WAUCONDA SAND AND GRAVEL IS LOCATED IN LAKE COUNTY, ILL., ABOUT TWO MILES NORTH OF THE VILLAGE OF WAUCONDA AND 3 MILES EAST OF THE VILLAGE OF ISLAND LAKE. 5640 PEOPLE LIVE WITHIN TWO MILES. THE 80-ACRE SITE IS A CLOSED AND COVERED LANDFILL OWNED BY THE WAUCONDA SAND AND GRAVEL CO., WHICH IS A CLOSED FAMILY CORPORATION WHOSE PRINCIPAL SHAREHOLDER IS JOHN OBENAUF. THIS SITE WAS USED AS A LANDFILL FOR ABOUT 30 YEARS UNTIL IT WAS CLOSED IN JULY 1978. THE LANDFILL WAS OPERATED WITHOUT A STATE PERMIT UNTIL 7/7/77. EARLY OPERATION OF THE LAND- FILL CONSISTED OF DUMPING REFUSE INTO THE UNLINED PIT WHICH WAS EXCAVATED BELOW THE WATER TABLE. NO APPARENT EFFORT WAS MADE TO CONTROL LEACHATE MIGRATION. THE EPA HAS DETERMINED THAT THE LEACHATE EMANATING FROM THE LANDFILL HAS CONTAMINATED THE GROUND WATER AND SURFACE WATER IN THE VICINITY OF THE LANDFILL. ANALYSES OF BOTH MONITORING AND RESIDENTIAL WELL SAMPLES REVEAL LOW LEVELS OF CONTAMINANTS INCLUDING IRON, PHENOLS, PCB'S, 2,4-DIMETHYL- PHENOL AND METHYLPENTANONE. LEACHATE CONTAMINATED WITH LOW LEVEL OF PCB'S HAS ALSO BEEN DETECTED ENTERING MUTTON CREEK DIRECTLY NORTH OF THE LANDFILL. THE ILLINOIS ATTY GEN'L AND THE IEPA HAVE HELD COMPLIANCE CONFERENCES WITH MR. JOHN OBENAUF, HIS ATTORNEY AND ENGINEER ON 3/6/81, 6/23/81, 5/12/82, AND 12/10/82. THE COMPLIANCE CONFERENCES WERE HELD IN HOPES OF NEGO