?J~~ April 29, 2009 TO: INTERESTED PARTIES. Thief River Falls, LLP (Doing Business As: Excel Dairy) RE: The Dairy Dozen -

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1 .Minnesota Pollution Control Agency 520 Lafayette Road North I St. Paul, MN I I I TTY I April 29, 2009 TO: INTERESTED PARTIES RE: The Dairy Dozen - Thief River Falls, LLP (Doing Business As: Excel Dairy) On April 28, 2009, the Minnesota Pollution Control Agency (MPCA) Citizens' Board voted to approve the amended,, and Order denying the Contested Case Hearing requests and authorizing Revocation and Reissuance of the National Pollutant Discharge Elimination System (NPDES)/State Disposal System (SDS) Permit to The Dairy Dozen - Thief River Falls, LLP (Doing Business As: Excel Dairy), Marshall County, Minnesota. The,, and Order document concludes that the criteria for ordering a contested case hearing have not been met in that the decision to revoke and reissue the NPDES/SDS Permit satisfied the requirements of Minnesota rules and statutes. We appreciate the time and effort of those who submitted comments on the NPDES/SDS Permit for TheDairyDozen- ThiefRiverFalls,LLP(DoingBusinessAs:ExcelDairy). Sincerely,?J~~ Paul Eger Commissioner PE/GS:slr St.Paul I Brainerd I Detroit Lakes I Duluth I Mankato I Marshall I Rochester I Willmar 150 YEARS ff'statehood 18S8-)

2 ATTACHMENT 1 STATE OF MINNESOTA MINNESOTA POLLUTION CONTROL AGENCY IN THE MATTER OF THE REQUEST FOR A CONTESTED CASE HEARING AND REVOCATION AND REISSUANCE OF NPDES/SDS PERMIT NO. MN FOR THE DAIRY DOZEN THIEF RIVER FALLS, LLP (DOING BUSINESS AS: EXCEL DAIRY) CONCENTRATED ANIMAL FEEDLOT FACILITY EXCEL TOWNSHIP, MARSHALL COUNTY, MINNESOTA FINDINGS OF FACT CONCLUSIONS OF LAW AND ORDER FINDINGS OF FACT The above-entitled matter came before the Minnesota Pollution Control Agency (MPCA) Citizens Board at a regular meeting held in St. Paul, Minnesota on April 28, Based on the MPCA staff review, comments and information received during the comment period, and other information in the record of the MPCA, the MPCA hereby makes the following,, and Order: INTRODUCTION 1. The matter before the MPCA Citizens Board is the revocation and reissuance of an individual National Pollutant Discharge Elimination System (NPDES)/State Disposal System (SDS) Permit for a dairy feedlot known as Excel Dairy located in Excel Township, Marshall County (Facility). As discussed more fully below, the purpose of the revocation and reissuance of the NPDES/SDS Permit is to correct a number of areas of environmental noncompliance at the Facility in a timely manner. 2. The MPCA received two timely requests for contested case hearings on the proposed revocation and reissuance of Excel Dairy s NPDES/SDS Permit. The first request was filed by the Speers Law Firm of Kansas City, Missouri on behalf of 23 of Excel Dairy s neighbors. The second request was filed by the law firm of Briggs and Morgan on behalf of Excel Dairy. JURISDICTION 3. The MPCA is authorized and required to administer and enforce all laws relating to the pollution of the air and water of the state. Minn. Stat. chs. 115 and The MPCA has authority to revoke and reissue this NPDES/SDS Permit and to rule on the contested case hearing requests on the NPDES/SDS Permit. Minn. Stat. chs. 115 and 116 and Minn. R. chs. 7000, 7001, 7009, and Under the federal Clean Water Act, the MPCA is delegated the authority from U.S. Environmental Protection Agency (EPA) to issue NPDES permits. 33 U.S.C. 1342; Minn. Stat , subd. 5. TDD (for hearing and speech impaired only): (651) Printed on recycled paper containing at least 30% fibers from paper recycled by consumers

3 DESCRIPTION Existing Facility Overview 6. The Dairy Dozen Thief River Falls, LLP (Doing Business As: Excel Dairy) (Excel Dairy or the Dairy) Concentrated Animal Feedlot Facility (Facility) is a total confinement dairy operation located in Section 31,. The Facility consists of three (3) total confinement dairy barns permitted to house 1,544 animal units, three (3) clay-lined liquid manure storage areas, two (2) clay-lined feed storage area runoff control basins, one (1) building to house sand separation equipment, and one (1) concrete feed storage area. The Facility utilizes sand as a bedding material for the animals which is scraped to a central gutter system (flume), along with manure produced by the animals, where it is flushed with recycled dilute liquid manure to the sand separation room. The sand is mechanically removed, cleaned, and stored to be reused as bedding for the animals while the manure is then transferred to the clay lined liquid manure storage system. The liquid manure enters the first liquid manure storage area where solids settling is intended to occur before being allowed to enter the second liquid manure storage area where the manure is further processed, and finally the liquid manure enters the third and final liquid manure storage area where it is ultimately stored or drawn back into the barns to flush more sand-laden manure to the sand separation room. Permitting History 7. Excel Dairy was originally constructed in 1996 and operated by Larry and Rhonda Amundson. The Dairy was a 1,544 animal unit operation that used typical organic bedding and one clay-lined manure basin. With organic bedding, manure basins typically form crusts that contain odors. The Amundsons stopped operating the Dairy in approximately The current ownership, led by Rick Millner, purchased the Dairy in late The Facility was re-permitted in the current ownership s name in June 2006 for 1,544 AU. At that time, the Facility consisted of one total confinement barn and one clay liquid manure storage area (now referred to as basin one). 9. In September 2006, the current owners submitted a permit application to add a new barn and two new clay-lined manure basins (now referred to as basin two and three) to the Facility. 10. In November 2006 (after the current ownership had purchased the Facility), MPCA staff Jim Courneya and Gary Lackey inspected the Facility. During the November 2006 inspection, there were no cows at the Facility and there was approximately three feet of manure/sludge in the bottom of basin one (then the only basin at the Facility). In addition, the MPCA staff observed deep wheel ruts in multiple locations on the sidewalls of the basin. As a result, the sidewall of the original basin needed to be repaired. 11. The MPCA staff also performed soil probes that revealed layers of sand in close proximity to the basin s liner. The damage to the sidewall indicated that agitation during clean out may have compromised the liner. If the liner was compromised, this would present a threat to ground water; especially with the presence of sand layers near the basin liner. The MPCA staff, therefore, determined that the integrity of the basin liner needed to be verified. 2

4 12. The MPCA reissued the Facility s permit in March The reissued permit required Excel Dairy to take specific steps to ensure the integrity of the liner in basin one. To evaluate the condition of the basin s liner at the bottom of the basin and repair the sidewalls of the basin, the Facility was required to remove and land apply the approximately three feet of sludge in the basin and to have a registered professional engineer evaluate the integrity of the liner. 13. The March 2007 permit required Excel Dairy to complete the repair and evaluation of basin one by November Excel Dairy, however, failed to complete the repair/evaluation of basin one until June 30, Despite the fact that it had not timely completed the repair/evaluation of basin one, Excel Dairy chose to stock the barns and to load additional manure into basin one. This made it necessary for Excel Dairy to transfer manure from basin one into basins two and three so that the repair/evaluation of basin one could be completed. 14. The March 2007 permit also authorized Excel Dairy to construct two new manure basins (referred to as basins two and three) and an additional barn. The March 2007 permit did not, however, authorize Excel Dairy to increase the number of animal units stocked at the Facility. Compliance/Enforcement History 15. In the fall of 2007, the Facility roughly doubled the size of an existing concrete feedpad. The Facility did this without first obtaining the necessary permission from the MPCA. As part of a stipulated enforcement action for this violation, the Facility was required to install a clay liner on an existing borrow pit on the site so that the borrow pit can serve as a runoff pond for any runoff from the feedpad. The Facility was also required to construct a second runoff pond to capture additional runoff from the feedpad. The Dairy has failed to manage that second runoff pond properly and in September 2008 discharged manure-contaminated runoff from the pond into waters of the State in violation of the Facility s permit. Specifically, the Facility discharged manure-contaminated runoff into a ditch which drains into the Thief River. 16. In May 2008, the MPCA began monitoring the hydrogen sulfide levels at the Excel Dairy property line because there had been numerous complaints about odors and air emissions from the basins. The MPCA s monitoring showed that the Facility was in significant non-compliance with Minnesota s hydrogen sulfide standards. 17. As part of its application for the March 2007 permit, Excel Dairy had submitted a narrative Air Emissions Plan which stated that the Facility would apply chopped straw to establish crusts on its basins in order to control air emissions. 18. On June 11, 2008, the Deputy Commissioner of the MPCA directed the Facility in writing to apply straw to the basins in order to establish crusts on the basins. Excel Dairy refused and instead stated that it could not and would not cover basins numbers two and three with straw as required by the narrative Air Emission Plan that the Dairy submitted with its permit application. 19. Beginning in May 2008, Excel Dairy began experimenting with aeration and the addition of microbes to its manure basins. Excel Dairy did not receive the MPCA s prior approval to implement these measures as required by rule, statute, and the Facility s permit. 3

5 20. After learning that the Facility had failed to implement the measures set forth in the narrative Air Emissions Plan that the Facility had submitted with its permit application, the MPCA and the Attorney General s office initiated a legal action to compel the Facility to stop exceeding Minnesota s hydrogen sulfide standards. The purpose of the State s civil action against Excel Dairy was to obtain immediate temporary abatement of Excel Dairy s ongoing hydrogen sulfide exceedances. 21. Marshall County has also initiated both civil and criminal legal actions against Excel Dairy for its exceedances of Minnesota s hydrogen sulfide standards. 22. In response to the State s request for a temporary injunction asking the Court to order Excel Dairy to install either straw or synthetic covers on its basins, Excel Dairy informed both the MPCA and the Court that upon the MPCA s approval of basin one for use, Excel Dairy would establish a straw crust on basin one. Excel Dairy also asked the Court to allow Excel Dairy to continue experimenting with aeration of basins two and three. Excel Dairy further informed both the Court and the State that if aeration of its basins failed to resolve the hydrogen sulfide exceedances, Excel Dairy would install synthetic covers on basins two and three. 23. On July 30, 2008, the Marshall County District Court issued its first Interim Order in the State s civil action against Excel Dairy. The first Interim Order directed Excel Dairy to establish a crust on basin one upon the MPCA s certification of that basin for use. The first Interim Order also directed Excel Dairy to continue aerating its basins. The first Interim Order reserved the right to require the Dairy to cover basins two and three if aeration failed to resolve the hydrogen sulfide exceedances and called for a review hearing in August or September 2008 to further evaluate the situation. 24. During the summer of 2008, the federal government also initiated enforcement action against Excel Dairy for its hydrogen sulfide exceedances. On July 18, 2008, the EPA issued a Notice of Violation to Excel Dairy for violating the federal Clean Air Act. During the summer of 2008, the federal Agency for Toxic Substances and Disease Registry (ATSDR) deployed its own air quality monitors in the homes of several of Excel Dairy s neighbors. ATSDR s monitors, which record hydrogen sulfide levels higher than the MPCA s monitors are capable of recording, recorded alarming levels of hydrogen sulfide in Excel Dairy s neighbors homes. On September 19, 2008, the ATSDR and the Minnesota Department of Health (MDH) took the unprecedented step of officially declaring Excel Dairy a public health threat as a result of the emissions from the uncovered manure basins. 25. In October 2008, the Court conducted a review hearing pursuant to the Court s first Interim Order. The MPCA s air quality monitoring data showed that Excel Dairy s system of crusting basin one, along with aeration of basins two and three, had failed to resolve the hydrogen sulfide exceedances. Excel Dairy continued to exceed Minnesota s hydrogen sulfide standards even after it established a crust on basin one and aerated basins two and three. The State, therefore, asked the Court to order Excel Dairy to install covers on basins two and three as Excel Dairy had said it would if its experiment with aeration failed to resolve the hydrogen sulfide issues. 26. At the October 2008 hearing, Excel Dairy again refused to install covers on basins two and three. Excel Dairy instead asked the Court for additional time to experiment with aeration. 4

