State Health Department Struggles To Close Illegal Dump in Lualualei

It was July 10, 1996. Leslie Doe heard a large SWOOMP! – and instantly recognized it as the sound of volatile fuel exploding. Outside, the glow from a huge ball of flame radiated from the neighboring property on Puhawai Road in Lualualei, O`ahu.

“Oh my gosh, now they’ve decided to burn the damn thing,” thought Doe, who prefers not to be identified by name. Certain that other neighbors would call 911, Doe sat back and watched the evening news as the neighbor’s illegal dumpsite went up in flames.

Junk so clogged the place that a bulldozer was needed to clear a path for the Fire Department. Several explosions erupted, caused by rupturing 150-pound gas cylinders or drums; to prevent further explosions, the state Department of Health paid $38,000 to a hazardous waste contractor to haul out 166 of the remaining 55-gallon drums, including 19 that contained hazardous waste. Neighborhood residents complaining of the acrid smell of burning waste were evacuated to the Wai`anae District Park. The fire burned for a week. Eventually, response agencies determined that the fire had been by caused the eruption of a long-smoldering underground burn of tires and other buried waste.

For a few days in the summer of 1996, thanks to generous media coverage of the fire, the goings-on at 86-348 Puhawai Road were public knowledge: the four-acre site was being used as an illegal dump for construction and demolition waste – called in the trade C&D — household refuse, and nearly everything in between. But both before and after the fire, the dump on Puhawai Road has received scant attention except for that paid to it by a handful of state and city regulators.

And more than four years later, the state is still unable to get the dump shut down and closed in accordance with state and federal regulations. In the eyes of state solid- and hazardous-waste regulators, the cost of cleanup vastly exceeds the value of the land, a fact that makes it unlikely that the state could ever recover costs should it move in and order the needed work done.

In the eyes of owner David Souza, there’s no need for closure at all. He’s in the process of building his dream house on the site, replete with a 1,300 square-foot master bedroom suite. Should he put his four acres on the market, he says, it would sell “in a heartbeat.”

 

 

Flashback to the 1980s. Nolan T. Gouveia and his wife, Mary, owned 86-348 Puhawai Road. Back then, it was a dirt lot where Nolan stabled horses. Over the course of that decade, their son Joseph became involved with and eventually married Sabrina Grace, daughter of George Grace, owner of Grace Hawai`i Recycling and Equipment Rental.

When the Gouveias moved to the Big Island in 1989, they gave the Graces power of attorney, allowing them to collect fees, manage property, and the like, on behalf of the Gouveias.

By that point, according to a tell-all letter Sabrina Grace wrote to the state Department of Health on June 25, 1997, the place had already become a junkyard. George Grace had moved his company’s operations onto the property and used it for storing equipment and scrap as well. The Gouveias had allowed Hawai`i Truck Parts, operated by Yvonne and Robert Dias, to store all manner of junk, including oil drums, on the property, Sabrina Grace wrote. She also claimed that Joseph Gouveia – by this time her former husband – had repaired and painted cars there and that he, too, used the place as a junkyard and landfill, burying solvents and paints. The property lies within the state Agricultural District where trucking baseyards, landfills and junkyards may be located only with a special permit. In no event would burial of solvents and paints be allowed.

By February of 1991, the City and County of Honolulu Department of Land Utilization had been alerted to the violations of the state land use law, which counties are responsible for enforcing. Sabrina, the nominal owner of a 90 percent interest in the land, was fined for running a trucking operation and a portable toilet business from the site. A month later, the city issued a Notice of Violation to both Sabrina Grace and to Nolan and Mary Gouveia, who still held a 10 percent stake. The notices were ignored; in November and December 1991, neighbors were complaining to the city that junk cars were being stockpiled and buried on the land.

While it is unclear which family was responsible or condoned what, there is some evidence the two clans worked together: In 1993, the Graces and Gouveias shared an office at 86-078C Farrington Highway. Sabrina Grace headed Double G Equipment Rental, Inc., a company that rented portable toilets and heavy equipment. Other members of the Grace family and two partners from the Big Island had formed Hawai`i Lua, another porta-potty rental firm, with offices at the same site. Finally, Gouveia Enterprises also listed the Farrington Highway address as its place of business.

