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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 Report Number: 2020-107

Introduction

Background

Since 2015 the Department of Toxic Substances Control (DTSC) has been working to identify lead contamination and, where present, remove it from about 10,160 residential properties, childcare centers, parks, and schools surrounding a former lead battery recycling facility in Southern California. About 100,000 people live in the contaminated area and are therefore at risk of exposure to lead-contaminated soil. Exposure to lead can cause serious health issues, including brain damage, memory loss, reproductive disorders, and other conditions, as the text box indicates. Even small amounts of lead can cause serious health problems, particularly for children, because it can cause developmental delays and seizures. At very high levels, lead exposure can result in death.

DTSC’s mission is to protect California’s residents and environment from the harmful effects of toxic substances. Its responsibilities include enforcing hazardous waste laws and restoring resources contaminated with toxic substances. To accomplish its responsibilities, it has around 930 staff members who work at 11 offices located throughout the State. When necessary, DTSC uses contractors to assist with cleanup of hazardous wastes.

Exide Technologies’ Lead Battery Recycling Facility

In 2000 Exide Technologies (Exide) acquired a 15-acre facility located in Vernon, California. Exide processed used lead-acid batteries and other lead-bearing materials to recover lead and other materials at this facility until 2014, when it ceased operations to address air pollution concerns that the South Coast Air Quality Management District (SCAQMD) had raised. DTSC’s permit history records state that the facility accepted about 11 million used lead-acid batteries each year, from which it recovered 100,000 to 120,000 tons of lead.

When it took over the Vernon facility in 2000, Exide assumed the previous owner’s interim status hazardous waste permit, which DTSC’s predecessor agency had granted in 1981, when the State first began requiring such permits. Part of DTSC’s responsibility includes the issuance of operating permits for hazardous waste facilities, such as the Exide facility, and their regular inspection. However, since 2007, actual monitoring of airborne emissions from the facility has been conducted by SCAQMD. Over the next 13 years, Exide submitted at least seven hazardous waste permit application revisions to DTSC. Exide intended these revisions to address repeated deficiencies in its application. In 2015 DTSC notified Exide that it intended to deny Exide’s application revision. Exide and DTSC jointly agreed that Exide would withdraw its permit application, permanently cease operations, and close the facility in accordance with a DTSC-approved closure plan.

In December 2016, DTSC approved Exide’s closure plan, which described how it would shut down the facility while protecting public health and the environment. That plan includes decontaminating, deconstructing, and disposing of the equipment and structures that the facility used to manage hazardous waste.

DTSC’s Identification of Lead Contamination

State law allows DTSC to take enforcement action against polluters or take other action, such as hazardous substance removal, when it determines that these substances may pose an imminent or substantial endangerment (ISE) to public health, welfare, or the environment. In November 2015, DTSC determined that pollution surrounding the Exide facility constituted an ISE situation. The ISE determination gave DTSC significantly more flexibility to procure cleanup contractors than state law normally allows.

In April 2016, the Legislature approved a $176.6 million loan from the State’s General Fund to DTSC for activities related to the investigation and cleanup of the lead-contaminated properties in the communities surrounding the Exide facility. DTSC determined that an area of about a 1.7-mile radius around the facility was contaminated because of activities from the facility—in this report, we refer to the area as the cleanup site. ² As of August 2020, Exide was disputing that it is responsible for lead contamination in the residential areas near its former facility. Although the former Exide facility is located in Vernon, the cleanup site extends into the cities of Los Angeles, Huntington Park, Commerce, Bell, and Maywood, as well as unincorporated Los Angeles County. Figure 1 shows the cleanup site.

Figure 1
DTSC Has Divided the Cleanup Site Into Seven Zones

In ISE situations, DTSC may order the responsible party to clean up the contamination or it can do so itself or through a contractor and seek to recover its costs from the responsible party. Here, DTSC chose to clean up the contamination by using contractors because Exide disputed the extent of its responsibility for the contamination, and DTSC determined that the contamination posed a significant threat.

As of June 2020, the State had provided nearly $260 million to DTSC, mostly in loans from the General Fund, to clean the lead-contaminated properties and conduct related activities at the cleanup site. The Legislature provided these loans with the expectation that DTSC would successfully recoup the cost of the cleanup from Exide. However, in early 2020 Exide filed for Chapter 11 bankruptcy, and 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. As part of its preparation for possible cost recovery, DTSC has been storing soil samples that it collects from each property as evidence of contamination. It also will probably need to provide documentation of the actions it has taken to clean properties and the amount its cleanup contractors have charged. Figure 2 outlines key events in the timeline of the Exide cleanup project.

Figure 2
Key Events in the Exide Cleanup Timeline

DTSC’s Cleanup Plan

Although the vast majority of the 10,160 properties in the cleanup site are residential, others—such as schools and childcare centers—are publicly owned. In July 2017, DTSC finalized its removal action plan (cleanup plan) for cleaning the lead-contaminated properties within the cleanup site. According to multiple DTSC staff, this effort was the largest cleanup of its kind in California. The cleanup plan prioritizes properties with the highest levels of lead contamination and the greatest potential health risk to sensitive individuals, which the plan defines as children younger than 7 years of age and pregnant women. The department has sampled more than 8,500 properties and identified more than 7,700 with lead concentrations over 80 parts per million (ppm), which makes them dangerous to sensitive individuals who live in or visit these properties. According to the assistant deputy director of DTSC’s Exide division (assistant deputy director), DTSC plans to address the 3,200 of these properties that have lead concentration of 300 ppm or greater, essentially prioritizing the most dangerous among all contaminated properties. Appendix B shows a detailed breakdown of the status of the cleanup effort as of spring 2020, including the number of properties for which property owners have not granted DTSC permission to sample for lead contamination.

The majority of DTSC’s cleanup activities to date have been performed by two contractors under three separate contracts. DTSC entered into an agreement with the first contractor (Contractor A) in April 2018 to clean 215 properties, with an amended value of $13 million. In August 2018, DTSC entered into another agreement with Contractor A, which—after subsequent amendments—includes the cleanup of an additional 1,100 properties for about $75 million. In October 2018, DTSC hired a second contractor (Contractor B) to clean up to 1,610 properties for $82 million. DTSC also has additional cleanup‑related contracts, including a $5.4 million contract with a consultant to assist with project management and a $186,000 contract with an independent auditor to provide an outside review of the department’s use of Exide-related funds.

DTSC’s process for cleaning up lead-contaminated soil includes multiple steps. First, it must obtain an owner’s or tenant’s permission to sample a property’s soil. A testing crew then takes multiple soil samples from the property to determine whether it is contaminated and, if so, the depth of contamination. If the property is contaminated with lead, a cleaning crew removes the contaminated soil, DTSC stores a sample of the contaminated soil, and the cleaning crew replaces contaminated soil with clean soil and replaces landscaping destroyed by the removal of contaminated soil. DTSC estimates that this process in its entirety takes about a week. Finally, DTSC offers property owners interior cleaning of structures on the property to remove lead‑contaminated dust.

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