PERFORMANCE AUDIT REPORT 100-Hour Audit Plumb Thicket

PERFORMANCE AUDIT REPORT 100-Hour Audit

Plumb Thicket Landfill Application: Determining Whether KDHE’s Review Complied with Applicable Laws and Regulations

A Report to the Legislative Post Audit Committee By the Legislative Division of Post Audit State of Kansas June 2004

04-18 Legislative Post Audit Committee Legislative Division of Post Audit

THE LEGISLATIVE POST Audit Committee and tors or committees should make their requests its audit agency, the Legislative Division of Post for performance audits through the Chairman or Audit, are the audit arm of Kansas government. any other member of the Committee. Copies of The programs and activities of State government all completed performance audits are available now cost about $9 billion a year. As legislators from the Division’s office. and administrators try increasingly to allocate tax dollars effectively and make government work more efficiently, they need information to evalu- ate the work of governmental agencies. The LEGISLATIVE POST AUDIT COMMITTEE audit work performed by Legislative Post Audit helps provide that information. Senator Derek Schmidt, Chair Senator Bill Bunten We conduct our audit work in accor- Senator Anthony Hensley dance with applicable government auditing stan- Senator Dave Kerr dards set forth by the U.S. General Accounting Senator Chris Steineger Office. These standards pertain to the auditor’s professional qualifications, the quality of the au- Representative John Edmonds, Vice-Chair dit work, and the characteristics of professional Representative Tom Burroughs and meaningful reports. The standards also Representative Bill McCreary have been endorsed by the American Institute Representative Frank Miller of Certified Public Accountants and adopted by Representative Dan Thimesch the Legislative Post Audit Committee.

The Legislative Post Audit Committee LEGISLATIVE DIVISION OF POST AUDIT is a bipartisan committee comprising five sena- tors and five representatives. Of the Senate 800 SW Jackson members, three are appointed by the President Suite 1200 of the Senate and two are appointed by the Sen- Topeka, Kansas 66612-2212 ate Minority Leader. Of the Representatives, Telephone (785) 296-3792 three are appointed by the Speaker of the House FAX (785) 296-4482 and two are appointed by the Minority Leader. E-mail: [email protected] Website: Audits are performed at the direction of http://kslegislature.org/postaudit the Legislative Post Audit Committee. Legisla- Barbara J. Hinton, Legislative Post Auditor

The Legislative Division of Post Audit supports full access to the services of State government for all citizens. Upon request, Legislative Post Audit can provide its audit reports in large print, audio, or other appropriate alternative format to accommodate persons with visual impairments. Persons with hearing or speech disabilities may reach us through the Kansas Relay Center at 1-800-766-3777. Our office hours are 8:00 a.m. to 5:00 p.m., Monday through Friday. LEGISLATURE OF KANSAS LEGISLATIVE DIVISION OF POST AUDIT

800 SOUTHWEST JACKSON STREET, SUITE 1200 TOPEKA, KANSAS 66612-2212 TELEPHONE (785) 296-3792 FAX (785) 296-4482 E-MAIL: [email protected]

June 9, 2004

To: Members, Legislative Post Audit Committee

Senator Derek Schmidt, Chair Representative John Edmonds, Vice-Chair Senator Bill Bunten Representative Tom Burroughs Senator Anthony Hensley Representative Bill McCreary Senator Dave Kerr Representative Frank Miller Senator Chris Steineger Representative Dan Thimesch

This report contains the findings, conclusions, and recommendations from our completed performance audit, Plumb Thicket Landfill Application: Determining Whether the Department of Health and Environment’s Review Complied with Applicable Laws and Regulations.

We would be happy to discuss the findings presented in this report with any legislative committees, individual legislators, or other State officials.

Barbara J. Hinton Legislative Post Auditor

Get the Big Picture Read these Sections and Features:

1. Executive Summary - an overview of the questions we asked and the answers we found.

2. Conclusion and Recommendations - are referenced in the Executive Summary and appear in a box after each question in the report.

3. Agency Response - also referenced in the Executive Summary and is the last Appendix.

Helpful Tools for Getting to the Detail

ƒ In most cases, an “At a Glance” description of the agency or department appears within the first few pages of the main report.

ƒ Side Headings point out key issues and findings.

ƒ Charts/Tables may be found throughout the report, and help provide

READER’S GUIDE a picture of what we found.

ƒ Narrative text boxes can highlight interesting information, or provide detailed examples of problems we found.

ƒ Appendices may include additional supporting documentation, along with the audit Scope Statement and Agency Response(s).

