United States
Environmental Protection
Agency
Office of
Inspector General
Washington, D.C. 20460
«xEPA Report of Audit
CONSOLIDATED REPORT ON
ERA'S COST RECOVERY ACTIONS AGAINST
POTENTIAL RESPONSIBLE PARTIES
E5EH4-11-0066-61534
September 24, 1986
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AUDIT REPORT E5EH4-11-0066-61534
CONSOLIDATED REPORT ON EPA'$ COST RECOVERY ACTIONS
AGAINST POTENTIAL RESPONSIBLE PARTIES
TABLE OF CONTENTS PAGE
j
SCOPE AND OBJECTIVES 1
SUMMARY OF FINDINGS 2
ACTION REQUIRED 4
BACKGROUND 5
FINDINGS AND RECOMMENDATIONS 6
1. EPA NEEDS TO ACTIVELY PURSUE SITES UNDER $200,000 6
2. BANKRUPT POTENTIAL RESPONSIBLE PARTIES IMPACT ON EPA'S
ABILITY TO RECOVER CLEANUP COSTS UNDER CERCLA 13
3. EPA NEEDS TO COMPLETE NEGOTIATIONS WITH RESPONSIBLE
PARTIES IN A MORE TIMELY MANNER 19
4. EPA NEEDS TO IDENTIFY AND TRACK STATUTE OF LIMITATIONS
(SOL) DATES 25
5. EPA NEEDS TO IMPLEMENT A COMPREHENSIVE MANAGEMENT
INFORMATION SYSTEM (MIS) TO TRACK ENFORCEMENT
ACTIVITIES 31
EXHIBITS
EXHIBIT A - COMPLETED NON-NATIONAL PRIORITY LIST REMOVAL
SITES WITH CLEANUP COSTS UNDER $200,000 35
EXHIBIT B - SCHEDULE OF COMPLETED REMOVAL ACTIONS ON CLEAN-
UP COSTS UNDER $200,000 THROUGH SEPTEMBER 30,
1985 36
EXHIBIT C - COMPLETED NON-NATIONAL PRIORITY LIST REMOVAL
SITES WITH CLEANUP COSTS BETWEEN $200,000 AND
UNDER $500,000 IN VALUE THAT MAY NOT BE
RECOVERED 42
EXHIBIT D - SCHEDULE OF SUPERFUND SITES THAT THERE IS A
BANKRUPTCY CASE AGAINST POTENTIAL RESPONSIBLE
PARTIES 43
EXHIBIT E - NEGOTIATIONS AS OF SEPTEMBER 30, 1985 45
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TABLE OF CONTENTS PAGE
(CONT'D)
APPENDIX 1 — SEPTEMBER 10, 1986 RESPONSE TO DRAFT AUDIT
REPORT FROM THE ASSISTANT ADMINISTRATOR, OFFICE
OF SOLID WASTE AND EMERGENCY RESPONSE 56
APPENDIX 2 — ADDITIONAL OIG COMMENTS TO OSWER's RESPONSE
DATED SEPTEMBER 10, 1986 61
APPENDIX 3 — DISTRIBUTION OF AUDIT REPORT 64
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
OFFICE OF
THE :NSPECTQR GSNEPAL
MEMORANDUM
SUBJECT: Audit Report No. E5EH4-11-0066-61534
Consolidated Report On EPA's Cost Recovery
Actions Against Potential Responsible Parties
FROM: Ernest E. Bradley
Assistant Inspector General for Audit (A-f09)
TO: J. Winston Porter
Assistant Administrator for Solid Waste and
Emergency Response (WH-562A)
SCOPE AND OBJECTIVES
We have completed a review of the Environmental Protection Agency's (EPA)
efforts to have potential responsible parties clean up hazardous waste
sites or pay for the cleanup performed by the Federal government under
the Comprehensive Environmental Response, Compensation, and Liability
Act (CERCLA) of 1980. CERCLA provides that the parties responsible for
the hazardous waste conditions at disposal sites should either perform
cleanups themselves or reimburse the Government for cleaning up the sites.
The objectives of our review were to: (1) identify the problems associated
with obtaining reimbursement for removal actions that were funded by the
Hazardous Substance Response Trust Fund (Trust Fund); and (2) determine
whether internal controls were adequate to ensure that EPA was pursuing
all enforcement actions necessary to achieve cost recovery.
We conducted our review at EPA Headquarters and EPA Regions 3 and 4.
Our review covered EPA's cost recovery actions from December 11, 1980
(inception of CERCLA) through September 30, 1985; and Agency policies,
procedures and new Initiatives through May 30, 1986. Our scope included:
1. Reviewing CERCLA policies, procedures, guidance documents and
other information related to the enforcement of CERCLA;
2. Interviewing senior EPA Headquarters and Regional officials, key
contractor officials, and attorneys from the Department of Justice
to obtain their views on EPA's hazardous waste site cleanup programs;
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3. Reviewing monthly financial management reports, quarterly manage-
ment accountability reports, the legal enforcement docket system,
and quarterly enforcement accomplishments to determine how effec-
tive EPA efforts were in having potential responsible parties
clean up hazardous waste sites or recover cleanup costs; and
4. Examining selected case files to determine delays affecting sites
from progressing towards settlement or cost recovery.
Our review was performed in accordance with the Standards for Audit of
Governmental Organizations, Programs, Activities, and Functions (1981
Revision), as promulgated by the Comptroller General of the United States.
Accordingly, our examination included tests of accounting records and
other auditing procedures we considered necessary in the circumstances.
Deficiencies disclosed as a result of our review are included in the
Findings and Recommendations section of this report. We have no irrdica-
tion that items not tested would disclose further weaknesses beyond those
described in the Findings and Recommendations section.
This report consolidates the results of our reviews at EPA Headquarters,
Region 3, and Region 4 conducted by the Internal, Mid-Atlantic and Southern
Audit Divisions of the Office of Inspector General. We issued individual
reports to each of the two Regional Administrators. The findings and
recommendations developed during our audits of Regions 3 and 4 were previously
discussed with and provided to the appropriate Regional Administrator for
comment. In addition, the findings and recommendations developed in our
Regional reports and at Headquarters were discussed with appropriate Head-
quarters officials. Also, we issued a flash report, on September 5, 1984,
alerting the Agency to problems with its enforcement activities.
SUMMARY OF FINDINGS
As of September 30, 1985, EPA had obligated $1.3 billion in Trust Fund
monies. During this same time period, the Agency had negotiated 84 cost
recovery cases, totaling $26 million, which resulted in the Trust Fund
being reimbursed $14 million from 72 cases. This represents a cost
recovery ratio of 1.1 percent of total Trust Fund obligations. This
does not include the Agency efforts in negotiating clean up actions to be
performed by responsible parties, or responsible parties who were not
technically capable of performing a cleanup who paid Into the Trust Fund
to finance the work ("cash out"). Unless EPA becomes more aggressive in
pursuing cost recovery actions, its ability to clean up the nation's
worst hazardous waste sites could be Impeded because the Trust Fund will
not be sufficiently replenished.
Cost recovery activities are becoming Increasingly more important in the
cleanup process. According to a General Accounting Office (GAO) report
dated May 6, 1986, EPA may need to spend as much 'as $80 billion to clean
up 4,000 of the worst hazardous waste sites over the next 30 years. EPA
estimates that about half of these sites will be cleaned up or financed
by responsible parties, while the remaining sites will be cleaned up by
using Trust Fund monies. EPA can replenish the Trust Fund by obtaining
reimbursement for work 1t has completed at hazardous waste sites. The
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funds recovered will allow EPA to increase the number of sites that will
receive attention. By increasing the number of sites to be cleaned up,
EPA will alleviate the ever increasing hazardous waste threats to the
public and environment.
We found EPA had encountered various problems in replenishing the Trust
Fund, because it was not taking aggressive cost recovery actions. However,
some of the problems encountered were outside EPA's immediate control.
The issues outside of EPA's control may eventually need to be resolved by
Congress and the courts. We also found EPA's recovery activities were
hampered because it did not have a coordinated comprehensive systematic
structure for overseeing cost recovery actions.
We found EPA was not aggressively pursuing cost recovery actions against
potential responsible parties where funds expended for cleanup were under
$200,000. Based on Agency records, we identified 182 completed removal
actions under $200,000, totaling $6,130,209, where cost recovery actions
were not being pursued by EPA. In addition, we calculated that EPA could
potentially lose over $60 million in the next 20 years if cost recoveries
for removal actions are not pursued. EPA officials attributed the overall
lack of cost recovery action primarily on resource constraints, and the
fact that the expenditures required to recover costs may approach the
costs of the cleanup itself. The expenditures incurred by the Agency in
preparing and pursuing a cost recovery action are potentially recoverable
from the responsible parties. We recognize resource constraints may
limit the number of cost recovery actions. However, failure to undertake
minimal cost recovery activities or explore alternative methods for recover-
ing costs on sites under $200,000 would adversely affect the Congressional
goal of cleaning up hazardous waste sites.
An issue which was somewhat outside the control of the Agency was potential
responsible parties filing for bankruptcy. As of September 30, 1985, bank-
ruptcy claims totaled over $65 million. Of the $65 million, EPA actually
recovered $27,165. We found that the Agency was not taking aggressive
and timely action in filing for cost recovery when the potential reponsible
party filed for bankruptcy. This could jeopardize the Agency's ability
to preserve its right as a creditor. Also, it is especially important for
EPA to establish itself as a creditor, since the courts have been leaning
towards giving Government units first priority after secured creditors.
EPA, by increasing its efforts, may stand.in a better position to recover
funds and be recognized as a first priority creditor.
Even though the Agency had a policy prescribing a 60-day cut-off period
for negotiations, we found 67 percent (276 of 411) of the negotiations
lasted an average of 279 days. Fifteen of the site negotiations over 60
days, amounting to $3,598,700 in clean-up costs, were concluded without a
settlement or cost recovery reached with potential responsible parties.
Agency officials informed us that the 60-day cut-off period was not
realistic and negotiations are usually lengthy when several responsible
parties were involved. EPA can improve its monitoring of negotiations
with responsible parties by requiring regional offices to maintain
documentation supporting the continuation of a negotiation and tracking
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milestone dates in an information system. Also, to ensure that established
milestones are met, EPA needs to inform the responsible parties of the
negotiation timefnames. Thus, if a reasonable settlement did not appear
feasible, negotiations can be broken off and cost recovery pursued through
civil action after EPA cleans up the site.
Historically, there has been considerable confusion over whether a statute
of limitations (SOL) will apply to CERCLA cases. The Congress may resolve
this issue in the CERCLA reauthorization bill. However, until this issue
is resolved by Congress or the Federal courts, EPA is at risk. We identified
65 completed removal actions, totaling $2,917,200, which may violate "tort
law" if not filed on or before December 31, 1986. EPA officials believe
that this area presents a low risk to the Agency.
Overall, EPA could have a better managed CERCLA enforcement program if it
had a comprehensive management information system (MIS) which would consoli-
date the data now contained in other Agency MISs. In addition, the new
system should include information on SOL dates, and negotiation milestone
dates which currently are not being collected. As the number of enforce-
ment actions increase in the future, this system will be crucial to
monitor enforcement activities and ensure all significant milestones are
being met. EPA will not have the resources or time to manually search
through individual regional project site files or review various MIS
reports to determine the status of enforcement activities. Realizing the
need for a comprehensive MIS to improve monitoring of CERCLA enforcement
activities, EPA is in the process of developing such a system.
The above audit results are discussed in detail in the "Findings and
Recommendations" section of the report.
The Assistant Administrator (AA) for Solid Waste and Emergency Response
provided formal written comments on our draft audit report in a memorandum
dated September 10, 1986. The AA generally agreed with our recommendations
and indicated that over the next several months the Agency will be reviewing
and revising its Superfund policies and procedures. We have summarized the
AA's position to appropriate locations in the report and included the complete
response as Appendix 1. We also discussed the results of our audit with
senior officials of the Office of Solid Waste and Emergency Response and the
Office of Enforcement and Compliance Monitoring on July 10, 1986.
We realize that the proposed Superfund bill will bring about some changes
regarding the issues discussed in the report. However, EPA would continue
to have responsibility to clean up hazardous waste sites. Therefore, we
believe that EPA will continue to need a sound enforcement program. We
made this review to determine how the Agency could more effectively
manage its CERCLA enforcement program.
ACTION REQUIRED
In accordance with EPA Directive 2750, the action official is required to
provide this office a written response to the audit report within 90 days
of the audit report date. The Action Official's response should include
an action plan with specific milestone dates for each corrective action
that was not fully implemented.
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BACKGROUND
On December 11, 1980, Congress enacted the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980 (Public Law 96-510). This
Act, commonly known as Superfund, provides for liability, compensation,
cleanup, and emergency response for hazardous substances released into the
environment and uncontrolled and abandoned hazardous waste sites. Superfund
broadly defines two types of response actions: removal and remedial.
The former term represents relatively short-term responses, while the latter
represents actions of longer duration leading to permanent resolution.
To fund removal and remedial actions, title II, subtitle B, established a
$1.6 billion Trust Fund to help clean up these sites. The Trust Fund was
to be collected over a 5-year period from taxes on petroleum and certain
chemicals and from Federal appropriations. Further, CERCLA requires that
parties responsible for the hazardous conditions at the sites either perform
the cleanups themselves or reimburse the Government for cleaning up the
sites.
EPA's enforcement authority to recover the costs of cleanup activities
performed by the Government comes from sections 106 and 107 of CERCLA.
Section 106(a) of CERCLA authorizes the issuance of". . . such orders as
may be necessary to protect public health and welfare and the environment."
Section 107 provides that, "past and present owners and operators of a
site, and generators and transporters who contributed hazardous substance
to a site, shall be liable for all costs incurred by the U.S. Government,
a state, or any other person, and for damages to or loss of natural
resources."
The Office of Waste Programs Enforcement (OWPE) and the Office of
Enforcement and Compliance Monitoring (OECM) are the Headquarters offices
responsible for overall management of the CERCLA enforcement programs. OWPE
provides policy direction to the regions for waste enforcement activities.
In addition, OWPE develops objectives, strategy, programs, and evaluation
criteria for regional enforcement programs. OECM is responsible for: (1)
developing national policies and procedures for uniform, fair and appropriate
enforcement of the environmental statutes and regulations; (2) monitoring
implementation of national policy by the regional offices; and (3) reviewing
for quality the legal and factual development of those cases which, because
of national or precedential significance, are referred to Headquarters from
the regions prior to referral to the Department of Justice. Because EPA
is decentralized, the majority of EPA CERCLA actions are the responsibility
of the regions. Thus, Headquarters plays more of an oversight role while
the regions actually carry out the program objectives.
CERCLA enforcement actions can occur at different points in the cleanup
process and Involve both regional and Headquarters program offices. This
creates difficulty in identifying and tracking milestones of CERCLA enforce-
ment activities. In general, the following actions occur once a responsible
party Is identified: (1) EPA attempts to negotiate with the responsible
party(ies) in order to reach a settlement for cleaning up the site; and (2)
if a settlement was not reached, EPA can cleanup the site with Federal funds
funds and seek to recover the cost of cleanup later.
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FINDINGS AND RECOMMENDATIONS
1. EPA NEEDS TO ACTIVELY PURSUE SITES UNDER $200,000
The Agency was not aggressively pursuing cost recovery actions against
potential responsible parties where funds expended for cleanup were under
$200,000. Despite a recent policy authorizing the regions to negotiate
with potential responsible parties for settlements, the extent of EPA's
pursuing these cases was questionable due to the higher priority given to
large dollar sites. As of September 30, 1985, we identified 182 non-National
Priority List (NPL) completed removal actions, totaling $6,130,209, where
funds may never be recovered if cost recovery actions are not pursued. EPA
officials believe that the costs associated with these site costs may never
be recovered because the Agency resources needed to recover the expenditures
may outweigh the actual costs recovered. We understand that resource con-
straints may limit EPA's pursuit of all hazardous waste sites. However,
EPA's failure to pursue sites under $200,000 would ultimately impact on
EPA's replenishing the Trust Fund and would send a signal to potential
responsible parties that the Agency was not serious about recovering
site cleanup costs. We calculated that EPA could potentially lose over
$60 million in the next 20 years if cost recoveries for removal
actions are not pursued. In addition, projected increases in hazardous
waste sites may only increase the likelihood of cost recovery efforts not
being taken on sites under $200,000. EPA's policy could adversely
affect the Congressional goal of cleaning up hazardous waste sites.
EPA Needs To Take Aggressive Action To Recover Over $6.1 Million In Trust
Fund Expenditures' ~~
We identified the total number of completed Superfund sites with expendi-
tures under $200,000, from the inception of CERCLA through September 30,
1985. Also, we reviewed EPA's efforts to pursue cost recovery actions
for these sites. We limited our analysis to removal sites since these
sites are generally intended for shorter-term responses to releases of
hazardous substances and are generally limited by CERCLA section 104 to
six months in duration and $1 million. We requested and received from
the Emergency Response Division (ERD) and the Office of Program Management
(0PM) the names of all sites with completed removal actions on or before
September 30, 1985. We found that EPA had completed 376 non-NPL removal
actions, totaling $76,534,439 in obligations, through September 30, 1985.
Of the 376 removal actions, we found 248 removal actions (66 percent),
totaling $11,474,856, which were under $200,000 in cleanup costs (refer
to Exhibit A). Our review further disclosed that 182 of the 248 sites
were not being pursued by EPA for cost recovery.
