                                STATE OF VERMONT

                            ENVIRONMENTAL COURT

                                               }
Secretary,                                     }
Vermont Agency of Natural Resources,           }
       Plaintiff,                              }
                                               }
             v.                                }      Docket No. 29-2-08 Vtec
                                               }
Steven Whitham, d/b/a Prospect Mountain,       }
      Respondent.                              }
                                               }

                                 Decision and Order

      On January 27, 2008, the Secretary of the Vermont Agency of Natural Resources

(ANR) issued an administrative order pursuant to 10 V.S.A. § 8008 regarding “Prospect

Mountain,” as Respondent.     After Steven Whitham timely requested a hearing in

Environmental Court on behalf of Prospect Mountain, the Secretary moved and was

granted permission to amend the administrative order to name Mr. Whitham as the

Respondent and to correct the location of the water system at issue in this case.

Respondent Steven Whitham represents himself; the Secretary of the Agency of Natural

Resources is represented by John Zaikowski, Esq.

      The Court extended the time for the hearing for good cause at the request of and

by agreement of the parties, to accommodate the schedules of the parties and to allow

discovery. The Court also extended the time for the issuance of the decision for good

cause. No environmental harm resulted from the delay.

      The statutes, rules and permits applicable to this matter are 4 V.S.A. Chapter 27;

10 V.S.A. Chapter 48, Groundwater Protection; 10 V.S.A. Chapter 56, Public Water

Supply; 10 V.S.A. Chapter 201; and the following sections of the Vermont Water Supply


                                           1
Rules1 (VWSR) and related federal regulations: VWSR Subchapter 21-6, § 6.6 and 40

CFR § 141.21 (water quality monitoring for coliform bacteria); VWSR Subchapter 21-6, §

6.8 and 40 CFR § 141.23 (water quality monitoring for nitrate); VWSR Subchapter 21-10,

§ 10.1 and 40 CFR § 141, Subpart Q (public notice); VWSR Subchapter 21-6, § 6.2.3

(microscopic particulate analysis for Ground Water Under the Direct Influence of

Surface Water determination). 10 V.S.A. § 8012(c)(2).



Findings

      Respondent Steven Whitham owns and operates a very small cross-country ski

area known as Prospect Mountain, in Woodford, Vermont. Respondent works outside

of the business in the summer to offset expenses and bring in extra income, but only has

an income of approximately $8,000 per year. Running the ski area has been getting

more difficult in recent years due to shorter seasons and less reliable snowfall. The area

primarily serves the local community; some local clubs and schools raise money to keep

the area going.

      Prospect Mountain serves a transient population during the ski season and

includes a restaurant licensed for occupancy of 75 people; the facility provides toilet

facilities with handwashing sinks, and provides food service. The facility provides

drinking water to more than twenty-five people per day during its season. It operates

seasonally each year from some time in November or December to some time usually in

April, depending entirely on weather and snow conditions, as it has no snowmaking

capability. Its operating season spans three quarterly reporting periods (fourth quarter,

first quarter and second quarter) for the ANR program (the Water Supply Division)

which administers the Vermont Water Supply statute and rules. Prior to some time in


1 Available at
http://www.vermontdrinkingwater.org/wsrule/Vermont%20WSR%20April%202005.pdf


                                            2
the early 1990s, a division of the Vermont Department of Health had been responsible

for the Vermont drinking water (water supply) program.

       The Prospect Mountain water system is a public water system that is classified as

a “transient non-community water system” under the Vermont Water Supply statute

and rules, as it serves at least twenty-five individuals daily on at least sixty days of the

year, but is not used by year-round residents or by the same twenty-five or more

individuals for more than six months per year. See 10 V.S.A. § 1671; VWSR § 21-2

“Public Water System”

       The ANR publishes and maintains on its website2 a handbook (The T[ransient]

N[on-]C[ommunity] Handbook) regarding the requirements for transient, non-

community water systems, including an appendix that includes lists of approved

laboratories for conducting the various tests required under the Water Supply Rules,

and includes three sample public notice flyers for notifying patrons of violations of

certain drinking water standards. The TNC Handbook as posted on the website is

dated on its front page: “February 2001 Edition,” although at page 3 of its text it states

that it is updated periodically and also warns that, in the case of any discrepancies

between the Handbook and the Water Supply Rules, that the Rules govern. The ANR

did not provide either the Water Supply Rules or the TNC Handbook in evidence; no

evidence was presented that Respondent had been provided with a copy of either. The

Notices of Violation issued to Respondent refer to a “public notice template” and a

“public notice certification form” as enclosures; no copies of these templates or forms

were provided in evidence, but they may be the same forms as found in the appendix to

the TNC Handbook.




