UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, O.C. 20460
DEC I I 1989
OSWER
Or
SOLID WASTE AND EMERGENCY RESPONSE
Directive: 9200.3-08
MEMORANDUM
SUBJECT: Flexible Funding in the Regional Extramural
Operating Plan — Super fund Management Review,
Recommendation #10
FROM: /.vDon R. Clay
, ^Assistant Administrator
j
TO: Waste Management Division Directors, Regions I-X
Purpose;
The purpose of this memorandum is to reinforce and clarify
the funding flexibility currently available to the Regions and to
discuss the FY 90 flexible funding initiatives and funds control
process.
Background;
In June 1988, the Assistant Administrator of the Office of
Solid Waste and Emergency Response (OSWER), following
recommendations that resulted from a HQ/Regional workgroup
effort, issued the first directive on flexible funding. This
memorandum established that under certain conditions, Regions
could redirect most remedial design (RD) funds to other high
priority actions. These actions included time critical removals,
potentially responsible party (PRP) oversight, and other RD or
Remedial Action (RA) projects in the Region. The funds that
could be redirected were those that were saved as a result of ?RP
takeovers or lower prices compared to original cost estimates.
This policy would be extended to funding RA projects; howevpr,
other national program needs and the oversight activities of ? •
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In 1989, Congress imposed new reporting requirements on the
Agency for the Response program element. The agreement
originally stated that the Agency would report through the
following eight categories:
Pre-remedial
Remedial Investigation/Feasibility Study (RI/FS)
RD
RA
removal actions
response support
remedial support
removal support
After further discussions, Congress determined that the Response
Program must report on four of these categories: RI/FS, RD, RA,
and Removal Action. This arrangement will be continued in FY 90.
The Agency will report the status of the current operating
plan compared with the original operating plan within 30 days
following the end of each quarter. In addition, we must notify
Congress immediately if the cumulative changes in a single
category exceed certain thresholds: $10 million for RA, $2
million for all others. Since the reporting requirements are
after the fact, this requirement has no impact on the flexible
funding policy. Transfers of $500 thousand or larger between the
TGB (Enforcement) and TFA (Response) accounts require prior
Congressional approval.
Objective;
This memorandum is to provide guidance.to the Regions on the
degree of flexibility that may be exercised in the funding of
Superfund activities during FY 90.
Implementation:
FY 90 Advice of Allowance (AOA) Structure;
In.FY 90, the Comptroller will issue the following
allowances to the Region:
Site allowance for removal actions - This allowance
provides funding for removal actions and is issued nor.-
site specifically.
Site allowance for RI/FS - This allowance provides
funding for all new and ongoing RI/FS projects and is
issued non-site specifically.
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Site allowance for RD - This allowance provides funding
for all new and ongoing RD projects and is issued, non-
site specifically.
Site allowance for RA - This allowance provides funding
for all new and ongoing RA projects. This allowance is
issued site, specifically.
Regular or other response allowance - This allowance is
issued non-site specifically and contains Response
funds for pre-remedial activities and removal,
remedial, and response support activities.
Regular Enforcement allowance - This allowance is
issued non-site specifically and contains resources for
the technical enforcement program.
The Comptroller will issue two AOAs. The "A" allowance will
include funding for removal actions, RI/FS, RD, and RA projects.
The "Regular" allowance will include everything else, including
non-OSWER Superfund accounts.
The operating year Superfund Comprehensive Accomplishments
Plan (SCAP) is updated regularly. Negotiations are held prior to
the fiscal year to finalize the annual Regional budget and at
mid-year to make adjustments in the budget for the last half of
the year. In addition, adjustments may be made prior to and
during the fourth quarter. Each quarterly Advice of Allowance is
approved based on the financial data in SCAP the month before the
start of the quarter. This allows Regions to make changes in
planned obligations (within their annual Regional budget) prior
to the issuance of the allowances.
Flexibility in the RA Allowance;
The shortage of RA funds and the implementation of RA
prioritization criteria will reduce the Regions' ability to
redirect RA funds. RA projects scheduled to begin in the first
three quarters of FY 90 were evaluated and ranked in accordance
with the environmental prioritization scheme for construction
projects established by HQ and implemented by the Regions. iBased
on the results of the environmental prioritization ranking panel,
a list of projects that will receive RA funds was developed.
Ranking forms used for prioritization should be completed for new
projects that become ready for construction. The peer review
panel will rank projects either by conference call or during the
regularly scheduled meetings. All projects will be re-evaluated
at mid-year and prior to the fourth quarter based on schedules,
and/or improvements to the prioritization process.
Approval from AA-OARM and AA-OSWER is required for the
redirection of RA funds to other program areas. Given the
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constraints in RA funding, HQ approval is highly unlikely.