Legislative Division of Post Audit 800 SW Jackson Street, Suite 1200, Topeka, KS 66612-2212 Phone: 785-296-3792 E-Mail: [email protected] Web: www.kslegislature.org/postaudit EXECUTIVE SUMMARY LEGISLATIVE DIVISION OF POST AUDIT

Overview of the Proposed Plumb Thicket Landfill

A California company called Waste Connections has proposed a ...... page 2 229-acre landfill to be located on a 950-acre site in northern Harper County about 45 miles southwest of Wichita. The area in Harper County is referred to as Plumb Thicket. Because of the site’s proximity to the Chikaskia River, which is a source of drinking water for about 25,000 people in southern Kansas and northern Oklahoma, local residents have raised numerous concerns about the proposed landfill’s effect on the environment. They have gone to court to challenge decisions made by local officials to zone the property for a landfill. Currently, the validity of that zoning decision remains under appeal, and the Secretary of Health and Environment has directed his staff to suspend all further review of the landfill application, pending the outcome of the court case. Did KDHE Follow State Laws and Regulations in Considering the Application For the Plumb Thicket Landfill? In general, KDHE followed State law in reviewing the permit ...... page 5 application for the Plumb Thicket landfill. KDHE’s review is just one part of the application process. Before KDHE can begin its review, local officials must approve the landfill. Also, the public has an opportunity to provide input before a permit is issued. Harper County officials approved the landfill and provided the necessary certifications to the Department. Our review showed only one area where the Department didn’t strictly adhere to State law: the Department didn’t consult with local health authorities in determining whether the proposed facility complied with laws, regulations, and standards. Department officials told us they didn’t think the law required them to contact local health officials.

For the most part, it appeared KDHE did a reasonable job ...... page 9 pointing out deficiencies in the application and making sure the applicant addressed them. State landfill regulations are numerous and often technical in nature. The application materials for the Plumb Thicket Landfill were more than 2 feet thick. We determined that Waste Connections’ application for the Plumb Thicket Landfill included all the materials that were required at the time. Because of the technical nature of some of those materials, we couldn’t say whether KDHE had questioned all the right things. KDHE staff did spend more than 6 months reviewing the application materials, and raised more than 150 issues that Waste Connections officials were required to address. Waste Connections amended the application materials several times to respond to those issues. We did note 2 potential weaknesses in the Department’s review. Although the application indicated that underground explosive tests had been done during the 1950s at the proposed landfill site, that information didn’t draw the attention of KDHE staff until the public comment phase of

EXECUTIVE SUMMARY i Legislative Division of Post Audit June 2004 the application review. Also, KDHE didn’t contact the Corporation Commission about Waste Connections’ assertion that the Commission no longer maintained records of abandoned oil wells and pipeline, a claim we found to be untrue.

The Department’s review process could be improved in ...... page 11 several areas. KDHE needs to provide more formal guidance for its staff to follow in reviewing landfill applications. In addition, its review process should include some checks of the accuracy of information the applicant submits.

Local citizens expressed several concerns about KDHE’s ...... page 11 objectivity regarding the landfill. Among the things they questioned:

Why KDHE was involved in the zoning hearings before they received an application for a landfill permit? We found that Department officials attended zoning meetings at the request of local officials.

Why the director of the Bureau of Waste Management wrote a letter to a local newspaper seemingly in support of the landfill? The Director told us he never submitted a letter to the newspaper, but rather the newspaper reprinted an informational article from a KDHE newsletter and formatted it as a letter to the editor.

Doesn’t the Department have a conflict of interest because it would benefit financially from fees collected from the landfill? For KDHE to benefit from additional fees from the landfill, it would need to import waste from other states. Since the landfill is being built primarily to handle waste from the Wichita area, it is unlikely that it will be generating any significant new revenue for the Department.

From the various documents and memoranda we reviewed during the audit, we saw nothing that indicated to us that the Department wasn’t objective in its review of the application.

Conclusion ...... page 13 Recommendations ...... page 13 APPENDIX A: Scope Statement ...... page 14 APPENDIX B: Agency Response ...... page 15

This audit was conducted by John Curran. Leo Hafner was the audit manager. If you need any additional information about the audit’s findings, please contact Mr. Curran at the Division’s offices. Our address is: Legislative Division of Post Audit, 800 SW Jackson Street, Suite 1200, Topeka, Kansas 66612. You also may call us at (785) 296-3792, or contact us via the Internet at [email protected].

ii EXECUTIVE SUMMARY Legislative Division of Post Audit June 2004 Plumb Thicket Landfill Application: Determining Whether the Department of Health and Environment’s Review Complied with Applicable Laws and Regulations

For the past 2 years, residents of Harper County, the Kansas Department of Health and Environment, and a California-based waste management company, Waste Connections, Inc., have been embroiled in a dispute about locating a new solid waste landfill in the County. County residents charge that the Department accepted a landfill permit application that omitted information on wetlands, floodplains, and potential erosion and flooding hazards.

Legislators have expressed concern, as have residents, that some of the required application materials weren’t provided, yet KDHE apparently considered the application satisfactory.

This 100-hour performance audit answers the following question:

Did KDHE follow State law and regulations in considering the application for the Plumb Thicket landfill?

