Community Investment
Information on Selected Facilities That Received Environmental Permits Gao ID: GAO-02-479 May 31, 2002Industrial facilities that operate under permits regulating some emissions and discharges have been the subject of complaints from community groups and environmental activists who charge that the facilities expose the surrounding communities to greater environmental risk than the general population. In response, the facilities point out that they contribute to the economic growth of the surrounding communities by employing residents and supporting other community needs, such as schools and infrastructure. In a survey of selected facilities, GAO found that the number of jobs in some decreased over time. According to facility officials, these jobs included unskilled, trade, technical, administrative, and professional positions with salaries ranging from $15,000 to $80,000 per year. Most of the facilities identified other contributions that they had made or planned to make in the local communities. These included volunteer work such as organizing cleanups; infrastructure improvements such as installing a new water drainage system; and financial assistance to schools, universities, community groups, and other organizations. Property values in a community are affected by many factors, including the condition of the land and houses, the proximity of the property to natural or man-made structures--such as the facilities covered by this study--that might be viewed as desirable or undesirable, and economic conditions in the surrounding or adjacent communities. Information on property values was unavailable for most of the communities and facilities studied. In these locations, community groups voiced concerns that the facilities would cause property values to decline. Officials at 6 of the 15 facilities GAO studied said they had used available incentives or subsidies. The incentives varied, depending on the type of facility and its location, but included tax exemptions, a local bond initiative, reductions in regulatory fees, and reduced utility rates.
GAO-02-479, Community Investment: Information on Selected Facilities That Received Environmental Permits
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United States General Accounting Office:
GAO: REport to Congressional Requesters:
May 2002: Community Investment: Information on Selected Facilities
That Received Environmental Permits:
GAO-02-479:
Contents:
Letter:
Results in Brief:
Background:
Information on Number and Types of Jobs:
Contributions to the Community:
Information on Property Values:
Incentives Received by the Facilities:
Agency Comments:
Appendixes:
Appendix I: Objectives, Scope, and Methodology:
Appendix II: Location and Description of the Industrial Facilities:
Appendix III: GAO Contacts and Staff Acknowledgements:
GAO Contacts:
Acknowledgments:
Tables:
Table 1: Jobs Provided by Facility:
Table 2: Types of Contributions Facilities Made to Communities:
Table 3: Review Locations and Facilities:
Abbreviations:
EPA: Environmental Protection Agency:
May 31, 2002:
The Honorable John Conyers, Jr., The Honorable Jesse L. Jackson, Jr.,
The
Honorable Nancy Pelosi, The Honorable José Serrano, The Honorable
Maxine
Waters, House of Representatives:
For many years, the location of industrial facilities that are subject
to federal air emissions and water discharge requirements has created
controversy for the surrounding communities. On the one hand, the
community is striving to bring commerce, jobs, and prosperity to the
community. On the other hand, the community wants to maintain for its
residents a quality of life that is free of industrial emissions and
waste. Some of these facilities, which operate under permits that
regulate certain types of emissions and discharges, have been the
subject of complaints from community groups and environmental
activists. The complaints charge that the facilities expose the
surrounding communities--generally low-income Hispanic and African-
American communities--to greater environmental risk than the general
population. In response, the facilities point out that they contribute
to the economic growth of the surrounding communities by employing
residents and supporting other community needs, such as schools and
infrastructure.
To better understand the economic impact of these facilities, you asked
us to study selected facilities and the nearby communities.
Specifically, for selected facilities you asked us to (1) determine the
number and types of jobs provided, (2) identify contributions the
facilities made to their communities, (3) determine the facilities‘
effect, if any, on property values in their communities, and (4)
determine the amount and type of government subsidies or incentive
packages the facilities received.
To address these objectives, we contacted 15 facilities--9 nonhazardous
waste-related facilities, [Footnote 1] 3 hazardous waste disposal
facilities, 2 chemical plants, and 1 concrete plant--in 9 locations and
asked them to provide information on jobs as well as on other
contributions they had made to the surrounding communities. In all
cases that we selected for our review, communities had filed complaints
about the facilities. We also contacted government officials in each of
these locations to determine the changes in property values and to
identify any incentives used by the facilities. In addition, we
interviewed representatives from community and environmental action
groups. We did not attempt to verify facilities‘ contributions to the
different communities. Also, we did not attempt to estimate the value
of incentives. Finally, results of our work cannot be projected beyond
the communities we reviewed. Appendix I provides detailed information
on our objectives, scope, and methodology.
Results in Brief:
Information on the number and types of jobs was provided by the
selected facilities in our study. The number of jobs in some facilities
decreased over time. The most recent information showed that the number
of jobs at the time of our review ranged from 4 to 103 per facility,
with 9 of the facilities having 25 jobs or less. According to facility
officials, these jobs included unskilled, trade, technical,
administrative, and professional positions that had salaries ranging
from about $15,000 to $80,000 per year, depending on factors such as
the type of work and the location of the facility. However, it is not
clear how many people were hired at each salary level or how many of
those hired lived in the communities near the facilities.
