurate description of the

costs of, you know, until we finish the

hearing. And so, really, we are not prepared

today to provide any testimony on that.

But we will be filing that along

with our post-hearing brief.

THE HEARING OFFICER: Mr. Porter?

MR. PORTER: My response is that the

February 2006 Pollution Control Board

186

directed that this hearing was not only to be

considering remedy, but whether or not

penalties and attorney fees, if any, should

be imposed. Obviously our position is that

none should be imposed, however the

government is going to seek them.

This was our opportunity for that

cross-examination, and, therefore, I would

object to it occurring by verifying the

petition later.

THE HEARING OFFICER: Thank you,

Mr. Porter.

MS. GRAYSON: I would join in that

objection.

MR. GRANT: I think that we're

distinguishing between -- the State's

distinguishing between whether or not

attorney's fees are due and the actual

hearing on attorney's fees themselves. I

think that maybe there's a little confusion.

I think the Board wanted us to

provide evidence of intentional, willful and

noncompliance with the Act, and I think we've

done so. But I don't think that the February

187

order requires to put it in evidence today.

MR. PORTER: There's little point to

belabor it now, but the order will speak for

itself. The order specifically required that

the party suggest the specific numbers, and,

therefore, I think it's clear in what it

requires.

And it certainly makes no sense

for us to have a subsequent hearing. We're

here, this is the time to do it, why pile on

expense?

But, again, I think all of that

argument can be addressed in the post-hearing

briefs.

THE HEARING OFFICER: Terrific. And I

thank you, and it will be on the transcript

and the record, and the Board will take a

look at it and figure out what to do with it

in their infinite wisdom.

Mr. Porter, you suggested you have

a public comment to read into the record?

MR. PORTER: I certainly can do that.

I have a written public statement of John

Swezy, and I'm happy to read it into the

188

record. It's not too long, and then I will

hand it up to you, Mr. Halloran, if that's

appropriate?

THE HEARING OFFICER: And I'll take it

as Hearing Officer Exhibit E.

How do you spell the name,

Mr. Porter?

MR. PORTER: S-W-E-Z-Y. And the

statement reads as follows:

"Public statement of John Swezy,

former City of Morris alderman.

My name is John Swezy, and I'm a

former alderman of the City of Morris. I was

initially elected alderman in 1979 and served

continuously as alderman for the City until

2007, which accounts for 28 years of public

service.

I hoped to present my statement

personally, however, due to a medical

condition, I'm unable to appear personally.

It is my hope and desire that the Pollution

Control Board will consider my statement as

an informed and firsthand accounting of the

history in the operations of the Community

189

Landfill site.

I'm familiar with the Community

Landfill Corporation, and the history

associated with both Parcel A and Parcel B

during my terms as alderman. It is

uncontested that the City owns the land which

underlies the Community Landfill. The City

did not, however, conduct any waste disposal

operations after entering into a lease and

operating agreement with Community Landfill

Corporation in 1982.

The events leading up to this

hearing are extremely unfortunate, and the

Illinois EPA should never allow this to

happen. Simply put, to now look to the

taxpayers of the City of Morris to finance

the remaining closure and post-closure

activities at the CLC site is a grows

injustice.

Based upon the provisions of the

lease and operating agreement, which the City

Council approved, CLC is solely responsible

for all closure, post-closure obligations.

Moreover, the Morris City Council is aware of

190

the fact that all development and operating

rights for the facility have been transferred

from the City of Morris to CLC, which is

consistent with the terms of the lease and

the operating agreement. The City council

had no reason whatsoever to believe that it

would ever, or should be called upon to

post-closure financial assurance, whether

it be $10 million or $17 million or any

amount.

In 1996 then Mayor Feeney

explained that the Frontier Insurance bond

was simply an insurance policy. There was no

indication nor was it my understanding that

the City would become a principal on a

performance bond.

Frankly, Mayor Feeney was never

authorized by the City council at any time to

execute any documents related to CLC's

operation of the landfill in any other

capacity, other than owner of the land

underneath the waste. As both by contract

and EPA permits, all the operation

development rights had been transfered to CLC

191

in 1982 and 1983."

MR. LaROSE: Excuse me, Mr. Halloran,

this isn't public comment, this is testimony.

This is factual testimony about what happened

in this case.

THE HEARING OFFICER: Granted.

Anything else, Mr. LaRose?

MR. LaROSE: No.

THE HEARING OFFICER: The Board will

weigh it accordingly. He's not sworn to --

MR. LaROSE: My objection would be, if

he was sworn, I might have ask him a few

questions about this.

THE HEARING OFFICER: I'm sure you

would, sir.

MR. GRANT: Just to sort of it follow

up on that, I want to point out that

Mr. Swezy was named as a witness in the

City's case as recently as August 29th. And

just as long as the Board is able to

distinguish testimony from citizen comment --

THE HEARING OFFICER: I think they

can. It's public comment. Thank you.

MR. PORTER: "To the best of my

192

knowledge, the EPA never called upon or

looked to the City to initiate closure of

Parcel B or post any financial responsibility

to become involved in any way until late 2002

or early 2003 when this whole mess arose. If

Parcel B really had reached its capacity in

the mid-to-late 1990s, why wasn't it the

EP" -- I have to start that sentence over,

excuse me.

"If the Parcel B really had

reached its capacity in the mid-to-late

1990s, why wasn't the EPA compelling CLC as

the permanent operator to close it at that

time point in time? If the EPA had done its

job, the City wouldn't be in the predicament

it finds itself in today.

Thank you for considering my

statement. I truly hope the Pollution

Control Board holds CLC responsible for its

obligation to post financial assurance.

It is also my hope that through

this Board's decision, EPA is put on notice

it has an obligation to protect the

environment and has failed to adequately

193

protect the citizens of the City of Morris.

As stated above, it is an injustice to now

burden our taxpayers with a ten or

$17 million obligation because of the EPA's

failure to enforce it's own regulations.

Respectfully submitted, John

Swezy, Morris alderman, 1979 to 2007."

(WHEREUPON, a certain document

was marked Hearing Officer

Exhibit E for identification,

as of 9/12/07.)

THE HEARING OFFICER: Thank you,

Mr. Porter. And again, Mr. LaRose and

Mr. Grant, you can respond to that public

comment if you so choose in your briefs.

But, again, the Board will weigh it

accordingly. Mr. Swezy was not under

oath.

Anything else for me to discuss?

And, as usual, thank you so much, your

civility and professionalism were beyond

reproach, and it was fun. So have a safe

drive home.

This concludes this hearing in the

194

matter. The September 13th date scheduled

for the hearing is canceled. Thank you so

much.

(WHICH WERE ALL THE MATTERS

HEARD IN THE ABOVE-ENTITLED

CAUSE THIS DATE.)

195

1 STATE OF ILLINOIS)

) SS:

3 COUNTY OF COOK )

I, SHARON BERKERY, a Certified Shorthand

5 Reporter of the State of Illinois, do hereby certify

6 that I reported in shorthand the proceedings had at

7 the hearing aforesaid, and that the foregoing is a

8 true, complete and correct transcript of the

9 proceedings of said hearing as appears from my

10 stenographic notes so taken and transcribed under my

11 personal direction.

IN WITNESS WHEREOF, I do hereunto set my

13 hand at Chicago, Illinois, this 7th day of

14 September, 2007.

Certified Shorthand Reporter

19 C.S.R. Certificate No. 84-4327.