Section 107 of CERCLA provides that past and present owners and operators
of a site, and generators and transporters who contributed hazardous
substances to a site, may be held liable for all costs of removal and
remedial actions undertaken by the United States, a state or any other
person. The Federal government can attempt to recover cleanup costs in
a lawsuit or, if the circumstances favor 1t, can agree to a settlement
with the responsible parties. The settlement would normally require the
responsible parties to voluntarily reimburse the Trust Fund (and possibly
others) for cleanup costs incurred.
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Based on the data reflected in the Agency's information systems, we
reviewed the extent of EPA's pursuit of cost recovery on sites under
$200,000. During our review of Region 3, we identified 63 sites (as of
September 30, 1984), totaling $2,240,134, where cleanup costs were under
$200,000. In determining whether EPA was actively pursuing cost recovery
for these sites, we found that 18 of the 63 sites were completed non-NPL
removal actions costing under $200,000.
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Our review of the 18 completed removal actions disclosed that Region 3 had
taken action to recover cleanup costs from responsible parties in four
instances. For two of these four actions, Agency expenditures totaled
$71,340 while the settlements resulted in recoveries of $58,504. The
Region referred to Headquarters for action the remaining two removal
sites, totaling $255,756. Regional personnel informed us that no actions
were currently planned to recover any costs from responsible parties for
the remaining 14 completed sites, totaling $728,822.
Region 3, in its response to our Regional report, indicated that the
remaining removals were not referred for cost recovery because there were
no viable responsible parties associated with the removals. We requested
Region 3 to provide us with documentation that no viable responsible parties
existed. On- July 28, 1986, the Regional Administrator (RA) responded to
our Region 3 report with a follow-up memorandum. In his response the
RA indicated that action is still ongoing at approximately half of the
sites which originally had no viable parties.
In Region 4, we identified 37 removal sites (as of September 30, 1984), •
totaling $1,726,888, where site expenditures would not exceed $200,000.
We reviewed the Agency's records and found that 24 of 37 sites, totaling
$958,288, were completed removal actions under $200,000. Cleanup activity
at the 24 sites had been completed for several months. However, negotia-
tions with the responsible parties for cost recovery were not scheduled.
For example, removal activity was completed at J&L Drum, TN in October 1982
at a cost of $44,015. Removal work at Caldwell County, NC was completed
in July 1983 at a cost of $39,990. However, cost recovery action had not
been initiated or planned at these sites at the time our fieldwork was
completed.
Regional officials attributed the overall lack of cost recovery action on
sites under $200,000 primarily to resource constraints and existing policy
guidance which discouraged cost recovery action on sites under $200,000.
Regional officials further explained that other factors such as strength
of evidence, financial viability of the responsible party, risk of litigation
and amount of funds involved also Influenced their decisions regarding
pursuit of cost recovery actions.
We reviewed the Office of Waste Programs Enforcement (OWPE) and the
Office of Enforcement and Compliance Monitoring (OECM) management reports
to determine whether the Agency was pursuing cost recovery actions on the
248 removal actions we Identified as of September 30, 1985. Our review
of the OECM's Docket System, OWPE's Case Management System, Superfund
Comprehensive Accomplishment Plan (SCAP) and the Removal Tracking System
disclosed that the Agency was not pursuing cost recovery actions on 182
removal sites EPA-wide, amounting to $6,130,209. (Refer to Exhibit B.)
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Confusion Exists Over How to Handle Small Cost Recovery Cleanup Actions
To provide more cost effective methods of settling cost recovery claims,
EPA issued a policy entitled "Interim CERCLA Settlement Policy," dated
December 5, 1984, which stated, in part that:
"The Regions are authorized to conclude settlements in certain
types of hazardous waste cases on their own, without prior review by
Headquarters or DOJ. Cases selected for this treatment would normally
have lower priority for litigation. Categories of cases not subject
to Headquarters review include negotiation for cost recovery cases
under $200,000, and negotiation of claims filed in bankruptcy. In
cost recovery cases, the Regions should pay particular attention to
weighing the resources necessary to conduct negotiations and litigation
against the amounts that may be recovered, and the prospects for
recovery. . ."
"Specific details concerning these authorizations will be addressed
in delegations that will be forwarded to the Regions under separate
cover. Headquarters is conducting an evaluation of the effectiveness
of existing delegations and is assessing the possibility of additional
delegations."
Prior to issuing the Settlement Policy, the Agency generally pursued
cost recovery actions only on sites where total cleanup costs exceeded
$200,000. While the December 5, 1984, Settlement Policy authorized the
regions to negotiate settlements with potential responsible parties where
total cleanup costs did not exceed $200,000, Headquarters never delegated
authority to the regions to actually approve and sign settlement agreements.
We also noted that the Settlement Policy stated that priority should be
given to sites where cleanup costs exceed $200,000.
In our review of Region 3, CERCLA Removal Enforcement Section personnel
stated there was a target on case referrals sent to Headquarters annually
for cost recovery, and these referrals were limited to sites over $200,000.
This target was established in the Agency's Strategic Planning and Manage-
ment System (SPMS). As a result, the Enforcement Section's priority was
to refer sites over $200,000 to Regional Counsel for review and subsequent
referral to Headquarters. Furthermore, Region 3 personnel stated that
sites under $200,000 were not referred to Regional Counsel because the
OECM and the Department of Justice (DOJ) normally will not pursue cost
recovery actions on any site under that amount. However, OECM personnel
told us that SPMS does not limit case referrals to sites over $200,000
and they had never refused to pursue a case for cost recovery, although
they admitted that higher priority is placed on sites over $200,000.
The EPA Administrator, in a February 13, 1985, speech indicated that EPA
must pursue cost recovery actions. The following indicated the direction
he planned:
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"Let's remember that EPA's mission is progress in achieving
environmental improvement. We achieve that progress by setting
sound standards and enforcing them. The regulated community must
know that we are committed to assuring this progress. We encourage
them to help us move forward on a voluntary basis. But where they
are unwilling, we will vigorously enforce our laws and our standards.
... It will be our policy to take action to recover all costs
incurred by government in'Superfund response actions."
On July 12, 1985, OECM and the Office of Solid Waste and Emergency Response
(OSWER) jointly issued a memo to the regions addressing small cost recovery
referrals. The memo stated:
"Based on discussions among our staff and Regional enforcement
personnel, it appears that confusion exists regarding Agency policy
on referring CERCLA cost recovery cases valued at less than $200,000.
. . . Although the Agency has placed a higher priority on referring
cost recovery cases with expenditures in excess of $200,000, there are
situations where referring small cost recovery actions is entirely
appropriate. For example, where we have initiated settlement discus-
sions which have failed to produce a settlement because of the
recalcitrance of the responsible parties, referral would generally
be appropriate to demonstrate the Agency's commitment toward enforce-
ment as a vehicle to compel private party response at CERCLA sites.
In addition, where a region has no case for more than $200,000, where
an enforcement presence would serve a deterrent effect, where a
Region's other enforcement priorities allow for the expenditure of
resources to support a small cost recovery case, or where the circum-
stances are ripe for testing some important aspect of law, referral
of such as case would be appropriate."
While this memo showed that Headquarters intended the regions to pursue
small cost recovery cases under $200,000, at the time of our review the
regions had not received formal delegation from Headquarters to implement
this guidance. In addition, Region 4 stated in its response to our April 18,
1986 audit report:
"As, 01G is aware, the Headquarters policy has been and continues to
be that, generally cost recovery referrals are a low priority at
sites where "minor" costs have been incurred (previously $200,000,
now proposed as $500,000 under the October 4, 1985 draft CERCLA
settlement policy). The basis for this policy, including resource
constraints and cost-effectiveness has been articulated in several
Headquarters policy documents."
Apparently, from these comments confusion still exists as to how to
handle sites under $200,000. EPA plans to raise the dollar limit to
$500,000 for small case recovery cleanups. In our opinion, this would
further compound the problem since the number of completed sites and the
resulting dollar values would Increase. For example, as of September 30,
1985, the number of completed removals between $200,000 and $500,000
totaled 19, with a dollar value of $5,761,002, that may not be recovered
(Refer to Exhibit C.)
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A major obstacle faced by EPA was that it could not compromise Section 107
cost recovery actions if they exceed $20,000 or if the settlement resulted
in the Agency recovering less than 100 percent of incurred costs. CERCLA
does not authorize EPA to compromise cost recovery claims. The only other
statutory authority under which EPA may compromise claims of the United
States is the Federal Claims Collection Act of 1966. According to the
law, if EPA wants to settle a claim for less than 100 percent, or that is
over $20,000, the settlement must be referred to DOJ for final approval.
For this type of recovery action the regions must refer the settlement
package to EPA Headquarters for concurrence and then Headquarters will
refer the package to the DOJ. In discussions with an OECM official he
stated that this procedure was causing an added burden to the Headquarters
staff.
As previously mentioned, EPA was not actively pursuing sites where costs
expended from the Trust Fund were under $200,000. We discussed this issue
with both Regional and Headquarters senior management. Region 3 officials
emphasized that OSWER personnel had verbally instructed them not to pursue
sites under $200,000. OWPE informed us that some sites either do not
have a viable responsible party or a potential responsible party can not
always be found. In addition, senior Headquarters representatives from
both OWPE and OECM informed us that these costs were not actively pursued
since resource constraints often limited EPA's cleanup efforts to higher
priority or large dollar (over $200,000) sites. In the early years of
the Superfund program, EPA was faced with a huge number of existing and
threatening hazardous substance releases and the need to conserve and use
Trust Fund resources most efficiently. As a result, EPA targeted its
enforcement resources on those sites where there was a greater likelihood
of successful action. We recognize that EPA's pursuit of all hazardous
waste sites may not be a prudent decision in light of limited resources.
However, in our opinion, failure to even undertake minimal cost recovery
activities in pursuing cost recovery for these sites increases the potential
of responsible parties avoiding their liability and this will consequently
impact on the amount of funds available for cleanup of hazardous waste sites,
Future Impact On The Trust Fund
In December 1984, as required by Section 301 (a)(b)(c) of CERCLA, EPA
submitted a report to Congress projecting the size and focus of the
Superfund program and future funding needs. According to the study, EPA
assumed that: (1) there were about 25,000 hazardous waste sites; (2) 2,500
of these 25,000 would be NPL sites; and (3) cost recovery from responsible
parties would be at a rate of 47 percent for removals. We estimated the
future dollar impact of the Agency's policy on the Trust Fund by identifying
the Agency's projections for the future number of removals and the average
dollar amount involved for removals under $200,000. The following informa-
tion and assumptions used in the calculation came from EPA's Section 301
study.
EPA's Section 301 study predicted that 190 removals will be performed each
year. One hundred and fifteen of these removals will be at non-NPL sites
and will average less than $200,000 per site. Based on historical data
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we calculated that potentially over $60 million will be lost to the Trust
Fund in the next 20 years if cost recoveries for removal actions under
$200,000 continue to be ignored. Presented below is our calculation.
0 190 removals per year - 30 NPL removals = 160 non-NPL removals
0 160 non-NPL removals x 72 percent (removals under $200,000) =
115 removals under $200,000
t
0 115 removals per year under $200,000 x $49,532 average cost of a
removal = $5,696,180 per year
0 $5,696,180 per year x 20 years of removal activities = $113,923,600
0 $113,923,600 x 53 percent nonrecovery rate = $60,379,508
This calculation did not take into account any increased cost for inflation
over the 20 year period. Further, the recovery rate of 47 percent assumed
by EPA may be too high. For example, GAO in a March 29, 1985, report stated
that the figure of 47 percent for cost recovery for removals was an optimistic
assumption based on what EPA hopes to accomplish rather than the actual 21
percent rate experienced for removals to date. We discussed this calculation
with OERR's Chief, Office of Program Management and he stated that the calcula-
tion was reasonable.
Alternative Methods of Pursuing For Cost Recovery Would Permit Recovery
While Saving Resources
Given the number of incidents or sites at which EPA had spent Trust Fund
monies, cost recovery cases have the potential to severely drain Agency
and DOJ enforcement resources. While the Agency is authorized to seek
recovery of all Trust Fund monies, the costs associated with case referral,
case preparation and litigation for cases involving removal or small remedial
actions in some cases may approach the cost of the cleanup itself. In order
to use Agency resources effectively the Agency needs to explore alternative
methods for pursuing cost recovery actions.
In a March 1986 article entitled: The Need for Innovative Environmental
Enforcement, the Acting Assistant Administrator for OECM indicated that
alternative approaches are available for EPA to pursue cost recovery
claims. In the article he stated the following:
"EPA can make more effective and efficient use of its existing
resources by exploring other means of bringing and resolving
enforcement actions, and making the present system more efficient.
. . . Some of these cases could be handled by arbitration. An
example of this type of case, in which the need for arbitration is
more apparent, are cost recovery cases under Section 107 of the
CERCLA .... EPA and the regulated community must be willing to
depart from the traditional judicial and administrative enforcement
procedures in some cases - especially those under CERCLA - in favor
of generally - accepted alternative procedures which promise economies
of time, money and other resources. Arbitration, both binding and
non-binding, and mediation would seem to be highly suitable
alternatives."
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We discussed with EPA officials the use of arbitration as one alternative
to pursuing cost recovery actions in court. Regional Counsel in Region 3
informed us that filing a cost recovery action in court is a more viable
option, since arbitration has no precedential value. Furthermore, they
would not like to see the resolution of cases put into the hands of an
arbitration board. Region 4 officials, while reacting favorably to the
concept of an arbitration board, expressed reservations about the ability
of an arbitration board to negotiate settlements if there were several
responsible parties involved or if the responsible parties deny liability.
Some Headquarters legal officials believe that, while arbitration eliminates
the need to go to court and reduces litigation costs, the process is still
time consuming for the region and settlements are generally reduced. However,
we believe that arbitration should be pursued in the absence of any other
action being taken.
In addition, we discussed the possibility of giving these cases to'private
attorneys outside the Agency on a contingency basis for fees. OECM
officials told us this may be a viable solution to reducing the impact on
EPA attorney resources.
Conclusion
We recognize that all hazardous waste sites may not be actively pursued
where cost recovery from responsible parties is required. While resource
constraints and pursuit of high dollar sites may be conserving the Trust
Fund, we believe that the Agency should take a more active role in pursuing
sites under $200,000. EPA should make every effort to negotiate with
responsible parties to recover cleanup costs. We believe that a reasonable
effort should be made to recover costs on all sites. Agency management needs
to evaluate the cost of pursuing cost recovery actions in court against the
prospect of actually recovering costs. Agency management also needs to
include in its evaluations the fact that costs incurred for cost recovery
actions are potentially recoverable. As the number of hazardous waste
sites increases, EPA must aggressively pursue cost recovery to ensure
replenishment of the Trust Fund.
OSWER Comments And 016 Evaluation
The Assistant Administrator for OSWER will take our recommendations into
consideration when updating Agency policies and procedures. The Assistant
Administrator further stated that the new Superfund bill expressly allows
for alternative dispute resolution procedures. In addition, the AA stated
that the new bill would give EPA administrative authority to pursue cost
recovery actions under $500,000, and it should not be necessary to hire
outside attorneys. We believe 1f the proposed new law gives Superfund
the authority to handle cases under $500,000 through administrative
means, the Agency will be in a better position to pursue cost recovery
actions. However, since the Agency has limited personnel resources and
priority may still be given to high dollar cases, we still believe that
outside attorneys on a contingent basis will be of benefit to the Agency.
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Recommendations
We recommend that the Assistant Administrator for the Office of Solid
Waste and Emergency Response:
1. Require that minimal cost recovery actions (e.g., notification,
demand letters) be pursued for sites where funds expended are
under $200,000. Also, Headquarters should weigh the costs to be
incurred for litigation versus the costs to be recovered before
pursuing a cost recovery action.
2. Develop and issue specific policies, procedures and negotiating
strategies for settling cases under $200,000 ($500,000) to the
regions to ensure a consistent Agency approach.
3. Examine the possibility of using an arbitration board or some
similar mechanism as an alternative to filing cost recovery
actions in court.
4. Pursue the possibility of giving cost recovery actions under
$200,000 to outside attorneys on a contingency basis for fees.
2. BANKRUPT POTENTIAL RESPONSIBLE PARTIES IMPACT ON EPA'S ABILITY TO
RECOVER CLEANUP COSTS UNDER CERCTA"
EPA may not recover millions of dollars spent for cleanup activities at
hazardous waste sites because some potential responsible parties (PRPs)
file for bankruptcy. During our review, we identified 22 ongoing sites
with cleanup costs in excess of $65.2 million, from the inception of CERCLA
through September 30, 1985, where costs may not be recovered because of
potential responsible parties filing for bankruptcy. Of the $65 million,
EPA had actually filed claims against bankrupt parties for over $57 million.
Of this, EPA was awarded $47,859, of which $27,165 was received on 2 of the
22 bankruptcy cases. The Agency needs to make improvements in two areas:
filing for cost recovery actions against bankrupt parties and establishing
a system to identify bankrupt parties. Improvements in these two areas
would enhance EPA's cost recovery efforts. Due to the uncertainty which
surrounds the bankruptcy issue, as well as the potential of PRPs to avoid
their responsibilities, the Agency must take aggressive action during the
early stages of the bankruptcy proceedings. This will place the Agency
in a better position since Its claims conceivably could be classified as
a first priority claim (I.e., administrative expenses) under bankruptcy
rules.
The OECM is responsible for pursuing legal enforcement actions against
bankrupt parties. EPA regional offices are responsible for developing and
referring bankruptcy cases to OECM. To assist the regions in developing
CERCLA enforcement actions against bankrupt parties, OECM issued, "Guidance
Regarding CERCLA Enforcement Against Bankrupt Parties," on May 24, 1984.
