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Golden Wings Aviation - Order, February 7, 1994

Order, February 7, 1994

STATE OF NEW YORK : DEPARTMENT OF ENVIRONMENTAL CONSERVATION

In the Matter

of

the Motion for a Summary Order for alleged violations of
the Environmental Conservation Law ("ECL") Article 17 and Title 6 of
the Official Compilation of Codes, Rules and Regulations of the State of New York
("6 NYCRR")Part 612 (Registration of Petroleum Storage Facilities) &
Part 613 (Handling and Storage of Petroleum)
Case No. R8-1006-93-09

- by -

GOLDEN WINGS AVIATION, INC.
8267 East Main Street
LeRoy, Genesee County
New York 14482

Respondent

WHEREAS:

  1. This proceeding was commenced by service of a Notice of Hearing and Complaint dated November 3, 1993 on Respondent Golden Wings Aviation.
  2. Upon review of ALJ O'Connor's Report (copy attached), I concur with and adopt its Finding of Facts, Conclusions and Recommendations.
  3. I find the Respondent in violation of the following sections of regulations pertaining to the bulk storage of petroleum products: 6 NYCRR 613.5(a) for failure to test its four underground storage tanks for tightness. Violation of this section of the regulations also constitutes violation of ECL Article 17, Title 10 (Control of the Bulk Storage of Petroleum).
  4. I find there are no mitigating factors to be considered and the recommendations of the Department Staff and ALJ are appropriate in this case.

NOW, THEREFORE, have considered this matter, it is ORDERED that:

  1. The Respondent is assessed a civil penalty of twenty-five thousand dollars ($25,000) which shall be due and payable thirty (30) days after service of this Order on Respondent or its designated representative.
  2. That within thirty (30) days of the service by a conformed copy of this Order, Respondent shall provide to the Department the results of tightness tests on its four underground storage tanks.
  3. In the alternative, within thirty (30) days of the service of this Order on Respondent, Respondent shall provide the Department Staff with approvable plans for permanent closure of its four underground storage tanks.
  4. The Department shall be authorized to enter and inspect Respondent's facility for the purpose of ascertaining compliance with the ECL, the regulations promulgated thereunder, and the terms and conditions of this Order.
  5. All communications between Respondent and the Department concerning this Order shall be made to the Department's Region 8 Director, NYS Department of Environmental Conservation, 6274 East Avon-Lima Road, Avon, New York 14414.
  6. The provisions, terms and conditions of this Order shall bind the Respondent, its officers, directors, agents, servants, employees, successors and assigns and all persons, firms and corporations acting for or on behalf of the Respondent.

For the New York State Department
of Environmental Conservation

_____________/s/_____________
By:THOMAS C. JORLING,
COMMISSIONER

Dated: February 7, 1994
Albany, New York

Golden Wings Aviation
Brian R. Poliner, President
8267 East Main Street
LeRoy, New York 14482

Peter Bush
Region 8 Director
New York State Department of
Environmental Conservation
6274 East Avon-Lima Road
Avon, New York 14414

Leo J. Bracci, Esq.
Assistant Region 8 Attorney
New York State Department of
Environmental Conservation
6274 East Avon-Lima Road
Avon, New York 14414

STATE OF NEW YORK
DEPARTMENT OF ENVIRONMENTAL CONSERVATION

PROCEEDINGS

On November 9, 1993, the New York State Department of Environmental Conservation (the "Department" or "DEC"), through its Region 8 Office, located at 6274 East Avon-Lima Road, Avon, New York 14414, served a Notice of Hearing and Complaint dated November 3, 1993 upon Golden Wings Aviation (the "Respondent"), 8267 East Main Street, LeRoy, Genesee County, New York 14482. Service was by Certified Mail, Return Receipt Requested. The U.S. Postal Service Domestic Return Receipt was signed for the Respondent by Carol Poliner for a delivery date of November 9, 1993. The Complaint was answerable not later than November 29, 1993. The Respondent did not respond to the Notice of Hearing and Complaint as required by Title 6 of the Official Compilation of Codes, Rules and Regulations of the State of New York ("6 NYCRR") 622.5.

Subsequently, as scheduled in the Notice of Hearing, the Department's Administrative Law Judge ("ALJ") presiding in this matter, Robert P. O'Connor, held a proceeding to hear the Department Staff's charges. The hearing, at 11:30 A.M. on December 15, 1993 in the Department's Region 8 Office, 6274 East Avon-Lima Road, Avon, New York, was conducted as a default hearing, because the Respondent did not appear, either by a corporate officer or by a representative. The Department Staff appeared by Leo J. Bracci, Esq., Assistant Region 8 Attorney. The Staff called one witness, Wendy Stevenson, a Water Program Specialist in the Department's Bureau of Bulk Storage, Division of Spills Management.

