October 27, 2020
2020-107
The Governor of California
President pro Tempore of the Senate
Speaker of the Assembly
State Capitol
Sacramento, California 95814
Dear Governor and Legislative Leaders:
As directed by the Joint Legislative Audit Committee, my office conducted an audit of the steps taken by the Department of Toxic Substances Control (DTSC) to identify and remove lead contamination from over 10,000 properties surrounding a former lead battery recycling facility in Vernon, California. Lead contamination can have detrimental effects on the health of individuals who are exposed, and in some cases can be lethal. Despite the importance of removing lead contamination, we found that DTSC’s cleanup efforts are behind schedule.
We are particularly concerned that DTSC has not removed contaminated soil from a total of 31 school, childcare facility, and park properties even though it had available options for cleaning those sites. This is troubling because the children who may frequent these locations are at particularly high risk from the negative health effects of lead. Additionally, DTSC is behind schedule in its effort to clean 3,200 of the most contaminated properties. DTSC estimated it could clean these properties by June 2021. However, it has not cleaned properties at its expected pace and recently slowed its cleanup pace further due to a dispute with a contractor. At its current pace, DTSC will not finish cleaning the most contaminated properties until more than one year after the expected completion date. Finally, after DTSC finishes cleaning these 3,200 properties, an estimated 4,600 properties will remain contaminated and DTSC has not established a timeline or strategy to clean those properties.
Furthermore, the cleanup project is likely to cost hundreds of millions of dollars more than the State has provided DTSC to date. The State has provided DTSC about $250 million to clean the 3,200 most contaminated properties. We estimate that by the time DTSC spends all of this funding, 269 of these properties will still be contaminated. The department’s poor cost estimation and cost overruns by one of its contractors have contributed to DTSC spending more than expected to clean the contamination. At current spending rates, we estimate that DTSC will need about $390 million more than it has been allocated to date to completely clean all 7,800 contaminated properties. Although the State expected it would recover its costs from Exide, in October 2020 a federal court approved a bankruptcy settlement that leaves significant questions about the State’s ability to obtain reimbursement for the cleanup.
Respectfully submitted,
ELAINE M. HOWLE, CPA
California State Auditor