HomeMy WebLinkAbout1980-12-23COUNTY SANITATION DISTRICTS
OF ORANGE COUNTY, CALIFORNIA
P. 0. BOX 8127, FOUNTAIN VALLEY, CALIFORNIA 92708
10844 ELLIS AVENUE (EUCLID OFF-RAMP. SAN DIEGO FREEWAY)
December 17, 1980
NOTICE OF SPECIAL MEETING
DISTRICT NO I 1
TUESDAYJ DECEMBER 23J 1980 -4:00 P.M.
10844 ELLIS AVENUE .
FOUNTAIN VALLEYJ CALIFORNIA
I am calling a special meeting of the Board of Directors of
County Sanitation District No. 1 of Orange ·county, California,
at the above hour and date.
TELEPHONES:
AREA CODE 714
540-2910
962-2411
The purpose of the meeting is to further consider the violation
of District. Industrial Waste Discharge Permit by Cherry Fasteners -
Townsend Division of Textron, Inc.
~~t!f:f
Chairman
rb
COUNTY SANITATION DISTRICTS
OF ORANGE COUNTY, CALIFORNIA
F>. 0. BOX 8127, FOUNTAIN VALLEY. CALIFORNIA 92708
10844 ELLIS AVENUE (EUCLID OFF-RAMP, SAN DIEC30 FREEWAY)
December 17, 1980
NOTICE OF SPECIAL MEETING
DISTRICT NO. 1
TUESDAYJ DECEMBER 23J 1980 -4:00 P.M.
10844 ELLIS AVENUE
FOUNTAIN VALLEY~ CALIFORNIA
I am calling a special meeting of the Board of Directors of
County Sanitation District No. 1 of Orange County, California,
at the above hour and date.
TELEPHCN ES:
AREA CODE 714
540-2910
962-2411
The purpose of the meeting is to further consider the violation
of District Industrial Waste Discharge Permit by Cherry Fasteners -
Townsend Division of Textron, Inc.
rb
/s/ James B. Sharp
James B. Sharp
Chairman
II
MANAGER'S AGENDA REPORT
County Sanitation Districts
of Orange County, Califomia
DISTRICT NO. ---
Special Me .eting
Tuesday , December 23, 1980 -4: 0-0 p·. m.
Post Office Box 8 127
10844 Ellis Avenue
Fountain Valley, Calif., 92708
Teleprcnes:
Area Code 71 4
540-2910
962-2411
Pursuant to the Board's direction on November 26th, the
Districts' General Counsel and Manager met on December 15th
and 16th with representatives and counsel for Cherry Fasteners
to negotiate an enforcement compliance agreement acceptable to
the Board. After two meetings , we failed to negotiate a mutually
acceptable agreement and the representatives of Cherry Fastener.s
requested that they present their case directly to the Board.
The Chairman has called this special meeting for this purpose.
Enclosed is the Districts' General Counsel's Me morandum
dated December 16th which outlines the discussions to date. In
addition, enclosed is a recap of the District's staff p r opo sal
and the latest response from the Cherry F asteners' representa-
tives.
Fred A. Harper
General Manager
•
i~~ · ~ BOARDS OF DIRECTORS
County Sanitation Districts Post Office Box 8127
10844 Ellis Avenue
Fountain Valley, Calif., 92708
Telephones:
II
of Orange County, Califomi1
DISTRICT No. 1
SPECIAL MEETING
TUESDAY~ DECEMBER 23, 1980 -4:00 P.M.
Area Code 714
540-2910
962-2411
AGENDA
( 1) Roll call
(2) Consideration of violation of Industrial Waste Discharge
Permit by Cherry Fasteners· -Townsend Division of Textron,
Inc.:
(.3}
(a) Consideration of·· motion to receive and f.ile General
Counsel's letter of December 4, 1980, to Cherry
Fasteners. See page "A"
(b) Consideration of motion to receive and file letter
from Cherry Fasteners -Townsend Division of Textron,
Inc. dated December 12, 1980. See page "B"
(c) Consideration of motion to receive and file General
Counsel's status report re negotiations with Cherry
Fasteners. See page "C" and enclosed copy of
minutes of Board's action at adjourned meeting on
November 26, 1980
(d) Staff report and discussion on status of negotiations
with Cherry Fasteners re Enforcement Compliance Agreement
setting forth provisions for payment of 'all fees and
charges, monitoring requirements, and all other terms
and conditions necessary for the permittee to compiy
with District regulations by May 19, 1981. See
page "D"
(e) Oral conunent by Cherry Fasteners' representatives
(f) ·Further· discussion
(g) Consideration of action re violation.of Industrial
Waste Discharge Permit by Cherry Fasteners -Townsend
Division of Textron, Inc.
Consideration of motion to adjourn {.~1
i i
.JAMCS G f.IOUAKC
T1-1v .... AS L w.oooAurr
ALAN R WAT'TS
• . KCl..iNARO R SMART • .JR,
~ ALAN R. BURNS
ROBCRT L. LAVOIC
01.NICL K. SFRAOLlt~
Cherry Fasteners
Townsend Division
Textron, Inc.
1224 East Warner Avenue
Santa Ana, Ca. 92707
LAW OFricr:s Of"
SUITE: 1020
CAL.I f"OR NIA f"I RST BANK BUI L.01 NG
IOSS NORTH MAIN STRCCT
SANTA ANA. CALIFORNIA 92701
December 4, 1980
Attention: Mr. Edmund B. Buster
Executive Vice President
Dear Mr. Buster:
ARCA COOC 71'4
83S•E.Z12
TCLC.COPICR
1714) S3S • 7787
This letter will se"rve to advise you of the action taken by
the Board of Directors of County Sanitation District No. 1 at a
special meeting held November 25, 1980, pertaining to discharge
violations by your firm and the remedial measures to be undertaken.
Specifically, the Board of Directors authorized me as General Legal
Counsel to the Districts to file legal proceedings against the
corporation and responsible subsidiaries on January 15, 1981,
subject to the possible suspension of those proceedings in the
event a mutually-satisfactory agreement is made and entered into
between your firm and the District prior to that_ date •.
As you are aware, the District, for several years, has been
advising Cherry Fasteners of the discharge requirements which
must be complied with and during the past two and one-half years
in particular have been working closely with your Staff representa-
tives to develop a system and program for insuring full compliance
with each of those limitations. Despite several representations
by your firm that projects were under way to develop, install and
maintain a system that would insure compl~ance, the District has
now determined that in fact no such systems have been undertaken,-
and therefore the compliance schedule date of October 1, 1980,
has not been met. We are now advised that because of certain
corporate actions to award engineering and construction contracts,
that a system could become operational by the latter part of May,
1981.
On behalf of the Districts, I wish to point out that because
of the failure to meet the limitations on the discharge of certain
heavy metals into the District.' s system, your firm is subject to
the following charges and/or penalties:
"A-1" AGENDA ITEM #2(A) "A-1"
Page Two
December 4, 1980
1. The sum of $254, 302. 00 as the charge for the excess U
quantity' of heavy metal discharges for the period of December 1,
1979 through September 30, 1980. The excess discharges are those
quantities over and above the interim limits mutually agreed upon
in the ECSA dated December 27, 1979, which are based upon the
1976 limits which are considerably more liberal in demand and do
not include any fines or penalties. ·
2. Penalty charge in.the amount of $25,430.20 for the de-
linquency of nonpayment of the statement of charges dated October
23, 1980 within thirty (30) days. This penalty is prescribed by
Section 507 of District Ordinance No. 103.
3. Interest at
month on the total
$1,398.66 per month.
the rate of one-half
unpaid balance. This
of one percent per
amount is equal to
4. The sum of $32, 500. 00 for excess discharges for the
period October 1, 1980 through October 31, 1980, and $18,346.00
for the period November 1, 1980 to November 30, 1980. These
discharges are quantities in excess of your permit limits, which
became applicable upon the expiration of the prior enforcement
schedule compliance agreement between your firm and the District
on September 30, 1980. These limits are established by Ordinance
duly adopted by the District.
5. An estimated $18, 000. 00 for each month conunencing December
1, 1980, until the newly-installed .. system becomes operational.
This is simply an es_timated charge based upon the samplings of
October and November, 1980, and the representations by you and
your firm that you did not envision being able to comply with
the 1978 limitations until the new system is on line.
6. Civil penalties at the rate of $6, 000. 00 per day com-
mencing October 1, 1980, and continuing for each and every day
thereafter until the system is installed_ .and ful:-1 compliance is
achieved by your firm. These civil penalties are prescribed by
District Ordinance No. 103, adopted July, 1976.
In recognition of the fact that you were present during the
Board of Directors meeting on November 25, 1980, and their de-
cision was stated to you at that time, I believe it is apparent
that the _District intends to seriously pursue this matter with
all available means in order to insure that compliance is obtained.
The District itself is under severe orders and threats of penalties
from the United States Environmental Protection Agency, the State
Water. Resources Control Board, and the Regional Water Quality
Control Board with respect to the heavy metals to be discharged
"A-2" AGENDA ITEM #2(A) "A-2"
Page Three
December 4, 1980
\..,,J into.-•. the ocean through the operation of our system. We cannot
cont:'..lnue ·to run the risk of vio.lation of those governing rules
and regulations of those agencies, and therefore, will pursue
this without further delay. However, I am sure you also under-
stood that the District is most anxious to accomplish a resolution
of this matter, and towards that end, invite your firm to submjt
a written proposal to the District 9onc~rning its intentions with
regard to both obtaining compliance and resolving the financial
liabilities as dP.scrihed ! .'.l Paragraphs l through 5 above. I
would also -request that we .schedule a meeting to review such a
proposal ~t ~he u([ice of the District on Monday, December
15, 1980, at 10:00 a.m. If this seems appropriate and agreeable
to you, I wouJ.d ask that you notify my office accordingly, and
I will i.nsure that all of the necessary representatives of the
Di~trict are available at that time.
Very truly yours,
KE & WOODRUFF
Tho~&:~~-
General Counsel
TLW:pj .
cc: Mr. F.A. Harper
II A-3 11 AGENDA ITEM #2(A) II A-3"
"B-1"
TOV 'NSEND h I ~:s ! t\•):J
December 12, 1980
E. B. Buster
Executive Vice President
1224 East Warner Ave., Box 2U
Santa Ana, California 92707
714/545-5511 or 213/979-2121
Townsend Division of Textron Inc. ,....·~}>\<..·~I Oj
TWX 910/595-1500 TELEX 678431
Mr. Thomas L. Woodruff
General Counsel
~ 'v' ... :<'i~ r~J O' . •./ .-:\·'.-~f\~\\;. ~
6 .... ~ ',,-... -_.. -
. ..... ~r-\, · \ ~t; · \1:.l:Ji
. -·~ ·: .. ::_~~·i :Z, \C!J~JlV
Rourke & Woodruff · .. '··~ _\ rJ~u o.~~n~~
Suite 1020 ·\~ ·\ 1~·7='~ \l \\u
California First Bank Building \::~\" t.:·\·
1055 North Main Street ·-~ / _:......._
" I r-,_,_. -~ Santa Ana, California 92701 '· "(o.
