Cash Flow for OII Cleanup Begins With $21.3 Million

Within a few months, treasurers of some of the nation’s largest corporations will write checks for hundreds of thousands--and in a few cases--millions of dollars to help pay for the cleanup of a closed dump in Monterey Park.

The checks, written to the U.S. Environmental Protection Agency and the state Department of Health Services by 51 companies and the Los Angeles Department of Water and Power, will total more than $21.3 million. They will be followed over the next three years by payments of more than $9.6 million.

At the same time, a group composed of 60 companies and the Southern California Rapid Transit District will hire experts and spend $35.9 million to take over daily management of environmental controls at the dump site.

Flow Is Just Beginning

But as large as these amounts are--and this is one of the largest monetary settlements in the history of EPA’s toxic cleanup program nationwide--the flow of money to protect public health from hazardous waste at the Operating Industries Inc. landfill is just beginning.

EPA officials say they plan to pursue claims against thousands of companies that shipped waste to the dump. Companies that have already agreed to spend millions for the initial stages of the cleanup can expect further demands from EPA as the work proceeds.

Lisa Haage, EPA regional counsel, said administrative orders will be issued early this year to compel cleanup participation by a number of companies that shipped large volumes of hazardous waste to the dump, but were not part of the initial settlement. Companies that refuse to comply will be taken to court, she said, and they could be ordered to pay up to three times the cost of cleanup work done in their behalf.

However, some of the companies identified by EPA as responsible for hazardous waste at OII say they cannot afford to pay the amounts demanded by the agency.

An executive for a company that was asked to pay $200,000 said his business, which has 100 employees, is in no position to write a check that size.

The businessman, who spoke on condition that neither he nor his company be identified, said the burden is especially hard to accept because the company did nothing improper. He said it disposed only of waste that OII was legally authorized to receive. The executive said he recognizes that under the federal Superfund law a company is responsible for its hazardous waste even after the waste has been legally disposed of in a dump. But, he said, EPA should make allowances for the financial burden on small companies.

Faces $400,000 Demand

Jeff Jerome, vice president of Southwest Processors Inc. in Vernon, said his company, which makes cattle feed out of animal fat and vegetable oil, faces a demand for payment from EPA of $400,000.

Jerome said his company sent sludge, clay and other harmless waste to OII, but because EPA is basing assessments on waste volume without regard to the content of the waste, his company’s bill is enormous.

Banks are unwilling to loan money for that sort of expense, Jerome said, and thus far his insurer has refused to acknowledge liability.

Simply put, Jerome said, “our problem is that we don’t have the money.”

Bill Donahoe, who owns Vernon Truck Wash, said EPA has asked his company, which has 52 employees, to pay more than $300,000. OII records indicate the company sent 470,000 gallons of waste to the dump, but Donahoe said it was harmless mud and sludge washed off trucks.

Donahoe said he has had trouble reaching EPA officials to present his argument that his waste was not hazardous. He said he has already been forced to spend $2,500 to prepare technical reports for EPA and will have to hire an attorney to defend himself in court if the agency presses its demands.

“All I know is that if they sue me (and win), they’ve got themselves a truck wash,” Donahoe said.

Haage said there is a public misconception that only materials that “sound toxic” are classified as hazardous waste. Actually, she said, the list is much broader, and includes solvents used to wash planes and trucks.

Haage said that while some types of hazardous waste may be more harmful than others, it is often impractical to differentiate in assessing liability.

Based on Volume

She said the cash settlements in the OII dumping have been based on the volume of hazardous waste, regardless of its toxicity.

Haage said there is no doubt that the ability to pay will be a problem for some companies. “OII is a very expensive site,” she said.

At a press conference last month, Daniel McGovern, EPA regional administrator, described OII as “one of the most complex and contaminated sites in the nation.”

Haage said the cleanup is complex because of the huge volume of waste buried at the site, and the fact that the dump is located in a populated area, with homes hugging its perimeter. The main portion of the dump, 145 acres, is located on the south side of the Pomona Freeway, bordering Montebello. An older section of the dump occupies 45 acres north of the freeway.

Haage said more is known today about how to handle hazardous waste than was known when Operating Industries was open. And because of that, she said, “I don’t think there will ever be another site as bad as OII.”

Problems at the dump have included odors, buildup of methane gas, emission of vinyl chloride and other toxic chemicals, and the creation of leachate, contaminated liquids that can seep into ground water.

