RE: City of Barre Sludge Management Program, Declaratory Ruling #284, Findings of Fact, Conclusions of Law, and Order October 11, 1994 VERMONT ENVIRONMENTAL BOARD 10 V.S.A. Chapter 151 Re: City of Barre Sludge Management Program Declaratory Ruling #284 FINDINGS OF FACT, CONCLUSIONS OF LAW, AND ORDER This decision pertains to whether a land use permit is required under 10 V.S.A Chapter 151 (Act 250) for the City of Barre's Sludge Management Program (the Sludge Program) and the City of Barre's Municipal Wastewater Treatment Plant (the Plant). As explained below, the Environmental Board concludes that the operation of the Sludge Program does not constitute the construction of improvements, and that the land used for the Sludge Program is not involved land with the Plant. Therefore, an Act 250 permit is not required for the Sludge Program. The Board also concludes that the Plant itself is, and remains subject to, Act 250 jurisdiction pursuant to Land Use Permit #500049 (the 1971 Permit) and amended Land Use Permit #500049-1 (the 1993 Permit). I. SUMMARY OF PROCEEDINGS On September 29, 1992, the City of Barre (Barre) requested an advisory opinion from the District #5 Environmental Coordinator regarding whether there was Act 250 jurisdiction over the Sludge Program. On October 27, 1992, the District #5 Environmental Coordinator issued Advisory Opinion #5-92-24 which advised that there was Act 250 jurisdiction over the application of sludge onto the tracts of farm land enrolled in the Sludge Program. The farm land enrolled in the Sludge Program is located in the Towns of Barre, Berlin, Calais, Orange, Williamstown, and Washington (the Area Farms). On November 25, 1992, Barre appealed from Advisory Opinion #5-92-24 to the Executive Officer of the Board and requested an advisory opinion. On March 3, 1993, counsel to the Board issued Advisory Opinion #EO-92-277 which advised that an Act 250 permit amendment to the 1971 Permit would be required prior to the application of sludge onto the Area Farms located in the Town of Barre, but that Act 250 jurisdiction did not extend to the application of sludge onto the remaining Area Farms. On April 1, 1993, Barre, pursuant to 10 V.S.A. § 6007(c), appealed from Advisory Opinion #EO-92-277 and petitioned for a declaratory ruling. On May 3, 1993, Board Chair Elizabeth Courtney convened a prehearing conference, and on May 7, 1993 a Prehearing Conference Report and Order was issued. In addition, a Notice of Filing of Petition for Declaratory Ruling was issued because not all persons and municipalities were properly notified of the petition for declaratory ruling filed on April 1, 1993. On May 14, 1993, the District #5 Environmental Commission (the District Commission) issued the 1993 Permit to Barre. The 1993 Permit authorizes the construction of improvements to the Plant (the 1993 Upgrade). On June 11, 1993, Barre appealed the 1993 Permit solely upon jurisdictional grounds. Barre contends that there is no jurisdiction over the Plant, including the 1993 Upgrade. On July 1, 1993, the Board deliberated on all party status requests. On July 9, 1993, the Board issued a Memorandum of Decision relative to the requests for party status. On July 9, 1993, the Board dismissed the appeal of the 1993 Permit because it concluded that the issue in the appeal would only duplicate one of the issues to be decided in this proceeding. On October 20, 1993, the Board convened an evidentiary hearing in Montpelier. The following parties participated in the hearing: City of Barre by Thomas Rounds, Esq. Town of Orange Planning Commission by David L. Childs Barent & Anne Stryker, Frank & Marilyn Johnson pro se Vermont League of Cities and Towns by Deborah L. Markowitz, Esq. At the conclusion of the hearing, the Board recessed the proceeding. On February 17, 1994, Board Chair Courtney appointed Board member Steve Wright as Acting Chair in this matter. On February 22, 1994, the Vermont Senate rejected the confirmation of Board Chair Courtney and Board members Ferdinand Bongartz and Terry Ehrich. The Board conducted a deliberative session on this matter on May 18 and October 11, 1994. On October 11, 1994, following a review of the evidence and arguments presented in the case, the Board declared the record complete and adjourned the hearing. This matter is now ready for decision. To the extent any proposed findings of fact and conclusions of law are included below, they are granted; otherwise, they are denied. II. ISSUES 1. Whether the land application of sludge by Barre onto the Area Farms constitutes development under 10 V.S.A. § 6001(3), and Board Rules 2(A)(4) and 2(D). 