The notices of violation did nothing to halt operations at the site – or even to prevent the city itself from engaging in business with the Graces. In 1994, while the city Department of Land Utilization was still attempting to pursue collection of fines, the city Department of Public Works contracted with George Grace for removal of ozone-depleting coolants from discarded refrigeration equipment. The contract period was from November 1994 to October 1995, but it was cut short on January 19, 1995, after an inspection by the city found that “mishandling of refrigerated units are resulting in [freon] releases,” a DOH report states. By this time, Grace had accepted 3,118 refrigerators, freezers, or other coolers.

 

 

About the same time that the city was terminating its contract with Grace for the recycling of coolant, the activities at Puhawai Road came to the attention of the state Department of Health. In late 1994, an engineer with the department’s Office of Solid Waste Management (OSWM) flew over the Leeward Coast in an attempt to spot illegal dump sites. Many were visible from the air, but the large “Grace site” was especially conspicuous.

It took nearly a year – until November 1995 – for the Department of Health to send notice to Sabrina Grace that she would be required to clean up the land and prepare an environmental assessment of the on-site hazards. For purposes of holding the Graces or anyone else responsible, that delay had critical consequences.

By early 1994, signs of a rupture between the Graces and the Gouveias were apparent. In January, the Gouveias sued the Graces, seeking the return of the Graces’ 90 percent interest in the land. The Gouveias also had removed Sabrina Grace as trustee of the Nolan T. Gouveia Trust, and Joseph had filed a restraining order against his wife to keep her from disposing of their joint properties.

By the end of the year, Sabrina Grace had filed for bankruptcy. Bankruptcy court records show she owed $272,720.12 to First Hawaiian Bank, $447,000 to Bank of America, $4,650 to the Department of Land Utilization, and an “undetermined” amount to the Gouveias. The Gouveias sought to keep Sabrina’s debt to them intact and on October 26, 1995, U.S. Bankruptcy Court Judge Lloyd King found in the Gouveias’ favor. Sabrina Grace’s debt to the Gouveias of $4,851,547.52 “shall not be dischargeable in bankruptcy,” King ruled.

To satisfy the claim of Bank of America, the bank initiated foreclosure action against the property and prepared to sell it at auction. As part of the process, the bank retained M&E Pacific, Inc., an engineering firm, to address environmental issues. M&E, in turn, contracted with Environmental Sciences-Pacific, Inc. (ES-P) to provide an inventory of the waste at the Grace/Gouveia property.

ES-P found that about 80 percent of the stockpiled waste was “construction debris and municipal trash debris.” The rest was junked vehicles, storage tanks (both above- and under-ground), boats, refrigerators, cylinders of compressed gas, tires, batteries, and “miscellaneous unknown potential hazardous waste and É liquid hazardous waste.” Also, the report said, “There is the potential for Asbestos Containing Material (ACM) from the debris.” ES-P did not test for soil contamination, nor did it do any asbestos screening or sampling.

The company recommended the removal and disposal of “all the waste streams.” With proper segregation, it stated, much of the scrap metal and used oil could be recycled, thereby reducing significantly the cost of clean-up. Without the recycling, ES-P estimated, the cost to sort, segregate, remove and dispose of just the surface debris would be between $875,000 and $975,000.

Waste continued to be hauled to the site. In January 1996, the Office of Solid Waste Management received another complaint about illegal dumpers. The agency conducted an inspection, but months passed without any follow-up or enforcement action.

 

 

Once again, delay proved the enemy of enforcement. In July 1996 the property was sold at auction for $50,000 to David Souza, a hauler who, according to Sabrina Grace, had used the site. David Allen Souza’s family had once operated a dairy in Wai`anae as well as a topsoil and “end-dumping” company called Leeward Rock Products. Souza and his son (also named David) operate Big Island Topsoil, out of Kamuela, and Island Topsoil, which is now headquartered at 86-348 Puhawai Road.¹

Days before Souza closed on the sale, the fire swept through the property. The embers were hardly cool when state solid waste staff met with Sabrina Grace and Souza. The state wanted all surface material removed from the property at once and also asked Grace and Souza for a list of all haulers.

On July 26, John Harder, then-coordinator for the solid waste office, wrote a warning letter to Grace, who still showed as owner of the property in DOH records. The DOH, he wrote, had inspected the Puhawai property on July 19 and had found hazardous waste drums among many other waste items. In addition to providing Grace with a list of legal hazardous waste haulers, Harder informed her that she would be responsible for the state’s costs of dealing with the site, including the $38,686.90 paid to PENCO for removal of drums from the path of the fire. Finally, Harder said, Grace would have to prepare an assessment of wastes on the site much more thorough than the one done by ES-P a year earlier. This one would have to characterize the surface and subsurface soil, identify all contamination, determine the environmental impact of that contamination, and describe interim remedial measures.