Most of the facilities identified other contributions that they had
made or planned to make to the communities in which they were located.
These contributions included volunteer work such as organizing
cleanups; infrastructure improvements such as installing a new water
drainage system; and financial assistance to schools, universities,
community groups, and other organizations. In three cases, the
facilities established a foundation or a fund to manage and disburse
the financial contributions. In one case, a facility set up a
foundation after community groups took legal action. In another case,
the foundation was not linked to legal action. The fund resulted from
collaboration among the community, the state environmental agency, and
the facility and ultimately resulted in the community dropping a
complaint that it had filed with the Environmental Protection Agency
(EPA). Despite these efforts, community residents often felt the
facilities‘ contributions did not adequately address their concerns.
Property values in a community are affected by many factors, including
the condition of the land and houses, the proximity of the property to
natural or manmade structures--such as the facilities covered by this
study--that might be viewed as desirable or undesirable, and economic
conditions in the surrounding or adjacent communities. Information on
property values was not available for most of the communities where the
facilities were located. However, some information was available for
two locations: Genesee County, Michigan, and South Bronx, New York.
Even in these two locations, the information available was not specific
enough to isolate the effect of the facility on property values because
of other factors that can affect property values. In locations where
property value data were not available, community groups voiced
concerns that the facilities would cause property values to decline.
Officials at 6 of the 15 facilities we studied said they had used
incentives or subsidies that were available in a particular area. The
officials said the facilities were located in these areas because of
low land costs, favorable zoning, or other factors. The incentives
varied, depending on the type of facility and its location, but
included tax exemptions, a local bond initiative, reductions in
regulatory fees, and reduced utility rates.
We obtained technical comments from certain EPA units on a draft of
this report. EPA‘s Office of Civil Rights commented that the report
needed (1) more detailed information on the number and types of jobs
and on those jobs provided to the communities nearest the facilities,
and (2) a comparison of property values in the communities closest to
the facilities to property values in similar communities. As stated in
the report, the facilities covered in this study were not required to
provide information; however, most of them voluntarily provided some
job-related information. A property value comparison would not have
been possible considering the data limitations and accessibility issues
that we identified. EPA units generally agreed with the information
involving the agency and provided clarifications, which we incorporated
into this report where appropriate.
Background:
Under the Resource Conservation and Recovery Act, the Clean Air Act,
and the Clean Water Act, the federal government has established
requirements setting limits on emissions and discharges from municipal
and private industrial facilities that might pollute the land, air, or
water. [Footnote 2] EPA shares responsibility for administering and
enforcing these requirements with the states that have been authorized
to administer the permit programs. EPA‘s implementing regulations cover
activities such as setting levels and standards for air emissions,
establishing effluent limitation guidelines for water discharges,
evaluating the environmental impacts of air emissions, monitoring
compliance with discharge limits for water permits, ensuring adequate
public participation, and issuing permits or ensuring that state
processes meet federal requirements for the issuance of permits.
While EPA has retained oversight responsibility for these activities,
it has authorized state, tribal, and local authorities to perform most
activities related to issuing permits to industrial facilities. These
authorities-- referred to as permitting authorities--receive federal
funding from EPA to carry out these activities and must adopt standards
that are equivalent to or more stringent than the federal standards.
Title VI of the Civil Rights Act and EPA‘s Title VI implementing
regulations [Footnote 3] prohibit permitting authorities from taking
actions that are intentionally discriminatory or that have a
discriminatory effect based on race, color, or national origin. EPA‘s
Title VI regulations allow citizens to file administrative complaints
with EPA that allege discrimination by programs or activities receiving
EPA funding [40 C.F.R.§§7.120(1998)].
Title VI complaints must be filed in response to a specific action,
such as the issuance of a permit. Because they must be linked to the
actions of the recipients of federal funds, complaints alleging
discrimination in the permitting process are filed against the
permitting authority, rather than the facility receiving the permit.
Complaints may be based on one permitting action or may relate to
several actions or facilities that together have allegedly had an
adverse disparate impact. Neither the filing of a Title VI complaint
nor the acceptance of one for investigation by EPA stays the permit at
issue.
As of February 7, 2002, EPA‘s complaint system showed 44 pending
complaints alleging that state agencies had taken actions resulting in
adverse environmental impacts that disproportionately affected
protected groups. Of these complaints, 30 involved complaints that were
accepted by EPA and were related to permits allowing proposed
facilities to operate at a specified level of emissions. Other
complaints involved issues such as cleanup enforcement and compliance.
Information on Number and Types of Jobs:
The 15 facilities covered in our study included waste treatment plants,
recycling operations, landfills, chemical plants, and packaging
facilities. These facilities were in nine locations, and some were in
rural areas, while others were in urban areas. (See app. II for
additional information on the location and description of the
facilities). All of the facilities that we studied reported that they
had provided jobs as a result of the creation or expansion of their
facility. [Footnote 4] As shown in table 1, the number of jobs ranged
from 4 to 103 per facility, with 9 of the facilities creating 25 jobs
or less. Most of the facilities involved waste-related operations,
which generally employ small numbers of employees.