2. Whether, pursuant to 10 V.S.A. § 6001(3) and Board Rule 2(A)(4), the Area Farms are involved land with the 1993 Upgrade because they are incident to the use of the 1993 Upgrade. 3. Whether, pursuant to 10 V.S.A. § 6001(3) and Board Rule 2(F)(2) or 2(F)(3), the Area Farms are involved land with the 1993 Upgrade. 4. Whether the 1993 Upgrade is a material change to the Plant as permitted by the 1971 Permit under Board Rule 34(A). This issue includes two sub-issues: (i) whether the 1971 Permit has expired; and (ii) if not, whether the 1971 Permit is valid notwithstanding that the Plant, including the 1993 Upgrade, physically disturbs less than 10 acres. 5. Whether the 1993 Upgrade is exempt from Act 250 jurisdiction pursuant to 10 V.S.A. § 6081(c) or (d)(1). 6. Whether the Sludge Program is a substantial or material change to the Plant as permitted by the 1971 Permit under Board Rule 34(A). III. FINDINGS OF FACT 1. The Plant serves Barre and the Town of Barre. The Plant accepts both residential and commercial waste, but does not receive runoff from storm drains. 2. The Plant produces de-watered sludge as a by-product. The Sludge Program involves the spreading of the sludge on the Area Farms as fertilizer. Barre operates the Sludge Program. 3. The Agency for Natural Resources (ANR) authorized the operation of the Sludge Program pursuant to Interim Certification #I9303 (the Certification). The Certification is issued under 10 V.S.A. § 6605b. 4. The Plant is currently allowed to discharge 3.8 million gallons per day of effluent into the Stevens Branch of the Winooski River. Under Barre's National Pollutant Discharge Elimination System (NPDES) permit, the upper limit for effluent flow has been reduced to 3.4 million gallons per day. The reduction is based upon changes in Barre's population. 5. At present, the Plant physically disturbs 3.2 acres of land. The 3.2 acres is depicted on Exhibit B8 as "Parcel A." Barre's acquisition of Parcel A, the construction of the primary Plant buildings, and the commencement of the Plant's original operation, all date back to 1958-59. 6. The original, primary Plant buildings constructed in 1958-59 are the storage building, primary clarifiers No. 1 and No. 2, and digesters No. 1 and No. 2. 7. On June 9, 1971, Barre filed an application for an Act 250 permit with the District Commission. The application was for modifications and additions to the primary Plant buildings, and a new interceptor sewer (the 1971 Upgrade). 8. The 1971 Upgrade consisted of the installation of twin screw pumps, and the construction of the control building, aeration basins No. 1 and No. 2, chlorine contact tanks, and final clarifiers No. 1 and No. 2. The 1971 Upgrade was constructed on Parcel A. 9. Barre answered Question 16 of the 1971 Upgrade Act 250 application as follows: Acreage: A. Number of acres owned, or in which you have a legal interest, within 5 mile radius N/A B. Number of acres in entire tract Treatment plant, 15; Sewer, 6 C. Number of acres in this project Treatment plant, 2.5; Sewer 6 D. Number of acres previously developed Treatment plant, 2.6 E. When do you anticipate beginning the project September, 1971 F. When will this development or subdivision be completed July, 1973 10. On July 14, 1971, the District Commission issued the 1971 Permit. The 1971 Permit authorized the construction of the 1971 Upgrade. The 1971 Permit provided, in part: Permit Expiration Date: September 15, 1973 11. The 1971 Permit was issued subject to Findings of Fact and Conclusions of Law. The 1971 Permit's Findings of Fact and Conclusions of Law provided, in part: On the basis of the pleadings on file and the evidence adduced at the hearing, the District Environmental Commission #5 makes the following findings of fact: 2. [Barre] is owner in fee of a parcel of land approximately 15 acres in size in the City of Barre. The precise location of the area of development is shown on the map exhibits attached to the application. 