Dear Mr. Woodruff,
This is in reply to your letter of December 4, 1980, which suggested
our company respond by way of a written proposal to County Sanita-
tion District No. 1.
Further, you suggested a meeting be set up at the office of the
district on Monday, December 15, 1980,. and subsequent communi-
cation with you has established that meeting date at 10: 30 a.m.
Bill Kester and I plan to be there. ·
To set the stage for our discussion on Monday, we will bring with
us copies of all pertinent documents, correspondence, prints, etc.,
and will be prepared to talk over with you and the district staff
any questions regarding the construction and implementation of
our effluent treatment facility.
I think we have been remiss in not sharing with you some of our
earlier considerations which made it impossible to begin design of
this facility until late 1979, but we will be prepared to present
that information to you at that time. In short, decision was made
late in 1979 to oontinue our expansion.here in California rather
than to move to another part of the United States. As a first
step, we leased a 40, 000 square foot facility in Costa Mesa and
moved an entire department in there during January, 1980. This
was step one in our program to keep the entire Cherry operation
here in Southern California, and the decision to do so was
critical to determining the location and capacity of our effluent
treatment plant. Effectively, then, we had only a very few
months to design and bUild this plant if we were to meet the
district's requirements by the end of the temporary operating
agreement.
u
AGENDA ITEM #2(s) "B-1"
"B-2"
December 12, 1980
Page 2
We engaged Allen Engineering Company as a consultant on· this project
on October 16, 1979, assigned two engineers on our staff to the pro-
ject, and they began to evaluate the problems and to design the plant
which would handle the volume of material we would be expected to
process. The decision to remain here in the local area with our
expanded facility called for a doubling of cadmium plating capacity,
and this turned out to be an important factor in the ultimate cost
of our facility.
Our engineering personnel assigned to the project visited a number
of small treatment facilities here in Orange County, and although
none of them exactly met our requirements, it was very helpful to
see some of the equipment in action and to determine how effective
it was. As a result of these investigations, our engineering people
have put together a design which is ·expected to process our yet
to be expanded plating department, and at the same time meet the
1982 standards adopted by ~he district.
Our design work was not completed ·until late October, nearly 30
days after the expiration of our temporary use permit, but repre-
sented the culmination of nearly one year's work by our Engineering
Department.
Throughout this procedure Textron, Inc., which must approve
our capital expenditures, had been briefed on the effluent
problems and were standing ready to approve our plans as soon
as we cx:>uld come up with. something definite on designs, time-
tables, and dollar amounts to be spent. As soon as these figures
were available, we asked for formal approval and were given such
authority on the first meeting date thereafter of the Board of
Directors. Further, so there would be no question as to approval,
we were given a Phase I approval of -$200,000. 00 so that work
could begin as soon as possible.
Meanwhile, three bids had been taken and the Allison Honer Company
was selected as the general contractor. Authortty was given for
Honer to proceed on October 31, 1980, and work was begun even
before a building permit was issued.
The building permit application was filed on November 3, 1980,
and has been approved and released to us in total at this time with
the exception of the laboratory building. That approva~ is expected
AGENDA ITEM #2(B) "B-2"
"B-3"
..
December 12, 1980
Page 3
momentarily and no delays should be experienced as a result of that
portion of the permit not having been earlier issued. ·
Our tenant on that portion of the property on which the effluent
plant was to be erected was notified in April of this year that the
area would have to be vacated, and they agreed to abandon that
area by July, which they did.
Under the terms of our building contract a completion date of
May 19, 1981 is expected. All purchase orders for on-site equip-
ment have been placed, and while actual delivery dates have not
been confirmed in their entirety, earlier quotations did not exceed
more than twelve weeks for delivery. The construction project is
on schedule at· this time, and we can reasonably expect completion
by May 19 or earlier.
Our immediate problem is one of a necessity to discuss and settle
the charges listed in your letter of December 4, 1980, page 2,
paragraphs one through six. These charges already amount to
over $300, 000. 00, and you indicate you may wish to assess us
$18,000. 00 per month beginning December 1, and that we might
be subject to civil penalties at the rate of $6, 000. 00 per day
beginning October l, 1980. · This is obviously a severe economic
impact to our operation, and we can not continue to operate even
temporarily if these charges are really to be assessed.
-We have only one immediate alternative which is to subcontract all
of our cadmium plating to firms with available capacity in the Los
Angeles Basin area. The differe nee in cost to us is immense, and
at the same time we would have to discharge approximately 34
people from our Plating Department. Further, if the charges
continue at the level you suggested -in -your letter, we would have
to give serious ex>nsideration to stopping all construction work and
o;:>nsider relocating the plating operation. We would prefer to neither
relocate nor to ·subc6ntract for an inteiim period~ and should like to
propose instead, that the district and our company continue to work
together to finish this facility and to get it into operation as quickly
as possible.
We would propose, then, that you cancel forthwith all charges
which have been described in paragraphs one through six, and
instead assess us a daily charge to take place after May 19, in
u
AGENDA ITEM #2(B) "B-3"
"B-4"
December 12, 1980
Page 4
the event we do not finish and begin operating our new effluent
treatment plant. · ·
I should like, also, to explain that it is more than just an incon-
venience for us to carry on our books accrued charges of more
than $300, 000. 00 at the close of our calendar year 1980. This
affects a number of vital functions within our company, and I will
gladly explain when we meet on Monday. There fore, I would like
to suggest that you and the staff qf the district agree to the
immediate cancellation of these charges, but instead apply a penalty
if we do not perform as expected after May 19, 1981.
Having taken this action, it might then be possible for you to call
a special meeting of the board and to take official action which
would allow us to remove this accrual from our books as of
December 31, 1980.
Once our drawings were complete on this project we have moved
as rapidly as is humanly possible to bring our dis.charges of
effluent within compliance of the district's regulations. We have
never had any intention of doing otherwise, but it has taken more
time than anticipated by either of us to oomplete our design, get
bids, process our building permits, and to get under way in
construction. Now that we ate reasonably assured of delivery of
all equipment and of meeting a oompletion date, we should ·very
much appreciate your taking positive action to eliminate the charges
against us and instead accept penalties to be paid by us in the
event we do not meet the completion date as prescribed.
Very truly yours,
-···63&1:{C-
E. B. Buster . .
EBB:mp
AGENDA ITEM #2(B) "B-4"
:::
t::j
:::
December 16, 1980 RECAP OF MONETARY DISCUSSIONS
WITH REPRESENTATIVES OF CHERRY
FASTENERS
General Counsel's
Letter 12/4/80
District Staff
Proposal 12-16-80
1. Enforce 1978 Limits
effective 10-1-80
2.
December 1, 1979 through
September 30, 1980. Charge
for excess quantity of
heavy metal over 1976
limits based on ECSA dated
December 27, 1979
Penalty non-payment
30 days J:>
Ci'> m 3. Interest \ of 1%/mo. .. , s :.s>
.........
-I 4. ~ Excess discharges
Oct. 1st through
Oct. 31st, 1980
Oct.' 80
:;t:
N
"""' t:;j
'-'
:::
t=j
:::
Nov. 1st through
Nov. 30th, 1980
• 78 limits
Nov. '80
'78 limits
5. Estimated charges
Dec. 1st until
newly installed
system operational
to May 19, 1981 $18,000/mo.
6. Civil penalties
$6,000/day com-
mencing 10/1/80
(.
$254,302
25,430
2,800
$282,532
32,500
18,346
)
)
)
)
)
)
)
)
)
)
)
99,000 est.
$432,378
(
(-
(
Extend $ 50,000
ECSA to
6-30-81
using 1976
limits
$282,532
50!000
$232,532
'76 ··limits
'76 limits
'76 limits
)
)
)
4,640
4,620
self 27,500 est.
monitoring
Deferred to 7/1/81.
Waived if in com-
pliance
$86,760
CSD No. 1 will waive balance
of $232,532 if proposed facili-
ties are completed and opera-
tional 6/30/81 per plans and
specifications submitted to
District
Cherry Fasteners
Of fer
12-16-80
Extend $15,000
ECSA
10-1-80
to 5-19-81
using 1976
limits
Would agree to some Unknown
stipulated amount
Oct. '80
'76 limits
Nov. '80
'76 limits
DJ?c. •so
'76 limits
1/1/81 thru
5/19/81
-0-
-0-
-0-
-0-
22,500 est.
$37,500
To be paid if proposed
facilities are not com-
pleted and operational
5/19/81 per plans and
specifications submitted
to District.
(
'
-,/
,~I~ ~BOARDS OF DIRECTORS
County Sanitation Districts Post Office Box 8127
10844 Ellis Avenue
Fountain Valley, Calif., 92708
Telephones:
II
of Orange County, Caliromi1
DISTRICT No. 1
SPECIAL MEETING
TUESDAY, DECEMBER 23~ 1980 -4:00 P.M.
Area Code 714
540-2910
962-2411
AGENDA
(1) Roll call
(2) Consideration of violation of Industrial Waste Discharge
Permit by Cherry Fasteners -Townsend Division of Textron,
Inc.:
(3)
Consideration of motion to receive and file General
Counsel's letter of December 4, 1980, to Cherry
Fasteners. See page "A"
Consideration of motion to receive and file letter
from Cherry Fasteners -Townsend Division of Textron,
Inc. dated December 12, 1980. See page "B"
Consideration of motion to receive and file General
Counsel's status report re negotiations with Cherry
Fasteners. See page "C" and enclosed copy of
minutes of Board's action at adjourned meeting on
November 26, 1980
Staff report and discussion on status of negotiations
with Cherry Fasteners re Enforcement Compliance Agreement
setting forth provisions for payment of all fees and
charges, monitoring requirements, and all other terms
and conditions necessary for the permittee to comply
with District regulations by May 1·9, 1981. See
page "D"
Oral comment by Cherry Fasteners' representatives
(f) F~rther·discussion
r(g)\ Consideration of action re violation of Industrial \:.J Waste Discharge Permit by Cherry Fasteners -Townsend
Division of Textron, Inc.
Consideration of motion to adjourn S-;~
.JAMCS G f. .)UFiKC
TMC>o.\AS L WOOOR.;F'F'
ALAN R WAT1 S
~C l•NARO R SMAF;"T • .JR.
ALAN R. E:IURNS
ROBCRT L. LAVOIE:
O'-NICL K. !:>FR'-OLlt~
Cherry Fasteners
Townsend Division
Textron, Inc.
1224 East Warner Avenue
Santa Ana, Ca. 92707
LAW Orr1cc.s OF"
SUITE: 1020
CAL.IF'ORNIA r!RST BANK BUILOING
. .ioss NORTH MAIN STRCCT
SANTA ANA. CALI F"ORf..I IA 92701
December 4, 1980
Attention: Mr. Edmund B. Buster
Executive Vice President
Dear Mr. Buster:
A~CA COOC 714
B3S• cZIZ
1 CLCCOPICR
(71.r.) 63~. 7787
This letter will s~rve to advise you of the action taken by
the Board of Directors of County Sanitation District No. 1 at a
special.meeting held November 25, 1980, pertaining to discharge
violations by your firm and the remedial measures to be undertaken.
