HomeMy WebLinkAbout971138.tiffSTATE OF COLORADO
Roy Romer, Governor
Patti Shwayder, Executive Director
Dedicated to protecting and improving the health and environment of the people of Colorado
HAZARDOUS MATERIALS AND WASTE MANAGEMENT DIVISION
4300 Cherry Creek Dr. S.
Denver, Colorado 80222-1530
Phone (303) 692-3300
Fax (303) 759-5355
May 23, 1997
222 S. 6th Street, Room 232
Grand Junction, Colorado 81501-2768
Phone (303) 248-7164
Fax (303) 248-7198
Gene Fritzler
P.O. Box 114
Fort Morgan, CO 80701
Re: Financial Assurance, Northern Colorado Brine
SW WLD NOR lE
Dear Mr. Fritzler:
.a-
I have reviewed the request made by you on behalf of your client
for an extension to the financial assurance required at all solid
waste facilities. In considering your request I have conducted a
file review and discussed the matter with the Weld County Health
Department (WCHD). What follows are my findings.
Colorado Department
of Public Health
and Environment
1. Per a November 20, 1996 letter form this Department to Mike
Cervi:
. repeated request for copies of analysis of pond waters.
2. Per a February 28, 1997 letter from WCHD to Mike Cervi,
facility owner:
.no analysis of the pond water per requirements. This is
the second consecutive occurrence.
. no determination of the origin of the water in the under
drain.
3. Per an April 17, 1997 letter from WCHD to Mike Cervi that was
refused and later re -dated May 1, 1997 and hand delivered:
.the onsite-operator was unable to demonstrate adequate
awareness of the types of waste receivable at the facility,
use of facility equipment, and daily operational
requirements.
. reiteration of the facility not providing information on
the presence of water in the under drain nor information on
inorganic analysis of the pond water.
The above referenced correspondence indicates that there are
continued and repeated deficiencies and areas of non-compliance
in the operation of this facility with regard to the solid waste
regulations and the conditions of the Certificate of Designation.
Cie: PG;/-/Lca-))CR
P4 0037
971138
Further, section 1.8.16 of the solid waste regulations allows
this Department to approve other financial assurance methods than
those specifically provided for in the regulations. You have
expressed an interest in the use of the corporate test/guarantee
which is currently in a federal draft document. The USEPA has
again moved its target date for a final document, this time until
August 1997. Once this document is complete it will take several
months to go through the regulation adaption process to put it
into the state solid waste regulations. Also, given the number
of times the finalization of the federal document has been
postponed, August 1997 may well be wishful thinking. The current
federal draft solid waste corporate test/guarantee is very
similar to the current corporate test/guarantee found in the
Colorado Hazardous Waste regulations, 266.14(i)(see enclosure).
Therefore, because of the site compliance history and status, I
am denying your request for an extension until April 9, 1998 for
financial assurance. However, you may use the enclosed hazardous
waste corporate test/guarantee, if you qualify, or any of the
other methods that are found in section 1.8 of the Regulations
Pertaining to Solid Waste Disposal Sites and Facilities (6 CCR
1007-2). I think a due date for the financial assurance package
of July 1, 1997 should be adequate. Please remember that all
costs for closure and post -closure are to be based on an
independent third party doing the work.
If you have questions concerning this matter I may be reached at
303/692-3445.
Sin j rely
(x/ enn P. Mallory
Solid Waste Unit�ekder
Compliance Prog�
enclosure
cc T. Jireck, WCHD
Board of County Commissioners
M. Cervi, owner
§ 266.14
(iv) The owner or operator is named as debtor in a voluntary or involuntary
prnreethng under Title 11 (Bankruptcy), U.S. Code; or
(v) The premium due is paid.