3. [Barre] proposes to construct additions to the present sewage treatment plant located on the above mentioned site and to construct a new interceptor sewer indicated on the enclosed plans. * * * 5. The proposed development will not result in undue water or air pollution. * * * 7. The proposed development will not cause unreasonable soil erosion or reduction in the capacity of the land to hold water so that a dangerous or unhealthy condition may result. * * * The proposed development meets the requirements of Title 10 VSA, §6086, a permit will be issued to the applicant, the City of Barre. This permit will expire on September 15, 1973 at which time all construction must be complete unless an extension is obtained under Title 10 VSA, §6091. 12. Barre was unable to complete construction of the 1971 Upgrade by September 15, 1973. Therefore, on September 13, 1973, it filed a request for an extension with the District Commission. 13. On September 14, 1973, the District Commission issued a letter to Barre which provided, in part: [The District Commission] has reviewed your request for an extension of the [1971 Permit] and has agreed to grant that request. Therefore, the expiration date of Land Use Permit #500049 shall now read December 15, 1973. 14. On March 3, 1993, Barre filed a permit amendment application for the 1993 Upgrade. 15. On May 14, 1993, the District Commission issued the 1993 Permit authorizing the 1993 Upgrade. The 1993 Upgrade consists of the construction of a sludge storage bunker, a third secondary clarifier, and two oxidation ditches, and the installation of new sludge processing equipment. 16. The 1993 Upgrade will be constructed on Parcels B and C as depicted on Exhibit B8. Parcels B and C are adjacent to Parcel A. Parcel B is 2.3 acres. Parcel C is 3.4 acres, but it is part of a larger 6.05 acre tract. Therefore, after the 1993 Upgrade is completed, the Plant will, in total, physically disturb the 8.9 acres delineated by Parcels A, B, C, notwithstanding that Barre owns a total of 11.55 acres. The 8.9 acres will be enclosed by a chain-link fence. 17. The 1993 Upgrade will increase the Plant's sludge digestion capacity. In addition, the Plant will be able to store up to six months worth of accumulated sludge. 18. Barre expects to withdraw the stored sludge for application to the Area Farms during the spring and fall. There will be no intervening storage of the sludge between its removal from the Plant and its application onto the Area Farms. 19. In conjunction with the Sludge Program, Barre uses a one sentence landowner consent form which provides that the title owner of the property consents to the application of sludge from the Plant. There is no provision for monetary compensation to the landowner. Barre does not impose any restrictions on the landowner's right to sell or mortgage the land enrolled in the Sludge Program. 20. The landowners may withdraw their fields from the Sludge Program at any time without Barre's consent and without the imposition of any penalties by Barre. The only activity which Barre will conduct on farm land that is removed from the Sludge Program will be testing and monitoring as mandated by the Certification. 21. Farm land removed from the Sludge Program remains subject to the land use restrictions contained in the Certification. Barre provides a copy of the Certification to all of the land owners that participate in the Sludge Program, and informs them of the land use restrictions contained in the Certification. 22. Ultimately, Barre is responsible for compliance with the requirements of the Certification. Barre will terminate the participation of an Area Farm in the Sludge Program if the Area Farm is used in such a manner so as to violate the terms and conditions of the Certification. 