To answer this question, we spoke with citizens in Harper County about their concerns with the proposed landfill and how KDHE handled the permit application for it. We reviewed State law and regulations pertaining to the permitting of solid waste landfills. We also reviewed the permit application submitted by Waste Connections and the various correspondence between the company and KDHE.

Finally, we interviewed Department officials about the application, their procedures in reviewing landfill applications, and concerns raised by citizens about how the Department handled the application.

A copy of the scope statement for this audit approved by the Legislative Post Audit Committee is included in Appendix A.

In conducting this audit, we followed all applicable government auditing standards. Our findings begin on page 5, following a brief overview.

PERFORMANCE AUDIT REPORT 1 Legislative Division of Post Audit June 2004 Overview of the Proposed Plumb Thicket Landfill

Construction of a solid waste landfill almost always raises concerns by the public, particularly over the potential impacts the landfill may have on environmental quality, local infrastructure, and property values. This was the case for a proposed landfill in Harper County. But in addition to these concerns, members of the public voiced concern that the Kansas Department of Health and Environment allowed the company proposing the landfill to submit an incomplete permit application. This 100-hour audit focuses on how KDHE handled the permit application for the proposed solid waste landfill, and whether the Department followed State law and regulations in doing so.

Waste Connections Inc. Waste Connections Inc. has waste-disposal and recycling operations in Has Proposed 21 states, mainly in the Western United States. It currently operates a Constructing a landfill in Finney County and a solid waste transfer station in Sedgwick Landfill on Property County. The transfer station handles solid waste originating from the In Harper County on Wichita area that is transferred to a landfill in Oklahoma. Land Referred to as “Plumb Thicket” The company has proposed locating a landfill on 950 acres it purchased in the northeastern portion of Harper County. The landfill would be located in northern Harper County, about 45 miles southwest of Wichita, and about 1.8 miles from the Chikaskia River, as shown in Graphic OV-1 below.

Graphic OV-1 Location of Proposed Landfill Site

Sedgwick County

Kingman County Wichita

Proposed Landfill Site

Harper Danville Sumner County Attica

Anthony

Harper County

OKLAHOMA

2 PERFORMANCE AUDIT REPORT Legislative Division of Post Audit June 2004 The landfill itself would take up about 229 acres. It also would be a “Subtitle D” landfill – a federal classification that means, among other things, the landfill would be required to have a synthetic liner designed to prevent seepage. Most of the solid waste going to the landfill would be from Sedgwick County, reducing the amount Waste Connections ships from there to Oklahoma.

In its permit application to KDHE, Waste Connections projected the landfill would accept about 1,500 tons of solid waste a day. Harper County Commissioners signed an agreement with the company in which the County would receive $2.25 for each ton of solid waste dumped in the landfill. This one incentive would generate more than $1 million annually for the County, for about a quarter of the County’s budget. Other incentives are described in the accompanying profile box.

Harper County Would Receive Significant Financial Incentives if the Landfill Ever Opens

As a result of negotiations between the Harper County Commission and Waste Connections over the location of the proposed solid waste landfill in the County, the 2 parties signed a host agreement. The agreement details the financial and other incentives the County would receive in exchange for not preventing the landfill from being located in the County, and for not restricting its operation after it opens. The incentives include:

! Free landfill dumping for all Harper County residents and businesses ! No tax abatements and a promise by Waste Connections not to dispute any tax levies ! A “host fee” to the County to be not less than $2.25 per ton of solid waste dumped ! Upkeep of the access roads to the landfill ! An additional $500,000 payment to the County when the landfill opens ! Reimbursement for any legal or other fees related to the County’s zoning decision ! Reimbursement for any expenses the County incurs from defending itself from lawsuits or any other litigation challenging its zoning decision ! Share of any revenue generated from the sale of gas or electricity from landfill operations ! Property owners adjacent to the landfill are guaranteed fair market value for their property as long as they don’t dispute the landfill

Citizens Have A group of citizens from Harper County and surrounding counties who Expressed Major oppose the landfill have formed an organization known as the Tri-County Concerns And Filed Concerned Citizens. This group and other citizens opposed to the landfill Lawsuits Over the have cited many concerns about locating a landfill in the “Plumb Thicket” Landfill area. These include:

! Potential contamination of the Chikaskia River ! Potential contamination of groundwater ! Destruction of habitat for the Arkansas Darter, a fish on the State’s list of threatened species ! Destruction of wetlands ! Poor compliance history and character of Waste Connections

Despite the opposition, the Harper County Commissioners approved a special use permit for the landfill in March 2002. State law requires local PERFORMANCE AUDIT REPORT 3 Legislative Division of Post Audit June 2004 zoning approval for the landfill before KDHE can begin reviewing the State permit application.

