BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
PEOPLE OF THE STATE OF ILLINOIS,
Complainant,
vs.
COMMUNITY LANDFILL COMPANY, INC.,
an Illinois corporation, and
the CITY OF MORRIS, an Illinois
municipal corporation,
Respondents.
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PCB No. 03-191
(Enforcement-Land)
NOTICE OF FILING
PLEASE TAKE NOTICE that we have today, December
7, 2007, filed with the Office of
the Clerk of the Illinois Pollution Control Board, by electronic filing, Complainant'sReply to
City Post Hearing
Brief and Closing Argument, a copy of which is attached and herewith served
upon you.
Respectfully submitted,
PEOPLE OF THE STATE OF ILLINOIS
ex rei.
LISA MADIGAN
Attorne General
of the
St
eo Illinois
BY:
STOPHER GRANT
istant Attorneys General
Environmental Bureau
69
W. Washington Street, "18
th
FIr.
Chicago, IL 60602
(312) 814-5388
Electronic Filing - Received, Clerk's Office, December 7, 2007
BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
PEOPLE OF
THE STATE OF ILLINOIS,
Complainant,
vs.
COMMUNITY LANDFILL COMPANY, INC.,
an Illinois corporation, and
the CITY OF MORRIS, an Illinois
municipal corporation,
Respondents.
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PCB No. 03-191
(Enforcement-Land)
REPLY TO CITY'S POST-HEARING BRIEF AND CLOSING ARGUMENT
NOW COMES Complainant, PEOPLE OF THE STATE OF ILLINOIS, by LISA
MADIGAN, Attorney General
of the State of Illinois, and submits its Reply to the City of
Morris' ("Morris") Post-Hearing Brief and Closing Argument ("Morris Brief').
I.
INTRODUCTION
The Board has found the Respondents in violation. However, Morris continues to argue
issues related to its underlying liability, and has presented no legally sufficient basis for denying
the relief sought by the State.
In
addition, Morris relies heavily on incompetent testimony in its
arguments, and attempts to trivialize ongoing noncompliance issues at the Morris Community
Landfill ("Landfill"). Morris has not accepted its legal responsibility to address the deteriorating
conditions, and the Board must now order such relief as to finally and completely bring the
Landfill into compliance with the Act and financial assurance regulations.
1
Electronic Filing - Received, Clerk's Office, December 7, 2007
II.
INCOMPETENT TESTIMONY SHOULD NOT BE CONSIDERED BY THE
BOARD
Throughout its Brief, Morris attempts to incorporate testimony which is not properly in
evidence. These include the Affidavit
of Morris Mayor Richard Kopczick, the Statement of
Alderman John Swezy (Morris Brief, p. 3), and the 2001 testimony of John Taylor (Morris Brief,
pp.21-25). As the Board is well aware the statements
of John Swezy and Mayor Richard
Kopczick are not evidence, but public comment. John Swezy had previously been identified as
a witness, but did not testify at hearing. His comments should not be considered 'competent
evidence. Likewise, Mayor Richard Kopczick was not called as a witness, even though the
hearing was held in the City
of Morris. Despite being represented as 'affidavit',his comments
also do not constitute competent evidence, and therefore should not be considered in the Board's
consideration
of the 33(c) and 42(h) factors
1
•
Neither should the 2001 testimony of former Illinois EPA employee John Taylor be
considered as evidence in
this
case. Although the Board is entitled to take notice
of this prior
testimony, it must also consider that Mr. Taylor'sprior testimony regarding the Frontier
Insurance Bonds was provided on behalf
of Morris and Community Landfill Company ("CLC")
in their unsuccessful 2001 permit appeal
2
. Following the Board'sdenial, the Appellate Court
stated that his opinions were "
...an error on the part of an employee ofthe Agency"3.
IComplainant has also moved to strike the affidavit on the basis that it does not constitute
even appropriate public comment.
2PCB 01-170. See: Complainant'sExhibit 4.
3331 Ill. App. 3d 1056, 1062 (3d Dist. 2002), Complainant'sExhibit 5, p. 6.
2
Electronic Filing - Received, Clerk's Office, December 7, 2007
III.