23. Sludge contains heavy metals, and may contain other potentially hazardous compounds such as polychlorinated biphenyls (PCBs) or arsenic. The Certification limits the amount of heavy metals and other potentially hazardous compounds which may be present in the sludge when it is land applied. The Certification requires that the sludge be tested for concentration levels of heavy metals and other potentially hazardous compounds. The Certification also requires groundwater testing. 24. In addition to authorizing the construction of the 1993 Upgrade, the 1993 Permit also extends the expiration date of the 1971 Permit until April 1, 2043, unless extended by the District Commission. 25. On June 11, 1993, Barre appealed the 1993 Permit solely upon jurisdictional grounds. On July 9, 1993, the Board dismissed Barre's appeal of the 1993 Permit because it concluded that it would only duplicate one of the issues to be decided by this declaratory ruling proceeding. IV. NOTICE OF PRIOR DECISIONS AND THE CERTIFICATION The Board concludes that Barre's application for the 1971 Permit, the 1971 Permit, and the September 13 and September 14, 1973 correspondence between the District Commission and Barre should be considered part of the record. The Board may take notice whether requested or not, and may do so at any stage of the proceeding. See V.R.E. 201(c) and (f); In re Handy, 144 Vt. 610, 613 (1984). While the Board does not believe that taking notice is legally necessary, the Board will do so to ensure that the record is clear. See R.J. Colton Company, Inc., #9A0082-1R-2-EB, Findings of Fact, Conclusions of Law, and Order at 9 (Jan. 14, 1992). In addition, the Board will also take notice of the Certification. Notice of the 1971 Permit application, the 1971 Permit, the September 13 and 14, 1973 corres- pondence, and the Certification are hereby taken pursuant to 3 V.S.A. § 810. V. MOTION FOR RECONSIDERATION OF BOARD'S EVIDENTIARY RULING On November 1, 1993, The Town of Orange Planning Commission requested that the Board reconsider its decision to exclude Exhibits O7 and O8. The Board affirms its original decision to exclude Exhibits O7 and O8 as being untimely filed and as hearsay, and denies the motion for reconsideration. VI. CONCLUSIONS OF LAW 1. Whether the land application of sludge by Barre onto the Area Farms constitutes development under 10 V.S.A. § 6001(3), and Board Rules 2(A)(4) and 2(D). Under the provisions of 10 V.S.A. § 6001(3) and Board Rule 2(A)(4), "development" is the "construction of improvements" on a tract of land involving more than 10 acres which is to be used for municipal or state purposes. Under Board Rule 2(D), the "construction of improvements" means any physical action on a project site which initiates development. Therefore, the land application of sludge is a development if it is the construction of improvements under Board Rule 2(D). Black's Law Dictionary defines: "Construct" as "To build; erect; put together; make ready for use." "Construction" as "The creation of something new, as distinguished from the repair or improvement of something already existing." "Improvement" as "A valuable addition made to property (usually real estate) or an amelioration in its condition, amounting to more than mere repairs or replacement of waste, costing labor or capital, and intended to enhance its value, beauty or utility or to adapt it for new or further proposes." Black's Law Dictionary 283 and 682 (5th ed. 1979). "Construction of improvements" is a deliberately limited term which cannot be extended to include any activity that initiates any use of the land. In Re Agency of Administration, 141 Vt. 68 (1982). Rather, the only type of activity that triggers Act 250 is land development that is "the first step in a proven development project." Id. at 93. In Re: Town of Windsor, Declaratory Ruling #255 (July 30, 1992), the Board ruled that there is no physical change or alteration when sludge is placed on land. In Re: Donna Caplan, Declaratory Ruling #252 (May 18, 1994), the Board ruled that the land application of septage does not constitute either "construction" or "improvement" under Board Rule 2(D) and, therefore, was not development as defined by 10 V.S.A. § 6001(3) or Board Rule 2(A)(2). The Board concludes that the land application of sludge does not constitute "construction" or "improvement" under Board Rule 2(D) and, therefore, the Sludge Program does not constitute development under 10 V.S.A. § 6001(3) and Board Rules 2(A)(4). Therefore, Barre's application of sludge onto the Area Farms pursuant to the operation of the Sludge Program does not trigger Act 250 jurisdiction. Because the Board concludes that the land application of sludge is not the construction of improvements, we do not consider the issue of whether the land application of sludge by a municipality is exempt farming construction pursuant to Board Rule 2(A)(2). 