Specifically, the Board of D~rectors authorized me as General Legal
Counsel to the Districts to file legal proceedings against the
corporation and responsible subsidiaries on January 15, 1981,
subject to the possible suspension of those proceedings in the
event a mutually-satisfactory agreement is made and entered into
between your firm and the District prior to that date •.
As you are aware, the District, . for several years, has been
advising Cherry Fasteners of the discharge requirements which
must be complied with and during the past two and one-half years
in particular have been working closely with your Staff representa-
tives to develop a system and program for insuring full compliance
with each of those limitations. Despite several representations
by your firm that projects were under way to develop, install and
maintain a system that would insure comp1_iance, the District has
now determined that in fact no such systems have been undertaken,
and therefore the compliance schedule date of October 1, 1980,
has not been met. We are now advised that because of certain
corporate actions to award engineering and construction contracts,
that a system could become operational by the latter part of May,
1981.
On behalf of the Districts, I wish to point ·out that because
of the failure to meet the limitations on the discharge of certain
heavy metals into the District.'s system, your firm is subject to
the following charges and/or penalties:
"A-1" AGENDA ITEM #2(A) "A-1"
i
Page Two
De ce m be r 4 , 19 8 0
~ 1. The sum of $254, 302. 00 as the charge for the excess
quantity.of heavy metal discharges for the period of December 1,
1979 through September 30, 1980. The excess discharges are those
quantities over and above the interim limits mutually agreed upon
in the ECSA dated December 27, 1979, which are based upon the
1976 limits which are considerably more liberal in demand and do
not include any fi~es or penalties. ·
2. Penalty charge in the amount of $25,430.20 for the de-
linquency of nonpayment of the statement of charges dated October
23, 1980 within thirty (30) days. This penalty is prescribed by
Section 507 of District Ordinance No. 103.
3. Interest at
month on the total
$1,398.66 per month.
the rate of one-half
unpaid balance. This
of one percent per
amount is equal to
4. The sum ·of $32, 500. 00 for excess discharges for the
.period October 1, 1980 through·· October 31, 1980, and $18, 346. 00
for the period November 1, 1980 to November 30, 1980. These
di~charges are quantities in excess of your permit limits, which
became applicable upon the expiration of the prior enforcement
schedule compliance agreement between your firm and the District
on September 30, 1980. These limits are established by Ordinance
duly adopted by the District •.
S. An estimated $18,000.00'for each month commencing December
1, 1980, until the newly-installed . system becomes operational.
This is simply an es_timated charge based upon the samplings of
October and November, 1980, and the representations by you and
your firm that you did not envision being able to comply with
the 1978 limitations until the new system is on line.
6. Civil penalties at the rate of $6, 000. 00 per day com-
mencing October 1, 1980, and continuing for each and every day
thereafter until the system is installe-d_ .and full compliance is
achieved by your firm. These civil penalties are prescribed by
District Ordinance No. 103, adopted July, 1976.
In recognition of the fact that you were present during the
Board of Directors meeting on November 25, 1980, and their de-
cision was stated to you at that time, I believe it is apparent
that the .District intends to seriously pursue this matter with
all available means in order to insure that compliance is obtained.
The District itself is under severe orders and threats of penalties
from the United States Environmental Protection Agency, the State
Water. Resources Control Board, and the Regional Water Quality
Control Board with respect to the heavy metals to be discharged
"A-2" AGENDA ITEM #2(A) "A-2"
•'
Page Three
December 4, 1980
into, .... the ocean through the operation of our system. We cannot
cont"inue ·to run the risk of vio.lation of those governing rules
and regulations of those agencies, and therefore, will pursue
this without further delay. However, I am sure you also under-
stood that the District is most anxious to accomplish a resolution
of this matter, and towards that end, invite your firm to submtt
a written proposal .. to the District conc~rning its intentions with
regard to both obt·aining compliance and resolving the financial·
liabilities as a~scrihed : :1 Paragraphs 1 through 5 above. I
would also request that we: .schedule a meeting to review such a
proposal .1t i·he uf I ice of the District on Monday, December
15, 1980, at 10:00 a.m. If this seems appropriate and agreeable
to you, I wou.ld a~k that you notify my off ice accordingly, and
I will i.nsure that all of the necessary representatives of the
Di~trict are available at that time.
Very truly yours,
KE & .WOODRUFF
Tho!:1 ~(f~,
General Counsel
TLW:pj .
cc: Mr. F.A. Harper
;;..-
"A-3" AGENDA ITEM #2(A) "A-3"
"B-1"
TOWNSEND h •~:s !st•):J
December 12, 1980
E. B. Buster
Executive Vice President
Townsend Division of Textron Inc. __,.-;_ ,c:·.! I
1224 East Warner Ave., Box 2157
Santa Ana, California 927Q7
714/545-5511 or 213/979-2121
TWX 910/595-1500 TELEX 678431
. _:· .. 1Y ~-tr..-[-..._t
., . ..,.. .r . .-t:\ ~· '":lJ D' · ... I -~ .. ~ · :rf\~\~r ;'\
Mr. Thomas L. Woodruff ... (\~)-.~~\?"
General" Counsel 'L-·· ?., \:>O
Rourke & Woodruff : ~ ··: (.§2-,C )..'" .~·~~
s ui te 10 2 0 .... ~: : " .~·~:·~a \,ui~'
California First Bank Building \ <\ t.:·•'"
1055 North Main Street > ·:~.)-..
Santa Ana, California 92701 ··< ··r.£:
Dear Mr. Woodruff,
This is in reply to your letter of December 4, 1980, which suggested
our company respond by way of a written proposal to County Sanita-
tion Dist rlct No. 1. ·.
Further, you suggested a meeting be set up at the office of the
district on Monday,. December 15, 1980,. and subsequent communi-
cation with you has established that meeting date at 10: 30 a. m.
Bill Kester and I plan to be there.
To set the stage for our discussion on Monday I we will bring with
us copies of all pertinent' documents, correspondence, prints, etc. ,
and will be prepared to talk over with you and the district staff
any questions regarding the construction and implementation of
our effluent treatment facility.
I think we have been remiss in not sharing with you some of our
earlier considerations which made it impossible to begin design of
this facility until late 1979, but we will be prepared to present
that information to you at that time. In short, decision was made
late in 1979 to continue our expansion-here in California rather
than to move to another part of the United States. As a first
step, we leased a 40, 000 square foot facility in Costa Mesa and
moved an entire department in there during January, 1980. This
was step one in our program to keep the entire Cherry operation
here in Southern California, and the decision to do so was
critical to determining the location and capacity of our effluent
treatment plant. Effectively, then, we had only a very few
months to design and bUild this plant if we were to meet the
district's requirements by the end of the temporary operating
agreement.
AGENDA ITEM #2(B) ·"B-1"
"B-2"
December 12, 1980
Page 2
We engaged Allen Engineering Company as a consultant on this project
on October 16, 1979, assigned two engineers on our staff to the pro-
ject, and. they began to evaluate the problems and to design the plant
which would handle the volume of material we would be expected to
process. The decision to remain here in the local area with our
expanded facility called for a doubling of cadmium plating capacity,
and this turned out to be an important factor in the ultimate cost
of our facility.
Our engineering personnel assigned to the project visited a number
of small treatment facilities here in Orange County, and although
none of them exactly met our requirements, it was very helpful to
see some of the eq~pment in action and to determine how effective
it was. As a result of these investigations, our engineering people
have put together a design which is expected to process our yet
to be expanded plating department, and at the same time meet the
1982 standards adopted by the district.
Our design work was not. completed until late October, nearly 30
days after the expiration of our temporary use permit, but repre-
sented the culmination of nearly one year's .work by our Engineering
Department.
Throughout this procedure Textron, Inc., which must approve
our capital expenditures, had been briefed on the effluent
problems and were standing ready to approve our plans as soon
as we oould oome up with. something definite on designs, time-
tables, and dollar amounts to be spent. As soon as these figures
were available, we asked for formal approval and were given such
authority on the first meeting date thereafter of the Board of
Directors. Further, so there would be no question as to approval,
we were given a Phase I approval -Of $200, 000. 00 so that work
could begin as soon as possible.
Meanw bile, three bids had been taken and the Allison Honer Company
was selected as the general contractor. Authority was given for
Honer to proceed on October 31, 1980, and work was begun even
before a building permit was issued.
The building permit application was filed on November 3, 1980,
and has been approved and released to us in total at this time with
the exception of the laboratory building. That approva~ is expected
AGENDA ITEM #2(B) "B-2"
"B-3"
December 12, 1980
Page 3
momentarily and no delays should be experienced as a result of that
portion of the permit not having been earlier issued.
Our tenant on that portion of the property on which the effluent
plant was to be erected was notified in April of this year that the
area would have to be vacated, and they agreed to abandon that
area by July, which they did.
Under the terms of our building oontract a oompletlon date of
May 19, 1981 is expected. All purchase orders for on-site equip-
ment have been placed, and while actual delivery dates have not
been confirmed in their entirety, earlier quotations did not exceed
more than twelve weeks for delivery. The construction project is
on schedule at this time, and we can reasonably expect completion
by May 19 or earlier.· ·
Our immediate problem is one of a necessity to discuss and settle
the charges listed i·n your letter of December 4, 1980, page 2,
paragraphs one through six. These charges already amount to
over $300, 000. 00, and you indicate you may wish to assess us
$18,000. 00 per month beginning December 1, and that we might
be subject to civil penalties at the rate of $6, 000. 00 per day
beginning October l, 1980. This is obviously a severe economic
impact to our operation, and we can not continue to operate even
temporarily if these charges are really to be assessed.
-We have only one immediate alternative which is to subcontract all
of our cadmium plating to firms with available capacity in the Los
Angeles Basin area. The difference in cost to us is immense, and
at the same· time we would have to discharge approximately 34
people from our Plating Department. Further, if the charges
continue at the level you suggested in ·your letter, we would have
to give serious oonsideration to stopping all construction work and
consider relocating the platfng operation. We would prefer to neither
relocate nor to subcontract for an interim period, and should like to
propose instead, that the district and our oompany cxmtinue to work
together to finish this facility and to get it into operation as quickly
as possible.
We would propose, then, that you cancel forthwith all charges
which have been described in paragraphs one through six, and
instead assess us a daily charge to take place after May 19, in
AGENDA ITEM #2(B) "B-3" ·
"B-4"
December 12, 1980
Page 4
the event we do not finish and begin operating our new effluent
treatment plant.
I should"'like, also, to explain that it is more than just an incon-
venience for us to carry on our books accrued charges of more
than $300, 000. 00 at the close of our calendar year 1980. This
affects a number of vital functions within our rompany, and I will
gladly explain when we meet on Monday. Therefore, I would like
to suggest that you and the staff of the district agree to the
immediate cancellation of these charges, but instead apply a penalty
if we do not perform as expected after May 19, 1981.
Having taken this action, it might then be possible for you to call
a special meeting of th~ board and to take official action which
would allow us to remove this accrual from our books as of
December 31, 1980.
Once our drawings were complete on this project we have moved
as rapidly as is humanly possible to bring our dis.charges of
effluent within compliance of the district's regulations. We have
never had any intention of doing otherwise, but it has taken more
time than anticipated by,either of us to complete our design, get
bids, process our building permits, and to get under way in
construction. Now that we ate reasonably assured of deli very of
all equipment and of meeting a completion date, we should ·very
much appreciate your taking positive action to eliminate the charges
against us and instead accept penalties to be paid by us in the
. event we do not meet the completion date as prescribed.