MORRIS CONTINUES TO DENY LIABILITY
Despite the Board'sfinding that the City of Morris is in violation, and its confirmation on
denial of reconsideration, Morris continues to argue that its failure to provide financial assurance
(to the date
of hearing) was reasonable, because "IEPA" has misinterpreted the financial
assurance regulations (Morris Brief, pp. 3, 6,
8, 15, 17). Clearly, Morris is referring to the
Board'sFebruary 16, 2006 decision, not Illinois
EPA's position. From July 21,2005, when
Complainant filed its Motion for Summary Judgment, through June
1, 2006, when the Board
denied the Motion to Reconsider, this issue was before the Board. However, liability was
established on February 16, 2006, and Morris' continued denials are both out
of place and
irrelevant.
Incredibly, Morris also continues to argue that it is reasonable to believe that the Frontier
Bonds are adequate financial assurance (Morris Motion, pp. 4, 16,21-25). This issue was
settled, once and for all,
by the Appellate Court'saffirmation ofthe Board's2001 decision in
PCB 01-170. From December, 2002 (when the Illinois Supreme Court denied the Respondents
petition for review), there could
be no reasonable doubt that the Frontier Bonds failed to meet the
regulatory requirements. Moreover, despite arguing that they believed them compliant, the
Respondents made no payment for Bond Premiums after 2001. Frontier Insurance Company was
placed in rehabilitation in 2002.
Morris also argues that the Bonds were 'valid'through 2006, which is irrelevant. The
State has never claimed that the Bonds were invalid, and in fact has made a claim on the Bonds4.
4Complainant has filed an appeal
of the Hearing Officer order excluding evidence on the
current value
of its bond claim.
3
Electronic Filing - Received, Clerk's Office, December 7, 2007
However, there can be no doubt that the Bonds have been noncompliant since 2000. The
Respondents have been in violation since their receipt
of Illinois EPA's Violation Notices on
November 16, 20005.
III.
MORRIS DENIAL OF OWNERSHIP
Morris now denies that it owns or controls the "landfill facility"(Morris Brief, pp. 6, 8,
11,13,25,29,33,34).
In
doing so it misrepresents the legal effect of a 1982 transfer of the
operating permit for the Landfill. Morris retained ownership
of the Landfill, and continued to
apply for an obtain Landfill permits in that
capacitl. As owner it collected royalties, treated
leachate, provided (noncompliant) financial assurance, and appealed permit denials to the Board
and Appellate Court. As late as August
29,2007, a sign at the Landfill entrance identified the
City
of Morris as owner of the LandfilC.
There is no evidence that Morris ever took action under its lease with CLC to correct
problems at the Landfill, and very little evidence that it took corrective action.
It
cannot now
escape liability
by claiming either a lack of ownership or control.
5Morris'argumel1t
that the initial date of violation was June 1,2006 would lead to an
absurd result. The Board could not have affirmed a violation
ifnone occurred prior to its denial
of the Respondents Motions to Reconsider. Because 30 landfills were issued violation notices
around the same time as Morris, and 28 replaced their Frontier Bonds with compliant financial
assurance in response, Complainant takes the position that Morris' receipt
of the violation notice
is the first day
of violation.
6As testified by Illinois EPA Permit Engineer Christine Roque, Morris has obtained more
than 50 Bureau
of Land permit as either "owner and operator" or "owner" of the Morris
Community Landfill. 9/11/07 tr., pp. 214. Two
of these Permits are in evidence as Exhibit 12,
each showing Morris as the permitted owner
of the Landfill.
7Complainant's Exhibit
8, p. 8, exposure 16.
4
Electronic Filing - Received, Clerk's Office, December 7, 2007
IV.
THE LANDFILL IS SERIOUSLY DETERIORATING
The City of Morris goes to great pains to trivialize the current problems at the Landfill,
claiming that the Illinois EPA inspector's August 29, 2007 inspection "showed no new
violations" (Morris Motion, p. 11). This statement mischaracterizes inspector Mark
Retzlaffs
testimony. As shown in the record, Mr. Retzlaff testified:
Q.
So you chose not to make note ofany new apparent violations?
A.
The violations, by simply having photographs and describing them,
technically are there, I
just am not engaging it into a new enforcement
action
8
.