2. Whether, pursuant to 10 V.S.A. § 6001(3) and Board Rule 2(A)(4), the Area Farms are involved land with the 1993 Upgrade because they are incident to the use of the 1993 Upgrade. Under 10 V.S.A. § 6001(3) and Board Rule 2(A)(4), Act 250 jurisdiction is triggered if the construction of improvements physically disturbs 10 or more acres on a single tract. The 1993 Upgrade will be constructed on Parcels B and C which, in aggregate, total 5.7 acres. Therefore, the construction of the 1993 Upgrade on Parcels B and C does not trigger Act 250 jurisdiction pursuant to 10 V.S.A. § 6001(3) and Board Rule 2(A)(4) unless the Area Farms are considered to be land which is incident to the use of the 1993 Upgrade. In Windsor, the Board ruled that, under Board Rule 2(A)(4), a 100-acre farm upon which sludge was to be spread was not incident to the use of the sludge's storage bunker since the sludge did not physically change or alter the land. Accordingly, the Board concludes that, under Board Rule 2(A)(4), the Area Farms are not incident to the use of the 1993 Upgrade since the sludge does not physically change or alter the Area Farms. 3. Whether, pursuant to 10 V.S.A. § 6001(3) and Board Rule 2(F)(2) or 2(F)(3), the Area Farms should be included as part of the involved land of the 1993 Upgrade. Under Board Rule 2(F)(2), "involved land" includes: Those portions of any tract or tracts of land within a radius of five miles owned or controlled by the same person or persons, which is incident to the use of the project. Under Board Rule 2(F)(3), "involved land" includes: Those potions of any tract or tracts of land within a radius of five miles owned or controlled by the same person or persons, which bear some relationship to the land actually used in the construction of improvements, such that there is a demonstrable likelihood that the impact on the values sought to be protected by Act 250 will be substantially affected by reason of that relationship. Board Rule 2(F)(2) and 2(F)(3) are applicable to municipal projects. Re: City of Montpelier, Declaratory Ruling #220 at 6 (July 13, 1990). Common to both Board Rule 2(F)(2) and 2(F)(3) is the issue of control. Black's Law Dictionary defines the term "control" as: To exercise restraining or directing influence over. To regulate; restrain; dominate; to hold from action; overpower; counteract; govern. Black's Law Dictionary 298 (5th ed. 1979). Barre uses a one sentence landowner consent form which provides that the title owner of the property consents to the application of sludge from the Plant. There is no provision for monetary compensation to the landowner. There are no restrictions on the landowner's right to sell or mortgage the land enrolled in the Sludge Program. Landowners may withdraw their fields from the Sludge Program at any time without Barre's consent and without the imposition of penalties by Barre. The only activity which Barre will conduct on farm land after it's removed from the Sludge Program will be testing and monitoring as mandated by the Certification. Based upon these circumstances, the Board concludes that Barre does not own nor control the Area Farms for purposes of Board Rule 2(F)(2) and 2(F)(3). Accordingly, the Area Farms enrolled in the Sludge Program are not counted towards the total amount of the 1993 Upgrade's involved land. 4. Whether the 1993 Upgrade is a substantial or material change to the Plant as permitted by the 1971 Permit under Board Rule 34(A). This issue includes two sub-issues: (i) whether the 1971 Permit has expired; and (ii) if not, whether the 1971 Permit is valid notwithstanding that the Plant, including the 1993 