Electronic Filing - Received, Clerk's Office, September 8, 2008
BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
PEOPLE OF THE STATE OF ILLINOIS,
)
)
Complainant,
)
)
vs.
)
)
EDWARD PRUIM and ROBERT PRUIM,
)
)
Respondents.
)
PEOPLE OF THE STATE OF ILLINOIS,
)
)
Complainant,
)
)
vs.
)
)
COMMUNITY LANDFILL COMPANY,
)
INC.,
\
/
)
Respondent.
)
PCB No. 04-207
(Enforcement - Land)
PCB No. 97-193
(Enforcement - Land)
(consolidated)
TO: Christopher Grant
Jennifer Van Wie
Environmental Bureau
Assistant Attorney General
69 W. Washington, 18th Floor
Chicago, Illinois 60602
cgrant@atg.state.il.us
jvanwie@atg.state.il.us
NOTICE OF FILING
Bradley Halloran
Hearing Officer
Illinois Pollution Control Board
100 West Randolph, Suite 11-500
Chicago, Illinois 60601
hallorab@ipcb.state-il.us
PLEASE TAKE NOTICE
that on
SEPTEMBER
8, 2008,
the undersigned caused to be
electronically filed with
Mr. John Therriault, of the Illinois Pollution Control Board, 100 West
Randolph Street, Suite 11-500, Chicago, Illinois 60601, the
RESPONDENTS' COMMUNITY
LANDFILL COMPANY, INC., ROBERT PRUIM AND EDWARD PRUIM'S MOTION
IN LIMINE
TO BAR COMPLAINANT'S EXPERT WITNESSES AND REPORT AND
ANY OTHER PREVIOUSLY UNDISCLOSED WITNESSES OR, ALTERNATIVELY,
TO CANCEL HEARING SET
FOR OCTOBER 20-23, 2008 FOR CAUSE AND TO
REOPEN DISCOVERY,
a copy
of which is attached and hereby served upon you.
/s/ Clarissa
Y.
Cutler
One
of Respondents' Attorneys
THIS FILING IS SUBMITTED ON RECYCLED PAPER.
Mark A. LaRose
LaRose
&
Bosco, Ltd.
200 N. LaSalle Street, Suite 2810
Chicago
IL
60601
(312) 642-4414
Atty. No. 37346
Clarissa
Y. Cutler (f/k/a Grayson)
Attorney at
Law (formerly with LaRose
&
Bosco, Ltd.)
155 North Michigan Avenue, Suite 375
Chicago
IL
60601
(312) 729-5067
Atty No. 44745
THIS FILING IS SUBMITTED ON RECYCLED PAPER.
BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
PEOPLE OF THE STATE OF ILLINOIS,
)
)
Complainant,
)
)
v.
)
)
EDWARD PRUIM and ROBERT PRUIM,
)
)
Respondents.
)
PEOPLE OF THE STATE OF ILLINOIS,
)
)
Complainant,
)
)
~
)
)
)
COMMUNITY LANDFILL COMPANY, INC.
)
)
Respondent.
PCB 04-207
(Enforcement - Land)
PCB 97-193
(Enforcement - Land)
(Consolidated)
RESPONDENTS' COMMUNITY LANDFILL COMPANY, INC., ROBERT
PRUIM AND EDWARD PRUIMS' MOTION
IN LIMINE
TO BAR
COMPLAINANT'S EXPERT WITNESSES AND REPORT AND ANY OTHER
PREVIOUSLY UNDISCLOSED WITNESSES OR, ALTERNATIVELY, TO
CANCEL HEARING SET
FOR OCTOBER 20-23, 2008 FOR CAUSE
AND TO REOPEN DISCOVERY
NOW COME Respondents COMMUNITY LANDFILL COMPANY, INC.,
ROBERT PRUIM and EDWARD PRUIM, b y and through their attorneys Mark
A.
LaRose of LaRose & Bosco, Ltd. and Clarissa
Y.
Cutler, of counsel to LaRose & Bosco,
Ltd. and pursuant to
35 Ill.Adm. Code Sections 101.616 and 101.510 hereby present their
Motion to Bar Complainant's Expert Witnesses and Report and Any Other Previously
Undisclosed Witnesses or Alternatively, to Cancel Hearing Set for October 20-23, 2008
For Cause and to Reopen Discovery and in support thereof, state as follows:
1
INTRODUCTION
The above captioned consolidated matters have been extensively litigated for
more than ten (10) years. By Order
of Hearing Officer Bradley Halloran on June 12,
2008, the matters were set for hearing on October 20-23, 2008. (See Order dated June
12,2008, attached
as Exhibit A and incorporated herein.) In compliance with discovery
schedules, Respondents had long ago deposed the Complainant's named expert witness
John Nosari on September 10, 2003. (See Deposition Transcript
of John Nosari, attached
as Exhibit B and incorporated herein.) Discovery in the above captioned consolidated
matters closed nearly three (3) years ago
on October 12, 2005. (See Order dated
September 13, 2005, attached as Exhibit C and incorporated herein).
Notwithstanding these clear and unambiguous orders, Complainant only now
seeks to present a different expert witness at hearing, Gary Styzens, who has heretofore
been undisclosed. In addition, Complainant seeks
to present a report prepared by Mr.
Styzens that was only presented to Respondents on August 27, 2008, less than two (2)
weeks ago and less than sixty (60) days prior to hearing. (See Styzens Report dated
August 26, 2008, attached
as Exhibit D and incorporated herein). For a myriad of
reasons, which are presented in further detail below, the late disclosure and attempted
substitution
of Mr. Styzens and his report for Mr. Nosari constitute the utmost in unfair
discovery tactics by Complainant which,
if allowed to proceed, would result in extreme
prejudice to Respondents. Complainant'stactics should not be sanctioned by the Hearing
Officer or by the Illinois Pollution Control Board. Since Respondents have not had the
opportunity to conduct full discovery, Complainant'switnesses Gary Styzens and/or John
Nosari should
be barred from testifying, as should Brian White and Blake Harris.
2
Alternatively, if the Hearing Officer determines that the witnesses should be permitted to
testify, (to the prejudice
of Respondents) the hearing dates of October 20-23,2008 should
be stricken to allow for additional discovery depositions to be taken
of all late and
previously undisclosed witnesses at the State's expense. Pursuant to
35 Ill.Adm Code
101.51
O(b), the Affidavit of Clarissa
Y.
Cutler is attached as Exhibit E and incorporated
herein in support
of the motion to cancel hearing.
FACTS
In February 2003, Complainant named John Nosari as its expert witness.
Accordingly, on September 10,2003, almost five
years ago, Respondents deposed Mr.
Nosari, who was represented by Assistant Attorney General Christopher Grant. During
his deposition, Mr. Nosari was questioned by Mr. LaRose, counsel for Respondents, on
the subject
of his opinions and reports as follows:
Q.
"Have you made any
of the - have you made any determination as
to any
of the component parts of economic benefit?
A.
No.
Q.
That is your assignment, however?
A.
That is my assignment.
Q.
And before you testify in this case, you intend to do that?
A.
That's correct.
Q.
Chris, I'm not going to belabor a lot. I mean, if he doesn't have
any conclusions. But once he gets them,
I'd like to talk to him about it before the
witness stand.
3
Mr. Grant: No, that's fine. I don'thave any problem. As a
matter of fact, we're going to ask him to prepare some sort of report which I will
consider that that's a continuing obligation to supplement interrogatories that we
have."
(See Exh. B, Nosari Deposition, pp. 25-26; Exh. E,
~
3).
Pursuant to Hearing Officer Bradley Halloran's Order dated September 13, 2005,
discovery in the consolidated matters closed on October 12, 2005. (See Exh. C).
Assistant Attorney General Christopher Grant did not tender a report prepared by Mr.
Nosari prior to this date. On June 12,2008, the matters were set for hearing on October
20-23, 2008. (See Exh. A; Exh. E,
n
3 and 4). To date, Mr. Nosari has not tendered a
report. (Exh. E,
~
5).
On August 4, 2008, that Complainant hinted in writing as to its intention to
provide an expert report "in the near future ... as soon as it becomes available." (See
Grant to Cutler letter dated August 4, 2008, attached as Exhibit F and incorporated
herein.)
Complainant also mentioned that "in the interest of saving money on
consultants" it intended to ask "to substitute Illinois EPA employee Gary Styzens for
John Nosari".
It
is not clear who Complainant intended "asking" for this last minute
substitution. Complainant further states that "Gary and John developed the opinion
together, and either can testify to its conclusions." (See Exh. F).
Shortly thereafter,
counsel for Respondent informed counsel for Complainant of their objection to this
substitution and proposed late tender of a report authored by a different expert than Mr.
Nosari. (See Exh. E,
~
6). However, it was not until August 27, 2008, that Complainant
actually provided a report which in fact is authored solely by Gary Styzens, and does not
4
mention John Nosari as having either written the report or developed the opinion,
contrary to the Complainant's earlier assertion. (See Exh. D and Exh.
E,
~
7). In
addition, Complainant's August 4, 2008 letter alludes to its intention
to elicit substitute
testimony from EPA employee Brian White and another newly mentioned witness EPA
employee Blake Harris. Both
of them should be barred from presenting any testimony as
well.
LEGAL STANDARDS
The supreme court rules on discovery are mandatory rules of procedure that
courts and counsel must follow. Dep't.
of Transportation v. Crull, 294 Ill.App.3d 531,
537, 228 Ill.Dec. 834, 690 NE 2d
143 (1998).
Rule 213(g) states that upon written
interrogatory, a party must disclose the subject matter, conclusions, opinions,
qualifications, and all reports
of a witness who will offer opinion testimony. Ill. Sup. Ct.
Rule 213(g). Rule 213(i) imposes on a party the continuing duty to supplement discovery
responses whenever new or additional information subsequently becomes known to that
party. Ill. Sup.
Ct. Rule 213(i). Furthermore, Rule 218(c) states that all dates for the
disclosure
of opinion witnesses and the completion of discovery shall be chosen to ensure
that discovery will be completed not later than
60 days before the date on which the trial
court reasonably anticipates the trial will commence.
1 III Sup. Ct. Rule 218(c) (emphasis
added). The purpose behind Rule
213 is to avoid surprise and to discourage tactical
gamesmanship. Dep't.
of Transportation v. Crull, 294 Ill.App.3d 531, 537, 228 Ill.Dec.