Very truly yours,
"-.-6~:ft:r.C-
E. B. Buster
EBB:mp
AGENDA ITEM #2(B) "B-4"
LAW OFFICES OF'
Rourke & WooJruff
SUITE 1020
JAMES G. ROURKE
THOMAS L. WOOORUF"F' CALIFORNIA FIRST BANK BUll.OING
1055 NORTH MAIN STREET
SANTA ANA, CALIFORNIA 92701
A.REA COOE 714
835-6212
\_,,I ALAN R. WATTS
KENNARO R. SMART, JR.
ALAN R. BURNS
ROBERT L. LAVOIE
OANIEL K. SPRAOl.IN
TEL.ECOPIER •
(714) 835-7787
MEMORANDUM
To: Board of Directors
County Sanitation District No. 1
From: General Counsel Date: December 16, 1980
Re: Negotiated·Settlement Proposals--
Cherry Fasteners
At the request of the Board of Directors at their special
meeting of November 25, 1980, tpe District's General Manager,
Chief Engineer and myself undertook to.participate in efforts of
negotiating a reasonable settlement for the payment of charges
. due to the District for excess discharges made by Cherry Fasteners
pertaining to heavy metals,-particularly cadmium. As a result
"C-1"
of that, I directed a letter to Cherry Fasteners dated December
4, 1980, outlining the actions that were· taken by the Board on
November 25, and providing a summary of 6 major items of financial
concern to both the District and, Cherry Fasteners. A copy of
that letter is enclosed herewith for your review.
In response thereto, we received a letter from Cherry Fasteners
on December 12, 1980, in contemplation of a scheduled meeting at
the District's offices on December 15, 1980. As is evident from
a review of the December 12th letter, also enclosed herewith, the
position of Cherry Fasteners was that they offered to pay abso-
lutely nothing and asked the District to waive and excuse all
charges for all discharges from the period of December, 1979
through the proposed May 19th completion-and compliance date.
Fred and I met with Mr. Ed Buster, Executive Vice President;
Mr. William Kester, Plant Manager; and Mr. Arthur Nissan, General
Counsel on Monday, December 15, 1980, and again reviewed the
entire proposal. It was our position that we should not make
any settlement offers on behalf of the District, but should in
fact await an affirmative offer on their part. We so indicated
to them, and they in turn replied by making the following offer:
1. That the Enforcement Compliance Schedule Agreement
(ECSA) be reinstated effective October 1, 1980, with the discharge
limitations being set at the 1976 level, rather than the 1978
level.
AGENDA ITEM #2(c) "C-1"
"C-2"
Page Two
December 16, 1980
2. They pay the sum of $10,000.00 for all discharges in
the past.
3. Effective January 1, 1981, they will pay for all dis-
charges over the ECSA permit limitations •
..
4. If their system is not complete by May 19, 1981, they
would agree that imposition of penalties, in an undetermined
amount however, would be okay.
The primary ~easoning and support of their offer was that
they felt that they should not pay any sums of money, to be des-
cribed as charges or penalties or otherwise, for the reason that
they believe the District did not incur any actual additional
costs to treat the excess quantities of cadmium and other hazard-
ous substances. They further argued that they in fact did not
"drag their feet" in terms of preparing for the installation of
a necessary on-site system. Lastly, that they simply could not
afford to pay in the neighborhood of $18,000.00 per month as the
cost of treating the excess discharges plus the risk of $6,000.00
a day penalties. At that point, we determined that their pro-
posal was so far re~oved from what the Board had indicated as
direction to us, that we requested additional time to respond.
As a result, we met again with the same people on Tuesday, December
16, 1980, and at that time, presented to them a counterproposal
on behalf of the District that was worked out by the Manager and
Engineering Department based upon the practical implementation as
well as all the other factors p~eviously brought to the Board's
attention. The counterproposal which we submitted to them was as
follows:
1. The District would extend the ECSA from October 1, 1980,
to June 30, 1981.
2. The ECSA would set and maintain .. -for its aura tion the
1976 limitations.
3. That Cherry Fasteners would pay charges for their excess
discharges over 1976 (not 1978 as per ordinance) for the months
of October, 1980 through June, 1981 as follows:
Octob.er, 1980
November, 1980
$4640.00
$4620.00
December, 1980 through June, 1981, per actual
invoice under the ordinance formula of $100.00
per pound for all pounds in excess of the
limitation
AGENDA ITEM #2(c) "C-2"
Page Three
December 16, 1980
4. That Cherry Fasteners would establish a daily monitoring
program acceptable to the District and provide an independent
laboratory analysis and report to the District each month not
later than the 10th of the following month.
5. That Cherry Fasteners would acknowledge that the total
amount owing to the· District for the period of December, 1979
through September, 1980, amounted to $282,532.00. ($254,302.00
principal; $25,430.00 penalty; $2,800.00 interest)
6. That Cherry Fasteners would pay $50,000.00 to the
District forthwith, as satisfaction of all excess charges from
December, 1979 through September, 1980.
7. That the District would waive the balance of $232,000.00
if the facilities are completed by June 30, 1981, per the plans
and specifications submitted to~and approved by the District.
8. That effective July 1, 1981, the permit would expire,
arid full compliance with all 1978 limitations would be required.
In the event of any failure to do so, the District could in fact
resort to any and all legal remedies, including the imposition of
~ civil fines and penalties for that timeframe.
"C-3"
The basic reasoning suppor~ing the offer by the District was
that we recognize the overall ·financial burden. We therefore cal-
culated the actual days where a discharge in the months of October
and November, 1980, exceeded the 1976 limits. This amounted to
5 days in each month, for a total of 46.4 and 46.2 pounds over
the permitted daily limits. This item alone reduced the prospec-
tive liability of Cherry Fasteners from $50,846.00 to $9,260.00
(reference paragraph 3 of District proposal above).
By utilizing the 1976 limits rather than 1978 for the en-
suing 7 to 8 months while they install .a-~ystem, it would also
realize a financial savings to Cherry Fasteners of $30,000.00 to
$100,000.00. We had estimated $18;000.00 per month, but if the
1976 limitations are used, it will probably be a maximum of
$5,000.00 per month.
With regard to a waiver of the balance on the amount owing
for the time period of December, 1979 through September, 1980,
it was felt that the District Directors had expressed opinions
previously indicating a willingness to do so, but the sum of
$50,000.00 was deemed to be a fair, reasonable and equitable amount
in view of the probable charges that could be imposed, as well as
the immediate cash savings and future cash savings to Cherry
Fasteners by agreeing to a continuation of the 1976 limits.
AGENDA ITEM #2(c) "C-3"
Page Four
December 16, 1980
Despite the scope of the offer on behalf of the District,
it was effectively rejected out-of-hand by Cherry Fasteners,
except that they agreed that they would pay $15,000.00 instead
of $10,000.00, but furthermore wanted to have ·a special meeting
of the Board of Directors to deal with them directly rather than
with Fred Harper ~nd myself. They again reiterated that they
did not feel that they should pay anything until May 19, 1981,
and that they should be allowed to continue their discharges
under the 1976 limits. The possible exception being that their
last offer contained a proviso that said that they would pay
"something" if they in fact discharged over the 1976 limits
during the ensuing 7 months.
Thomaa:Lc!C!L~·
General Counsel
TLW:pj
cc: Mr. F.A. Harper
"C-4" AGENDA ITEM #2(c) "C-4"
::::
t:j
::::
:.t>
G'>
rT1 ··-::-a
):>
t--e
(
Decen~er 16, 1980
1. Enforce 1978 Limits
effective 10-1-80
December l, 1979 through
September 30, 1980. Charge
for excess quantity of
heavy metal over 1976
limits based on ECSA dated
December 27, 1979
2. Penalty non-payment
30 days
3. Interest % of 1%/mo.
,,.
RECAP OF MONETARY DISCUSSIONS
WITH REPRESENTATIVES OF CHERRY
FASTENERS
General Counsel's
Letter 12/4/80
District Staff
Proposal.12-16-80
$254,302
25,430
2,800
$282,532
)
)
)
)
)
)
)
)
)
)
)
Extend $ 50,000
ECSA to
6-30-81
using 1976
limits
c $282 :s32 >
(-50 p 000 )" c $232,532 > ..
--i 4. rT1 Excess discharges
Oct. 1st through
Oct. 31st, 1980
Oct.' 80
• 78 limits '76:li~its 4,640
'76 limits 4,620
3
::ft::
N ...-..
t:1 .._,,
::::
tj
::::
32,500
Nov. '80 Nov. 1st through
Nov. 30th, 1980 '18 limits \· 18,346
5. Estimated charges
Dec. 1st until
newly installed
system operational
to May 19, 1981 $18,000/rno. 99,000 est.
'76 limits
self 27,500 est.
monitoring
6. Civil penalties Deferred to 7/1/81.
$6,000/day com-Waived if in com-
mencing 10/1/80 pliance
$432,378 $86,760
CSD No. 1 will waive balance
of $232,532 if proposed facili-
ties are completed and opera-
tional 6/30/81 per plans and
specifications submitted to
District
('
Cherry Fasteners
Off er
12-16-80
Extend $15,000
ECSA
'-10-1-80
' to 5-19-81
using 1976
limits
Would agree to some Unknown
stipulated amount
Oct. '80
'76 limits
Nov. '80
'76 limits
D~c. '80
'76 limits
1/1/81 thru
5/19/81
-0-
-0-
-0-
-0-
22,500 est.
$37,500
To be paid if proposed
facilities are not com-
pleted and operational
5/19/81 per plans and
specifications submitted
to District.·
..
~'
COUNTY SANITATION DISTRICT NO. 1
SPECIAL MEETING DECEMBER 23, 1980
ACTION REQUESTED BY CHERRY FASTENERS UNDER AGENDA ITEM (.2) (g) :
1) Motion to rescind the motion regarding violation of District's
Industrial Waste Discharge Permit by Cherry Fasteners -
Townsend Division of Textron, Inc., adopted at the adjourned
regul~r meetirig of November 26, 1980.
2) Motion authorizing an extension of Waste Water Discharge
Permit to Cherry Fasteners {etc.) under July 1, 1976
discharge limit~ to June 30, 1981 upon the following
conditions:
(a) Payment of $ for excess discharges and
costs to. the District prior to January 1, 1981, pay-
ment to be made in full prior to January 1, 1981.
(b) Commencing with the first working day in January,
1981 daily monitoring of discharges by Permittee,
reports by independe~t lab regarding excesses.
{Six days per week,·sundays excepted.)
(c) Monthly payment for any discharges in excess of 1976
limits as shown by daily monitoring and lab reports
commencing January, 1981
"" '
COUNTY SANITATION DISTRICT NO. 1
SPECIAL MEETING DECEMBER 23, 1980
ACTION REQUESTED BY CHERRY FASTENERS UNDER AGENDA ITEM (2) (g):
1) Motion to rescind the motion regarding violation of District's
Industrial Waste Discharge Permit by Cherry Fasteners -·
Townsend Division of Textron, Inc., adopted at the adjourned
regular meeting of November 26, 1980.