After KDHE started its review of the permit application, however, a District Court judge ruled in favor of Tri-County Concerned Citizens in a lawsuit the group had filed questioning the Harper County Commissioners’ zoning decision. KDHE has suspended any further review of the application pending Waste Connection’s appeal of the District Court decision, as shown in the accompanying timeline. Timeline of the Proposed Plumb Thicket Landfill

October 11, 2000: Harper County Economic Development Council held its first meeting with representatives from Waste Connections regarding a landfill in Harper County

July 12, 2001: Waste Connections applied for a special-use zoning permit for a landfill in Harper County

October 9, 2001: Harper County Zoning and Planning Commission voted to recommend to the Harper County Commission that it deny Waste Connection’s application for a special use permit

March 5, 2002: Harper County Commission approved a special use permit for Waste Connections

May 15, 2002: Kansas State Historical Society concluded the proposed landfill would have no effect on historic properties

June 6, 2002: U.S. Corps of Engineers informed Waste Connections that it didn’t need a permit from the Corps

August 13, 2002: KDHE received Waste Connections’ permit application for a solid waste landfill in Harper County

December 16, 2002: After KDHE provided Waste Connections with its initial response to the permit application, Waste Connections submitted a revised application

January 27, 2003: Waste Connections submitted its 3rd and final revised application

January 27, 2003: The Kansas 30th District Court ruled in favor of Harper County Commission in a lawsuit filed by the group, Tri-County Concerned Citizens. The lawsuit was appealing the Commission’s zoning decision for the landfill based on the grounds that the Commissioners had already made their decision before zoning meetings were held.

February 6, 2003: Tri-County Concerned Citizens filed a motion to reopen the case based on evidence withheld by the County

February 20, 2003: KDHE issued a public notice of intent to grant Waste Connections a permit to operate a landfill at the Plumb Thicket site

February 28, 2003: Kansas Department of Wildlife and Parks informed Waste Connections that it wouldn’t need a permit from the Department for development of the Plumb Thicket site

April 2 & 3, 2003: KDHE held public hearings on the landfill in Harper County

April 15, 2003: KDHE extended the public comment period on the landfill until May 16, 2003

July 7, 2003: The District Court ruled in favor of Tri-County Concerned Citizens that the Harper County Commission did prejudge the zoning case

July 15, 2003: KDHE announced it was suspending its review of Waste Connections’ landfill application as a result of the District Court’s ruling

August 25, 2003: Waste Connections and Harper County Commissioners filed an appeal of the District Court decision to the Kansas Court of Appeals

October 6, 2003: The Appeals Court dismissed the Harper County Commission’s appeal after the Commission voted to withdraw its appeal. Waste Connection still has its appeal.

March-April 2004: Briefs filed in Kansas Court of Appeals

4 PERFORMANCE AUDIT REPORT Legislative Division of Post Audit June 2004 Did KDHE Follow State Laws and Regulations in Considering the Application For the Plumb Thicket Landfill?

For the most part, the Department followed State laws and regulations in reviewing the Plumb Thicket landfill application. The only exception we noted: Department officials didn’t consult with local health authorities regarding the landfill application, as required. KDHE appeared to do a reasonable job of pointing out deficiencies in the application and making sure the applicant addressed them.

However, the Department hasn’t developed formal procedures for reviewing landfill applications, and in some cases it could do more to verify the accuracy of information applicants submit. Some local citizens have expressed concerns that KDHE lacked objectivity regarding the Plumb Thicket landfill, but we didn’t see evidence of that in the few areas we were able to review. These and related findings are discussed in more detail in the sections that follow.

In General, KDHE KDHE’s review is actually just one part of the application process. Followed State Law Before KDHE can begin its review, local officials must approve the In Reviewing the Permit landfill. Also, the public has an opportunity to provide input before the Application For the permit is issued. The application process is shown on the next page. Plumb Thicket Landfill As noted in the Overview, Harper County Commissioners approved the landfill and provided the necessary certifications to KDHE. KDHE staff spent more than 6 months reviewing the application and corresponding with Waste Connections to resolve issues they had identified. At the end of that process, KDHE announced that the application was in conformance with all State solid waste landfill laws and regulations and was ready to proceed to the public hearing process.

Comments at the public hearing raised numerous concerns about the landfill, some of which are summarized in the accompanying box. Because of the pending court case, KDHE put the application on hold. As a result, it has not yet investigated and resolved all the issues brought forth in those hearings, and has not issued a permit for the landfill. If KDHE resumes its review, its staff will finish reviewing public comments and make a final decision on whether to issue a permit to Waste Connections.