834, 690 NE 2d
143 (1998). An expert'stestimony is limited to the fair scope of opinions
disclosed during discovery. Sinclair
v. Berlin, 325 Ill.App.3d 458, 452-53, 758 N.E.2d
Since the Hearing Officer entered an order closing discovery on October 12,2005, the Board rule
allowing discovery at least ten (10) days prior to the hearing does not apply. 35 III.Adm.Code Section
10 1.616(c).
5
442,470 (2001). Courts have the authority to enter a wide range of orders when a party
unreasonably fails to comply with discovery rules and orders. Ill. Sup. Ct. Rule 2l9(c).
ARGUMENT
As outlined above, Complainant had nearly five (5) years to present a report
prepared by its previously disclosed witness John Nosari, who was deposed on
September 10,2003. Instead, Complainant has showed a complete lack
of diligence by
waiting until August 27,2008 to disclose a report that
is prepared not by John Nosari but
by somebody else, Gary Styzens, who had never been mentioned before August
4, 2008.
It
is completely unfair to expect Respondents to prepare for Styzens' testimony in just
over a month when Complainant has had five (5) years to supplement discovery and
properly present him
as a witness (along with his report).
Complainant
is likely to argue that there is still time for Respondent to prepare by
deposing these newly disclosed witnesses in an expedited manner and that the hearing
should
go forward as scheduled. However, as noted above, such a compressed time
frame is clearly not contemplated by the supreme court rules, particularly when discovery
was closed on October 12,2005 by order
of the hearing officer nearly three (3) years ago.
Complainant's dilatory behavior and lax attitude toward these well established discovery
rules and set discovery deadlines should not be tolerated.
The testimony
of both John Nosari and Gary Styzens should be barred. The
testimony
of John Nosari should be barred since his name does not appear on the report
tendered by the Complainant on August 27,2008, even though Assistant Attorney Grant
stated in September 2003 that a report would be forthcoming nearly five
(5) years ago.
(See Exh. D.)
The testimony
of Gary Styzens should be barred since he was not
6
disclosed as a witness officially until his report was tendered to Respondent on August
27, 2008, less than sixty (60) days prior to hearing and almost three (3) years after
discovery was closed on October 12, 2005. (See Exh. C.) Similarly, the testimony
of
Brian White and Blake Harris should be barred since Respondents were not given the
opportunity to depose them.
Alternatively, in the event the hearing officer determines that the witnesses should
be allowed to testify, the hearing dates
of October 20-23, 2008 should be stricken for
cause solely due to Complainant's conduct and through no responsibility
of Respondents.
Discovery should be reopened in order to allow Respondents adequate time to depose the
newly disclosed witnesses and to prepare its defenses accordingly. A new hearing date
should be scheduled in accordance with the sixty day time frame after discovery is
concluded as set forth above. Fundamental fairness as well as adherence to established
discovery rules demand no less. In compliance with Section 101.5l0(b), Respondents
propose that the hearing be rescheduled after January 15, 2009, which would allow for
the depositions
of the newly disclosed witnesses, as well as enable Respondents to name
any responsive witnesses
of their own.
CONCLUSION
WHEREFORE, based on the foregoing, Respondents respectfully request that
Hearing Officer Bradley Halloran GRANT their Motion to Bar Complainant's Expert
Witnesses and Report and Any Other Previously Undisclosed Witnesses. Alternatively,
if the Hearing Officer determines that the witnesses should be permitted to testify,
Respondents respectfully request that he GRANT their Motion to Cancel Hearing Set for
7
October 20-23, 2008 For Cause and to Reopen Discovery, finding good cause and that
the motion was not brought as the result of lack of diligence.
Respectfully Submitted,
Mark
A. LaRose
LaRose
&
Bosco, Ltd.
200 North LaSalle Street, Suite 2810
Chicago IL 60601
(312) 642-4414
Clarissa
Y. Cutler
Attorney at
Law
J55 North Michigan Avenue, Suite 375
Chicago IL 60601
(312) 729-5067
BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
PEOPLE OF THE STATE OF ILLINOIS,
)
)
Complainant,
)
)
vs.
)
)
EDWARD PRUIM and ROBERT PRUIM,
)
)
Respondents.
)
PEOPLE OF THE STATE OF ILLINOIS,
)
)
Complainant,
)
)
vs.
)
)
COMMUNITY LANDFILL COMPANY,
)
INC.,
I
J
)
Respondent.
)
PCB No. 04-207
(Enforcement - Land)
PCB No. 97-193
(Enforcement - Land)
(consoiidated)
EXHIBIT LIST TO:
RESPONDENTS' COMMUNITY LANDFILL COMPANY, INC., ROBERT PRUIM AND
EDWARD PRUIM'S MOTION
IN LIMINE
TO BAR COMPLAINANT'S EXPERT
WITNESSES AND REPORT AND ANY OTHER PREVIOUSLY UNDISCLOSED
WITNESSES OR, ALTERNATIVELY, TO CANCEL HEARING SET
FOR OCTOBER
20-23,2008
FOR CAUSE AND TO REOPEN DISCOVERY
Exhibit A - Order dated June 12,2008 setting hearing for October 20-23,2008
Exhibit B - Excerpts from John Nosari's deposition transcript taken September 10, 2003
Exhibit C - Order dated September 13, 2005, closing discovery on October 12,2005
Exhibit D - Gary Styzen'sreport dated August 26, 2008
Exhibit E - Affidavit
of Clarissa
Y.
Cutler dated September 8, 2008
Exhibit F - Letter from Christopher Grant to Clarissa Cutler dated August 4, 2008
THIS FILING IS SUBMITTED ON RECYCLED PAPER.
ILLINOIS POLLUTION CONTROL BOARD
June 12, 2008
PEOPLE OF THE STATE OF ILLINOIS,
)
)
Complainant,
. )
)
v.
)
PCB 04-207
)
(Enforcement - Land)
EDWARD
PRUTh1 and ROBERT PRUTh1,
)
)
)
Respondents.
)
_"~~'
il )\1
j
'
j
-
:..:.J.J
7nPR
....
ST,J.:TE OF iLLjNOlS
?oilutin
r
,
Comro! Board
PEOPLE OF THE STATE OF
ILLINOIS~
Complainant,
v.
COMMUNITY LANDFILL COMPANY,
INC.,
Respondent.
)
)
)
)
)
PCB 97-193
)
(Enforcement - Land)
)
(Consolidated)
)
)
)
HEARING OFFICER ORDER
On June
5,
2008, all parties participated in a telephonic status conference with the hearing
officer. Discussion centered on scheduling a hearing
in these matters for the week of October 20
through the 23, 2008.. All parties agreed that these dates were acceptable. To that end, the
hearing is scheduled for October 20, 21, 22 and
23,2008. The time and location will be noted in
a notice ofhearing.
The parties were informed that a written pre-hearing status report will
be requested in the
above-captioned matters and that a briefmg schedule will
be discussed at the next status
conference.
The parties
or their legal representatives are directed to appear at a telephonic status
conference with the hearing officer on July 17, 2008, at 9:30 a.m. The telephonic conference
must be initiated
by the complainant, but each party is nonetheless responsible for its own
appearance. At the conference, the parties must be prepared to discuss the status ofthe above-
captioned matter and potential hearing dates.
IT IS SO ORDERED.
2
~ "?,-~~-
\
. Bradley P. Halloran
Hearing Officer
Illinois Pollution Control Board
James
R.
Thompson Center, Suite 11-500
100 W. Randolph Street
Chicago-, lUilIDMl 606tH
312.814.8917
3
CERTIFICATE OF SERVICE
It is hereby certified that true copies
ofthe foregoing order were mailed, first
class, on June
12,2008, to each ofthe persons on the attached service list.
It
is hereby certified that a true copy ofthe foregoing order was hand delivered to
the following on June
12,2008:
John T. Therriault
Illinois Pollution Control Board
James
R.
Thompson Center
100 W. Randolph St., Ste. 11-500
Chicago, Illinois 60§01
'.
~
,?
\.~CH--
\
BradleyP: Halloran
Hearing
Officer'
lllil).ois pollution Control Board
100 W. Randolph Street, Suite 11-500
Chicago, Illinois 60601
(312) 814-8917
PCB 2004-207
Clarissa
C. Grayson,
LaRose
&
Bosco, Ltd.
200
North LaSalle Street
Suite 2810
Chicago,
IL 60601
PCB 2004-207
Jennifer
A.
Tomas
Office
ofthe Attorney General
". Environmental Bureau
500 South Second Street
Springfield,
IL 62706
PCB 2004-207
Edward
Pmilll
Community Landfill Company
c/o Morris Community Landfill
1501
Ashley Road
Morris, IL 60450
4
PCB 2004-207
Christopher J. Grant
Office
ofthe Attorney General
Environmental Bureau
500
South Second Street
Springfield,
IL 62706
PCB 2004-207
Robert
Pruim
Community Landfill Company
c/o Morris Community Landfill
1501
Ashley Road
Morris, IL 60450
1
1
BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
2
3
PEOPLE OF THE STATE OF
ILLINOIS,
No. PCB No. 97-193
Respondent.
Petitioner,
vs.
)
)
)
)
)
)
)
COMMUNITY LANDFILL COMPANY,
)
INC., an Illinois Corporation,)
)
)
4
6
9
7
8
5
10
11
Discovery deposition of JOHN NOSARI,
12
taken before Tammy S. Wagahoff, CSR, at the instance
13
of the Respondent, on the 10th day of September, 2003,
14
at the hour of 2:00 p.m., at Andrews Engineering, 3535
15
Mayflower Boulevard, Springfield, Illinois, pursuant
16
to attached stipulation.
17
18
19
20
~:-.
21
22
23
24
ASSOCIATED COURT REPORTERS
1-800-252-9915
P.O. Box 684
Taylorville, Illinois
62568
ITB
ASSOCIATED COURT REPORTERS
DEPOSITION OF JOHN NOSARI
13
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Q.
Let's say that by depositing waste in excess
of the above, in excess of their permitted capacity,
they secured a million dollars in additional gross
revenues.
A- Good, okay.
Q.