OII, which was opened in 1948, took in large amounts of liquid hazardous waste from 1976 until it was closed in 1984. OII records show that the dump received more than 230 million gallons of hazardous waste, including petroleum products, paint, ink, foodstuffs and cleaning solvents.

Haage said EPA is seeking cleanup assistance from the dump owners and waste haulers, as well as the companies that generated the waste. The owners have submitted a settlement offer, which EPA is considering.

Haage said haulers are liable for hazardous waste they picked up and took to OII on their own authority, but not for waste they hauled at the direction of others.

After the dump was closed, its owners stopped paying for the control of landfill gas and leachate. The state, and later EPA, took over management of the site.

Haage said more than 4,000 companies sent hazardous waste to the landfill, but that 80% of the waste came from 189 sources.

About two-thirds of those sources, including oil refineries, industrial and chemical plants and food processors, have agreed to either pay cash or perform work at the dump. The commitments are contained in a partial consent decree filed by attorneys for the state and federal governments in U.S. District Court in Los Angeles on Dec. 7.

The decree will not become effective until it is approved by a judge, after a court hearing.

Companies that have agreed to pay for the initial cleanup work in cash will pay varying amounts, based on the volume of hazardous waste they dumped. The amounts range from $15,000 from the Coca-Cola Company to $5.9 million from Atlantic Richfield Co. Three of the companies have negotiated agreements to make payments over three years. They are Atlantic Richfield, Exxon Corp. and Union Pacific Resources Co.

From those cash payments, EPA will receive $18.5 million and the state nearly $770,000 as reimbursement for what they have spent managing the site since the dump was closed. The settlement provides about $6 million to pay for EPA’s oversight of future cleanup work and $7.5 million for anticipated cost overruns and additional work.

Improve System

The companies that have agreed to spend $34 million on work at the dump will hire contractors to build and operate a plant to treat leachate. They will also maintain and improve the existing system to collect and burn landfill gas, as well as perform other maintenance and monitoring tasks.

The settlement does not cover the expanded landfill gas collection system EPA is planning at a construction and 30-year maintenance cost of $73 million, nor any other work that may be recommended under the final cleanup plan the agency is preparing.

EPA officials say that when they are ready to proceed with the expanded gas collection system and other new work, they will return to the companies that are responsible for the hazardous waste and ask them either to do the work or to pay for it.

Under the partial consent decree, the companies do not admit liability for contamination of the site, but they are not excused from paying future cleanup costs.

The companies that have chosen to undertake work at the dump and not simply pay part of the cleanup costs have formed the OII Steering Committee to manage the project. The committee’s attorney, Daniel A. Giannotti, said the companies are committed to spending $34 million and perhaps more if the work is not done satisfactorily and EPA imposes penalties. But, Giannotti said, the companies are willing to take the penalty risk in order to exercise control over the cleanup and make sure their dollars are well spent.

Once the consent decree is approved by the court, the OII Steering Committee will move its contractors onto the dump site and take over monitoring and maintenance functions from EPA contractors for about five to eight years, or until EPA develops a final plan for the property.

Company Gallons deposited Chevron USA 14,056,802 Atlantic Richfield 9,288,682 Co. American National 9,046,551 Can Texaco Inc. 8,779,521 Exxon Corp. 7,811,257 McDonnell 6,762,060 Douglas Corp. Union Oil Co. 6,247,505 NI Industries Inc. 5,581,172 Sun Exploration 5,264,880 & Production Co. Occidental 4,471,080 Petroleum Mobil Oil Corp. 4,272,933 Southern California 3,602,724 Gas Co. Continental Can 3,564,335 IT Corp. 3,521,119 Shell Oil Co. 3,442,910 Powerine Oil Co. 3,401,162 Santa Fe Energy 3,390,002 Co. Martin Marietta 3,089,925 Corp. Del Amo Energy 3,082,880

EPA list of companies that have deposited more than 3 million gallons of hazardous waste at OII landfill, based on OII records.

Members of the OII Steering Committee who have agreed to spend $34 million on cleanup work at the OII landfill and reimburse the state and federal government $1.9 million for past costs:

Allied-Signal Inc.

American Airlines Inc.

Bethlehem Steel Corp.

Betz Laboratories Inc.

Borg-Warner Corp.

Calgon Corp.

Carnation Co.