6 27. In Marshall County s civil and criminal cases against Excel Dairy, Excel Dairy argued that the MPCA s 40-year old hydrogen sulfide standards were invalid and that Excel Dairy, therefore, could not be required to install covers on its basins. 28. On January 2, 2009, the Court issued its second Interim Order in the State s civil case against Excel Dairy. In the Court s second Interim Order, the Court decided to wait until Excel Dairy s challenge to Minnesota s hydrogen sulfide standards in the County litigation had been resolved before ruling on the State s renewed request to require Excel Dairy to cover basins two and three. The State s request for an order requiring Excel Dairy to install covers on basins two and three is, therefore, still pending before the Marshall County District Court. 29. On January 9, 2009, Excel Dairy notified both the Marshall County District Court and the MPCA that Excel Dairy would be removing the cows from the site and that the Facility would install synthetic covers on basins two and three. PROCEDURAL HISTORY 30. Under the authority of Minn. Stat and pursuant to Minn. R to , the draft NPDES/SDS Permit, incorporated herein as Appendix D to the Findings, was placed on public notice March 4, 2009, with the last day of the public notice period officially ending at 4:30 p.m. on April 3, The MPCA notified the public of the public comment period. A Notice of Intent to Revoke and Reissue NPDES/SDS Permit MN was provided to the Thief River Falls Times and published on March 4, The public notice was provided to Excel Dairy on February 27, The public notice was provided to governmental agencies and individuals listed on the MPCA s Marshall County interested parties mailing list, governmental agencies and individuals, as well as other interested parties, by mail on March 3, In addition, the public notice and draft NPDES/SDS Permit were made available for review on the MPCA Web site at on February 27, The MPCA held a public informational meeting on March 23, 2009, in Thief River Falls, Minnesota at the Pennington County Highway Department Joint Use Facility. This meeting was held during the public comment period for the NPDES/SDS Permit with approximately 32 people in attendance. While the focus of the meeting revolved around the revocation with reissuance process and the terms, conditions, and requirements of the draft NPDES/SDS Permit, general questions were also addressed. 33. The public comment period for the draft NPDES/SDS Permit began on March 4, 2009, and ended on April 3, During the 30-day comment period, the MPCA received six comment letters from government agencies and entities, and received 17 comment letters from citizens. The MPCA also received two comment letters after the public comment period had ended. 34. The MPCA prepared responses to all comments received during the 30-day public comment period. Comment letters received have been hereby incorporated by reference as Appendix A to these findings. The MPCA responses to comments received are hereby incorporated by reference as Appendix B to these findings. 5

7 CONTESTED CASE HEARING REQUESTS 35. The MPCA received two timely requests for contested case hearings on the proposed revocation and reissuance of Excel Dairy s NPDES/SDS Permit. The first request was filed by the Speers Law Firm of Kansas City, Missouri on behalf of 23 of Excel Dairy s neighbors. The second request was filed by the law firm of Briggs and Morgan on behalf of Excel Dairy. The requests for contested case hearings are hereby incorporated by reference as Appendix C to these findings. 36. The MPCA s decision whether to grant the petitions for a Contested Case Hearing is governed by Minn. R , subp. 1, which states: Subpart 1. Board or commissioner decision to hold Contested Case Hearing. The board or commissioner must grant the petition to hold a Contested Case Hearing or order upon its own motion that a Contested Case Hearing be held if it finds that: A. there is a material issue of fact in dispute concerning the matter pending before the board or commissioner; B. the board or commissioner has the jurisdiction to make a determination on the disputed material issue of fact; and C. there is a reasonable basis underlying the disputed material issue of fact or facts such that the holding of a Contested Case Hearing would allow the introduction of information that would aid the board or commissioner in resolving the disputed facts in making a final decision on the matter. 37. In order to satisfy the first requirement, Minn. R , subp. 1(A), the hearing requester must show there is a material issue of fact in dispute as opposed to a disputed issue of law or policy. A fact is material if its resolution will affect the outcome of a case. O Malley v. Ulland Brothers, 540 N.W.2d 889, 892 (Minn. 1996) 38. In order to satisfy the second requirement, Minn. R , subp. 1(B), the requester must show that the MPCA has jurisdiction or authority to make a determination on the disputed issues of material fact. Agencies are not permitted to act outside the jurisdictional boundaries of their enabling act. Cable Communications Board v. Nor-West Cable, 356 N.W.2d 658, 668 (Minn. 1984). Therefore, each issue in the contested case request has to be such that it is within the MPCA s authority to resolve. 39. Finally, under Minn. R , subp. 1(C), the requester has the burden of demonstrating there is a reasonable basis underlying the disputed material issue of fact or facts such that the holding of a contested case hearing would allow the introduction of information that would aid the MPCA in making a final decision on the matter. In the Matter of Solid Waste Permit for the NSP Red Wing Ash Disposal Facility, 421 N.W.2d 398, 404 (Minn. Ct. App. 1988). To do so, the requester must demonstrate that a hearing would allow for the introduction of new information that would be helpful to the MPCA in reaching a final decision. Speers Law Firm Contested Case Request 6

8 40. The Speers Law Firm s contested case request asks the MPCA to revoke Excel Dairy s NPDES/SDS Permit without reissuance. The request identifies six reasons for a contested case hearing. The MPCA s findings regarding each of these reasons are as follows. Reason 1: Excel Dairy Emissions Exceedances 41. In its first listed reason for holding a contested case hearing, the Speers Law Firm states that Excel Dairy has exceeded Minnesota s hydrogen sulfide air quality standards. The Speers Law Firm further asserts that Excel Dairy s experimentation with aeration of the manure basins has not been successful at resolving Excel Dairy s hydrogen sulfide exceedances. The Speers Law Firm requests a hearing to show why the MPCA should revoke the Facility s NPDES/SDS Permit. 42. The Speers Law Firm s first listed reason for holding a contested case hearing fails to satisfy the requirements of Minn. R , subp. 1, for the following reasons: 43. First, there is not a material issue of fact in dispute between the MPCA and the requester. The MPCA does not dispute the Speers Law Firm s assertion that Excel Dairy has exceeded Minnesota s hydrogen sulfide standards and that Excel Dairy s experimentation with aeration of the manure basins has not been successful at resolving Excel Dairy s hydrogen sulfide exceedances. As a result, these facts are not in dispute. 44. Second, the question of whether the MPCA should revoke Excel Dairy s NPDES/SDS Permit without reissuance is a question of law and policy, not a question of fact. As a result, the question of whether the MPCA should revoke Excel Dairy s NPDES/SDS Permit without revocation is not a disputed issue of material fact. 45. Finally, the requester has failed to demonstrate that a hearing would allow for the introduction of new information that would be helpful to the MPCA in reaching a decision in this matter. In fact, the requester s first listed reason for holding a contested case hearing relies exclusively on information that the MPCA itself has generated in this matter. Thus, even if the requester had identified a disputed issue of material fact, the requester has failed to demonstrate that a hearing would allow for the introduction of new information that would be helpful to the MPCA in reaching a final decision in this matter. Reason 2: Neighbor Evacuations 46. The Speers Law Firm s second listed reason for holding a contested case hearing is that odors from Excel Dairy forced nearby residents to evacuate their homes in June The requester points out that Rita Messing, a toxicologist from the MDH, advised neighbors of Excel Dairy to evacuate their homes due to the emissions from the Dairy. 47. The Speers Law Firm s second listed reason for holding a contested case hearing fails to satisfy the requirements of Minn. R , subp. 1, for the following reasons: 48. First, there is not a material issue of fact in dispute between the MPCA and the requester. The MPCA does not dispute the requester s assertion that Excel Dairy forced nearby residents to evacuate their homes during the summer of The MPCA also does not dispute the requester s assertion that Rita Messing, a toxicologist from the MDH, advised neighbors of Excel Dairy to 7

9 evacuate their homes due to the emissions from the Dairy. In fact, the MPCA has collected affidavits from both Rita Messing and the neighbors who were forced from their homes and has presented those affidavits to the Marshall County District Court as part of the State s civil case against Excel Dairy. As a result, these facts are not in dispute. 49. Second, the requester has failed to demonstrate that a hearing would allow for the introduction of new information that would be helpful to the MPCA in reaching a decision in this matter. The requester s second listed reason for holding a contested case hearing relies exclusively on information that the MPCA either already has or which the MPCA itself has generated in this matter. Thus, even if the requester had identified a disputed issue of material fact, the requester has failed to demonstrate that a hearing would allow for the introduction of new information that would be helpful to the MPCA in reaching a final decision in this matter. Reason 3: Minnesota Department of Health Concerns About Emissions 50. The Speers Law Firm s third listed reason for holding a contested case hearing describes the MDH s concerns regarding the health effects of the emissions from Excel Dairy. The requester again points out that Rita Messing has described concerns regarding the health effects of air emissions from Excel Dairy on the Dairy s neighbors. The requester also points out that mismanagement of runoff from Dairy operations may contaminate ground water supplies. 51. The Speers Law Firm s third listed reason for holding a contested case hearing fails to satisfy the requirements of Minn. R , subp. 1, for the following reasons: 52. First, there is not a material issue of fact in dispute between the MPCA and the requester. The MPCA does not dispute the requester s assertion that Rita Messing and the MDH have valid concerns about the health effects of Excel Dairy s emissions if those emissions are not brought under control. As noted above, the MPCA has presented evidence about Dr. Messing s and the MDH s concerns regarding the health effects of Excel Dairy s emissions to the Marshall County District Court in the State s civil case against Excel Dairy. The MPCA also does not dispute the requester s assertion that mismanaged runoff from feedlots can contaminate ground water. As a result, these facts are not in dispute. 53. Second, the requester has failed to demonstrate that a hearing would allow for the introduction of new information that would be helpful to the MPCA in reaching a decision in this matter. On the question of the health effects of Excel Dairy s emissions, the requester s third listed reason for holding a contested case hearing relies exclusively on information that the MPCA either already has or which the MPCA itself has generated in this matter. Thus, even if the requester had identified a disputed issue of material fact, the requester has failed to demonstrate that a hearing would allow for the introduction of new information that would be helpful to the MPCA in reaching a final decision in this matter. 54. The requester has likewise failed to demonstrate that a hearing would allow for the introduction of new information regarding potential runoff from the feedlot that would be helpful to the MPCA in reaching a decision in this matter. On the question of runoff from Excel Dairy, the requester does not identify any new information that suggests that the MPCA s draft NPDES/SDS Permit would fail to adequately protect ground water. As a result, even if the requester had identified a disputed issue of 8

10 material fact, the requester has failed to demonstrate that a hearing would allow for the introduction of new information that would be helpful to the MPCA in reaching a final decision on this question. Reason 4: Declaration of Public Health Hazard 55. The Speers Law Firm s fourth listed reason for holding a contested case hearing states that the ATSDR and the MDH declared Excel Dairy a public health hazard on September 19, The Speers Law Firm s fourth listed reason for holding a contested case hearing fails to satisfy the requirements of Minn. R , subp. 1, for the following reasons: 57. First, there is not a material issue of fact in dispute between the MPCA and the requester. The MPCA does not dispute the Speers Law Firm s assertion that the ATSDR and the MDH declared Excel Dairy a public health hazard on September 19, In fact, the MPCA presented the ATSDR/MDH declaration of a public health hazard into evidence in the State s civil case against Excel Dairy. As a result, these facts are not in dispute. 58. Second, the requester has failed to demonstrate that a hearing would allow for the introduction of new information that would be helpful to the MPCA in reaching a decision in this matter. In fact, the requester s fourth listed reason for holding a contested case hearing relies exclusively on information that the MPCA already has. Thus, even if the requester had identified a disputed issue of material fact, the requester has failed to demonstrate that a hearing would allow for the introduction of new information that would be helpful to the MPCA in reaching a final decision in this matter. Reason 5: EPA Notice of Violation to Excel Dairy 59. The Speers Law Firm s fifth listed reason for holding a contested case hearing states that the EPA issued a Notice of Violation against Excel Dairy for hydrogen sulfide exceedances. 60. The Speers Law Firm s fifth listed reason for holding a contested case hearing fails to satisfy the requirements of Minn. R , subp. 1, for the following reasons: 61. First, there is not a material issue of fact in dispute between the MPCA and the requester. The MPCA does not dispute the Speers Law Firm s assertion that the EPA issued a Notice of Violation to Excel Dairy for Excel Dairy s hydrogen sulfide exceedances on July 18, In fact, the MPCA presented the EPA s Notice of Violation into evidence in the State s civil case against Excel Dairy. As a result, these facts are not in dispute. 62. Second, the requester has failed to demonstrate that a hearing would allow for the introduction of new information that would be helpful to the MPCA in reaching a decision in this matter. In fact, the requester s fifth listed reason for holding a contested case hearing relies exclusively on information that the MPCA already has. Thus, even if the requester had identified a disputed issue of material fact, the requester has failed to demonstrate that a hearing would allow for the introduction of new information that would be helpful to the MPCA in reaching a final decision in this matter. Reason 6: ATSDR Health Consultation Report Regarding Excel Dairy 9

11 63. The Speers Law Firm s sixth listed reason for holding a contested case hearing states that the ATSDR issued a Health Consultation regarding Excel Dairy on March 26, The requester points out that the ATSDR Health Consultation recommends that the Dairy rapidly implement permanent covers for the manure storage basins and eliminate above-ground manure transfer to assure compliance with air quality standards. The requester also points out that the ATSDR Health Consultation also calls for the MPCA to continue to monitor the emission of hydrogen sulfide from the Dairy to confirm the efficacy of the control technology. 64. The Speers Law Firm s sixth listed reason for holding a contested case hearing fails to satisfy the requirements of Minn. R , subp. 1, for the following reasons: 65. First, there is not a material issue of fact in dispute between the MPCA and the requester. The MPCA does not dispute the Speers Law Firm s assertion that the ATSDR issued a Health Consultation on March 26, The MPCA also does not dispute the need for rapid and effective measures to assure compliance with air quality standards, including covers on the manure basins and elimination of above-ground manure transfer. The MPCA also does not dispute the need for the MPCA to continue monitoring hydrogen sulfide emissions at Excel Dairy to confirm the effectiveness of the control technology. As a result, these facts are not in dispute. 66. Second, the requester has failed to demonstrate that a hearing would allow for the introduction of new information that would be helpful to the MPCA in reaching a decision in this matter. In fact, the requester s fifth listed reason for holding a contested case hearing relies exclusively on information that the MPCA already has. Thus, even if the requester had identified a disputed issue of material fact, the requester has failed to demonstrate that a hearing would allow for the introduction of new information that would be helpful to the MPCA in reaching a final decision in this matter. 67. The Speers Law Firm identifies eight issues that it proposes be addressed at a contested case hearing. The MPCA s findings regarding each of these issues are as follows: Issue 1: Revocation of Excel Dairy s Permit 68. The Speers Law Firm s first proposed issue requests that Excel Dairy s NPDES/SDS Permit be revoked permanently. In the alternative, the Speers Law Firm requests that Excel Dairy be required to seek a conditional use permit from Marshall County. 69. The Speers Law Firm s first proposed issue fails to satisfy the requirements of Minn. R , subp. 1, for the following reasons: 70. First, the first issue does not identify a material issue of fact in dispute. The question of whether to revoke Excel Dairy s NPDES/SDS Permit without reissuance is a question of law and policy, not a question of fact. As a result, the question of whether the MPCA should revoke Excel Dairy s NPDES/SDS Permit without reissuance is not a disputed issue of material fact that is appropriate for resolution through a contested case hearing. 71. The question of whether Excel Dairy will need to seek a conditional use permit from Marshall County is also not a disputed issue of material fact. The question of whether Excel Dairy will need to seek a conditional use permit from Marshall County is a legal question that turns on Marshall County s requirements. The MPCA does not have jurisdiction to determine whether a 10

12 conditional use permit is required under Marshall County s requirements. However, it should be noted that the issuance of a new State permit for this Facility will in no way excuse the Facility from also complying with Marshall County s requirements. 72. Second, the requester has failed to demonstrate that a hearing would allow for the introduction of new information that would be helpful to the MPCA in reaching a decision in this matter. As noted above, the requester has not identified any evidence or information that the MPCA does not already have that would be introduced at a contested case hearing in this matter. Issue 2: Covers on the Basins 73. The Speers Law Firm s second proposed issue requests that the straw cover on basin one be at least 12 inches thick in order to control odor. 74. The Speers Law Firm s second proposed issue fails to satisfy the requirements of Minn. R , subp. 1, because the MPCA agrees that the cover on basin one should be at least 12 inches thick. The draft NPDES/SDS Permit has been revised to include this requirement. As a result, there is no disputed issue of material fact regarding the thickness of the cover on basin one. Issue 3: Synthetic Impermeable Cover and Flare on Basin Two 75. The Speers Law Firm s third proposed issue requests further discussion regarding the use of covers and flares on basins two and three. The petition requests that gaseous matter collected under the covers be treated to eliminate odors and the emission of harmful compounds. 76. The Speers Law Firm s third proposed issue fails to satisfy the requirements of Minn. R , subp. 1, for the following reasons: 77. First, the third proposed issue does not identify a material issue of fact in dispute. The third proposed issues identifies issues for discussion, not disputed issues of fact for resolution through a contested case hearing. 78. Second, the cover systems will include treatment to eliminate odor and prevent the emission of harmful compounds. Various studies have indicated that the impermeable cover and gas collection and flare system on basin two is capable of odor and air emissions reductions of more than 95 percent. The bio-gas collected beneath the impermeable cover is routed through the gas collection system to the flare where it is combusted to eliminate the release of odors and hydrogen sulfide. The combustion of bio-gas does create sulfur dioxide and nitrogen oxide compounds, which are regulated by the MPCA when emission rates exceed 50 or more tons per year. The MPCA staff have discussed the issue of emissions from bio-gas flares with experts from the University of Minnesota and in their estimation, the emissions from the flares will not be produced in a large enough quantity to require regulation by the MPCA, nor create an adverse impact to the environment or human health. Other larger scale dairies in Minnesota (more than twice the size of Excel Dairy) employ anaerobic digestion to produce bio-gas to combust in generators to produce electricity. This process produces very similar emissions and preliminary calculations indicate that not even these larger scale dairies, which attempt to generate as much bio-gas as possible, emit enough sulfur dioxide to require regulation. Therefore, the flare at Excel Dairy is not expected to require regulation of sulfur dioxide or nitrogen oxide compounds. As a result, there is not a disputed issue of material fact on this point. 11

13 79. Third, the requester has failed to demonstrate that a hearing would allow for the introduction of new information that would be helpful to the MPCA in reaching a decision in this matter. The requester has not cited any evidence or information that it claims it would introduce if there was a contested case hearing on this issue. As a result, the requester has failed to demonstrate that a hearing would allow for the introduction of new information that would be helpful to the MPCA in reaching a decision in this matter. Issue 4: Reporting Requirements for Equipment Malfunctions 80. The Speers Law Firm s fourth proposed issue requests that Excel Dairy be required to report within 48 hours any time that the Dairy has an equipment malfunction and necessitates the use of a honeyvac, surface hose, or other equipment to transfer manure to basin one. 81. The Speers Law Firm s fourth proposed issue fails to satisfy the requirements of Minn. R , subp. 1, for the following reasons: 82. The actual manure transfer equipment breakdown does not always directly lead to increased air emissions from the Facility. Although the breakdown of equipment can lead to alternative methods of manure transfer to basin one, as long as the manure is placed into basin one below the level of the crust/straw cover, the air emission reductions provided by the crust/straw cover will still occur. In other words, as long as the manure enters basin one below the crust/straw cover, there will not be an increase in air emissions as compared to before the breakdown of the manure transfer system. Thus the need to report equipment breakdown is not necessary. 83. The draft NPDES/SDS Permit has been modified to require that all waste additions to basin one must occur below the crust/straw cover. As a result, there is no disputed issue of material fact regarding reporting equipment failure. 84. Additionally, the requester has failed to demonstrate that a hearing would allow for the introduction of new information that would be helpful to the MPCA in reaching a decision in this matter. As noted above, the requester has not identified any evidence or information that the MPCA does not already have that would be introduced at a contested case hearing in this matter. 12

14 Issue 5: Revised Manure Management Plan 85. The Speers Law Firm s fifth proposed issue asserts that Excel Dairy must have a plan for properly emptying its wastes, that the MPCA must be able to take prompt enforcement in case of violations and that regular inspections of the lagoons should take place to ensure compliance with applicable requirements. 86. The Speers Law Firm s fifth proposed issue fails to satisfy the requirements of Minn. R , subp. 1, for the following reasons: 87. First, there is no disputed issue of material fact because the MPCA agrees with the requester s suggestions. The draft NPDES/SDS Permit requires Excel Dairy to develop a manure management plan that meets all requirements of Minn. R. ch regarding the proper storage, treatment, and disposal of manure. The MPCA also agrees to conduct inspections of the manure basins to ensure compliance with all applicable requirements. 88. Second, there is no disputed issue of material fact regarding the MPCA s ability to take prompt enforcement. The MPCA s enforcement authorities are established in statute by the Minnesota legislature as a matter of law. A contested case hearing could not alter or expand the MPCA s enforcement authority because the MPCA has no jurisdiction to expand its own enforcement authority. As a result, a contested case hearing regarding the MPCA s enforcement authority and would not allow for the introduction of new information that would be helpful to the MPCA in reaching a final decision on this issue. Issue 6: Need for Operations and Maintenance Plan 89. The Speers Law Firm s sixth proposed issue asserts that Excel Dairy has failed to self report noncompliance issues in the past and states that inspections are critical to ensuring that the Dairy complies with applicable requirements. 90. The Speers Law Firm s sixth proposed issue fails to satisfy the requirements of Minn. R , subp. 1, because the MPCA agrees that Excel Dairy has failed to self report noncompliance issues in the past and that inspections are critical to ensuring that the Dairy complies with applicable requirements. The MPCA intends to conduct inspections to ensure that the Dairy complies with all applicable requirements. As a result, there is no disputed issue of material fact regarding the Dairy s failure to self report violations in the past or regarding the need for inspections to ensure compliance in the future. Issue 7: Need for Continued/Expanded Air Quality Monitoring 91. The Speers Law Firm s seventh proposed issue asserts that air quality monitoring at the Facility should continue and that more monitoring stations should be established around the Facility. 92. The Speers Law Firm s seventh proposed issue fails to satisfy the requirements of Minn. R , subp. 1, for the following reasons. 13

15 93. First, there is no disputed issue of material fact regarding the need for continued air quality monitoring. The MPCA has committed to continue hydrogen sulfide monitoring around Excel Dairy in order to ensure compliance with applicable air quality standards. 94. Second, the requester has failed to demonstrate that a hearing would allow for the introduction of new information that would be helpful to the MPCA in reaching a decision regarding how many monitoring stations to establish. The requester has not cited any evidence or information that it claims it would introduce regarding the need for additional monitoring stations if there was a contested case hearing on this issue. Moreover, the simple fact is that the MPCA has a finite number of air quality monitors. A contested case hearing would not enable the MPCA to deploy more air quality monitors than it has. As a result, the requester has failed to demonstrate that a hearing would allow for the introduction of new information that would be helpful to the MPCA in reaching a decision in this matter. 95. For the reasons discussed above, the Speers Law Firm s contested case request fails to meet the requirements of Minn. R Excel Dairy Contested Case Request 96. Excel Dairy submitted a request for a contested case hearing on the MPCA s proposal to revoke and reissue the Dairy s NPDES/SDS Permit on April 3, Excel Dairy has identified 12 proposed issues in support of its contested case request. The MPCA s findings with respect to each of those issues are as follows: Excel Dairy Issue 1: Whether 4.6(C)(1) of Excel Dairy s Permit Bars the MPCA from Revoking and Reissuing Excel Dairy s Permit 97. Excel Dairy claims that 4.6(C)(1) of the Facility s current permit precludes the MPCA from revoking and reissuing the Facility s NPDES/SDS Permit. Excel Dairy s first proposed issue fails to satisfy the requirements of Minn. R , subp. 1, for the following reasons: 98. First, the question of whether 4.6(C)(1) of Excel Dairy s current NPDES/SDS Permit precludes the MPCA from revoking and reissuing the Facility s permit is a question of law, not a question of fact. As a result, this is not an issue that is appropriate for resolution through a contested case hearing. 99. Second, even if the first issue were a fact issue instead of a legal issue, Excel Dairy has failed to demonstrate that a hearing would allow for the introduction of new information that would be helpful to the MPCA in reaching a decision in this matter. Excel Dairy has not submitted any new evidence or information on issue number one that the MPCA does not already have. As a result, even if Excel Dairy had identified a fact issue instead of a legal issue, a contested case hearing would not be required, because Excel Dairy has failed to demonstrate that a hearing would allow for the introduction of new information that would be helpful to the MPCA in reaching a decision in this matter Although it is not necessary to address Excel Dairy s request for a contested case hearing, the MPCA finds that Excel Dairy has misinterpreted 4.6(C)(1) of its current NPDES/SDS Permit. 14

16 101. Excel Dairy describes 4.6(C)(1) of its NPDES/SDS Permit as establishing a 30-day forbearance agreement; granting Excel Dairy an extra 30 days to exceed Minnesota s hydrogen sulfide standards without having its NPDES/SDS Permit revoked and reissued. The language of 4.6(C)(1) does not support Excel Dairy s interpretation Section 4.6(C)(1) of Excel Dairy s Permit imposes an obligation upon Excel Dairy to prepare a plan for addressing hydrogen sulfide within 30 days of receiving notice from the MPCA of a potential to exceed the standards. Contrary to Excel Dairy s assertions, this NPDES/SDS Permit provision in no way grants Excel Dairy extra hydrogen sulfide exemption days or precludes the MPCA from taking affirmative action to bring Excel Dairy into compliance with hydrogen sulfide standards. In fact, 4.6(C)(1) of the NPDES/SDS Permit says nothing whatsoever about the MPCA waiving any rights or authorities it has to enforce applicable environmental protection laws. In fact, this issue was presented to the Marshall County District Court in the State s civil case against Excel Dairy. In its first Interim Order, the Marshall County District Court rejected Excel Dairy s argument that it was entitled to an extra 30 days of hydrogen sulfide exceedances and concluded that Excel Dairy was not entitled to more than the 21 days of exemption from hydrogen sulfide standards established by Minn. Stat Moreover, in this case, it has been significantly longer than 30 days since Excel Dairy was notified that it was exceeding Minnesota s hydrogen sulfide standards. The MPCA notified Excel Dairy on June 11, 2008, that the Facility needed to apply chopped straw to its basins in order to control its hydrogen sulfide emissions. Instead of complying with the MPCA s notification, Excel Dairy responded that it had decided to implement a system of aeration and biological addition in the basins that the MPCA had never approved. Although Excel Dairy has claimed that the MPCA never responded to its plan, this is not accurate. The MPCA initiated a civil action in Marshall County District Court against Excel Dairy and informed both the Court and the Dairy that the MPCA did not approve of aeration or biological treatment of Excel Dairy s basins As noted above, although the Marshall County District Court concluded that Excel Dairy had violated the law by implementing aeration and biological treatment of its manure basins without the MPCA s prior approval, the Court nevertheless gave Excel Dairy permission to temporarily continue aeration of its basins. Excel Dairy did so throughout the summer and fall of 2008 and continued to exceed Minnesota s hydrogen sulfide standards throughout that time period. Thus, despite having failed to obtain the MPCA s approval, Excel Dairy has had a chance to remedy its hydrogen sulfide exceedances with its chosen system. Excel Dairy s chosen system has simply not been successful. Thus, Excel Dairy has had more than 30 days to attempt to make its proposed solution work and it has failed to do so. Section 4.6(C)(1) of Excel Dairy s NPDES/SDS Permit does not preclude the MPCA from revoking and reissuing Excel Dairy s permit in order to restore the Facility to compliance with applicable environmental protection standards. Excel Dairy Issue 2: Whether 9.2(H) of Excel Dairy s Permit Bars the MPCA from Revoking and Reissuing Excel Dairy s Permit 105. Excel Dairy claims that 9.2(H) of the Facility s current NPDES/SDS Permit precludes the MPCA from revoking and reissuing the Facility s NPDES/SDS Permit. Excel Dairy s second proposed issue fails to satisfy the requirements of Minn. R , subp. 1, for the following reasons: 15

17 106. First, the question of whether 9.2(H) of Excel Dairy s current NPDES/SDS Permit precludes the MPCA from revoking and reissuing the Facility s NPDES/SDS Permit is a question of law, not a question of fact. As a result, this is not an issue that is appropriate for resolution through a contested case hearing Second, even if Excel Dairy s second issue were a fact issue instead of a legal issue, Excel Dairy has failed to demonstrate that a hearing would allow for the introduction of new information that would be helpful to the MPCA in reaching a decision in this matter. Excel Dairy has not submitted any new evidence or information on issue number two that the MPCA does not already have. As a result, even if Excel Dairy had identified a fact issue instead of a legal issue, a contested case hearing would not be required, because Excel Dairy has failed to demonstrate that a hearing would allow for the introduction of new information that would be helpful to the MPCA in reaching a decision in this matter Although it is not necessary to address Excel Dairy s contested case request, the MPCA finds that Excel Dairy has misinterpreted 9.2(H) of its NPDES/SDS Permit Section 9.2(H) of Excel Dairy s NPDES/SDS Permit sets forth conditions that the Dairy must satisfy in order to establish an affirmative defense to an MPCA enforcement action due to an upset Section 9.2(H) of Excel Dairy s NPDES/SDS Permit does not apply in this case for several reasons First, this is not an enforcement action. The MPCA is not revoking and reissuing Excel Dairy s NPDES/SDS Permit to punish Excel Dairy for its past violations. The MPCA is simply trying to return the Facility to compliance with applicable standards. Where the upset defense applies, the defense does not preclude the MPCA from requiring a facility to return to compliance Second, even if this were an enforcement action, Excel Dairy would not be eligible for the upset defense. According to Minn. R , the upset defense applies to violations of effluent limits if certain conditions are met. In other words, the upset defense applies to violations of water discharge requirements, not air emission limits. As a result, Excel Dairy s attempt to claim an upset defense to its violations of Minnesota s air quality standards is without merit Third, even if the upset defense were available for Excel Dairy s violations of air quality standards, Excel Dairy has failed to establish that it qualifies for the defense. To qualify for the upset defense, a permittee must fulfill reporting and corrective action requirements within timeframes set forth in Minn. R Excel Dairy does not claim and has presented no evidence that suggests that it fulfilled these requirements. Excel Dairy s attempt to claim an upset defense in this case is therefore without merit Fourth, Excel Dairy incorrectly asserts that the Marshall County District Court has conclusively determined that Excel Dairy s hydrogen sulfide exceedances were caused by the MPCA s order to repair/evaluate basin one. This is not accurate. The Marshall County District Court s statement that the MPCA s requirement to repair/evaluate basin one was a cause of Excel Dairy s hydrogen sulfide exceedances was made in that Court s first Interim Order which was never finalized. It is therefore not a conclusive determination of the Court. Moreover, the Marshall County District Court s statement was made before it became clear that Excel Dairy would continue to exceed hydrogen sulfide standards even after the repair/evaluation of basin one was complete. 16

18 115. Fifth, Excel Dairy incorrectly asserts that the cause of its hydrogen sulfide exceedances was the MPCA s decision to require Excel Dairy to repair/evaluate basin one. At the time of the November 2006 inspection, there was approximately three feet of manure/sludge in the basin. If the Dairy had acted promptly to complete the repair of the sidewall and evaluation of the basin liner while there were no cows at the Facility, it could have been completed relatively simply in a short period of time and with likely no hydrogen sulfide exceedances. Instead, the Dairy chose to delay the repair/evaluation of basin one. The Dairy also chose to stock the barns with cows before the two new basins were operational. The Dairy then added fresh manure to the original basin before the repair/evaluation had been done. This, of course, meant that a basin full of manure (as opposed to three feet of sludge) had to be removed in order to repair the sidewall and evaluate the liner of the original basin. Therefore, to the extent that the repair/evaluation of the original basin contributed to the Facility s numerous hydrogen sulfide exceedances, it was caused by the Dairy s delay in completing the work and the Dairy s choice to stock the barns before the work was done Moreover, Excel Dairy has continued to exceed the hydrogen sulfide standards even after the repair/evaluation of the original basin was complete. The repair/evaluation of the original basin was supposed to be completed by November 1, Excel Dairy did not complete the work until June 30, Excel Dairy has had numerous hydrogen sulfide exceedances even after June 30, Finally, even if Excel Dairy were able to establish that the hydrogen sulfide exceedances were primarily or partially caused by work on basin one, it would not preclude the MPCA from revoking and reissuing the Facility s NPDES/SDS Permit. The hydrogen sulfide exceedances have continued even after the repair/evaluation of basin one was complete. The MPCA has authority and a responsibility to take action to stop the hydrogen sulfide exceedances and the revocation and reissuance of the Facility s NPDES/SDS Permit is designed to do that. Excel Dairy Issue 3: Whether Due Process Precludes the MPCA from Revoking and Reissuing Excel Dairy s Permit Because Excel Dairy has Challenged the Continuous Air Monitoring Data in Marshall County s Cases Against Excel Dairy 118. Excel Dairy claims that the MPCA cannot rely upon the MPCA s continuous air monitoring (CAM) data because Excel Dairy has challenged the admissibility of the CAM data in Marshall County s cases against Excel Dairy. Excel Dairy s third proposed issue fails to meet the requirements of Minn. R , subp. 1, for the following reasons: 119. First, the question of whether due process precludes the MPCA from relying upon the CAM data where Excel Dairy has challenged the admissibility of the CAM data in Marshall County s cases against the Dairy is a question of law, not a question of fact. As a result, this is not an issue that is appropriate for resolution through a contested case hearing Second, even if Excel Dairy s third issue were a fact issue instead of a legal issue, Excel Dairy has failed to demonstrate that a hearing would allow for the introduction of new information that would be helpful to the MPCA in reaching a decision in this matter. In fact, Excel Dairy has specifically stated that its objections to the CAM evidence could not be resolved through a contested case hearing. Excel Dairy has also failed to identify any new evidence or information on issue number three that it would present at a contested case hearing that the MPCA does not already have. As a result, even if Excel Dairy had identified a fact issue instead of a legal issue, a contested case 17