Let's say that -- before I go into the next
step, I want to clarify one thing. Why would you use
gross
profit as opposed to net profit?
A- Well, when we're look at economic benefit,
we're looking or when -- well, okay, when we're
looking at economic benefit, what we're looking at is
what actually has changed, what's the difference
between had they, you know, had this occurred or had
it not occurred. So what we're looking at is those
things that are going to be different. So what we
would do is we would take the total cash that came in
from the service, which would be the revenues. And
then we would try
to
estimate what the additional
costs were to this corporation by doing this. In this
particular case let's say that they brought in a
million dollars, and then we could estimate say that
the company incurred an additional
$200,000
in
expenses by moving this around or doing whatever they
had to do to get it. So then we would be dealing with
14
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Q.
$600,000 additional gross profit, right?
A. Right, uh-huh.
Q.
From the overfill, right?
A- Correct.
Q.
Now we have to deduct from that income
taxes?
A.
Correct.
Q.
Assume a rate for me, 30 percent?
A.
Let's say
40
percent.
Q.
So we assume 40 percent?
A-
That would be
$240,000.
Q.
In taxes?
A-
In tax.
Q.
So $240,000 in taxes. That's a deduction.
So
that leaves us with 260, is that right?
A- No,
240,
I think it's
360.
Q.
No, it leaves us with 360?
A-
Correct.
Q.
So $360,000 is overfill before taxes, 360 is
the additional net gross profit, right?
A. Correct.
Q.
Okay. Now number six, number six really has
nothing
to do with these numbers, does it?
A.
Number, what's number six?
16
1
the
$800,000,
the one million plus the
$200,000.
We
1
Q.
rm sorry, number six is the caiculation of
2 would not take into consideration other costs that are
2 the weight of an estimated weighted average cost of
3 going to be there anyway.
3 capital. In other words, what they would have to pay
4
Q.
Got ya. So, for example, their telephone
4 to obtain these financial resources.
5 bill is going
to be the same whether they're filling
5
A- That's correct.
6 it above the line or below the line?
6
Q.
Does the amount of this number, whether it's
7
A-
That's right.
7 a dollar or a million, affect our next calculation?
8
Q.
So you're not going to -- unless, unless
8
A- No.
9 they could prove that because they were filling it
9
Q.
It's going to cost us a point to get a
10
above the line their telephone bill tripled for some
10
dollar, it's going to cost us a point to get a million
11
reason because they had to talk on the phone more?
11
dollars, it's going to cost us a point to get ten
12
A-
Exactly.
12
million dollars?
13
Q.
Okay. Got ya. So a million bucks in gross
13
A. Well, the more you borrow, perhaps the more
14
revenue, right. Let's just assume for the purpose of
14
it's going to cost you. The interest rate could go
15 our example that the additional variable cost to bring
15 up. In other words, just like if you own a house,
16
it down to your term gross profit is a half million
16
let's say you borrow
9S
percent versus borrowing
80
17 dollars.
17 percent, the interest rate is going to go up. The
18
A. Okay. Why don't you use something like
18 more you borrow, the higher the risk so the higher the
19 $400,000
or
$600,000
because if you use a half a
19
rate.
20 million, that can get confusing.
20
Q.
The more you borrow against the value of the
21
Q.
Okay. That's fine. Let's use $400,000.
21
item?
22
Let's use $400,000 for additional variable costs which
22
A- Yeah. In the case of a business, the more
23 leaves us with --
23 borrowings they have, the higher the risks, so the
24
A- $600,000.
24
larger you would expect the interest rate.
Page 13 to 16 of 64
4 of 20 sheets
DEPOSITION OF JOHN NOSARI
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Q.
Okay. So it does have an effect on that?
A. n can, yeah.
Q.
Have you actually determined this estimated
weighted cost
of capital in this case? Or, in other
words, what Community would have to pay to obtain --
A.
No.
Q.
Okay. Is that something that you plan on
doing
in the future?
A. Yes.
Q.
When?
A. Well, whenever I can get additional
information to do it.
Q.
Okay. How are you going to go about it and
what information do you need?
A. Well, first of all, the tax returns that I
got in the last three years, there was no balance
sheet that was included. So I need some indicator of
the interest rate, appropriate interest rate that
would apply in this case. And the question is where
would I get that. And the answer is, well, you know,
basically taking an auditor's approach here, trying to
use the best interest that's available. So in this
particular case what we were trying to do is look at
the financial position of this firm, the size of the
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owner's equity. That's really the most difficult part
in coming up with a weighted average cost of capital.
In this case, you know, there's no
public stay of common stock, there's no dividend
information. So coming up with an appropriate cost
for the owner's equity part is going to be different
because it's a privately owned corporation.
The other thing about this one that's
different is that this is a Sub Chapter S Corporation,
and it's very possible when this corporation borrows
money, it's probably borrowing money not just on the
financial resources of the corporation; but the loans
could be guaranteed by the stockholders, which would
have an effect of reducing the interest rate because
it would reduce the risk, especially if they were
guarantors of those loans.
So the bottom line is I would use the
best information available to try to estimate, you
know, a fair interest rate to use for the cost of
equity.
Q.
Okay. And a run down, that best information
would be complete
tax returns including the balance
sheets?
A. Right. And would also include, you know,
18
1
firm, and the industry it's in and try to get from
2 some source what the appropriate interest rate would
3 be. We could also look at their tax return and see
4 what interest rate they paid, what the total interest
5 rate was.
6
Q.
Did you do that in this case?
7
A.
I haven't done it yet, no.
8
Q.
But you would be able to tell that -- the
9 last thing you said is see what interest rate they
10 actually paid, that's in the tax return, right?
11
A.
Well, if I had the entire tax return, I
12 could calculate it. But based upon the amount of
13 loans that are listed on the balance sheet and from
14 the expenses that they pay.
15
Q.
Okay.
16
A. Now this case is a little bit different than
17 the other two that I told you about because the other
18 two were publicly held corporations. This is a
19
privately held corporation.
20
Q.
And record keeping is a little bit
21
different?
22
A.
Well, the other thing is, you know, we don't
23 have -- in those two cases, the hard part is to
24 estimate the cost of capital, that is the cost of
1
2
3
4
5
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7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
20
information, you know, financial information regarding
the shareholders, such as their tax returns. I would
look at probably some other information such as what
the prime rate was, different interest rates published
by the Federal Reserve Board. I could look at Robert
Morris and Associates, which is an organizations that
publishes financial information for different
industries for companies of different industries and
different sizes within those industries so that would
be a source that I would use.
Q.
What else?
A. Basically any financial information that I
thought would
be
relevant to the case.
Q.
Let me explore this concept of the
shareholders financial information. Are you saying
that you would use that information to determine
whether or not the actual money they paid in interest
rates needed to be discounted or increased because of
their participation as shareholders. If, in fact, Mr.
Nosari,
this company was able to borrow money during
this time at this rate, isn't that the best rate to
use regardless of whether it's a Sub Chapter S.or not?
A.
I'm not sure I can answer that right now.
Q.
Okay. What would you need -- let's back up.
5
of 20 sheets
Page 17 to 20 of 64
DEPOSITION OF JOHN NOSARI
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2
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5
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9
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18
19
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21
What additional information would you need to
1
determine whether or not the money that this company
2
actually borrowed at arm's length is not the best.
3
indicator of an estimated weighted average cost of
4
~~R
5
A. If they borrowed money at arm's length,
6
okay, and the total cost of that borrowing and the
7
total cost, I'm sorry, the total cost of the borrowing
8
and we would determine what the principal amount of
9
the debt was. Or if we could get the loan
10
information, that would give us what the interest rate
11
was, if that would be consistent with other published
12
information so that, in fact, the rate that was
13
charged would be consistent with the information on
14
the financial statements on the prevailing rates at
15
the time, then that would be good evidence that would
16
be appropriate interest rate to charge.
17
Q.
If, for example, Community Landfill in
1998
18
was able to borrow a million bucks at nine percent
19
amortized over twenty years; and if, in fact, if you
20
looked at your books a company, privately held Sub
21
Chapter S Company with these type of resources and
22
shareholders with those type of resources were getting
23
those type of rates, that was something that you would
24
22
23
A.
Yes, uh-huh.
Q.
Here in Springfield?
A.
Yes.
Q.
And is it your own firm?
A.
Uh-huh (affirmative).
Q.
Forgot to tell you, one of the rules of this
thing, instead of saying uh-huh or huh-uh, you've got
to say yes or no.
A.
Yes, I forgot. I should know that.
Q.
I should have told you that. And what's the
name of your firm?
A.
It's John Nosari, CPA.
Q.
Okay. Is there anything else you do besides
your work at the university? Did they used to call
that Sangamon State?
A.
It was Sangamon State, but it became the
third campus of the University of Illinois.
Q.
When?
A. 1995.
Q.
No kidding. So besides your work at the
U of I and your work at John Nosari, CPA, are you
doing anything else professionally?
A. Not right now. I mean, I was, as you know,
I was in the Air Force reserve for a number of years;
24
1
say that's --
1
and
I
was at the Air Force Accounting and Finance
2
A.
That would work, yes.
2
Center for twelve years.
3
Q.
Okay. John, do you have, you probably don't
3
Q.
Then you found the ten thousand dollar
4 have it here, but do you have.a current CV or resume?
4 toilet seat, and they kicked you out?
5
A. I do, but I didn't bring it.
5
A. Right. Well, actually they made me a war
6
Q.
Can we get one?
6 time planner. That's true, they did.
7
MR. GRANT: Yes. You want to
7
Q.
Have you ever been to a landfill?
8
like fax it to me tomorrow?
8
A. No, I haven't. I've come close a couple
9
THE WITNESS: Sure.
9
times.
10
MR. LaROSE: That would be
10
Q.
You've never been to Community Landfill,
11
great.
11
this one?
12
MR. GRANT: You want to attach
12
A.
No.
13
it to the dep?
13
Q.
And do you have a package of documents that
14
MR. laROSE: I think I want it
14
has been supplied to you in this case?
15
attached to the dep. As far as I'm concerned
15
A.
Yes.
16
personally, his credentials are
impec~ble.
I don't
16
Q.
Did you bring those with you?
17
remember. What the hell. Professionally, I knew you
17
A.
I did.
