Re: EPA Landfill Financial Assurance Rule

PJ Prete (
Fri, 22 Jan 1999 16:11:58 -0500


Referencing your forward to greenyes list of financial assurance rule

I assume you are interested in EPA's new rule, so I thought I would
let you know how it impacts North Carolina - not at all. EPA has
been tossing this rule (local government test for financial
assurance) for years, and North Carolina has already incorporated
into our rules when they were revised to be consistent with Subtitle
D landfill revisions. The rule has been in place for a couple of
years and the local government test has been an option for public
landfills since April 1994. A large majority (all but a handfull) of
local governments that own landfills use this test and have since

Of more concern is the proposed rule to allow a "corporate test" for
private landfills that is similar to the local government test. This
would allow private landfill operators to use a number of financial
strength indicators in lieu of providing "real" financial assurance
(ie insurance, bond, letter of credit, etc.). The problem with that,
is that no matter how strong a company looks on paper, even the
giants can fall. The indicators are based on numbers that are at
least a year old at the time of submittal and may not reflect recent
financial changes. If the corporation goes "belly up" it is up to
the State to wait in line behind all the other creditors to try to
collect some portion of the cost of closure, post closure care and
corrective action. And then who is the steward - the tax payer.

While the local government test does not bother me - I anticipate
that all 100 counties will still be here 30 years after they are out
of the landfill business the corporate test has its problems. North
Carolina was petitioned by a private corporation to promulgate rule
to allow a corporate test two early in 1995. We commissioned EPA's
financial consultants to evaluate the indicators that were proposed
(essentially the same as the indicators in the proposed Federal rule)
and were provided with considerable technical explanation of why the
indicators are all but worthless - they will not screen out a company
that could be failing.

I am providing this to you FYI and copying the list for all
others that might be conserned about this. I would be glad to
discuss with you further.


Philip J. Prete
North Carolina Div. of Waste Management
(919) 733-0692 ext 252