19 hearing would not be required, because Excel Dairy has failed to demonstrate that a hearing would allow for the introduction of new information that would be helpful to the MPCA in reaching a decision in this case. Excel Dairy Issue 4: Whether Excel Dairy s Permit Required the Formation of a Straw Crust on its Manure Basins 121. Excel Dairy asserts that its NPDES/SDS Permit does not require it to establish straw covers on its manure basins. Excel Dairy notes that the Marshall County District Court preliminarily concluded in its first Interim Order that Excel Dairy s permit does not require crusting of the basins. Excel Dairy also asserts that its refusal to crust its basins does not qualify as information that was previously unavailable to the MPCA. Excel Dairy s fourth proposed issue fails to meet the requirements of Minn. R , subp. 1, for the following reasons: 122. The question of whether Excel Dairy s current NPDES/SDS Permit requires crusting is not a disputed issue of material fact. It is a question of law that is not appropriate for resolution through a contested case hearing. Moreover, the MPCA is not seeking to compel Excel Dairy to crust its basins under the current NPDES/SDS Permit in this administrative action Put another way, even if the MPCA were to concede that Excel Dairy s current NPDES/SDS Permit does not include an enforceable requirement for Excel Dairy to crust its basins, revocation and reissuance of the NPDES/SDS Permit is still appropriate. Excel Dairy submitted a narrative Air Emissions Plan with its permit application that stated that the Facility would crust its basins to control air emissions. Although Excel Dairy has argued that it never really intended to actually crust its basins, it is undisputed that Excel Dairy did submit the plan. It is also undisputed that in July 2008, Excel Dairy stated that it cannot and will not crust basins two and three. As a result, the terms and conditions of the current NPDES/SDS Permit, which incorporates the Air Emissions Plan, do not accurately represent the actual circumstances relating to the Facility Moreover, even if the issue of the enforceability of the crusting requirement in Excel Dairy s NPDES/SDS Permit were a fact issue instead of a legal issue, Excel Dairy has failed to demonstrate that a hearing would allow for the introduction of new information that would be helpful to the MPCA in reaching a decision in this matter. Excel Dairy has not submitted any new evidence or information on issue number four that the MPCA does not already have. As a result, even if Excel Dairy had identified a fact issue instead of a legal issue, a contested case hearing would not be required, because Excel Dairy has failed to demonstrate that a hearing would allow for the introduction of new information that would be helpful to the MPCA in reaching a decision in this case Although Excel Dairy has claimed that its refusal to crust basins two and three was not information that was unavailable to the MPCA when it issued the NPDES/SDS Permit, the Dairy has failed to demonstrate that a hearing would allow for the introduction of new information that would be helpful to the MPCA in reaching a decision in this matter As part of its permit application, Excel Dairy submitted a narrative Air Emissions Plan, dated September 11, 2006, that stated that the Dairy would establish straw covers on its basins to control air emissions. The Dairy also submitted a basic chart of air control measures as part of its permit application, also dated September 11, The MPCA s permit states that the Air Emission Plan 18

20 dated September 11, 2006, is incorporated as an enforceable part of the NPDES/SDS Permit. The Dairy asserts that it only intended to comply with the chart of air control measures (which did not include crusting of the basins) and not the additional measures specified in the narrative Air Emissions Plan Excel Dairy presented this information to the MPCA in the course of the State s civil lawsuit against the Dairy. Moreover, the two MPCA staff involved in drafting the Dairy s current NPDES/SDS Permit have produced sworn affidavits stating that they specifically told the Dairy s representatives that the Dairy would need to crust its basins to control air emissions. It was only in the summer of 2008, approximately 16 months after the MPCA issued the Dairy s NPDES/SDS Permit, that the Dairy presented the State with its court briefs insisting that it could not and would not crust its basins. Excel Dairy has failed to demonstrate that a contested case hearing would allow for the introduction of new information that would be helpful to the MPCA in reaching a decision in this case. Excel Dairy Issue 5: Whether Excel Dairy s Use of Aerators Justifies Revocation and Reissuance of its Permit 128. Excel Dairy asserts that the MPCA cannot rely upon Excel Dairy s use of aerators to justify revocation and reissuance of its NPDES/SDS Permit because the Marshall County District Court s July 30, 2008, first Interim Order authorized Excel Dairy to aerate basins two and three. Excel Dairy s fifth proposed issue fails to meet the requirements of Minn. R , subp. 1, for the following reasons: 129. Excel Dairy has failed to establish a disputed issue of material fact. The MPCA does not dispute the fact that the Marshall County District Court s first Interim Order has temporarily authorized Excel Dairy to aerate basins two and three. As a result, this is not a disputed issue of fact that is appropriate for resolution through a contested case hearing To the extent that Excel Dairy claims that the Court s temporary injunction precludes the MPCA from exercising its statutory authority over the Facility s feedlot NPDES/SDS Permit to effectuate a permanent solution to the Facility s environmental violations, Excel Dairy raises an issue of law, not an issue of fact. Moreover, the Marshall County District Court s temporary injunction does not in any way eliminate the MPCA s statutory responsibility for and authority over Excel Dairy s NPDES/SDS Permit It should be noted that Excel Dairy has not claimed that it received the MPCA s approval to install aerators in its basins before doing so. Instead, Excel Dairy ed the MPCA a notice after it had purchased aerators and a few days before installing the aerators. It is, however, undisputed that the MPCA never approved of the use of the aerators. In fact, the Marshall County District Court concluded in its first Interim Order that Excel Dairy did not have the right to implement aeration or biological treatment of its manure basins without the MPCA s prior approval Additionally, it is undisputed that Excel Dairy s current NPDES/SDS Permit does not authorize the use of aerators. As a result, the terms and conditions of the NPDES/SDS Permit do not accurately reflect the actual circumstances relating to the Facility. 19

21 133. Excel Dairy claims that the fact that it ed the MPCA on May 29, 2008, after purchasing and shortly before installing the aerators means that its experimental aeration of its basins was not information previously unavailable to the MPCA. This claim does not qualify as a disputed issue of material fact Excel Dairy does not claim that it requested or received the MPCA s approval to aerate its basins when the current NPDES/SDS Permit was issued in March In fact, Excel Dairy s to the MPCA about aerating its basins was not received until May 2008, over one year after the current NPDES/SDS Permit was issued. Furthermore according to Excel Dairy s pleadings in the State s civil case against it, Excel Dairy began biological treatment of its basins long before the May 29, 2008, to the MPCA. According to the Affidavit of Timothy Johnson, Excel Dairy began implementing biological treatment of its basins as long ago as October Similarly, according to the second page of the update that Excel Dairy submitted to the MPCA, Excel Dairy was introducing unevaluated and unapproved biological agents into the manure basins in the fall of 2007, before the update was ever provided. Excel Dairy does not and cannot claim that it notified, much less requested and received permission from the MPCA before taking this action. It is undisputed that Excel Dairy s current NPDES/SDS Permit does not include the use of aeration or biological treatment in the manure basins. As a result, there is no dispute of material fact that Excel Dairy s aeration and biological treatment of its basins was not information available to the MPCA when it issued the Dairy s current NPDES/SDS Permit In addition to failing to establish a material issue of disputed fact regarding its aeration of its manure basins, Excel Dairy has failed to demonstrate that a hearing would allow for the introduction of new information that would be helpful to the MPCA in reaching a decision in this matter. Excel Dairy has not submitted any new evidence or information on issue number five that the MPCA does not already have. As a result, even if Excel Dairy had identified a disputed issue of material fact, a contested case hearing would not be required, because Excel Dairy has failed to demonstrate that a hearing would allow for the introduction of new information that would be helpful to the MPCA in reaching a decision in this case. Excel Dairy Issue 6: Whether Excel Dairy Overstocked the Facility with More Animal Units than its Permit Allows 136. Excel Dairy asserts that the MPCA has falsely accused Excel Dairy of admitting to overstocking the Facility with more than the permitted 1,544 animal units. Excel Dairy s sixth proposed issue fails to meet the requirements of Minn. R , subp. 1, for the following reasons: 137. Excel Dairy has failed to establish a disputed issue of material fact. Contrary to Excel Dairy s summary of the MPCA s preliminary findings, the MPCA has not accused Excel Dairy of overstocking its Facility with more than the permitted number of animal units. Instead, the MPCA s preliminary decision to revoke and reissue the Dairy s NPDES/SDS Permit states that documentation recently obtained from Excel Dairy indicates that the Dairy appears to have overstocked the Facility by housing cows that weigh more than 1,000 pounds Under Minnesota law, a mature dairy cow weighing more than 1,000 pounds is 1.4 animal units. Minn. Stat , subd. 4a. A mature dairy cow weighing less than 1,000 pounds is 1.0 animal units. Id. 20

22 139. In this case, Excel Dairy represented to the MPCA that it would either house 1,104 mature dairy cows weighing more than 1,000 pounds or house 1,544 cows weighing less than 1,000 pounds Pursuant to its current NPDES/SDS Permit, Excel Dairy has submitted an Annual Report that indicates that the Facility housed as many as 1,540 cows less than 1,000 pounds (1,540 animal units). However, in the State s litigation against Excel Dairy, Excel Dairy has submitted reports into evidence that suggest that the cows that Excel Dairy has housed weigh more than 1,000 pounds, which would equate to 2,156 animal units using the head numbers in the Annual Report. The September 26, 2008, report submitted on behalf of Excel Dairy by its consultants Paul D. Kuhlmeier and David Parker utilizes numerous tables, references, and estimations for dairy cows weighing 1,400 pounds. In addition, the daily facility waste generation data presented in the report suggest that 1,925 1,400-pound cows (2,695 animal units) were housed at the Facility. Presuming that Excel Dairy s reports to the Court are accurate, this would mean that Excel Dairy has stocked its Facility with more animal units than its NPDES/SDS Permit allows Neighbors of Excel Dairy have also reported to the MPCA that Excel Dairy employees have admitted to stocking the barns with more cows than the NPDES/SDS Permit allows Although Excel Dairy may dispute whether it actually overstocked its barns, Excel Dairy has failed to establish a disputed issue of material fact that there is a question regarding whether Excel Dairy has overstocked its barns. As a result, it is reasonable to verify the number and weight of animal units housed at the Facility and a contested case is not necessary on this issue A contested case on this issue is unnecessary for an additional reason. Under Minnesota law, the MPCA has the right to conduct investigations to confirm compliance with the environmental laws that the MPCA enforces. Minn. Stat and and Minn. R As a result, even if the MPCA did not modify Excel Dairy s NPDES/SDS Permit to expressly require confirmation of the animal unit numbers housed at the Facility, the MPCA would still have the legal authority to require the Dairy to verify its animal unit numbers. The MPCA is including this requirement in the NPDES/SDS Permit simply for purposes of transparency and clarity. Excel Dairy Issue 7: Whether Excel Dairy s Exceedances of Minnesota s Hydrogen Sulfide Standards Endanger Human Health or the Environment 144. Excel Dairy asserts that because it has challenged the validity of Minnesota s hydrogen sulfide standards in the two court cases Marshall County has brought against it, the Dairy s exceedances of those standards do not qualify as a threat to human health or the environment. Excel Dairy s seventh proposed issue fails to meet the requirements of Minn. R , subp. 1, for the following reasons: 145. Excel Dairy s challenge to Minnesota s 40-year old hydrogen sulfide standard is a legal issue, not a disputed issue of material fact. As a result, the validity of Minnesota s 40-year old hydrogen sulfide standard is not an issue that is appropriate for resolution through a contested case The MPCA believes that the Minnesota Court of Appeals has exclusive jurisdiction to consider Excel Dairy s challenge to the validity of Minnesota s 40-year old hydrogen sulfide standards. Nevertheless, to the extent that the MPCA is required to rule on Excel Dairy s challenge, the MPCA concludes that Excel Dairy s challenge fails for the reasons set forth in the MPCA s amicus brief 21