18
were a CPA. Tell me what you're doing now.
18
Q.
Can I take a look at them, please?
19
THE WITNESS: Well, I'm the
19
A.
Sure.
20
chairman of the accounting and economics department at
20
Q.
While I'm doing this, will you just go over
21
the University of Illinois in Springfield, associate
21
the documents that he has and make a list of them?
22
professor. I'm responsible for the auditing
22
MS. GRAYSON: Yes.
23
curriculum and the accounting.
23
MR. GRANT: Off the record for
24
Q.
Are you also in private practice?
24
a second.
Page 21
to
24
of 64
6 of 20
sheets
DEPOSITION OF JOHN NOSARI
25
1
(Off Record Discussion).
2
MR. laROSE: In the IBP, Inc.
3
case, is that an EPA case, too?
4
THE WITNESS: Right, uh-huh.
5
Q.
Were you able to determine the weighted cost
6
of capital in that case?
7
A. Yes.
8
Q.
Based on information that was available
9
through the pubiic fiiings?
10
A. Well, yes, for the most part. How do
I
want
11 to say this. Yes, that would be correct, it would be
12 the information from either their annual reports or
13 from their
see
filings.
14
Q.
Okay. And what about Panhandle Eastern
15
Pipeline, were you able to make the same determination
16
in those cases?
17
A. Yes, using the same information.
18
Q.
Using the pUbiic information. Okay.
As
I
19
understand it as we sit here today, John, you do not
20
have a conclusion as to either economic benefit or as
21
a component of that estimated cost of capital?
22
A. That's correct.
23
Q.
Have you made any of the -- have you made
24
any determination as to any of the component parts of
26
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
27
Q.
When was the last time you spoke to him?
A. Today.
Q.
When was the first time you spoke to him?
A. About three months ago.
Q.
And between three months ago and today, you
received
-- go ahead.
A. Well, maybe it was three times, three months
ago and then
I
talked to him yesterday and then
I
talked to him today.
Q.
Sometime between three months ago and today,
you received from him the pack of documents that he
wanted you
to review and hopefully use as part of your
analysis?
A. Right.
Q.
I'm not going to delve into anything that's
potentially attorney/client, but did he tell you what
to say today?
A.
No.
Q.
Okay. Basically be a nice boy and tell the
truth?
A. Right.
Q.
Okay. Is your assignment for economic
benefit as
far as you know iimited only to this
overfill or filling above the permitted line?
28
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6
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8
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14
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19
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23
24
economic benefit?
A.
No.
Q.
That is your assignment, however?
A. That is my assignment.
Q.
And before you testify in this case, you
intend
to do that?
A. That's correct.
Q.
Chris, I'm not going to belabor a lot. I
mean,
if he doesn't have any conclusions. But once he
gets
them, I'd iike to talk to him about it before the
witness stand.
MR. GRANT: No, that's fine. I
don't have any problem.
As
a matter of a fact, we're
going
to ask him to prepare some sort of report which
I will consider that that's a continuing obiigation to
supplement interrogatories that we have.
MR. laROSE: And I promise you
I won't waste
your time, but I can't just ask him
about
it on the witness stand.
MR. GRANT: Oh, no, I
understand.
MR. laROSE: How many times
have you talked to Mr. Grant about your assignment?
THE WITNESS: Twice.
1
A.
Yes.
2
Q.
Are you aware that as part of subsequent
3
permits issued to this company they were reqUired to
4
reserve in another area of the landfill as much as
5 450,000
cubic yards of air space so that the overfill
6 could be moved from one location
to the other?
7
A.
No.
8
Q.
If, in fact, sir, assuming that there is no
9
more than
450,000
cubic yards of overfill, they are
10
required to pick that waste up and move it to another
11
location and fill up other air space that has a value
12
today, could that affect your analysis of economic
13
benefit?
14
A.
No.
15
Q.
Why?
16
A. Well, because when we're looking at the
17 economic benefit, we're looking at the economic
18 benefit that they received by exceeding the capacity
19 or exceeding the permit at that point in time. The
20 additional cost of moving that landfill to another
21 location is, you know, relates to another decision in
22 the sense that the accrual of the economic benefit was
23 what they received by the revenue that they attained
24 plus the earnings of the interest up until that point
7 of 20 sheets
Page 25 to 28 of 64
DEPOSITION OF JOHN NOSARI
29
31
1 in time.
1 creating the overfill and the cost of the air space
2
Q.
So if they have to give it back the next
2 today factor into your analyses?
3 day,
that doesn't cou nt?
3
A.
In other words, what you're saying is let's
4
A.
No.
4 say that whenever they filled this up, let's say it
5
Q.
Why?
5
was 1998, okay, and they were selling this air space
6
A.
Because it's a different decision.
6
for let's say $10 a cubic yard and the fair market
7
Q.
So if they just in simple terms, if the
7
value of it in the year 2003 would be $15.
8
bottom line of your ultimate calculation is that their
8
Q.
That's right.
9
economic benefit was a million dollars
from doing
9
A.
Okay.
10
this?
10
Q.
Would that factor into your analysis at all?
11
A.
Uh-huh (affirmative).
11
A.
I would use the economic, we would use the
12
Q.
Up to the point in time that they have to
12 value that they actually received, which would have
13 move it, and the next day it costs them a million
13
been 1998, which would have been the $10.
14 five?
14
Q.
Okay. And if, in fact, they had to take
15
A.
To move it.
15 this waste that they received $10 for and move it into
16
Q.
Not just physically to move it but a million
16 an available space that they were required to reserve
17
five in taking up additional air space that has a
17
as part of their permit where they could now sell that
18 value to it, because, remember, they've got to move it
18 space for $15, that won't factor into your analysis?
19 somewhere that has value to it, right? That doesn't
19
A.
Well, what you're talking about here is
20 count in your analysis?
20 opportunity cost, your opportunity revenue, which
21
A.
No.
21 would be what they've foregone, right, because you're
I
22
Q.
Why?
22
going to use it for that.
23
A.
Because it's a different aspect, it's a
23
Q.
Yes.
I
24
different decision. It's a different economic event
24
A.
I have to think about it.
30
32
1 than the initial economic event that was done when
1
Q.
Okay. If, in fact, sir, the coming into
2 they exceeded their permit.
2
compliance
of that is moving this waste for which they
3
Q.
When does the economic benefit analysis end?
3 were paid
let's say $10 per yard into an available air
4
A.
Well, that's a good question. It would end
4 space that they were required to reserve at $15 per
5
at the present time that they are -- normally it would
5 yard, wasn't the net cost of the overfill $5, not a
6
end when they would be in compliance.
6 net savings?
7
Q.
Okay. And in this case in order to be in
7
A.
Well, see, I don't think so because the
8 compliance, they have to either have this material
8
problem is they elected to exceed the capacity. And
9
left in place, left there with the proper government
9 we used the hypothetical year of 1998.
So
they made
10 authorizations or they have to take this material out
10 the decision to exceed that decision in 1998. They
11 and move it somewhere where it's not over line?
11 received the benefit of that. Let's say they moved
12
A.
Yeah, in this particular case that would
12 this in 2004. So from 1998 to 2003 they obtained the
13
probably be right.
13
economic benefit of the initial sales price less the
14
Q.
So in this particular case, even though the
14 variable cost plus having those funds available until
,
15 economic benefit and analysis would continue until
15 2004.
16 they moved the material, you wouldn't consider the
16
Q.
Less taxes?
I
17 cost of moving the material as part of the economic
17
A.
Less taxes, right. Okay. Then in the year
18 benefit?
18 2004, they now come into compliance.
19
A.
Well, I don't think so.
19
Q.
By giving up $15 per unit for what they have
20
Q.
Are you sure of that?
20 already received
$10 per unit?
21
A.
No, I'll take a look at it.
21
A.
I think the bottom line is, no, you would
22
Q.
Okay. When you do your economic benefit
22 not take that into consideration because this is the
23 analysis, will the cost of the air space, in other
23 economic benefit they received was from 1998 to 2003.
24 words X per cubic yard at the time that they were
24 2004, they come into compliance. And I don't believe
Page 29 to 32 of 64
8 of 20 sheets
DEPOSITION OF JOHN NOSARI
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
33
we would take into consideration tbe cost.
Q.
You made a statement that I want to
follow-up on. You said in 1998 they made the decision
to do this. How do you know that? Forget the year.
How do you know anybody made a decision to do
anything?
MR. GRANT: I'm going to
object. I think we've been talking about hypothetical
questions here. We haven't introduced any
of the
facts in the case.
MR. laROSE: Understood. But
he said in this case.
MR. GRANT: It's okay for him
to answer the question. I want to make it clear.
MR. laROSE: Do you know who
made
any decision to do anything?
A.
No, I'm basing it on the fact it occurred.
Q.
And I didn't mean to imply that, you know,
that this was some type of calculated maneuver as
opposed to something that just occurred.
A.
Correct, that I was just basing it on
historical fact.
Q.
Okay. If you don't factor in the cost of
them having to come into compliance in your economic
34
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
35
and when it ended. And to go beyond that, I'd have to
do some research to answer that question.
Q.
Okay. In fact, sir, if you were doing
anything
but an economic benefit analysis, if you were
just doing a finandal analysis of this company, the
overfill would have generated some additional income
for a period of time, but ultimately under our
scenario would have resulted in a loss to the company
because
of things they would have to do to manage the
overfill in accordance with the law, correct?
A.
Based on the scenario you were talking
about?
Q.
Yes.
A.
That would be correct.
Q.
Based on a scenario of having to take the
waste that they made on for several years and move it
to an area that was more valuable in later years, they
actually would have lost money, not gained.
A.
Well, they would have lost some opportunity
income, the opportunity income that they've foregone
by moving the fill
to
the new location where they
could have sold it for $15 a yard versus $10 would
have resulted, in fact, resulted in lower revenue in
excess of what they originally received, that would be
36
1 benefit analysis, where is that factored in?
1 correct.
2
A. Well, it's part of their cost of, it's part
2
Q.
Right. What is it about the fact that this
3 of the cost of coming into compliance. It's not
3 analysis is now being performed for the government in
4
related to the economic benefit that they obtained
4 an environmental setting that changes it from just a
5
when they violated the law because this is another
5 standard economic analysis that we just discussed?