2) Motion authorizing an extension of Waste Water Discharge
Permit to Cherry Fasteners (etc.) under July 1, 1976
discharge limits to June 30, 1981 upon the following
conditions:
(a) Payment of $ 1 ~1<JV'-" for excess discharges and
(b)
costs to the District prior to January 1, 1981, pay-
ment to be made in full prior to January 1, 1981.
Commencing with the first working day in January, 1 Pt,. ,r-L·• .• ,f A...'i11'<, ,., ....
1981 daily monitoring of discharges by Permittee, ~ v~~~ VP-> q
reports by independent lab regarding excesses.
(Six days per week,·suridays excepted.}
(c) Monthly payment for any discharges in excess of 1976
limits as shown by daily monitoring and lab reports
commencing January, 1981
Cl fJ ' -~-J.r-. ~ o..,},,(~J (J/tl, .-j,~ ~~·, LA(),(. ~ 0--. 0 :('ifa-U-.· 'f]' t . .... I
I "-/) L . ~ /'/ .q ~ J ~.(.,-{,t~J ,)
-:j---~ .~-, v ')
fl {,.---/'v . ~. L ,, Cf.1
c<-<--~.<:. 1---1 J;JA ~1 fu--x~r_ .d kJ ~ /!r-A-4~
l_A\,L v) ... '.dl!A""·' tv"'-· '-""' L ~ -~ ,J <J
(,
December 16, 1980 RECAP OF MONETARY DISCUSSIONS
WITH REPRESENTATIVES OF CHERRY
FASTENERS
General Counsel's
Letter 12/4/80
District Staff
Proposal 12-16-80
1. Enforce 1978 Limits
effective 10-1-80
December 1, 1979 through
September 30, 1980. Charge
for excess quantity of
heavy metal over 1976
limits based on ECSA dated
December 27, 1979
2. Penalty non-payment
30 days
3. Interest % of 1%/mo.
4. Excess discharges
Oct. 1st through
Oct. 31st, 1980
Nov. 1st through
Nov. 30th, 1980
Oct.' 80
'78 limits
Nov. '80
'78 limits
5. Estimated charges
Dec. 1st until
newly installed
system operational
to May 19, 1981 $18,000/mo.
6. Civil penalties
$6,000/day com-
mencing 10/1/80
$254,302
25,430
2,800
$282,532
32,500
18,346
)
)
)
)
)
)
)
)
)
)
)
99,000 est.
$432,378
Extend $ 50,000
ECSA to
6-30-81
using 1976
limits
( $282. 532 )
(-50. 000 )
( $232, 532 )
'76 .. limits· 4,640
'76 limits 4,620
'76 limits
self 27,500 est.
monitoring
Deferred to 7/1/81.
Waived if in com-
pliance
$86,760
CSD No. 1 will waive balance
of $232,532 if proposed facili-
ties are completed and opera-
tional 6/30/81 per plans and
specifications submitted to
District
('
Cherry Fasteners
Off er
12-16-80
F~tend $15,000
ECSA
10-1-80
to 5-19-81
using 1976
limits
Would agree to some Unknown
stipulated amount
Oct. '80
'76 limits
Nov. '80
'76 limits
D~c. '80
'76 limits
1/1/81 thru
5/19/81
-0-
-0-
-0-
-0-
22,500 est.
$37,500
To be paid if proposed
facilities are not com-
pleted and operational
5/19/81 per plans and
specifications submitted
to District.
JAMCS G. ROURKE
THOMAS L. WOOORUfF
ALAN R. WATTS
KE:NNARO R. SMART, .JR.
ALAN R. BURNS
ROBERT L. LAVOIE .
OANIE:L K. SPRADLIN
Cherry Fasteners
Townsend Division
Textron, Inc.
LAW OF flCE.S OF
SUITE 1020
CALIFORNIA F'IRST BANK BUILDING
1055 NORTH MAIN STREET
SANTA ANA, CALIF'ORNIA 92701
December 4, 1980
1224 East Warner Avenue
Santa Ana, Ca. 92707
Attention: Mr. Edmund B. Buster
Executive Vice President
Dear Mr. Buster:
ARCA CODE 714
835• 6212
TELECOPIER
(714) 835· 7787
This letter will serve to advise you of the action taken by
the Board of Directors of County Sanitation District No. 1 at a
special meeting held November 25, 1980, . pertaining to discharge
violations by your firm and the remedial measures to be undertaken.
Specifically, the Board of Directors authorized me as General Legal
Counsel to the Districts to file legal proceedings against the
corporation and responsible subsidiaries on January 15, 1981,
subject to the possible suspension of those proceedings in the
event a mutually-satisfactory agreement is made and entered into
between your firm and the District prior to that date •.
As you are aware, the District, for several years, has been
advising Cherry Fasteners of the discharge requirements which
must be complied with and during the past two and one-half years
in particular have been working closely with your Staff representa-
tives to develop a system and program for insuring full compliance
with each of those limitations. Despite several representations
by your firm that projects were under way to develop, install and
maintain a system that would insure compliance, the District has
now determined that in fact no such systems have been undertaken,
and therefore the compliance schedule date of October 1, 1980,
has not been met. We are now advised that because of certain
corporate actions to award engineering and construction contracts,
that a system could become operational by the latter part of May,
1981.
On behalf of the Districts, I wish to point out that because
of the failure to meet the limitations on the discharge of certain
heavy metals into the District's system, your firm is subject to
the following charges and/or penalties:
,
Page Two
December 4, 1980
1. The sum of $254, 302. 00 as the charge for the excess
quantity of heavy metal discharges for the period of December 1,
1979 through September 30, 1980. The excess discharges are those
quantities over and above the interim limits mutually agreed upon
in the ECSA dated December 27, 1979, which are based upon the
1976 limits which are considerably more liberal in demand and do
not include any fines or penalties.
2. Penalty charge in.the amount of $25,430.20 for the de-
linquency of nonpayment of the statement of charges dated October
23, 1980 within thirty (30) days. This penalty is prescribed by
Section 507 of District Ordinance No. 103.
3. Interest at
month on the total
$1,398.66 per month.
the rate of one-half
unpaid balance. This
of one percent per
amount is equal to
4. The sum of $32, 500. 00 for excess discharges for the
period October 1, 1980 through October 31, 1980, and $18, 346. 00
for the period November 1, 1980 to November 30, 1980. These
discharges are quantities in excess of your permit limits, which
became applicable upon the expiration of the prior enforcement
schedule compliance agreement between your firm and the District
on September 30, 1980. These limits are established by Ordinance
duly adopted by the District.
S. An estimated $18, 000. 00 for each month commencing December
1, 1980, until the newly-installed . system becomes operational.
This is simply an es.timated charge based upon the samplings of
October and November, 1980, and the representations by you and
your firm that you did not envision being able to comply with
the 1978 limitations until the new system is on line.
6. Civil penalties at the rate of $6,000.00 per day com-
mencing October 1, 1980, and continuing for each and every day
thereafter until the system is installed and full compliance is
achieved by your firm. These civil penalties are prescribed by
District Ordinance No. 103, adopted July, 1976.
In recognition of the fact that you were present during the
Board of Directors meeting on November 25, 1980, and their de-
cision was stated to you at that time, I believe it is apparent
that the District intends to seriously pursue this matter with
all available means in order to insure that compliance is obtained.
The District itself is under severe orders and threats of penalties
from the United States Environmental Protection Agency, the State
Water. Resources Control Board, and the Regional Water Quality
Control Board with respect to the heavy metals to be discharged
Page Three
December 4, 1980
inta:~i the ocean through the operation of our system. We cannot
conf:tnue to run the risk of vio_lation of those governing rules
and _regulations of those agencies, and therefore, will pursue
this without further delay. However, I am sure you also under-
stood that the District is most anxious to accomplish a resolution
of this matter, and towards that end, invite your firm to submit
a written proposal to the District yoncerning its intentions with
regard to both obtaining compliance and resolving the financial
liabilities as a~scrihed ! :1 Paragraphs 1 through 5 above. I
would also ;_-. 4._._::_; U-:..=-. '::! schedule a meeting to review such· a
proposal ;it i· he u Cf ice of the District on Monday, December
15, 1980, at 10:00 a.rn. If this seems appropriate and agreeable
to you, I would ask that you notify my off ice accordingly, and
I will i.nsure that all of the necessary representatives of the
District are available at that time.
TLW:pj
cc: Mr. F.A. Harper
Very truly yours,
KE & WOODRUFF
Tho~~6.~,
General Counsel
... ' ..
TOWNSEND i i J;i i ,{•]:I
E. B. Buster
Executive Vice President
Townsend Division of Textron Inc.
Mr. Thomas L. Woodruff
General Counsel
Rourke & Woodruff
Suite 1020
December 12, 1980
California First Bank Building
1055 North Main Street
Santa Ana, California 92701
Dear Mr. Woodruff,
1224 East Warner Ave., Box 2157
Santa Ana, California 92707
714/545-5511 or 213/979-2121
TWX 910/595-1500 TELEX 678431
This is in reply to your letter of December 4, 1980, which suggested
our company respond by way of a written proposal to County Sanita-
tion District No. 1.
Further, you suggested a meeting be set up at the office of the
district on Monday, December 15, 1980,. and subsequent communi-
cation with you has established that meeting date at 10: 30 a.m.
Bill Kester and I plan to be there. ·
To set the stage for our discussion on Monday, we will bring with
us copies of all pertinent documents, correspondence, prints, etc. ,
and will be prepared to talk over with you and the district staff
any questions regarding the construction and implementation of
our effluent treatment facility.
I think we have been remiss in not sharing with you some of our
earlier considerations which made it impossible to begin design of
this facility until late 1979, but we will be prepared to present
that information to you at that time. In short, decision was made
late in 1979 to oontinue our expansion here in California rather
than to move to another part of the United States. As a first
step, we leased a 40, 000 square foot facility in Costa Mesa and
moved an entire department in there during January, 1980. This
was step one in our program to keep the entire Cherry operation
here in Southern California, and the decision to do so was
critical to determining the location and capacity of our effluent
treatment plant. Effectively, then, we had only a very few
months to design and build this plant if we were to meet the
district's requirements by the end of the temporary operating
agreement.
-. ..
December 12, 1980
Page 2
We engaged Allen Engineering Company as a consultant on this project
on October 16, 1979, assigned two engineers on our staff to the pro-
ject, and they began to evaluate the problems and to design the plant
which would handle the voltune of material we would be expected to
process. The decision to remain here in the local area with our
expanded facility called for a doubling of cadmium plating capacity,
and this turned out to be an important factor in the ultimate cost
of our facility.
Our engineering personnel assigned to the project visited a number
of small treatment facilities here in Orange County, and although
none of them exactly met our requirements, it was very helpful to
see some of the equipment in action and to determine how effective
it was. As a result of these investigations, our engineering people
have put together a design which is expected to process our yet
to be expanded plating department, and at the same time meet the
1982 standards adopted by the district.
Our design work was not completed until late October, nearly 30
days after the expiration of our temporary use permit, but repre-
sented the culmination of nearly one year's work by our Engineering
Department.