PERFORMANCE AUDIT REPORT 5 Legislative Division of Post Audit June 2004 The Landfill Permitting Process in Kansas

Landfill Local Operator’s KDHE’s Government’s Role Role Role

Landfill Operator Acquires Land Determines that landfill location meets all zoning and land use requirements Landfill Operator Obtains Zoning Approval and Certification of Conformance Determines that landfill is in with Local Waste Mgmt. Plan accordance with the local From Local Authorities waste-management plan KDHE Staff Review Application and Materials Landfill operator submits for Conformance to State Certifies the above application and required Law and Regulations to KDHE materials to KDHE

KDHE Staff communicate any deficiencies in the application or supporting Q: materials to the landfill Landfill operator works to operator correct deficiencies in the application and provides revisions and supp- Public’s Role lemental materials to KDHE A: KDHE staff review application revisions and other materials and make Notification of a public a determination as to hearing is posted in the whether the application Kansas Register and a has met all basic require- local newspaper at least 30 ments & is ready to go to days before the hearing the public hearing process

KDHE staff record and study Public provides comments public comments and and documents to KDHE materials, which may result during public hearings in the landfill operator ! regarding the advisability of Q: needing to revise plans or issuing a permit for the submit additional documents Landfill Operator works landfill to address isssues raised in public comments A: KDHE staff review materials submitted by the landfill operator in response to public comments

KDHE issues or denies permit for landfill

6 PERFORMANCE AUDIT REPORT Legislative Division of Post Audit June 2004 Public Comments Received by KDHE Were Overwhelmingly Opposed to the Proposed Landfill

Before KDHE suspended its review of Waste Connections’ landfill permit application in July 2003, Department staff counted and summarized the public comments it had received up to that point. In all, the Department received 317 separate public comments with 290 expressing opposition to the landfill. These included emails, letters, and testimony during public hearings. The following are some the comments recorded by KDHE:

! “If you permit this landfill to operate, I am sure that in a couple of years my grandkids will not be playing in the Chikaskia river, and we will not be eating fish taken from the river.”

! “...I run cattle on the Chikaskia River. My cattle probably drink about 6,000 gallons of water a day out of that clean river. I am concerned of the possibility of contamination.”

! “The company, Waste Connections, Inc., doesn’t have a good record in Oklahoma; broken contracts and didn’t pay fines.”

! “Why doesn’t KDHE maintain a neutral ground to gain credibility with the taxpayers as well as WCI until after all evidence is presented? Why do they give the impression they are only for the waste management company?”

! “In Harper County, I believe the commissioners approved an unsuitable site, therefore KDHE must lower the standards of Kansas laws and regulation to make the site eligible for a landfill.”

We questioned one area where KDHE did not appear to do all that was required. Table I-1 on the next page shows the major statutory requirements related to applications to construct solid waste landfills. As the table shows, KDHE met most of the mandatory requirements set out in law.

Based on our review of the application file, we questioned KDHE’s actions in the area described below:

! KDHE didn’t seek the advice and counsel of local health authorities. K.S.A. 65-3407(b) states that:

“upon receipt of any application and payment of the application fee, the Secretary (of KDHE), with advice and counsel from the local health authorities and the county commission, shall make an investigation of the proposed solid waste processing facility or disposal area and determine whether it complies with the provisions of this act and any rules and regulations and standards adopted thereafter.”

Although the law seems to clearly indicate that KDHE should contact local officials as part of an investigation, KDHE officials told us they hadn’t contacted the Harper County Health Department in this case. They said that they didn’t think the law required it, and that local health departments generally don’t have jurisdiction or information relevant to a solid waste landfill.

PERFORMANCE AUDIT REPORT 7 Legislative Division of Post Audit June 2004 Table I-1 Major Statutory Provisions Related to Applications To Construct Landfills

Statutory Provision Was It Done in Comments This Case?

Any person wanting to construct a landfill Yes On August 13, 2002, Waste Connections must make and application and pay an Inc. filed an application and paid the $5,000 application fee to the Secretary of Health filing fee to KDHE. and Environment. K.S.A 65-3407(b)

Upon receipt of the application, the Partially KDHE conducted an investigation, but didn’t Secretary of Health and Environment, with consult with local health authorities. the advice and counsel of local health authorities, must make an investigation to determine whether the facility complies with law, regulations and standards. K.S.A 65- 3407(b)

The Secretary may consider whether the No (optional) A KDHE official stated that, historically, the facility is needed in conjunction with the Secretary has deferred the question of county or region’s solid-waste management whether a landfill facility is needed to local plan. K.S.A 65-3407(b) officials

Before reviewing any application the Yes Waste Connections provided KDHE with Secretary must conduct a background updated information to the business investigation of the applicant to check for disclosure statement the company already financial, technical, and management had on file with the Department. The capabilities. K.S.A 65-3407(c) statement contains the company’s financial information, information on permits held in other states, and history of violations received. KDHE staff review the materials and identify any potential concerns that might warrant further investigation. In addition, staff regularly review financial business reports about the company.

