REPORT TO MAYOR AND COUNCIL NO. 99-2 CA

TO THE HONORABLE MAYOR AND COUNCIL

DATE: March 2, 1999

U.S. Environmental Protection Agency has sent letters to more than 800 private and public entities, including the City of Sunnyvale, inviting them to settle as "de minimis" contributors and resolve any liability they have as potentially responsible parties for contribution of hazardous waste to the Casmalia disposal site in Santa Barbara County. The amount of money that EPA is seeking from each of the parties varies, depending upon the amount of waste sent to the site. For the City of Sunnyvale, the amount sought is $38,996; however, we can take advantage of a 5% discount and remit $37,046 if we do so promptly.

The Casmalia Disposal Site in Santa Barbara County was designed to safely contain hazardous waste. Thousands of entities shipped 4.453 billion pounds of waste there between 1973 and 1989. Although designed for such disposal, it has become a Superfund cleanup site and the estimated cost to clean up the 252 acres is $399 million. Cleanup operation and maintenance activities at the site are expected to continue to at least the year 2090. The cleanup work includes capping multiple landfills and establishing and operating systems to collect, treat and dispose of millions of gallons of subsurface liquids per year.

The Resource Conservation and Recovery Act (RCRA) regulating hazardous waste facilities and the "Superfund law," the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), govern what transpires. Because of the waste shipment manifests created by RCRA, everything is documented, including the type and amount of waste sent be each "generator." Using those records, the EPA determined there were 150 major generators and thousands of others who were "de minimis." The EPA entered into a consent decree with 52 of the major waste generators under which the private parties will pay for, and perform, certain site work. The EPA then issued administrative enforcement orders to the major parties who did not agree to settle.

The EPA is authorized under CERCLA to enter into "de minimis" settlements when it is "practicable and in the public interest" if the settlement "involves only a minor portion of the response costs at the facility" and both the amount and the toxic effects of the hazardous substances contributed "are minimal in comparison to other hazardous substances at the facility." If the de minimis parties pay a "cashout" amount, CERCLA authorizes the EPA to promise that it will not bring future legal actions against the settling party for the matters resolved in the settlement (a covenant not to sue) and protection to the settling party from being sued by other liable parties and being brought back into the litigation (contribution protection).

According to the records, Sunnyvale sent 222,713 pounds of waste to Casmalia. Pursuant to an established cashout formula, the amount assessed for this waste is $38,996. However, if the City agrees to settle and remits payment before April 9, 1999, EPA will settle for 95% of the amount, the sum of $37,046. If Sunnyvale agrees to a "de minimis" settlement and cashout payment, EPA will provide a covenant not to sue and contributor protection. If we decline to accept the offer, EPA will assume we decline to participate in the remediation of the site. Non-settling parties are subject to major enforcement action.

A prompt settlement will cost the City $37,046. The money will come from the Utility Enterprise Funds and the General Fund.

Council Agenda.

1. Agree to the "de minimis" settlement offer.

2. Do not agree to the "de minimis" settlement offer.

Alternative 1, agree to the "de minimis" settlement offer of $37,046.

Valerie J. Armento
City Attorney

RTC\Casmalia Disposal Site