Three days later, Harder sent a more formal letter, this one detailing all of the violations found at the property and ordering an end to any further dumping. In addition, the department prepared a draft Notice and Finding of Violation and Order for Sabrina Grace to cease and desist accepting solid waste; control, abate and extinguish all fires at the dump, provide a written report on corrective measures taken, pay fines and penalties of $736,000. The order, undated, never was signed.

Yet before the Notice of Violation could be mailed, both warning letters had been returned as undeliverable. Grace had reportedly moved to Waimea on the Big Island. Souza had taken ownership of the property. DOH investigators passed copies of the warning letters on to Souza’s mother, who had moved on to the site. On September 19, 1996, Thomas Arizumi, chief of the DOH Environmental Management Division, issued the first warning letter directly to Souza.

 

 

On April 1, 1997 DOH inspector Teresita Salire reported on her investigations. She had interviewed Sabrina Grace, who disavowed any further interest in the property. But despite Grace’s wish to extricate herself from the whole mess, she met with the DOH later that month to discuss a Consent Agreement to avoid paying costly fines.

Grace initially was cooperative. By early August 1997, the DOH had drafted a consent agreement for her signature. Among other things, Grace was to notify Souza of the state’s intention to have the site cleaned and ask his permission to gain access to the site. Grace would also agree to cooperate in preparation of a joint clean-up plan, provide and help pay for a site assessment and clean-up and closure plan, and, finally to submit a report to the DOH upon completion of all of the required activities. Failure to comply would result in fines of $10,000 per day for each day “that such failure continues,” the agreement states.

The agreement did not let Grace off without paying any sort of fine. For the violations described in the July 29, 1996 warning letter, the DOH assessed a fine of $5,000, but proposed waiving them in return for Grace performing various acts of community service. The agreement identified seven cleanup projects throughout the Leeward O`ahu area that Grace would be required to work on to fulfill her community service.

All the careful planning that went into the agreement was in vain: Grace never signed it, and she has escaped any liability, so far as the Department of Health is concerned. Steven Chang of the Office of Solid and Hazardous Waste told Environment Hawai`i that the DOH is not pursuing enforcement action against Grace.

 

***
A New Target

 

Having apparently given up on Sabrina Grace, the DOH focused its enforcement efforts on Souza. From October 1997 through September 1999, the DOH sent Souza warning letters, conducted four inspections, all of which found that Souza was continuing to haul a variety of wastes to his property. In January 1999, the DOH issued a Notice of Violation and Order, requiring Souza to pay for closure, cleanup, etc., of the site and fining him $71,805 for violations.

Souza was unfazed. In August, the DOH received a complaint about more dumping, and in September another DOH inspection verified that the dumping and grading continued. Inspectors saw old cars and tires on the property. Trucks still moved in and out, but the nature of what was brought to the site seemed to consist of things like wood, topsoil and other C&D waste.

According to Souza, this was part and parcel of his stockpiling business, for which he had a city permit. “Whatever I brought in, I had a stockpiling permit” for it, he claims, and this allowed him to bring in milk, feed, dirt – practically anything, he says. He swears he allowed no illegal dumping.

City records show a one-year permit was issued in March 1997 for stockpiling 1,473 cubic yards of fill (about 700 dump-truck loads). That permit was renewed for another year in February 1998. His most recent permit expired April 1999.

The permits were issued despite Souza owing the city several thousand dollars in fines. Larry Watanabe of the city Department of Planning and Permitting says stockpiling on agricultural land “would be allowedÉif it were related to a construction job nearby, and a stockpile was needed for temporary use.”

Souza incurred the fines for running a trucking operation on the site and for having an unpermitted building on the property. That building has since been torn down and today, only his family lives and works there. As far as running his business from the property goes, he says, “I can run what I want because it’s a family thing. It’s just me and my family, and I own the equipment.”

The DPP’s Watanabe says Souza may have an office at the site, but there must be “no physical evidence of a trucking business” — in other words no trucks and no stockpiles.

As far as the cleanup goes, Souza says he’s paid about $95,000 for it and the job is nearly done. “I’m waiting for them [the Department of Health] to come out and say I’m finished,” he says.

Souza may be in for a long wait. He has never submitted the required closure plan or site assessment that the DOH requires as a condition of closing a landfill. Without a proper site assessment, the DOH has no way of knowing whether and for what purpose the cleaned-up land is fit. For example, the waste is likely to include contaminated soils.