2Available at
www.vermontdrinkingwater.org/tnc/TNChandbookMain.pdf and
www.vermontdrinkingwater.org/tnc/TNCappendices.pdf
                                             3
       The water source for the Prospect Mountain water system is a spring, rather than

a drilled well; it therefore is at risk for being affected by (under the influence of) surface

water, and for that reason being susceptible to bacterial contamination.

       All transient non-community water systems are required to perform certain

monitoring of their water, including for total coliform bacteria and for nitrate.

Monitoring consists of collecting a water sample according to a prescribed method,

having the sample analyzed by a qualified laboratory, and reporting the results to the

Water Supply Division. Transient non-community water systems must monitor for

total coliform on a quarterly basis, and for nitrate on an annual basis. Such sampling is

only required in each quarter in which the system is serving water to the public. In

addition to the periodic monitoring, systems using springs or shallow wells are

required to do additional testing to determine whether the ground water source is

under the direct influence of surface water (GWUDI). If coliform bacteria are detected,

more frequent samples may be required.

       The presence of coliform bacteria in drinking water is of concern because they

are an indicator of the presence of harmful organisms that could cause disease, and may

indicate a problem with the water system’s treatment system or distribution lines. The

presence of particular strains of coliform bacteria (E. coli) indicate that the water may be

contaminated with human or animal wastes. Infants, the elderly, and people with

compromised immune systems may particularly be at risk. Coliform contamination

requires that the water system advise its users that the water must be boiled for at least

five minutes before being used for drinking, washing of fruits and vegetables to be

eaten raw, and tooth brushing, and that bottled water must be made available.

       The presence of elevated nitrate levels in drinking water is a particularly serious

concern for infants below the age of six months, who can become seriously ill or die, as

their inability to process the nitrate deprives them of oxygen (so-called “blue baby”


                                              4
syndrome). Nitrate contamination requires the use of bottled water, as boiling only

makes the nitrate more concentrated.

      If the required monitoring for coliform and nitrate is not being done, the water

system is required to post or distribute the same public notice as if there has been

contamination, and to notify the ANR that the public notice has been accomplished.

VWSR § 10.3. The purpose of public notice is so that the users of the system do not rely

on the general assumption that drinking water supplied to the public is safe to drink.

The public notice may be accomplished by posting, by radio, or by hand or direct

delivery, as appropriate to the particular water system. VWSR § 10.2.4. The main

consideration is that the water system has done its best to reach every user. A template

for the public notice, and a certification form required to be returned to the ANR to

show that the public notice has been accomplished, is provided with each notice of

alleged violation of the monitoring requirements.

      Prior to some time in 2004, although the regulations had required quarterly

monitoring for total coliform, the ANR had only been requiring such sampling

annually. To assist transient non-community water systems to make the transition to

quarterly reporting, for approximately a year to a year-and-a-half prior to the first

quarter of 2005, the ANR’s Water Supply Division engaged a contractor to go to the

operators of these systems, and to teach them how to sample and inform them that

sampling would now be required quarterly.

      All transient non-community water systems, including Respondent’s system,

were advised by letter dated December 23, 2004, that the collection and monitoring of

routine samples by the Water Supply Division contractor would conclude with the first

quarter of 2005, and that thereafter the water systems would be responsible for their

own compliance with the total coliform quarterly monitoring, annual nitrate

monitoring, and other routine and specifically required follow-up monitoring.


