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December 15, 1993

APPROVED BY:____________

POL 550A COST RECOVERY

RCW 70.105D.050(3) requires that the department seek to recover the amounts spent for investigative and remedial actions and orders from potentially liable persons (PLPs). It is the department's intention to recover those costs which are reasonably attributable to sites. While timing of cost recovery for individual sites will be considered on a case-by-case basis, the department expects payment of costs as they are incurred.

1. For The Purpose Of This Policy, Costs Are Defined In The Following Way:

Remedial action costs are costs reasonably attributable to the site and may include costs of direct activities, support costs of direct activities and interest charges for past due payments. The department shall charge an hourly rate based on direct staff costs plus support costs. The department shall use the following formula for computing hourly rates:

Hourly Rate = DSC + DSC(ASCM) + DSC(PSCM), where,
DSC = Direct Staff Costs defined in (a) below,
ASCM = Agency Support Cost Multiplier defined in
(b) below, and,
PSCM = Program Support Cost Multiplier defined in
(c) below.

(a) Costs of direct activities are direct staff costs and other direct costs. Direct Staff Costs (DSC) are the costs of hours worked directly on a contaminated site, including salaries, retirement plan benefits, social security benefits, health care benefits, leave and holiday benefits, and other benefits required by law to be paid to, or on behalf of, employees. Other Direct Costs are costs incurred as a direct result of department staff working on a contaminated site including, for example, costs of: travel related to the site, printing and publishing of documents about the site, purchase or rental of equipment used for the site, and contracted work for the site.

(b) Agency Support Costs are the costs of facilities, communications, personnel, fiscal, and other state-wide and agency-wide services. The Agency Support Cost Multiplier (ASCM) used shall be the agency indirect rate approved by the agency's federal cognizant agency for each fiscal year.

(c) Program Support Costs are the costs of administrative time spent by site managers and other staff who work directly on sites and a portion of the cost of management, clerical, policy, computer, financial, and other support provided by other program staff to site managers and other staff who work directly on sites. Other activities of the toxics cleanup program not included in Program Support Costs include, for example, community relations not related to a specific site, policy development, and a portion of the cost of non-site management, clerical, policy, computer, financial, and other support staff. The Program Support Cost Multiplier (PSCM) used shall be calculated by dividing a portion of actual Program Support Costs as defined in Section (2)(c) of WAC 173-340-550 by the Direct Staff Costs of all hours charged to site related work.

2. All Consent Decrees, Agreed Orders, And Unilateral Orders Shall Contain Provisions For Cost Recovery.

The Toxics Cleanup Program (TCP) Cost Recovery Coordinator, as a member of the Negotiation Review Team, shall insure that each consent decree or order includes a provision for cost recovery.

3. The Cost Recovery Unit of Ecology's Fiscal Office Shall Maintain Documentation Of Cleanup Costs.

The Fiscal Cost Recovery Unit is responsible for maintaining site files which document all agency costs associated with the investigative and remedial actions at each site (AFRS Project codes starting with 2, 6, 7, and 8).

4. The Cost Recovery Unit of Ecology's Fiscal Office Shall Provide Itemized Statements Documenting Costs Incurred.

The Fiscal Cost Recovery Unit shall prepare billing statements in the time frame specified in the decree/order.

Statements shall include cost documentation such as copies of Time Accounting Reports (including charge-out rates), Agency Financial Reporting System (AFRS) reports, support costs (Agency and Program) rates, and other documentation appropriate to the specific site.

5. Only Approved Invoices Shall Be Issued To The Potentially Liable Person.

The TCP Cost Recovery Coordinator and the Site Manager shall approve all invoices before they are sent to the Potentially Liable Person (PLP).

The Site Manager shall signify approval of all direct charges by signing the invoice cover memo (see PRO 550A).

6. Interest Shall Be Charged In The Following Way:

Interest shall be charged at the maximum allowable rate on invoices not paid within ninety (90) days, or the number of days specified in the decree or order. Interest shall accrue at the rate of one percent (1%) per month, or fraction thereof, on the past due amount, or the amount allowable at the time, according to RCW 43.88.175.

7. The TCP Cost Recovery Coordinator Shall Report Cost Recovery Data To The TCP Management Team, at Least Quarterly.

Reports shall include the total amount of costs billed during the quarter, the total amount of payments received, and problem areas which need the attention of the Management Team.

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