Before reviewing an application the No (optional) KDHE staff said there wasn’t any justification Secretary may request the Attorney to conduct a criminal background check General to conduct a comprehensive criminal background investigation of the applicant. K.S.A 65-3407(d)

The Secretary must require the permittee Yes Waste Connections created a trust fund to to provide a trust fund, a surety bond, an cover the estimated $7.7 million in closure irrevocable letter or credit or an insurance and post-closure costs for the landfill. The policy to cover the costs of closing the company’s initial deposit into the fund was landfill and post-closure expenses. $258,000. K.S.A 65-3407(h)

The Secretary cannot issue a permit to Permit has not None of the 3 rivers in Kansas that meet the construct a landfill within ½ miles of a been issued yet, definition of a navigable stream used for navigable stream used for interstate but no stream or interstate commerce—the Kansas River, commerce, or within 1 mile of an intake intake point is Missouri River, and Arkansas River—are point for any public surface water supply within the speci- close to Plumb Thicket. The nearest intake system. K.S.A 65-3407(l)(1) fied distances. for a public water system is several miles away.

8 PERFORMANCE AUDIT REPORT Legislative Division of Post Audit June 2004 Before reviewing an application the Yes The Harper County Commission certified that Secretary must require the board of county the landfill would be consistent with the Gyp commissioners or the mayor of the Hills Solid Waste Management Plan on municipality to provide a certification that August 12, 2002. the landfill is consistent with the area’s solid-waste management plan. K.S.A 65- 3407(m)(1)

If the location where the landfill will be Yes The Harper County Commission certified that located is zoned, the Secretary must the landfill was consistent with local land use obtain certification from the local planning restrictions on August 12, 2002. However, and zoning authority that the location is the certification noted that an appeal to the consistent with local land use restrictions, or zoning decision had been filed in District if not zoned, that it is compatible with Court. surrounding land use. K.S.A 65-3407(m)(2)

The Secretary must obtain proof that the Yes KDHE received proof of ownership on permittee owns the land on which the September 4, 2002. facility will be located. K.S.A 65-3407(m) (3)

If the investigation of the application finds Yes KDHE staff sent a 37-page initial response that it does not conform to law, regulations, containing over 150 questions and concerns or standards, the Secretary must issue a —most of which dealt with the construction report to the applicant stating the and engineering plans. They sent a separ- deficiencies in the application. K.S.A 65- ate 4-page letter with questions & concerns 3407(b) regarding the hydrogeology study the company had commissioned for the landfill site. Multiple phone conversations and letters were exchanged between KDHE and Waste Connections until KDHE was satisfied with the company’s response. An official with the Harper County Health Department told us he thought his Department could provide some relevant advice to KDHE, particularly from his staff’s experience in enforcing the County’s sanitation code and their familiarity with local environmental conditions.

For the Most Part, State landfill regulations are numerous and often technical in nature, and It Appeared KDHE applications to construct a landfill can be voluminous. For example, the Did a Reasonable Job application materials for Plumb Thicket were more than 2-feet thick. We Pointing Out weren’t able in this 100-hour audit to determine whether all regulations Deficiencies in the were complied with. Application and Making Sure the We reviewed Waste Connection’s application materials to determine Applicant Addressed whether they appeared to be complete. Also, to get a sense of whether Them KDHE thoroughly reviewed the application, we examined the correspondence between KDHE officials and the company to determine what issues were raised and whether KDHE made sure those issues were addressed to its satisfaction.

Waste Connections’ application appeared to contain all the materials KDHE required at the time the application was submitted. One of the concerns we had heard when this audit was requested was that the landfill application Waste Connections submitted was incomplete because it did not include comments from several State agencies as required on KDHE’s application form. PERFORMANCE AUDIT REPORT 9 Legislative Division of Post Audit June 2004 When Waste Connections’ landfill application was submitted in August 2002, that requirement was not on the application form. The requirement was not added until KDHE revised its application form in April 2003. The new form does require applicants to notify several agencies about any proposed landfill facility, including the Department of Wildlife and Parks, the Kansas Water Office, and the U.S. Army Corps of Engineers. Applicants are required to send any comments they receive to KDHE as part of their application.

KDHE’s initial review produced more than 150 issues that Waste Connections was required to address. As noted earlier, KDHE staff spent more than 6 months reviewing the application and requiring Waste Connections to resolve the issues they identified. Several rounds of correspondence and follow-up responses took place between the company and KDHE. Most of the issues they raised were technical in nature and dealt with the construction and engineering of the landfill. For example, KDHE required Waste Connections to modify its construction plans to include the construction of additional monitoring wells to help detect any pollution that might foul the habitat of the Arkansas Darter.

We also saw some evidence that KDHE was being fairly strict in its dealings with Waste Connections. For example, we saw a August 2002 e-mail from the Director of the Bureau of Waste Management informing his staff that he told Waste Connections by phone KDHE would “allow no game playing as part of this permit application, nor would we accept anything that did not clearly comply with all aspects of the law and regulations.”

We did note a couple of possible weaknesses in KDHE’s review of the application materials. Each of those is discussed below.

