Radioactive Thorium Cleanup: Financial Impact Hits Everyone

The removal of thorium from Kress Creek and the West Branch of the DuPage River has implications far beyond the mere excavation. There is the issue of restoration. There is the issue of money. There is the issue of public health. There is the issue of the fish/wildlife/river ecosystem. And it goes on. This article focuses on money.

The cost to remove the contaminated material and restore the property is tremendous. Kerr-McGee Corp., owner of the Rare Earths Facility in West Chicago which was the source of the contamination, pays for the work, but is eligible to apply for some reimbursement from the federal government. At the Fall Luncheon of The Conservation Foundation, guest speaker John Wills, President of Christopher B. Burke Engineering West, stated the price tag is currently at $150 million.

What will be the financial burden on Warrenville tax payers? Costs could include the following:

Legal fees,

Costs for furnishing signs, barricades, municipal utilities hookups and all required City permits,

Likely reduced property tax revenue from impacted properties,

Additional heavy truck wear and tear on roads,

Potentially diminished property values, and

Other?

When the cleanup began in West Chicago in the 90‘s, the entire City was impacted. Heavy duty construction equipment was excavating the old factory site on Ann St., Reed Keppler Park, and residential properties. Streets in the City brandish hazardous waste haul route signs. Grand old trees were replaced by nursery stock. As a part of the Agreements between the City of West Chicago and Kerr-McGee, West Chicago received $10 million to compensate the City. West Chicago’s Mayor Mike Fortner called this a “backfill fee” or “tipping fee“. It was paid to the City in $2 million installments. According to Mayor Fortner, the City has not spent a penny of the money. He said that rather than the City borrow money on the open market, the City borrows from the $10 million pot and repays it with interest! Additionally, interest from the $10 million has been used by the City for community projects.

In the 1995 Consent Agreement, West Chicago received $1.8 million for legal fees from Kerr-McGee. Between 1997 and 2005, the City of West Chicago received $500,000 for oversight costs and $4 million for legal costs. In an intergovernmental agreement between the City of West Chicago, the City of Warrenville and others, West Chicago pays the legal fees. When asked “If West Chicago is not fully reimbursed by Kerr-McGee for the fees, would the other parties be billed?”, Mayor Fortner said there had been “no such discussions.”

In 1997, the West Chicago Park District received $397,000 from Kerr-McGee.

The Thorium Action Group (TAG) set up a “Public Benefit Fund” with $1 million from Kerr-McGee. The interest accrued is used for scholarships for District 94 students. In 2005, seven $5,000 scholarships were awarded to students who may not otherwise have afforded higher education.

These dollar figures are not exhaustive, only exemplary.

To date, the City of Warrenville has failed to negotiate for any compensation from Kerr-McGee. Any financial burden will likely fall on the Warrenville tax payers. The General Fund is forecast to have revenue shortfalls. How will the City cover the potential costs?

What are financial implications to the impacted property owners in Warrenville? They may be eligible for a partial reduction in their property tax assessment. According to the Township Assessor, Mark Malay, each property owner who asks will be considered on a case-by-case basis. Impacted property owners are encouraged to provide documentation from the EPA or Kerr-McGee that shows the contamination on their property to the Winfield Township Assessor. The telephone number is 231-3573, fax is 231-3697.

Property owners may also want to consider placing property in a Conservation Easement. Such an easement “is a legal agreement that a land owner makes to permanently limit the amount and type of development” stated Dan Lobbes, Director-Land Preservation, The Conservation Foundation. He added that easements “put in place the natural values of the property” such as buffering rivers and streams or maintaining habitat for threatened or endangered species. Dan added that there are criteria that a property must meet and there are costs to the property owner including an appraisal, survey, title fee, recording fee, and legal costs. On the plus side, there can be income tax benefits and potentially grant assistance. For more information contact Dan at 428-4500, ext. 55. Consulting financial/tax advisors is recommended.

Thanks to you readers who have called in response to this series. You have helped with information and insights and suggested additional areas of concern. Thanks!

Note: Major agreements including “The Local Communities’ Consent Decree“, which the Warrenville City Council approved on March 21, 2005 and “The Phase 2 Final Agreement Between Kerr-McGee Chemical Corporation and The City of West Chicago“, dated February 24, 1997, contain some specific dollar amounts to be paid. The Agreements also contain unspecified financial obligations for other potentialities and circumstances.