Investigation: For environmental violators, state often cuts deals

Environmental violations, fines and leniency in Texas

Lake LBJ (KXAN Viewer Photo)
FILE - Lake LBJ (KXAN Viewer Photo)

BURNET COUNTY, Texas (KXAN) -- Joe Lyda flips a sizzling New York Strip Steak and checks the jalapeno poppers on his condo’s poolside grill. It’s a quintessential Fourth of July weekend afternoon at Lake LBJ.

On the lake, shrieking children are being pulled behind powerboats, fishermen haul in bass and a wastewater plant pumps out thousands of gallons of treated sewage beneath the lake’s surface.

Lyda and other lake-goers would hope that treated wastewater, processed by utility company Aqua Texas, Inc. which is associated with Aqua Utilities, Inc., would be up to state standards, but that has not always been the case.

“Kids swim in the water, there’s boating in that water, there’s fish that come out of that water, so something should be done,” Lyda said.

Granite Shoals condominium owner Joe Lyda said he's concerned
Granite Shoals condominium owner Joe Lyda said he is concerned, if the state isn't doing enough to punish environmental violations.

Aqua’s Burnet County wastewater treatment plant in Granite Shoals has been cited multiple times for violations related to the release of treated wastewater into the lake and the company’s facility, according to records obtained from the Texas Commission on Environmental Quality.

And Aqua has consistently had its fines reduced by the TCEQ. A KXAN investigation has found that type of forgiveness is often extended to companies large and small throughout the state.

Over the past five years, more than half of all businesses targeted by TCEQ have received a discount of at least 20 percent on their fines, and, in many cases, the discount is much larger, according to a KXAN analysis of more than 9,000 enforcement actions over the past five years.

Across the state, Aqua Texas and Aqua Utilities have had more than 30 TCEQ violations that resulted in the imposition of fines—one of the highest violation counts of any company in that time period, state records show.

Most of those violations appear minor. In Burnet County, the company’s violations include repeated instances of releasing improperly treated wastewater into Lake LBJ, two violations in 2011 and another in 2014. Though the offense reocurred, Aqua received a discount on its fines in each of those cases, according to TCEQ records.

In a prepared email statement, Aqua said it is “proud to protect and provide Earth’s most essential resource on behalf of more than 180,000 people statewide,” and “the company spent more than $14 million last year to improve Texas water and wastewater systems, provide better service and meet environmental regulations.”

The company also said it takes action to resolve TCEQ compliance matters, and it follows “established, objective and transparent procedures” in determining its response to compliance issues. Aqua said the benefit of being a large utility is that it is able to spend the money required to correct compliance violations and improve service. Many water systems the company has acquired also had preexisting problems, and Aqua invested in fixing those issues, the company said.

TCEQ officials told KXAN they operate under state law and strive for uniform enforcement, when they structure fines for violations.

But the systematic reduction of fines—called deferrals—has concerned critics like Larry Soward, a former TCEQ commissioner.

The agency’s enforcement system results in penalties that don’t deter violations, such as excess pollution, Soward said. Former Gov. Rick Perry appointed him in 2003, and he served as a commissioner through 2007.

TCEQ Director of Enforcement, Bryan Sinclair, said his agency must abide by state law and levy penalties fairly.
TCEQ Director of Enforcement, Bryan Sinclair, said his agency must abide by state law and levy penalties fairly.

“You certainly have an environment—a culture—in this state, where entities know they can go to the TCEQ and work the process to their benefit,” Soward said. “The TCEQ will basically accept the resolution of that enforcement action, which, more often than not, is more favorable to the violator.”

TCEQ officials told KXAN the agency has kept in line with its statutory power; TCEQ works with businesses to help get them into compliance, and fines must be fair.

“It is about compliance. That’s the goal of our enforcement program,” said Bryan Sinclair, TCEQ director of enforcement. In many cases, “the deferral is offered to encourage quicker settlement of the enforcement case without having to go through the expensive process of having to go through a hearing with lawyers involved.”

Sinclair said finding the best method of enforcement is a balancing act.

‘A set design’

KXAN reviewed more than 9,000 formal enforcement actions from fiscal year 2011 through 2015. More than half the companies penalized for a violation received some level of a discount, beginning at 20 percent.

To arrive at a fine, TCEQ investigators use a penalty calculation worksheet: a spreadsheet marked with each violation, its severity and duration.

“We follow a set design,” Sinclair said.

Enforcement actions and fines ultimately end up before TCEQ commissioners for approval.

As a commissioner, Soward used to sign off on the enforcement orders. He said there is still too much leeway in penalty calculations.

“If you look at the regulations and the policies for enforcement, there’s built into that whole process a great deal of subjectivity and discretion,” he said. “For example, if you look at the penalty policy the TCEQ has in place, you’ll see numerous opportunities for the TCEQ to lessen a fine, or to increase a fine, but to make adjustments from what the statute would say is the penalty for that violation.”

