$21.3 Million Is Just Start of Cash Flow for OII Work

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 3 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.

But as large as these amounts are--and this is one of the largest monetary settlements in the history of the 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.

Plan to Pursue Claims

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 the 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.

But some of the companies identified by the 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, the EPA should make allowances for the financial burden on small companies.

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 the EPA of $400,000.

Jerome said his company sent sludge, clay and other harmless waste to the landfill, but because the 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 so far his insurer has refused to acknowledge liability.

‘We Don’t Have the Money’

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

Bill Donahoe, who owns Vernon Truck Wash, said the EPA has asked his company, which has 52 employees, to pay more than $300,000. OII records indicate that 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 the 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.

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.

Doesn’t Expect Repeat

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.

Operating Industries, which was opened in 1948, took in large amounts of liquid hazardous waste from 1976 until it was closed in 1984. Landfill 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 the 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 the 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 the EPA, took over management of the site.

Haage said that 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.

Varying Amounts Due

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 3 years. They are Atlantic Richfield, Exxon Corp. and Union Pacific Resources Co.

From those cash payments, the 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 the EPA’s oversight of future cleanup work and $7.5 million for anticipated cost overruns and additional work.

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 that the 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.

Will Spend $34 Million

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 the 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 5 to 8 years, or until the EPA develops a final plan for the property.

PAYING THE PRICE OF POLLUTION

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.

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

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 USA 7,811,257 McDonnell 6,762,060 Douglas Corp. Union Oil Co. 6,247,505 NI Industries Inc. 5,581,172 Sun Oil Co. 5,264,880 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