Table 1. Jobs Provided by Facility:
Facility name and location: Texas Industries Austin Package Plant;
Austin, Texas; Type of facility: Concrete and cement production; Number
of jobs[A]: 10.
Facility name and location: Georgia Pacific; Columbus, Ohio; Type of
facility: Chemical manufacturing; Number of jobs[A]: 49.
Facility name and location: ExxonMobil; Alsen, Louisiana; Type of
facility: Chemical manufacturing; Number of jobs[A]: 40.
Facility name and location: Natural Resources Recovery, Inc.; Alsen,
Louisiana; Type of facility: Nonhazardous waste--construction and;
demolition debris and wood waste landfill; recycling; Number of
jobs[A]: 5[D].
Facility name and location: New York Organic Fertilizer Company; Hunts
Point, New York; Type of facility: Nonhazardous waste--fertilizer
production; Number of jobs[A]: 39[B,C].
Facility name and location: Tri Boro Fibers; Hunts Point, New York;
Type of facility: Nonhazardous waste--recycling; Number of jobs[A]: 40-
50[].
Facility name and location: Tristate Transfer Associates, Inc.; Hunts
Point, New York; Type of facility: Nonhazardous waste--garbage
collection; Number of jobs[A]: 7.
Facility name and location: Waste Management (Truxton),; Hunts Point,
New York; Type of facility: Nonhazardous waste--carting and demolition;
Number of jobs[A]: 14[].
Facility name and location: Waste Management (Barretto); Hunts Point,
New York; Type of facility: Nonhazardous waste--transfer station for
clean; fill material such as rocks, dirt, bricks, and masonry; Number
of jobs[A]: 4[].
Facility name and location: Hunts Point Water Pollution Control Plant;
Hunts Point, New York; Type of facility: Nonhazardous waste--sewage
treatment; Number of jobs[A]: 67[].
Facility name and location: North Meadow Municipal Landfill; Hartford,
Connecticut; Type of facility: Nonhazardous waste--municipal landfill;
Number of jobs[A]: 4.
Facility name and location: Genesee Power Station; Genesee Township,
Michigan; Type of facility: Nonhazardous waste--wood-burning power
plant; Number of jobs[A]: 25[].
Facility name and location: Chemical Waste Management; Kettleman City,
California; Type of facility: Hazardous waste disposal; Number of
jobs[A]: 103[ B,E].
Facility name and location: Safety-Kleen, Inc.; Buttonwillow,
California; Type of facility: Hazardous waste disposal; Number of
jobs[A]: 23[ B].
Facility name and location: Safety-Kleen, Inc.; Westmoreland,
California; Type of facility: Hazardous waste disposal; Number of
jobs[A]: 22[ B].
[A] Numbers were provided for 2001 unless otherwise noted.
[B] These numbers were provided for 2002.
[C] There were 80 jobs in 1993.
[D] This number was provided for 1998.
[E] There were 200 jobs in 1990 and 75 jobs in 1997.
Source: Information was provided by the listed facilities.
[End of table]
For four of the facilities, information was available from documents
prepared before the facilities began operating on the number of jobs
the facilities had estimated they would provide. In each of these
cases, the number of jobs estimated was greater than the number of jobs
provided. Specifically, Genesee Power Station estimated it would
provide 30 jobs and provided 25; ExxonMobil estimated it would provide
50 jobs and provided 40; Natural Resources Recovery estimated it would
provide between 15 and 40 jobs and provided 6; and Safety-Kleen, Inc.,
estimated it would provide 50 jobs in Westmoreland and provided 22.
Officials from a few facilities told us that their facilities, in
addition to providing jobs directly, generated additional jobs outside
of the facility. For example, a document from ExxonMobil indicated that
for every job provided at the plant, 4.6 jobs resulted elsewhere in the
East Baton Rouge Parish economy. Also, Chemical Waste Management
officials told us that their landfill increased business in the area
and that this enhanced business could result in more jobs. We did not
verify the facilities‘ estimates of jobs generated outside of the
facility. [Footnote 5]
In some cases, the number of jobs at these facilities decreased over
time. For example, jobs at the chemical waste facility in Kettleman
City, California, decreased from 200 in 1990 to 103 in 2002; and jobs
at a similar facility in Buttonwillow, California, decreased from 110
in 1987 to 23 in 2002. In addition, jobs at a fertilizer plant in New
York decreased from 80 in 1993 to 39 in 2002. Officials from the two
facilities in California told us that the changes resulted from a
decreased demand for the facilities due to a reduction in the amount of
waste generated by a more environmentally conscious public.
We obtained information on the salary ranges and types of jobs provided
for 14 of the 15 facilities. [Footnote 6] According to officials at
these facilities, the salaries for the jobs provided varied from about
$15,000 to $80,000 per year, depending on factors such as the type of
work and the location of the facility. However, the information that
the facilities provided was not detailed enough to allow us to
determine the numbers for each job type, the salaries for individual
jobs, or the number of jobs filled by people from the surrounding
communities. The information indicates a wide range of salaries;
however, community organizations in some locations told us that, in
their view, the majority of the jobs filled by community residents were
low paying.