                                           5
      Respondent was not open for business in the third quarter (July, August, and

September) in any calendar year. Respondent did not open for the 2006–07 season until

January 2007, due to a lack of snow in the fourth quarter of 2006. Thus, the quarters in

which Respondent was in fact open for business but did not monitor for coliform, after

the first quarter of 2005, were the second and fourth quarters of 2005, the first and

second quarters of 2006, and the first and second quarters of 2007.3 The Water Supply

Division accepted a sample taken by the Department of Health in the fourth quarter of

2007 to qualify as the required sample for that quarter.         Respondent sampled as

required for coliform in 2008.

       Respondent failed to perform annual monitoring for nitrate for 2005, for 2006

and for 2007. Although as of the date of trial Respondent had not provided an annual

sample for nitrate for 2008, he testified to his intention to do so just prior to the ski

area’s opening for the season towards the end of 2008, which would be sufficient to

comply for calendar year 2008.

      The bathroom sinks are the only places where the public has independent access

to water at the facility. From at least 2006, Respondent had posted hand-printed signs

in the bathrooms stating: “Do not drink the water.” However, he did not post the

specific notices using the “templates” or sample notice forms, regarding the potential

dangers of coliform or nitrates, in 2005, 2006, 2007, or the first two quarters of 2008.

After receiving the notices of violation, Respondent telephoned the ANR to tell them

that he had been posting his own signs, and sent a letter to ANR in January of 2008 to


3
   The ANR submitted into evidence the warning letter sent to Respondent regarding
his failure to monitor for coliform bacteria in the second quarter of 2005, and the
separate Notices of Alleged Violation sent to Respondent for failure to monitor for
coliform bacteria for each of the second, third, and fourth quarters of 2006, and the first
and second quarters of 2007. The ANR also submitted into evidence the Notices of
Alleged Violation sent to Respondent for failure to monitor for nitrate for 2006, and for
2007.
                                            6
tell them that he had posted his own signs, but did not send ANR the certification

notices regarding posting. Health Department inspectors who came twice a year to

inspect the restaurant did not state any problem with the hand-lettered signs;

Respondent did not distinguish between the apparent acceptance of the signs by the

Department of Health personnel and the notices from the ANR, as far as he understood

his responsibilities to the state.

       Although Respondent was required to perform four additional coliform samples

in December 2007, as one did not pass, and to perform five as well in January 2008, the

samples taken in February and March of 2008 did pass. While Respondent suspects

that the failures were due to his incorrect sampling methods, it is reasonable to

conclude that he similarly would have had to have done four additional samples at

least once each season had he done the sampling required in the 2005–06 season and in

the first two quarters of 2007.

       The cost of water sampling for coliform is approximately $15 per sample. The

cost of water sampling for nitrate is approximately $50 per sample. The ANR did not

present evidence of the avoided cost of delaying the MPA testing from 2007 to 2008, nor

of the cost of the public notice and certification to the ANR. Respondent’s avoided costs

were therefore $150 for the nitrate samples for 2005, 2006, and 2007; plus $270 for the

coliform samples, calculated as five coliform samples in the second quarter of 2005

(once plus four additional as discussed in the previous paragraph), seven coliform

samples for the 2005–06 season (once in each of three quarters plus four additional as

discussed in the previous paragraph), and six coliform samples for the 2006–07 season

(once in each of two quarters plus four additional as discussed in the previous

paragraph).

       In addition to the periodic monitoring for coliform and nitrate, because the

source for Respondent’s water system is a spring, and is therefore at risk for being

“groundwater under the direct influence of surface water” (GWUDI), Respondent was
                                           7
required to perform a microscopic particulate analysis (MPA) test during the high water

period between April 1 and June 1, and to submit the results to the Water Supply

Division by July 1. This was a more expensive test, but no evidence was presented as to

its cost. However, as this test was done in 2008, the only avoided cost attributable to

this test would be one year’s interest on the cost of the test.

       A representative of the Water Supply Division had inspected the system in

March of 2006, but did not send a formal notice to Respondent until February 2, 2007,

requiring him to perform microscopic particulate analysis testing between April 1 and

June 1 of 2007.    Respondent did not perform the required microscopic particulate

analysis until the relevant period of 2008; the Water Supply Division ruled as of June 15,

2008, that Respondent’s water source was determined not to be under the direct

influence of surface water, that is, that it had passed.