23 defending the validity of Minnesota s hydrogen sulfide standards in the Marshall County District Court cases against Excel Dairy Minnesota s hydrogen sulfide standards are primary standards. Minn. R Primary standards are levels established to protect the public health from adverse effects. Minn. R , subp. 2. Therefore, by exceeding Minnesota s hydrogen sulfide standards, Excel Dairy has endangered human health and the environment By exceeding Minnesota s hydrogen sulfide standards, Excel Dairy has also violated its NPDES/SDS Permit, the MPCA s feedlot rules, and Minn. Stat These violations endanger the environment. Minn. Stat. 116B.02, subd As noted above, Minnesota s long-standing hydrogen sulfide standards are entirely valid. However, even if there was some deficiency in the 40-year old administrative record, there is still ample evidence that Excel Dairy s emissions have endangered human health. Excel Dairy s neighbors have provided sworn statements about the adverse effects that Excel Dairy s emissions have had on their health. The ATSDR and the MDH have also produced expert evidence that demonstrates that Excel Dairy s emissions endanger its neighbors health. The Marshall County District Court has also concluded in its first Interim Order that the issuance of sickening emissions from Excel Dairy was rendering the neighbor s physically ill In addition to failing to establish a material issue of disputed fact regarding its challenge to Minnesota s hydrogen sulfide standards, Excel Dairy has failed to demonstrate that a hearing would allow for the introduction of new information that would be helpful to the MPCA in reaching a decision in this matter. Excel Dairy has not submitted any new evidence or information on this issue that the MPCA does not already have. Instead, Excel Dairy has offered legal arguments that it has already shared with the MPCA as part of the Marshall County court cases against Excel Dairy. As a result, even if Excel Dairy had identified a disputed issue of material fact, a contested case hearing would not be required, because Excel Dairy has failed to demonstrate that a hearing would allow for the introduction of new information that would be helpful to the MPCA in reaching a decision in this case. Excel Dairy Issue 8: Whether Excel Dairy s Neighbors Reports of Adverse Health Effects from the Dairy s Emissions are Legally Valid 151. Excel Dairy asserts that as a matter of law, the MPCA should discount Excel Dairy s neighbors reports regarding the adverse health effects Excel Dairy s emissions have caused. Excel Dairy s eighth proposed issue fails to meet the requirements of Minn. R , subp. 1, for the following reasons: 152. Here again Excel Dairy has raised a legal issue, not a disputed issue of material fact. Excel Dairy s eighth issue amounts to a legal motion to exclude the neighbors statements regarding the effect that Excel Dairy s emissions have had on their health. As a result, this is not a disputed issue of fact that is appropriate for resolution through a contested case hearing Moreover, Excel Dairy has erroneously suggested that the MPCA is relying exclusively on the neighbors statements to justify revocation and reissuance of its NPDES/SDS Permit. This is not accurate. The MPCA is relying on all of the evidence in the record of this case, including but not 22

24 limited to the neighbors statements, the monitored levels of hydrogen sulfide at the Dairy s property line and in its neighbors homes, the expert opinions of the MPCA staff, the expert opinions of the ATSDR, the expert opinions of the MDH, and Excel Dairy s own statement that it intended to install covers on its manure basins. Excel Dairy Issue 9: Whether the ATSDR/MDH Report Demonstrates a Threat to Human Health or the Environment 154. Excel Dairy asserts that as a matter of law, the MPCA cannot rely on the ATSDR/MDH report declaring Excel Dairy to be a public health threat because Excel Dairy claims that the report was not based on the Dairy s normal operating conditions. Excel Dairy s ninth proposed issue fails to meet the requirements of Minn. R , subp. 1, for the following reasons: 155. Here again Excel Dairy has raised a legal issue, not a disputed issue of material fact. Excel Dairy s ninth issue amounts to a legal motion to exclude the ATSDR/MDH report regarding the threat that Excel Dairy s emissions pose to the public health. This is not a disputed issue of fact that is appropriate for resolution through a contested case hearing In addition to failing to establish a material issue of disputed fact regarding the ATSDR/MDH report, Excel Dairy has failed to demonstrate that a hearing would allow for the introduction of new information that would be helpful to the MPCA in reaching a decision in this matter. Excel Dairy has not submitted any new evidence or information on this issue that the MPCA does not already have. Instead, Excel Dairy has offered legal arguments that it has already shared with the MPCA regarding why the MPCA should not consider the ATSDR/MDH report. As a result, even if Excel Dairy had identified a disputed issue of material fact, a contested case hearing would not be required, because Excel Dairy has failed to demonstrate that a hearing would allow for the introduction of new information that would be helpful to the MPCA in reaching a decision in this case Moreover, Excel Dairy has erroneously suggested that the MPCA is relying exclusively on the initial ATSDR/MDH report to justify revoking and reissuing the Facility s NPDES/SDS Permit. As noted above, the MPCA is relying on all of the evidence in the record in this case. This includes, but is not limited to, the fact that Excel Dairy continued to exceed Minnesota s hydrogen sulfide standards and to sicken its neighbors even after it completed the repair/evaluation of basin one and brought basin one on line, neighbors statements, the monitored levels of hydrogen sulfide at the Dairy s property line and in its neighbors homes, the expert opinions of the MPCA staff, the expert opinions of the ATSDR/MDH (including the ATSDR/MDH Health Consultation dated March 26, 2009), and Excel Dairy s own statement that it intended to install covers on its manure basins. Excel Dairy Issue 10: Whether Minn. Stat Provides 21 or 28 Days of Exemptions from Minnesota s Hydrogen Sulfide Standards 158. Excel Dairy asserts that Minn. Stat provides feedlot operators 28 days of exemption from Minnesota s hydrogen sulfide standards. Excel Dairy s tenth proposed issue fails to meet the requirements of Minn. R , subp. 1, for the following reasons: 159. Here again Excel Dairy has raised a legal issue, not a disputed issue of material fact. Excel Dairy s tenth issue raises a legal argument about the meaning of a statute. This is not a disputed issue of fact that is appropriate for resolution through a contested case hearing. 23

25 160. As a legal issue, Excel Dairy s claim that Minn. Stat provides 28 days exemption is without merit Minn. Stat (c) provides that: (b) Livestock production facilities are exempt from state ambient air quality standards while manure is being removed and for seven days after manure is removed from barns or manure storage facilities. (c) For a livestock production facility having greater than 300 animal units, the maximum cumulative exemption in a calendar year under paragraph (b) is 21 days for the removal process. (emphasis added). To be eligible for the exemption, the producer must provide advance notice to either the MPCA or a delegated county feedlot officer that the producer is using its exemption days. Minn. Stat (d) (2006); Minn. R (2007) In other words, the statute provides that a producer the size of Excel Dairy is entitled to a maximum of 21 days of exemption from the State hydrogen sulfide standard. Id. Excel Dairy, however, claims that it is entitled to 28 days of exemption. Excel Dairy s claim of extra exemption days is without merit The statute clearly indicates that the maximum number of days that a larger producer can be exempt under part (b), which includes both removal and post-removal days, is 21 days. Id. Excel Dairy has impermissibly attempted to parse the statute in order to gain 7 extra days of exemption that the legislature never intended to give Although the language of the statute is clear that Excel Dairy is entitled to 21 days of exemption, not the 28 it is attempting to take, the legislative history of Minn. Stat makes this point even clearer. The Minnesota House of Representatives Research Summary of the bill that created this exemption states that the bill [a]dds new language exempting feedlots from state ambient air quality standards while manure is removed from storage facilities and for seven days thereafter. But, for a facility with more than 1,000 animal units the exemption can be for no more than 21 days per year. As the emphasized language demonstrates, the legislature never intended large feedlots like Excel Dairy to combine the seven days allowed to smaller facilities with the 21 days allowed for larger facilities as Excel Dairy is trying to do in this case. Excel Dairy s claim that it is entitled to 28 days worth of exemptions from hydrogen sulfide standards is without merit It is worth noting that the Marshall County District Court concluded in its first Interim Order that contrary to Excel Dairy s assertions, Excel Dairy was not entitled to more than 21 days of exemption from the hydrogen sulfide standards According to Excel Dairy s pleadings in the State s civil case against it case, Excel Dairy took 12 days worth of exemptions from May 5 through May 16, 2008, and took its remaining nine days from June 3, 2008, through June 11, (Aff. Perry, Ex. Q, S.) Thus, Excel Dairy used up all 21 days of its exemption during those two windows of time. Id The MPCA s data show that Excel Dairy has exceeded the hydrogen sulfide standard hundreds of times on days for which it could not and did not claim exemptions. For example, Excel Dairy had 369 exceedances of the 30 ppb hydrogen sulfide standard and 187 exceedances of the 50 ppb hydrogen sulfide standard on the following days outside of its claimed statutory exemption period: May 23, May 24, May 25, May 28, May 29, May 31, June 2, June 12, June 13, June 18, June 20, 24

26 June 23, June 24, June 25, June 26, June 27, July 3, July 7, July 10, July 11, July 13, July 14, July 15, July 16, July 19, July 20, July 21, July 22, July 23, July 27, July 28, July 29, July 30, August 2, August 8, August 9, August 10, August 12, August 13, August 14, August 15, September 4, September 15, September 16, September 17, September 18, September 20, September 21, September 22, September 25, September 27, September 28, October 3, October 4, October 5, October 6, October 7, October 10, October 12, October 17, October 23, and October In other words, of the 179 calendar days from May 6 to October 30 (monitoring season) the Dairy claimed the hydrogen sulfide exemption for 21 of those days leaving 158 days. Of the 158 days, Excel Dairy exceeded the 30 ppb hydrogen sulfide standard one or more times during 62 of those days. Thus, even if Excel Dairy was entitled to an extra seven days of exemptions (which it is not), Excel Dairy has more than used up its exemption days Excel Dairy has therefore failed to establish a disputed issue of material fact as to whether Minn. Stat establishes 21 or 28 days of exemption from Minnesota s hydrogen sulfide standards. Excel Dairy Issue 11: Whether Unspecified Modifications to Excel Dairy Justify Revocation and Reissuance of Excel Dairy s Permit 169. Excel Dairy asserts that unspecified allegations of Excel Dairy s modifications of its Facility cannot support revocation and reissuance of its NPDES/SDS Permit. Excel Dairy s eleventh proposed issue fails to meet the requirements of Minn. R , subp. 1, for the following reasons: 170. The MPCA does not contend that unspecified modifications to Excel Dairy s NPDES/SDS Permit support revocation and reissuance of its NPDES/SDS Permit. On the contrary, the MPCA has specifically detailed the modifications to the Facility that Excel Dairy has made in this case. They are expanding the feedpad without permission, failing to crust its basins, implementing aeration of its basins, implementing biological treatment of its basins, and possibly overstocking the Facility with excess animal units. Because the MPCA does not dispute Excel Dairy s assertion that the MPCA needs to specify what modifications Excel Dairy has made to its Facility, Excel Dairy has failed to identify a disputed issue of material fact Excel Dairy asserts that the MPCA cannot revoke and reissue its NPDES/SDS Permit to address the unauthorized expansion of the Dairy s feedpad because that issue was addressed via a separate enforcement action. Excel Dairy claims that principles of accord and satisfaction preclude the MPCA from modifying the Facility s NPDES/SDS Permit to address the expanded feedpad Excel Dairy s assertion of accord and satisfaction does not raise a disputed issue of material fact that is appropriate for resolution through a contested case hearing. Accord and satisfaction is a legal issue, not a factual issue. Moreover, accord and satisfaction is a concept applicable to contract law, not environmental law. This is not a contract dispute and accord and satisfaction is not applicable in this matter It is important to note that this is a permitting action, not an enforcement action. The MPCA is not seeking to penalize Excel Dairy for expanding its feedpad without authorization. As Excel Dairy has noted, it has already paid a penalty for this violations. The fact that a penalty has been paid for making an unauthorized change to a permitted facility does not, however, eliminate the MPCA s 25