The facilities provided the following information:
* The ExxonMobil Corporation told us that their facility in Louisiana
had
both hourly and salaried jobs. According to ExxonMobil, its hourly jobs
included mechanics, electricians, and laboratory technicians; and its
average wage was about $23 an hour, which is equivalent to $47,840 per
year. [Footnote 7] Salaried jobs included engineers, a chemist,
accountants, and administrative assistants, and the average salary was
just under $70,000 annually.
* The Texas Industries Package Plant, located in Texas, told us that
its
jobs included plant manager, sales representative, dispatcher,
packaging coordinator, maintenance mechanic, plant operator, crew
operators, crew members, and administrative positions. The salaries
ranged from about $10 to $15 per hour, which is equivalent to $20,800
and $31,200 per year, respectively.
* The three hazardous waste treatment facilities in California reported
that the jobs at their facilities--facility manager, manager, heavy
equipment operators, plant operators, truck receiving operators,
customer service representatives, and waste acceptance specialists--
had salaries ranging from $28,000 to $82,000 annually.
* The nine nonhazardous waste-related facilities located in
Connecticut,
Louisiana, Michigan, and New York reported having jobs that included
facility site managers, site supervisors, scale and machine operators,
technical assistants, mechanics, and laborers. Salaries for these jobs
ranged from $7.50 to $33.50 per hour, which is equivalent to $15,600
and $69,680 per year, respectively.
About half of the facilities provided some information on whether their
jobs were filled by people from the communities. Specifically,
according to information provided by the Hunts Point, South Bronx, New
York facilities, a large number of employees in the waste-related
facilities resided in the Bronx. The Hunts Point Water Pollution
Control Plant had 67 employees from the Bronx, with 1 living in the
immediate Hunts Point neighborhood. Safety-Kleen, Inc., told us that
the majority of the employees in its two facilities lived in the county
where the facilities were located.
Over the years of the Genesee Power Station‘s operation, about half of
the 68 employees resided in Flint or Genesee County, Michigan; however,
the facility did not indicate how many employees, if any, lived in
Genesee Township--the home of the power station--or the Flint community
that is close to the plant. Similarly, information provided by the
Texas Industries Package Plant in Austin, Texas, indicated that its 10
employees all resided in a nearby community, town, or city but did not
identify the number from the community immediately surrounding the
plant. And in a 1998 document submitted to EPA, Natural Resources
Recovery, Inc., indicated that four of its five employees lived in the
town where the plant was located. However, community representatives
told us that few, if any, town residents worked at the landfill at the
time of our visit.
Contributions to the Community:
As shown in table 2, officials from 10 of the 15 facilities said they
had contributed to the communities in which they were located.
Specifically, they performed volunteer work that included offering
firefighting assistance and organizing cleanups in the area. They also
made infrastructure improvements, such as installing a new water
drainage system. In addition, some of the facilities made or were
planning to make financial contributions in the communities where they
were located. These financial contributions would assist schools and
universities as well as community groups and other organizations. For
example, the Genesee Power Station awarded eight $1,000 scholarships to
high school students.
Table 2. Types of Contributions Facilities Made to Communities:
Facility[A]: Georgia Pacific; Volunteer work: X; Infrastructure:
[Empty]; Schools and universities: X; Community groups and other: X;
Foundations: [Empty].
Facility[A]: ExxonMobil; Volunteer work: X; Infrastructure: [Empty];
Schools and universities: X; Community groups and other: X;
Foundations: [Empty].
Facility[A]: New York Organic Fertilizer Company; Volunteer work:
[Empty]; Infrastructure: [Empty]; Schools and universities: X;
Community groups and other: X; Foundations: [Empty].
Facility[A]: Genesee Power Station; Volunteer work: X; Infrastructure:
X; Schools and universities: X; Community groups and other: X;
Foundations: [Empty].
Facility[A]: Waste Management (Truxton); Volunteer work: [Empty];
Infrastructure: X; Schools and universities: [Empty]; Community groups
and other: [Empty]; Foundations: [Empty].
Facility[A]: Waste Management (Barretto); Volunteer work: [Empty];
Infrastructure: X; Schools and universities: [Empty]; Community groups
and other: [Empty]; Foundations: [Empty].
Facility[A]: North Meadow Municipal Landfill; Volunteer work: [Empty];
Infrastructure: [Empty]; Schools and universities: [Empty]; Community
groups and other: X[B]; Foundations: [Empty].
Facility[A]: Chemical Waste Management (Kettleman City); Volunteer
work: X; Infrastructure: [Empty]; Schools and universities: X;
Community groups and other: X; Foundations: X.
Facility[A]: Safety-Kleen, Inc. (Buttonwillow); Volunteer work: X;
Infrastructure: [Empty]; Schools and universities: X; Community groups
and other: X; Foundations: X.
Facility[A]: Safety-Kleen, Inc. (Westmoreland); Volunteer work: X;
Infrastructure: [Empty]; Schools and universities: [Empty]; Community
groups and other: [Empty]; Foundations: [Empty].
