Article date: December 18, 1999

Authority gives nod to Avtex agreement

Town, county to be protected from pollution liability

"It became clear years ago we would not be able to eliminate risk, but to bring it to a tolerable level."

William P. Barnett

authority member

By Diane Hartson

The Front Royal-Warren County Economic Development Authority on Friday approved an agreement aimed at protecting the town and county from any pollution liability at the Avtex Fibers Superfund site.

The authority unanimously approved the "prospective purchaser agreement" following a briefing on the document by attorneys.

The agreement includes a pledge by the federal government not to sue the authority, town or county if any past pollution is discovered after the authority takes, ownership of the 500 acre site.

The authority has hired Richmond based Sands Anderson Marks and Miller to review the agreement. Lee Byrd, an attorney for the firm, outlined areas where he felt there could be potential problems.

About 25 years ago, the authority issued a $15 million bond to Avtex and FMC Corp. for the wastewater treatment plant at the site, Byrd said. The agreement says that if the local governments have misled the federal government in saying they had no status as operators of the plant, the U.S. Department of Justice could have the agreement declared null and void, he said.

In that case, the authority would lose its protection under the agreement and could be open to having the U.S. Environmental Protection Agency seek to have it help pay for pollution costs.

Th Superfund Act holds any past or future owner liable for a portion of those costs unless an agreement similar to the one approved is in effect.

He also pointed out that the document includes no way for the authority to force the EPA or FMC Corp., to complete the cleanup according to a timetable. FMC Corp., is the company responsible for cleaning up the site.

"It gives the authority no right to sue the EPA, even to enforce the terms of the agreement," Byrd said.

Justice Department attorney James Lofton said the agreement "is the best protection we can give you against being sued. We have given you everything were statutorily able to give you."

The agreement is a standard contract and over 100 have been put into place at other Superfund sites, he said.

On the wastewater treatment plant issue, the town or county would have to have employees working there in order to qualify as operators of the plant, Lofton said.

Authority Chairman Richard Novak asked what protection the authority would have against FMC Corp., declaring bankruptcy, as Avtex did in 1990.

The company will spend up to $63 million completing the clean up under the terms of a consent decree, and the federal government has received legal proof that sufficient funds have been set aside to do that work, Lofton said.

FMC will be reimbursed for a third of what it spends by three federal agencies, The Department of Defense, the Commerce Department and the National Aeronautics and Space Administration because of the terms of an earlier decree.

The federal government is partly responsible for the cleanup because it kept the former rayon plant open before its final closure in 1989. At the time, the plant was the only source of a rayon used in the nations defense and space programs.

Authority member William P. Barnett said the agreement cannot be expected to eliminate all potential liability for the authority.

"It became clear years ago we would not be able to eliminate risk, but to bring it to a tolerable level," he said.

Barnett said the authority faced a similar risk when it bought farmland for industrial development that could contain an oil tank.

"Yeah, but those farms dont glow in the dark," said authority member Ronald L Mabry.

Lofton said FMC Corp.s attitude about the cleanup is "lets do the right thing, lets do the best job we can."

Authority member William M. Biggs asked about groundwater contamination and how the pollution might spread. Lofton said the groundwater flows to the west to the South Fork of the Shenandoah River.

"Theyre not going to eradicate all the groundwater contamination under the lagoons. That would take billions and billions of dollars," Lofton said.

Also, the authority discussed whether it would be liable if pollution was found after it completes demolition of several buildings. They feared possible contamination would be found in the ground under the buildings during redevelopment.

The agreement holds the authority liable for "exacerbating" any pollution.

"We feel we know pretty darn well the level of contamination at the site," Lofton said, adding that the authority would have to dig up pollution and then cover it up or dump it into the river to be liable under that clause.

Authority Director Stephen A. Heavener said FMC Corp., officials have told him the company, under the consent decree terms, would be "on the hook forever" if the buildings were never demolished. The decree includes a provision allowing the federal government to sue for more cleanup costs if past pollution is discovered later.

The agreement was the last of several documents needed before the authority could take ownership of the site.

The authority is expected to take over and begin redevelopment by early next year.