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STATE OF INDIANA    )        BEFORE THE INDIANA DEPARTMENT
                )    SS:    OF ENVIRONMENTAL MANAGEMENT
COUNTY OF MARION    )

COMMISSIONER OF THE DEPARTMENT    )
OF ENVIRONMENTAL MANAGEMENT,    )        
                            )
        Complainant,            )                
                            )
            v.                )    CAUSE NO. B-2358
                            )
F. G. MCGRADY                    )
                            )
        Respondent.                )

AGREED ORDER

    The Complainant and the Respondent desire to settle and compromise this action without hearing or adjudication of any issue of fact or law, and consent to the entry of the following Findings of Fact and Order.

I. FINDINGS OF FACT

1.    Complainant is the Commissioner (hereinafter referred to as "Complainant") of the Indiana Department of Environmental Management, a department of the State of Indiana created by IC 13-13-1-1.

2.    Respondent is F. G. McGrady (hereinafter referred to as "Respondent"), who owns and operates a confined feeding business located in Fountain County at Section 12, T19N, R7W near Hillsboro, Indiana.

3.    The Respondent regularly engages in the confined feeding of over 600 swine. Therefore, the Respondent is a confined feeding operation, as defined by IC 13-11-2-40. The Respondent has approval for 2,450 animals.

4.    The Indiana Department of Environmental Management ("IDEM") has jurisdiction over the parties and subject matter of this action.

5.    Pursuant to IC 13-30-3-3, IDEM issued a Notice of Violation on March 29, 1999 via Certified Mail to:

                F. G. McGrady
                R.R.1, Box 3,
                Hillsboro IN 47928 .
                
    On June 30, 1994 IDEM issued a confined feeding approval for this facility, AW Approval No. 3241 ("the Confined Feeding Approval"). This approval contained a number of operating requirements.
    
     7.    IC 13-18-4-5 states, in substance, that a person may not throw, run, drain or otherwise dispose into any of the streams or waters of this state, or to cause, permit or suffer to be thrown, run, drained, allowed to seep, or otherwise disposed into any waters, any organic or inorganic matter that shall cause or contribute to a polluted condition of any waters.

     8.    327 IAC 5-2-2 states, in part, that any discharge of pollutants into waters of the state as a point source discharge is prohibited unless in conformity with a valid National Pollutants Discharge Elimination Systems (NPDES) permit obtained prior to the discharge.

    327 IAC 5-2-3(c) states, in part, that the owner of a facility or operation from which a discharge of pollutants occurs is responsible for applying for and obtaining a NPDES permit.

    327 IAC 5-2-3(f) states, in part, that new and existing concentrated animal feeding operations shall provide the commissioner with the additional information specified in application Form 2B NPDES as described in 45 FR 33557-8 or substantially equivalent forms supplied by the commissioner.

    327 IAC 5-4-3(a) states, in part, that concentrated animal feeding operations are point sources subject to the NPDES permit program.

    327 IAC 5-4-3(b) states, in part, that concentrated animal feeding operations are defined as those in which more than two thousand five hundred (2,500) swine each weighing over 25 kilograms (approximately 55 pounds) are confined.

    327 IAC 2-1-6(a)(1) states, in relevant part, that all waters at all times and at all places, including the mixing zone, shall meet the minimum conditions of being free from substances, materials, floating debris, oil or scum attributable to municipal, industrial, agricultural, and other land use practices or other discharges:

        a. that will settle to form putrescent or otherwise objectionable deposits;

        b. that are in amounts sufficient to be unsightly or deleterious;

        c. that produce color, visible oil sheen, odor or other conditions in such degree          as to create a nuisance;

        d. which are in amounts sufficient to be acutely toxic to, or to
         otherwise severely injure or kill aquatic life, other animals, plants, or humans;
    
        e. which are in concentrations or combinations that will cause or contribute to          the growth of aquatic plants or algae to such degree as to create a nuisance,          be unsightly, or otherwise impair the designated uses.

         IC 13-30-2-1, which states, in part, that no person shall discharge, emit, cause, allow, or threaten to discharge, emit, cause, or allow any contaminant or waste including any noxious odor, either alone or in combination with contaminants from other sources, into the environment or into any publicly owned treatment works.

         327 IAC 2-6.1-4 contains definitions as follows:

         (15)    "Spill" means any unexpected, unintended, abnormal, or unapproved dumping, leakage, drainage, seepage, discharge or other loss of petroleum, hazardous substances, extremely hazardous substances, or objectionable substances.
(16)    "Spill response"for purposes of this rule means the following:

     (A) the spill is contained; and
     (B) free material is removed

(17)    "Spill report" means an oral report that includes .... the location and time of the spill; the identification of the substance spilled, the quantity of substance that has been or may further be spilled, the identification of the person making the spill report, and what measures have been or will be undertaken to perform a spill response and any other information that may be significant to the response action.