Legend:
X represents the kinds of contributions made by each facility.
[A] Tri Boro Fibers; Hunts Point Water Pollution Control Plant;
Tristate Transfer Associates, Inc.; Natural Resources Recovery, Inc.;
and Texas Industries Austin Package Plant did not provide information
on other contributions. :
[B] The North Meadow Municipal Landfill fund was intended to assist
community groups and other organizations. :
Source: GAO analysis based on information provided by facilities.
[End of table]
In three communities, the facilities established foundations or funds
to manage and disburse the financial contributions. One foundation was
set up following legal action taken by community groups. In another
case, the foundation was not linked to legal action. The fund resulted
from collaboration among the state environmental agency, the facility,
and the community that ultimately resulted in the community dropping
its complaint with EPA. The facilities and community groups in these
three locations provided the following information:
* The Kettleman City Foundation, a California nonprofit public benefit
corporation, was set up after legal action was taken by the community
against Chemical Waste Management. The foundation was organized to
improve the quality of life of the residents of Kettleman City and
nearby areas of Kings County, California, by developing capacity,
leveraging additional resources, and protecting the environment and
residents‘ health and welfare. The board of this foundation consisted
of the legal representative for the Center on Race, Poverty, and the
Environment; [Footnote 8] three community residents; and the manager of
the Chemical Waste Management facility. Chemical Waste Management
provided $115,000 to the foundation. In addition, Chemical Waste
Management agreed to make further contributions annually, based on tons
of municipal waste disposed at its landfill. Since 1998, Chemical Waste
Management has contributed almost $300,000 to the foundation. Some of
these funds are to be used to help build the Kettleman City Community
Center, which plans to provide a variety of social services.
* The Buttonwillow Community Foundation was established in June 1994.
The
directors of the foundation included representatives from local
government offices, the Chamber of Commerce, and a senior citizens‘
group. This foundation‘s primary function was to provide grants to
facilitate projects promoting the health, education, recreation, safety
and welfare of the Buttonwillow residents. Safety-Kleen, Inc., provided
an initial $50,000 donation to the foundation. Its annual contribution
to the foundation is linked to the tons of waste received at the
facility, and in calendar years 2000 and 2001, these contributions
exceeded $100,000.
* The North Meadow Municipal Landfill worked with the community to
address the community‘s concerns. Consequently, a fund called the
Economic Development Account was established for economic development
for minority business enterprises, social welfare projects, relief of
the poor and underprivileged, environmental education, community
revitalization, amelioration of public health concerns, and for other
charitable purposes within Hartford. A board consisting of community
group and city representatives would determine how to distribute funds
from the account. At the time of our review, the facility had agreed to
provide $9.7 million for the account over 10 years. In exchange for
these contributions, the community group agreed to accept the
landfill‘s expansion and withdraw the complaint to EPA.
Despite these efforts, community residents often felt these
contributions were inadequate.
Information on Property Values:
Property values in a community are affected by many factors, including
the condition of the land and houses; the proximity of the property to
natural or manmade structures--such as the facilities covered by this
study--that might be viewed as desirable or undesirable; and economic
conditions in the surrounding or adjacent communities. Information on
property values was not available for most of the communities where the
facilities were located. For example, in some rural and unincorporated
areas, information on property values was kept for a limited number of
properties or was based on property sales, which were infrequent and
had not occurred since the facilities had begun operating.
Some information was available for two locations--Genesee Township,
Michigan, and South Bronx, New York. Even in these two locations, the
information available was not specific enough to isolate the effect of
the facility on property values because of the other factors that can
affect property values, such as the location of other manufacturing or
waste- related facilities in the area or economic activity in adjacent
areas. The Genesee Township tax assessor provided information showing
that property values in the area had not changed. In the South Bronx,
property assessment data indicated that property values had increased
in the Hunts Point neighborhood--the neighborhood where multiple waste
management facilities were located. For this case, local officials
stated that the increase occurred because of factors such as expanding
economic development and the rising cost of housing in Manhattan.
[Footnote 9]
In locations where property values were not available, community groups
voiced concerns that the facilities would cause property values to
decline. For example, residents of Alsen, Louisiana, believed that the
location of nearby industrial facilities, including the facilities
studied for this report, affected property values and reduced
homeowners‘ ability to sell their homes for a reasonable price. Similar
concerns were included in the complaints regarding the hazardous waste
landfills in California. The Alum Crest Acres Association, Inc., a
community group in Columbus, Ohio, and the Garden Valley Neighborhood
Association located near the Texas Industries Austin Package Plant also
expressed concern about the effect of the industrial facilities on
their property values.
Incentives Received by the Facilities:
Six of the 15 facilities we studied said they used incentives or
subsidies that were available in a particular area. Officials from
these facilities also said that they chose their location because of
low land costs, favorable zoning, or other factors. The incentives
varied, depending on the type of facility and its location, but
included tax exemptions, a local bond initiative, reductions in
regulatory fees, and reduced utility rates.