Chevron

Conoco Inc.

Cooper Drum Co.

Crowley Maritime Corp.

Deft Inc.

Delta Air Lines Inc.

Douglas Oil Co.

Dunn-Edwards Corp.

Flying Tiger Line Inc.

GATX Terminals Corp.

General Felt Industries Inc.

General Motors Corp.

Georgia-Pacific Corp.

Hughes Aircraft Co.

Ingersoll-Rand Co.

Jaybee Manufacturing

Kenosha Auto Transport Corp.

Lever Brothers Co.

Liberty Vegetable Oil Co.

Long Beach Oil Development Co.

Major Paint Co.

Martin Marietta Corp.

Max Factor & Co.

McDonnell Douglas Corp.

Menasco Inc.

Mobil Oil Corp.

NI Industries Inc.

NL Industries Inc.

Occidental Petroleum Corp.

Parker-Hannifin Corp.

PPG Industries Inc.

Procter & Gamble Manufacturing Co.

Reynolds Metals Co.

Safeway Stores Inc.

Santa Fe Energy Co.

Shell Oil Co.

Sinclair Paint Co.

Southern California Edison Co.

Southern California Gas Co.

Southern California Rapid Transit District

Southern Pacific Transportation Co.

Southwestern Engineering Co.

Sparkletts Drinking Water Corp.

Superior Industries International Inc.

Sun Exploration & Production Co.

Texaco Inc.

THUMS Long Beach Co.

Transportation Leasing Co. for Greyhound Corp.

USG Corp. for Hollytex Carpet Mills

Union Oil Co. of California

Uniroyal Goodrich Tire Co.

Welch’s Overall Cleaning Co.

Willamette Industries Inc.

Xerox Corp.

PAYMENTS FOR LANDFILL CLEANUP

Name of Company Payments to Payments to EPA state Aluminum Co. of America $699,200 $6,080 American Can/Primerica Corp. 95,087 827 American National Can 5,715,863 49,703 Anchorlok Corp. 292,100 2,540 Aratex Services Inc. 146,050 1,270 Armco Inc. 109,250 950 Atlantic Richfield Co. 5,866,449 51,030 Beatrice/Hunt-Wesson Inc. 196,650 1,710 BJ-Titan Services Co. 81,650 710 Borden Inc. 94,300 820 CalMat Co. 100,050 870 Champion International Corp. 90,850 790 Coca-Cola Bottling Co. 92,000 800 of Los Angeles The Coca-Cola Co. 14,950 130 Davidson P.W.P 96,600 840 Los Angeles Department 437,000 3,800 of Water and Power Edgington Oil 289,800 2,520 Emerson & Cuming Inc. 177,100 1,540 Exxon Corp. 4,934,650 42,910 Firestone Tire & Rubber Co. 104,650 910 Flint Ink Corp. 197,800 1,720 FPCO Oil & Gas Co. 98,900 860 Franciscan Ceramics Inc. 184,000 1,600 General Latex & Chemical Corp. 110,400 960 Hydril Co. 88,550 770 International Extrusion Corp. 85,100 740 International Paper Co. 158,700 1,380 Interpace Corp. 745,200 6,480 Kiewit Continental Inc. 2,251,700 19,580 Lockheed Corp. 815,350 7,090 Longview Fibre Co. 80,500 700 Luxfer USA Ltd. 119,600 1,040 Maytag Corp. 141,450 1,230 McAuley LCX Corp. 126,500 1,100 Mitchell Energy Corp. 317,400 2,760 Owens-Illinois Inc. 90,850 790 Quantum Chemical Corp. 400,200 3,480 Reichhold Chemicals Inc. 261,050 2,270 Reisner Metals Inc. 108,100 940 7Up/RC Bottling Cos. 86,250 750 of Southern California Soule-Arnon Liquidating Agency 1,518,000 13,200 Stroh Container Co. 320,850 2,790 SupraCote Inc. 98,900 860 The Times Mirror Co. 171,350 1,490 Tree Island Industries Ltd. 113,850 990 TRW Inc. 209,300 1,820 Union Carbide Corp. 34,500 300 Union Pacific Resources Corp. 1,795,150 15,610 United Air Lines Inc. 125,350 1,090 United Parcel Service 101,200 880 of America Inc. United States Brass Corp. 323,150 2,810 Van Waters & Rogers 96,600 840 TOTALS 31,010,049 269,670