! Although Waste Connections acknowledged in its application that underground explosive tests had been done during the 1950s at the proposed landfill site, it didn’t draw the attention of KDHE staff until the public comment phase of the application review, KDHE staff didn’t require additional information from the company on the possible impact of these tests. The tests, known as seismic reflection investigations, involve inserting explosives 55-75 feet into the ground to help detect oil. Several of these tests were done at the Plumb Thicket site. A KDHE official told us he was aware of the tests but didn’t question them until after the issue was brought up by a citizen during public hearings over the permit application.

! KDHE didn’t contact the Corporation Commission about a Waste Connections assertion that the Commission no longer maintained records of abandoned oil wells and pipelines. Even though its staff had raised an issue with Waste Connections about abandoned oil

10 PERFORMANCE AUDIT REPORT Legislative Division of Post Audit June 2004 wells on the proposed landfill site. In its response to KDHE, Waste Connections stated that it had contacted the Commission, but that Commission staff indicated they no longer maintained records of abandoned wells or pipelines. When we checked with Corporation Commission officials, however, they told us they do maintain records of abandoned wells and pipelines, and provided such information in 1999 for a construction project in the same location as the proposed landfill.

The Department’s The areas we identified where improvements could be made are Review Process discussed below. Could Be Improved in A Couple of Areas ! KDHE should provide more formal guidance for staff to follow in reviewing landfill applications. KDHE officials told us that although they used a number of standard checklists in their review of landfill applications, they hadn’t developed formal guidance for staff to follow because the agency doesn’t receive landfill applications very often, and because of the number and complexity of State regulations involved. It appeared to us, however, that written guidance could be important for several reasons. First, because landfill applications can be so complex and voluminous, written procedures could provide guidance on which requirements are most important and where staff should focus their efforts. Second, such procedures could suggest sources for independently verifying the accuracy of certain types of information contained in an application. And third, because landfill applications are so infrequent, written procedures could provide a level of consistency to the review process and could serve as a guide for newer employees who have never reviewed one before.

! KDHE’s review process should include some checks of the accuracy of information the applicant submits. State law requires plans, designs, and data gathered for the construction of a landfill to be prepared by a professional engineer licensed to practice in Kansas. Consequently, much of the information contained in a landfill application is provided by engineers and is supported by drawings and test results that KDHE staff can review. KDHE also has its own hydrogeologist on staff, who can visit potential landfill sites and check some of the data provided by an applicant, as was done in the case of the Plumb Thicket site. However, other information the applicant provides to KDHE such as the applicant’s compliance record in other states, or information the company supplies in response to KDHE staff’s questions, may be subject to omissions or misstatements. We think it would be good practice for KDHE to verify the accuracy of some of the most important pieces of these types of information, at least on a spot-check basis.

Local Citizens During this audit, we heard a number of concerns from local citizens Expressed Several about the local and KDHE officials’ conduct related to the Plumb Concerns About Thicket landfill application. In the time available for this audit, we KDHE’s Objectivity weren’t able to confirm or dispel many of the concerns being raised. Regarding the Landfill However, we did gather information about several issues relating to KDHE’s involvement in the application process.

PERFORMANCE AUDIT REPORT 11 Legislative Division of Post Audit June 2004 Table I-2 shows some of the concerns citizens cited and what we were able to found out about them within the time available for this 100-hour audit.

Table I-2 Concerns Raised About KDHE’s Involvement in the Plumb Thicket Landfill

Concern LPA Comment

The Department attended KDHE officials told us they had attended these meetings because the Harper zoning meetings before an County/Cities Joint Planning Commission had invited them to describe the landfill application for the landfill application process and provide general information on the regional hydrogeology was ever submitted of the proposed landfill site. Commission officials verified they had asked KDHE officials to attend those meetings.

The Department had a The State receives $1 for every ton of solid waste disposed of in-State and for each conflict of interest because ton of solid waste transferred out-of-State. The revenue generated from this fee it stood to gain additional helps fund some of the activities of KDHE’s Bureau of Waste Management. revenue from the landfill Because the State already receives fees from the solid waste generated in-State, the only way the Plumb Thicket landfill could increase the amount of tonnage fees the State receives is if the landfill imported solid waste from outside the State. KDHE officials told us they didn’t attempt to calculate whether the Plumb Thicket landfill would generate additional revenues for the State. They also said they didn’t foresee the landfill taking on significant amounts of out-of-State solid waste.

Waste Connections started KDHE’s authority in this area extends only to constructing a landfill. KDHE construction on the landfill informed Waste Connections in August 2002 that land clearing, earth work, and without a permit from installation of a fence could be done at the landfill site, but that no construction of KDHE any parts of the landfill would be allowed. Because Waste Connections officials continued to ask the Department about what construction activities could be performed at the site, KDHE created a policy on allowable construction landfill activities before a permit is issued. The policy was then sent to Waste Connections in January 2003. KDHE officials told us they made at least 2 trips to the landfill site to monitor the construction activities taking place. They said the work they saw wasn’t on the landfill itself. During their last trip in Spring 2004, they said it appeared that Waste Connections had stopped all activity at the site.

