REIMBURSEMENT TO LOCAL GOVERNMENTS
FOR EMERGENCY RESPONSE TO
HAZARDOUS SUBSTANCE RELEASES

By DENNIS G. WALSH of Klein, Thorpe and Jenkins, Ltd.

Under Section 123 of the Comprehensive Environmental Response, Compensation And Liability Act of 1980, also known as Superfund, local governments may apply for reimbursement for expenses incurred (up to $25,000 per single response) in carrying out temporary emergency measures necessary to prevent or mitigate injury to human health or the environment associated with the release or threatened release of any hazardous substance or pollutant or contaminant. The program is intended to help alleviate the significant financial burden on local governments and will not supplant local funds normally provided for response. Reimbursement does not apply to expenditures incurred in the course of providing what are traditionally local services and responsibilities, such as routine firefighting.

To be allowable, costs for which reimbursement is sought must be consistent with Superfund and with federal cost principles outlined in the 0MB Circular A-87 "Cost Principles for State and Local Governments." The local government may also seek assistance from the EPA regional office in determining which costs may be allowable. Final determination of the reasonableness of the costs for which reimbursement is sought will be made by EPA. In general, however, allowable costs are those project costs which are eligible, reasonable, necessary and allocated to the project. Costs allowable for reimbursement may include but are not limited to:

1. "Disposable materials and supplies" acquired, consumed and expended specifically for the purpose of the response for which reimbursement is being requested (hereafter referred to as "the response");
2. Compensation for unbudgeted wages of employees for the time and efforts devoted specifically to the response that are not otherwiseprovided for in the applicant's operating budget (e.g., overtime pay for permanent full-time and other than full-time employees);
3. Rental or leasing of equipment used specifically for the response (e.g., protective equipment or clothing, scientific and technical equipment) (Note: reimbursement for these costs will not exceed the duration of the response);
4. Replacement costs for equipment owned by the applicant that is contaminated beyond reuse or repair, if the applicant can demonstrate that the equipment was a total loss and that the loss occurred during the response (e.g., self-contained breathing apparatus irretrievably contaminated during the response);
5. Decontamination of equipment contaminated during the response;
6. Special technical services specifically required for the response (e.g., costs associated with the time and efforts of technical experts/specialists not otherwise provided for by the local government);
7. Other special services specifically required for the response (e.g., utilities);
8. Laboratory costs for purposes of analyzing samples taken during the response;
9. Evacuation costs associated with the services, supplies and equipment procured for a specific evacuation; and
10. Containerization or packaging cost including transportation and disposal of hazardous wastes.

Unallowable costs for reimbursement include but are not limited to:

1. Purchase or routine maintenance of equipment

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   of a durable nature that is expected to have a period of service of one year or more after being put into use without material impairment of its physical condition, except as provided in paragraphs (a) (4) and (a) (5) above;

2. Materials and supplies not purchased specifically for the response;
3. Employee fringe benefits;
4. Administrative costs for filing reimbursement applications;
5. Employee out-of-pocket expenses normally provided for in the applicant's operating budget (e.g., meals, fuel);
6. Legal expenses that may be incurred as a result of response activities, including efforts to recover costs for potentially responsible parties; and
7. Medical expenses incurred as a result of response activities.

Detailed cost documentation must be provided by the local government and ensure that costs incurred are substantiated and that cost documentation is adequate for an Agency audit. Documentation of response costs must include at a minimum:

1. Specification of the temporary emergency measures for which reimbursement is requested;
2. Specification of the local agency incurring the cost;
3. Detailed breakdown of actual costs, by cost element such as overtime, equipment rental;
4. Supporting documents such as invoices, sales receipts, rental or leasing agreements; and
5. Generally accepted ac+counting practices consistently applied.

Only one request for reimbursement will be accepted for each hazardous substance emergency requiring immediate response at the local level. When more than one local agency or government has participated in such a response, those agencies and governments must determine which single entity will submit the request on behalf of all of them. The request for reimbursement must be submitted on a form supplied by EPA. Upon receipt of a reimbursement request, EPA will verify that it complies with all the requirements for reimbursement. When the request is incomplete or has sufficient defects, EPA will return the request to the applicant with written notification of its deficiency. A request returned to the applicant for correction of deficiencies must be resubmitted to EPA within 60 days. The requirements for reimbursement include immediate steps and, as such, each local government that is interested in participating in this program in the future should obtain copies of the rules and regulations relating to the same now. •

Page 18 / Illinois Municipal Review / September 1994