RE: Illlnois Central Sprlngs

May 3, 1999

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
REGION 5
77 WEST JACKSON BOULEVARD
CHICAGO IL

Mr. Davld R. Berz
Neil Gotshal & Manges (CBS Attorneys)
1615 L Street, N.W.
Washington, D.C. 20036-5610

Dear Mr. Berz:

This letter responds to your letter of April 22, 1999, which in turn was prompted by the March 25, 1999, meeting between the Unlted States Envlronmental Protection Agency ("U.S. EPA") and CBS Corporation ("CBS"), and my follow-up letter to you, dated April 12, 1999, regarding the Illinols Central Spring treatment faculty. U.S. EPA has given CBS numerous opportunities to design, build, and operate an Utterly water treatment system at Illlnols Central Spring over the past year. After dlffl At negotiat~oTls, the parties reported a deadlock o the out on August 14, 1998. The U.S. EPA concluded that C3S's propcsa~ =^~ treatme.Tt Of emery ng surface water at Iilinols Central Sprlng likely would not prov de adequate protection to human hea th and the environment as an interim measure. Rather than going to Alan over this issue, U.S. EPA proceeded with addressing the discharge of PCB-contaminated waste from the llinois Central Spring itselff. On September 30, 1998, EPA issued its decision document an action memorandum) for the Illinois Central Sprlng interim treatment facility and started the design of the system. In accordance we the suggestion from Magistrate Judge Foster, U. S . EPA reserved its rights to bring claims against CBS for cost recovery at a future time. U.S. EPA's resolution of this heated issue allowed the parties to concentrate their efforts on negotiating clean-up measures for the remaining sites.

Despite the failure of the negotiations over the treatment system during the summer of 1998, at all times subsequent to the deadlock, U.S. EPA made it clear through informal channels, that CBS could take over and complete the design and construction of the treatment system as long as the system was designed and built in accordance with EPA's September 30, 1998, action memorandum. During that entire time, CBS provided, U.S. EPA with no indication that it would be willing to take over the project. In order to complete the treatment system during the 1999 construction season, CBS knew that EPA had to proceed with the design and construction without any delays. As EPA kept CBS informed as it made decisions and progress on the design of the system.

On March 25, 1999, U.S. EPA met with CBS and exp alned he final design of the water treatment system in detail, and gave CBr another opportunity to take over the construction of the project. Copies of design documents were also provided to ES. On April 22, CBS asked U.S. EPA to delay the start of construction until after (1) CBS has had a chance to "formally" respond to U.S. EPA's proposal and April 12, 1999, follow-up letter, and (2)-U.S. EPA has had a chance to consider CBS's proposal and presumably open up a new round of negotiations with CBS. Informally we heard from CBS only that CBS may renew its offer to build the system CBS proposed in the summer of 1998, which U.S. EPA had previously rejected, and which would be inconsistent with U.S. EPA's action memorandum.

The EPA declines your request to delay the construction of the water treatment system. U.S. EPA must continue to move forward in order to accommodate contract lead times, meet the construction schedule, and ensure that the water treatment plant is operational in time for the anticipated start of the source control operable unit of the Lemon Land Landfill remedial action. U.S. EPA informed CBS about hese deadlines during the March 25, 1999 meeting.

U.S. EPA must also respond to CBS's allegation that U.S. Oh's design of the water treatment system s not consistent with what the United States proposed to Mag~s~rate Judge Foster in the August 14, 1999, deadlocked status conference. U.S. EPA's now- complete design is consistent with the proposal to Judge Foster and with the September 30, 1999 action memorandum. The costs are higher than the earlier, pre-design estimate, because details regarding the design have been worked out. During the August 14, 1999, hearing CBS also suggested variables to the treatment proposal it made to Magistrate Judge Foster, wherein costs could be increased by a factor of four or more. During the design process, EPA paid careful consideration to CBS's concern that money to build the interim system should not be wasted by building components which would be incompatable with a final treatment system that will be considered after the completion of the Lemon Lane source control measures. The final design of the Illinois Central Spring interim treatment system provides for flexibility and the ability for expansion of treatment capacity should such measures be required as part of permanent system.