       The costs of enforcement expended by ANR on this case consisted of

approximately 40 hours of one ANR employee’s time, at $24 per hour, plus

approximately 7½ hours of another employee’s time at $22.27 per hour, for a total cost

of enforcement of $1127.



       Conclusions as to Violation (10 V.S.A. §8012(c)(1)):

       The statute requires this Court to determine whether a violation has occurred, 10

V.S.A. § 8012(b)(1), independently of reviewing and determining anew a penalty

amount under 10 V.S.A. § 8012(b)(4).

       By failing to monitor for coliform during the second and fourth quarters of 2005,

the first and second quarters of 2006, and the first and second quarters of 2007,

Respondent violated VWSR Subchapter 21-6, § 6.6 and 40 CFR § 141.21 (water quality

monitoring for coliform bacteria). By failing to perform annual monitoring for nitrate

for 2005, for 2006 and for 2007, Respondent violated VWSR Subchapter 21-6, § 6.8 and

40 CFR § 141.23 (water quality monitoring for nitrate).           By failing to perform
                                              8
microscopic particulate analysis in 2007, Respondent violated VWSR Subchapter 21-6, §

6.2.3 (microscopic particulate analysis for Ground Water Under the Direct Influence of

Surface Water determination). By failing to post adequate notice incorporating the

information on the public notice templates, and by failing to certify to the ANR that the

posting had been accomplished, Respondent violated VWSR Subchapter 21-10, § 10.1

and 40 CFR § 141, Subpart Q (public notice).



Determination of Order and Penalty (10 V.S.A. §8012(c)(3)):

       The Administrative Order contains no remedial provisions to correct any past

violations; rather, it contains directives for future compliance and a penalty. See 10

V.S.A. § 8012(b)(2).    Therefore, the Court must determine whether the compliance

directives are reasonably likely to achieve the intended result and must review and

determine anew an appropriate penalty amount for the violations by applying the

criteria set forth in 10 V.S.A. § 8010(b).

Penalty

       The Secretary seeks a penalty of $5,270.       A civil penalty must be basically

remedial in effect, rather than primarily punitive. The methodology inherent in the

statute and applied consistently by this Court has been to remove the economic benefit

gained from the violation, in order to carry out the statutory purpose of preventing the

unfair economic advantage obtained by persons who operate in violation of

environmental laws, 10 V.S.A. § 8001(2) and § 8010(b)(5),4 and then to apply the


4
   Effective July 1, 2008, the recapture of economic benefit was separated from the §
8010(b) penalty factors, and now may be recaptured in addition to the maximum
penalty amount. Compare §§ 8010(c)(1), (2). See 2008 Vt. Laws No. 191, available at
http://www.leg.state.vt.us/DOCS/acts.cfm?Session=2008 and codified in pertinent part
at 10 V.S.A. § 8010(c)(2). As Respondent’s actions for which penalties are sought
occurred prior to the date of this statutory change, 1 V.S.A. § 214 requires application of
the prior statute. In the present case, there is no practical difference in the result.
                                             9
remaining statutory factors to determine what additional penalty is needed, or whether

any mitigating factors should reduce any element of the penalty. That is, the entire

economic benefit first must be removed to carry out a primary purpose of the Uniform

Environmental Enforcement Act: to make it less expensive to comply with the law than

to violate it.

         Section 8010(b) requires the Court to consider the following factors in

determining the amount of the penalty: (1) actual or potential harm to human health

and the environment; (2) the presence of mitigating circumstances, including

unreasonable delay on the part of the Secretary in seeking enforcement; (3) whether the

Respondent knew or had reason to know the violation existed; (4) Respondent’s record

of compliance; (5) economic benefit gained by Respondent from the violation;5 (6)

deterrent effect of the penalty; (7) actual cost of enforcement; and (8) length of time the

violation has existed.

         Potential for Harm to Human Health, 10 V.S.A. § 8010(b)(1)

         Although Respondent’s failure to test and failure properly to warn the system’s

users of the potential for water contamination did not result in any actual harm to

public health, these violations are important due to the potential for harm to human

health from untested drinking water and especially if users of a water system are not

properly informed of the potential dangers from the untested water.

