Landfill’s Closing May Bring Loss of Cleanup Funds : Pollution: Azusa Land Reclamation Co. might take back some of its $20.5 contribution to fight underground water contamination.

The court-ordered closure of the Azusa Land Reclamation Co. landfill has cast doubt on the future of a $20.5-million contribution the dump’s operator made in 1989 to assist the cleanup of the San Gabriel Valley’s polluted underground water supply.

State and landfill officials said it is uncertain what will now happen with the money, considered one of the few sure funding sources for a cleanup estimated to cost hundreds of millions of dollars.

The money--included in calculations of a state and federal plan for a $106-million short-term pollution cleanup--originally was placed in an escrow account as a condition of the dump’s planned expansion. But now the expansion has been blocked by the courts, effectively forcing the dump to close.

On the eve of the closure last week, landfill manager Paul Schelstrate said company officials had decided to withdraw all but $3 million of the money from the escrow account.

He said some of the money might be used to pay for the court-ordered environmental studies that must now be undertaken before the 302-acre rock quarry south of the Foothill Freeway would be permitted to reopen.

But later, Schelstrate said no final decision had been made. “It’s still very much up in the air,” Schelstrate said.

Craig M. Wilson, assistant chief counsel for the State Water Resources Control Board, said it is unclear whether the landfill will be allowed to withdraw the money. He said there is ambiguity in the agreement concerning in what circumstances the money would revert to the landfill company.

The $20.5 million was set aside in 1989 after a unusual offer by the landfill’s parent firm, Browning-Ferris Industries, and its chairman, William D. Ruckelshaus, twice administrator of the U.S. Environmental Protection Agency. Ruckelshaus personally made the proposal in 1989, first in a letter and then in an appearance before the state water board in Sacramento.

Ruckelshaus, giving assurances that his firm wanted to do everything it could to protect the landfill environs and the surrounding San Gabriel Basin, offered the money to be used to pay for three water treatment plants. For years, state and federal officials have been perplexed about how to finance the region’s expensive cleanup of ground-water pollution.

A majority of the five-member state water board found the Ruckelshaus offer enticing enough to make it one of the conditions for approval of expansion of the landfill.

Landfill officials have maintained that the $20.5-million payment was in no way an admission that the landfill has polluted the underground water supply, which suffers from heavy contamination from industrial solvents and degreasing agents.

“It was a good-faith effort to try to help the valley,” Schelstrate said.

Some environmentalists, however, have long been skeptical about the company’s motives in donating the money.

“It seemed like an attempt to buy off the opposition of the dump,” said Maxine Leichter, head of the Sierra Club’s Angeles Chapter water quality group.

If the landfill company now takes the money back, Leichter said, “it just shows that their attempt was not to clean up, but just to get their landfill (expansion approved).”

Local water officials--joined by a diverse coalition of environmentalists and the Metropolitan Water District of Southern California--criticized the state board for accepting the $20.5 million in the first place.

“We always kind of felt the money didn’t matter, that we were going to battle (the dump’s expansion) to the end,” said Robert G. Berlien, an official with the Main San Gabriel Basin Watermaster. “We thought that the stopping of the expansion of the landfill was more important than the dollar amount BFI offered for the cleanup.”

And landfill opponents say the BFI money, whether withdrawn or not, by no means solves financial issues surrounding the contamination.

“We certainly are happy to have all the funds we can get for the cleanup,” said Victor Gleason, deputy counsel of the Metropolitan Water District of Southern California. “But that doesn’t begin to deal with the (funding) problems we might have down the road.”

State officials said they are continuing to research the escrow agreement. They said the matter is expected to come up soon when the state water board holds meetings to discuss a host of subjects related to the landfill’s closure. The environmental studies and subsequent hearings could take from 18 months to five years, Schelstrate said.

Meanwhile, the dump--once the final resting place for 10% of Los Angeles County’s trash--now legally may only accept demolition and construction debris. Last week it laid off about half of its 40 employees.