The record of the proceeding officially closed on December 23, 1993, when the stenographic transcript of the hearing was received in the Department's Office of Hearings in Albany, New York.

Department Staff Position

The Complaint pursuant to 6 NYCRR Part 622 (Uniform Enforcement Hearing Procedures), set forth the Department Staff's allegations that Respondent is in violation of Environmental Conservation Law ("ECL") Article 17, Title 10 (Control of the Bulk Storage of Petroleum), and 6 NYCRR Part 613 (Handling and Storage of Petroleum).

The Staff alleges that Respondent failed to timely conduct tightness testing on four underground petroleum tanks, each with a capacity in excess of 1,100 gallons, at its petroleum bulk storage ("PBS") facility in LeRoy, New York.

The Relief Sought

The penalty provisions of ECL 71-1929 provide for the assessment of a civil penalty of not more than $25,000 per day for each violation of Title 10 of ECL Article 17 or any of the rules and regulations promulgated to implement the "petroleum bulk storage control law."

In the instant case, the Department Staff alleges Respondent has violated tightness testing provisions for underground petroleum storage tanks for each of four tanks owned and operated by Respondent. The Department Staff seeks assessment of a monetary penalty of $25,000 and an order that Respondent either immediately test its underground storage tanks in accordance with the applicable regulations or close the PBS facility..

Respondent's Answer

As noted above, Respondent did not provide an Answer to the Complaint or appear at the hearing on December 15, 1993.

FINDINGS OF FACT

  1. Respondent, Golden Wings Aviation, operates a PBS facility in conjunction with an airline (air taxi) business located at 8267 East Main Street, LeRoy, Genesee County, New York 14482.
  2. On May 4, 1992, the Department Staff received a Petroleum Bulk Storage Application dated April 30, 1992 and a registration fee of $250 from Brian R. Poliner, Respondent's President, for Respondent's LeRoy facility. Respondent noted that the application was to reflect a change in ownership for the facility.
  3. The date the Petroleum Bulk Storage Application is received in the Region 8 office is the date the Department Staff considers the facility to have been registered. The Staff issued a Petroleum Bulk Storage Registration Certificate for the facility, with the registration number 8-079928 and the date May 4, 1992. The registration certificate expires on May 4, 1997.
  4. Located at the site of Respondent's PBS facility are four storage tanks for petroleum products having an aggregate storage capacity of more than 1,100 gallons. Underground tank numbers 001, 002 and 003 each have a capacity of 4,000 gallons. The Department's records indicate these three tanks were originally installed in May 1974. Underground tank number 004, installed in May 1979 according to the Department's records, has a capacity of 2,000 gallons. Respondent's PBS Application form lists all four tanks as having been installed in January 1977.
  5. All four tanks at Respondent's PBS facility are of steel/carbon steel construction and have no known internal or external protection against leaking or corrosion. None of the four tanks has any secondary containment measures or any leak detection provisions. Respondent lists all four tanks as storing unleaded gasoline.
  6. All of the underground tanks at Respondent's PBS facility are subject to the periodic tightness testing and reporting requirements in 6 NYCRR 613.5. On the PBS Application form, Respondent listed all four underground tanks as having been last tested in December 1989. Respondent did not provide any documentation to the Department that the tanks had been tested in 1989, and the Department has no record of such test results.
  7. The Department's records show the tanks as having been last tested in December 1987, and the Department Staff so noted this date when it issued the PBS Registration Certificate on May 4, 1992. The Staff also noted on the Certificate that the tanks were next due for testing in December 1992.
  8. On April 1, 1993, the Department Staff sent Respondent a letter, via First Class Mail, to the attention of Brian R. Poliner, listing the four tanks at Respondent's PBS facility and noting the overdue testing date of December 1992. The letter also noted that Respondent would have to test the tanks immediately to bring the facility into compliance with the PBS regulations in 6 NYCRR Part 613. The letter detailed the information required by the Department in the tank tightness test reports and advised Respondent to contact the Department Staff with any questions. The letter was not returned to the Department as being undeliverable by the U.S. Postal Service.
  9. On July 7, 1993, the Department Staff subsequently sent Respondent, attention Brian R. Poliner, via Certified Mail, Return Receipt Requested, a Notice of Violation/Compliance Directive citing the failure of Respondent to tightness test its four underground tanks by the testing due date of December 1992. Staff directed Respondent to test the tanks or permanently close the facility within 30 days and noted that failure to comply would result in the Staff "seeking injunctive relief and the assessment of penalties as provided by law." A representative of Respondent, whose signature on the U.S. Postal Service Domestic Return Receipt is illegible, verified receipt of the Notice of Violation/Compliance Directive by Respondent on July 9, 1993.
  10. 10. A member of the Department Staff did a site inspection at Respondent's facility prior to the Staff's issuance of the PBS Registration Certificate in May 1992. However, the Staff did not verbally contact the Respondent or physically visit Respondent's PBS facility in LeRoy, New York after December 1992 and prior to initiating its Notice of Hearing and Complaint on November 3, 1993. All notifications to Respondent of its alleged noncompliance were by written documents as noted above.
  11. The Department Staff indicated at the hearing that the cost of tightness testing of Respondent's four underground storage tanks would be approximately $300 to $500 per tank.