(9) Whenever the current closure and/or post -closure cost estimate increases to an
amount greater that the face amount of the policy, the owner or operator, within 60
days after the increase, must either cause the face amount to be increased to an amount
at least equal to the current closure and/or post -closure cost estimate and submit
evidence of such increase to the Department, or obtain other financial assurance as
specified in this section to cover the increase. Whenever the current closure and/or
post -closure cost estimate decreases, the face amount may be reduced to the amount of
the current closure and/or post -closure cost estimate following written approval by the
Department.
(10) Commencing on the date that liability to make payments pursuant to the
post -closure insurance policy accrues, the insurer will thereafter annually increase the
face amount of the policy. Such increase must be equivalent to the face amount of the
policy, less any payments made, multiplied by an amount equivalent to 85 percent of the
most recent investment rate or of the equivalent coupon -issue yield announced by the
U.S. Treasury for 26 -week Treasury securities.
(11) The Department will give written consent to the owner or operator that he/she
may terminate the insurance policy when:
(i) An owner or operator substitutes alternate financial assurance as specified in
this section; or.
—(ii) The Department releases the owner or operator from the requirements of this
section in accordance with § 266.14(1).
(1) Financial Test and Guarantee for Closure and/or Post Closure.
(1) An owner or operator may satisfy the requirements of this section by demonstrating
that he/she passes a financial test as specified in this paragraph. To pass this test the
owner or operator must meet the criteria of either paragraph (i)(1)(i) or (i)(1)(ii) of
this section:
(1) The owner or operator must have:
(A) Two of the following three ratios: a ratio of total liabilities to net worth
less than 2.0; a ratio of the sum of net income plus depreciation, depletion,
and amortization to total liabilities greater than 0.1: and a ratio of current
assets to current liabilities greater than 15; and
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§ 266.14
(B) Net working capital and tangible net worth each at least six times the
sum of the current closure and post -closure cost estimates and the current
plugging and abandonment cost estimates; and
(C) Tangible net worth of at least $10 million; and
(D) Assets located in the United States amonnting to at least 90 percent of
total assets or at least six times the sum of the current closure and
post -closure cost estimates and the current plugging and abandonment cost
estimates.
(ii) The owner or operator must have a current senior debt rating of AAA, AA, or
A as issued by Standard and Poor's or Ma, Aa, or A as issued by Moody's. Senior
debt includes bonds, notes and debentures.
(2) The phrase "current closure and post -closure cost estimates" as used in paragraph
(i)(1) of this section refers to the cost estimates required to be shown in paragraphs 5-8
of the letter from the owner's or operator's chief financial officer (§ 266.18(i)). The
phrase 'current plugging and abandonment cost estimates" as used in paragraph (i)(1) of
this section refers to the cost estimates required to be shown in paragraphs 5-8 of the
letter from the owner's or operator's chief financial officer (40 CFR § 144.70(f)).
(3) To demonstrate that he/she meets this test, the owner or operator must submit the
following items to the Department:
(1) A letter signed by the owner's or operator's chief financial officer and worded
as specified in § 266.180;
(ii) A copy of the independent certified public accountant's report on examination
of the owner's or operator's financial statements for the latest completed ficral
year; and
(iii) If the criteria of § 266.14(i)(1)(i) is used, a special report from the owner's or
operator's independent certified public accountant to the owner or operator stating
that:
(A) He/she has compared the data which the letter from the chief financial
officer specifies as having been derived from the independently audited,
year-end financial statements for the latest fiscal year with the amounts in
such financial statements; and
(B) In connection with that procedure, no matters came to his/her attention
which caused him/her to believe that the specified data should be adjusted.
737
§ 266.14
(iv) Companies not required to submit audited financial statements to the U.S.
Securities and Exchange Commission must have the auditors opinion prepared by
an auditor licensed in the State of Colorado.
(4) An owner or operator of a new facility must submit the items specified in paragraph
(i) of this section to the Department at least 60 days before the date on which
banrdous waste is first received for treatment, storage, or disposal.
(5) After the initial submission of items specified in paragraph (i) of this section, the
owner or operator must send updated information to the Department within 90 days
after the close of each surreeding fiscal year. This information must consist of all three
items specified in paragraph (i) of this section.