This policy encourages consistency in current and future bankruptcy cases
brought by EPA. The guidance provides, 1n part: (1) a discussion of
enforcement theories available to the Agency to pursue bankrupt parties
under CERCLA; and (2) an overview of the relationship between cost recovery
under CERCLA and bankruptcy law. Currently, a new procedure is being
circulated for review.
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The Bankruptcy Reform Act of 1978, commonly referred to as the Bankruptcy
Code, states that a claim may be based on a right to payment as a result
of work completed and cost incurred. There are two types of bankruptcies,
(Chapter 7 and Chapter 11) that a corporation can seek. Chapter 7 bank-
ruptcy is when a corporation actually "walks out" and quits its business.
This usually happens because liabilities outweigh the assets and the
corporation does not plan to reorganize. The corporation can accomplish
this by placing itself in a Chapter 7 bankruptcy with the approval of the
court, or it can be forced into it by its creditors with court approval.
Thus, the assets are used to pay off creditors. In a Chapter 11 bankruptcy
the corporation plans to continue its business and have debts previous to
its bankruptcy request worked out with its creditors during the reorganiza-
tion phase. The corporation will actually be paying current business costs
during the period as an ongoing business while it is in negotiation for
payment of previous debts. In both types of bankruptcies the court is
involved as well as the creditors.
Under section 507 of the Bankruptcy Code, the claims of secured
creditors (i.e., repayment of loans) are satisfied fully before assets
are distributed to any unsecured creditors. Section 507 also sets up the
priority structure for the satisfaction of unsecured claims. The priority
order for such claims are:
1. Administrative expenses . . . and any fees and charges assessed
against the estate . . . ;
2. Unsecured claims allowed under section 502(b) of the Bankruptcy
Code (certain claims arising in involuntary cases);
3. Allowed unsecured claims for wages, salaries, or commissions,
including vacations, severance and sick leave pay;
4. Allowed unsecured claims for contributions to employee benefit
plans;
5. Allowed unsecured claims of individuals, to the extent of $900
. . . ; and
6. Allowed (certain) unsecured (tax or penalty fee) claims of
Governmental units.
Under the Bankruptcy Code it appears that an EPA claim would be classified
as a sixth priority claim. However, in a recent bankruptcy case, T.P.
Long Chemical, Inc. (Case No. 581-906), the Ohio Federal District Court
classified cleanup costs as administrative expenses or a first priority
claim under the bankruptcy rules. Thus, this ruling has placed the
Agency in a better position to. recover cleanup costs. Region 5 Regional
Counsel's response to this opinion states that:
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"This ruling is significant in that it is the first time to my
knowledge that a Bankruptcy Court has held that expenses of an
environmental cleanup under CERCLA are administrative expenses of
the bankruptcy's estate. While the court did not allow the Agency
to stand ahead of perfected secured interest holder, the classifi-
cation of Government cleanup costs as administrative expenses places
the claim of the Agency well ahead of most creditors."
Current Status Of Agency Bankrupt Actions
We requested from the Acting Associate Enforcement Counsel for Hazardous
Waste Enforcement at Headquarters, a status report on CERCLA bankruptcy
actions. We wanted to determine (1) the number and dollar value of
bankruptcy cases being pursued by the regions, and (2) the amount of
funds that had been recovered from bankrupt parties. OECM provided us
with a status report of CERCLA bankruptcy actions as of September 30,
1985. We also used a Financial Management System report to determine
the recovered amount (refer to Exhibit D). These reports disclosed the
following:
1. The Agency identified 22 bankruptcy cases, totaling $65,150,841;
2. The Agency had actually filed claims against the above bankrupt
parties for $57,245,705; and
3. The Agency, while awarded $47,859, had actually recovered
$27,165 in cleanup costs from 2 of the 22 bankrupt cases,
as of September 30, 1985.
As shown above, the Agency had filed 22 bankrupt cases; yet, the Agency
had not been very successful in recovering costs. We discussed the
results with OECM personnel who told us that the Agency would rather use
its resources against a PRP with adequate resources. However, we believe
that the Agency must be able to balance its actions against PRPs among
viable and less viable parties so that industry will note that EPA will
pursue all cost recovery actions to the fullest extent possible.
Management Of Bankruptcy Cases
The Agency was not taking aggressive and timely action in filing for cost
recovery when the PRP had filed for bankruptcy. This can result in the
Agency not being able to preserve its right as a creditor. In addition,
EPA did not have an effective monitoring system to determine if and when
a PRP goes bankrupt. This is critical since EPA would only have a limited
time in which to present its claim.
Filing For Cost Recovery
The primary objective of cost recovery is to provide reimbursement of
expenditures to the Trust Fund. A second objective is to encourage
voluntary actions by responsible parties. EPA's cost recovery strategy
generally calls for the initiation of cost recovery efforts as soon as
total costs are known.
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The Agency must establish itself as a creditor. If this is done, the
Agency will legally put the responsible party on notice that it expects
payment and if the PRP goes bankrupt, EPA would be on file as a creditor.
Thus, EPA would receive notice of bankruptcy (order of relief) and other
creditor's notices which are important so that it will know the status of
the proceedings.
In a January 30, 1985, memorandum entitled " Procedures for Documenting
Costs for CERCLA Section 107 Actions" the Director, OWPE stated that, "It
is the Agency's intention that some type of action be taken to recover
expenses for every site where Federal money was expended. The Agency
plans to have all cases dealt with in a timely and efficient manner." To
accomplish this Headquarters should refer the bankruptcy claim to the
Department of Justice for filing by a specific due date or a special
exception must be requested. Prompt referral of bankruptcy cases is
necessary to preserve the Agency's claim as a creditor. The Agency has
to file a "proof of claim" to be assured of preserving its rights as a
creditor. The proof of claim under a bankruptcy may be the only remedy
left for the Agency to recover funds from a bankrupt PRP.
An April 7, 1986, article in the Legal Times entitled "DOJ Gets More
Aggressive in Chapter 11 Cases" contained a comment made by Associate
Deputy Attorney General Jay B. Stephens. He stated:
"... that the Justice Department finally has awakened to the
realization that "there are great potential dollars our there: for
the government to collect. Previously, he said, "competing interests"
and priorities have kept the department and its prosecuters from
focusing on bankruptcy matters."
With this in mind, EPA should be aggressive in seeking reimbursement for
cleaning up sites, especially in the early stages when the PRP is filing
for bankruptcy. We believe that if the case is pursued early, a more
favorable outcome may result since the Agency would have established the
priority of its claim in relation to other creditors.
EPA recognizes the need to pursue judicial actions against bankrupt parties.
However, even if EPA finds a responsible party to be financially sound at
the time identified, there is no guarantee that the PRP will not file for
bankruptcy at a later date. Consequently, an OECM attorney believes that
while a cost recovery action can be initiated before completion of a
remedial investigation/feasibility study, this would not preclude a
responsible party from declaring bankruptcy to avoid liability.
The Need For Aggressive Action Against Bankrupt Parties
EPA needs to file claims against PRPs as soon as possible in order for
the Agency to reserve its right to recover claims on costs associated
with site cleanup of bankrupt parties. If EPA does not file a claim and
the bankrupt party does not place EPA on its creditors list, the Agency
may lose its creditor status. This would occur because the court would
not know that EPA is a creditor. Thus, no distribution of any available
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funds could be made to EPA. Also, if EPA does not file or files in later
stages of bankruptcy, there is the possibility of: (1) abandonment of the
site; (2) other administration costs "eating up" the assets; (3) and the
sale of assets at "fire sale" prices, or other methods to dilute the assets
prior to and during the bankruptcy. This could be done without EPA having
a say in the matter. In addition, an aggressive stand against bankrupt
parties may bring out more PRPs that will absorb the cost of cleanups or
catch fraudulent schemes. For-example, in a recent bankruptcy declaration,
(Thomas Solvent Co. (TSC)). the U.S. has filed a CERCLA section 107
complaint to recover cost associated with site cleanup. Part of the new
case will be against Richard Thomas, individually, and four corporations
which were "spun-off" from TSC prior to TSC's bankruptcy.
A major obstacle faced by EPA was when does it become a creditor. We
discussed this issue of EPA's rights to claim as a creditor with an
attorney from OECM. We asked when is EPA "officially" a creditor so that
it will be necessary for the bankrupt party to list the Agency as a creditor,
The OECM attorney stated that some PRPs interpret it to be at the time of
a demand letter, while others do not. Further, when EPA sends out a demand
letter, the letter should state that EPA is an official creditor. The
attorney also stated that EPA is supposed to be notified when a PRP goes
bankrupt. However, if a responsible party does not "interpret" EPA to be
a creditor, EPA may not be notified. If EPA is not notified of a PRP's
bankruptcy filing, it will not be able to file a claim in sufficient time
to preserve its right of claim. Further, a PRP could go bankrupt and EPA
could have no knowledge of this. We were also told that to develop a
system that EPA would know if PRP goes bankrupt would be difficult since
a party could be bankrupt in many different states and districts.
Under a Chapter 7 bankruptcy, as explained in the June 30, 1985, memorandum
entitled, "Procedures for Documenting Costs for CERCLA § 107 Actions," a
claim must be filed within 90 days from the first meeting of the creditors
unless an extension is moved for or granted. Under Chapter 11 a claim must
be filed by the date set by the court. However, to file a claim timely,
EPA must know the date that a proof of claim has to be filed. It is
important that EPA becomes aware of any PRP bankruptcies and acts in a
timely manner. As previously stated, EPA needs to be aware of a bankruptcy
at the earliest stage so that it can attend creditors meeting and thus be
able to support Its position effectively. If the Agency does not become
aware of bankruptcies early or does not act in a timely manner, the poten-
tial for recovering costs lessens.
EPA Does Not Have An Adequate System To Determine
When A PRP Goes Bankrupt'
We found that there was no list of all PRPs. Thus, when EPA is notified
of a PRP filing for bankruptcy, it had no listing to refer to. It is
important that the Agency place more emphasis on these bankrupt parties
since it may be the last chance in which the Agency can preserve its
rights. This 1s the only way the Agency can establish its priority on
the distribution of the debtor's estate.
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EPA did not have a system in place to determine if a PRP files for
bankruptcy. The court will only notify EPA when a PRP files for bank-
ruptcy if EPA is listed as a creditor by the bankrupt party. In those
cases where the court notified EPA that the PRP was filing for bankruptcy,
EPA did not have adequate policies and procedures to take the necessary
action to establish the priority of its claim in relation to other
creditors. As a result, when a notice came in, EPA did not know to who
it should go. OGC is developing new procedures to ensure that the Agency
can respond in a timely manner. It is necessary that the Agency's
attorneys: (1) receive notification of all PRP bankruptcy claims, and
(2) be notified when a PRP sends bankruptcy notices to creditors. The
Agency needs to be on record as a creditor in sufficient time so that it
can attend the meeting of creditors (usually not less than 20 or more
than 40 days after the order of relief). Also, the Agency's attorney
handling a bankruptcy case must be able to receive any notices sent to a
creditor on a timely basis so that he/she can respond within the time
stated on the notice.
CONCLUSION
The intent of the enforcement program is to compel responsible party clean-
up of hazardous waste sites or to have them pay for cleanups performed by
the Government. In our opinion, responsible parties declaring bankruptcy
impacts on funds available for cleanup of other sites. We believe that
EPA should be more aggressive in filing early claims against responsible
parties. By increasing its effort, EPA may stand in a better position to
recover funds earlier, and potentially prevent the PRP from declaring
fraudulent bankruptcy. In addition, failure to aggressively recover cost
expended from the Trust Fund will not only reduce the number of hazardous
waste sites that EPA could clean up, but also demonstrate to PRPs that they
can avoid reponsibilities by filing for bankruptcy.
OSWER Comments And PIG Evaluation
In response to the draft audit report, the Assistant Administrator
indicated that OSWER will review and revise the Bankruptcy guidance
regarding timeliness of actions and procedures for establishing EPA
claims. In addition, OSWER will consider revising the demand letters to
include appropriate official creditor language. OSWER did not comment on
our recommendation concerning priority of claims.
RECOMMENDATIONS
We recommend that the Assistant Administrator for Solid Waste and
Emergency Response:
1. Use more explicit language in the demand letter identifying EPA
as an "official creditor", thus no interpretation of the demand letter
will be required by the PRP;
2. Establish procedures on how to take the necessary action(s) to
establish EPA's priority claim in relation to other creditors;
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3. Coordinate with the Office of General Counsel on developing new
procedures and a system that will permit EPA to take timely action, once
it is notified of a PRP's bankruptcy filing; and
4. Coordinate with OECM to try and balance Agency actions against
both viable and nonviable PRPs especially in light of the courts' recent
leaning towards giving Governmental units first priority on hazardous
waste cases after secured credftors.
3. EPA NEEDS TO COMPLETE NEGOTIATIONS WITH RESPONSIBLE PARTIES
IN A MORE TIMELY MANNER"
Negotiations with responsible parties were not always fully successful and
often extend well beyond established Agency timeframes for conducting nego-
tiations. Even though the Agency has a policy prescribing a 60-day cut-off
period for negotiations, we found that EPA did not have a coordinated or
systematic structure for tracking negotiations to ensure timely completion.
We estimated that 276 (67 percent) of 411 negotiations were either (1)
ongoing from fiscal 1984 or (2) initiated in fiscal 1985 and had exceeded
60 days, with negotiations, lasting an average of 279 days. Fifteen of
the site negotiations over 60 days, amounting to $3,598,700 in clean-up
costs, were concluded without a settlement or cost recovery reached with
responsible parties. In addition, even though they did not exceed 60 days
in length, we found 31 negotiations in the amount of $6,733,000 which were
considered unsuccessful since they did not result in a settlement. Also,
we found 43 additional negotiations that had outcomes that were fund
financed actions for which we were unable to obtain dollar amounts from
either SCAP or CMS. EPA officials informed us that cutting off negotiations
is a judgment call based on the progress made and usually negotiations were
not concluded by the 60-day cut off period. Even though various systems
were supposed to track enforcement progress, we were unable to determine
the current status or results of all negotiations. Untimely negotiations
delay sites from progressing toward cost recovery through litigation and
ultimately may weaken the Agency's position to reach a settlement with
responsible parties to clean up sites.
Superfund enforcement actions can occur at different points in the cleanup
process and can involve both regional and Headquarters personnel. In
general, these actions include: (1) identification of the responsible
parties; (2) notification of the responsible parties by letters showing
their potential liability for cleaning up the site; and (3) negotiations
between EPA and the responsible parties to determine whether a mutually
agreeable settlement is possible. EPA may also negotiate with responsible
parties to determine whether they will perform various phases of site
cleanup, such as the remedial investigation/feasibility study (RI/FS),
cleanup of surface problems at the site, or cleanup of groundwater
contaminated at the site. EPA may negotiate for one phase at a time or
for several phases at once.
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If negotiations are successful, the terms of the agreement between EPA
and the responsible parties are incorporated into an administrative
consent order or consent decree. The financial settlement alternative is
similar to costs recovered for the Trust Fund, because the responsible
parties contribute money while EPA arranges for the cleanup. If negotia-
tions prove unsuccessful, EPA can (1) clean up the site itself with Trust
Fund money or (2) issue a unilateral administrative order or obtain a
court order forcing the responsible parties to clean up the site. When
EPA cleans up the site, it attempts to recover the cleanup costs from
the responsible parties at a later date. In issuing a unilateral admini-
strative order or obtaining a court order, the reponsible party must
comply with the terms of the.order or pay fines or treble damages.
Since the beginning of the Superfund program, the goal of negotiations
was to secure privately managed or financed cleanup of hazardous substance
releases. The timeframes for completing negotiations have generally
remained the same throughout the history of CERCLA. For example, on
February 23, 1982, a memorandum entitled, "Hazardous Waste Compliance
and Enforcement Program Guidance" was issued by the Office of Solid Waste
and Emergency Response. The memorandum mentioned that if substantive
negotiations, which are believed to lead to a satisfactory resolution
within a short period of time (normally 60 days or less), have not been
entered into within 30 days of the date of response required by the notice
letters, Regional program offices should proceed with administrative action
or litigation. In addition, on August 26, 1983, EPA issued a policy docu-
ment entitled, "Guidance on Pursuing Cost Recovery Actions Under CERCLA,"
which indicates that a reasonable period of time for most negotiations is
60 to 90 days. This policy also maintains that the negotiation timeframes
be disclosed to the responsible parties as a deadline to reach an agreement,
The most recent EPA policy which discusses the timing of negotiations is
contained in the "Interim CERCLA Settlement Policy," dated December 5,
1984. This guidance mentions that a Negotiations Decision Document (NDD),
which follows completion of the RI/FS, makes the preliminary identification
of the appropriate remedy for the site. Prelitigation negotiations between
the government and the responsible parties should normally not extend for
more than 60 days after approval of the NDD. If significant progress is
not made within a reasonable amount of time, the Agency will not hesitate
to abandon negotiations and proceed immediately with administrative action
to litigation. While the type of negotiation undertaken by the Agency
may vary, the general timeframe for conducting negotiations with respon-
sible parties was 60 days.
The basic working document used by EPA .to plan and manage CERCLA enforce-
ment activities is the Superfund Comprehensive Accomplishment Plan (SCAP).
The SCAP provides information on each region's plans for enforcement
activities on a quarterly basis and records whether those activities were
accomplished within the expected quarter. One item which SCAP tracks is
negotiations with responsible parties. We reviewed SCAP to determine the
results of negotiations that were ongoing in fiscal 1985. Also, we wanted
to determine the length of negotiations. By reviewing the SCAP we found
that 411 negotiations were ongoing with responsible parties. However,
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the SCAP was updated every fiscal quarter to only include any additional
negotiations which were started. There was no detailed information provided
on the status of the ongoing negotiations or how long they were in progress.