REGULATORY CRITERIA

The applicable regulations in this matter, 6 NYCRR Parts 612 and 613, became effective on December 27, 1985.

Facility or storage facility is defined in pertinent part in 6 NYCRR 612.1(c)(10) as one or more stationary tanks, with associated piping and fittings, which have a combined storage capacity of over 1,100 gallons of petroleum at the same site. A facility may include both aboveground and underground tanks.

Existing facility is defined in 6 NYCRR 612.1(c)(9) as a facility which has been constructed and is capable of being operated as of the effective date of the regulations.

Testing Requirements

The schedule for periodic tightness testing of the underground storage tanks at the Respondent's facility is set forth in 6 NYCRR 613.5(a)(1)(ii): "Any tank and piping system which is due for an initial test within the first year of the effective date of these regulations or any tank which is of unknown age must be tested within two years of the effective date of these regulations."

Additionally, Table 1 of 6 NYCRR 613.5(a) provides that an initial test for tightness is required to be performed on an unprotected tank when the tank is 10 years old and that the tank be retested every 5 years thereafter until permanently closed.

The testing schedule further requires, pursuant to 6 NYCRR 613.5(a)(1)(v): "If for any reason, testing or inspection is not performed as required in this section, the tank or piping system must be replaced . . . or taken out of service pursuant to the requirements of section 613.9 of this Part."

Notification Requirements

The notification requirements pertaining to modification of facilities are set forth in 6 NYCRR 612.2(d): "Within 30 days prior to substantially modifying a facility, the owner must notify the department of such modification on forms supplied by the department."

Closure Requirements

The pertinent requirements for closure of underground tanks which are permanently out of service are set forth in 6 NYCRR 613.9(b)(1): "Any tank or facility which is permanently out of service must comply with the following:

(i) Liquid and sludge must be removed from the tank and connecting lines. Any waste products removed must be disposed of in accordance with all applicable State and Federal requirements.

(ii) The tank must be rendered free of petroleum vapors. Provisions must be made for natural breathing of the tank to ensure that the tank remains vapor-free.

(iii) All connecting lines must be disconnected and removed or securely capped or plugged. Manways must be securely fastened in place. . .

(v) Underground tanks must either be filled to capacity with a solid inert material (such as sand or concrete slurry) or removed. If an inert material is used, all voids within the tank must be filled. . . ."

Further, in 6 NYCRR 613.9(b)(2): "Storage tanks or facilities which have not been closed pursuant to paragraph (1) of this subdivision are subject to all the requirements of this Part and Part 612 of this Title, including but not limited to periodic tightness testing, inspection, registration and reporting requirements."

The requirements for reporting of out-of-service tanks are set forth in 6 NYCRR 613.9(c): "The owner of a tank or facility which is to be permanently closed must notify the department within 30 days prior to permanent closure of the tank or facility pursuant to the requirements of section 612.2(d) of this Title."

CONCLUSIONS

  1. The four existing underground storage tanks at the petroleum bulk storage facility owned by Respondent Golden Wings Aviation and located at 8267 East Main Street, LeRoy, Genesee County, New York, were properly tested for tightness in December 1987, within two years of the effective date of the regulations which require such testing.
  2. Respondent's four underground storage tanks, as noted on Respondent's PBS Registration Certificate dated May 4, 1992, were due to be tested again for tightness not later than December 1992, according to the schedule set forth in 6 NYCRR 613.5.
  3. Respondent did not test its four underground tanks for tightness by the testing due date of December 1992. Respondent did not respond to the Staff's notifications in April 1993 and July 1993 that the tightness testing of its tanks was overdue.
  4. By not testing its four unprotected underground storage tanks during the "every five year" schedule set forth in Table 1 of 6 NYCRR 613.5(a)(1), with its tanks to have been tightness tested not later than December 1992, Respondent violated the provisions of 6 NYCRR 613.5(a)(1). Failure to test each tank represents a separate violation.