Complainant has described the Landfill conditions in its Post-Hearing Brief, and now
requests that the Board examine the photographs taken at Mr.
Retzlaffs two inspections.
Exhibit
7, from his June 26, 2007 inspection, shows uncovered construction refuse dumped on a
hillside, including plywood, drywall, strapping and cardboard (exposures 3-5). Mr. Retzlaff also
found uncovered sewage sludge (exposure 6) and uncovered general refuse (exposures 7-8).
Exhibit
8, from the August 29, 2007 inspection, includes pictures of erosion cuts (exposures 2-6),
leachate seeps (exposures 11, 14, 17), and additional uncovered refuse (exposure 19). Using a
toxic vapor analyzer, Mr. Retzlaff found ambient gas levels
of 30 ppm at an erosion cut, and
levels too high for the instrument to read next to a leachate wellhead9. Landfill gas odors were
present.
In
his testimony, Morris expert Devin Moose stated that more than 50% of the
Landfill's gas collection system was nonfunctional
lO
•
89/11/07 Tr., p.88
99/11/07 Tr., pp. 71-72.
1°9/12/07 Tr., p.
105
5
Electronic Filing - Received, Clerk's Office, December 7, 2007
Mr. Retzlaff also testified to unpermitted dumping of general refuse and construction
debris in Parcel All including dumping outside
of the previously permitted area
l2
. While the
State does not seek a finding
of violation of 415 ILCS 5/21(d)(l) (2006) in this case based on
these facts, the evidence shows continued operation of the Landfill to and through August 29,
2007, as well as the slipshod manner is which waste is still being handled.
The present condition of the Landfill is abysmal, and without action by the Board, likely
to worsen. CLC co-owner Edward Pruim testified that the company is essentially insolvent.
The City of Morris has provided funds for "minor cover repair"l3, but otherwise (as shown by
their brief) is attempting to avoid responsibility. Morris' own expert testified that the Landfill
has "legally fallen into the category almost of an abandoned landfill, in my opinion"14.
However, there is no financial assurance available for the State to take remedial action.
The
ongoing violations are hardly trivial.
V.
FINANCIAL ASSURANCE MUST BE PROVIDED BASED ON AN ILLINOIS
EPA-APPROVED COST ESTIMATE
In July, 2007, Morris submitted a revised cost estimate for closure and post closure care,
in the amount
of approximately $10.5 MM, and now argues that, in the event that the Board
orders them to provide financial assurance, it should
be in that amount. However, this is the first
financial assurance permit modification submitted
by the Respondents since 2000. Illinois EPA
119/11/07 Tr., p. 58-59.
12
9/11/07 Tr., p. 91
13Testimony of Devin Moose, 9/12/07 Tr., p. 131
14
9/12/07 Tr., p. 125
6
Electronic Filing - Received, Clerk's Office, December 7, 2007
must review this application in detail to determine whether the revised estimate conforms with
the regulations. Therefore, the Board should order the Respondents to provide compliant
financial assurance pursuant to the most recent approved cost estimate, i.e. $17,427,366.00 until
such time
(if ever) that Illinois EPA approves a new figure and grants a permit modification or
the Board determines otherwise after a permit appeal. The Respondents, who have provided no
financial assurance in any amount for years, must comply with Illinois
EPA's standard permit
review procedure before a new cost estimate can be accepted by the Board.
Moreover, a review
of Morris' new cost estimate dictates prudence in this matter, as it
conflicts with prior Board rulings.
In
PCB 01-48/01-49 (consolidated), the Respondents
vigorously contested the requirement
of guaranteeing third party performance of leachate
treatment. However, after due consideration the Board found that this additional assurance, in
the amount of$10,081,630.00, was required under the regulations
15
.
In
its revised estimate the City of Morris has almost entirely eliminated this cost. They
have unilaterally reduced leachate treatment from the previously-required 100 years to 30 years.
They have reduced the cost estimate for leachate treatment from more than ten million dollars to
less than thirty-five thousand dollars
l6
.
In
addition, their plan calls for closure over a period of
5-6 years
17
,
while Board regulations call for closure to be completed in less than one year.