Furthermore, we were unable to identify exact start dates for the 411 negotia-
tions. Headquarters officials from the Office of Waste Programs Enforcement
(OWPE) informed us that the SCAP is a Superfund management tool to monitor
regional progress of various site activities. The SCAP does not provide
detailed information on these activities. For monitoring purposes, OWPE
officials believe that tracking progress by fiscal quarters is adequate,
and that reporting details, such as specific dates for each site was not
warranted. However, OWPE referred us to the Case Management System (CMS)
which contains specific dates on various enforcement actions.
We obtained a copy of a CMS report to determine whether the negotiations
were completed, what the results were, and the length of time that EPA
spent negotiating with responsible parties. We found that the CMS, in
general, provides critical milestone dates for such enforcement actions
as administrative/unilateral orders, case referrals to the Department of
Justice, cases filed, and settlements with responsible parties. The CMS
does not monitor or track negotiations per se but only the end result,
(e.g., if the case was referred to Headquarters). In addition, EPA did
not have a system that pointed out that a negotiation was taking longer
than 60 days and may need to be cut off.
Using the SCAP and CMS reports, we extracted pertinent information to
estimate the length of the 276 negotiations we reviewed. Also, we found
another 16 actions for which we could not determine the length of negotia-
tions (refer to Exhibit E).
Our review of SCAP and CMS results for the 292 negotiations disclosed the
following:
0 104 sites did not appear to have been completed by September 30, 1985.
Based on the Agency's records, these negotiations are still ongoing.
0 100 sites appear to have concluded with settlements with responsible
parties. We believe these negotiations were successful.
0 43 sites appear to have been transferred to the Trust Fund (fund
financed action) for potential EPA cleanup. Since these negotia-
tions did not result In a private party clean up, we consider these
negotiations to be unsuccessful.
0 11 sites appear to have concluded with EPA issuing unilateral
administrative orders. We believe these negotiations were
unsuccessful.
0 6 sites were either (1) transferred to another EPA program for
action, (2) transferred to a state for action, (3) involved bank-
rupt parties, or (4) had no action listed.
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0 4 sites appear to have concluded with referrals to the Department
of Justice. We consider these site negotiations unsuccessful since
they did not result in a settlement with responsible parties.
0 2 sites appear to have concluded with cost recovery actions. We
consider these negotiations successful.
0 22 sites had outcomes that could not be determined from the system.
We concentrated on identifying negotiations which lasted over the 60-day
cut-off period as stated in Agency guidance. Our review of the 411 site
negotiations disclosed that 276 (67 percent) exceeded the 60-day Agency
policy, with the average negotiation taking 279 days. Of these 276 negotia-
tions, it appeared 15, totaling $3,598,700, concluded with no settlement
being reached with the responsible parties (i.e., fund financed, issuance
of unilateral administrative order or subsequent referral/filing to the
Department of Justice). We were not able to determine the dollar amounts
for the 43 fund financed actions.
The Superfund program is generally implemented in the regions. Headquarters
officials informed us that detailed site negotiation documentation should
be available in the regional offices. However, in Region 3 our review
was hampered because many of these pertinent documents (notice and demand
letters, responsible party correspondence, minutes of negotiations, etc.)
could not be located. For example, in 5 of 25 site files (20 percent)
reviewed, we could not determine the duration of the negotiations which took
place between the Region and the responsible parties. This was due to the
fact that the Regional site files were generally not organized. Furthermore,
our review of Superfund enforcement information maintained by Region 3 dis-
closed that there was no system that provided comprehensive information on
all enforcement actions.
Region 3 could provide information on dates such as when (1) notice letters
were sent to responsible parties; (2) administrative orders and consent
decrees were issued; and (3) judicial enforcement actions were referred to
EPA Headquarters and the Department of Justice. However, at the time of
our review, the Region did not have any report or system that showed the
dates when (1) responsible party searches began and ended; (2) response to
notice letters and subsequent correspondence were received; (3) negotiations
with responsible parties began and ended; (4) settlements with responsible
parties were reached; and (5) responsible parties performed cleanup actions
at a site 1n compliance with administrative orders and consent decrees. Our
review of the Superfund enforcement action information maintained by Region 3
disclosed that most of this information was maintained 1n individual site
files.
In Region 4, we could not review and evaluate the status of negotiations
of the Region's 151 Superfund sites because the information could not be
obtained without a detailed review of the Individual project files. The
status of negotiations was not monitored and controlled on an ongoing
basis at all sites. While the Region had been moderately successful in
negotiating settlements for certain phases of site cleanup, the Agency
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guidelines for conducting negotiations within 60 days had not been con-
sistently met. In addition from information available, it was sometimes
difficult to determine precisely when negotiations were initiated and
concluded. Of the 29 sites reviewed, 9 different negotiations lasted
from 6 months to 30 months. In response to our Region 4 report, the
Region had taken steps to limit negotiations following the completion of
a workplan to 60 days or less. Also, the Region had earlier implemented
procedures for tracking the milestones of remedial and enforcement processes
of each site which should help.
While many of the above regional and Headquarters systems and reports track
and monitor various enforcement actions, they did not record critical mile-
stone dates for enforcement activities occurring at all sites. Consequently,
EPA did not have a mechanism to track all critical enforcement milestone
dates (i.e., length of negotiations) in any systematic manner from initia-
tion through completion.
The General Accounting Office (6AO) in a May 1986 report "Responsible
Party Clean Up Efforts Required Improved Oversight" stated that, "Experience
with EPA's settlement process has shown that it may take 2 years or more
to complete a remedial investigation and feasibility study. Subsequent
negotiations and settlements to establish remedy selection, design, and
implementation may add yet another year, even before cleanup begins."
In addition, an EPA contractor in a March 14, 1986, study showed the
following on negotiations:
— Pre-RI/FS negotiations should not last for more than 60-90 days
actually lasted for an average period of 195 days.
— Study findings for both elapsed time and workdays required indicate
that more effort is being expended on (Pre-RI/FS) negotiations
than had been assumed by Headquarters.
-- Remedial design/remedial action (RD/RA) negotiations which should
last about 60-90 days based on current policy, actually lasted
about 250 days.
— Although data is limited, the study results indicate that the
elapsed time required for (RD/RA) negotiations is significantly
longer than either prior budget assumptions or the OWPE policy on
the conduct of settlement discussions anticipated.
We discussed with both legal and Superfund officials at Headquarters and
the Regions the reasons why negotiations with responsible parties are so
time consuming. For example, negotiations were lengthy at the Delaware
City PVC Plant (15 months) in Region 3 because the 106 administrative
orders for the feasibility study and remedial cleanup was the first of its
kind, and there were disagreements over the consent order's wording. Also,
Headquarters policy changes had to be reflected in the consent order and
this delayed its issuance.
23
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At Headquarters, in a discussion with a senior attorney from OECM, we
were told that the 60-day cut off period for negotiations is not realistic
and that negotiations are usually lengthy when they involve several
responsible parties. In addition, if an agreement cannot be reached with
all RPs involved, then the negotiations tend to drag on. Furthermore,
in Region 3, we found only a few instances where the Region had informed
the responsible parties that the negotiation period would be only 60
days. In our opinion, if the responsible parties were told there was a
time limit on negotiations, site cleanup and fund reimbursement may be
expedited.
However, EPA officials argue that negotiations have resulted in favorable
settlements to compel responsible party cleanup of hazardous waste sites.
Senior OWPE management believe that the success of the negotiation process
should be measured against the settlement reached with responsible parties.
Furthermore, Superfund and legal enforcement representatives stated that
they may negotiate at length because, in their opinion, the likelihood of
reaching a settlement with responsible parties is greater than pursuing the
case through litigation.
CONCLUSION
While we recognize EPA's recent success to compel responsible party clean-
ups through negotiations, we believe the negotiation process needs to be
made more timely. While we agree with EPA that the current 60-day cut-off
to complete negotiations may be unrealistic in some instances, we believe
that some cut-off period must be established in conducting negotiations
with responsible parties. As we stated earlier, 276 of the 411 negotia-
tions exceeded the 60-day Agency policy. These 276 negotiations averaged
279 days. EPA must re-evaluate its December 5, 1984, guidance and establish
a more realistic timeframe to complete negotiations with responsible parties,
Furthermore, EPA should improve its monitoring of all negotiations by
requiring regional offices to maintain information on meeting this goal
in any enforcement management system. To ensure that these timeframes
are met, EPA should inform all responsible parties prior to beginning
negotiations of the cut-off period. If negotiations approach the cut-off
period without a reasonable settlement, then they should be broken off by
EPA, and cost recovery pursued through civil action. Negotiations with
responsible parties are an essential part of the enforcement process.
Failure to conduct timely negotiations would, in our opinion, increase the
likelihood of responsible parties delaying or potentially avoiding their
liability (i.e., declaring bankruptcy) which may ultimately weaken EPA's
efforts to recover cleanup costs on future hazardous sites.
OSWER Comments And PIG Evaluation
The Assistant Administrator for OSWER indicated that OSWER will re-evaluate
their present policy, procedures and negotiation timeframes under the new
Superfund bill and will take our recommendations into consideration. We
agree with this action. However, to evaluate how OSWER has acted on our
recommendations, we need to be advised on the new revised policy and
procedures.
24
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Recommendations
We recommend that the Assistant Administrator for Solid Waste and
Emergency Response:
1. Re-evaluate the Agency's present policy and procedures to ensure
that timeframes set for negotiations are reasonable. Also, timeframes
should not be exceeded unless it can be documented in the files that
significant progress is being made.
2. Require that specific steps in the negotiation and settlement
process are planned, scheduled, and initiated in a systematic and orderly
manner in order to minimize delays in the settlement process.
3. Require Agency negotiators to notify responsible parties that
the negotiations must be concluded within the Agency's established timeframe.
4. Require the regional offices to maintain information on the
length of negotiations and whether this conforms to the goal established
by EPA.
4. EPA NEEDS TO IDENTIFY AND TRACK STATUTE OF LIMITATIONS (SOL) DATES
EPA could potentially fail to recover millions of dollars in cleanup
costs by not filing cost recovery actions within the "statute of limita-
tions" (SOL) period. Although Agency policy states that court actions
should be brought timely, there was no formal system to identify and track
SOL dates. During our audit, we identified 65 non-NPL completed removals
sites, totaling $2,917,200, which may be lost if cost recovery actions
are not filed on or before December 31, 1986. While some of these sites
may ultimately be referred to the Department of Justice, EPA may eventually
violate the SOL unless agreement can be reached on what is the SOL period.
Consequently, responsible parties could completely avoid any financial
liability for the cleanup of hazardous waste sites if appropriate cost
recovery actions are not filed in court within the SOL period. Despite
confusion as to when the SOL period should start, this issue will become
more significant in the next few years as an increasing number of sites
progress toward cleanup. Although EPA is aware of the situation, formal
procedures and a system need to be developed to ensure that: (1) all
cost recovery actions are filed timely regardless of the SOL; and (2) SOL
dates are identified for all cleanup sites on a current and ongoing basis.
EPA Needs To Improve Its Timing of Cost Recovery Actions
Historically, there has been considerable confusion over whether a SOL
will apply to CERCLA cases and, if so, when it would start. Since CERCLA
did not mention an SOL time period in which an enforcement action must be
filed, EPA over the past years issued conflicting guidance in order to
minimize the risk in recovering expended funds. Both the August 1983
Agency policy (when dollars are first expended) and the February 1984
internal OWPE policy (upon completion of a response action) adopted a 3-year
SOL period. OWPE believed it would be extremely cumbersome and make for
"piecemeal litigation" to file cases when funds are first expended because
25
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expenditures for a site frequently extend over a period of several years.
The House of Representatives CERCLA reauthorization bill proposes a 3-year
SOL period from when a response action is completed. In our flash audit
report, we recognized that the CERCLA reauthorization legislation may
resolve this issue for future sites but may not "grandfather" cases prior
to its passage.
The Comprehensive Environmental Response, Compensation, and Liability Act
of 1980 (CERCLA) did not mention a time period in which a cost recovery
action must be filed to avoid violation of the SOL. EPA officials at
Headquarters and in the regions told us that CERCLA cases could fall
either under Federal law (six years), or tort law (three years).
To help clarify the issue, EPA issued a document entitled "Guidance on
Pursuing Cost Recovery Action Under CERCLA" on August 26, 1983. This
guidance stated:
"There is some doubt at this time as to precisely which limitation
period will be applied to a cost recovery action . . . since it is
possible that a court may see CERCLA actions arising out of the
tortious conduct of others, cost recovery actions should be brought
within three years. ... In order to avoid argument on this point
and to eliminate a potential bar to recovery, the Agency should
attempt to commence all cost recovery action within three years of
the date dollars are first expended."
The OWPE issued supplemental guidance in the form of a memorandum on
February 15, 1984, stating that EPA should observe a three year SOL
period that begins on the completion date of a response action. However,
this guidance was never officially issued to the regional offices for
implementation.
On September 5, 1984, we issued a flash report expressing our concern
that a number of potential cost recovery actions under CERCLA might be in
jeopardy due to the uncertainty surrounding a CERCLA SOL. On March 26,
1985, the Agency issued a response to our flash report. In addressing our
concern over the uncertainty surrounding the SOL for cost recovery actions,
the Agency response stated, in part, that:
"We need to differentiate between a legal definition of the SOL under
CERCLA and the establishment of timeliness for referrals of CERCLA cost
recovery actions. The Agency must strike an appropriate balance between
the need to minimize any risks to the government's ability to recover
expended funds and the operational realities of the CERCLA program
and the cost recovery process."
Legal Definition
The position of the Government (EPA and Department of Justice) is that
there is no SOL under CERCLA, but 1f there was, 1t would be six ^ears from
completion of a response action. There are cases now in the courts which
may provide some case law on whether no SOL applies, a six-year SOL
applies, or whether three years is the appropriate limitation period.
26
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On March 26, 1985, EPA issued a discussion paper on a New Hampshire court
ruling concerning the SOL on CERCLA cases. The case involved a responsible
party attempting to block a New Hampshire claim for cost recovery under
CERCLA by implying that the SOL had expired. The judicial decision was
that the State claim should not be dismissed since the three-year SOL
(under Section 112 of CERCLA) does not apply to judicial actions for cost
recovery. EPA, in its discussion paper, concluded that:
i
"It is important to note that this is the first definitive ruling
concerning the SOLs for cost recovery actions under CERCLA. Although
the opinion concerns a claim brought by a state under Section 107 of
CERCLA, we would expect a similar ruling on claims by the United States,
The decision is strong support for the proposition that Congress
intended to allow Federal and state governments to undertake judicial
actions for reimbursement of removal, remedial, and response costs
expended under CERCLA at any time."
While we recognize /the significance of the decision, we believe there
still is uncertainty surrounding the SOL. For example, EPA mentions in
its response to our flash report that there is a risk that the courts
may take a contrary review, such as selecting the start date rather than
the completion date as the SOL time period or holding to a three-year SOL.
An OECM attorney re-emphasized that the above case is the first decision
concerning the SOL, and that several other cases may have to be decided
to clarify this issue. In addition, EPA in its response indicated that
the Congress and the courts will be making the definitive determination
on the SOL.
The CERCLA reauthorization bills specifically address the SOL for cost
recovery. The Senate version, dated September 26, 1985, provides that a
claim must be presented or action commenced within six years after the
date of completion of the response action (Statute of Limitations,
SE142(a), Section 113). However, the House of Representatives version
provides that an initial action for recovery of costs must be commenced
within three years after completion of the removal action or within six
years after initiation of physical on-site construction of a remedial
action (Section 113, Litigation, Jurisdiction, and Venue, (g) Statute of
Limitations, (2) Action for Recovery of Costs). If the House's version
takes precedence, the SOL for removal actions will be three years from
completion of the action.
Until such time that this issue is satisfactorily resolved by either the
Congress or the Federal courts, we believe EPA should utilize a conserva-
tive date for SOL: three years from the completion of the removal action.
For long-term remedial projects the Agency also needs to take action to
ensure that the necessary documentation will be available to support the
Agency's cost recovery actions. The Chief, Superfund/RCRA Procurement
Branch, Procurement and Contracts Division (PCMD) has already initiated
some action by requesting a class deviation from the Federal Acquisition
Regulations (FAR). On March 21, 1986, the Chief requested a FAR deviation
be processed that will require contractors to retain records for a period
27
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of 10 years in lieu of 3 years after final payment. This deviation would
apply to all Superfund contracts. However, a recent audit by the U.S.
Army Audit Agency, "Superfund Management U.S. Army Corps of Engineers,
Washington, D.C.," dated 24 April 1986, revealed that the Army's current
documentation requirements were not adequate, in that accounting documents
are to be kept 6 years, 3 months from payment. As such, the required
documentation from the Corps of Engineers may be destroyed before litiga-
tion is begun. The Agency in its August 1, 1986, response indicated that
it is currently negotiating with the Corps of Engineers to ensure that
Corps contracts contain the same records retention requirements as EPA
contracts. This would help minimize the likelihood of the Corps contractors
destroying necessary documentation before EPA files a case for cost recovery.
Timely Filing
In their response to our flash report concerning the SOL, the Assistant
Administrator for OSWER and Assistant Administrator for OECM stated that:
"... for reasons of good management, it is appropriate to establish
an earlier date for filing cost recovery actions regardless of the
statute of limitations. Evidence is fresher, knowledgeable personnel
are more likely to be available and the Fund can more likely be
replenished if actions are brought as soon as possible."
