State Toxics Control Agency Admits Not Collecting $184.5 Million in Cleanup Fees

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The state agency that regulates toxic polluters regularly spends millions of dollars to clean up sites without collecting money from the responsible parties.

This week, the Department of Toxic Substances Control (DTSC) said it has identified $102.7 million that it failed to bill responsible parties, $45 billion it billed but didn’t collect and $37.3 million that is tied up in litigation. Altogether, the department noted 1,700 sites that fell through the cracks.

The reason for the missing money? The department, which has been heavily criticized for being too cozy with polluters, hasn’t had a system in place to track billing since its creation 26 years ago. And it may be too late to catch up now. During that time, the department says, it has spent more than $1.4 billion overseeing cleanups of contaminated properties.

The businesses range from small mom and pop stores to giant conglomerates like Chevron and many of them no longer exist. “It looks like a lot of those companies are bankrupt and have been for some time, so the likelihood of getting the full $184 million is not high,” DTSC spokesman Jim Marxen told NBC Bay Area

The list does not include big ticket items like military bases or federal Superfund sites.

Although the problem was identified in 1992 and raised as an issue many times since, according to the department, it didn’t try to do anything about it until Debbie Raphael became director in 2011 and ordered a billing review by an internal Cost Recovery Team.

Department critic Consumer Watchdog said Raphael’s response was not good enough and called for the State Auditor to do a comprehensive financial audit. “It’s outrageous that companies like Chevron, chemical companies, and junkyards didn’t get billed for cleanups and regulators stuck Californians with the tab,” Consumer Watchdog advocate Liza Tucker wrote on the group’s website. “This is financial malpractice and heads should roll at the DTSC.”      

Tucker said the amount not collected could actually run into the billions and complained that the department has refused to release spreadsheets of information about companies not billed, claiming it was privileged attorney-client information. “This is just the tip of the iceberg,” she said.

The department did release a list (pdf) of the companies it had failed to bill over the years, and topping the list was the Pigment & Chemical Company in Contra Costa County. The company, which went bankrupt in 1998, was never sent its cleanup bill for $9.4 million. The city of Cudahy, which appears to still be around, is probably still wondering why it didn’t get its $4.3 million bill.

Raphael told the Sacramento Bee that the department is doing a site-by-site analysis for potential future billing and that the situation is finally under control: “We believe we have our arms around the problem now.”

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