Throughout this procedure Textron, Inc., which must approve
our capital expenditures, had been briefed on the effluent
problems and were standing ready to approve our plans as soon
as we could come up with. something definite on designs, time-
tables, and dollar amounts to be spent. As soon as these figures
were available, we asked for formal approval and were given such
authority on the first meeting date thereafter of the Board of
Directors. Further, so there would be no question as to approval,
we were given a Phase I approval of $200,000. 00 so that work
could begin as soon as possible.
Meanw bile, three bids had been taken and the Allison Honer Company
was selected as the general contractor. Authority was given for
Honer to proceed on October 31, 1980, and work was begun even
before a building permit was issued.
The building permit application was filed on November 3, 1980,
and has been approved and released to us in total at this time with
the exception of the laboratory building. That approval is expected
December 12, 1980
Page 3
momentarily and no delays should be experienced as a result of that
portion of the permit not having been earlier issued.
Our tenant on that portion of the property on which the effluent
plant was to be erected was notified in April of this year that the
area would have to be vacated, and they agreed to abandon that
area by July, which they did.
Under the terms of our building contract a completion date of
May 19, 1981 is expected. All purchase orders for on-site equip-
ment have been placed, and while actual delivery dates have not
been confirmed in their entirety, earlier quotations did not exceed
more than twelve weeks for delivery. The construction project is
on schedule at this time, and we can reasonably expect completion
by May 19 or earlier.
Our immediate problem is one of a necessity to discuss and settle
the charges listed in your letter of December 4, 1980, page 2,
paragraphs one through six. These charges already amount to
over $300, 000. 00, and you indicate you may wish to assess us
$18, 000. 00 per month beginning December l, and that we might
be subject to civil penalties at the rate of $6, 000. 00 per day
beginning October 1, 1980. This is obviously a severe economic
impact to our operation, and we can not continue to operate even
temporarily if these charges are really to be assessed.
-We have only one immediate alternative which is to subcontract all
of our cadmium plating to firms with available capacity in the Los
Angeles Basin area. The difference in cost to us is immense, and
at the same time we would have to discharge approximately 34
people from our Plating Department. Further, if the charges
continue at the level you suggested in your letter, we would have
to give serious consideration to stopping all construction work and
consider relocating the plating operation. We would prefer to neither
relocate nor to subcontract for an interim period, and should like to
propose instead, that the district and our company continue to work
together to finish this facility and to get it into operation as quickly
as possible.
We would propose, then, that you cancel forthwith all charges
which have been described in paragraphs one through six, and
instead assess us a daily charge to take place after May 19, in
December 12, 1980
Page 4
the event we do not finish and begin operating our new effluent
treatment plant.
I should like, also, to explain that it is more than just an incon-
venience for us to carry on our books accrued charges of more
than $300, 000. 00 at the close of our calendar year 1980. This
affects a number of vital functions within our company, and I will
gladly explain when we meet on Monday. Therefore, I would like
to suggest that you and the staff of the district agree to the
immediate cancellation of these charges, but instead apply a penalty
if we do not perform as expected after May 19, 1981.
Having taken this action, it might then be possible for you to call
a special meeting of the board and to take official action which
would allow us to remove this accrual from our books as of
December 31, 1980.
Once our drawings were complete on this project we have moved
as rapidly as is humanly possible to bring our dis-charges of
effluent within compliance of the district's regulations. We have
never had any intention of doing otherwise, but it has taken more
time than anticipated by either of us to complete our design, get
bids, process our building permits, and to get under way in
construction. Now that we are reasonably assured of delivery of
all equipment and of meeting a completion date, we should ·very
much appreciate your taking positive action to eliminate the charges
against us and instead accept penalties to be paid by us in the
event we do not meet the completion date as prescribed.
Very truly yours,
63&(f_r
E. B. Buster
EBB:mp
MEET I NG !};.. TE Dec . 23, 1980 T 1 ;-1 E _4_: _oo_p_._m_. DISTRI CTS
1
DISTRICT 1
(5ALTAREL[_I) ... SHAR P ...... + ----
(YAMAMOTO) .•... WARD,J ..... ~ ----
(RI LEYL · ••.•... ANTHONY,P .. ~ ----
(CR ANK) ........ HUTCH I SON .. ------
0 I STRI ( 1 2
~FRIED) ........ WEDAA ..... .
SEYMOUR) ...... RO TH ....... ------
(W I NTERS) ...... BORflHOF T ... ------
( GAMB IrlA) ...... FOX ........ ------
(ECKENROD E) .... HO LT ....... ------
(ODLUM) ....... KA\>IANAM I ..• ------
(WIEDER) ....... MILLE R ••... ------
(CULVEB) ....... PERRY .••... ------
(BEYER) ........ SM ITH ...••. ------
(HOLLI NDEN) •••. STAN TON ..•. ------
(CORBETT) ...... WAR D,B ...•• ------
(WARD,J) •••.... YAMAMO TO ••• ------
DISTRICT 3
(COLLI NS) •••••• VAN DYKE .•. ------
(ROWAN) •••.••.. EVANS •..•.. --___ _
ROGET) ••••...• CORB ETT .••. _____ _ !HOLLI NDEN) •..• AD LER ...••• --___ _
PERRY) •••••••. CU LVER •..•• __
KIRKPATRI CK) .. FINLAYSON.. ----
MANP I c) ....... FIN LEY ••.•• == == ==
F OX) ..•.•••••. ISLES .••••.
SEITZ) .••••... LASZLO ••••. == == ==
DAVIS) •••••••• REES E. •••.•
S EY MO UR) ••... ~ROTH •••.••• == == ==
ZOMMICK) •••••• SY LVIA •••••
ROMAGNIN O) ••.• WH EELER •••. ------
(MILLER) ••••.•• WIEDER ••••• ------
(BORNHOf T ) ••••. WIN TERS •••• ------
(WARD, J) ••••••• YAMAMOTO ••• ------------
DISTRICT 5
~f"iA URER)) •••••• HEATHER •••• --___ _
STRAUSS •••••• COX ••••••• --__ --
ANTHONY ,p) •••• RILEY •••••• _____ _
DISTRICT 6
(CRANK)·~ •••••• HUTCHI SO N •• _____ _
(H EATHERJ •••••• PLUMMER ••••
(RI LE Y) •••••••• AN THONY,p •• == == ==
DISTR ICT 7
BEYER) •••• ~ ••• SM ITH •••••• ------
SA LTAREt-LI J ··-EDGAR •••••• ------
HEATHEB). ····-HART ••••••• ------
WIEDER) •••• ·• -MILLER ••••• ------
ANTHONY, A) • ••• VARDO ULI S •• ------
HAN SON) ••• •• •• WAHNER· •••• ------
YAMAMOTO) ••••• WARD,J •••.• ------
DISTRICT 11
~BAIL E Y) ••••••• PATIINSON •. ------
MA CALL J STER) •. BA I LEY ••.•• ------
MILLER) ••••••. WIEDER •.•.• --___ _
10/8/80
JOIN T i30ARDS
(HOLLlt!DEN) ..... ADLER ..... -----
(RI LEY) ......... ANTHONY, P .. --__
(MACALLISTER) ... BAI LEY ..... --__
(W I NTERS) •...... BORNHOFT •..
(ROGET) ......... CORBE TT ... ·====
(STRAUSSl ....... CO X ....... .
(PERRY) ......... CULV ER ..... == ==
(SALTARELLI) .... EDGAR ..... .
(RO\·/AN) .......... EVANS ...... ----
(KIRKPATRICK) •.. FINLAYSON .. ----
(MANDJ C) ........ FI NL EY ..••. ----
(GAMB I NA ) •...... FOX ........ ----
(H EATHER) ...... -HART .....•. ----
(MAURER) ........ HEATHER .... ----
(ECKENRODE} ..... HO LT ......• ----
(CR Ar_'IK} · ........ HU TC HISON •. ----
(FO X) ..••....... ISLES ...... ----
!
ODLUM) .•.•.... KAWANAMI ..• ----
SEITZ}· .•... ·• -LAS ZLO •••.• ----
WIEDERi •·· •..•. MIL LER •..•• ----
BAI LEY •••...•. PATTINSON .• ----
(CULVER •••..... PERRY •...•• ----
(HEATHER) •••...• PLU MM ER •••• ----
(DAVIS) ..••••... REESE°. ••••• ----
(ANTHONY, P) •..•. RILEY ...... ====
(SEYMOUR) ·······ROTH •..•••. --__
(SALTAREl.tll) •.•. SHARP ..•••• ----
(BEYER)········ -SMITH ••... ·----
(HOLLIND~N) ····.STANTON ... ·----
(ZOMMICK ······-SYLVIA-••• ·----
~COLLINS ·······VAN DYKE ·.·----
AMTHONY ,A)···· -VARDOULIS . ·----
HANSON)······· -WAHNER ..•• ·--__
(CORBE TT) .•.•.•• WARD,B •.••• ----
(YAMAMOTO)····· ·WARD,J • • • · ·--·--
(F R IED)········ ·WEDAA · • • •• ·----~ROMAGNINO) ····-WHEEL ER ··.·----
MILLER)······· -WIEDER·····--__
BORNHOF T ) ·····-WINTERS ·· •• --
(WARD,J) ········YAMAMOTO ···--
OTHERS
+
HARP ER·····_y_
SYLVESTER · • --1L-
LEW IS······ __L_
~~~~~:::::-v
ANDERSON •••
BAK ER ••••••
CONATSER •••
DAWES .•••••
FATLA!llD •••.
YOUNG ••••.•
WOODRUFF . • • J/"'
HOHENER •.•• --
HOWARD-••••
HUNT •••••••
KEITH ••••.•
LYNCH •••••• __
MART I NSON •• __
STE VENS ••.• __
. , ..
(2 -d)
DIST RI CT 1 -DECEMBE R 23 , 1980
SPECIAL MEETING
St aff report an d dis c ussion
111e staff a dvised that they me t wi t h representatives of Cherry Fasteners on
December 15th and again the next day an d tried to negotiat e some type of agreeme nt
for compli a nce . Submitted a proposal and counter proposa l as outline d i n agenda
p ackage . Cherry Fas t eners then requested t h a t they ad d ress t h e Board since t h ey
fe l t their offer was as far a s they cou ld go. At that po int staff contacted
Directors to call a special me eting . Ward asked for a clar i fic a tion of Districts '
p r oposa l and Mr. Harper rev iewed points 1 t hrough 6 on Sched ule D. State d t h a t
Cherry Fasteners offe red $15 ,000 to sett le a ll past exces s char ges through this
cal endar y e ar . 19 8 1 projecte d ch a rge is bas ed on $5,000 a mo nth to Ma y 19 , 198 1,
wh en they fee l the y will be on line with n e w f a cilities . Wa rd as ked wh at t h e l a st
day of the current agreement was and was answered Sep t ember 30, 198 0. This
would ext e nd that agreement to J une 30, 1981.
Sharp aske d when they billed for excess charge s. REL advis e d the billing for
$282,532 went out about 6 weeks ago and the billing for Oct o ber a nd Nov ember would
go within t h e next two or three weeks. Sharp then que s tioned wh e ther the total
charge of $432,378 reflected more than just the cost of h andling and monitor i ng?