Subsequently, on October 7, 1985, the Assistant Administrator for OSWER
and the Assistant Administrator for OECM issued a joint memorandum to the
regions on the "Timing of CERCLA Cost Recovery Actions." The purpose of
the memorandum was to provide guidance on when cost recovery actions
should be initiated under § 107 of CERCLA. The memo also noted that the
above policy guidance was not intended to limit any actions, but was
intended to assist EPA regional offices in the management of cost recovery
actions. Specifically:
(1) Cost recovery action should be initiated within one year of
completion of a removal action at a non-National Priorities List Site.
(2) Cost Recovery action should be initiated as soon as practicable
after signing the Record of Decision, usually within 18 months of that
time for remedial actions. However, cost recovery actions should not
begin until the Remedial Design Phase is completed.
The above policy was further included in the Agency's Operating Guidance
FY 1987 (page 12).
In order for EPA to have an effective and efficient cost recovery program,
it must establish "early" timeframes and plans for initiating and filing
cost recovery actions. Without such plans and timeframes, EPA will
experience great difficulty in handling the hundreds of CERCLA cost recovery
cases over the next several years. In addition, with an established plan
EPA will be able to properly allocate resources to ensure timely settlements.
Thus, EPA would be able to accomplish the ultimate goal, early replenishment
of the Trust Fund, which would allow the Agency to clean up additional
hazardous waste sites at an earlier time.
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EPA Needs To Track SOL Dates
Despite confusion over the SOL time period, EPA needs to develop a manage-
ment information system to identify and track SOL dates for initiating
cost recovery actions against responsible parties. On September 5, 1984,
we issued a flash audit report to bring this significant issue to the
immediate attention of management. We reported that there was no formal
system or procedures in place to provide management an overview of cost
recovery actions in regard to the SOL. In addition, We found while
Superfund personnel were generally aware of the status of their own
individual cases, there was no comprehensive record of the status of all
cases. We recommended that: (1) EPA develop a comprehensive listing of
all cleanup actions to date; and (2) implement a system and procedures to
identify and track cost recovery actions in regard to SOL dates.
In November 1984, OWPE developed a process to review completed removal
actions and completed units of remedial actions to assure that cost
recovery cases were filed before the SOL expired. This process used
three years from the completion of the removal/remedial action as the
ending date for SOL purposes. OWPE informed the regions that this report
was to be reviewed for accuracy and possible action on a quarterly basis.
In our review of Region 3, we found that on November 27, 1984, Headquarters
sent the first of these quarterly reports to the region. It showed the SOL
period for actions that were completed for three years or were approaching
three years from completion in fiscal 1985. This report identified four
removal actions and Region 3 confirmed that cost recovery had been initiated
on three of these sites. The fourth site had no financially viable respon-
sible parties. Our review disclosed that there were an additional three
removal actions that the OWPE report did not identify. Although these
three cases were filed with the Department of Justice, the fact that neither
Headquarters or Region 3 identified these sites indicates that the OWPE SOL
review process alone was not sufficient to assure that cost recovery actions
were filed before the SOL expires.
In Region 4 our review disclosed that the Region could encounter signifi-
cant problems with cost recovery actions that are ongoing at two major
sites. On one site, the Regional Superfund Comprehensive Accomplishment
Plan (SCAP) indicates negotiations were scheduled for the third quarter of
fiscal 1985. However, under the most conservative assumption, the SOL
would have expired in September 1984. The Regional SCAP also shows that
for the second site a responsible party search was scheduled for the third
quarter of fiscal 1985. However, the SOL would have potentially expired
in the second quarter of fiscal 1985.
Throughout the audit, we briefed senior OWPE and OECM management on the
status of our review. When asked about their response to our September 5,
1984, flash audit report on the SOL, they provided us a memorandum from
the Director, OWPE to the acting Assistant Administrator for OSWER on the
status of that response. The memorandum states, in part, that:
29
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"We are presently compiling information, including completion dates
on all removal actions. Me are in the process of developing a
computer tracking system for cost recovery to identify and track
cost recovery actions. The current docket system in OECM allows us
to track cost recovery referrals to Headquarters, referrals to the
Department of Justice, and filings of complaints and certain
additional information. Our new system will also be able to track
the activities associated'with CERCLA 107 cases, which include dates
of expenditures, SOL, issuance of demand letters, and actual
expenditures associated with site response actions."
On March 26, 1985, EPA issued a response to our flash report.^ EPA
agreed with our recommendations to establish a system to identify and
track response actions and key dates for cost recovery and is currently
developing such a system. In the interim period, the Agency established
a manual system to track significant dates on site specific basis.
However, the OWPE did not address our recommendation of developing a
comprehensive listing of potential SOL dates even after informing the
Assistant Administrator for OSWER (in a February 1985 memorandum) that
this was being compiled. OWPE did indicate that information on potential
SOL dates were available. However, the dates were not monitored since
the Agency had agreed on a 6-year SOL period and no sites were in danger
of violating the SOL period.
Subsequent to the Agency's response to our flash report, we wanted to
identify at Headquarters all completed non-NPL removals which may violate
the SOL if not filed on or before December 31, 1986. We requested a
listing from OERR identifying all removal actions completed on or before
December 31, 1983. This listing provided us information on sites that
would reach the 3-year SOL period on or before December 31, 1986. We
elected to use the more conservative timeframe of three years after
completion for a removal action. We found that there were 106 removal
actions, amounting to $14,609,558. Subsequently, we attempted to deter-
mine whether these sites had been filed for cost recovery actions. Due
to the lack of a centralized management information system to monitor
site status, we were forced to rely on several Superfund and legal
enforcement management documents to determine whether cost recovery
action was initiated. Our review of the legal docket system and the case
management system disclosed that 65 removal actions, totaling $2,917,200,
may be lost if cost recovery actions are not filed by December 31, 1986.
Discussions with Headquarters officials revealed they did not view the
SOL as a serious problem. As discussed in EPA's response to the OIG
flash audit report, Headquarters officials discussed their position that
the 6-year statute of limitations applied'as well as recent progress in
developing a tracking system as steps taken to minimize a potential SOL
violation. Consequently, EPA believes that this area is a low risk.
While we recognize and commend the Agency's progress, we believe that
inadequate identification and tracking of SOL dates is still a serious
problem.
30
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As discussed above, we identified 65 non-NPL completed removal sites,
totaling $2,917,200, which may violate the SOL if not filed on or before
December 31, 1986. We believe the SOL is a potential risk to cost recovery
since a final decision was not made on the issue by either Congress or
the Federal courts. Until this issue is resolved, EPA is still at risk
in recovering costs expended from CERCLA. The Agency can minimize the
risk by aggressively pursuing cost recoveries in accordance with revised
guidance.
OSWER Comments and PIG Evaluation
In the September 10, 1986 memorandum, the Assistant Administrator for
OSWER indicated that work was initiated on a tracking system that will
identify all removal actions and pinpoint significant enforcement-related
dates, including the statute of limitations dates. In addition, OSWER
and OECM have requested that the Regions review the universe of removal
actions for purposes of potential cost recovery actions.
The response states that the new Superfund bill directly addresses the
issue of the statute of limitations. However, as we stated in our report,
depending on which version of the Superfund bill may be passed, the SOL
period can vary.
RECOMMENDATIONS
We recommend that the Assistant Administrator for Solid Waste and Emergency
Response:
1. Proceed under the more conservative tort law timeframe (three
years after completion of a removal) until such time the issue
is resolved by Congress or the courts.
2. Include and track in the comprehensive listing of all removal
actions the SOL date.
3. For those sites where the SOL is about to expire, take immediate
action to initiate negotiations or referrals to DOJ.
4. Ensure that cost recovery actions are being Initiated within one
year of completion of a removal action at non-NPL sites.
5. EPA NEEDS TO IMPLEMENT A COMPREHENSIVE MANAGEMENT INFORMATION SYSTEM
(MIS) TO TRACK ENFORCEMENT ACTIVITIES
EPA would have a better managed CERCLA enforcement operation with a
comprehensive management Information system which would consolidate the
information now contained in various Agency Information systems. At the
time of our review, the Agency used several information systems to collect
and maintain site-specific enforcement information. Each of these systems
served a useful but particular management Information need. However,
currently no one system provides all Agency managers with all the timely
and consistent data needed to effectively manage and/or evaluate its
Superfund enforcement program. Even though EPA enforcement program
managers have indicated that a system providing comprehensive information
for tracking enforcement actions is beneficial, EPA has not developed
such a system.
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OSWER has recognized that its current information system needs improvement.
In December 1984, an EPA contractor completed an internal study for OSWER
which recommended that a comprehensive information system be developed.
The Agency is now developing such a system. If properly developed and
implemented, the new system could: (1) reduce or in some instances
eliminate the conditions noted in this report on the problems with the
Agency's cost recovery effort; and (2) improve the overall Agency manage-
ment of CERCLA enforcement activities.
We found that CERCLA enforcement information was contained in various
management and financial information systems: Superfund Comprehensive
Accomplishments Plan (SCAP); the Case Management System (CMS); Enforcement
Docket System; CERCLA Information System (CERCLIS); and Financial Manage-
ment System. While we noted that each of these systems served a particular
useful management need, none of the systems was designed to serve as a
integrated system which would contain specific milestones and financial
information to adequately monitor CERCLA enforcement activities. Agency
officials were required to use outputs from multi systems and manually
search through individual regional project site files to determine
the enforcement status of any given hazardous waste site.
In our audits of Regions 3 and 4, we experienced difficulty in determining:
(1) site status and (2) cost recovery activities from the various automated
information systems. As a result, we had to manually generate pertinent
site and program information such as: (1) information on bankruptcy cases;
(2) the length of time taken for the negotiation process; (3) progress in
pursuing enforcement actions against potential responsible parties; and
(4) the statute of limitations dates. OWPE, which is the responsible office
for managing the CERCLA enforcement program, was unable to provide us with
detailed statistical information in such areas as length of negotiation,
and the number of sites where the statute of limitations was expiring or
had expired. As a result, we were required to extract the information
from several reports. In addition, our request for information on the
number and amount of bankruptcy claims had to be referred to the regions.
Regional personnel manually generated this data from the project files
since the systems did not contain this information.
In a February 6, 1985 memo, the Director, OWPE agreed that the information,
we requested, would be of benefit and could assist in a better management
of the CERCLA enforcement program. Additionally, both Regions 3 and 4
agreed that a comprehensive automated management information system was
needed. Region 4, in fact, had developed an automated regional site
tracking system to improve control over the status of its enforcement
actions. However, at the time of our review, we were unable to review
the status of negotiations and the cost recovery actions at all of the
Regions' Superfund sites due to the voluminous correspondence and data
in the individual project files. This information could not be obtained
without doing a detailed review of the individual project files.
Our audit findings indicate a need to collect additional information in a
automated format. Our review of Region 3 showed that the Region did not
have any reports or system that reported the dates when: (1) responsible
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party searches began and ended; (2) responses to notice letters and sub-
sequent correspondence were received; (3) negotiations with responsible
parties began and ended; (4) settlement with responsible parties were
reached; and (5) responsible parties performed cleanup at a site in
compliance with administrative orders and consent decrees.
In addition, our review of the regions were hampered because many of the
pertinent documents (notice and demand letters, responsible party
correspondence, minutes of negotiations) could not be located because the
site files were generally not well organized. Even though Region 3
agreed with the findings and implemented a central filing system for
enforcement data, the need and benefits of an automated MIS are still
apparent and valid.
As previously mentioned, enforcement actions may be taken by both regional
and Headquarters offices and by both EPA and DOJ. As a result, we believe
there is a need to be able to quickly determine the current status of a
site and the responsible Agency office. Currently, the Agency has no
system which would provide this type of information, and there is a
potential for sites to be lost or for site activities not to be taken.
CONCLUSION
Despite these shortcomings, we recognize the Agency's efforts to improve
its reporting capabilities for enforcement actions. However, we believe
improvements are still needed in order for Agency officials to effectively
manage the CERCLA enforcement program. In our opinion, as the number of
enforcement actions increase in the future, it will become increasingly
necessary to maintain comprehensive Superfund enforcement.tracking
information.
We believe a comprehensive management information system offers
many benefits. First, the information will allow managers to determine
how long different steps in the enforcement process are taking so that
reasonable time frames for completing these steps can be set. Second, it
will provide an easy way to determine whether the time frames set for the
enforcement process are being met. Third, the information will help
managers in workload planning by providing data on upcoming steps.
Fourth, the information will help management to more easily respond to
information requests from Congress and other sources.
OSWER Comments And PIG Evaluation
The Assistant Administrator for OSWER in the September 10, 1986 memorandum
made no specific comments with regard to our recommendations for this
finding. As stated in our report, we believe Agency officials need to
make improvements to effectively manage the CERCLA enforcement program.
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RECOMMENDATIONS
We recommend that the Assistant Administrator for Solid Waste and Emergency
Response:
1. Designate the development of the CERCLA enforcement system as
a high priority item; and
i
2. Require that pertinent site-specific enforcement information
on bankrupt cases, statute of limitations, negotiation milestone
dates, etc. be included as data elements in the new MIS.
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EXHIBIT A
COMPLETED NON-NATIONAL PRIORITY LIST
Region
1
2
3
4
5
6
7
8
9
10
Totals
iL SITES WITH CLEANUP COSTS UNDER
Total Number of
Compl eted
Removal Sites
Under $200,000
as of 09/30/85
16
15
32
65
40
18
11
7
35
9
"258
$200,000
Total Obligations
of Removal Sites
Under $200,000
as of 09/30/85
$ 997,475
644,237
1,792,501
2,768,504
1,902,972
608,703
589,519
169,320
1,473,392
528,233
$11,474,856
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SCHEDULE OF COMPLETED REMOVAL ACTIONS ON
CLEANUP COSTS UNDER $200,000
"THROUGH SEPTEMBER 30, 1955"
EXHIBIT B
Page 1 of 6
REGION
NAME OF SITE
1 Bourdeaudhui
1 Bursey Asbestos
1 Castle Hill
1 Cyanide Incident
1 Dean Street
1 Gonic Sites
1 Great Diamond Island
1 Hougels Neck
1 Keswick Road
1 Lake Sunapee
1 Matarazzo
1 Pointer Asbestos
1 Total Sites - 12
2 Abandoned Drum
2 Abandoned Drums Erie Canal
2 Blue Poly Drum
2 Blue Spruce International
2 Fort Totten
2 Horseshoe Road Dump
2 Kearny Drum Dump #1 & #5
2 Kearny Drum Dump #2
2 Long Island Beach
2 Signo Trading
2 Mallkill Well
2 Total Sites - 11
COMPLETION
DATE
6/14/1985
5/28/1985
5/9/1984
1/23/1983
8/3/1983
3/13/1985
4/18/1983
3/19/1985
11/10/1983
6/9/1984
5/28/1985
7/1/1985
2/19/1982
7/16/1982
2/24/1984
11/15/1983
4/21/1983
7/12/1985
5/3/1985
4/13/1985
8/13/1982
7/3/1984
3/16/1984
TOTAL
OBLIGATIONS
$145,120
22,000
190
1,528
180,000
•150,000
829
5,000
194
31,732
10,000
25,000
$571.593"
$ 1,146
675
777
3,291
0 I/
60,000
92,131
42,000
1,095
134,325 2/
18,315
$353,755
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EXHIBIT B
Page 2 of 6
REGION
NAME OF SITE
3 Baltimore Iron & Metals
3 Biedler Road
3 Boyertown Scrap Metal
3 Caustic Midnight Dump
3 Columbia Park Drum
3 Coons Run
3 East Cumberland Street
3 Evans Trail
3 Eweing Road Drum Site
3 Fennel Road
3 Interstate 70 Acid Spill
3 Locomotive Junkyard
3 Mt. Pocono
3 Old Garage
3 Patrick Diehl
3 Piney Creek Drum
3 Pottstown Abandoned Trailer
3 Richardson Property
3 Security Boulevard
3 Semco PCB Site
3 Springer Septic Services
3 Stoneman Property
3 Tinicum Marsh
3 Vulcanized Rubber & Plastics
3 Wheeling Hill
3 Yokum Chlordane Contamination
3 Total Sites - 26
COMPLETION
DATE
2/1/1984
6/8/1983
5/19/1983
3/24/1983
1/25/1985
9/6/1983
9/28/1984
8/8/1984
10/24/1984
7/11/1985
5/31/1984
3/15/1984
1/24/1984
2/8/1985
1/8/1985
7/6/1985
5/2/1985
2/5/1985
3/4/1985
10/31/1984
2/13/1984
6/19/1985
9/23/1983
7/6/1983
12/28/1983
3/20/1984
TOTAL
OBLIGATIONS
73
4
35
1
151
109
169
25
11
16
1
45
6
50
15
180
43
115
142
55
5
154
42
4
18
,656
,707
,181
,409
,238
,279
797
,372
,000
,163
,657
,228
,729
,699
,678
,452
,583 21
,038
,830
,490
,412
,113
,968
,696
,570
,387
$1,481,332
4
4
4
4
4
4
4
4
4
4
4
4
4
4
Abandoned Drum 7/28/1984
Abandoned Drum 8/11/1983
Abandoned Drum/Hillsborough 9/17/1982
Abandoned Drum/Hillsborough 9/17/1982
Abandoned Drum/Marathon 1/1/1985
Ahoskie Midnight Dump 3/29/1985
Buckhorn Pesticide F1re 3/28/1985
Buford Highway 11/20/1984
Bush Brothers Plating 8/31/1985
C. D. Buff 3/21/1985
Caldwell County 7/15/1983
Callahan Drum 10/28/1983
Canton Plating & Bumper Works 12/19/1984
Cape Fear Wood Preserving 3/19/1985
$
1,812
1,821
6,996
3,976
4,187
3,000
15,000
5,000
120,000
20,000
39,976
7,963
200,000
150,000
37
-------
EXHIBIT B
Page 3 of 6
REGION
NAME OF SITE
4 Catoosa County Labpack
4 Caustic Chemical
4 Coal Branch Hollow «
4 Creosote Tanks Release
4 Davenport Creosote Spill
4 Everhart Lumber Site
4 Ft Oglethorpe Drum
4 GA Highway 138
4 Gail Foster Property
4 Hadaway Road
4 Head PCB Spill
4 Horry Co. Fireworks
4 Ivy Road (Bessie Runner)
4 J & L Drum Site
4 Jimmy's Truck Stop
4 Johnson Property Site
4 Lake Kathy Road Spill
4 Lake Worth Inlet
4 Lummis Island
4 McAllister Drum Site
4 Midnight Dump
4 Midnight Dumping (KY)
4 Midnight Dumping/Guilford
4 One-Hour Koretizing
4 Payco Pallet and Drum
4 PCB Midnight Dump
4 Pembroke Pines
4 Petro Chemical
4 Rock Bridge Park
4 Rome Coal Tar
4 Roosevelt Highway Spill
4 S. Electroformlng
4 Scotts Creek Battery
4 Simpson Road Drum
4 Snapper Lane
4 St. John River
4 Unknown Chemical Discharge
4 Villa Rica-H1gh Point Rd
4 Western Carolina Smelting
4 Williams Pesticide Site
4 Total Sites - 54
COMPLETION
DATE
4/30/1985
7/20/1983
6/24/1985
9/28/1984
8/19/1983
5/23/1984
2/28/1985
4/12/1984
7/13/1984
4/29/1985
2/7/1985
2/18/1985
10/30/1984
10/26/1982
5/1/1985
4/16/1984
1/18/1985
6/4/1985
4/10/1984
1/13/1984
8/24/1984
7/28/1984
7/17/1981
7/30/1984
4/10/1984
2/15/1983
12/19/1982
10/28/1983
1/25/1984
5/19/1985
12/15/1983
8/30/1984
1/25/1985
4/15/1985
10/14/1983
10/3/1984
12/3/1982
5/17/1984
12/5/1984
4/9/1983
TOTAL
OBLIGATIONS
$ 4,000
9,930
32,000
50,000
54,533
10,500
6,000
5,544
3,000
3,000
20,000
90,000
15,000
40,782
12,OOU
50,000
13,000
2,158
25,000
87,025
50,000
9,529
1,954
14,000
25,464
36,019
19,765
175,858
25,000
100,000
34,937
28,000
87,000
27,000
3,225
11,284
4,289
16,612
81,000
10.616
$1,874.75?