16.    327 IAC 2-6.1-7, requires, in part, that any person who operates, controls or maintains any mode of transportation or facility from which a spill occurs shall, upon discovery of a reportable spill to the waters of the state, do the following:

    (1)     Contain the spill, if possible, to prevent additional spilled material from entering the waters of the state.

    (2)     Undertake or cause others to undertake activities needed to accomplish a spill response.

    (3)     As soon as possible but within two (2) hours of discovery, communicate a spill report to the Department of Environmental Management, Office of Environmental Response: Area code 1-888-233-7745 for in state calls (toll free).

         Respondent was found to be violating confined feeding approval conditions during August 24, 1998 and August 26, 1998 IDEM inspections. Insufficient freeboard, from zero inches with seepage over the top, to approximately six inches were observed on the hog manure lagoon during the respective inspection dates. One foot is the minimum freeboard requirement stated in Approval #3241. This failure to maintain adequate freeboard is a violation of Respondent's confined feeding approval. The seepage over the top of the lagoon as observed August 24, 1998, constitutes a violation of IC 13-30-2-1, IC 13-18-4-5, 327 IAC 2-1-6(a)(1), and 327 IAC 5-2-2. Because the overflow from the lagoon as observed August 24, 1998, was not reported to the IDEM spill line, this event constitutes a violation of 327 IAC 2-6.1. The threat to discharge as noted on August 26, 1998 is in violation of IC 13-30-2-1.

    On August 26, 1998, IDEM observed excess waste being pumped from the approved lagoon to an unapproved storm water detention pond. IDEM issued a September 10, 1998, Letter of Warning (LOW) which required the filing of a new approval application, reduction of amount of manure in the waste lagoon, and removal of all waste from the storm water detention pond. IDEM re-inspected on October 1, 1998, and found that no additional waste had been land applied from the unapproved storm water detention pond after the August 26, 1998 inspection. The use of the storm water detention pond for manure storage is in violation of the Confined Feeding Approval, and IC 13-30-2-1.

    The site was re-inspected on February 19, 1999 at which time the storm detention pond was found to still be holding manure, which was seeping out at the base of the berm, forming an organic sheen, and discharging to a creek west of the facility. A field ammonia test was conducted on waste in the detention pond. The waste tested at greater than eight parts per million of ammonia nitrogen, indicating the presence of pollutants. The waste seeping through the berm tested at approximately eight parts per million of ammonia nitrogen. Water leaving the site tested at approximately one to two parts per million. Respondent was contacted, and he agreed to begin pumping waste from the storm water detention pond to the approved lagoon. This incident constitutes violation of the Spill Rule 327 IAC 2-6.1 in that the spill was not reported, nor was any response conducted. The run-off of spilled wastes to waters of the state constitutes violation of Water Quality Standards 327 IAC 2-1-6(a)(1), as

well as IC 13-18-4-5 and IC 13-30-2-1. This incident is also an unpermitted discharge, in violation of 327 IAC 5-2-2, 327 IAC 5-3-2, and 327 IAC 5-4-3. An Initial Incident Report (Incident Number 9902159) was made by the IDEM inspector. The continued use of the storm water detention pond for storage of manure constitutes a violation of the Confined Feeding Approval and IC 13-30-2-1

    Also on February 19, 1999, it was observed that a discharge pipe had been installed from a point between the approved lagoon and the pre-nursery building to the storm detention pond at some time after the August 24, 1998 inspection date. This was an unapproved construction. The construction of the discharge pipe to the storm water detention pond is in violation of the Confined Feeding Approval and IC 13-30-2-1.

    Review of records at IDEM indicate a history of noncompliance. Respondent was previously issued a Notice of Violation, Cause No.B-1802, on August 23, 1995 for similar violations at Farm #3 located in Montgomery County. Additionally, Respondent was issued a Notice of Violation for Cause No. B-270, for similar violations at this site for which an Agreed Order was accepted by the Stream Pollution Control Board on November 20, 1975.

    A settlement conference was held on May 5, 1999 at which Respondent admitted he made errors in judgement regarding available storage capacity and storm-water runoff patterns at the site. Respondent explained how the violations occurred and how the associated problems were resolved. Respondent outlined a plan to prevent any further violations in the future by reducing the number of swine to be located there and by improved site maintenance.

    In recognition of the settlement reached, Respondent waives any right to administrative and judicial review of this Agreed Order.