Because
of these major deviations from the previously approved permit, the Board must allow
the permit approval and/or appeal process to proceed according to Illinois
EPA's standard
15Complainant'sExhibit 6, p.28
16See: City Exhibits 1
&
2
17
9/12/07 Tr., p. 90
7
Electronic Filing - Received, Clerk's Office, December 7, 2007
procedure. The Board should not allow the Respondents to substitute a late-submitted permit
application for full Agency review.
VI.
ECONOMIC BENEFIT SHOULD BE BASED ON SURETY BOND COST
Complainant has requested that the Board recover all economic benefit derived by the
Defendants from avoided surety bond premiums, and has conservatively estimated this benefit to
be $1,056,534.00. However, the City
of Morris claims that it could have provided a municipal
government guarantee pursuant to
35 Ill. Adm. Code 811.717 at no cost, and therefore there is no
economic benefit. The Board must reject this claim outright.
First, as admitted
by City Auditor William Crawford, the City of Morris could never have
provided the required amount
of financial assurance by using Section 811.717
18
•
In
2005, the
City could have posted approximately $7 MM financial assurance, increasing to approximately
$9 MM in 2007
19
•
Throughout this period the required financial assurance was over $17 MM.
Moreover, the City
of Morris
never
posted any amount, at any time. They did not post a
guarantee after received Illinois
EPA's violation notice, nor after losing in the Appellate Court in
2002, nor after the Board found them in violation in early 2006. Also, though the City
of Morris
claims that it could have been done at no cost, evidence in that regard is highly speculative.
The regulations require that a municipal guarantee be listed on a City's financial
statements
20
.
Illinois EPA Compliance Manager Brian White thought such a listing could affect
18
9/12/07 Transcript, p. 54.
19
9/12/07 Tr., pp. 48-49.
2
°35 Ill. Adm. Code 811.716(b), incorporated by reference in 811.717.
8
Electronic Filing - Received, Clerk's Office, December 7, 2007
a City's ability to bOITow
21
. City Auditor William Crawford testified that while he didn't see
economic benefit from not posting a guarantee, it was out
of his area of expertise
22
. He did not
know
if such a guarantee would affect its bond rating
23
. Engineer and expert witness Devin
Moose agreed with Morris cou,nsel's statement that a there would be no
cose
4
•
However, there
is no evidence that Mr. Moose was qualified to provide an opinion on local government finances,
or the impact
of listing a multi-million dollar contingent liability of a City'sbond rating. He was
simply agreeing with counsel on an area outside
of his professional expertise.
In
a case such as this, where there are multiple methods of compliance, the cost of the
method actually chosen by the Respondent should be given great weight. The Board should
presume that the
~espondent
evaluated the costs associated with each, and chose the most cost
effective method.
In
this case, no other method besides surety bonds was ever used to provide
financial assurance, and that known cost should be used in calculating the economic benefit
gained from the vioiations.
VII.
THE REMEDY SOUGHT BY THE STATE IS IN ACCORDANCE WITH THE
PROVISIONS OF THE ACT
Morris complains that the relief sought by Complainant would fall upon local taxpayers.
Understanding this, the State has been conservative in its calculation
of penalty.
It
does not seek
interest on avoided compliance costs, just recovery
of the avoided expenditure.
It
has used
21
9/12/07 Tr., pp. 192-193.
229/12/07 Tr., p. 37
23
9/12/07 Tr., p. 63-64.
24
9/12/07 Tr., p. 97
9
Electronic Filing - Received, Clerk's Office, December 7, 2007
apparent below-market surety bond premiums from an insolvent company. Its calculations do
not include the cost
of providing standby collateral to support such Bonds. Additionally,
recovery
of royalty income is necessary for deterrence, as municipal entities should no more be
able to profit from illegal activity than should a private company.
In
our case, Morris continued
to allow dumping at a landfill with no operating permit (including dumping
of its own waste),
failed to provide funds for closure
of Parcel B, and failed to provide assurance that the Landfill
would in fact be closed. Closure is now
11
years past due.
