Since 2015 the Department of Toxic Substances Control (DTSC) has been working to identify and remove lead contamination from about 10,160 properties surrounding a former lead battery recycling facility that Exide Technologies (Exide) operated in Southern California. Our presentation of numbers throughout most of the report is based on parcels of land. However, to align our report with the way DTSC describes the cleanup project, we use the term properties when describing our findings. Approximately 100,000 people live in the area surrounding the facility and are thus at risk of lead exposure, which can cause significant health problems for vulnerable populations such as children. DTSC’s data indicate that a significant majority of the properties—including residences, childcare centers, parks, and schools—had dangerous levels of lead contamination. This audit report concludes the following:
DTSC Is Behind Schedule on Its Cleanup and Has Yet to Address Contaminated Properties That Pose a High Risk to Residents
In the early stages of its cleanup effort, DTSC identified 50 properties—including childcare centers, schools, and parks—where lead contamination posed a particularly high risk to children who frequently spend time at these locations. Despite the risk these properties present, DTSC has yet to clean 31 of them. In fact, it has cleaned only one of these properties since May 2018. In addition, DTSC has been unable to maintain the cleanup pace it presented in its 2017 plan for cleaning the most contaminated properties. As a result, it is significantly behind schedule and is unlikely to meet its goal to clean the 3,200 most contaminated properties by June 2021—extending the time that residents in the cleanup site are exposed to dangerous levels of lead. Finally, DTSC has not established a timeline or strategy for cleaning an estimated 4,600 remaining properties that also have dangerous levels of contamination. Until DTSC creates a plan for cleaning all lead-contaminated properties, stakeholders and policy makers will have little information about the level of effort and time the cleanup project will require.
The Cleanup Project Is Likely to Cost Hundreds of Millions of Dollars More Than the State Has Provided DTSC to Date
The State has already provided $251 million to DTSC to complete the cleanup of the 3,200 most contaminated properties. However, we estimate that DTSC will exhaust this funding before cleaning 269 of these properties. Moreover, based on DTSC’s current spending rate, we estimate the total cost of the cleanup project will approach $650 million. DTSC’s estimates of per-property cleanup costs were inaccurate because it failed to account for predictable costs, such as inflation and payment of legally required prevailing wages. Finally, DTSC has paid about $17 million more than it anticipated to clean 768 properties because it did not establish adequate protections in its agreement with its largest cleanup contractor. In particular, it agreed to a cost structure that requires it to pay for all cost overruns related to labor and materials instead of a fixed-price structure that held the contractor responsible for cost overruns.
Summary of Recommendations
To ensure that it promptly and effectively addresses the risk that lead‑contaminated properties pose to children and other individuals, DTSC should do the following:
- Immediately begin cleaning all childcare centers, parks, and schools.
- Immediately deploy sufficient resources to clean the 3,200 most contaminated properties on schedule.
- By no later than April 2021, identify and publicize the date by which it expects to complete its cleanup of all 7,800 contaminated properties.
- To ensure that it has sufficient funding to clean up all lead‑contaminated properties, DTSC should identify the full amount of funding it needs to complete the cleanup of these properties. It should submit a request for funding in time for the spring 2021 budget discussions that includes a range of funding options that spans from funding for the full cleanup to funding for only a portion of the remaining contaminated properties.
- To protect against the unsustainably high costs it has incurred thus far in the cleanup project, DTSC should structure any future cleanup contracts so that they at least partially incorporate fixed prices.
DTSC expressed concern about our conclusions that it is behind schedule to complete the cleanup of the 3,200 most contaminated properties and that it has not developed a cleanup plan for the remaining 4,600 properties. DTSC believes that it has cleaned properties more quickly than comparable cleanup projects and that it could not anticipate certain factors that have slowed its rate of progress. Further, DTSC cited a lack of funding as a reason it has not developed a plan to clean the remaining 4,600 properties. However, DTSC concurred with and agreed to implement all of our recommendations.