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

COMMISSIONER OF THE DEPARTMENT    )        
OF ENVIRONMENTAL MANAGEMENT,    )
                            )
        Complainant,            )
                            )
            v.                )CAUSE NO. 1998-4642-W or B-2327
                            )
FRONTIER CO-OP, INC.,                )
INDIAN TRAILS BRANCH            )
        Respondent.                )

2.    Frontier Co-op, Inc. Indian Trails Branch (hereinafter referred to as the "Respondent" or "Site"), is a fertilizer company doing business at 7250 East State Route 47 Lebanon, Boone County, Indiana 46052.

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

4.    Pursuant to IC 13-30-3-3, IDEM issued a Notice of Violation via Certified Mail on February 22, 1999 to:    

    Mr. Ron Hysong, President            Ron Sibert, Registered Agent        
    Frontier Co-op, Inc.                Frontier Co-op, Inc.
    Route 1, Box 99                3900 East State Route
    Jamestown, Indiana 46147            Lebanon, IN 46052

5.    On April 29, 1998, designated representatives of the Indiana Department of Environmental Management (IDEM), Emergency Response Section, began a spill response investigation at the Site.

6.    327 IAC 5-2-2 states that any discharge of pollutants into the waters of the state as a point source discharge, except for exclusions made in 327 IAC 5-2-4, is prohibited unless in conformity with a valid NPDES permit obtained prior to the discharge.

7.    327 IAC 2-1-6(a)(1) states, in substance, that all waters at all times and at all places, including the mixing zone, shall meet the minimum conditions of being free from substances, materials, floating debris, oil or scum attributable to municipal, industrial, agricultural, and other land use practices or other discharges:

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

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

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

    d.    which are in amounts sufficient to be acutely toxic to, or to otherwise severely injure or kill aquatic life, other animals, plants, or humans.

    e.    which are in concentrations or combinations that will cause or contribute to the growth of aquatic plants or algae to such degree as to create a nuisance, be unsightly, or otherwise impair the designated uses.

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

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

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

    (3)    As soon as possible but within two (2) hours of discovery, communicate a spill report to the Department of Environmental Management, Office of Environmental Response: Area code 1-888-233-7745 for in-state calls (toll free), 1-317-233-7745 for out-of-state calls. If new or updated spill report information becomes known that indicates a significant increase in the likelihood of damage to the waters of the state, the responsible party shall notify the department as soon as possible but within two (2) hours of the time the new or updated information becomes known.

    (4)    Submit to the Department of Environmental Management, Office of Emergency Response, 2525 North Shadeland Avenue, P.O. Box 6016, Indianapolis, IN, 46206-6015, a written copy of the spill report if requested in writing by the department.

    (5)    Except from modes of transportation other than pipelines, exercise due diligence and document attempts to notify the following:

        (A)    for spills to surface waters that cause damage, the nearest affected downstream water user located within ten (10) miles of the spill and in the State of Indiana; and

        (B)    for spills to soil outside the facility boundary, the affected property owner or owners, operator or operators, or occupant or occupants.

9.     IC 13-18-4-5 states, in part, that it is unlawful for any person to throw, run, drain, or otherwise dispose into any of the streams or waters of this state, or to cause, permit, or suffer to be thrown, run, drained, allowed to seep, or otherwise disposed into any waters, any organic or inorganic matter that shall cause or contribute to a polluted condition of any waters, according to any rule of the board under sections 1 and 3 of this chapter.

10.    IC 13-30-2-1 requires, in substance, that a person may not discharge, emit, cause, allow, or threaten to discharge, emit, cause, or allow any contaminant or waste including any noxious odor, either alone or in combination with contaminants from other sources, into the environment or into any publicly owned treatment works in any form which causes or would cause pollution which violates rules, standards, or discharge of emission requirements adopted by the appropriate board pursuant to this article.

     11.    On April 29, 1998, employees of the Site were bleeding off anhydrous ammonia vapor into a 150 gallon tank of water in order to repair a leaking valve. At 1:30 PM on April 29, 1998, a part-time employee emptied the water from the tank onto the ground instead of applying the mixture on farm-ground with a sprayer.