38
-------
EXHIBIT B
Page 4 of 6
REGION
NAME OF SITE
5 Abandoned Chemicals
5 Abandoned Drum
5 Abandoned Drum
5 Abandoned Drums-Ecorse
5 Bloomington Capacitor Site
5 C-Way
5 Chemical Drum
5 Chicago Drum
5 Cyanide Incident
5 Drums on Beach
5 Elkhart Site
5 Floyd Hutter
5 Fort & Scotten Streets
5 GP & K, Inc.
5 1-69
5 Midnight Dump, W. 58th Street
5 Midnight Dumping
5 Millpoint (Spring Lake)
5 Niles Township
5 Oak Creek
5 R. J. Trucking
5 Seaway Warehouse
5 Sorrento Site
5 St. Louis River
5 Total Sites - 24
COMPLETION
DATE
4/18/1983
7/3/1983
7/16/1982
6/27/1984
2/1/1985
11/26/1984
7/1/1982
7/22/1984
8/17/1984
7/2/1982
3/25/1985
6/10/1984
4/16/1984
6/10/1985
3/6/1985
4/28/1983
10/1/1981
7/6/1984
3/20/1985
1/31/1985
7/9/1985
7/17/1984
3/31/1984
8/27/1984
TOTAL
OBLIGATIONS
$ 46,402
1,569
1,142
6,095
53,559
21,749
3,487
22,317
494
2,628
93,122
1,424
8,713
9,428
16,049
456
23,970
2,501
16,236
5,000
18,695
28,443
3,239
1,103
$387,82f
6
6
6
6
6
6
6
6
6
6
6
6
6
Acrylonitril Spill 4/3/1984
Amoco Dock 31 3/8/1982
Chemical Drums-Padres Island 10/17/1984
Haddock Airport 2/5/1985
Houston Ship Channel 1/4/1984
Jack Dennis Pesticide Burnsite 3/18/1983
Near Wills Point 5/14/1983
Padre & Mustang Islands I 3/27/1985
Panther Creek 3/11/1982
South of Waco 5/5/1983
Stonewall Drug Dump 6/13/1985
Styrene Spill 2/22/1984
W. J. Oil 2/3/1984
Total Sites - 13
$ 2,250
3,643
5,119
15,000
5,000
32,381
9,652
160,422
3,037
3,792
7,000
7,065
54,777
$309,138
39
-------
EXHIBIT B
Page 5 of 6
REGION
NAME OF SITE
7 Blue River Flood
7 Flood Damage
7 Franklin/Gimblin St.'
7 Holly Street Drum Site
7 Rockwood School District
7 Total Sites - 5
8 Gene Murren
8 Green River Cyanide
8 Montgomery Ward Store
8 Vaagan-Dahle Farm
8 Total Sites - 4
9 A. S. Power Plant
9 Abandoned Drum
9 Abandoned Drum
9 Angeles National Forest
9 Big Spring Ranch
9 Bloomfield Avenue
9 Cherokee Trucking
9 Crystal Cove Beach
9 Cyanide Spill
9 Drainage Ditch
9 Echo Bay Station
9 L. Fricker Co.
9 Laguna Beach II
9 Long Beach Drum
9 M/V Victoria II Keehi Lagoon
9 Mystery Dump
9 N Tulip St. - Escondido
9 Parkside Drive
9 PCB Transformers
(includes 31 subsites)
9 Riverside Pesticide
9 Roic-Sun Valley
COMPLETION
DATE
6/30/1984
2/22/1983
5/2/1984
6/29/1984
7/23/1984
3/30/1984
1/23/1985
5/15/1984
7/20/1984
7/24/1984
5/27/1982
8/22/1984
7/23/1982
4/21/1983
7/13/1984
2/15/1985
8/22/1983
5/16/1985
1/4/1984
4/26/1983
7/19/1985
4/29/1984
8/20/1984
9/15/1985
12/14/1981
3/15/1985
3/21/1984
9/21/1984
6/10/1985
6/20/1985
TOTAL
OBLIGATIONS
36,006
31,323
26,537
29,000
49,007
$171,873
$ 16,268
3,000
106,000
24,419
$149.687
$ 27,321
1,580
2,000
4,370
3,780
3,243
105,503
3,561
8,500
1,994
9,015
175,999
1,266
1,069
50,000
6,989
44,541
6,231
4,707
27,490
100,000 2/
40
-------
REGION
NAME OF SITE
9 Sacramento River
9 Satala Power Plant
9 South Half Moon Bay
9 Tafuna Power Plant
9 Tuba City Acid Tank
9 Unknown Chemical Drums
9 Washo Drum
9 Total Sites - 28
10 Abandoned Drum
10 Municipal Landfill
10 Ohlson Mountain PCB
10 PCB Contamination
10 Spokane Drum Fire
Total Sites - 5
Total Completions - 182
COMPLETION
DATE
2/16/1983
7/18/1984
8/14/1985
7/19/1984
9/10/1982
5/11/1983
8/28/1985
3/9/1984
5/20/1982
8/23/1985
6/17/1983
6/21/1985
EXHIBIT B
Page 6 of 6
TOTAL
OBLIGATIONS
$ 2,363
20,214
20,000
40,276
34,140
1,394
2,500
$710,04F
$ 1,058
6,181
101,399
8,571
3,000
$120,209'
$6,130,209
I/ Financial Management Division's records shows an obligation through
September 1985 of $675.
2/ OWPE states that these sites are targeted for action in the SCAP.
41
-------
EXHIBIT C
COMPLETED NON-NATIONAL PRIORITY LIST REMOVAL SITES
Region
1
2
3
4
5
6
7
8
9
10
Totals
WITH CLEANUP COSTS BETWEEN
AND UNDER $500,000 IN VALUE THAT MAY
t
Total Number of
Completed Removal
Sites Between
$200,000 - $500,000
as of 09/30/85
1
1
5
4
3
2
1
2
0
0
19
$200,000
NOT BE RECOVERED
Total Obligations
of Removal Sites
Between
$200,000 - $500,000
as of 09/30/85
$ 400,112
293,332
1,648,633
1,108,000
970,907
460,878
442,140
437,000
0
0
$5,761,002
42
-------
-p-
CO
SCHEDULE
THERE IS
OF SUPERFUND SITES THAT
EXHIBIT D
Page 1 of 2
A BANKRUPTCY CASE AGAINST
POTENTIAL RESPONSIBLE PARTIES
Region
1
2
2
3
3
3
4
5
5
5
5
5
5
Case/Site Name
Johns Manville, NH
Syncon Resins, Inc.
Combe Fill
Landfills, NJ
North
South
Bruin Lagoon, PA
Drake Cheml cal , PA
L.A. Clarke & Sons
American Creosote, FL
A&F Materials, IL
Electric Utilities
Corp, IL
Isantl Solvent, MN
Liquid Disposal , MI
Long, T.P. OH
Peerless Plating, MI
Total EPA Claim
Against Bankruptcy
Responsible Party
$1,100,000
1,867,596
228,530
88,879
1,222,446
1,200,000
65,492
7,000,000
100,000
176,575
777,727
321,505
37,859
139,339
(Note 1)
Date of
Bankruptcy
8/26/82
10/19/81
11/13/81
02/08/77
00/00/81
03/11/83
05/21/82
Not Known
09/19/83
07/00/83
04/00/82
05/29/81
08/22/83
Date of
Claim
11/30/84
03/21/83
01/22/86
12/09/83
12/20/83
11/02/84
07/22/82
06/00/83
10/19/84
09/13/83
01/13/83
07/29/83
01/01/85
Total CERCLA
Funds Spent
Through
Sept. 30, 1985
$1,100,000
2,809,732
228,530
88,879
3,578,356
1,630,341
Not Known
1,261,724
586,694
1,000,000
995,000
2,777,247
37,859
147,650
Total Funds
Awarded Notes
$ -0-
-0-
-0-
_o-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
37,859 Note 2
-0-
-------
EXHIBIT D
Page 2 of 2
5
5
6
6
6
7
7
9
Thomas Solvent, MI
Crystal Chemical, TX
Hardage Disposal Site
Metcoa, TX
Triangle Chemical, TX
Aidex Corp, IA
Charter, MO
Metate Asbestos
4,335,006
814,879
979,550
332,669
148,653
12,000
34,000,000
2,297,000
$57,245,705
04/06/84
09/24/81
01/28/85
Not Known
06/00/81
02/05/79
04/20/84
02/25/83
08/21/84
07/15/82
06/03/85
01/24/84
09/23/82
06/22/81
11/18/84
08/10/83
3,477,195
1,548,152
Not Known
336,798
332,669
2,214,015
34,000,000
7,000,000
$65,150,841
==========
-0-
-0-
-0-
-0-
-0-
10,000 Note 3
-0-
-0-
$47,859 Note 4
Total Sites
22
Notes
Note 1
Note 2
Note 3
Note 4
The above information is a result of OECM's generated data. The column "Total CERCLA
Funds Spent Through September 30, 1985" does not represent the actual expenditures as of
September 30, 1985. They may represent estimates, funds expended through the date of
claim, and approximate amounts through this period. The current FMS does not show all
site specific costs. Thus, it is difficult to obtain the exact expenditures per site. To
obtain such amounts it would require Agency personnel to go to many different
sources.
EPA received $14,198 as payment for this case.
EPA received $12,967 as payment for this case.
EPA received $27,165 as payment for this amount.
-------
NEGOTIATIONS AS OF SEPTEMBER 30, 1985
(Note 1)
EXHIBIT E
Page 1 of 11
REG
NAME OF SITE
Beacon Heights Landfill
Laurel Park, Inc.
Charles George
Grovel and Wells 1 & 2
Hocomonco Pond
Norwood PCB/Grant Gear
Plymouth Harbor
Resolve Inc
Salem Acres
Silreslm Chemical
McKin Co.
O'Connor Site
Ulnthrop Town Landfill
Coakley Landfill
Exxon
Flmble Door
Gonic (Two Drum Sites)
Keefe Environmental Services
Rodgers Mobile Home
Savage
Central Landfill
Landfill & Resource Recovery
Peterson/Puritan Inc
P1c1llo Farm
Stamina Mills
Western Sand and Gravel
(KES)
QUARTER
INITIATED
3rd Qtr 85
3rd Qtr 84
3rd Qtr 85
2nd Qtr 85
3rd Qtr 85
3rd Qtr 85
1st Qtr 85
3rd Qtr 85
2nd Qtr 85
3rd Qtr 84
2nd Qtr 85
2nd Qtr 85
3rd Qtr 85
2nd Qtr 85
3rd Qtr 85
3rd Qtr 85
4th Qtr 84
Not Known
3rd Qtr 85
4th Qtr 85
2nd Qtr 85
3rd Qtr 84
Not Known
3rd Qtr 85
3rd Qtr 85
2nd Qtr 84
QUARTER
COMPLETED
3rd Qtr 85
4th Qtr 85
4th Qtr 85
4th Qtr 85
3rd Qtr 85
1st Qtr 86
1st Qtr 85
2nd Qtr 85
1st Qtr 85
1st Qtr 85
4th Qtr 85
ESTIMATED LENGTH
OF NEGOTIATION
THRU FY 86 2nd QTR.
315 days
360 days
315 days
405 days
315 days
315 days
495 days
315 days
405 days
450 days
225 days
405 days
90 days
90 days
180 days
315 days
90 days
Not Known
315 days
225 days
405 days
180 days
Not Known
315 days
315 days
540 days
OUTCOME
Settlement
NOTES
Settlement
Settlement
Settlement (2)
Fund Fin. Action
Unilateral Order
Fund Fin. Action
Cost Recovery
Fund Fin. Action
Fund Fin. Action
Settlement
(2)
-------
EXHIBIT E
Page 2 of 11
REG
NAME OF SITE
Abestos Dump
Chemical Leaman Tank Lines, Inc.
D'lmpeMo Property
Fried Industries
GEMS
GEMS
Johnson & Towers
Johnson & Towers
KIN-BUC Landfill
King of Prussia
Lipari Landfill
Llpari Landfill
Lone P1ne Landfill
Lone P1ne Landfill
M & T Dellsa
MKY Corporation
Price Landfill
Quanta Resources
Quanta Resources
Ringwood Mines
Scientific Chemical Processing (Carl)
Scientific Chemical Processing (Carl)
Scientific Chemical Processing (Newark)
Syncon Resins
Tabernacle Drum Dump
Clothier Disposal
Fulton Terminals
G. M. Central Foundry
Hudson River PCB's
QUARTER
INITIATED
3rd Qtr 84
2nd Qtr 85
2nd Qtr 85
3rd Qtr 85
3rd Qtr 85
4th Qtr 85
2nd Qtr 85
2nd Qtr 85
1st Qtr 85
1st Qtr 84
3rd Qtr 84
2nd Qtr 85
1st Qtr 84
1st Qtr 85
3rd Qtr 85
4th Qtr 85
2nd Qtr 85
3rd Qtr 85
2nd Qtr 85
2nd Qtr 85
3rd Qtr 85
3rd Qtr 85
3rd Qtr 85
3rd Qtr 85
2nd Qtr 84
2nd Qtr 85
2nd Qtr 85
2nd Qtr 84
1st Qtr 84
QUARTER
COMPLETED
3rd Qtr 85
4th Qtr 85
3rd Qtr 85
3rd Qtr 85
3rd Qtr 85
1st Qtr 86
3rd Qtr 85
3rd Qtr 85
1st Qtr 86
2nd Qtr 85
3rd Qtr 85
3rd Qtr 85
ESTIMATED LENGTH
OF NEGOTIATION
THRU FY 86 2nd QTR.
360 days
180 days
90 days
315 days
315 days
225 days
405 days
405 days
180 days
540 days
675 days
405 days
Not Known
495 days
315 days
90 days
90 days
315 days
90 days
405 days
180 days
315 days
315 days
315 days
360 days
405 days
405 days
450 days
540 days
OUTCOME
Settlement
Settlement
Not Known
NOTES
(2)
Cost Recovery
Settlement
Fund Fin. Action
Settlement
Settlement
Settlement
Settlement
(4)
Unilateral Action
Settlement
Fund Fin. Action
-------
EXHIBIT E
Page 3 of 11
REG
NAME OF SITE
Olean Wellfield(McGraw-Edlson)
Pollution Abatement Services (PAS)
SAG Harbor/Nabisco
Volney Landfill
Wide Beach
Fibers Public Supply Wells
Frontera Creek
Juncos Landfill
Puerto Rico Chemical
Upjohn Facility
Dover AFB
Harvey & Knott Drum
Tybouts Corner Landfill
Tybouts Corner Landfill
Limestone Road
Mid-Atlantic Wood Preservers
Sand Gravel & Stone
United Rigging
Ambler Asbestos Site
Amchem Dioxin
Domino Salvage Yard
Drake Chemical
Fischer & Porter
Havertown PCP Site
Henderson Road
Lackawanna Refuse
Lavelle Borehole
Letterkenny Army Depot
McaDoo Associates
Mill Creek
QUARTER
INITIATED
3rd Qtr 85
3rd Qtr 85
1st Qtr 85
2nd Qtr 85
3rd Qtr 85
4th Qtr 85
3rd Qtr 85
2nd Qtr 84
4th Qtr 84
1st Qtr 84
1st Qtr 85
3rd Qtr 85
4th Qtr 84
2nd Qtr 85
3rd Qtr 84
3rd Qtr 85
4th Qtr 84
3rd Qtr 85
1st Qtr 85
2nd Qtr 84
2nd Qtr 85
1st Qtr 85
1st Qtr 84
4th Qtr 84
3rd Qtr 85
4th Qtr 85
3rd Qtr 85
1st Qtr 85
3rd Qtr 84
3rd Qtr 84
QUARTER
COMPLETED
3rd Qtr 85
1st Qtr 86
Not known
1st Qtr 85
1st Qtr 85
Not Known
2nd Qtr 86
4th Qtr 85
3rd Qtr 85
4th Qtr 85
4th Qtr 85
2nd Qtr 85
1st Qtr 85
1st Qtr 85
1st Qtr 86
1st Qtr 86
2nd Qtr 85
1st Qtr 85
ESTIMATED LENGTH
OF NEGOTIATION
THRU FY 86 2nd QTR.