First and foremost however, the Board must grant the affirmative relief sought
by the
State. The Board should find one thing missing from the City
of Morris' argument:
~
commitment to come into compliance. The City argues that it is performing some closure and
post closure care. However, according to their exptert, this consists
of testing, evaluation, and
"funding, to a certain degree, some minor cover repairs at the facility"25. As previously noted,
less than 50%
of the landfill's gas control system is functioning. Mr. Moose acknowledged that
one gas probe had tested at 300%
of the methane lower explosive limit. However, the only
response action taken was that the City is "watching the gas probe information closely"26. This
is not an appropriate response to learning
of a defective landfill gas collection system, or the
presence
of potentially explosive levels of methane in gas probes. When asked directly whether
(to his knowledge), the City
of Morris was willing to perform closure on Parcel B, Mr. Moose
answered that he did not know
27
.
25
9/12/07 Tr., p. 131
26
9/12/07 Tr., pp. 128-129
27
9/12/07 Tr., p. 148
10
Electronic Filing - Received, Clerk's Office, December 7, 2007
The City has now submitted a revised closure plan. However there is no commitment to
implement that plan
if approved by Illinois EPA. The City claims that it could put up at least a
portion
of the required financial assurance using a government guarantee. However, there is no
indication that they actually will do so. The Board must order closure
of Parcel B, and also order
the Respondents to provide full financial assurance.
It
is time for the ongoing noncompliance at
the Morris Community Landfill to come to an end.
VIII. CONCLUSION
Complainant respectfully requests that the Board enter an order containing the following
relief:
1)
Requiring the Respondents, jointly and severally, to post financial assurance
meeting the requirements
of the 35 Ill. Adm. Code 811.700, and current Landfill Permits,
in the amount
of $17,427,366.00, within 30 days of the date of the Board'sfinal order;
2)
Requiring the Respondents, jointly and severally, to upgrade the financial .
assurance for closure and post closure, as required by
35 Ill. Adm. Code 811.701,
within 60 days
of issuance of an Illinois EPA- approved cost estimate.
3)
Requiring the Respondents, jointly
and severally, to initiate closure of Parcel B
within 60 days
of the date of the Board'sfinal order, and to complete closure in
accordance with 35 Ill. Adm. Code 811.110, and Permit No. 2000-LFM-156.
4)
Assessing a civil penalty against the Respondents, jointly and severally, in the amount
of _
$1,056,534.00, and an additional civil penalty against Respondent City
of Morris in the
amount of $399,967.40,
5)
Ordering the Respondents to cease and desist from further violation
of the Act and Board
regulations, including but not limited to violations
of the financial assurance regulations;
and
6)
Ordering such other relief as the Board
deeI!1s appropriate and just.
11
Electronic Filing - Received, Clerk's Office, December 7, 2007
BY:
RESPECTFULLY SUBMITTED
PEOPLE OF THE STATE OF ILLINOIS
by
LISA MADIGAN,
Attorney General
of the State of Illinois
MATTHEW
J.
DUNN, Chief
Environmental Enforcement!Asbestos
Litigation Division
ARIE CAZEAU Chief
ental Bureau orth
RISTOPHER GRANT
NNIFER TOMAS
Environmental Bureau
Assistant Attorneys General
69 W. Washington Street, #1800
Chicago, IL 60602
(312)814-5388
(312)814-0609
12
Electronic Filing - Received, Clerk's Office, December 7, 2007
CERTIFICATE OF SERVICE
I, CHRISTOPHER GRANT, an attorney, do certify that I caused to be served this 7
th
day
of December, 2007, the foregoing Complainant'sReply to City'sPost-Hearing Brief and Closing
Argument, and Notice
of Filing, upon the persons listed below, by placing same in an envelope
bearing sufficient postage with the United States Postal Servic
Chicago Illinois.
CHRISTOPHER GRANT
Service List
Mr. Mark La Rose
La Rose
&
Bosco
200 N. La Salle Street, #2810
Chicago, Illinois 60601
\
Mr. Charles Helsten
Mr. Richard Porter
Hinshaw
&
Culbertson
100 Park Avenue
Rockford IL 61105-1389
Mr. Bradley P. Halloran
Hearing Officer
Illinois Pollution Control Board
100 W. Randolph Street
Chicago IL 60601
Mr. Scott M. Belt
105 E. Main Street
Suite 206
Morris IL 60450
Electronic Filing - Received, Clerk's Office, December 7, 2007
