Loading...
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. -4- 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) -5 - 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 . -6 - 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 -2-