     12.    On April 29, 1998 at 3:30 PM, a third party observed dead fish in Carroll Ditch and notified the Indiana Department of Natural Resources (IDNR) with a complaint. An IDNR Conservation Officer (CO) arrived at the area to investigate the complaint at 5:00 PM on the same day, and discovered a fish-kill of 1,243 fish. Darkness kept the officer from completing his count.

     13.    On April 30, 1998, IDEM's Emergency Response Section began an investigation by sampling at the initial complaint location on Carroll Ditch. The ammonia field kit analysis was used where 3-4 ppm ammonia nitrogen was observed. IDEM interviewed people and took several more samples for field analysis, as the investigation moved upstream to Campbell Ditch. When runoff from the Site was field tested, ammonia concentrations were found to be off the scale for field kit amounts. The problem was traced to the 150 gallon tank water source, noted above, through further sampling. Analysis by the State Department of Health Environmental Lab found increasingly higher ammonia nitrogen concentrations up to a highest amount of 48 mg/l in runoff from the Site.

14.    There was a 0.75 mile area of the Campbell Ditch and a 1.5 mile area of the Carroll Ditch affected. Over 1,243 fish were killed in the Campbell Ditch and Carroll Ditch areas, in violation of 327 IAC 5-2-2, 327 IAC 2-1-6(a)(1), IC 13-30-2-1, and IC 13-18-4-5.

     15.    Personnel of Frontier Co-op, Inc. also failed to make proper notification of the above referenced spill to IDEM, in violation of 327 IAC 2-6.1-7.

     Settlement conferences were held on April 22, 1999 and June 9, 1999, at which Respondent questioned whether the amount of material that was spilled was of enough significance to report and/or to cause a fish kill. Respondent also questioned whether other sources of pollutants in the area may have been responsible for the fish kill. IDEM reviewed the available information and concluded that concentrations of ammonia nitrogen were present in surface storm water run-off from Respondent's property and that there was a spill of waste onto the ground that the Respondent should have reported to IDEM. The possibility of conducting a Supplemental Environmental Project (SEP) was discussed, and Respondent later submitted a proposal that was accepted and at least partially approved.

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

18. Pursuant to IC 13-30-3-3, entry into the terms of this Agreed Order does not constitute an admission of any violation contained herein

2.    Within thirty (30) days from the Effective Date of this Order, the Respondent shall submit to IDEM for its approval a Compliance Plan (CP) which addresses the violations noted at Respondent's facility. The CP is subject to the approval of IDEM. If the plan is deemed inadequate by IDEM, a revised plan shall be submitted within thirty (30) days of receipt of notice from IDEM of the inadequacies thereof. If after submission of the revised document(s) IDEM still finds that the document(s) are inadequate, then IDEM may require further modification of the CP as necessary to meet IDEM's requirements. If further modification does not meet IDEM's approval, IDEM will suggest appropriate modification to be undertaken by Respondent within specified time frames. If such modification is not timely undertaken or an alternative plan timely submitted by the Respondent is not approved by IDEM, the Respondent will be subject to stipulated penalties. Respondent shall immediately implement the CP, upon written notification by IDEM that the CP has been approved.

    The CP shall include but not be limited to:

    a.    delineating the area of contamination affected by the incident described in Finding of Fact No. 11, and a description of the remediation of contaminated soils;    

    b.    a plan that addresses improved housekeeping that will minimize the possibility of future contamination and releases;

3.    Within thirty (30) days from the Effective Date of this Order, the Respondent shall submit to IDEM for its approval a Standard Operating Procedure (SOP) which addresses spill prevention and response at Respondent's facility, including provision for an employee training program. The SOP is subject to the approval of IDEM. If the plan is deemed inadequate by IDEM, a revised plan shall be submitted within thirty (30) days of receipt of notice from IDEM of the inadequacies thereof. If after submission of the revised document(s) IDEM still finds that the document(s) are inadequate, then IDEM may require further modification of the SOP as necessary to meet IDEM's requirements. If further modification does not meet IDEM's approval, IDEM will suggest appropriate modification to be undertaken by Respondent within specified time frames. If such

modification is not timely undertaken or an alternative plan timely submitted by the Respondent is not approved by IDEM, the Respondent will be subject to stipulated penalties. Respondent shall immediately adopt the SOP, upon written notification by IDEM that the SOP has been approved.