315 days
315 days
180 days
405 days
315 days
90 days
315 days
270 days
585 days
855 days
315 days
90 days
405 days
675 days
315 days
540 days
90 days
180 days
540 days
180 days
90 days
360 days
90 days
180 days
225 days
180 days
90 days
180 days
67b days
OUTCOME
Fund Fin.
NOTES
Action
(2)
Settlement
Fund Fin. Action
Settlement
Transferred to RCRA(2)
Settlement
Fund Fin. Action (2)
Settlement
Settlement
Fund Fin. Action (3)
Settlement (2)
Fund Fin. Action
Not Known
Settlement
Unilateral Order
Settlement
Fund Fin. Action
Fund Fin. Action (2)
Not Known
-------
EXHIBIT E
Page 4 of 11
REG
NAME OF SITE
00
Moyers Landfill
Palmerton Z1nc
Swissvale Auto Parts
Taylor Borough Dump
Tyson's Dump
Tyson's Dump
United Metal Traders
Westinghouse #2
Avtex Fibers Site
Culpepper Wood Preservers
Defense General Supply FF
East Kane Tar Pits
Fort A. P. H111
Hampton Cylinders (Moor-F1ta)
IBM Manassas Site
Big John's Gullet Pile
B1g John's Salvage-Holt Rd
Georges Creek
Helzer Creek
Manila Creek D1ox1n
Mobay Chemical
Monsanto (Plant Road)
Monsanto Landfill
Monsanto Plant
Nitro Dump
Ordnance Works Disposal
Poca Mine
Smith Douglas
South Charleston
QUARTER
INITIATED
3rd Qtr 85
4th Qtr 84
3rd Qtr 84
3rd Qtr 85
1st Qtr 85
4th Qtr 85
Not Known
4th Qtr 84
2nd Qtr 85
3rd Qtr 85
1st Qtr 85
4th Qtr 85
1st Qtr 85
1st Qtr 85
3rd Qtr 85
4th Qtr 84
2nd Qtr 85
1st Qtr 85
1st Qtr 85
1st Qtr 85
3rd Qtr 85
1st Qtr 84
1st Qtr 85
4th Qtr 84
1st Qtr 85
4th Qtr 84
1st Qtr 85
4th Qtr 85
1st Qtr 85
QUARTER
COMPLETED
4th Qtr 85
2nd Qtr 85
2nd Qtr 85
1st Qtr 85
2nd Qtr 85
1st Qtr 86
4th Qtr 85
1st Qtr 85
4th Qtr 85
4th Qtr 85
4th Qtr 85
3rd Qtr 85
4th Qtr 85
4th Qtr 85
1st Qtr 85
4th Qtr 85
4th Qtr 85
ESTIMATED LENGTH
OF NEGOTIATION
THRU FY 86 2nd QTR,
315 days
360 days
270 days
315 days
90 days
225 days
Not Known
585 days
405 days
315 days
495 days
225 days
90 days
360 days
90 days
90 days
405 days
270 days
270 days
270 days
315 days
540 days
270 days
585 days
270 days
90 days
270 days
225 days
270 days
OUTCOME
NOTES
Settlement
Settlement
Not Known
Settlement
Settlement
Settlement
Civil Action Ref.
Unilateral Order
Not Known
Settlement
Settlement
Settlement
Settlement
Settlement
Fund Fin. Action
Settlement (1)
Not Known
-------
EXHIBIT E
Page 5 of 11
REG
NAME OF SITE
Perdido Groundwater Contamination
Saraland Apartments
City Industries
H1pps Road Landfill
HolUngsworth Solderless Terminal Co,
Miami Drum Services
NW 58th Street
Pickettvllle Road Landfill
Zellwood Ground Mater Contamination
Marzone/Chevron Co
Powersv1lie
A1rco
Harrison City
Flowood
Gautier 011(Seaboard)
Chemtronlcs Inc
Dockery Property
Mart1n-Mar1etta/Sodyeco
Potter Pits
Independent Nail
Medley Farms
Palmetto Wood Preserving
Palmetto Wood Preserving
Galloway Pits
Acme Solvent Reclaiming
Alburn Indnerator/HAAS
Crab Orchard/Sangamo Dump
Cross Brothers
Environmental Dynamics
KERR-MCGEE
QUARTER
INITIATED
1st Qtr 85
3rd Qtr 85
4th Qtr 85
2nd Qtr 85
4th Qtr 85
2nd Qtr 85
2nd Qtr 85
4th Qtr 85
3rd Qtr 84
1st Qtr 85
1st Qtr 85
1st Qtr 85
4th Qtr 85
3rd Qtr 85
2nd Qtr 85
3rd Qtr 85
4th Qtr 85
3rd Qtr 84
4th Qtr 85
4th Qtr 85
4th Qtr 85
4th Qtr 85
2nd Qtr 85
4th Qtr 85
3rd Qtr 85
3rd Qtr 85
4th Qtr 84
2nd Qtr 85
2nd Qtr 84
3rd Qtr 84
QUARTER
COMPLETED
1st Qtr 86
4th Qtr 85
2nd Qtr 85
3rd Qtr 85
1st Qtr 86
1st Qtr 86
2nd Qtr 86
3rd Qtr 85
4th Qtr 85
3rd Qtr 85
2nd Qtr 86
2nd Qtr 86
3rd Qtr 85
2nd Qtr 85
ESTIMATED LENGTH
OF NEGOTIATION
THRU FY 86 2nd QTR.
360 days
90 days
225 days
405 days
225 days
405 days
405 days
225 days
270 days
180 days
360 days
360 days
225 days
270 days
90 days
90 days
225 days
675 days
225 days
225 days
225 days
225 days
90 days
225 days
315 days
270 days
540 days
90 days
360 days
675 days
OUTCOME
Settlement
Settlement
NOTES
Fund F1n. Action
Settlement
Fund F1n. Action
Settlement
Settlement
Settlement
Settlement
Not Known
Unilateral Order
Civil Action Ref.
Settlement
Fund Fin. Action
Settlement (2)
-------
EXHIBIT E
Page 6 of 11
REG
NAME OF SITE
Ul
o
KERR-MCGEE
KERR-MCGEE (Kress Creek/West Branch)
KERR-MCGEE(Reed-Keppler)
KERR-MCGEE(Residential Areas)
KERR-MCGEE(Sewage Treatment Plant Site)
NL Industries/Taracorp Lead Smelter
Pagel1s Pit
Riverdale Chemical Co
Sheffield (U. S. Ecology)
Velslcol Chemical Corp
Uauconda Sand & Gravel
American Chemical Service
Bennett Stone Quarry
D1mar Corp
Enviro-Chem
Fisher-Calo
Fort Wayne Reduction Dump
Lemon Lane Landfill
Main Street Well Field
Main Street Well Field
Midco I
M1dco I
Midco II
Midco II
Meal's Dump
Neal's Landfill
Seymour Recycling
Wayne Waste 011
Wedzeb Enterprises
Westlnghouse Sites
American Steel Works
Berlin & Farro
Berlin & Farro
Burrows Sanitation
QUARTER
INITIATED
1st Qtr 84
Not Known
Not Known
Not Known
Not Known
1st Qtr 85
4th Qtr 85
4th Qtr 84
2nd Qtr 85
1st Qtr 85
4th Qtr 84
3rd Qtr 85
Not Known
3rd Qtr 85
3rd Qtr 84
3rd Qtr 85
3rd Qtr 85
Not Known
3rd Qtr 85
3rd Qtr 85
1st Qtr 84
2nd Qtr 85
1st Qtr 85
2nd Qtr 85
Not Known
Not Known
1st Qtr 84
4th Qtr 85
2nd Qtr 84
1st Qtr 84
4th Qtr 85
1st Qtr 84
3rd Qtr 85
3rd Qtr 85
QUARTER
COMPLETED
4th Qtr 85
4th Qtr 85
4th Qtr 85
4th Qtr 85
3rd Qtr 85
1st Qtr 86
2nd Qtr 85
4th Qtr 85
4th Qtr 85
1st Qtr 86
3rd Qtr 85
4th Qtr 85
1st Qtr 86
1st Qtr 86
4th Qtr 85
3rd Qtr 85
4th Qtr 85
4th Qtr 85
3rd Qtr 85
3rd Qtr 85
3rd Qtr 85
3rd Qtr 85
3rd Qtr 85
3rd Qtr 85
1st Qtr 86
1st Qtr 86
3rd Qtr 85
Not Known
2nd Qtr 86
4th Qtr 85
ESTIMATED LENGTH
OF NEGOTIATION
THRU FY 86 2nd QTR,
855 days
Not Known
Not Known
Not Known
Not Known
180 days
90 days
180 days
180 days
270 days
585 days
180 days
Not Known
90 days
540 days
180 days
90 days
Not Known
90 days
90 days
540 days
90 days
180 days
90 days
Not Known
Not Known
855 days
90 days
630 days
540 days
Not Known
8B5 days
225 days
90 days
OUTCOME
NOTES
Fund Fin. Action
Fund Fin. Action
Fund F1n. Action
Fund F1n. Action
Settlement
Not Known
Settlement
Settlement (2)
Fund F1n. Action
Not Known
Settlement
Settlement
Not Known
Not Known
Fund Fin. Action
Settlement
Settlement
Settlement
Settlement
Settlement
Settlement
Settlement
Settlement
Settlement
Not Known
Unilateral
Settlement
Settlement
Settlement
Fund Fin. Action
-------
EXHIBIT E
Page 7 of 11
REG
NAME OF SITE
Dow Chemical Co (Midland)
Ionia City Landfill
K. L. Avenue Landfill
K. L. Avenue Landfill
Kareckas Farm
Kentwood Landfill
Mason County Landfill
MES Co/Joe Wilds
Metamora Landfill
OTT/Story/Cordova Chemical
Packaging Corp of America
Tar Lake
U. S. Aviex '
Whitehall Municipal Wells
Burlington Northern
FMC-Northern Ordinance
Isantl
Joslyn Manufacturing & Supply
New Brighton/Arden Hills
NL/Taracorp
Rellly Tar & Chemical Corp
South Andover(Andover Sites)
South AndoverJAndover Sites)
St. Louis River
University of Minnesota
Whlttaker Corp
American Steel Drum
Arcanum Iron & Metal
QUARTER
INITIATED
3rd Qtr 84
3rd Qtr 85
3rd Qtr 85
4th Qtr 85
1st Qtr 85
3rd Qtr 85
4th Qtr 85
2nd Qtr 85
3rd Qtr 85
1st Qtr 84
2nd Qtr 84
3rd Qtr 84
3rd Qtr 85
3rd Qtr 84
1st Qtr 84
2nd Qtr 85
2nd Qtr 85
1st Qtr 84
2nd Qtr 84
4th Qtr 84
1st Qtr 84
2nd Qtr 85
4th Qtr 85
2nd Qtr 85
3rd Qtr 85
2nd Qtr 85
1st Qtr 85
4th Qtr 85
QUARTER
COMPLETED
2nd Qtr 85
4th Qtr 85
1st Qtr 86
2nd Qtr 86
2nd Qtr 85
1st Qtr 86
1st Qtr 86
3rd Qtr 85
4th Qtr 85
2nd Qtr 86
2nd Qtr 85
1st Qtr 86
4th Qtr 85
3rd Qtr 85
2nd Qtr 85
1st Qtr 86
1st Qtr 86
Not Known
2nd Qtr 85
3rd Qtr 85
4th Qtr 85
2nd Qtr 86
2nd Qtr 85
1st Qtr 86
ESTIMATED LENGTH
OF NEGOTIATION
THRU FY 86 2nd QTR.
270 days
90 days
180 days
180 days
90 days
180 days
90 days
90 days
90 days
810 days
360 days
540 days
90 days
360 days
450 days
270 days
270 days
Not Known
720 days
180 days
540 days
180 days
225 days
360 days
315 days
405 days
90 days
90 days
OUTCOME
NOTES
Settlement
Settlement
Not Known
Fund Fin. Action(2)(3)
Settlement
Not Known
Not Known
Settlement
Fund F1n. Action (2)
Fund Fin. Action
Settlement
Not Known
Settlement
Settlement
Settlement
Not Known
(4)
Transferred to State(2)
Settlement
Settlement
Fund Fin. Action
Fund Fin. Action
Unilateral Order
Not Known
(2)
-------
EXHIBIT E
Page 8 of 11
REG
NAME OF SITE
Ul
ro
Cecil Undsey
Mid-South
Bayou Bonfouca
Bayou Sorrel 1
Citgo
Cleve Reber
Cleve Reber
Homestake Mining
Lee Acres(DOI)
South Valley
South Valley
Hardage/Crlner .
Okemah Drum Site
Bailey Waste Disposal
Bio-Ecology Systems
Brio Refinery
Brio Refinery
Crystal Chemical
Crystal City
Dixie 011 Processors
French Limited
Harris-Farley Street
Hastings Radio Chemical
Hill Sand Co
Industrial Transformers
Koppers
Motco
Motco
Odessa Chromium I
Odessa Chromium II
Petrochemical System
Sheridan Disposal
South Cavalcade
QUARTER
INITIATED
4th Qtr 85
4th Qtr 85
3rd Qtr 85
2nd Qtr 85
3rd Qtr 85
3rd Qtr 85
3rd Qtr 85
3rd Qtr 85
3rd Qtr 85
1st Qtr 84
3rd Qtr 84
2nd Qtr 85
3rd Qtr 85
2nd Qtr 85
1st Qtr 84
1st Qtr 85
1st Qtr 85
4th Qtr 84
3rd Qtr 85
4th Qtr 85
1st Qtr 85
3rd Qtr 84
4th Qtr 85
1st Qtr 85
3rd Qtr 85
1st Qtr 85
4th Qtr 84
4th Qtr 84
1st Qtr 85
1st Qtr 85
1st Qtr 85
3rd Qtr 85
1st Qtr 85
QUARTER
COMPLETED
1st Qtr 86
4th Qtr 85
4th Qtr 85
1st Qtr 86
4th Qtr 85
4th Qtr 85
1st Qtr 85
2nd Qtr 85
4th Qtr 85
3rd Qtr 85
2nd Qtr 85
3rd Qtr 85
2nd Qtr 85
4th Qtr 85
3rd Qtr 85
4th Qtr 85
4th Qtr 85
2nd Qtr 85
2nd Qtr 85
2nd Qtr 85
3rd Qtr 85
3rd Qtr 85
2nd Qtr 85
2nd Qtr 85
ESTIMATED LENGTH
OF NEGOTIATION
THRU FY 86 2nd QTR,
90 days
225 days
90 days
405 days
90 days
180 days
90 days
315 days
90 days
360 days
270 days
405 days
90 days
90 days
450 days
180 days
90 days
585 days
90 days
225 days
180 days
450 days
225 days
495 days
90 days
90 days
180 days
180 days
180 days
180 days
90 days
315 days
90 days
OUTCOME
NOTES
Not Known
Fund F1n. Action
Settlement
Not Known
Not Known
No Action
Settlement
Fund F1n. Action
Settlement
Fund Fin. Action
Fund Fin. Action
Settlement
Settlement
Fund Fin. Action
Settlement
Settlement
Fund Fin. Action
Settlement
Fund Fin. Action
Civil Action Ref.
Fund Fin. Action
Fund Fin. Action
Fund Fin. Action
Settlement
-------
EXHIBIT E
Page 9 of 11
REG
NAME OF SITE
in
Co
8
A1dex
Chemplex
Mason City Coal
Cherokee County
Cortland Container
John's Sludge Pond
Elliot Shooting Park
Findett
Fulbrlght Landfill
Riverfront Landfill
Riverfront Landfill
St. Joseph Landfill
Union Carbide Agricultural Prod.
Environmental Services Inc
Hastings G. W. Contamination
Anaconda Smelter
Anaconda(Mill Creek)
Burlington Northern RR
California Gulch
Denver Radium
Denver Toluene
H111 AFB
Koppers Co
Martin Marietta/Denver Aerospace
Micronutrlents International
Ogden Defense Depot
PDC Spas
Sharon Steel/Midvale Smelter
Smuggler Mt.
Tooele Army Depot
Wasash Chem
QUARTER
INITIATED
2nd Qtr 84
1st Qtr 85
4th Qtr 85
4th Qtr 85
3rd Qtr 84
1st Qtr 84
4th Qtr 85
2nd Qtr 85
3rd Qtr 85
2nd Qtr 85
3rd Qtr 85
4th Qtr 85
4th Qtr 85
4th Qtr 84
4th Qtr 85
3rd Qtr 84
4th Qtr 85
1st Qtr 85
4th Qtr 85
2nd Qtr 85
4th Qtr 85
3rd Qtr 85
1st Qtr 85
3rd Qtr 85
4th Qtr 85
3rd Qtr 85
1st Qtr 85
2nd Qtr 85
2nd Qtr 85
3rd Qtr 85
4th Qtr 85
QUARTER
COMPLETED
Not Known
2nd Qtr 85
1st Qtr 85
1st Qtr 86
ESTIMATED LENGTH
OF NEGOTIATION
1st Qtr 85
1st Qtr 86
1st Qtr 86
4th Qtr 85
1st Qtr 86
2nd Qtr 86
2nd Qtr 86
2nd Qtr 86
2nd Qtr 85
3rd Qtr 85
4th Qtr 85
THRU FY 86 2nd QTR.