II. ORDER

1.    This Agreed Order shall be effective ("Effective Date") when it is approved by the Complainant or her delegate, and has been received by the Respondent. This Agreed Order shall have no force or effect until the Effective Date.

2.    Respondent shall immediately cease all unpermitted discharges to waters of the State.

    Respondent shall immediately remove all animal waste from the storm water detention pond, establish a grass groundcover in the area around it, and shall not allow manure to enter this basin in the future. Respondent shall also immediately begin to maintain at least two feet of freeboard in the currently approved lagoon at this location.

     4.    Respondent shall, within thirty (30) days of the Effective Date, submit a spill prevention control and countermeasure plan (SPCC) for any farm within the state of Indiana that is owned and/or operated by Respondent. Submission shall be sent to the address given in Paragraph 7 of this Order. The plan shall include, but not be limited to:

    a.    Provisions for notification of any spill to IDEM, Office of Environmental
        Response, to all affected downstream users, and to any other affected parties, and

    b.    Provisions that specifically detail steps to be taken for spill containment,              recovery, and cleanup, in compliance with 327 IAC 2-6.1.

    The plan is subject to the approval of IDEM. If the plan is deemed inadequate by IDEM, a revised plan shall be submitted within thirty (30) days of receipt of notice from IDEM of the inadequacies thereof. If after submission of revised plans, IDEM still finds the plan to be inadequate, then IDEM will modify the plan to meet IDEM's requirements. If the requirements of the plan are not timely undertaken, the Respondent will be liable for stipulated penalties. IDEM approval of a spill contingency plan shall be solely as a requirement of settling this action and in no way relieves the Respondent of his/her obligation to comply with all applicable regulations or statutes. Nothing in this provision prevents Complainant from exercising its full enforcement authority as to all permit requirements, rules and statutes.

    Within thirty (30) days of the Effective Date of this Agreed Order, Respondent shall submit a new application for a Confined Feeding Approval to IDEM's Land Use Section. The application shall indicate how the confined feeding facility and/or its manure management facilities will be modified to comply with standard requirements (specifically, minimum storage capacity), and when this will be accomplished. The application shall also include a comprehensive manure management plan. By a date specified by Respondent, and approved by IDEM, the construction, layout, and general operation of the Respondent's confined feeding facility shall meet the approval of IDEM's Land Use Section.
    
     6.    Within ten (10) days of achievement of any milestone date contained in any approved plans, as a result of this Order, Respondent is to provide to IDEM written notification of such.
    


7.    All submittals required by this Agreed Order, unless notified otherwise in writing, shall be sent to:

        Dave Knox, Case Manager
        Water Enforcement Section
        Office of Enforcement
        IGCN, Rm N1315
        Indiana Department of Environmental Management
        100 North Senate Avenue    
        P.O. Box 6015
        Indianapolis, Indiana 46206-6015

8. Within One Hundred Twenty (120) days of Effective Date, Respondent is required to submit an application for a National Pollutants Discharge Elimination Systems (NPDES) permit for Farm #1, located in Fountain County because of the demonstrated increased discharge potential of the Respondent's confined feeding facility. This NPDES permit application shall be sent to:

        Len Ashack, Chief
        Water Permitting Branch
        Office of Water Management
        IGCN, Rm N1203
        Indiana Department of Environmental Management
        100 North Senate Avenue    
        P.O. Box 6015
        Indianapolis, Indiana 46206-6015

    The Respondent is assessed a civil penalty of $22,500. Within thirty (30) days of the Effective Date of this Agreed Order, the Respondent shall pay a cash penalty of $4,500. The payment shall be submitted to the Environmental Management Special Fund, as directed by Order Condition # 13. In lieu of payment of the remaining Civil Penalty, the Respondent shall perform and complete the Supplemental Environmental Project ("SEP"), described by Order Condition # 10 below. The total funds expended on the SEP shall be a minimum of $36,000. If the SEP is not completed in accordance with this agreement and within the specified time period, subject to any extension for cause due to force majeure, the Respondent agrees to pay the remaining amount of the Civil Penalty, plus interest at the rate established by IC 24-4.6-1-101, to the Environmental Management Special Fund. Payment of the remaining Civil Penalty shall be submitted within fifteen (15) days from receipt of a notice to pay from the IDEM. Interest on the remaining Civil Penalty shall be paid from the Effective Date of this Agreed Order.