It was explained that the $254,302 is the amount we feel they are over the interim
limits based on 1976 require ments, plus penalties and interes t . Excess of permit
requirements are computed at s o much per pound for each e l e ment. For tha t period
of nine months h ad so many pounds that were over per mit limits. During the p e riod
from December 27, 1979 through September 30 , 1980, were based on interi m limits
which were 19 76 l imits . The $32,500 and $18 ,346 for October and November are
bas e d upon .the present permit which they are supposed to be in compliance with
which is the 1978 limits . 111e penalty amounts are still those same amolll1ts that
are set forth in the ordinance . Anthony asked what our out-of-pocket costs for
monitoring them were. REL answered he r eally didn't know. We monitored them six
times and samp lin g. Probably t a lking about $700 to $1000 per trip for sampling,
by the time you figure our inspector to go to their facility, the equipment r ental,
samp ling, the lab time for analysis, the write-up, etc . Added the fees are designed
to discourage dumping heavy metals. The fees established in the ordinance are
consistent with other agencies. Is a di scouragement for pollution rather than for
recovery of costs.
Sharp asked what kind of a position we are in with EPA and other organizations
because of wha t has transpired in the last several years. FAH advised th at we are
required to have pre -treatment program in place by 1982. Based on EPA requirements
the program we have instituted and the I.W. Ordinance adopted in 1975 and effective
7-1-76, are part of this program . This i s a requirement of SWRCB and a lso ties
into a revenue program for anyone taking State and Federal grants. This is what
we have been implementing. REL added he felt it was i mportant to point out that
when we adopted the ordinance, the pre -treatment program was in a state of flux.
Our industries were asking what they should do. We knew we had to have certain
controls to protect the environment and came up with sound program for mass emission .
They have a certain mass they can discharge on a 24-hour basis. The reason behind
that ordinance was to encourage water conservation. If industries lowered discharge
and stil 1 had the same mass, w.ere not penalized for being good managers . EPA
standards for wastewater treatment that are coming out are really based on concentrations .
If we are not successful with our waiver application, then EPA regul a tions will be
far more strict than ours.
..
,\nthony stated that the main i ssue is complian ce . Asked if comp l iance efforts
were sti ll comi n g along sin ce our last meeting? FAH advised that he was at Cherry
Fastener 's faci lity and they are progress ing. Then aske d if staff felt that whe n
facilities comp l e t e d, they wi ll cause them to comp l y? REL said he felt progress
they are mak ing today is genera ll y goo d . Work is being done. Have reviewed their
plans and have made comments and they have modified them. As f ar as the quality
of d i scharge , they are sti ll in non-comp li ance and are in violation a t this time .
Ward asked if we had received any comment re purchases of equipment and what is being
put i n the gro und? REL answered t hat they h ave their permits from the City of Santa
Ana an d as far as placement of orders for al l of the equipmen t, don 't think they
hav e placed them at th i s time . Think they are mov ing a h ead though .
Then asked Cherry Fasteners to brin g Direct ors up to da te on wh ere they were .
Nisson stated that everything in the way of equipment is on order at this time .
He then indicated that one of the prob l ems was that the Di strict 1.,rants them to
accept is that they acknowledge owing $282,532 for the period indi cated on the
chart . Said they would not do that and don 't believe the ordinance wou ld sustain
s uch a figure . Said it provides that i n order to ma k e a determinat ion of non -
co mpliance , have to make an anal ysis of grab sample . Need six grab samp les during
December, 1979, to December , 198 0. If the e fflue nt i s found to be in excess of
the con centration requireme nts, then a sampling and .eva luation period ma y be
in itiated b y the District. Was no such p rogram until October, 198 0. If Di strict
h ad d one that, cou ld then base the fees for non-compliance for a period not to
excee d 10 normal working days. Ex t ended fees through the whole period for non-compl i ance
on the full inde pendent samp l es . Don 't think District wo uld be in compliance with
ordinance and Cherry Fasteners would not' accept that figure. Said they felt that
the purpose of the ordinance is to get compliance with a ll the industries in the
County to r edesign and install n ecessary e quipme nt. Stated Cherry Fa steners h as
don e that a nd have not waited until the l ast minute to do it . St arted in 1977
in stalling cadmium unit which is pictured in District's entry. Found that didn 't
work and h a d to s tart designing n e w faci lity. As of the end of last year a de termination
was made not to move this facility from Santa An a to another location and to expand
certain activities which wou ld r e quire a treme ndously larger volume of plating.
Instead of 200,000 gallons would be increased to 350,000 gallons. Wanted to design
a facility that would be in full compliance with the 1978 requirements and 1982
requireme nts that are looking down their n ecks . Consequently, did not comply with
schedule set up for completion by September 30th. Wasn't because they wanted to
disregard and totally ignore ordinance. Feel that the figures are excessive and
the nature of the penalties. Said their proposal would be to pay s om e thing for
the excesses since Octob er and through December. Want to fix the figure now and
pay it . Are in agreement with staff on taking daily tests based on 1976 standards.
Will pay excess on a monthly basis. Expect to complet e facilities by May 19. Staff
sugges ted to extend through June and they certainly would not di sagree with that.
Said they fe lt that this was in the spirit of the ordinance and the policy the
Board has been implementing in the p a st. Feel they would not accept the l etter
as written setting forth these ch arges .
Sharp asked if the unit they constructed a year or so ago was built at our r e quest.
Ke s ter said it was at their own option. Sa id it does p rovide some benefits to the m
and will continue to try to operate it. Asked him if it was to clean up their
discha rge? Th ey answered, no, it was a cadmium recovery unit but did clean up
di scharge a lso.
REL then replied to Nissan's comme nt s re ordinance . Said he was in error . All of
our industries were given permits that covered 1976 limits . Wer e rewritten when
new 1978 requireme nts came out in July, 19 78 . Many of the industries were not able
to comp l y immediately . At that time we h ad an enforcement compliance schedule which
allowed u s to extend some permit require ments for a period not to exceed 180 days .
Thi s we did in 19 78 with Ch erry Fast en ers . Th e ECSA was signed July 25 , 1978.
-2 -
I
It extended the 1976 l imits for 180 days but they d]d not get their act together .
We did go into a grab sampl e and samp le and analys i s program as called for in the
ordinan ce . Was as ked whe n that was and he advised in the Spring of 1979 (about May).
Th ey were assessed and it became apparent that they sti ll were n ot go in g to meet
compliance . That is when we agreed to the complete schedu l e .
Sharp qu estion e d why some indu stri es were ab l e to get in shape to comply with the
ordinance more quick l y t han others . Said Cherry Fasteners mus t be h aving the greatest
problem of all . Asked wh at the ECSA they signed said . REL advised that it s t ated
that if they cannot meet certain permit requirements, that there are certa in steps
t hat they must take before anyone can come into compliance which means they have to
build someth ing for pretreatment . Mus t design facilities , submit p l an s, secure
building permits from cities, commence construction, comp l e te construction, testing
and start up . In that period of time must a l so comply with 1976 l imits and t h ey
agreed to that . Basically , they te ll us Khat their timing \.;ill be and we usually
accept it if it is a r esonable schedu le. In December of 1979 they submi tt e d a
letter that had milestone dates . Th e y said by Sept e mber 30, 1980, t hey will be in
full compliance. In April, 1980 , we had a meeting a nd they assur ed us that they
were on schedule. The s ix samples that were taken during this ECSA period were
not grab sample s but were 24-hour samples . Four were in n on-compliance and two
were in compliance . l'lh en the y went beyond the 1978 date , the ordinan ce says they
could go into a Cease an d Desist phase . Th ere are c ertain options in the ordin ance
that state some kind of agreement must be reached or amend permit or revoke their
discharge permit . We have not done that to date.
Asked Ni sson why company didn't meet agreement a year ag o? Nisson referred question
t o Mr. Buster and Buster said Mr . Kester wou l d help him answer question. Buster
said r e timing, they ma d e a decision late in 1979 to k eep the plant here . In doing
so de cided to take expansion out side of th e city of Santa Ana to another area and
in doin g so would have to practically double the size of t h e pl at ing unit . Design
work was do n e and cons ultant taken on at that time . Design work went on through
1980. Was a l itt l e s l ower than an tici pat ed . Difficulty was one of communication
wi t h t h e District , par ticul arly in t h e l ast 60 d ays . Abo ut 30 -40 days after
permit had expired , their des i gn work was completed . At that time they irrunediately
entertained three bids on the p r oject , p r iced out all of the equipment and made
arrangement s t o ge t approval from parent compan y '. They then selected a bidder
a n d app l ied for permit b efore the l as t pl ans were d one an d awarde d the co nt r act.
Work was actu a lly begun ab out 10 days before first permit was issued . About mid-
Nov e mber . After October meetin g , were moving ah ead with permits , final p l ans a nd
bids . Was no de l ay as far as financing or approval by Textr on . At that time all
of the equipment purchase orders were r eleased . Delive ries were approximately
1 0-12 weeks as qu oted. De l ays were purely ones of not being able to get the design
work done . Worke d with city on permits . Sai d l ack of communication i n the last
60 days didn't help their case along when permit was in force . Thought they did
their b est in getting the work done as quickly as they could . Asked Ch erry Fast en e rs
the d ate they decid ed to stay in Orange Co un ty an d Bu ster answered about October
or November of 1979 . Was a comp l ex t hing . Leased building in Costa Mesa and
took occupancy in January . Decided to stay in Santa Ana within 30 days. Asked
him if that is when they decided t o expan d operation and how much? He answered
that they were practical l y doubling the cadmium plating . Not doubling the other
opera tions . Haven 't doub l ed it yet . Is in the plans for this year . The n e w
facility is designed to hand l e t h e do ubl e vo l ume --350,000 gallons , the other one
h and l ed 250 ,000 gal lons.
Anthony stated that we went over progress at the last meeting . We h a ve h a d a lot
of evidence that t h ey h ave project mov i ng and h ave had confirmation from staff that
th ey are physica l l y moving on thi s . This is why we wanted the staff to negotiate to
be sure they are in the process of complying . Said if we are satisfied with thi s
recap, could make some k i n d of motion.
-3-
Ward stated h e would like to find out if we are getting any progress as fa r
as a so luti on to the probl em.
Anthony :indi cate d that th e last mee tin g we we nt over the actual schedule point by
point. Asked Cherry Fasteners if they felt that the steps that they have taken
since the last meetin g al l point the direction of compliance as soon as they
can get there? Nissan a n swered , at the risk of being presumptuous, he had prepared
a proposed requeste d action if Directors wou ld l ike to cons i der it . Passed out
copy of proposed motions . SEE ATTACHED .
Ward aske d staff for comment and Sharp said he wou ld some discussion on this .
Sharp sai d one quick reading of something like this may not be quite adequate .
May need to ask staff to review . Sharp said one oth er item that bothers him is
where we are legally on this . Don't \Vant to give away the farm . I s a legal
problem i n enforcing the ordinance and t h e agreement that was entered into in
good faith. Don 't think we can just waive a l ot of fine s wh i ch may be imposs ibl e
for u s to wai ve . Asked TLW about t h e l imit s of our abi lity to wa i ve o r defer fees .