Upgrade, physically disturbs less than 10 acres. The 1971 Permit's Conclusion of Law stated that the 1971 Permit would "expire on September 15, 1973 at which time all construction must be complete unless an extension is obtained under Title 10 VSA, §6091." At Barre's request, the District Commission then extended the date until December 15, 1973. Based on this, Barre contends that the 1971 Permit expired in 1973, and that Act 250 jurisdiction cannot be "reimposed" because less than 10 acres is physically disturbed by the Plant and the 1993 Upgrade. In Re: Interstate Uniform Services, Declaratory Ruling #147 (Sept. 26, 1984), the Board ruled that those permits issued between 1971 and 1973 that only contained construction expiration deadlines had not expired because such permits did not conform to the requirements of 10 V.S.A. § 6090(a), that is, the requirement that all Act 250 permits have a second expiration date linked to the economic life of the development. The Interstate case originated from the District #5 Environmental Commission. Likewise, it was the District #5 Environmental Commission which issued the 1971 Permit to Barre. In fact, the 1971 Permit was issued 15 months before the District #5 Environmental Commission issued Interstate's permit, and the expiration language used in Barre's 1971 Permit and Interstate's permit is identical. Id. at 6. In recognition of the problems created by the issuance of permits without expiration deadlines, the Board adopted Board Rule 35(D). Board Rule 35(D) provides that permits issued with only construction expiration dates may be renewed with the addition of a permit expiration date which reflects the economic usefulness of the project. Accordingly, based upon the Board's ruling in Interstate and the purposes of Board Rule 35(D), we conclude that the 1971 Permit has not "expired." The second sub-issue to be considered pertains to whether the 1971 Permit is valid if the Plant, including the 1993 Upgrade, physically disturbs less than 10 acres. Barre obtained the 1971 Permit for a municipal project that physically disturbed less than 10 acres on a tract of land which, in 1971, Barre stated was 15 acres. Under current Board precedent, only that land which is physically disturbed is counted as "involved land" in municipal projects. This definition of involved land emerged from Board decisions which were subsequent to the issuance of the 1971 Permit. See Re: Town of Rutland, Declaratory Ruling #207 at 5 (May 5, 1989) and case cited therein. Barre contends that since the Plant does not physically disturb 10 or more acres, the District Commission lacked jurisdiction over the 1971 Upgrade, and thus, the 1971 Permit is void as a matter of law. Further, Barre contends that it can raise the issue of jurisdiction even though it obtained the 1971 Permit, did not appeal it when it was issued, and waited more than 20 years to challenge it. Based upon the Vermont Supreme Court's decision in In re Wildcat Construction Co., Inc., No. 91-523 (Vt. May 4, 1993), the Board concludes that the 1971 Permit is valid and that the Plant remains subject to it. In Wildcat, Wildcat Construction Co., Inc. operated a trucking business at a site in St. Albans since 1970. In 1983, Wildcat was issued an Act 250 permit which contained conditions as to the use of the property. Wildcat did not appeal the 1983 permit or challenge the district commission's jurisdiction. The 1983 permit was then amended in 1984. Under the 1984 permit amendment, the district commission reserved the right to re-open the case prior to June 1, 1989. In 1989, the district commission re-opened the case and found Wildcat in violation of its 1984 permit. The district commission forwarded its findings to the Board. The Board convened a revocation proceeding and, while declining to revoke the permit, imposed new permit conditions. Wildcat Construction Co., Inc. appealed to the Vermont Supreme Court. Before the Vermont Supreme Court, Wildcat challenged whether the district commission had jurisdiction to issue the 1983 permit. The Vermont Supreme Court stated: [Wildcat] first claims that the Board lacked Act 250 jurisdiction when it first issued the land use permit