    As performance of a SEP the Respondent shall, within ninety (90) days of the Effective Date of this Agreed Order, expend a minimum of $36,000 on the purchase of a tank truck manure injection system ("the system") as described in Appendix A. The purchase and use of the system are approved as a SEP subject to the following conditions:

    a.    Prior to using the system, the Respondent shall submit a manure management plan that documents the Respondent's plan for direct injection. Prior to using the system, the Respondent shall also submit a spill response plan for any farm where the injection toolbar will be used. The spill response plan must be approved by IDEM prior to use of the injection toolbar on any farm. Prior to commencement of each individual use of the system, Respondent shall notify the IDEM inspector for the county in which the system is used. Voice mail messages left for the inspector shall be sufficient notification.

    b.     The system shall be used only at the Respondent's Confined Feeding Operation (CFO) approval sites and in accordance with the approval.

    c.    The system shall be used only for application of manure generated at facilities owned and/or managed by the Respondent. The system shall be designed so that no manure is emitted from the injection knives when they are lifted from the ground at the end of the fields.

    d.    The Respondent shall identify the location of all underground field tiles prior to manure injection at any site, and shall not inject manure into or within ten (10) feet of an underground field tile.

    The Respondent shall submit documentation of expenditures within ten (10) days of purchasing the system.

    In the event the following terms and conditions are violated, the Complainant may assess and the Respondent shall pay a stipulated penalty in the following amounts:

         Violation                        Penalty
        Paragraph 2.                    $5,000 per day any unpermitted discharge occurs;

        Paragraph 3.                    $1,000 per day this requirement is not met;

        Paragraph 4.                    $200 per week SCCP submitted late, or revised SCCP submitted late, if necessary;
        
        Paragraphs 5,8.                $200 per day either of these requirements not met;

        Paragraph 6.                    $100 per day written notification is not submitted;

        Paragraph 10.                    $200 per day any SEP condition is not met.

    Stipulated penalties shall be due and payable within thirty (30)days after Respondent receives written notice that the Complainant has determined a stipulated penalty is due. Assessment and payment of any stipulated penalties shall not preclude the Complainant from seeking any additional relief against the Respondent for violation of the Agreed Order. In lieu of assessment of the stipulated penalty given above, the Complainant may seek any other remedies or sanctions available by virtue of Respondent's violation of this Agreed Order, or Indiana law, including but not limited to civil penalties pursuant to IC 13-30-4 and revocation of approval pursuant to IC 13-15-7-1.

14.    Civil and stipulated penalties are payable by check to the Environmental Management Special Fund. Checks shall include the Cause Number of this action and shall be mailed to:
                Cashier
                Indiana Department of Environmental Management
                100 N. Senate Avenue
                P. O. Box 7060
                Indianapolis, IN 46207-7060

15.    In the event that the cash penalty required by paragraph 9 is not paid within thirty (30) days of the Effective Date of this Agreed Order, Respondent shall pay interest on the unpaid balance at the rate established by IC 24-4.6-1-101. The interest shall continue to accrue until the civil penalty is paid in full.

    This Agreed Order shall apply to and be binding upon the Respondent, its officers, directors, principals, agents, successors, subsidiaries, and assigns. The Respondent's signatories to this Agreed Order certify that they are fully authorized to execute this document and legally bind the parties they represent. No change in ownership, corporate,

or partnership status of the Respondent shall in any way alter its status or responsibilities under this Agreed Order.

17.    In the event that any terms of the Agreed Order are found to be invalid, the remaining terms shall remain in full force and effect and shall be construed and enforced as if the Agreed Order did not contain the invalid terms.

18.    The Respondent shall provide a copy of this Agreed Order, if in force, to any subsequent owners or successors before ownership rights are transferred. Respondent shall ensure that all contractors, firms and other persons performing work under this Agreed Order comply with the terms of this Agreed Order.

19.    This Agreed Order shall remain in effect until Respondent has complied with all terms and conditions of this Agreed Order, including twelve consecutive months in compliance with Respondent's Confined Feeding Approval and all applicable rules and statutes, as cited in this Cause.    



TECHNICAL RECOMMENDATION:        RESPONDENT:
Department of Environmental Management

By:     _________________________        By:     _________________________
    Mark Stanifer, Section Chief                F. G. McGrady
    Office of Enforcement                

                            

Date: _______________                Date:     _______________

COUNSEL FOR COMPLAINANT:        COUNSEL FOR RESPONDENT:
Department of Environmental Management

By: _________________________            By: ________________________
Office of Legal Counsel                
Department of Environmental Management

Date: _______________                Date: _______________

APPROVED AND ADOPTED BY THE INDIANA DEPARTMENT OF ENVIRONMENTAL MANAGEMENT THIS _______________________ DAY OF ____________________, 1999.

                            FOR THE COMMISSIONER:

                            

                            Signed 10/1/99
                            Felicia A. Robinson
                            Assistant Commissioner of Enforcement

Converted by Andrew Scriven