Funding for ongoing orolects. mixed funding settlements, long
term response, and operations and maintenance, however, are not
subject to the prioritization or approval processes and may be
reprogrammed by the Regions. In addition, $10 million is
available to support RAs costing less than $2 million. These
projects will be funded on a first ready first funded basis
(without regard to environmental priority).
RA funds made available as a result of a PRP settlement: or
bids coming in below expected amounts will be returned to HQ for
funding of other priority RA projects. In some cases, HQ may
recommend that the Region retain the funds to support
unanticipated RA cost escalations. In situations where the PRP
takes over a planned Fund-lead project, Regions should retain a
portion of the funds for oversight of PRP work.
Non-Site Specific Funding Flexibility:
Within the other response, removal, RI/FS, RD, and
Enforcement allowances, Regions may redirect funds to meet site
or activity priorities. Redirecting funds between these
allowances requires OSWER program office approval of a SCAP
amendment and Comptroller approval of a change request. It is
important to note that transfers of funds out of the removal
action category are rarely approved because Congress has
specifically added resources to this area. ' Regions may reprogram
funds more easily into the removal action category from other
non-site specific allowances. The changes in planned/actual
obligations must be reflected in CERCLIS.
Funds saved within the RI/FS and RD accounts as a result of
a settlement or where actual costs are lower than estimated will
generally stay within the Region. These funds may be used within
the allowance for other RI/FS or RD projects, respectively. In
most cases, funding for RI/FS may not exceed the Fund ceiling for
each Region. The ceiling may be increased in some instances to
augment PRP contribution(s) or to fulfill citizen requests for
further technical work. In addition, Headquarters approval win
generally be given for the redirection of unused funds to the
following priorities:
classic emergencies
removal actions to make NPL sites safe
ongoing RA projects
funds necessary to oversee PRP activities
A SCAP amendment and change request must be approved before :he
funds can be redirected to activities outside the allowance.
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New Flexibility^
As a result of recommendations in the Superfund Management
Review and other OSWER initiatives, additional flexible funding
options have been identified and will be implemented in FY 90:
To support the bias for action and the creation of safe
sites, funds saved through PRP settlements or other
means may be redirected toward the removal program
after provisions are made for PRP oversight. These
funds can be transferred to the removal allowance after
HQ approval of a SCAP amendment and change request.
Regions may redirect RD funds when a consent decree is
referred to the Department of Justice for lodging or
when PRPs indicate they will comply with a Unilateral
Order (UAO).
Regions may retain and redirect non-RA remedial
response funds made available as a result of the
following actions:
PRP takeovers or settlements;
RI/FS or RD bids that are less than planned
amounts; and
actual obligations less than planned obligations.
Special non-site contingency accounts have been created in
the CERHELP database to provide each Region with a means to
"hold" and track the amount of funds made available through the
actions described above. As Regions identify uses for these
funds, the contingency account should be reduced. If the funds
will be used for an activity supported by a different allowance,
a SCAP amendment and change request must be approved prior to
obligation.
Response funds can be used to address deficient PRP
projects. Regions are allowed to redirect funds to accommodate
this need. PRP projects that will require substantial Fund
involvement to correct should be coded as Fund take-overs in
CERCLIS. Funding should be transferred to the appropriate
Response1 (TFA) AOA category. For projects requiring limited Fund
involvement, funds should be transferred to the Enforcement (TG3)
AOA. Again, a SCAP amendment and change request will be
necessary for transfers between AOA categories.
Priority Order for Identifying Sources of Funds;
Described below is the approach that Regions should foiiov
in identifying sources of funds.
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As a first step, Regions should determine if funds are
available in the CERHELP contingency account that can
be redirected within or between allowances to start the
response action.
If no contingency funds are available, funds planned
for obligation in future quarters (within the Region's
annual budget), that will not be used as originally
planned, should be tapped.
After mid-year, funds made available within the annual
Regional budget as a result of the mid-year or
third/fourth quarter adjustment process, should be used
to initiate the response action.
As a last resort, Regions may request an increase in
their annual budget through the redirection of funds
made available as a result of mid-year or third/fourth
quarter adjustments in other Regions.
Conclusion
Except for RA funds, the Regions currently have considerable
flexibility in the use of the extramural funds received in their
annual operating plan. In some cases, HQ approval is required
prior to redirecting the funds. Though the approval process is
simple, it requires input from several HQ offices and may take up
to two weeks to complete.
The HQ/Regional workgroup on flexible funding is exploring .
further options to increase Regional fund flexibility. We win
keep you informed on their progress.
cc: Bruce Diamond
Sally Mansbach
Henry Longest
Clem Rastatter
Thad Juszczak
Richard Brozen
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