Community Investment: Information on Selected Facilities That Received Environmental Permits (05/31/2002, GAO-02-479}

-------------------------Indexing Terms-------------------------
REPORTNUM:   GAO-02-479
    TITLE:   Community Investment: Information on Selected Facilities That Received Environmental Permits
     DATE:   05/31/2002



This is the accessible text file for GAO report number GAO-02-479 
entitled 'Community Investment: Information on Selected Facilities That 
Received Environmental Permits' which was released on July 12, 2002.



This text file was formatted by the U.S. General Accounting Office 

(GAO) to be accessible to users with visual impairments, as part of a 

longer term project to improve GAO productsï¿½ accessibility. Every 

attempt has been made to maintain the structural and data integrity of 

the original printed product. Accessibility features, such as 

alternative text descriptions for reformatted tables and agency comment 

letters, are provided but may not exactly duplicate the presentation or 

format in the printed version. The portable document format (PDF) file 

is an exact electronic replica of the printed version. We welcome your 

feedback. Please E-mail your comments regarding contents or 

accessibility features of this document to [email protected].



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 Josï¿½ 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 facilitiesï¿½ 

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 facilitiesï¿½ 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 

facilitiesï¿½ 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. EPAï¿½s 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. EPAï¿½s 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 EPAï¿½s 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. EPAï¿½s 

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.ï¿½ï¿½7.120(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, EPAï¿½s 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 facilitiesï¿½ 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 Stationï¿½s 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 

residentsï¿½ 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 citizensï¿½ 

group. This foundationï¿½s 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 communityï¿½s 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 

landfillï¿½s 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 

homeownersï¿½ 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, 

ExxonMobilï¿½s 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. EPAï¿½s 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. Dï¿½Agostino Director, Financial Markets and Community 
Investment:



Signed by Davi M. Dï¿½Agostino.



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. ï¿½ï¿½ 6901 - 6986); 42 U.S.C. ï¿½ï¿½ 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. ï¿½ï¿½ 1251 through 

1376), respectively.



[3] See 42 U.S.C. ï¿½ï¿½ 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 Administrationï¿½s 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 facilitiesï¿½ 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 Agencyï¿½s (EPA) complaint system. These complaints involved 

facilities that received environmental permits and were located in 

communities that felt the facilitiesï¿½ 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 requestorsï¿½ 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 ExxonMobilï¿½s 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 worldï¿½s 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 cityï¿½s 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. Dï¿½Agostino (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]



GAOï¿½s Mission:



The General Accounting Office, the investigative arm of Congress, 

exists to support Congress in meeting its constitutional 

responsibilities and to help improve the performance and accountability 

of the federal government for the American people. GAO examines the use 

of public funds; evaluates federal programs and policies; and provides 

analyses, recommendations, and other assistance to help Congress make 

informed oversight, policy, and funding decisions. GAOï¿½s commitment to 

good government is reflected in its core values of accountability, 

integrity, and reliability.



Obtaining Copies of GAO Reports and Testimony:



The fastest and easiest way to obtain copies of GAO documents at no 

cost is through the Internet. GAOï¿½s Web site ( www.gao.gov ) contains 

abstracts and full- text files of current reports and testimony and an 

expanding archive of older products. The Web site features a search 

engine to help you locate documents using key words and phrases. You 

can print these documents in their entirety, including charts and other 

graphics.



Each day, GAO issues a list of newly released reports, testimony, and 

correspondence. GAO posts this list, known as ï¿½Todayï¿½s Reports,ï¿½ on its 

Web site daily. The list contains links to the full-text document 

files. To have GAO e-mail this list to you every afternoon, go to 

www.gao.gov and select ï¿½Subscribe to daily E-mail alert for newly 

released productsï¿½ under the GAO Reports heading.



Order by Mail or Phone:



The first copy of each printed report is free. Additional copies are $2 

each. A check or money order should be made out to the Superintendent 

of Documents. GAO also accepts VISA and Mastercard. Orders for 100 or 

more copies mailed to a single address are discounted 25 percent. 

Orders should be sent to:



U.S. General Accounting Office



441 G Street NW,



Room LM Washington,



D.C. 20548:



To order by Phone: 	



Voice: (202) 512-6000:



TDD: (202) 512-2537:



Fax: (202) 512-6061:



To Report Fraud, Waste, and Abuse in Federal Programs:



Contact:



Web site: www.gao.gov/fraudnet/fraudnet.htm E-mail: [email protected]



Automated answering system: (800) 424-5454 or (202) 512-7470:



Public Affairs:



Jeff Nelligan, managing director, [email protected] (202) 512-4800 U.S.

General Accounting Office, 441 G Street NW, Room 7149 Washington, D.C.

20548: