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Superfund needs changes to best serve public.

The concept of a city and the public interests it serves has a long-standing history. The very lifeblood of ancient civilization sprang from the cities. Cities have long been recognized as a principal motivating factor in human progress, surpassed only, some say, by the development of agriculture.

Underlying the development of the American city were the important notions of home rule and local self-government. The municipal corporation was created and exists for the benefit of the people ... not as a private business corporation for pecuniary profit either for themselves or for the city as a corporation, but to supply such municipal needs, conveniences and comforts to advance the prosperity of the whole community. In sum, cities exist only to serve and benefit the public interest.

This article attempts to: highlight the legitimate public interests represented by cities which are being severely threatened under the existing Superfund law; identify why proposed legislation and EPA regulation fall short of addressing inequitable municipal Superfund liability; and encourage cities to engage in a uniformed nationwide effort to have Congress consider alternative Superfund approaches to dealing with cities.

The Problem

Superfund liability is based not on any improper conduct by a city but as a result of federal Superfund law. States have also enacted similar Superfund laws. The law imposes liability on the existing or past owner or operator of a contaminated site along with the transporter and generator of the waste at the site. Liability is imposed irrespective of the fact that the owner or operator may have conducted all activities to provide a service vital to the public, and consistent with all applicable laws.

Cities are being forced to recognize and address the universal nature of Superfund liability through their respective budgets and the pocketbooks of the local taxpayers. The legal, administrative and technical costs of a Superfund site cleanup are staggering.

Cleanup alone can average more than 25 million dollars per Superfund site. Courts have held Superfund liability to be strict, joint and several, meaning that if a city is any one of the aforementioned parties it could be held liable for up to the full amount of site cleanup.

Such tremendous costs could severely impact even the vast budgets of the largest city. However, in the case of medium and smaller cities, an unexpected 25 million dollar debt could cripple, or in the worst case, bankrupt a city and deprive its residents of vital services.

The striking impact of Superfund on cities is demonstrated by a quick review of the EPA "Interim Municipal Settlement Policy." The policy noted that of 1,219 proposed and final EPA National Priority List sites, nearly 25 percent involve municipalities.

It is clear that Superfund, while seeking to accomplish one legitimate public interest (cleanup of hazardous waste sites) substantially disregards the public interests served by cities and threatens to sacrifice their ability to continue serving the public interest.

The EPA Solution

In late 1989, the EPA adopted its "Interim Municipal Settlement Policy." The policy, while providing some limited unique treatment for haulers of non-hazardous municipal solid waste and municipal cleanup financing alternatives, recognized very little distinction between cities seeking to serve the public interest and their profit-making private sector corporate counterparts. In fact, the policy expressly stated that both would be treated alike for purposes of negotiations regarding the cleanup of Superfund sites and the great liabilities associated therewith.

The policy fails to address two key issues. The first is the notion that the cities are engaged in their activity and in fact exist only to further public interests such as the provision of legitimate services vital to the public health, safety and welfare. Secondly, the most important is the significant Superfund liability exposure and its substantial litigation and other costs which could cripple, if not end, the ability of a city to meet legitimate local public needs.

The ultimate result of the existing Superfund approach is that as cities continue to be responsible as a deep pocket for the tremendous costs of environmental cleanup, municipal treasuries are being severely drained and cities with already tight budget conditions are forced to make dramatic cuts in irreplacable police, fire and other services to the direct detriment of the local taxpaying citizen. The EPA's attempted recognition of the uniqueness of cities in its policy falls far short of recognizing the public interest at stake under Superfund.

Despite the tremendous liabilities faced by cities, both for past and future activities, cities, have been slow to respond in a nationwide coordinated non-piecemeal effort to seek Superfund amendments which recognize the legitimate public interests they serve.

Cities should learn from the major industry lobbying efforts, such as the oil industry which was able to gain a petroleum exclusion which recognizes petroleum products as materials exempt from Superfund. The banking industry is in the midst of coordinated lobbying efforts to seek legislative expansion of their exemption. The clear message is that nationwide coordinated efforts are effective to bring about Superfund change.

The time has come for cities to realize that Superfund liabilites constitute the proverbial "Sword of Damocles" over the heads of cities attempting to provide those vital services that the local citizenry rightfully depend upon them to provide. In so recognizing the impact of Superfund, cities may then focus their resources to address a comprehensive national lobbying effort requesting Congress to amend the Superfund reauthorization process to eliminate or mitiigate the existing threat posed by Superfund to public interests.

The American Communities for Cleanup Equity was formed to develop a nationwide effort to address some Superfund inequities facing cities. The effort has been successful in leading to last year's proposed federal legislation to amend Superfund (S 1557 and HR 3026). Unfortunately, the legislation deals primarily with municipal solid waste and sewage sludge generator/transporter liability and does not deal with municipal owner/operator liability which is a substantial problem for many cities.

In response to the ACCE efforts, the EPA is now considering a new municipal policy aimed at setting upward limits on municipal generator/transporter Superfund liability. While the EPA policy is encouraging, it only partially addresses the municipal Superfund liability inequities. The municipal owner/operator liability must be a part of any Superfund liability relief. The issue must be addressed to allow cities to continue to provide public services without the environmental "Sword of Damocles" hanging over their efforts.

Conclusion

If cities are to continue to serve the legitimate public interests for which they were created, their Superfund liabilities (whether generator/transporter or owner/operator) must be tempered. Possible alternatives include a municipal settlement policy which provides increased deminimus settlement opportunities for municipalities, exempts cities from "orphan" share liability when other PRPs are not present or are bankrupt, provides in-kind settlement opportunities, ensures that cities do not have to pay premiums to settle with the EPA, or provides a credit policy for municipal activities conducted solely in the public interest but which caused contamination.

Irrespective of which alternative is considered, the EPA and Congress must be made aware that Superfund threatens to sacrifice the fundamental public interests represented by cities. Utilizing alternatives could provide a compromise of allowing the Superfund public interest to be furthered without sacrificing cities and the public interests they represent.
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Copyright 1992 Gale, Cengage Learning. All rights reserved.

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Title Annotation:Special Report: Prescribing Change for Superfund Law
Author:Sanchez, James C.
Publication:Nation's Cities Weekly
Date:May 25, 1992
Words:1205
Previous Article:Caregiving issue explored at WIMG meeting.
Next Article:Staggering local costs point to need for reform.
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