6
event that is occurring for them to come into
6
A. Well, this is a similar question to your
I
7 compliance.
7 previous one.
I
8
Q.
Isn't the purpose of figUring out economic
8
Q.
Understood.
9 benefit is
the economic benefit from the
9
A. Basically, again, it relates
to
what you
10 noncompliance?
10 consider point of that decision or point of that
11
A. Right.
11 economic event. And to go beyond that, as I
12
Q.
Okay. And if the cost to come into
12 indicated, I would have to do some additional
13 compliance ultimately completely wipes out that
13 research.
14 economic benefit because it costs more
to
come into
14
Q.
As you sit here, you can't point to any law,
15 compliance than the economic benefit, doesn't the
15 rule, regulation, treatise or book that would support
16 whole economic benefit analysis just go away? Isn't
16 the theory that an economic benefit analysis should
17 that the matrix, Mr. Nosari?
17 not take into consideration the cost
of
coming into
18
A. Well, I would think so because what we're
18 compliance?
19 saying is we're not going to take into consideration
19
A. The only thing I can tell you is that the
20 that cost of coming into compliance.
20 economic benefit analysis is supposed to result in
21
Q.
And who says that? You, the EPA, both of
21 the, in this case being put in exactly the same
22 you, some book?
22 position they were had they not done this, okay. So
23
A. Well, I'll just have to say that it's based
23 that they, so whatever benefit they received was taken
24 on my perception of when the economic events occurred 24 away. And then you're getting involved in a question
9 of 20 sheets
Page 33 to 36 of 64
ILLINOIS POLLUTION CONTROL BOARD
September 13, 2005
PEOPLE
OF THE STATE OF ILLINOIS,
)
)
Complainant,
)
)
v.
)
PCB 04-207
)
(Enforcement - Land)
EDWARD PR'uI:M and ROBERT PRUIM, .
)
)
)
Respondents.
)
PEOPLE OF THE STATE OF ILLINOIS,
)
)
Complailiant,
)
)
V.
}
\
PCB 97-193
)
(Enforcement -Land)
CO:MMUNITY LANDFILL COMPANY,
)
( consolidated)
INC.,
)
)
Respondent.
)
HEARING
OFFICER
ORDER
RECEIVED
CLERK'S OFFloe
SEP
f
32005
.
STATE OFILUNOIS
Pollution Control
Board
On
September 13, 2005, all parties participated
in
a telephonic status conference with the
hearing officer. The parties represented that discovery is proceeding but that additional time
is.
needed to complete depositions. To that end, all discovery must be completed on or before
October 12, 2005. The parties were advised to suggest possible hearing dates at the next status
conference.
The parties or their legal representatives are directed to participate
in
a telephonic status
conference with the hearing officer on November 3, 2005, at
11 :00 a.m. The telephonic status
conference must
be initiated by the complainant, but each party is nonetheless responsible for its
own appearance. At the status conference, the parties must
be prepared to discuss the status of
the above-captioned matters and their readiness for hearing.
IT IS SO ORDERED.
ITC
2
Bradley P. Halloran
Hearing Officer
lllinois Pollution Control Board
James
R.
Thompson Center, Suite 11-500
100
W. Randolph Street
Chicago, lllinois 60601
312.814.8917
3
CERTIFICATE OF SERVICE
It
is hereby certified that true copies of the foregoing order were mailed, first class, on
September 13; 2005, to each ofthe persons on the attached service list.
It
is hereby certified that a true copy ofthe foregoing order was hand delivered to the
following on September 13,2005:
Dorothy M. Gunn
illinois Pollution Control Board
James R. Thompson Center
100 W. Randolph St., Ste. 11-500
Chicago, illinois 60601
Bradley
P. Halloran
Hearing Officer
illinois Pollution Control Board
100 W. Randolph Street, Suite 11-500
Chicago, Illinois 60601
(312) 814-8917
_
~_:
...,.....,:,f.
.
• . .IPCB servicelabels.asp
PCB 2004-207
Clarissa
C. Grayson
LaRose
&
Bosco, Ltd.
200 North LaSalle Street
Suite 2810
Chicago,
II,
60601
PCB 2004-207
Jennifer A. Tomas
Office
of the Attorney General
Enviro=ental Bureau
188 West Randolph, 20th Floor
Chicago,
II,
60601
PCB 2004-207
Edward Pruirn
Co=unity Landfill Company
c/o Morris
Co=unity Landfill
1501 Ashley Road
Morris,
II,
60450
PCB 2004-207
Christopher
J. Grant
Office
ofthe Attorney General
Enviro=ental Bureau .
188 West Randolph, 20th Floor
Chicago,
II,
60601
PCB 2004-207
Robert Pruirn
Co=unity Landfill Company
clo Morris
Co=unity Landfill
1501 Ashley Road
Morris,
II,
60450
Page 1 of 1
https://www.ipcb.state.i1.us/cooVintemaVServiceLabels.asp?type=Service_Labels
9/13/2005
AUI~Z5-09
04:00Fm
Fram-IAGO·ENVIRON~NTAL
BUREAU
+31Z814Z341
1-911
P. DOZ/Oll
F-S31
to:
FROM:
DATE:
August 26, 2008
.i\TeeMessma, ClifefLegal COun:se1
Dlinois Environmental Protection Agency
Gary Styzens, ClAIMBA, Financial Analyst,
illinois Environmental Protection Agency
SUBJECT: CommllIlit)'LandfillJPruim - Economic Benefit Analysis
As you requested, I have finalized an estimate of economic benefit; associated with avoided expenditures
for the Community Landfill/Pnlim case. This particular case involves three (3) types/categories of
avoided costs and the total economic benefit estimated for all three cost categories combined is
$1
t
486
t
079 with the following breakout:
--------AAvoidanee-in-r-emoval-af~eessIQver:hei_gh!_Waste;--:
-----1Ii-$~39,
793
Avoidance ofPost-Closure Costs - Significant Mod Application: $ 73,950
Avoidance
ofFinancial Assurance Upgrade COsts
$
72.336
51.486,079
I understand that you requested an estimate of economic benefit on behalf of the nJinois Attomey
General's~Office
and you
will
provide them with a copy ofmy memo/report. My analysis and supporting
facts are
presented
in
Section III ofthis memo. !fyou have any questions or need additional information
please let me know.
I. lNTRODUCIlON
I
am.
employed by the
Illinois
EnviromnentaI Protection Agency ("illinois EPAn) as a finarlciaI analyst.
As part of my duties, I develop reasonable estimates of economic benefit of noncompliance
in
enforcement cases refened to me by the Dlinois EPA's Chief
Legal
Counsel on behalf of the Dlinoi$
Office ofthe Attomey General.
Issues to be Addressed
by this
Report
This
repo~
presents the analysis that I have completed based upon financial documentation ofavoided
expenditures associated
with costs for the permitting, inspection, maintenance, repair.
and
operation of
Community Landfill and/or measures necessary to ensure compliance
with
federal and state law.
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Delayed Costs:
By
delaying eompIiance costs. the violator can eam a returo On these funds that
should have been committed to the capital investment or one-time expenditure required fur
pollution control and compliance with applicable environmental regulations. The violator's
economic benefit is the difference between investing
in
pollation control and investing
in
other
projects (invernng
in
improved marketing, product improvements, hiring additional sales staff
etc.)
or placing the funds in other lnvestment accounts. For the CommunitY Landfill case, costs
1m'"b,.Pn I'lu'lifipd1111 lIvni"Pd llint'Pthl'!'f"hll'i:h"I'nnn OnM,ml'nrlltinn io,.nfifying ann ""IlI'nTting
_~ditur~ n~~
t()
elirniTl~e
violations
ll!ld
achieve _c(jmpliBIl
ce
w!t:!J.
~~~llhle
regulations.
Avoided Costs: Costs can be avoided altogether instead
ofbeing delayed. Avoided CQliV. can
include continuing annual, recurring costs or
one time period costs that the violator would have
incurred
had it complied with enviromnental regulations on time (maintenance, utilities,
inl>pections, monitoring, permitting fees, financial assurance etc.). The violator'seconomic
benefit for avoided compliance costs
is the sum oCthe total avoided annual costs plus the
return
that could be expected on these funds that were used for other projects/investments rather than for
pollution
control compliance.
Suztement OfQualiJications
A copy ormy current resume is attached as Attachment A.
n. BACKGROUND INl'ORMATION
One ofIDinois EPA'smost important responsibilities
is to
ensure that
Tegulated
entities comply with
applicable mvitomnentallaws. A
comersLone ofthe civil penalty program is recapturing the economic
benefit tbat a violator may have gained from activities that
are not
m
compliance
with
applicable rules and
regulations. Recapture helplilevel the
~nomilf
pll1.Ying flclll
hypmvfll1tine vintlltoT"i
from
nhtllining
an
unfair
financial advantage over their competitors who made the necessary expenditures
for
environmental
Ii
]
comp ance.
.
There
are usually two components to the civil penalties: gravity and economic benefit. The gravity
component reflects the seriousness
ofthe violation. The economic benefit component focuses on the
violator's
economi.c
gain
from noncompliance that may occur
in
three basic ways.
1. Delay necessary pollution control expenditures,
2. Avoid necessarypollutioD control expenditures,
3.
Gain
a competitive advantage during the period ofnoncompliance.
2
1
The
Federa1.R.egisterVoL64,No.117IFriclay, II1lle 18, 1999 provid1.-s an
overview
ofeconomic benefit zmalysis.
Z Due to the high level ofavoided
opera~
and maintenance costs and the acceptance ofwaste above
grade
in
violation ofthe permit allowances; there is a high risk
that
a competitive advantage occurred
during the noncompliance period.
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In
presenting economic benefit analysis
in
a hearing with the lllinois' Pollution Control Board or before
the Civil Courts,
the
USEPA guidance plQvides that an expen should provide an independent financial
analysis
ofthe economic benefit the violator obtained as a result ofits violations. The independent
financial assessment reflects the expert'sown analytical
apPlQaeb as applied
to
the particular facts ofa
case.
The expert approach
used
by
the. State ofillinois was developed for use
in
a 200112002 case
ClgaID.5t
P~andl~~i;[~@e
•.