in 1983 because the project was less than ten acres and located in a town that had adopted permanent zoning and subdivision regulations. [Wildcat] did not challenge the district commission's jurisdiction in 1983 nor did it appeal the 1983 permit, and therefore the attachment of jurisdiction became final. (Emphasis added.) Id. at 2. The facts in this case are easily substituted for those in Wildcat: in 1971, Barre applied for and obtained the 1971 Permit. Barre did not challenge the District Commission's jurisdiction in 1971 and nor did it appeal the 1971 Permit. The 1971 Permit's findings and conclusions are final and not subject to attack in a subsequent application proceeding, whether or not they were properly granted in the first instance. In re Taft Corners Associates, Inc., 4 Vt. Law Week 138 (April 30, 1993). Therefore, the attachment of jurisdiction over the Plant became final and the 1971 Permit is valid and binding. See In re John Rusin, No. 93-325 (Vt. June 10, 1994); In re Denio, 158 Vt. 230, 234 (1992). Prior Board rulings support the Board's conclusion that jurisdiction does not dissolve based upon subsequent events. For example, in Re: Richard Farnham, Declaratory Ruling #250 (July 17, 1992), the Board ruled that once construction had commenced on a housing project subject to Act 250, jurisdiction remained notwithstanding the sale of the property to an individual who would not have required a permit had the construction begun under his ownership. In the context of a subdivision created and sold without the required Act 250 permit, the Board ruled that jurisdiction is not released upon the sale of the land to a party who did not create the subdivision. Re: Stevens and Gyles, Declaratory Ruling #240 (May 8, 1992). When Barre submitted its application for the 1971 Permit, it represented that the tract was 15 acres in size. The District Commission took jurisdiction over the 1971 Upgrade as a municipal improvement on a tract of land greater than 10 acres. It was incumbent upon Barre to challenge Act 250 jurisdiction over the 1971 Upgrade when it originally applied for the 1971 Permit instead of now trying to rely on subsequent Board precedent which limits municipal jurisdiction to those instances where 10 or more acres is physically disturbed. Accordingly, the Board concludes that the 1971 Permit is a valid and binding Act 250 permit. Having concluded that the 1971 Permit is valid and binding, we next consider whether the 1993 Upgrade triggers Act 250 jurisdiction as either a substantial or material change to the 1971 Permit. Board Rule 34(A) provides that a permit amendment is required for any substantial or material change in a permitted project. Since the 1971 Permit is valid, any proposed change in the Plant has the potential to be either a substantial or material change. "Material change" is defined in Board Rule 2(P) as an "alteration to a project which has a significant impact on any finding, conclusion, term or condition of the project's permit and which affects one or more values sought to be protected by the Act." The Board's material change test involves a two-step analysis. First, the Board must find that an alteration has taken place or will take place. This alteration may be either a physical change or a change in use. Re: Mount Mansfield Co., Inc., Declaratory Ruling #269 (July 22, 1992); Re: Town of Sunderland, Declaratory Ruling #200 at 10 (June 24, 1988). Second, the Board must find that the alteration has a significant impact on any finding, conclusion, term or condition of the project's permit and that the alteration affects one or more of the values Act 250 protects. With regard to alterations, the 1993 Upgrade involves the construction of a sludge storage bunker, a third secondary clarifier, and two oxidation ditches on 5.7 acres of previously undisturbed land. These alterations will have significant impacts with regard to the findings of fact made in the 1971 Permit relative to criteria 1 (air pollution), 4 (soil erosion), and 9(F) (energy conservation). By having a significant impact on these findings, the 1993 Upgrade also affects the Act 250 values because each of these findings relates to