         Mitigating Circumstances, 10 V.S.A. § 8010(b)(2)

         Respondent presented evidence of the low-budget nature of his operation and

the community support for his low-cost cross-country ski area. That evidence has been

considered in the relatively low amount of the total penalty imposed in this case and

the relatively low amount necessary in this instance to achieve deterrence and obtain

compliance. Respondent’s negligible personal profit, or the financial difficulties of the


5   See footnote 4, above.
                                             10
business, however, does not excuse compliance with the laws and regulations required

to protect the public health, any more than a not-for-profit organization such as a

museum or a hospital, or a public institution such as the state Agency of

Transportation, would be excused from compliance with such regulations in the

operation of a café, snack bar, water fountain, or state highway rest area.

       ANR sought enforcement for the violations at issue within a reasonable time

frame. The Court has not found violations for the quarters or periods during which

Respondent’s ski area was not open for business, even though it was Respondent’s

failure to communicate with ANR that led it to issue the notices of alleged violation for

the summer quarters.

       Whether Respondent Knew or Had Reason to Know the Violation Existed, 10
       V.S.A. § 8010(b)(3)
       Respondent does not contest that he was made aware of the drinking water

testing requirements and the 2005 transition to the water systems’ responsibility for

carrying out and reporting the required testing. As to the posting of notice, based on

the attachments to the Notices of Alleged Violation, he had reason to know that his

posting of the hand-lettered notices was not adequate, and that he had to provide

certification of posting to the Water Supply Division of the ANR. His subjective belief

about the adequacy of his hand-lettered notices was based upon the fact that the Health

Department’s restaurant inspectors came to the facility twice a year and did not object

to the nature of the notices.

       Respondent’s Record of Compliance, Duration of the Violation, 10 V.S.A.

       § 8010(b)(4),(8)

       Respondent took three operating seasons:       2005–06, 2006–07, and 2007–08 to

come into compliance.




                                            11
       Economic Benefit Gained from the Violation, 10 V.S.A. § 8010(b)(5)

       Respondent’s economic benefit is represented by the avoided cost of doing the

testing, for a total of $420.

       Deterrent Effect of the Penalty, 10 V.S.A. § 8010(b)(6)

       Respondent has come into compliance with the coliform testing requirements,

the nitrate testing requirements, and the microscopic particulate analysis requirements,

and the system has been determined not to be at risk from the influence of surface

water. As of the time of trial the facility was closed for the summer; because Respondent

had not performed the 2008 monitoring for nitrate, the public notice requirement

remained in effect. All that remains is for Respondent to continue to perform the

required testing, to use the required public notice template if the system users have to

be notified in the future regarding coliform or nitrate, and to report the public notice

properly to the Water Supply Division.         Based on Respondent’s modest financial

situation, a relatively small amount of additional penalty should be adequate to achieve

deterrence, that is, to achieve future compliance with the requirements.

       Actual Cost of Enforcement, 10 V.S.A. § 8010(b)(7)

       ANR’s actual cost of enforcement, exclusive of attorney time which was not

presented in evidence, was approximately 40 hours of one ANR employee’s time, at $24

per hour, plus approximately 7½ hours of another employee’s time at $22.27 per hour,

for a total cost of enforcement of $1127.



       Taking all of the foregoing factors into account, the imposition of a total penalty

of $2,000 for the violations is appropriate in the present case, including $1127 in

enforcement costs and $420 in economic benefit (avoided cost of compliance), with an

additional $453 in recognition of the potential for harm, the need for future deterrence,

the length of time it took to achieve compliance, and the other factors discussed above.

                                            12
Prospective compliance

        Paragraphs B, C, D, E, F, G, and H of the Administrative Order required

Respondent to take the following actions:

        Paragraph B required Respondent to “issue Public Notice to the system’s users

for the failure to monitor for coliform and nitrate,” within 15 days of the effective date

of the Order. Paragraph C required Respondent to submit copies of the notices and the

completed “public notice certification forms” to the Water Supply Division (WSD) of

the ANR within 25 days of the effective date of the Order.

        Paragraph D required Respondent to conduct coliform monitoring for the system

in accordance with the VWSR and submit the results to the WSD within 30 days of the

effective date of the Order. Paragraph E required Respondent to conduct quarterly

monitoring for coliform commencing with the April 1, 2008 quarter (second quarter of

2008) and every quarter thereafter in accordance with the VWSR and to submit the

results to the WSD.

        Paragraph F required Respondent to conduct nitrate monitoring for the system

according to the VWSR and to submit the results to the WSD within 30 days of the

effective date of the Order.

        Paragraph G required Respondent to collect a water sample from the system

between April 1 and June 1 of 2008, and to conduct microscopic particulate analysis

(MPA) testing on it in accordance with the VWSR. Paragraph H required Respondent

to submit the results of the MPA testing to the WSD for review no later than July 1,

2008.    Respondent has complied with paragraphs G and H, so that the system was

ruled to be exempt from further requirements regarding GWUDI as of June 15, 2008.

        The order sections are therefore reasonably likely to achieve the intended result,

with modifications recognizing that Paragraphs G and H have been complied with, and

that the remaining requirements are prospective only.
                                            13
        Accordingly, taking all these factors into account, and based on the findings,

conclusions, and reasoning of this decision, it is hereby ORDERED and ADJUDGED

that:

        Paragraph A of the January 27, 2008 Administrative Order is vacated. On or

before May 1, 2009, Respondent shall pay a total penalty of $2000 for the violations, to

the State of Vermont, to be deposited in the general fund pursuant to 10 V.S.A. §8010(e).

Respondent and the ANR may discuss a payment schedule and propose it to the Court

as a modification of this order.

        Paragraphs B, C, D, E, F, G, and H are modified to read as follows, in light of the

evidence as to compliance as of the date of trial, and, as modified, are affirmed:

        B.    In the event that any required monitoring for coliform is not conducted or

is not timely conducted, or tests positive, Respondent shall immediately contact the

Water Supply Division at 1-800-823-6500 or 802-241-3400 and within 24 hours shall

issue Public Notice to the system’s users as provided in the current version of the TNC

Handbook or as otherwise instructed by the Water Supply Division.

        C.    In the event that any required monitoring for nitrate is not conducted or is

not timely conducted, or tests positive, Respondent shall immediately contact the Water

Supply Division at 1-800-823-6500 or 802-241-3400 and within 24 hours shall issue

Public Notice to the system’s users as provided in the current version of the TNC

Handbook or as otherwise instructed by the Water Supply Division.

        D. & E.      Respondent shall continue to conduct the monitoring for coliform

as required by the Vermont Water Supply Regulations once in each quarter in which

Respondent is open to the public, which the ANR expects normally to be in the first,

second and fourth quarters of each year.
                                            14
       F.     Respondent shall continue to conduct the monitoring for nitrate as

required by the Vermont Water Supply Regulations once in each year in which

Respondent is open to the public; Respondent expects normally to conduct the required

nitrate monitoring in the late fall of each year, prior to opening for business.



Rights of Appeal (10 V.S.A. §§ 8012(c)(4) and (5)):

       WARNING: This decision will become final if no appeal is requested within 10

days of receipt of this decision. Respondent and the Secretary of the Agency of Natural

Resources have a right to appeal this decision. The procedures for requesting an appeal

are found in the Vermont Rules of Appellate Procedure (V.R.A.P.) subject to the

Vermont Rules for Environmental Court Proceedings (V.R.E.C.P.) 4(d)(6). Within 10

days of receipt of this Order, any party seeking to file an appeal must file the notice of

appeal with the Clerk of this Court, together with the applicable filing fee. Questions

may be addressed to the Clerk of the Vermont Supreme Court, 111 State Street,

Montpelier, VT 05609-0801, (802) 828-3276. An appeal to the Supreme Court operates

as a stay of payment of a penalty, but does not stay any other aspect of an order issued

by this Court. 10 V.S.A. § 8013(d). A party may petition the Supreme Court for a stay

under the provisions of V.R.C.P. 62 and V.R.A.P. 8.



       Done at Berlin, Vermont, this 2nd day of March, 2009.




                            _________________________________________________
                                  Merideth Wright
                                  Environmental Judge




                                             15