(6) If the owner or operator no longer meets the requirements of paragraph (i)(1) of
this section, he/she must send notice to the Department of intent to establish alternate
financial assurance as specified in this section. The notice must be sent by certified mail
within 90 days after the end of the fiscal year for which the year-end financial data show
that the owner or operator no longer meets the requirements. The owner or operator
must provide the alternate financial assurance within 120 days after the end of such
fiscal year.
(7) The Department may, based on a reasonable belief that the owner or operator may
no longer meet the requirements of paragraph (i)(1) of this section, require reports of
financial condition at any time from the owner or operator in addition to those specified
in paragraph (i)(3) of this section. If the Department finds, on the basis of such reports
or other information, that the owner or operator no longer meets the requirements of
paragraph (i)(1) of this section, the owner or operator must provide alternate financial
assurance as specified in this section within 30 days after notification of such a finding.
(8) The Department may disallow use of this test on the basis of qualifications in the
opinion expressed by the independent certified public accountant in the accountant's
report on examination of the owner's or operator's financial statements [see paragraph
(i)(3)(ii) of this section]. The Department will evaluate other qualifications on an
individual basis. The owner or operator must provide alternate financial assurance as
specified in this section within 30 days after notification of the disallowance.
(9) During the period of post -closure care, the Department may approve a decrease in
the current post -closure cost estimate for which this test demonstrates financial
assurance if the owner or operator demonstrates to the Department that the amount of
the cost estimate erreeAc the remaining cost of post -closure care.
(10) The owner or operator is no longer required to submit the items specified in
paragraph (i)(3) of this section when:
(i) An owner or operator substitutes alternate financial assurance as s1ified in
this section; or
738
§ 266.14
(ii) The Department releases the owner or operator from the requirements of this
section in accordance with § 266.14(1).
(11) An owner or operator may meet the requirements for this section by obtaining a
written guarantee. The guarantor must be the direct or higher -tier parent corporation
of the owner or operator, a firm whose parent corporation is also the parent corporation
of the owner or operator, or a firm with a "substantial business relationship" with the
owner or operator. The guarantor must meet the requirements for owners or operators
in paragraphs (i)(1) through (i)(8) of this section and must comply with the terms of the
guarantee. The wording of the guarantee must be identical to the wording specified in §
266.18(j). A certified copy of the guarantee must accompany the items sent to the
Department as specified in paragraph (i)(3) of this section. One of these items must be
the letter from the guarantor's chief financial officer. If the guarantor's parent
corporation is also the parent corporation of the owner or operator, the letter must
describe the value received in consideration of the guarantee. If the guarantor is a firm
with a "substantial business relationship" with the owner or operator, this letter must
describe this "substantial business relationship" and the value received in consideration
of the guarantee. The terms of the guarantee must provide that:
(i) If the owner or operator fails to perform final closure and/or post -closure care
of a facility covered by the guarantee in accordance with the closure plan and other
permit requirements whenever required to do so, the guarantor will do so or
establish a trust fund as specified in § 266.14(a) in the name of the owner or
operator.
(n') The guarantee will remain in force unless the guarantor sends notice of
cancellation by certified mail to the owner or operator and to the Department.
Cancellation may not occur, however, during the 120 days beginning on the date of
—receipt of the notice of cancellation by both the owner or operator and the
Department, as evidenced by the return receipts.
(iul If the owner or operator fails to provide alternate financial assurance as
specified in this section and obtain the written approval of such alternate assurance
from the Department within 90 days after receipt by both the owner or operator
and the Department of a notice of cancellation of the guarantee from the
guarantor, the guarantor will provide such alternative financial assurance in the
name of the owner or operator.
(12) If the Department has subscribed to an automated system containing audited
financial data on the owner or operator, the owner or operator will only be required to
submit a closure and/or post -closure cost estimate. Passage of the financial test will
then be determined by the Department
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