In Louisiana, the state granted ExxonMobil an industrial tax exemption
from state, parish, and local taxes on property such as buildings,
machinery, and equipment that were used as part of the manufacturing
process. This exemption, which is available to any manufacturing
company that builds or expands a facility within the state, is
initially available for 5 years but may be renewed for an additional 5
years. According to the Louisiana Department of Economic Development,
ExxonMobil‘s polyolefin plant had received tax exemptions worth
approximately $193 million between 1990 and June 2000. Also, in 2001,
approximately $139 million was filed for the ad valorem tax exemption
related to the Polypropylene project.
The Buttonwillow and Westmoreland, California, hazardous waste
facilities received a low-interest bond issued by the California
Pollution Control Financing Authority in the amount of $19.5 million,
and the facility in Kettleman City experienced a 40-percent reduction
in regulatory fees as a result of provisions granted by the state in
January 1998. In the latter case, facility representatives said the
provisions were intended to help keep the facility from laying off
employees.
In the Hunts Point community in the South Bronx, the New York Organic
Fertilizer Company was eligible for discount rates from the utility
company--Consolidated Edison--because of its location. The utility
company offered this incentive to any facility that located in a
certain community and hired a percentage of employees from that
community. Also, Tri Boro Fibers, a recycling company located in Hunts
Point, received a local tax exemption that was available to all
recycling facilities for trucking fees and certain purchases.
Agency Comments:
Certain EPA units provided technical comments on a draft of this
report. EPA‘s Office of Civil Rights commented that the report needed
(1) more detailed information on the number and types of jobs and on
those jobs provided to the communities nearest the facilities and (2) a
comparison of property values in the communities closest to the
facilities to similar communities. As stated in the report, the
facilities covered in this study were not required to provide
information, however most of them voluntarily provided some job-related
information. Facilities were not required to provide a specified number
of jobs to receive permits to locate in a given area. A property value
comparison would not have been possible considering the data limitation
and accessibility issues that we identified. EPA generally agreed with
the information about the agency and provided clarifications which we
incorporated into this report where appropriate.
As arranged with your offices, unless you publicly announce its
contents earlier, we plan no further distribution of this report until
30 days after the date of the report. At that time, we will send copies
to the appropriate congressional committees and the Administrator of
the Environmental Protection Agency. We will also make copies available
to others on request. If you have any questions about this report,
please contact Nancy Simmons, Assistant Director, or me at (202) 512-
8678. Key contributors to this assignment are listed in appendix III.
Davi M. D‘Agostino Director, Financial Markets and Community
Investment:
Signed by Davi M. D‘Agostino.
FOOTNOTES
[1] Waste-related facilities included waste transfer, fertilizer
production, and incineration.
[2] See P. L. No. 94-12, 90 Stat. 2795 (codified as amended in
scattered sections of 42 U.S.C. §§ 6901 - 6986); 42 U.S.C. §§ 7401 -
7642 (1994 and Supp. 1998); and P. L. No. 95-217, 91 Stat. 1566
(codified as amended in scattered section of 33 U.S.C. §§ 1251 through
1376), respectively.
[3] See 42 U.S.C. §§ 2000d - 2000d-7 (1994 and Supp. 1998) and 40
C.F.R. part 7 (2001).
[4] While the facilities covered in this study were not required to
provide this information, all of them voluntarily provided some job-
related information. We did not verify the information they provided.
We also did not determine whether these jobs represented a net increase
in jobs for the community. Facilities were not required to provide a
specified number of jobs to receive permits to locate in a given area.
[5] In March 1999, we reported on the difficulty of estimating
employment gains in our report Economic Development: Observations
Regarding the Economic Development Administration‘s May 1998 Final
Report on Its Public Works Program, GAO/RCED-99-11R (Washington, D.C.:
May 1998).
[6] We did not verify the information provided by the 14 facilities.
[7] We computed annual salary estimates using 2,080 hours per year.
[8] The Center on Race, Poverty, and the Environment represents low-
income communities and workers throughout California that have concerns
about environmental hazards.
[9] We visited and collected information prior to the September 11
terrorist attack. We did not determine the impact of the attacks on the
South Bronx property values.
[End of section]
Appendix I. Objectives, Scope, and Methodology:
The objectives of this engagement were to (1) determine the number and
types of jobs provided, (2) identify contributions made by the
facilities to their communities, (3) determine the facilities‘ effect,
if any, on property values in their communities, and (4) determine the
amount and type of government subsidies or incentive packages the
facilities received. We did not examine the environmental impact of the
facilities or the associated impact, if any, on the health of the
communities in which they were located.
We selected facilities for this engagement from the Environmental
Protection Agency‘s (EPA) complaint system. These complaints involved
facilities that received environmental permits and were located in
communities that felt the facilities‘ operations were having a
disproportionate impact on them. As of February 7, 2002, the system
contained 44 complaints, of which EPA had accepted 36 for further
review.
As agreed with the requesters, we considered only facilities covered by
complaints involving issues related to the permitting process (30 of
the 36 accepted complaints). We initially selected three of the
complaints, which involved three locations and eight of the facilities
covered in our study. We found that 1 of these complaints involved 26
waste-related facilities. As agreed with our requestors‘ staffs, we
included 6 of the 26 facilities in the scope of this engagement.