KDHE didn’t take into KDHE received the study during the public comment phase of the application consideration a hydro- review process. KDHE suspended its review of the application before it could geology study the Sumner research the issues raised by the public, so it’s too early to conclude whether the County Commission had study will be considered or not. obtained of the proposed landfill site

KDHE was biased in favor We didn’t see anything in the correspondence and documentation we reviewed that of the landfill from the very would openly indicate KDHE was biased in its review of the landfill application. start, and its Director of the However, we did come across an e-mail from the Bureau Director to his staff Bureau of Waste informing them he had told Waste Connections by phone that “we (KDHE) will Management had written a allow no game playing as part of this permit application nor would we accept letter to the editor of a local anything that did not clearly comply with all aspects of the law and regulations.” newspaper that appeared to support the landfill. The Director of the Bureau of Waste Management told us he had not written a letter to the editor. He showed us an article he had written in the Bureau’s “Solid Waste Update” newsletter that’s identical to the “letter” that appeared in the paper, and said the newspaper had simply printed this article and attributed it to him as though he had written it as a letter to the editor. Newspaper officials told us it was their policy not to accept second-hand submissions, but they weren’t able to provide us with a copy of the letter the Director reportedly had written. The article was mostly factual, but some of the language he used to inform newsletter readers about the project potentially could be viewed by some as being supportive of the landfill —especially when they thought it was written as a letter to the editor.

12 PERFORMANCE AUDIT REPORT Legislative Division of Post Audit June 2004 Conclusion Given the myriad of requirements and the complexity of some of the issues involved, we can’t say unequivocally that the Department of Health and Environment questioned all of the things that should have been questioned. However, from our review we did conclude that the application contained the relevant information that was required at the time Waste Connections applied for a permit. In addition, the correspondence and other documents we reviewed suggested to us that the Department did a reasonably thorough review of the application. Nonetheless, the Department doesn’t have uniform guidelines for its staff to follow in reviewing landfill applications, and could benefit from developing them.

Recommendation To help ensure that reviews of landfill applications are conducted in a consistent and thorough manner, the Department of Health and Environment should develop some written guidelines for staff to follow when reviewing those applications. The guidelines should be general enough to apply to all landfill applications, but should address such issues as which information in the application is most critical to review, what level of review should be performed, and what sources may be available to independently verify information submitted by the applicant or the applicant’s representatives.

PERFORMANCE AUDIT REPORT 13 Legislative Division of Post Audit June 2004 Table I-1 Major Statutory Provisions Related to Applications To Construct Landfills

Statutory Provision Was It Done in Comments This Case?

The Secretary must obtain proof that the Yes KDHE received proof of ownership on permittee owns the land on which the September 4, 2002. facility will be located. K.S.A 65-3407(m) (3)

We did note a couple of possible weaknesses in KDHE’s review of the application materials. Each of those is discussed below.

Table I-2 Concerns Raised About KDHE’s Involvement in the Plumb Thicket Landfill

Concern LPA Comment

PERFORMANCE AUDIT REPORT 13 Legislative Division of Post Audit June 2004 APPENDIX A

This appendix contains the scope statement that was authorized by the Chair of the Legislative Post Audit Committee on February 24, 2004. The requesting legislator was Representative McCreary.

SCOPE STATEMENT

Plumb Thicket Landfill Application: Determining Whether the Department of Health and Environment’s Review Complied with Applicable Laws and Regulations

For the past 2 years, residents of Harper County, the Kansas Department of Health and Environment, and a California-based waste management company have been embroiled in a dispute about locating a new solid waste landfill in the County. County residents charge that the Department approved a landfill permit application that omitted information on wetlands, floodplains, and potential erosion and flooding hazards. In addition, the entity requesting the permit is required to notify the Water Office, Geological Survey, Biological Survey, and other State and federal agencies, and provide proof of that notice and the agencies’ response in the application. Legislators have expressed concern, as have residents, that many of these materials weren’t provided, yet KDHE apparently considered the application satisfactory. Tri County Concerned Citizens, an opposition group, has sued to block the landfill and the case currently is in court.

A performance audit in this area would address the following question:

1. Did KDHE follow State law and regulations in approving the application for the Plumb Thicket landfill? To answer this question, we would review State law and regulations governing the landfill permitting process. We would review the Plumb Thicket application, and would determine whether it complied with those requirements. We would interview Department and county officials, representatives of Tri County Concerned Citizens, and outside experts as necessary, to determine whether the Department’s permit approval met all requirements.

Estimated completion time: 100 hours

14 PERFORMANCE AUDIT REPORT Legislative Division of Post Audit June 2004 APPENDIX B

On May 20, 2004, we provided copies of the draft audit report to the Department of Health and Environment. It’s response is included as this Appendix.

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