1]Jeti~cial
analysis using Excel spreadsheets was developed by Gary Styzens,
CIA. MBA
with
technical assistance'
fum Dr:
John Nosan,CPA:;L:IA aprofessorafUDiversftY'of'
illinois-Springfield.
In
this case,
I
conducted an independent financial analysis of
the
economic benefit Community LClndfill
obtnined
IIll
~
recu1t oftheir
noncompli::mcll
with environment3l reguhtioIli. My malyrii,
t1ut
includes
the use
ofExcel spreadsheets, incoIporates many ofthe basic financial concepts incolpOIated into a
general
fil!ll1!eiol
education
and lI9:lociatcd
finanoial tcxtboolw Ullod in college ourriculumo' inoluding:
• Time value ofmoney concepts including future value.
• Cost
ofCapital concepts
usiDU;
a
compsDy
specific Weighted Avemge Cost ofCapital
\'N
ACC)3
or Prime
Lending
Rate as a benchmark for WACC.
It
Tax conc..yts.
---------,-.-----,opportumty costs.
The above approach has been well tested in the Panhandle case with Panhandle'sexpert witness accepting
the
genercd approach; except for some general challenges with the weighted average cost of capital
approach used
by
Dr. Nosan.
Professional Standards
The professional accounting and auditing standards used to develop reasonable estimates ofecooomic
benefit
and for perfonning the financial analysis ofeconomic benefit wclude the following items:
• The Institute ofIntemal Auditors auditing standards
•
Tho GanoroI Aocountnbility OffiOD (GAO) Govornment Auditing
EtQlldards
(Yl;lllow Dcolt)
III
American Institute of Certified Public Accountmts (AICPA) Statements on Auditing
Standards (SAS)
• Office
ofManagement and Budget (OMB) Circulars
m. ANALYSIS
As requested, I have estimated aD economic benefit associated with avoided expenditures for CommUDity
Landfill is $1,486,079;
with
the following breakout:
3 I did
no~
hAve
~~iour eo~ 5pe.:.jfj~ ~~
.uta lu .::a.h:uhl1c .. "UWJ"lL!Y
~p~ilili
WACe. Couscqucmly, used lhe
Federal Reserve Prime I.ellding Rate lIS a conserval1ve be:ach:mark COS[ ofcapitallQme value ofmoney Illtc.
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~
A."o;dllftee
I!l.
Romovll1 of ExocoolOvorhlight WWlte: Economic Benefit - Sl,339,7P3 • Non..
compliance period is operation from submittal of an addendum to application by owners/operators for
modification
to permit received by IEPA on April 30, 1991 through the time period of this analysis July
31,2008.
}> Avoidance of Post-Closure Costs - Significant Mod Application: Economic Benefit =573,950 - Non-
!W.J1J»]jqn~Q
pmQC!j!l.Jl'OI!1_D:t!bm!ttLl!
_~f1he
Own8r/OplllUtor filed vari;mc8 on April 26, 1995 through th8
time period ofthis analysis July 31, 2008."
""
)- Avoidance ofFinancial Assurance Upgrade Costs: Economic Benefit ... m,336 - Non-compliance
period
ii
from when the Agency received the pmotmznce bond on June 10, 1996 through the time period
of this analysis July 31,2008.
As mentioned earlier, the Total Economic Benefit from combining the
avoided costs occurring
with
the
above three classification ofavoided costs is $1,486,079. Attachment B provides an.
overview/explanation on the details ofmy Economic Beaefit calculations along with four (4) pages of
EXI:p.l bil<;P.d o;preilds1l.P.t.;t<; (i1tt:lr.hP.d).
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2006 to present
ATTACIIMENT A
Resume of Gary Styzens
GARY STYZENS, MBA
11871 Pinehollow Lane
Petersburg; Illinois
62675
(217) 632-3607
CERTIFIED INTERNAL AUDITOR
State
of ltrinoiS, Environmental Protection Agency (IEPA), Springfield, IL
Economic
Benefit AnalySt and Manager (1/06 • present) functions as a financial
analyst
to:
• PlaTT, research, and develop estimates of economic benefit for penalty cases
Including support in settlement negotiations and provide assistance and
consultation for any economic benefit estimates to the Chief Legal Counsel and the
Attorney General's OffIce for potentiallrtlgatlon actMtles.
----------_.
~SeAte_as_aR_expert-finar:lcial-analystrpeOOR'AS-maRagement-studie5-Qf-tRe-e--
adequacy of internal administrative and fiscal controls; provides assessment of the
adequacy of major systems including revenues and receiv<lble and
~penditu~;
perrorms nscaJ monltonng ana reporrlng OT agency revenues. oOllgauons ana
expenditures; evaluates, develops, and Implements management reports on cash
flow
analysis and expenditure controls.
• Porform :lbility to p:Iy :In::llyclc
:IC it rol::ltoc to pon:lltioc dovoloped
by
tho IEPA ::lnd
Attorney General.
2003
to
2005
State
of
illinois, Illinois Office
o~
Intemal Audits (lOlA), Springfield, IL
Internal Audit Division Manager (10103
-12105)
functions as manager of lOlA's
intornol
oucflt progrom for the DMEllon of Economic Devolopmont, Environmont!l
Regulation, and Law Enforcement that includes 10 staff aUditon; and includes the
following agencies/departments: Agriculture, Environmental Protection, Natural
Resources, Commerce and Economic Opportunity, State Police, Law Enforcement
Training
& Standards
Board,
Corrections, Prisoner Review Board, and Violence
Prevention Agency. Duties Included:
" Implemerlt a
risk based audit plan that identifies individual audits to
be
conducted in
the Division dUring the year.
• Manage the Division's
internal auditing program to assure compliance With the
dr-t6G<\1
OI).'WI •• 'd
la,t6.'.,.1Auuili"!:J
A\olu, II ''''
"'loliluk:ur
II
Ilt:lllilli AuJilur':ol;tul.!ili,
~
standards,
and
lOlA's policies and procedures.
• State
of
Illinois' Economic Benefit expert providIng analysis to the IEPA, Trust Fund
Commission, and Attorney General.
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2001 to 2003
1991 to 2000
State of IllinoiS, Environmental Protection Agenr:;y (IEPA). Springfield, IL
senior Public Service Administrator (1/01 - 9/03)
Cltief Internal Auditor function as manager of IEPA's internal audit function that
includes four
staff auditoJ'S. Duties Include:
• Prepare a risk based audit
plan identifying the individual audits to be conducted
dUTlng the year, and an annual report detailing
lhe
rt:5u[lt; uf
U,tl priu!
yt:i:.U'l; fJlio1ll,
•
M~na~Jhe ~~n_c;y J.!!t~~l
E!:!dJt!l}!lJ?rograf!l..!~
C1~ure ,c:ol11l?li~nce
with the "Fiscal
Control and
Intemal Auditing Acf' and ffie institute oflntemal
AuOifOrs~
aUdltffig
standards.
.
• Direct audits
of the Agency's systems
of
accounting and administrative controls;
obligation"expenditure. receipt
and use of public funds
by
the Agency and, grants
received or made
by
the Agency.
•
ReView the design
of
new electronic data processing systems, Directs special
audits
of the operations. procedures, programs and activities of the Agency as
requested
by the Director or Deputy Director of
the
Agency.
• Perform audits of EtXlnomic Benefit and Ablllty to Pay associated with penalty
cases being managed
by the Division of Legal Counsel and the Illinois Attomey
General including expert testimony.
Significant Job Related Accomplishments:
»
Provided financial related expert
~'"timony
for the Division
of
Legal Counsel before the
Pollution Control Boan! 011 a key mtbIcement case that de1imded lliPA'sapproach to
determine a reasonable penalty for violations ofthe EPA Act. The Pollution Con1rol Board
jS$UCd a
record
ciVIl penalty approaohing $1 million.
»
Worla:d with Agency management
to
improve the effectiveness ofmanagement'ssystem of
administtativ\: and accounting controls to ensure that IEPA is
in
complimce with
statdfedera1 roles and. xegulations, Agency programs are operating efliciently and, program
goals and objet:tives me being acbieved.
The
result
of improwd internal controls is evidenced by a reduction ofexremal audit
findings made by the Auditor General over the last ten years
from
approximately 40 down
to lhree
in
the FY2001102 audit
)0 At the l"CqueSt ofthe Depu1;y Director. worked as a project leader to develop and implement
an Agency-wide property control process including elimination ofduplilWate inwDtoIy
systems,
and
development ofa pl'QpC(ty control process including procedures, fonns,
staffing, and a bar code scannmg system. For the
first
time
in
10 years the Auditor General
audit had no material property control findings.
State
Of
illinois. environmental Protection Agency. Springfield,
lL
PUblic Service Administrator (6191-1/01)
Internal Audit section Supervisor functloned as lead aUditor by performing non-
routine audits
of complex programs. Assisted in
the
management of the agenr:;y
intemal aUditing program to assure compUance with the Fiscal Control and Intemal
Auditing
Acta;
participated in the development ofthe annual audit plan and the annual
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evaluation of ;;audit accomplishments; assisted in the coordlnatlon of the annual
evaluation and certification of internal controls; verified and documented corrective
action taken to resolve audit findings:
and supervised three audit staff.
Performed and coordinated all facets
of internal audits for management, Internal
contro~
and Information system audIts. WorKed closely with the Chief Auditor to report
C1'ilical audit Issues to senior management and responded to management's inquiries
and speclal audit requests.
Worked closely with the Attorney General's Office and
IEPA Chief Legal Counsel to assist in penalty negotiations invoMng violators of the
EPA Act. Performed detailed financial statement analysis to determine the violator's
-reasonable 'penallY arnourtnmd'tol:letermlne'1he'vtolator's1'manclal-abilityio-pay-a
penalty without
causing excessive financial hardship. 1985 to 1991 State of IUinois.
Department of Public Aid, Springfield, IL
Internal
Auditor
11\
(7/89. 6191)
.
Management Audit Unit Sup£!rvisor controlled, performed. and directed management
and program audits as requested by management. Program audits Included:
Homeless Shelter,
Day Care, Refugee. and Welfare To Work. RevieWed high dollar
contracts to ensure that costsibudgets were reasonable for the services being
provided.