TL W stat.e d we ha ve two or three different categories of fin ancial b u rden. We are
ta l king about fees in the p a st prior to or during the cours e of the ECSA unti l
September 30, 1980. Fees prescribed by ordinance and excess liabi lity they may
occur a re a little bit different. If there is a disput e d agreement , it i s clear
the Districts have l egal powe r to compromise that . Said when he and FAH proposed
a settlement with r ep r esen a t ive s of Cherry Fasteners, it was done soley on the
basis of constructing a bottom line package deal. Advised if we take the raw dollar
amount, could have got the same number in a numb e r o f way s. Thought it was the
consensus of h e and FAH that the direction from the Board was that we weren't
tryin g to embarrass anyone or unduly thrash them. We purposely didn 't attach
any monies with a fine or penalties . Said Nissan comm en ted that h e didn't know
if the ordinance could sustain ~ $5 0,000 . Tom stated tha t we could h ave put
that number of $50, 000 in any numbe r of places. Th e point is t hat we wanted to
come up with a fu ll package per the direction of the Board . Stated that it is
true that we have to have a sampling program with a 10-day maximum, but if we
didn't do that, is another provision tha t institutes $ per pound which is
$6 ,000 per day. If we imposed this, could be $ · Said we tried to
stru cture a financial package· that didn't try to penalize them . I s always room
for some compliance. Pointed out that there is a major change in the law
comm encing January 1s t. We will be directly liable and $6,000/day would be on
us before we pass it through to the disch arger.(?) The ordinance is one the
book s as a law and r e quires that they be under the 1978 limits as of Octob er 1st .
Said he had some real difficulty in trying to waive that item . Re t h e other items
with respect to discharges from last September through December, that numb er is
soft . There were discharges in the re in other items on the list . The Board is not
ob ligated to initiate or direct TLW to initiate to seek those penalties so have
that option.
Wa~d asked if we app ly $250,000 p en alties, what would your reaction be and i f we
waived a ll fees , what would your r eaction be? FAH stated th a t our concern first
of a ll is the ordinance. We are functioni n g under the ordinance. Said there are
many industries h e re in the county that have taken the ordinance serious l y f rom
day one. Ha ve spent substantial amounts of money. In a sense the efforts of
Cherry Fast e n ers haven 't really been substantial until just recently .
An thony st~te~ that the · -s~aff could have come in a year ago and told the Directors
but they didn t . FAH advised that the fact that we e ntered into an agreeme nt we
fe l t a s .though they would comply. Director asked a bout other agencies in non~compliance.
JWS advised we have assessed other industries, the l arge st being in the neighborhood
of $10,0?0. Sharp stated we have got to recover all the costs we have put out ·in
encouragin g the company to come into comp l iance . Don't see how there could be any
argume nt abo ut that.
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Sharp added that the thing is, as Anthony points out, the company since October has
begun to dig i n and get this thin g bui l t so they wi l l be in compliance . Asked if
we co llect our c osts and i f we are convinced they are on the way to comp l yin g , what
e l se is it we must do in order to be within the law? \\'ard asked if this motion
would then be acceptable if the numbers were filled in? TLK said he didn 't have
any problem with the form of the motion. Wou l d be based on 1976 limits rather
than 1978 limits .
Anthony aske d what about when t h e time r uns out? What should we do now or then?
TLW advised that we need that put into the offer . Shou ld be put in settlement
package now so if it happens that they don 't get system on .
Ward stated that we haven't \~ai ved any right t o reopen the situation on July 1st
and talk about these fees again. TLW stated that he would have to advise District
to enter into agreement so they can 't renegotiate.
l\'ard suggested that they move to adopt recommendat i on from Cherry Fasteners and to
p ut $20,000 in the blank . Anthony stated that he fe l t that would certainly cover it .
Wou l d cover samp l es testing o f l ast year. I t was then asked what kind of charges
wo ul d ap ply as of J anu ary 1s t. Answer ed they would be actual l i ke we ta l ked about
l ast time. The y wo ul d have t o monitor themse l ves and wou l d have to pay any charges
tha t the y r an up a f ter t h e first of t he year. Ant h ony sai d we a r e still ta l k ing
about an o ther $20 ,000 after the fi rs t of the year at n o cost to the Di stri c t. Said
he f e lt $15,000 i s e n ough an d the $20,000 after the first of the year .
Question was then as ke d wh e the r amo unt included Oc tober , Nove mb er & Decembe r ch arge s ?
TLW advised th at wh a t ev e r n umbe r Directors se lect f or e xce ss di s charges prior to
Janua ry 1st, wa nt to b e certain it a ddresse s the c urre nt t h ree mo nths. The se c ond
thing i s tha t the monito ring i s to b e at t he e xpe n se o f t h e disch arger .
(See n ext p age for f inal mot ion)
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Ward moved items as indicated on data s upplied by Cherry Fasteners fillin g
in the blank in item (2)(a) with the figure of $15,000 . He f urther moved that
Cherry Fastener s continue to report to our staff on the progress of construction
and on a ll monitoring a t Cherry Fasteners expense .
Motion seconded .
Question asked re how often to report to staff . REL advised samp ling should be
done every working day and should be reported monthly .
Sharp added that he assumed there wou l d b e some type of monitoring or survei llance
done by the staff along wi th Cherry Fasteners so we know if their construction
schedu l e starts to drift again. He asked if it was import a nt that that kind of
survei ll ance become part of the motion? Also should hav e a condition in the
mot ion that if the May 19th date is not met , think we have to spell out something
so that is covered . Anthony said the May 19th date is the ideal time but staff
has recommended June 30th . Adde d that monitori ng of construction wi ll be done by
staff an d will come back to Board by J uly 1 . As k e d Ch e r ry Fasteners if t he y
agreed that there would be free access of information betwee n staffs . Che rry
Fasteners answered, they had no prob l em with that. It was stated that we are
not waivin g any rights or making ru1y sett l ement beyond that time .
TLW stated that the Board was actually directing a n agre ement to be execu ted . Not
just a un i l ateral act ion b y t h e Board bu t are d i rectin g an agreement be prepared .
Ward stat e d h e wo uld incl ude t h a t--di r ectin g t h e staff to come back with a n agreement --
i n his motion .
Niss an advised that it was i mportan t to Cherry Fasteners that they do no t c a r ry
a c ontingent l iability on the b ooks . Ar e a numbe r of reasons they don't want a
carr y-ove r said Bu ster . He exp l a ined that whe n t h ey close t he cal e n dar ye ar , is
their fi scal year end a l s o . The company ma k es a report t o shareholde r s. I f the r e
is any c ontingent liab i lity, h ave t o be lis t e d and in lO K a l s o. ?? Have profit
s haring in the compan y a nd if they h a v e a contingent li ab ility , have t o set as i de
20% t o c over it . Th ey certa inl y don't wa n t t h a t to happen . Are perf ect l y willing
t o a cce pt the n orma l lia bility o f mee t i n g t he r e qui remen ts but don 't wan t to
c arry ove r b ecau se it wo uld h ave to app ear in l OK.
Ant h ony asked TLW if Ch err y Fast eners coul d accept a det ermination of our a ct ion
as a n agreeme n t. Tom said as far as h e was con cern ed they c oul d .
TLW added that if we are goin g t o u se t h e 1976 limits, i t should be pu t und e r
t h e ECSA f r om September 30 th to J une 30 th . Co ul d d i rect General Manager to execute
agreeme nt in accorda n ce with ECSA i n fo r m ap p r ov ed by Gene r a l Coun se l . I t was then
n~ved by Ward t o di r ect the Chi e f En g ineer t o execute the agr eeme n t .
\ TLW a l so a d v i sed t h at i f t h e Boar d 's dec i s i on is t h at t h ey pay X-doll a r s for a ll
servi ce throu gh December 31, 1980, t h en Dist . is probably ''ai vi ng any c l aim t o
get anyth i n g out of that. However , commencing Janu ary 1st can come back and enforce
$6 ,000/day .
A vo ice vo t e was then taken on t h e mo t i on inclu d in g ame n dments . Mot i on carri ed .
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COUNTY SANITATION DISTRlCT NO . l
SPECIAL MEETING DECEMBER 23 , 1980
ACTION REQUESTED BY CHERRY FASTENERS UNDER AGENDA ITEM (2) (g):
1) Motion to rescind the motion regarding viola tion of District 's
Industrial Waste Discharge Permit by Cherry Fasteners -
To~nsend Division of Textron , Inc., adopted at the adjourned
r egu lar meeting o f November 26 , 1980 .
2) Motion authorizing an extension of Waste Water Di scharge
Permit to Cherry Fast e ners (etc .) under July 1, 197 6
discharge limits to June 30 , 1981 u pon the f ollowi ng
cond i tions :
{a ) Paymen t of $ 15, ~o o for excess di sch a rge s and
costs to th e District prior to January 1 , 1 981, pay -
ment to be made in full prior to J an uary 1 , 1 98 1.
(b) Commencing with the first working day in January ,
1981 daily monitoring of discharges by Permittee ,
r eports by indepen d e nt l ab regarding exces ses .
{Six days per week , Sundays excepted .)
(c ) Month l y payme n t fo r any d ischarges in exces s of 1 976
limits as shown by daily monitoring and lab r eport s
comme ncing J a nuary , 1981
... .. ~. l / 26/ 80
/
Reco nv ene in r eg u l ar
session
Action re violation of
District's I~dustrial Waste
Disc h arge Permit by Cherry
Fastene rs -To wnse nd
Di vision of Textron , Inc.
At 5:56 the Board reconvened i n re gu l a r
session.
The following action relative to violation
o f the District's Industria l Waste Discharge
Permit by Cherry Fasteners -Townsend
Division of Textron, I nc ., wa s move d,
seconded and duly carried :
That the Genera l Counse l be instructed to initiate and file legal proceeding s
against Cherry F as ten ers -T o~~send Division of Textron, Inc . to enforce compliance
with the Uniform Ordinance Establishing Regu l at i ons for Use of District Sewerage
Faciliti es , includ ing collection of a ll charges owj ng for noncompl i anc e to b e
f i l e d on January 15, 1 98 1, or as soon ther eafte r as possib le . However , ___ _
i{~ .. t"he staff and General .Counsel can negotiate an enforcement -~o;;;p.li an ce . -----
agre eme n t accep tab l e to the Board set ting for th prov ision s for payment of a ll
fe es and charges, monitorin g requir ements an d ~11 othe r terms and conditions
n ecessary fo r the permi ttee to cqmpJy .. with District regµlations by May 19 , 1981,
for consideration by Directors at thei r r egular meeting on J anuary 14, 19 8 1,
the Board wil l ho ld filin g of said legal proceedings in abeyance .
Adjournmen t Moved, second e d and du l y carri ed :
That thi s meetin g of the Board o f Direct ors o f County Sanitation District No. 1
be adjourned. The Chairman the n declared the meeting so adjourned at 6:02 p .m.,
Nov emb er 26, 1 98 0.
Secretary of the Board of Directors
County Sanitation Di s trict No. 1
of Orange County, California
Chairman of the Board of Di rec tors
County Sanitation District No. 1
of Orange County, California
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