PENALTY DISCUSSION

The papers before me do not indicate whether the Department Staff provided Respondent with a copy of the Department's Civil Penalty Policy which, among other subjects, outlines the Department's procedures for calculating penalties, and also the Department's Bulk Storage and Spill Response Enforcement Guidance Memorandum. This latter program-specific document discusses, among other matters, the prioritization of various types of violations of the petroleum bulk storage regulations.

The Department's Civil Penalty Policy requires that all monetary penalty calculations must begin with the potential statutory maximum dollar amount which could be assessed. The policy states the penalty should equal the "gravity component," plus the "benefit component," plus or minus any adjustments.

The benefit component of the penalty is an estimate of the economic gain accrued to the violator by not complying with the statute or regulations and the gravity or seriousness of the violations. In this case, the Staff has mentioned the economic gain recognized by the Respondent would be as much as $2,000, i.e. - the savings of up to $500 to test each of four tanks. Therefore, for purposes of this discussion, the benefit component should be considered to be $2,000.

The seriousness of the violations requires a determination regarding the "gravity factors":

(a) potential harm and actual damage caused by the violations; and

(b) relative importance of the type of violations in the context of the Department's overall regulatory scheme. Here, the Department Staff has noted that Respondent's underground tanks are unprotected bare steel tanks which are now well over 15 years old, and as such, they represent a potential environmental threat via corrosion and leakage of gasoline into the surrounding soil and groundwater. Furthermore, because Respondent's tanks hold gasoline, any instance of leaking could cause an accumulation of fumes which could then pose a fire safety threat. Since there are four individual tanks, the Department Staff view each tank as singly posing a significant environmental threat and risk.

Moreover, the Department Staff considers the significance of Respondent's violations to be relatively important to the Department's regulatory process. Respondent's failure to test the tanks for tightness represents noncompliance with the petroleum bulk storage regulations in 6 NYCRR Part 613. This category of violation is characterized by the guidance memorandum as a "Highest Priority Violation - Tier #1", a violation to be resolved expeditiously. Under the terms of the regulations in 6 NYCRR Part 613, Respondent is obligated to either test the tanks in accordance with the five year schedule or to permanently place them out of service.

The above noted violations are important in the Department's overall mandate from the Legislature and the Governor to carry out its statutory obligations. The tightness testing requirements are necessary, particularly in instances such as the Respondent's facility, to ensure that old, unprotected underground storage tanks have not corroded to the point where their continued use presents a threat to the environment.

In the Civil Penalty Policy, the factors which may be used to adjust the gravity component of the penalty are:

(a) culpability,

(b) violator cooperation,

(c) history of non-compliance,

(d) ability to pay, and

(e) unique factors.

The Civil Penalty Policy states the culpability factor will be used only to increase the amount of an assessed penalty. Based upon the papers before me, there is no justification for an upward adjustment of any penalty in this case. Indeed, the Staff seeks a penalty substantially less than the maximum allowed by law. Therefore, culpability is not a factor.

With respect to violator cooperation, despite several written notifications from the Department Staff regarding the requirements for testing its underground storage tanks for tightness, Respondent did not test the tanks for tightness.

Although Respondent was well aware of both its obligations to comply with the petroleum bulk storage regulations and its liabilities for not doing so, Respondent has not even responded to the Department Staff's notifications, nor did Respondent appear at the hearing. Therefore, Respondent has been totally uncooperative in remedying the violations.

The Respondent has no history of prior environmental violations. Therefore, history of non-compliance is not a factor in the instant case.

Any adjustment to a penalty calculation based on the Respondent's ability to pay normally requires a significant amount of financial information specific to the violator. The burden to demonstrate inability to pay rests solely with the Respondent. The record in this instance is devoid of any such information from Respondent.

The civil penalty policy provides that the penalty calculation can be adjusted up or down for factors which are not anticipated in the policy document. No unanticipated factors exist in this instance.

With respect to the assessment of a civil penalty, in its closing remarks at the hearing the Department Staff provided an adequate explanation of how the requested penalty amount, $25,000, was determined.

Since the Staff's recommended monetary penalty is already well below the maximum penalty allowed by law for the violations committed, all of the above considerations are obviously reflected in the Staff's penalty request. In this regard, since the Staff's charges were proven, the Staff's penalty recommendation should be accepted as reasonable. Based upon all the above information, there is no justification to modify the Staff's request for relief in this case.

RECOMMENDATIONS

Since Respondent has committed multiple violations of the Environmental Conservation Law and accompanying regulations by its failure to test its four underground storage tanks for tightness, I recommend Respondent be assessed a civil penalty in the amount of twenty-five thousand ($25,000) dollars.

I further recommend that Respondent be ordered to immediately either complete the tightness testing of its four underground storage tanks or permanently close its four tanks.

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