Supervised and directed 4 junior auditors to ensure audIts were accurately reported.
conducted within budgeted hours, and emphasize significant issues. Drafted and
reviewed audit programs, audit reports or report segments drafted by junior auditors
----------Felative-to-completeness.and..accw:acye.---------
_
Internal Auditor II (9/87 • 7/89)
Advanced
Level Senior Auditor regularly conducted internal audits of non-routine
and complex natures inclUding financial, internal control, operational, and compliance
audits. Functioned independently, as a team leader, and as auditor in charge of Junior
auditors.
Internal Auditor I
(4/85
• 9/87)
JunIor Auditor conduded internal audits
of
simple and complex programs
independently and as team member under general supervision. Prepared
audit reports for review
and completed specific phases of complex audits.
EDUCATIONAL SUMMARY:
Certified
Internal Auditor, 1988
State
of Illinois, Department
of
ProfessIonal Registration
M.B.A., Business
Administration, 1983
Southern illinois University, Carbondale, IL (SPA 3.30/4.00)
B.S.,
Foresb'ylEnvironmentai
Sciences,1980
Southern illinois University, Carbondale, IL (GPA 3.50/4.00)
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From-IAno-ENVIRONMENTAL
Filing - Received,
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Clerk's
+31Z81423U
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T-811 P.009/011
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H37
Attachment B
AVOIDED
Economic Bp.nefit ASllociated wit.h Avoided Expenditures
(SChedule
Initial Compliance Investment Page 1- Overheight Removal)
This
section provides a sample/overview ofthe Excel spreadsheet calculations on Economic Benefit
Column B: This represents the non-compliance period
and
is provided to us by the IEPNAG anorneys.
Dunng this penoai:Iie company wasnolm
comvt;ance-with-enviromm:ntalregulati~DS;
Column C li'irst
Row
of schedule Initial CompJill-ocf': In.vf''.51mC''J1tfur Ovf':rlmigllt R''mlOVlll (Pllef'l 1) ill the:
starting point for calculating the economic benefit for avoided expenditures and shows the before tax costs for
removing
exc~overheight
waste associated with the permitted landfill named Community. This .figure was
obtained from the non-compliant entity.
Columns
J) flrst Row shows the tax implications/reduction associated with the avoided environmental
compliance expenditures using the estimated corporate
tax
rate
in
illinois .of approximately 33%.
Environmental
compliance expenses
are
tax exempt.
Column E
is calculating the after
tax
interest earnings throughout the noncompliance period on avoided
---~peDSes-using-the.B~
estimate ofthe cost ofcapital/time value of money rates.
As
you move down thrt non-compliance period the different annual B:mk: Prime Loan Rates in Column F :Ire
applied
in
each year's calculatious. The interest calculations are brought
down
the noncompliance period
with
interest
charging on both the a.voided l'rincipaland the interest compounded throughout the period.
CollUDD E Last
Row
is the
tQta1
Economic Benefit (interest and pr'wcipal) associated v.ith the avoided
expenditures.
Column F is the Federal Reserve Bank Prime Loan Rate and this median interest rate for each year of
noncompliance is used to estimate the level of investment income the Corporation received
by
investing
mnnil".~
in tllr. r.nrp01'lltinn TlItllr:r than in llnllntinn rnnlml
mf'lll'lllm..
to romply with environment2llpemrit
requirements. Schedule PRIME page four (4) provides the prime rate information.
Column G shows the interest earnings resulting from
investment ofmonies
in
the Corporation and lbe interest
is
added back to column E to ohtain the final, total; Economic Benefit (principal and interest)
in
Column E,
Last
RlilW.
.
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Frum-IAGo-ENVIRONUENTAl
Filing - Received,
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T-911 P.OIO/Oll
8, 2008
F-G3T
ATl'Al,;HMEjS'r c
Documents Consulted
LIST OF DOCUMENTS CONSULTEp
1.
BEN~l.1al
2. Federal ReglsterVol.64,No.1l7I.Friday. June 18, 1999
3. Economic Benefit related professional1iteraturelarticle:
1'1
USEPA Officf.'
ofEnfr.rrrol'lTTlf"J'lt
ll1'lrl
r.nml'liflTl~r:
A<;<;intllTlr.~
ilffililr. titlrk '1
,r,vr.liTle
thft flllyine
Field: Eliminating the Economic Benefit
ofViolating EnvUownental Laws"
• USHP A
I office ofRTlfon;ement
and Compliance Monitoring "IDENIlfYING AND
CALCULATING ECONOMIC BENEFIT THAT GOES BEYOND AVOIDED AND/OR
DELAYED COSTS"
4. Chemical
Engineering Magazine-Plant Cost Index for inflation factors
5. Federal Reserve Website-Prime Lending Rates
6. FoW'(4) pages ofanachm<s
in
Excel for computing Economic Benefit
7. InfoIIl1auon on aVOIded expenditUreS associated witlillU'eecategories ofavoi:Qe(J costs pertaining m-.
non-eornpliance for Community Landfill.
.
-9-
VJ:AIl
HON~1'L1'\"~CE
fElUotI
011: PII1;,,) year figu"Cd 8tll2 daysand
dally
raI1!
for 100B ..
II!
.OS24 01.0001436
and is 111ccn f,om l'rimeRate S, heel"le
Wcrkslocel
....
.....
~
...
~
...
0>
~
g
....
~
.....
....
J,
...
..
...
•• ---r:-
<.",
..
·~ITOIUI_O'II1cd.on"'bled
-,
... I -.
$4O,ltr ..p,ruIitu"'...o"'._....
COLUMN E:
libows
1lIe JlIintillll
~nllJllm$l
",,,u'II1.lallo!in
I Corpo:JIlelov,,'cClllI...,WI!d•• 1D volded ""llClIdllu,es an
.cIdi1lonll f1Jnri.lwutanc<..,.... 61 : S30,U6-Ul,480 plu.
S2,84fi.
£16: 1I1e econonlc bmcl11 orrnt:36inclJdcs the Il\/oidcd principcd Cllpcmlltul'Cf in
B-IO ($32.074) 11111 D«umult.1ed In
CItllintp; cl' $40,262 in 024 thotnCC:lUod
IluOus)mullhc n. ncompliance peri. from: une 20, 1996 Uuough tho tlHlem period;
July 31 2008.
GIO: J'srtlal yClllllllUrcd 8. 194
do~
and ddl)'nil. lor 1996
"'10.0S2S or .1l0>2260 ""d
Is
1llI<mi:fom Pr me RIlle
Scbtdu c Worksl"!.
mTAL
COLtrl1l'lD: Ccnp:m.. ,",!>o=oIk
gIyon up 110m "'
:»%
duo Ie :rMtaoml:,IIII .._..,..."'losd"llJU,ad .....,
",..,L 'rba'3ll>...
.cr. ........llIIdn'.ptovidtllbr
IEJlA CIl1llll111lll
Dr,
1010Now, PltD,C1A,('PAIIld
_U.......
1lIl1:J<
ClIll1l&I."fCOfJXlllW:
eo.
Atc:lin
DlintJlJ
1bJ~
LnmoD'lic BffdJ Dalto II'tnDC'blAltAr_U1M
t'JlI,d.lldlp. l'IrItdJtll.Nllnlmol:
241
I
COLUAIN II N_pUamo paiod
COLI.NN
C, S41J11.A..iol"lIrlll'"o
provide4
b~
Dorea"orund ••
c!Inltol.~rr
.luloc:lftool B_" 01 Uad
.wI
Dnd Aucm.yO.nolll and ,ol,lt.i 10
A""".YG,"'"01IIF.
lo,ulllel.., Rumrill ......_ durlns II.
porlncl lulr
1993tluo"llh lb. dale Ih.
A,.enqttttllnld. porfOl'No" bond
CI
1...10,1996.
COLUMN"
SlIUItC l'd=l
Res"'"
B.n\ Prim
l.o.all.tJt. AMuil
~!odIan
RaIA
ftlj2tfwe;'f4QIiIlua""99fh,rcgtllltv4gJM1UW"l1.6 PBfftf
fAA
fd
S", PRIMS IlATE SCHEOULll
WOR~:EET
_aoolll:4lIMI
BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
Complainant,
vs.
EDWARD PRUIM and ROBERT PRUIM,
Respondents.
PEOPLE OF THE STATE OF ILLINOIS,
Complainant,
vs.
COMMUNITY LANDFILL COMPANY,
INC.,
Respondent.
PCB No. 04-207
(Enforcement - Land)
PCB No. 97-193
(Enforcement - Land)
(consolidated)
AFFIDAVIT OF CLARISSA Y. CUTLER
I, CLARISSA
Y.
CUTLER, being duly sworn on oath ai1d affirmation, do hereby depose and
state
as follows:
1.
I am an attorney and am of counsel with LaRose
&
Bosco, Ltd. who represent
Community Landfill Company, Inc. ("CLC") and Edward Pruim and Robert Pruim in the above
referenced consolidated matters currently pending in the Illinois Pollution Control Board.
2.
The factual basis for Respondent'sMotion to Cancel Hearing is set forth herein and in
Respondent's Motion along with the attached documentation.
3.
Respondents deposed the Complainant'snamed expert, John Nosari, on
Sept~mber
1
10,2003, five (5) years ago. (See Exh. B to Respondent'sMotion). At that time, Assistant Attorney
General Christopher Grant stated that Mr. Nosari would prepare a report and acknowledged
Complainant's continuing obligation to supplement interrogatories. (See Exh. B to Respondent's
Motion, pp. 25-26). By order
ofHearing Officer Bradley Halloran, discovery closed in these matters
on October 12,2005, nearly three (3) years ago. (See Exh. C to Respondent's Motion).
4.
On June 12,2008, this matter was scheduled for hearing on October 20-23,2008.
(See Exh. A to Respondent's Motion).
5.
To date, Mr. Nosari has not tendered a report.
6.
Instead, on August 4,2008, Assistant Attorney General Christopher Grant indicated in
writing that
"in the interest of saving money on consultants" it intended to ask "to substitute Illinois
EPA employee Gary Styzens for John Nosari" , explaining that "Ga.ry and John developed the
opinion together, and either can testify to its conclusions." He further indicated his intention to
provide an expert report "in the near future ....
as soon as it becomes available." (See Exh. F to
Respondent's Motion).
7.