27 authority to reissue the Facility s NPDES/SDS Permit so that the terms and conditions of the NPDES/SDS Permit accurately reflect the actual conditions at the Facility. Minn. R (B). Excel Dairy Issue 12: Whether Excel Dairy s Permit can be Revoked and Reissued to Address the Discharge of Manure-Contaminated Runoff from the Feedpad Runoff Pond 174. Excel Dairy concedes that it discharged manure-contaminated runoff from its feedpad runoff pond into waters of the State in violation of applicable requirements. Excel Dairy claims that the MPCA cannot revoke and reissue its NPDES/SDS Permit to address this discharge because the MPCA approved the design and operation of the runoff pond. Excel Dairy s twelfth issue fails to meet the requirements of Minn. R , subp. 1, for the following reasons: 175. Excel Dairy s twelfth issue raises a legal issue, not a disputed issue of material fact. Specifically, Excel Dairy is claiming that the MPCA is estopped from addressing an illegal discharge to waters of the State if the MPCA approved the design and operation of the source of the discharge. Because this is a legal issue and not a factual issue, it is not appropriate for resolution through a contested case hearing. Moreover, Excel Dairy has failed to identify any legal authority or evidence to support its assertion that the MPCA cannot address an illegal discharge from a source simply because the MPCA allegedly approved of the design of the source. Excel Dairy has, in fact, failed to identify any evidence that it would offer on this issue if the MPCA were to hold a contested case hearing. As a result, Excel Dairy has failed to demonstrate that a hearing would allow for the introduction of new information that would be helpful to the MPCA in reaching a decision in this matter The MPCA is statutorily authorized and required to enforce all laws related to pollution of the waters of the State. Minn. Stat , subd. 1(a). This includes the responsibility for reviewing the design of disposal systems. Minn. Stat , subd. 1. It also includes the responsibility for taking appropriate actions when disposal systems discharge in violation of applicable requirements as in this case. Minn. Stat , subd. 5; Minn. Stat Put simply, even if Excel Dairy is correct that its discharge of manure-contaminated runoff resulted from a pond that the MPCA approved, the MPCA still has authority to revoke and reissue the NPDES/SDS Permit so that the problem can be fixed Moreover, regardless of the MPCA s approval of the pond system to control feed storage area runoff, the Facility is responsible for correctly operating and maintaining the system in compliance with the terms and conditions of the Facility s NPDES/SDS Permit and applicable State rules and regulations For the reasons discussed above, Excel Dairy s contested case request fails to satisfy the requirements of Minn. R , subp. 1. The MPCA s Response to Excel Dairy s Miscellaneous Other Assertions 179. Apart from the 12 proposed issues for which Excel Dairy seeks a contested case hearing, Excel Dairy has made several miscellaneous assertions. The MPCA s findings with respect to those miscellaneous assertions follow. The MPCA s Requirement to Evaluate Basin One 26

28 180. As noted above, Excel Dairy asserts that the MPCA staff is to blame for Excel Dairy s exceedances of Minnesota s hydrogen sulfide standards because the MPCA staff required Excel Dairy to repair/evaluate basin one to ensure that the clay liner had not been compromised In November 2006, MPCA staff Jim Courneya and Gary Lackey inspected the Facility. During the November 2006 inspection, there were no cows on site and there was approximately three feet of manure/sludge in the bottom of basin one (then the only basin at the Facility). In addition, the MPCA staff observed deep wheel ruts in multiple locations on the sidewalls of the basin. As a result, the sidewall of the original basin needed to be repaired The MPCA staff also performed soil probes that revealed layers of sand in close proximity to the basin s liner. The damage to the sidewall indicated that agitation during clean out may have compromised the liner. If the liner was compromised, this would present a threat to ground water, especially with the presence of sand layers near the basin liner. The MPCA staff therefore determined that the integrity of the basin liner needed to be verified The MPCA reissued the Facility s NPDES/SDS Permit in March The reissued NPDES/SDS Permit required Excel Dairy to take specific steps to ensure the integrity of the liner in basin one. To evaluate the condition of the basin s liner at the bottom of the basin and repair the sidewalls of the basin, the Facility was required to remove and land apply the approximately three feet of sludge in the basin and to have a registered professional engineer evaluate the integrity of the liner The March 2007 NPDES/SDS Permit required Excel Dairy to complete the repair/evaluation of basin one by November Excel Dairy, however, failed to complete the repair/evaluation of basin one until June 30, Despite the fact that it had not timely completed the repair/evaluation of basin one, Excel Dairy chose to stock the barns and to load additional manure into basin one. This made it necessary for Excel Dairy to transfer manure from basin one into basins two and three so that the repair/evaluation of basin one could be completed Basins two and three were not initially constructed properly. When Excel Dairy initially notified the MPCA that construction of basins two and three was complete, an inspection was conducted (July 23, 2007) in which the MPCA found large diameter rocks within the basins liners and missing anti-scour pads. Therefore, the basins could not be certified for use. Upon being notified that the issues with the basin liners were corrected, an inspection was conducted (August 29, 2007) in which the MPCA still observed large diameter rocks within the basins liners; therefore, the basins could still not be certified. Photos documenting the final removal of the large rocks were taken on October 4, 2007, and made available to the MPCA on October 8, An inspection was conducted (October 16, 2007) in which it was verified that the rocks had finally been removed and the basins were then certified for use Excel Dairy s failure to promptly clean out and repair basin one (when there was only three feet of manure/sludge in it) meant that basin one was full of manure that had to be removed when Excel Dairy finally began working on it. Although Excel Dairy could have land applied that manure, the Dairy instead chose to pump manure from basin one into basins two and three. In addition, the barns were fully stocked and, during the repair/evaluation of basin one, basins two and three were receiving the fresh manure from the barns when the Dairy chose to pump even more manure from basin one to basins two and three. 27

29 187. Excel Dairy was required to complete the clean out and evaluation of basin one by November 1, 2007, but did not do so until June , approximately nine months behind schedule. As noted above, Excel Dairy s failure to promptly complete work on basin one coupled with its decision to stock the barns prematurely meant that Excel Dairy had to transfer significant quantities of manure from basin one into basins two and three at a time when they were also receiving the fresh manure generated from the barns. Thus, even if the transfer of manure from basin one to basins two and three did aggravate the Facility s hydrogen sulfide exceedances, that transfer was necessitated by the Dairy s own actions, not by the MPCA Moreover, the evidence refutes Excel Dairy s suggestion that but for the repair/evaluation of basin one, the Facility would comply with the hydrogen sulfide standards. As the MPCA s air quality monitoring establishes, Excel Dairy continued to exceed Minnesota s hydrogen sulfide standards throughout the fall of 2008, even after the repair/evaluation of basin one was complete. Even after the MPCA had to withdraw its hydrogen sulfide monitors (due to cold weather) at the end of October 2008, Excel Dairy s neighbors continued to experience sickening emissions from the manure basins. The Dairy s attempt to blame its hydrogen sulfide exceedances on the repair/evaluation of basin one is therefore without merit. The MPCA s Response to Excel Dairy s Refusal to Apply Straw to its Basins 189. On June 11, 2008, the MPCA Deputy Commissioner Leo Raudys notified Excel Dairy in writing to apply straw to its manure basins to provide immediate containment of hydrogen sulfide emissions A subsequent MPCA investigation indicated that Excel Dairy had refused to comply with the directive. Instead, the Dairy had begun experimenting with aeration and biological treatment of its basins although the Facility did not have the MPCA s approval to do so. The MPCA and the Attorney General s Office therefore initiated civil legal action against Excel Dairy to compel the Dairy to comply with its NPDES/SDS Permit and with hydrogen sulfide standards Despite having been directed by the MPCA to implement a proven method of controlling the emissions from its manure basins and having been sued by the MPCA and the Attorney Generals Office to compel it do so, Excel Dairy submitted a proposal on June 27, 2008, to continue its unapproved aeration and biological treatment of its manure basins. Although Excel Dairy claims that the MPCA ignored that plan, this is not true. The MPCA responded to Excel Dairy s June 27, 2008, proposal in the form of pleadings and statements to the Marshall County District Court explaining why the MPCA s technical experts could not support the plan. As noted elsewhere in these findings, the subsequent air quality monitoring has demonstrated that the MPCA s technical experts were correct. Excel Dairy s aeration and biological treatment methods did not work. The MPCA s Certification of Basin One for Use Excel Dairy asserts that the MPCA inexplicably delayed approval of basin one. Excel Dairy s assertion is not accurate for the following reasons During the hearing on the State s request for a temporary injunction in its civil case against Excel Dairy, the judge encouraged the parties to work together to have basin one certified for use as quickly as possible. The judge also admonished the parties to try to settle the litigation if possible. 28

30 194. On Friday July 11, 2008, the MPCA received a written certification from Excel Dairy s engineer that basin one was ready for the MPCA to inspect and approve for use. The MPCA had a previouslyscheduled settlement conference with Excel Dairy the following week on Wednesday, July 16, Before departing from that settlement conference, the MPCA feedlot engineer George Schwint arranged to visit Excel Dairy the following week to finalize the certification of basin one for use. As scheduled, Mr. Schwint visited Excel Dairy on July 23, 2008, and certified basin one for use. Put another way, the MPCA reviewed the submitted engineering reports and documents and certified basin one for use eight business days after receiving notice from Excel Dairy that the basin was ready for inspection. Excel Dairy s September 26, 2008, Proposal to Continue Experimental Methods 195. Excel Dairy claims that it has sought the MPCA s approval to implement a number of recommendations that Excel Dairy s consultants (Paul Kuhlmeier and David Parker) have proposed and that the MPCA has not responded. Excel Dairy s claims are not accurate for the following reasons The Kuhlmeier/Parker report was not submitted to the MPCA for approval. As noted above, the EPA has also initiated enforcement action against Excel Dairy for violating the federal Clean Air Act. The Kuhlmeier/Parker report was submitted to the EPA as part of that enforcement action and the MPCA was copied on it. Excel Dairy had never applied for an amendment of its NPDES/SDS Permit to implement the Kuhlmeier/Parker recommendations. Thus, Excel Dairy s claim that it has been awaiting the MPCA s approval to implement the Kuhlmeier/Parker recommendations is not accurate Excel Dairy s claim that the MPCA has not responded to the Kuhlmeier/Parker report is likewise not accurate. In both pleadings and arguments to the Marshall County District Court, the MPCA has unambiguously stated that a recognized solution (i.e. covers) to Excel Dairy s hydrogen sulfide exceedances is required in this case. 29

31 Excel Dairy s Willingness to Cover Basins Two and Three 198. On January 9, 2009, Excel Dairy notified the Marshall County District Court and the MPCA and stated that Excel Dairy was willing to maintain a natural cover or crust on basin one, install an impermeable cover on basin two, and install a permeable cover on basin three. Excel Dairy also stated that it intended to submit an application for an amendment of its NPDES/SDS Permit by March 1, 2009, to effectuate these changes and seeking an increase in its permitted animal units to 2,000 animal units Although Excel Dairy has failed to submit a permit application as it informed the Court and the MPCA that it would, the MPCA notes that the proposed revocation and reissuance of Excel Dairy s NPDES/SDS Permit authorizes and requires the Dairy to implement the corrective actions that the Dairy has already publicly stated that it is willing to implement. REVOCATION AND REISSUANCE AUTHORITY AND JUSTIFICATION 200. Minn. R (A) provides that alterations or modifications to a permitted facility or activity that will result in or have the potential to result in a significant alteration in the nature or quantity of permitted materials to be stored, processed, discharged, emitted, or disposed of by the permittee justifies revocation and reissuance of a permit In this case, Excel Dairy has altered its Facility in the following ways that result in or have the potential to result in significant alteration of the nature or quantity of air emissions from the Facility First, when it applied for its current NPDES/SDS Permit, Excel Dairy submitted a narrative Air Emission Plan that stated that the Dairy would apply straw to the manure basins to establish and maintain a crust on the basins to control air emissions from the basins. On June 11, 2008, the Deputy Commissioner of the MPCA directed the Facility in writing to apply straw to the basins in order to establish crusts on the basins. The Dairy refused and has instead indicated that it never intended to cover basins two and three with straw as required by the narrative Air Emission Plan that the Dairy submitted with its permit application Second, beginning in May 2008, Excel Dairy installed aerators (which were never approved or permitted by the MPCA as required) in basins two and three and also began using an unapproved biological treatment agent. Continuous air monitor (CAM) data collected at the Facility s property line have shown hundreds of exceedances of Minnesota s hydrogen sulfide standards from May 2008 through October That same CAM data have shown that the aeration of basins two and three is insufficient to keep the Facility in compliance with Minnesota s hydrogen sulfide standards Third, based on statements that Excel Dairy has made, the Dairy also appears to have altered its Facility by stocking the Facility with more animal units than the NPDES/SDS Permit allows. Under the current NPDES/SDS Permit, the Facility is authorized to stock 1,544 animal units. Under Minnesota law, a mature dairy cow weighing over 1,000 pounds is 1.4 animal units. (Minn. Stat , subd. 4a.) A mature dairy cow weighing less than 1,000 pounds is 1.0 animal units. Id. 30