Subsequently, using geographic location, type of facility, and
population density (urban versus rural), we selected seven additional
complaints involving diverse facilities and locations. We found that
two of these complaints involved facilities that were no longer in
business; consequently, we excluded them from our analysis. The
remaining five complaints involved six additional locations and seven
facilities. Table 3 outlines the 9 locations and 15 facilities included
in our study.
Table 3. Review Locations and Facilities:
Facility name and location: Alsen, Louisiana; Natural Resources
Recovery, Inc.; ExxonMobil.
Facility name and location: Hunts Point, New York; Waste Management
(Truxton)Waste Management (Barretto)Tri Boro FibersHunts Point Water
Pollution Control PlantNew York Organic Fertilizer CompanyTristate
Transfer Associates, Inc..
Facility name and location: Hartford, Connecticut; North Meadow
Municipal Landfill.
Facility name and location: Genesee Township, Michigan; Genesee Power
Station.
Facility name and location: Austin, Texas; Texas Industries Package
Plant.
Facility name and location: Kettleman City, California; Chemical Waste
Management.
Facility name and location: Buttonwillow, California; Safety-Kleen,
Inc..
Facility name and location: Westmoreland, California; Safety-Kleen,
Inc..
Facility name and location: Columbus, Ohio; Georgia Pacific.
Note: We performed work at all of these locations except Austin, Texas,
and Columbus, Ohio.
Souce: GAO.
[End of table]
To determine the number of jobs provided, the contributions the
facilities made to the communities, and the impact on property values,
we used a structured data collection instrument to interview officials
from each facility and from state or local economic development and
planning organizations. We asked for information such as the number of
jobs provided over time, the number of jobs filled by people in the
communities nearest the facilities, the types of jobs offered, and the
salaries for each job. However, we did not examine whether the jobs
represented a net increase in jobs within the community. Where
available, we obtained property assessment information from local tax
assessment offices. We also interviewed representatives from community
and environmental action groups, some of which were involved in filing
complaints with EPA. We analyzed documents pertaining to jobs at the
facilities, property values before and after the facilities began
operating or expanding, contributions to the community, and program
planning; reviewed public hearings related to the issuance of
environmental permits; and reviewed economic and demographic data. In
general, we did not independently verify the information provided.
To determine the subsidies or tax incentives that the facilities used,
we interviewed officials from the facilities and from state or local
economic development and planning organizations. We also reviewed
documents obtained from these officials.
We conducted our work between May 2001 and May 2002 in accordance with
generally accepted government auditing standards. We obtained comments
on a draft of this report from EPA officials. We also asked the
representatives of some facilities with whom we consulted to review
portions of the draft of this report for accuracy and clarity. Their
comments are incorporated into this report as appropriate.
Appendix II. Location and Description of the Industrial Facilities:
Alsen, Louisiana:
Alsen is located along the Mississippi River near Baton Rouge,
Louisiana, in an industrial corridor. Located along this corridor are
facilities such as petrochemical plants that produce one-fifth of all
U.S. petrochemicals, a lead smelter, a commercial hazardous waste
incinerator, and landfills. Alsen is located in a rural area where the
population is predominantly low income and African-American. Two of the
facilities included in this report are located in Alsen--ExxonMobil and
Natural Resources Recovery, Inc.
The ExxonMobil facility produces both polyethylene and polypropylene
(plastic) for textile, film, and automotive markets and is located in a
cluster of petrochemical companies. The Louisiana Environmental Action
Network and the North Baton Rouge Environmental Association filed a
complaint with EPA against the Louisiana Department of Environmental
Quality for issuing a permit for ExxonMobil‘s expansion of an existing
plant. According to officials at the facility, a $150-million expansion
was initiated in 1998 and, with a capacity of 600 million pounds, will
increase production to meet the growing demand for polypropylene.
Natural Resources Recovery, Inc., is a construction and demolition
debris landfill. The facility also recycles wood and construction
material. As with ExxonMobil, Louisiana Environmental Action Network
and North Baton Rouge Environmental Association filed a complaint with
EPA against the Louisiana Department of Environmental Quality
concerning Natural Resources Recovery, Inc.
Hunts Point, South Bronx, New York:
The residential population within the Hunts Point community consisted
of about 12,000 people in 2000, many of whom were renters. Community
residents are largely Hispanic and African-American, and many residents
are low income. The community is home to many industrial facilities,
including numerous waste treatment facilities. Six of the waste
treatment facilities are included in this report--Waste Management
(Truxton), Waste Management (Barretto), Tri Boro Fibers, Hunts Point
Water Pollution Control Plant, New York Organic Fertilizer Company, and
Tristate Transfer Associates Inc. Respectively, these facilities handle
carting and demolition, transfer clean fill material, recycle
nonhazardous waste, treat sewage, conduct thermal drying of biosolid
waste, and collect garbage. Most of these facilities have operated
since the 1980s and 1990s. These and other facilities are the subject
of a complaint filed with EPA by U. S. Congressman Serrano and various
Hunts Point community groups against the New York State Department of
Environmental Conservation and New York City Department of Sanitation
concerning the issuance of permits to operate existing and proposed
facilities.