It
was not until August 27,2008 that Complainant actually provided a report which in
fact is authored solely by Gary Styzens, and does not mention John Nosari as having either written
the report or developed the opinion. (See Exh. D).
8.
The history ofthis matter'sproceedings is as follows. On May 1,1997, Complainant
filed its first complaint in the 1997 matter naming CLC as the sole respondent which contained six
(6) counts alleging violations relating to managing refuse and litter, leachate flow, landscape waste,
financial assurance, failure to file a significant modification permit, and water pollution.
Complainant then filed a First Amended Complaint on April
3, 1998 with CLC again as the sole
2
respondent. The First Amended Complaint included four (4) additional counts alleging violations
relating to overheight
of the landfill.
On November 24, 1999, over CLC's strenuous objections, complainant filed a Second
Amended Complaint, again only naming CLC as respondent. The Second Amended Complaint
included twelve (12) additional counts, for a total
oftwenty-two counts, alleging violations relating
to asbestos, used tires, the gas collection facility, leachate disposal, final cover, financial assurance,
and failure to provide revised cost estimates.
On April 5, 2001, the Board ruled against CLC on its motion for summaryjudgment in regard
to Counts V and XII
ofthe Second Amended Complaint. CLC filed a motion for reconsideration on
May 15, 2001. On July 26, 2001, the Board reversed its decision on Count XII by finding in favor
of CLC on liability and dismissing that count. The Board affirmed its ruling against CLC on Count
V and ordered a hearing
on penalty.
On October 3, 2002, the Board issued an extensive order regarding the parties cross-motions
for summary judgment in the 1997 case against CLC. The Board found in favor of CLC on Counts
XI, XVIII, and XXII
of the Second Amended Complaint al1d dismissed those counts against CLC.
The Board denied the Complainant'smotion for Summary Judgment on Counts I, II, VI, XV, XVII,
XIX (in part) and XX ofthe Second Amended Complaint, and ordered a hearing on liability on those
counts. Finally, the Board found
in favor of Complainant on Counts III, IV, V, VII, VIII, IX, X, XIII,
XIV, XVI,
XIX (in part) and XXI and ordered a hearing on penalty on those counts.
On December 5, 2003, Complainant filed a motion before the Board wherein it requested
leave to file its Third
Amended Complaint naming Edward Pruim and Robert Pruim, the principals
of CLC, as additional respondents. That motion was unanimously denied by the Board on March 18,
3
2004. On May 21, 2004, Complainant then filed a complaint against Edward Pruim and Robert
Pruim individually, which, after the Board dismissed Count XII
ofthe 2004 complaint, left eighteen
(18) counts remaining against Edward Pruim and Robert Pruim individually. Because the underlying
allegations in the 1997 and 2004 cases are identical, the Board consolidated them on February 17,
2005.
On September 10, 2004, Edward Pruim and Robert Pruim filed motions to dismiss which
were denied by the Board on November 4, 2004. Edward Pruim and Robert Pruim answered the
complaint on January 4, 2005. Because the underlying allegations in the 1997 and 2004 cases are
essentially identical, the Board consolidated the matters on February 17,2005.
On January 13, 2006, Edward Pruim and Robert Pruim filed motions for summaryjudgment
which were denied by the Board on April 20, 2006. On May 30, 2006, Edward Pruim and Robert
Pruim filed a motion for reconsideration which was denied by the Board on June 15,2006.
On June
27,2006, the matter was scheduled for hearing on December 11-15, 2006.
On September
22,2006, Respondents moved the hearing officer to cancel the Dec. 11-15,
2006 hearing due to Edward Pruim'shaving undergone emergency quintuple bypass surgery that was
complicated by the presence
ofan aortic aneurism and blood clot on his lung. Respondents' motion
was granted on October
17,2006, with the hearing officer having found good cause and that the
motion was not brought as the result
of any lack of diligence.
On October 25, 2007, the matter was scheduled for hearing on April 7-10, 2008. On
February
21,2008, Respondents moved the hearing officer to cancel the April 7-10, 2008 hearing
due to counsel having suffered a broken elbow on January 17, 2008. Respondents' motion was
granted on March 5, 2008, with the hearing officer having found sufficient cause to
do so and did not
4
find that it was brought as the result of any lack of diligence.
9.
Only two previous cancellation requests have been granted in this proceeding.
In
granting these requests, the hearing officer found good or sufficient cause to grant the respondents'
motions and did not find that they were brought as the result
of any lack of diligence. This is only
the third request for cancellation that has been made and
is not brought as the result of a lack of
diligence, but because ofComplainant'sfailure to adhere to discovery schedules and extremely late
disclosures
of witnesses and reports for the hearing currently scheduled tor October 20-23, 2008.
Respondents seek what is in essence
a short continuance of the hearing date until mid-late January,
2009
in order that they may have time to adequately prepare given Complainant'sfailure to comply
with discovery deadlines.
10.
The information contained in this Affidavit is based
on
my personal knowledge. If
called upon to do so,
I
would competently testify to same.
Further, Affiant sayeth naught.
SUBSCRIBED AND SWORN TO
before me this
t
day of
September, 2008
NOTARY PUBLIC
Q.~lSeal
'l'homas5 CoIadarci
Molart Pib/oc
State
clllffrois
Mt COI'1'lIllJSSlOO EXjlires 01112/2010
5
'-
, .
OFFICE OF THE ATIORNEY GENERAL
STATE OF ILLINOIS
Lisa Madigan
ATTORNEY GENERAL
August 4, 2008
Ms. Clarissa Cutler
Attorney at Law
155 North Michigan Avenue
Suite
375
Cli.icago, Illinois 60601
re:
Supplemental Discovery Responses, People
v. Community Landfill Company,
Edward Pruim, Robert Pruim, PCB 97-193/PCB 04-207 (Consolidated)
Dear Clarissa:
This letter is meant to supplement our Responses to CLC's Second Set ofInterrogatories,
and to advise you that we will be providing an expert report on our Economic Benefit
of
Noncompliance estimate in the near future.
In
addition; in the interest of saving money on
consultants, we will be asking to substitute Illinois EPA employee Gary Styzens for John Nosari.
Gary and John developed the opinion together,
fu'1d either Cfu'1 testify to its conclusions,
The updated BEN estimate is based on three avoided expenditures, specifically:
1)
Failure to relocate excess/overheight waste: $950,000.00 plus interest from
April 30, 1997. CLC notified Illinois EPA oftrJ.s cost through an
addendum to their sigmod permit application on this date.
2)
BEN from failure to upgrade financial assurance on several occasions
between 1993 and 1996: $47,871.33 plus interest from June 20, 1996.
The report explaining these cost avoidances was originally prepared by
Jo1lliTayTof, ariifIiiis'been provioe"d'in discovery (a second copy wIll be
attached to the expert report). We had previously named Dave Walters
as
witness for this report, but may substitute Brian White, who now has Mr.
Walter'sposition. In addition, Blake Harris may provide testimony in this
area.
IIIIIIBI--'
ITF
500 South Second Street, Springfield, Illinois 62706 • (217) 782-1090 • TTY: (877) 844-5461 • Fax: (217) 782-7046
100 West Randolph Street, Chicago, Illinois 60601 • (312) 814-3000 • TTY: (800) 964-3013 • Fax: (312) 814-3806
1001
R"stMain. tCarhonc1ale,
Tllinoi. h2901 • (<\lR) .'>29-<\400 •
TTY:
(R77)
<\7.'>-9~:;g
•
Fax,
(<\lR) -"7.9-h41<\
._.
3).
Estimate of avoided costs related to CLC'slate-filed Sig-Mod permit
application: $44,526.00 plus interest from April 26, 1995. This
information was provided by Cris Roque, and was previously provided to
CLC.
We will provide the written opinion as soon
as it becomes available. The Nosari/Styzens
opinion will merely bring these avoided expenditures forward to the present using the bank prime
lending rate.
As previously agreed, we agree to allow additional deposition of the testifying
witness on the updated opinion.
istopher Grant
ssistant Attorney General
Environmental Bureau
69
W. Washington, #1800
Chicago, Illinois 60602
(312) 814-5388.
cc:
Peter Orlinsky
Jennifer
VanWie
Paula Wheeler
Mr. Mark LaRose
LaRose
&
Bocso
200 N. La Salle Street, Suite 2810
Chicago, Illinois 60601
CERTIFICATE OF SERVICE
I, Clarissa Y. Cutler (f/k/a Grayson), an attorney, hereby certify that I caused to be served
a copy
of the foregoing
RESPONDENTS' COMMUNITY LANDFILL COMPANY, INC.,
ROBERT PRUIM AND EDWARD PRUIM'S MOTION
IN LIMINE
TO BAR
COMPLAINANT'S EXPERT WITNESSES AND REPORT AND ANY OTHER
PREVIOUSLY UNDISCLOSED WITNESSES OR, ALTERNATIVELY, TO CANCEL
HEARING SET FOR OCTOBER 20-23, 2008 FOR CAUSE AND TO REOPEN
DISCOVERY,
by electronic filing, emailing, and by placing same in first-class postage prepaid
envelopes and depositiw same in the U.S. Mail Box located at 200 North LaSalle Street,
Chicago, Illinois, this
8
T
day of
SEPTEMBER, 2008,
addressed as follows:
By U.S. Mail and email
Christopher Grant
Jennifer Van Wie
Environmental Bureau
Assistant Attorney General
69
W. Washington, 18th Floor
Chicago, Illinois 60602
cgrant@atg.state.il.us
jvanwie@atg.state.il.us
Mark
A. LaRose
LaRose
&
Bosco,
Ltd.
200 N. LaSalle Street, Suite 2810
Chicago IL 60601
(312) 642-4414
Atty. No. 37346
By U.S. Mail and email
Bradley Halloran
Hearing Officer
Illinois Pollution Control Board
100 West Randolph, Suite 11-500
Chicago, Illinois 60601
hallorab@ipcb.state.il.us
lsi
Clarissa Y. Cutler
One
of Respondents' Attorneys
Clarissa
Y. Cutler (f/k/a Grayson)
Attorney at Law (formerly with LaRose
&
Bosco, Ltd.)
155 North Michigan Avenue, Suite 375
Chicago IL 60601
(312) 729-5067
Atty No. 44745
THIS FILING IS SUBMITTED ON RECYCLED PAPER.