32 205. In this case, Excel Dairy represented to the MPCA that it would either house 1,104 mature dairy cows over 1,000 pounds or house a hybrid cow that weighed less than 1,000 pounds so that the Facility could stock a total of 1,544 cows Pursuant to its current NPDES/SDS Permit, Excel Dairy has submitted an Annual Report that indicates that the Facility housed as many as 1,540 cows less than 1,000 pounds (1,540 animal units). However, in the State s litigation against Excel Dairy, Excel Dairy has submitted reports into evidence that suggest that the cows that Excel Dairy has housed weigh more than 1,000 pounds, which would equate to 2,156 animal units using the head numbers in the Annual Report. The September 26, 2008, report submitted on behalf of Excel Dairy by its consultants Paul D. Kuhlmeier and David Parker, utilizes numerous tables, references, and estimations for dairy cows weighing 1,400 pounds. In addition, the daily Facility waste generation data presented in the report suggests that 1,925 1,400-pound cows (2,695 animal units) were housed at the Facility. Presuming that Excel Dairy s reports to the Court are accurate, this would mean that Excel Dairy has stocked its Facility with more animal units than its NPDES/SDS Permit allows Overstocking of the Facility would also result in or have the potential to result in a significant alteration in the nature or quantity of emissions from the Facility s manure basins nature or quantity of permitted materials stored, processed, discharged, emitted, or disposed of by the permittee Minn. R (B) provides that revocation and reissuance of a permit is justified when the commissioner receives information previously unavailable to the Agency showing that the terms and conditions of the permit do not accurately represent the actual circumstances relating to the permitted facility or activity In this case, when it applied for its current NPDES/SDS Permit, Excel Dairy represented to the MPCA that the Dairy could and would apply chopped straw to all three of the manure basins to establish crusts on the basins in order to mitigate the emission of odors and hydrogen sulfide. When directed to do so by the MPCA in June 2008, the Dairy refused. Instead, the Dairy represented to both the MPCA and the Marshall County District Court that the Dairy had never truly intended to apply chopped straw to or to establish crusts on basins two and three, and that the narrative Air Emission Plan that the Dairy submitted with its permit application was submitted accidentally Instead, Excel Dairy elected to implement an unapproved program involving aeration and biological treatment of its manure basins although these measures had never been approved or permitted by the MPCA. As a result, the NPDES/SDS Permit terms and conditions do not accurately represent the actual circumstances relating to the permitted Facility. Moreover, the Facility s aeration program has not been successful at achieving compliance with Minnesota s hydrogen sulfide standards As noted above, information recently obtained from Excel Dairy has also indicated that the terms and conditions of the NPDES/SDS Permit do not accurately represent the actual circumstances relating to the number and size of animals being housed at the Facility Minn. R (F) provides that revocation and reissuance of a permit is justified when the commissioner finds that the permitted facility endangers human health or the environment and that a change in the permitted activity would remove the danger to human health or the environment. 31

33 213. In this case, the Facility has exceeded Minnesota s hydrogen sulfide standards hundreds of times from May 2008 through October These standards are primary standards. This means that the hydrogen sulfide standards that the Facility is exceeding are set at a level necessary to protect human health. Neighbors of the Facility have reported being physically sickened by the noxious emissions from the Facility s manure basins on numerous occasions. The neighbors symptoms include but are not limited to headaches, dizziness, respiratory difficulty, nausea, vomiting, sore throats, and eye irritation. In fact, several of the neighbors have literally been driven from their homes on numerous occasions as a result of the emissions from the Facility The MPCA uses the Honeywell MDA Scientific Chemcassette Model SPM to evaluate compliance with the State Ambient Air Quality Standards for hydrogen sulfide. The MDA SPM was one of two methods approved for this purpose by the MPCA Commissioner in December Since 1997, the MPCA, consultants and regulated industry have used the MDA SPM to demonstrate compliance at over 60 facilities in Minnesota. In 2008, the MDA SPM was deployed to 15 sites at eight facilities in Minnesota; including Excel Dairy In addition, these instruments are generally accepted and relied upon by various state and federal agencies and academic and scientific institutions. For example, United States Department of Health and Human Service s Agency for Toxic Substances and Disease Registry uses the same type of continuous air monitor that is being used at Excel Dairy. The State of North Carolina Department of Environment and Natural Resources Division of Air Quality and the State of Maine Bureau of Remediation and Waste Management also use the same type of continuous air monitors that are being used at Excel Dairy. The University of Minnesota Department of Agriculture / National Pork Board also use the same type of continuous air monitors that are being used at Excel Dairy. This type of continuous air monitor has also been used in published studies by distinguished experts in the field of air emissions from animal agriculture. For example, a group of professors from the University of North Carolina, Northern Illinois University, the University of Massachusetts Lowell, and Duke University used this type of Continuous Air Monitor in a study entitled Air Pollution and Odor in Communities Near Industrial Swine Operations published in the journal Environmental Health Perspectives, vol. 116, no. 10 (2008) The SPM using a hydride chemcassette is certified by the manufacture to be chemical specific for hydrogen sulfide and accurate within +/- 25% of the true value. The MPCA considers all data within this accuracy range to be valid pending review of operational data and the results of instrument performance audits To ensure the accuracy of the measurements the instrument undergoes periodic flow, leak and optical checks to verify operational status. Instrument performance is determined by conducting performance audits that challenge the monitors in the field with certified hydrogen sulfide gas standards of known concentrations Three instrument performance audits were conducted on each MDA SPM deployed at Excel Dairy in Results demonstrated that the monitors were accurately recording the hydrogen sulfide levels from the facility. In fact, to the extent that the monitors had varied from true values, the monitors recorded from 10% to 18% lower levels of hydrogen sulfide than the true values. In other words, any variation would favor Excel Dairy and there were still hundreds of exceedances. 32

34 219. On September 19, 2008, the federal ATSDR and the MDH took the unprecedented step of officially declaring this Facility a public health threat as a result of the emissions from the uncovered manure basins On March 26, 2009, the MDH and ATSDR provided a health consultation to the neighbors near Excel Dairy. In summary, the consultation found that unhealthy levels of hydrogen sulfide are present in the area surrounding the Dairy. Repeated exposures to hydrogen sulfide at the measured levels may cause persistent eye and throat irritation, headaches, and nausea, to name a few of the health effects identified in the consultation. The consultation also continues to discuss the effect of stress as a result of having to live with the emissions and its detriment to the neighbor s health as well. Finally, the conclusion drawn in the consultation is that the Dairy is a public health hazard. The health consultation recommends that rapid, effective, and permanent measures be taken to curtail emissions including covering the basins and eliminating overland transfer of manure In addition to exceeding the hydrogen sulfide standards, the Facility also violated provisions regarding exemptions from Minnesota s hydrogen sulfide standards. Minnesota statute establishes a maximum 21-day exemption from the hydrogen standards for a feedlot of this size when manure is being emptied and land applied. This exemption only applies if the feedlot follows proper procedures in notifying the MPCA of its activities. In this case, the Facility failed to follow proper notification procedures and tried to claim a cumulative 58 days of exemptions instead of the maximum 21 days that the law allows The Facility has also repeatedly violated statutory, rule, and permit provisions that prohibit modification of permitted facilities without obtaining prior approval form the MPCA In addition, the Facility has discharged manure-contaminated runoff to waters of the State in violation of applicable environmental protection requirements Based on the above, the Commissioner has preliminarily determined that the Facility endangers human health and the environment and that changes in the permitted activity would remove the danger to human health or the environment. APPLICABLE STANDARDS 225. The Permit has been drafted in accordance with the requirements of Minn. R. chs. 7020, which are designed to protect human health and the environment. COMMENT LETTERS RECEIVED DURING THE PUBLIC NOTICE PERIOD 226. The MPCA received a total of 23 comment letters from the public and two requests for a Contested Case Hearing, in response to the draft Permit Notice. Members of the public expressed a variety of concerns about the location of the proposed Facility, past compliance and air emissions issues, and potential effects of the manure generated, stored, and land applied to surface and ground waters. The commenters also expressed concerns related to the continued noncompliance with the hydrogen sulfide standards, displeasure with the ownership and management of the Facility, and future air emissions from the continued operation of the Facility. These comments are addressed in the Response to Comments, and the MPCA adopts and incorporates by reference the rationale in the Response to Comments as its Findings. 33

35 The Dairy Dozen - Thief River Falls, LLP (d/b/a Excel Dairy) Reissuance ofnpdes/sds Pennit No. MN Response to Comments, and the MPCA adopts and incorporates by reference the rationale in the Response to Comments as its Findings. CONCLUSIONS OF LAW 1. Based on Minn. R , the MPCA Citizens' Board and Commissioner have jurisdiction to decide whether a Contested Case Hearing should be granted or denied. 2. The Contested Case Hearing requests should be denied. 3. As set forth above, Excel Dairy has implemented alterations or modifications to its facility and activities that result in or have the potential to result in a significant alteration in the nature or quantity of permitted materials to be stored, processed, discharged emitted, or disposed of by the permittee; thereby justifying revocation and reissuance of the Facility's permit. 4. As set forth above, the commissioner has received information previously unavailable to the agency that shows that the terms and conditions of Excel Dairy's current permit do not accurately represent the actual circumstances relating to the permitted facility or activity; thereby justifying revocation and reissuance of the Facility's permit. 5. As set forth above, revocation and reissuance of Excel Dairy's permit is justified because the facility endangers human health and the environment and a change in the permitted activity would remove the danger to human health or the environment. 6. Any findings that might properly be termed conclusions and any conclusions that might properly be termed findings are hereby ad,optedas such. ORDER 1. The petitions for a Contested Case' Hearing are hereby denied. 2. The Minnesota Pollution Control Agency approves the revocation and reissuance ofnpdes/sds Permit No. MN to The Dairy Dozen - Thief River Falls, LLP (Doing Business As: Excel Dairy). IT IS SO ORDERED Commissioner Paul ~;~r Chair, Citizens' Board Minnesota Pollution Control Agency Date 'I1~9 fo~ 34

36 SUPPLEMENTAL FINDINGS 1. The following language is hereby inserted at the end of paragraph IV B 1 of the draft permit. "If the MPCA determines that the land application sites are too wet for the proper land application of manure, the due date for removal of manure from basins one, two, and three shall be extended to not later than thirty days after Spring, 2009, road restrictions are removed for Marshall County, Minnesota." 2. The chart at Paragraph I C 1 of the draft permit is also hereby revised so that the due date of item one, Removal of Manure from Basins, reads "June 1,2009 or thirty days after road restrictions are removed ifmpca determines land application sites too wet."