Not
90
225
22b
180
855
90
405
315
405
315
225
225
585
225
180
90
360
225
180
90
270
495
270
180
315
90
90
180
315
225
Known
days
days
days
days
days
days
days
days
days
days
days
days
days
days
days
days
days
days
days
days
days
days
days
days
days
days
days
days
days
days
OUTCOME
Not Known
Unilateral
Settlement
Settlement
Settlement
Settlement
Fund Fin.
Unilateral
Settlement
Settlement
Settlement
Unilateral
Fund Fin.
Settlement
NOTES
(4)
Order
(2)
(3)
Action
Order
Order
Action
-------
EXHIBIT E
Page 10 of 11
REG
NAME OF SITE
NAME OF SITE
10
Ul
*•-,.
NOTES
Indian Bend Mash Area
L1tchf1eld Airport Area
Aerojet General
Del Norte City Pesticide Storage Area
Falrchlld Camera & Instrument Mt. View
Intel Mt. View
Montrose Chemical
NEC Electronics
Norwalk Dump
Raytheon
Slltec Corp
Bunker H111
Bonneville Power Adm
Gould Inc
Martin Marietta Aluminum
Commencement Bay, S. Tacoma (12A)
Commencement Bay/Tacoma Tar Pits
Northslde Landfill
Queen City Farms Inc
Strandley
Western Processing Co
Williams & Son
QUARTER
INITIATED
3rd Qtr 84
3rd Qtr 84
4th Qtr 84
4th Qtr 85
3rd Qtr 85
3rd Qtr -85
2nd Qtr 84
3rd Qtr 85
3rd Qtr 85
3rd Qtr 85
3rd Qtr 85
2nd Qtr 85
1st Qtr 85
2nd Qtr 85
2nd Qtr 85
3rd Qtr 84
3rd Qtr 84
Not Known
4th Qtr 85
1st Qtr 85
3rd Qtr 85
2nd Qtr 85
QUARTER
COMPLETED
2nd Qtr 85
2nd Qtr 85
2nd Qtr 86
4th Qtr 85
4th Qtr 85
2nd Qtr 85
4th Qtr 85
4th Qtr 85
4th Qtr 85
4th Qtr 85
2nd Qtr 85
4th Qtr 85
4th Qtr 85
1st Qtr 85
1st Qtr 85
1st Qtr 85
1st Qtr 86
3rd Qtr 85
4th Qtr 85
ESTIMATED LENGTH
OF NEGOTIATION
THRU FY 86 2nd QTR.
270 days
270 days
540 days
225 days
90 days
90 days
360 days
90 days
90 days
90 days
90 days
405 days
90 days
180 days
180 days
180 days
180 days
Not Known
90 days
180 days
315 days
180 days
OUTCOME
NOTES
Settlement
Unilateral Ord
Settlement
Settlement
Settlement
Fund Fin. Action
Settlement
Civil Action Ref.
Settlement
Settlement
Settlement
Settlement
Settlement
Settlement
Settlement
Fund Fin. Action
Settlement
Settlement
Settlement
(1) The Information above was generated from OWPE's SCAP report on negotiations dated 10/25/85 and
5/16/86. These negotiations were ongoing prior to FY 85, Initiated in FY 85, completed in FY 86
(2nd quarter), or FY 85 negotiations ongoing thru FY 86 (2nd quarter). The estimated length of
negotiation was obtained by giving a value of 90 days for each full quarter and giving a value
of 45 days for each initiated and completed quarter.
-------
EXHIBIT E
Page 11 of 11
(2) The Information was not shown on the FY 86 SCAP report as being transferred; thus we were unable to determine
the status of negotiations. We requested the Information from the Office of Waste Program Enforcement, Compliance
Branch (OWPE - CB) and they provided us with Information on a quarter completed basis, status(ongoing/transferred)
and Initiated date 1f needed. We did not put 1n this chart negotiations which were In the FY 85 SCAP report,
but were told that they were completed in FY84 In the review by the above mentioned office. We also did not
Include Information on two sites which we were told were Federal facilities and should not be Included In SCAP.
(3) The dates were changed since they were apparent mistakes and OWPE corrected them.
(4) The outcome was found as a bankrupt case (See Exhibit D).
Oi
Ul
-------
APPENDIX 1
Page 1 of 5
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
SEP I 0086
OFFICE OF
SOLID WASTE AND EMERGENCY RESPONSE
MEMORANDUM
SUBJECT: Draft Consolidated Report on EPA's Cost Recovery
Actions Agains-t Potential Responsible Parties
Ff( • "
FROM: jLltattftOflP«
Assistant Administrator
\y
TO: Ernest E. Bradley 111
Assistant Inspector General for Audit
Thank you for the opportunity to respond to the subject audit report.
We are concerned that the findings as they are presented in the report do not
reflect the total scope of the enforcement program. The enforcement program
has three basic strategies. First, we negotiate with the responsible party
or parties to undertake the cleanup or to pay EPA upfront for the costs of
the cleanup (cashout). If the negotiations fall, EPA then has two remaining
choices: Either to take the responsible party to court to compel a cleanup
action or to use the Fund and subsequently to recover the costs of cleanup
from the responsible party. We feel that it would provide balance to the S®e APPendix
report to include the number of settlements we have achieved that require ote
responsible parties to clean up the site. As on September 30, 1985, we had
settlements worth approximately $477 million in cleanup, 175 cases filed
worth $306 million in cleanup, and $137 million filed for cost recovery.
Another concern we have about the report is the cost recovery ratio of
1.1 percent of Trust Fund expenditures. We feel that this is a very poor
characterization of our cost recovery program for*a number of reasons. First,
the analysis compares total funds obligated with total cash received through gee
cost recovery as of September 30, 1985. Using the total funds obligated is Append!
not indicative of the site work that is completed, the time it takes to Note 2
prepare a case once work is complete, and the existance of a viable responsible
party at those sites where work has been done. Additionally, the scope of
your audit was limited to removals, yet your analysis takes into consideration
all Superfund costs. Finally, all Superfund costs are not cost recoverable.
For instance, it is Agency policy not to recover research and development
costs.
56
-------
APPENDIX 1
Page 2 of 5
A better characterization would be to compare the amount of funds
expended at a completed site that has a viable responsible party, to the
amount of cost recovery achieved through cases filed and cases in negotiation.
It should be mentioned that in FY 1986, we expect to double the amount of
cost recovery that we achieved In. the first five year of the fund.
Our next concern is your statement on page 10 that, "potentially over
$60 million will be lost to the fund in the next 20 years if cost recov- See Appendix 2
erles for removal actions under $200,000 continue to be ignored." Although Note 3
$60 million may not be recovered over the next 20 years, it will not be due
to ignoring cases under $200K. It will be due to not having a viable
responsible party.
The next concern is your statement about "the Congressional goal of
establishing a self-sustaining Fund to clean up the hazardous waste sites".
The Congressional goal is to clean up the nation's worst hazardous waste
sites. Since we estimate that more than half of the sites are abandoned and
have no viable responsible party against which to cost recover, your inter- See
pretation of the Congressional goal would not appear to be reasonable. A Appendix 2
more accurate statement would be to say that it is important that EPA maintain Note 4
an aggressive cost recovery program because EPA will be able to clean up
additional sites with the recovered funds. It is also Important to note
that Congress must appropriate these dollars to EPA, before they can be
used.
Our final concern is related to the 199 sites under $200,000, that are
not being pursued by EPA. In reviewing the sites listed in exhibit A, we See
have determined that almost 50 percent of the sites are under $10,000. In Appendix 2
weighing our staffing resources against the amount of recoverable dollars, Note 5
cases under $10,000 represent a low priority.
Before addressing each of your specific recommendations, we want to
point out that the new Superfund bill will bring some changes. Over the next
several months, we will be reviewing our existing policies and procedures and
will be revising them to incorporate the new provisions. During this process,
we will also take your recommendations Into consideration in updating our
policies and procedures.
.*
PIG Recommendation'- Small Case Policies
1. Require that minimal cost recovery actions (e.g., notification,
demand letters) be pursued for sites where funds expended are
under $200,000. Also, Headquarters should weigh the costs to
be incurred for litigation versus the costs to be recovered,
before pursuing a cost recovery action.
2. Develop and issue specific policies, procedures, and negotiating
strategies for settling cases under $200,000 ($500,000) to the
Regions to ensure a consistent Agency approach.
57
-------
APPENDIX 1
Page 3 of 5
3. Examine the possibility of using an arbitration board or
some similar mechanism as an alternative to filing cost
recovery actions in court.
4. Pursue the possibility of giving cost recovery actions under
$200,000 to outside attorneys on a contingency basis for
fees.
OSWER Response
Under the new Superfund, cases under $500,000 now can be
handled through admnistratlve means. We will be reviewing
existing policies and requirements of the new law, and we
take into consideration your recommendations. The new Super-
fund bill expressly allows for alternative dispute resolution
procedures. Since the new law gives us administrative author-
ity to pursue cost recovery actions under $500,000, it should
not be necessary to use outside attorneys.
QIC Recommendation - Bankruptcy Cases
1. Use more explicit language in the demand letter identifying
EPA as an "official creditor," thus no interpretation of the
demand letter will be required by the PRP.
2. Establish procedures on how to take the necessary action(s) to
establish EPA's priority claim in relation to other creditors.
3. Coordinate with the Office of General Counsel on developing
new procedures and a system that will permit EPA to take
timely action, once it is notified of a PRP's bankruptcy filing.
4. Coordinate with OECM to try to balance Agency actions against
both financially viable and nonviable PRPs, especially in light of
the courts''recent leaning towards giving governmental units first
priority on hazardous waste cases after secured creditors.
OSWER Response
We will consider revising our demand letters to include the
appropriate "official creditor" language.
The Bankruptcy Guidance issued by OECM will be reviewed and
revised as appropriate in light of the suggestions made re-
garding timeliness of actions and procedures for establishing
EPA's claims.
58
-------
APPENDIX 1
Page 4 of 5
PIG Recommendation - Negotiation Policy
1* Re-evaluate the Agency's present policy and procedures to
ensure that timeframes .set for negotiations are reasonable.
Also, timeframes should not be exceeded unless it can be
documented in the files that significant progress is being
made.
2. Require that specific steps in the negotiation and settlement
process are planned, scheduled, and initiated in a systematic
and orderly manner in order to minimize delays in the settle-
ment process.
3. Require Agency negotiators to notify responsible parties that
the negotiations must be concluded within the Agency's estab-
lished timeframe.
4. Require the Regional offices to maintain information on the
length of negotiations and whether this conforms to the goal
established by EPA.
OSWER Comments
We will re-evaluate our present policy and procedures and
timeframes for negotiations under the new law, and take your
recommendations into consideration.
PIG Recommendation - Statute of Limitation (SOL)
1. Proceed under the more conservative tort law timeframe (three
years after completion of a removal) until such time as the
issue is resolved by Congress or the Courts.
2. Include and track the SOL date in the comprehensive listing
of all removal actions.
3. For those sites where the SOL is about to expire, take immediate
action to initiate negotiations or referrals to DOJ.
OSWER Response
The new Superfund bill directly addresses the issue of the
statute of limitations.
OSWER has initiated work on a tracking system that will identify
all removal actions and pinpoint significant enforcement-related
dates, Including statute of limitations dates.
OSWER and OECM have already asked the Regions to review the universe
of removal actions for purposes of potential cost recovery actions.
59
-------
APPENDIX 1
Page 5 of 5
Current guidance ("Timing of CERCLA Cost Recovery Actions")
requires that CERCLA actions be initiated in a manner that
ensures compliance with any applicable statute of limitations
and also ensures that the evidence does not become stale.
We appreciate the opportunity to comment on the draft consolidated audit
report. If you have any questions regarding our comments, please call Brad
Campbell on 382-4478.
cc: Jack McGraw
Gene Lucero
Brad Campbell
60
-------
APPENDIX 2
Page 1 of 3
ADDITIONAL 01G COMMENTS TO OSWER'S
RESPONSE DATED SEPTEMBER 10, 1986
The following notes present the OIG's response to OSWER's comments which
were not addressed in the body of the report:
Notes
OSWER presented some dollar figures on settlements achieved with
responsible parties (RPs). After receiving this response, we
requested further clarification of these figures from OSWER.
OSWER indicated that: (1) the $477 million was money received
from RPs to actually clean up the sites and was not part of the
$1.3 million Trust Fund obligations; (2) $225 million of the
$306 million was also included in the $477 million figure
mentioned above; and (3) the remaining $81 million of $306
million represents the value of cleanups EPA is pursuing through
the court system. None of the above figures were part of the
$1.3 billion Trust Fund obligations. In addition, the $137
million is money that EPA is trying to recover by requesting
the Department of Justice to file for cost recovery. The $137
million is a part of the $1.3 billion Trust Fund obligations.
We-believe that the 1.1 percent cost recovery ratio is not a
poor characterization since it shows the actual percentage of
total funds the Trust Fund received through cost recovery.
We are pointing out that $14 million, or 1.1 percent, of the
$1.3 billion obligated from the Trust Fund for cost recovery
efforts as of September 30, 1985 have been returned to the Trust
Fund by collections from responsible parties. Obligations are
mainly a combination of two important accounting transactions:
(1) disbursed amounts and (2) estimates of future expenditures
that may occur. Thus, obligations represent the expenditures
and best estimate of expenditures the fund has or intends to
incur. While it would be unrealistic to expect EPA to recover
all Trust Fund expenditures, the Agency needs to be more aggressive
in pursuing its cost recovery actions.
We agree that cast recovery actions are resource intensive and
may not always be practical. However, we are concerned that
the current practice of selective enforcement may deplete the
Trust Fund and exempt numerous responsible parties from financial
liability for cleanup costs. All funds recovered, regardless
of the amount are considered important since they replenish the
Trust Fund and may be utilized for future cleanups.
In addition, the scope of our audit was not limited to just
removals. Three of the findings consisted of remedial as well
as removal actions.
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Notes
3 We believe that the Agency needs to strengthen its methods in
pursuing cases under $200,000. In his response, the Assistant
Administrator for Solid Waste and Emergency Response commented,
"Although $60 millipn may not be recovered over the next 20
years, it will not be due to ignoring cases under $200,000. It
will be due to not having a viable responsible party." The
Agency stated that it uses a priority system in pursuing cases
and that cases under $200,000 have a lower priority than larger
dollar cases. We realize that some of the costs may not be
recovered due to a lack of viable responsible parties. However,
when there is a viable responsible party, the low priority given
to these cases may still result in the funds not being recovered.
In addition, we have serious reservations about establishing a
threshold for initiating cost recovery actions. Should a
threshold be established, it could encourage responsible parties
to establish multiple hazardous waste sites in order to avoid
financial liability for cleanup costs.
4 While we agree with OSWER's statement that some sites may be
abandoned and have no viable responsible party, we believe
overall EPA must pursue an aggressive cost recovery program.
We believe EPA should pursue cost recovery actions at all sites
to the extent such actions can be pursued on a cost effective
basis (e.g., negotiations, filing of lawsuit, etc.) Such a position
will show that EPA will use strength in the process of recovering
funds.
5 We would like to provide clarification in 3 areas. First,
OSWER's comment should refer to Exhibit B and not Exhibit A.
Second, based on a special printout provided by OSWER that
showed some of the sites were listed under entirely different
names, the number of sites under $200,000 was subsequently
changed from 199 to 182 sites. Third, while cases under $10,000
1n value may not have the highest priority, we believe all sites
need to be evaluated for potential cost recovery action. In his
response to the Region 4 audit report, the Regional Administrator
stated:
"Since the established floor for cost recovery actions is
$500,000, recovery actions costing less than $500,000 are a
lower priority at both EPA-HQ and at the Department of
Justice (DOJ). Therefore, cost recovery for sites under
$200,000 is practically nonexistent. In HQ, the Office of
General Counsel (OGC) as well as Region IVs Office of
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Page 3 of 3
Regional Counsel (ORC) are not prepared to pursue or
negotiate settlements at these low dollar sites. Until
authority to settle these cases administratively is delegated
to the regions, very few of these cases will be pursued."
In our opinion, all sites should be examined to determine the
need for negotiations and possible filing of a case. Thus, the
negotiation team would be able to show strength. In addition,
we believe alternative methods such as the use of outside attorneys
on a contingency basis for fees should still be explored.
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APPENDIX 3
DISTRIBUTION OF AUDIT REPORT
Copies
A. Office of Inspector General (A-109) 10
Inspector General (1)
Deputy Inspector General (1)
Director, Audit Operations Staff (3)
Divisional Inspectors General for Audit (5)
B. Headquarter*s Office
Assistant Administrator for Solid Waste
and Emergency Response (WH-562A) 3
Deputy Assistant Administrator for Solid
Waste and Emergency Response (WH-562A) 1
Assistant Administrator for Enforcement
and Compliance Monitoring (LE-133) 1
Comptroller (PM-225) 1
Agency Follow-up Official (PM-225) 1
Attn: Resource Management Division
Associate Administrator for Regional
Operations (A-101) 1
C. Regional Office
#
Regional Administrator, Region III 1
Regional Administrator, Region IV 1
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