Buttonwillow, Westmoreland, and Kettleman City, California:
These three communities are located in sparsely populated portions of
Kern County, Imperial County, and Kings County, respectively. Residents
of all three communities are predominantly Hispanic and low income. In
addition, each of the communities is home to one of the three hazardous
waste treatment facilities included in our study.
Safety-Kleen, Inc.--the world‘s largest recycler of automotive and
industrial fluid wastes--operates the facilities located in
Buttonwillow and Westmoreland. [Footnote 1] These facilities collect,
process, recycle, and dispose of a range of hazardous wastes. The
Buttonwillow facility, which accepts a wide range of EPA regulated
hazardous and nonhazardous waste, has been operating since 1982. The
area immediately surrounding the facility is irrigated agricultural and
undeveloped land. Irrigated agriculture, oil production, and waste
disposal are the predominant land uses for several miles around the
facility, and the closest residence is about 3 miles away. The
Westmoreland facility began operating in 1980 and also accepts a wide
range of EPA regulated hazardous and nonhazardous waste. Like the
Buttonwillow facility, the Westmoreland facility processes and disposes
of both hazardous and nonhazardous waste.
Chemical Waste Management operates the third facility, which is located
about 4 miles from Kettleman City in Kings County, California. This
facility provides hazardous waste treatment, storage, and disposal
services to a variety of customers--including universities, government
agencies, and private industry--throughout California and the western
United States. In addition, the facility has a separate landfill that
handles municipal solid waste generated from two counties.
The Parents for Better Living of Buttonwillow, People for Clean Air and
Water of Kettleman City, and Concerned Citizens of Westmoreland filed a
complaint with EPA against the California Department of Toxic
Substances Control and Imperial County Air Pollution Control District,
regarding these three hazardous waste landfills.
Genesee Township, Michigan:
Genesee Township is a suburban area located in Genesee County and is
adjacent to the city of Flint, which is the fourth-largest city in
Michigan. Residents near the facility are largely low income and
minority.
The Genesee Power Station is a wood-burning power plant located in an
industrial park within the township. Using waste wood, the plant
produces electricity for a power company that services about 35,000
homes in Flint and Genesee Township. The area surrounding the plant
includes a cement- making plant, an asphalt plant, a fuel storage
facility, and a residential community.
The Saint Francis Prayer Center filed a complaint with EPA against the
Michigan Department of Environmental Quality regarding the issuance of
a permit for the Genesee Power Station.
Hartford, Connecticut:
Hartford is an urban area in central Connecticut. The North Meadow
Municipal Landfill--one of the facilities covered in our study--has
existed for over 75 years and is located in north Hartford in a
community of about 35,000 people. The city of Hartford owns the
landfill, which is run by the Connecticut Resource Recovery Authority.
The facility is located in an area that abuts an industrial zone
containing auto dealerships, the city‘s public works garage, a
junkyard, vacant buildings, and other industrial businesses. The
neighborhood near the facility is largely minority and suffers from
poorly maintained and abandoned buildings.
The Organized North Easterner and Clay Hill and North End, Inc., filed
a complaint with EPA against the Connecticut Department of
Environmental Protection regarding this landfill. However, after
subsequent discussions among representatives of the community, the
state environmental agency, and the facility, an agreement was reached
and the complaint was withdrawn.
Austin, Texas:
While Austin is considered the home of the Texas Industries Austin
Package Plant, which was included in our study, the plant is located
outside of the city. The plant produces packaged products that include
various types of concrete, mortar, sand, cement and asphalt mixes. It
primarily sells its products to construction companies in the
southwestern United States.
The Garden Valley Neighborhood Association--which represents a largely
minority, residential community close to the plant--filed a complaint
with EPA against the Texas Natural Resources Conservation Commission
regarding the concrete plant.
Columbus, Ohio:
The Georgia Pacific facility has operated in an urban area on the south
side of Columbus, Ohio, in Franklin County since 1971. The facility
annually produces 110 million pounds of resin as well as 235 million
pounds of formaldehyde, which is used in making plywood, particleboard,
ceiling tiles, laminates, and other products.
On behalf of a community near this facility that is approximately 80
percent minority, Alum Crest Acres Association, Inc., and South Side
Community Action Association filed a complaint with EPA concerning the
permit issued for this facility by the Ohio Environmental Protection
Agency and the City of Columbus.
FOOTNOTES
[1] In June 2000, Safety-Kleen, Inc., filed for bankruptcy.
[End of Section]
Appendix III. GAO Contacts and Staff Acknowledgments:
GAO Contacts:
Davi M. D‘Agostino (202) 512-8678 Nancy Simmons (202) 512-6201:
Acknowledgments:
Staff members who made key contributions to this report were Gwenetta
Blackwell-Greer, Emily Chalmers, M. Grace Haskins, Tina Kinney, Tina
Morgan, and Paul Thompson.
[End of Section]
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