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

                Dave Knox
                Water Section
                 Office of Enforcement
                Indiana Department of Environmental Management
                100 N. Senate Avenue
                P. O. Box 6015
                Indianapolis, IN 46206-6015

5.    Respondent is assessed a civil penalty of Twenty-Four Thousand Dollars ($24,000). Within thirty (30) days of the effective date of the Agreed Order, the Respondent shall pay a cash penalty of Four Thousand Eight Hundred ($4,800) Dollars. The payment shall be submitted to the Environmental Management Special Fund, as directed by paragraph ten (10). The remaining Nineteen Thousand Two Hundred Dollars ($19,200) of the Civil Penalty will be offset by the Respondent's completion of a Supplemental Environmental Project (SEP), as described in Exhibit A. and incorporated by reference, in lieu of payment of the actual dollar amount.

6.    The Respondent has submitted a SEP proposal quoting a total eligible price of over Ninety Thousand Five Hundred Thirteen Dollars ($90,513). The total funds expended on the SEP shall be a minimum of Thirty-Eight Thousand Four Hundred Dollars ($38,400), if completed for a portion of the SEP approved at a 2:1 off-set ratio . In the event the SEP cost more than the minimum amount required, the Respondent assumes responsibility for all additional costs without any further offset of the Civil Penalty as cited above in paragraph five (5). Respondent shall have twelve (12) months from the effective date of this Agreed Order to complete the SEP. Within thirty (30) days after completion of any approved portion of the SEP, Respondent shall submit itemized documentation of costs incurred in performing that portion of the SEP to IDEM. In the event the SEP is not completed within the twelve (12) month period, Respondent shall receive no offset, and the balance of Nineteen Thousand Two Hundred Dollars ($19,200) shall become immediately due and payable. If the Respondent does not spend the full amount within

    the specified time period, subject to any extension for cause due to force majeure, the Respondent agrees to pay the remaining amount of the Civil Penalty, offset by the balance of the funds not expended for the SEP at a 3.1 to1 ratio against the Civil Penalty, plus

interest at the rate established by IC § 24-4.6-1-101, to the Environmental Management Special Fund. Payment of the remaining Civil Penalty shall be submitted within fifteen (15) days from receipt of a notice to pay from the IDEM. Interest on the remaining Civil Penalty shall be paid from the effective date of this Agreed Order.

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

         Violation                        Penalty

        Paragraph II.2.            $500 per day for failure to comply with any requirement of this paragraph.

        Paragraph II.3.            $500 per day for failure to comply with any requirement of this paragraph.

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

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

10.    In the event that the civil penalty required by paragraph 5 is not paid within thirty (30) days of the Effective Date of this Agreed Order, Respondent shall pay interest on the unpaid balance at the rate established by IC 24-4.6-1-101. The interest shall continue to accrue until the civil penalty is paid in full.

11.    This Agreed Order shall apply to and be binding upon the Respondent. The Respondent's signatories to this Agreed Order certify that they are fully authorized to sign for and legally bind the parties they represent. No change in ownership, corporate, or partnership

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

     12.    In the event that any terms of the Agreed Order are found to be invalid, the remaining terms shall remain in full force and effect and shall be construed and enforced as if the Agreed Order did not contain the invalid terms.
    
     The Respondent shall provide a copy of this Agreed Order, if in force, to any subsequent owners or successors before ownership rights are transferred. Respondent shall ensure that all contractors, firms and other persons performing work under this Agreed Order comply with the terms of this Agreed Order.

     This Agreed Order shall remain in effect until all of the following events have been completed:

    A. Respondent has completed all requirements of Section II., Paragraphs 2 and 3;

    B. IDEM issues a resolution of cause or "close out" letter to Respondent in this cause.

By:     _________________________        By:     _________________________
    Mark Stanifer, Section Chief                 Ron Sibert
    Office of Enforcement                    Registered Agent
                            
                            
Date: _______________                Date:     _______________

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

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

Date: _______________                Date: _______________

APPROVED AND ADOPTED BY THE INDIANA DEPARTMENT OF ENVIRONMENTAL MANAGEMENT THIS DAY OF , 2000.

                            For the Commissioner:

                            Signed 3/2/00
                            Felicia A. Robinson
                            Assistant Commissioner of Enforcement