compliance with the specified criterion. The "Act 250 values" are the values protected by the Act 250 criteria since it is through achieving compliance with those criteria that the public and the environment are protected. See Mount Mansfield at 14. The Board concludes that in this case, the 1993 Upgrade is subject to Act 250 jurisdiction as a material change to the 1971 Upgrade and, therefore, we conclude that the 1993 Permit is valid and binding upon Barre. Because we have concluded that the 1993 Upgrade is a material change to the 1971 Upgrade, we do not reach the issue of whether the 1993 Upgrade is a substantial change under Board Rule 34. In the future, however, it is possible that changes to the Plant may be substantial changes under Board Rule 34. 5. Whether the 1993 Upgrade is exempt from Act 250 jurisdiction pursuant to 10 V.S.A. § 6081(c) or (d)(1). 10 V.S.A. § 6081(c) applies where a solid waste management facility is authorized by a provisional certification issued pursuant to 10 V.S.A. § 6605d. Barre's Certification is an interim certification issued pursuant to 10 V.S.A. § 6605b. Therefore, 10 V.S.A. § 6081(c) is not applicable in this case. With regard to 10 V.S.A. § 6081(d)(1), because we conclude that the 1971 Permit is valid and binding, we conclude that the 1993 Upgrade is not exempt from Act 250 jurisdiction pursuant to 10 V.S.A. § 6081(d)(1). In Re: Village of Waterbury Water Commissioners, Declaratory Ruling #227 (Feb. 5, 1991), and again in the Windsor decision, the Board ruled that 10 V.S.A. § 6081(d)(1) only applies where a substantial change is proposed to a pre-existing development. Because the 1971 Permit is a valid and binding permit, the 1971 Upgrade is not a pre-existing development. Therefore, 10 V.S.A. § 6081(d)(1) is not applicable to the 1993 Upgrade. 6. Whether the Sludge Program is a substantial or material change to the Plant as permitted by the 1971 Permit under Board Rule 34(A). The Board concludes that the application of sludge onto the Area Farms pursuant to the Sludge Program is neither a substantial nor material change to the 1971 Upgrade. With regard to material change, the land application of sludge onto the Area Farms does not entail any physical changes to the Plant. Nor does the land application of sludge result in any change in the use of the Plant. The Plant's function has always been to process wastewater. With regard to substantial change, because the land application of sludge onto the Area Farms does not entail any physical changes to the Plant, the Sludge Program is not a substantial change. See In re Barlow, 4 Vt. Law Week 199 (1993); In re H.A. Manosh Corp, 147 Vt. 367 (1986); Re: Village of Waterbury Water Commissioners, Declaratory Ruling #227 at 16 (Feb. 5, 1991). VII. ORDER 1. No Act 250 permit is required for the land application of sludge onto the Area Farms pursuant to the Sludge Program since such activity does not constitute development under 10 V.S.A. § 6001(3), and Board Rules 2(A)(4) and 2(D). 2. The Area Farms are not incident to the use of the 1993 Upgrade under Board Rule 2(A)(4). 3. The Area Farms are not included in the involved land of the 1993 Upgrade under Board Rule 2(F)(2) and 2(F)(3) because Barre does not own or control the Area Farms enrolled in the Sludge Program. 4. The 1971 Permit has not expired, and is legally valid and binding pursuant to its terms and the terms of the 1993 Permit. 5. An Act 250 permit is required for the construction of the 1993 Upgrade since the 1993 Upgrade is a material change pursuant to Board Rule 2(P) and 34 to the 1971 Upgrade, and the 1993 Permit is valid and binding upon Barre. 6. The 1993 Upgrade is not exempt from Act 250 jurisdiction pursuant to 10 V.S.A. § 6081(c) or (d)(1). 7. The application of sludge onto the Area Farms pursuant to the Sludge Program is neither a substantial nor material change pursuant to Board Rule 2(G), 2(P), and 34 to the 1971 Upgrade. Dated at Montpelier, Vermont this 11th day of October, 1994. ENVIRONMENTAL BOARD \s\Steve E. Wright Steve E. Wright, Acting Chair William Martinez Samuel Lloyd Arthur Gibb Jean Richardson, participated pursuant to 3 V.S.A. § 849 c:\ccm\decision\dr284.dec (d3)