Soward said there are also cases when violations are so “egregious the full measure of the enforcement regulations come to bear, but that is more uncommon than common.”

In one North Texas case, TCEQ slammed Frisco company Exide Technologies with a $2.45 million fine in 2015 for industrial hazardous waste violations.

But a fine of that magnitude appears to be more the exception than the rule, according to penalty records reviewed by KXAN.

TCEQ hit Aqua Texas and Aqua Utilities Inc., which are operated by the same parent company Aqua America, with a total of more than $284,000 in fines related to 32 enforcement cases from 2011 through 2015. Several of the cases resulted in minor fines of less than $1,000. In one case, Aqua was ordered to fully pay an $86,860 fine, according to data analyzed by KXAN. Out of those 32 Aqua enforcement cases, TCEQ reduced the utility company’s fines 25 times, totaling more than $21,000 in deferred payments, state data shows.

“If you look at the regulations and the policies for enforcement, there’s built into that whole process a great deal of subjectivity and discretion.” — Larry Soward

By offering the deferrals, Sinclair said the “advantage” is that TCEQ arrives at an order faster and gets the company into compliance sooner. Sinclair said he’s heard the criticism that fines should be strictly enforced, but he said quicker compliance is worth it.

Numerous Aqua facilities have had TCEQ violations, including a wastewater treatment plant in Hays County. Other Aqua violations have occurred in Brazoria, Grimes, Harris, Parker, Polk and Travis counties, among others, according to TCEQ records.

Sinclair said the issue with Aqua could be that it has many small facilities in places with a limited number of resources.

The companies with the most violations over the past five years include DCP Midstream, ExxonMobil, Chevron, Du Pont and Aqua. KXAN combined instances of Aqua Utilities Inc. and Aqua Texas because the investigation reports show the same leadership at both companies.

An investigation

A fine against a company for an environmental violation is often a year or more in the making. First, TCEQ initiates an investigation, which can be scheduled or unannounced. If TCEQ receives a complaint, investigators may arrive without prior notice.

Normally, the agency gives a few days notice before a visit, said Susan Jablonski, TCEQ director of Central Texas field operations. That buffer gives the company time to complete forms and be prepared for the inspection, she said.

“Three days notice is about time for them to get the necessary paperwork together,” Jablonski said. “That is a prudent notification that we have found to have a more thorough investigation on site.”

Jablonski said she does not have concerns that prior notice would give a company time to clean up violations in the days before investigators arrive.

It is important for similar violations to be treated equally throughout the state, and TCEQ must be fair in levying fines against companies, Jablonski added.

Altogether, TCEQ monitors and enforces environmental standards at thousands of regulated entities in the state. That oversight, Jablonski said, requires more than 100,000 investigations in a given year.

In Texas, businesses in Harris County receive the most citations from TCEQ. View the interactive map below to see a county-by-county count on the number of violations given by TCEQ.

‘Scare these actors’

It’s been years since Soward said he’s seen a significant effort to toughen TCEQ’s fines.

In 2003, the state audited the agency’s enforcement functions. The audit raised a number of recommendations that, Soward said, would have improved enforcement. The agency also conducted an extensive “self evaluation” and staff came forward with “hundreds” of recommendations to improve the agency during Soward’s tenure, he said.

TCEQ adopted only a few of the state auditor’s recommendations, and “little came of that self review,” Soward said.

However, a TCEQ spokesperson said the agency took the review very seriously and made several changes, including a streamlined complaint process, the addition of a field citation program and shortened timelines for addressing and correcting violations.

Soward later worked as a consultant for a group of environmentalists pushing for enforcement changes in the 2011 legislative session. He said that effort resulted in a significant alteration: the cap on daily fines was increased to a maximum of $25,000 from $10,000.

Enforcement changes have also been attempted at the legislative level.

For years, Rep. Eddie Rodriguez, D-Austin, has backed legislation that would change the TCEQ’s enforcement methods.

Rep. Eddie Rodriguez, D-Austin, has authored legislation that could increase penalties for environmental violators.
Rep. Eddie Rodriguez, D-Austin, has authored legislation that could increase penalties for environmental violators.

In 2003, Rodriguez introduced legislation that would have made TCEQ fines at least equal to the value of the economic benefit the company would gain through the violation. The bill did not pass.

“They probably have more authority, more power, than they’re using right now,” Rodriguez said, regarding TCEQ. “The penalty has to scare these actors into shape. That’s what they are there for.”

Rodriguez said he would likely pursue changes again at the state level during the upcoming legislative session.

Perhaps companies, such as Aqua, might have been dissuaded from allowing environmental violations to occur, if stiffer penalties loomed.

For Lyda, relaxing poolside in Granite Shoals, the issue of stiffer fines comes back to public health.

Aqua’s wastewater treatment plant sits about 40 yards from his barbecue pit. He said the state should take more action. After all, the state’s natural resources hang in the balance.

We love this lake…Lake LBJ, it’s beautiful,” he said. “I’d like to keep it that way.”

 

TCEQ Violations

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