Report 2020-107 Recommendation 4 Responses

Report 2020-107: California Department of Toxic Substances Control: The State's Poor Management of the Exide Cleanup Project Has Left Californians at Continued Risk of Lead Poisoning (Release Date: October 2020)

Recommendation #4 To: Toxic Substances Control, Department of

To ensure that it has sufficient funding to clean up all lead-contaminated properties in the cleanup site, DTSC should do the following:

-Identify the full amount of funding it needs to complete the cleanup of the 3,200 most contaminated properties and the remaining 4,600 contaminated properties. It should submit a request for funding in time for spring 2021 budget discussions that includes a range of funding options that spans from funding for the full cleanup to funding for only a portion of the remaining contaminated properties.

-Immediately revise its cost estimation methods to encompass the factors that it now knows will affect its overall costs. If needed, it should contract for expertise in determining accurate and complete estimates of the remaining cleanup cost.

Annual Follow-Up Agency Response From October 2023

In January 2021, DTSC submitted a budget change proposal (BCP) to provide the resources needed to reach the goal of cleaning 3,200 of the most contaminated properties. In May 2021, DTSC put forth a second BCP to cleanup an additional 2,740 properties with a representative lead concentration above 200 ppm. The Legislature approved both requests and appropriated the resources in SB 158, for a total of $322.4 million to achieve cleanup of these qualified properties. This funding will reduce the universe of remaining properties requiring cleanup from 4,600 to approximately 1,900.

As described in the response to recommendation 3, DTSC is currently working with the U.S. EPA to add the Exide project to the NPL list. If approved, this would provide additional critical resources needed to complete the cleanup of the approximately 1,900 remaining properties.

Additionally, on June 27, 2023, Governor Newsom signed SB 101, a budget bill that added $67.3 million to the residential cleanup project, to clean up the residential parkways within Exide Preliminary Investigation area. Cleanup of the parkways is anticipated to begin late 2023. Overall, 6,425 parkways exceed the residential cleanup goal for lead and/or other metals, and thus qualify for cleanup.

California State Auditor's Assessment of Annual Follow-Up Status: Partially Implemented

DTSC had previously revised its cost estimation methodology, but then only used it to estimate the cost of cleaning an additional 2,740 properties. This remains only partially implemented until DTSC uses its revised methods to calculate the cost of cleaning all contaminated properties.

Annual Follow-Up Agency Response From November 2022

In January 2021, DTSC submitted a budget change proposal (BCP) to provide the resources needed to reach the goal of cleaning 3,200 of the most contaminated properties. In May 2021, DTSC put forth a second BCP to cleanup an additional 2,740 properties with a representative lead concentration above 200 ppm. The Legislature approved both requests and appropriated the resources in SB 158, for a total of $322.4 million to achieve cleanup of these qualified properties. This funding will reduce the universe of remaining properties requiring cleanup from 4,600 to approximately 1,900.

As described in the response to recommendation 3, DTSC is currently working with the U.S. EPA to add the Exide project to the NPL list. If approved, this would provide additional critical resources needed to complete the cleanup of the approximately 1,900 remaining properties.

California State Auditor's Assessment of Annual Follow-Up Status: Partially Implemented

As DTSC indicates, it revised its cost estimation methodology but then only used it to estimate the cost of cleaning an additional 2,740 properties. This recommendation remains only partially implemented until DTSC uses its revised methods to calculate the cost of cleaning all contaminated properties.

1-Year Agency Response

In January 2021, DTSC submitted a budget change proposal (BCP) to provide the resources needed to reach the goal of cleaning 3,200 properties. In May 2021, DTSC put forth a second BCP to cleanup an additional 2,740 properties with a representative lead concentration above 200 ppm. In response, the Legislature approved both requests and appropriated the resources in SB 158, for a total of $322.4 million to achieve cleanup of these qualified properties.

DTSC has used a revised cost estimation procedure to estimate the cost of cleaning up the remaining qualified properties within the PIA. This was reflected in the 2021 May Revision BCP that requested $291 million General Fund to clean up 2,740 additional properties. This revised cost estimation incorporates the following factors:

Inflation

Increased Labor rates

Sample storage

Performance and Payment Bonds

Project Management and Quality Assurance

Financial Audit

DTSC's cost estimation spread sheet will be provided via email along with the additional supporting documentation.

California State Auditor's Assessment of 1-Year Status: Partially Implemented

As DTSC indicates, it revised its cost estimation methodology but then only used it to estimate the cost of cleaning an additional 2,740 properties. This remains only partially implemented until DTSC uses its revised methods to calculate the cost of cleaning all contaminated properties.

6-Month Agency Response

The Governor's Budget includes a Budget Change Proposal (BCP) for $31.4 million to complete cleanup of the 3,200 properties. We also intend to use a portion of Lead-Acid Battery Recycling Facility Investigation and Cleanup (LABRIC) cleanup funds to continue residential cleanups in the preliminary investigation area (PIA).

DTSC has used a revised cost estimation procedure to estimate the cost of cleaning up the remaining properties within the PIA that may require cleanup. This revised cost estimation incorporates the following factors:

-Inflation (3.5% annual)

-Increased Labor rates

-Sample storage

-Performance and Payment Bonds

-Project Management and Quality Assurance

-Financial Audit

California State Auditor's Assessment of 6-Month Status: Pending

In its response, DTSC did not indicate that it identified the full amount of funding to complete the cleanup of the remaining lead contaminated properties. Further, although it described its revised cost estimation procedure, it did not provide any documentation to support that it used this revised procedure to estimate its remaining cleanup costs. Without a new cost estimate, DTSC does not have an accurate and complete estimate of the remaining cleanup cost.

60-Day Agency Response

4.A Response: Not Fully Implemented

New appropriations of state funding for additional cleanups would be part of future budgetary discussions.

4.B Response: Fully Implemented as of 12/18/2020.

DTSC has revised our cost estimation methods to include the following:

Inflation

Project Labor Agreement wage increase

Sample storage

Performance and Payment Bonds

Project Management and Quality Assurance

Financial Audit

DTSC will use this revised methodology for cleanup cost going forward.

California State Auditor's Assessment of 60-Day Status: Pending

DTSC provided us its updated cost estimation methodology. However, it did not provide us any evidence that it has used this updated methodology to prepare a new cost estimate. Without a new cost estimate, DTSC does not have an accurate and complete estimate of the remaining cleanup cost.

All Recommendations in 2020-107

Agency responses received are posted verbatim.