Souza dismisses such concerns. “Never had contaminated soil,” he claims. ” The only contamination was in their brain,” referring to the Department of Health investigators. He said he took soil samples to check if he could grow anything safely on the property.

“I’m pretty sure DOH will be satisfied,” he says.

Souza’s soil remarks to Environment Hawai`i contradict those he made on June 12, 1997 to a Clean Air Branch inspector who had visited his property while responding to a dust complaint. The inspector’s report, based on a conversation with Souza, says, “as a requirement for him [Souza] to obtain ownership of the property, (it was previously known as the George Grace site), he was to excavate and remove the contaminated soil that had been landfilled on the site in addition to removing previously stockpiled materialÉ. Thus he had excavated and removed the contaminated material and was proceeding to fill in the area with base coarse until the dust complaints were generated.”

 

 

It has taken Souza years, using his own trucks, to clean everything the Graces had left behind. He says he thought he’d have help from the state and is bitter about not getting any. He also feels the real polluters have escaped unpunished.

“When we first had the fire, on the news, [the Department of Health] was quoted saying we would work hand in hand,” Souza says. “When all was said and done, they said, ‘You’re on your own.’ ” Inspectors came periodically, but he says, “Nobody says nothing. I keep doing my cleanup.”

Department of Health files tell a different story. The post-fire report of William Perry, the state on-scene coordinator, notes that Souza had met with Harder and himself, and that Perry himself “attempted to convince Mr. Souza that there is a proper way to clean the site and he would need to be in compliance with the Solid and Hazardous Waste Branch Rules and Regulations.” Souza was encouraged to work with Harder and was also introduced to Grace Simmons, the state hazardous waste manager, to discuss proper disposal of hazardous waste under federal law.

Perry’s report states Sabrina Grace, the Gouveias, and David Souza were apparently “fully aware of the condition of the property and the processes (i.e., land filling and dumping waste) prior to the property transactionÉ. Mr. Souza, claiming never to have set foot on the property, does not understand the liability he incurred when purchasing the property.” (Souza’s reported claim that he had never set foot on the property until acquiring it is contradicted by Sabrina Grace.)

Today, Souza says, he understands the problem, but still feels cheated.

“I know that by buying the property, I [assumed liability], but no go making it like I did [the damage],” he says. In addition, Souza says that he’s a community man: “We donate. I did a $185,000 donation to Aloha United Way. Where’s the community now? We made the parking lots for the Wai`anae Coast Comprehensive Health Center. We’re community.”

 

 

State on-scene coordinator William Perry’s final recommendations, made September 5, 1996, were that a site assessment be done, that the Solid and Hazardous Waste Branch regulate Souza’s removal activities, and that the U.S. Environmental Protection Agency conduct a criminal investigation.

For three years, the Office of Solid Waste Management tried unsuccessfully to get Souza to report on his cleanup efforts. Office personnel have not set foot on the property since last September, having finally referred the case to the Attorney General’s office as well as the EPA. What actions they will take and when, one can only guess, since the policies of both offices is not to discuss ongoing investigations. As a result, a cloud of ambiguity hangs over this property, and while the parties currently involved seem to be inching towards a resolution, the question remains: Could the situation have been resolved sooner?

A state law passed in 1998 provides for jail terms for operators of illegal open dumps (up to 30 days in jail for each day the dump is in operation). The law also allows the courts to revoke a contractor’s license or a waste hauler’s Public Utilities Commission license for participating in illegal dumping. So far, the DOH has not pursued these avenues of punishment.

“We try to get them to stop the operation,” says Steven Chang of the DOH Solid and Hazardous Waste Branch. “In many cases, they’re scraping along. Whatever money they make, they consume. Many of these operations, show no assets, so there’s nothing to go after, just a piece of contaminated land.”

At the Puhawai property, all indications are that business-as-usual – the dumping, in any case — has stopped. The DOH’s Chang still holds out hope that Souza could ultimately be stuck with cleaning up the site at his cost. Restoring the property to its original condition is out of the question, Chang notes; even if Souza complies with the DOH, his property will eventually have to be recognized and treated as a closed landfill.

Removing everything from a landfill such as Souza’s, which has been building for more than a decade, would take millions of dollars, Chang says. A new owner would potentially be another deep pocket, in the highly unlikely event that Souza can sell it, he adds.

Souza disagrees. Even though he’s improving the property with a new rock wall and house, he says he’s had enough of the headaches associated with the property

“I’m ready to pull out. I’m ready to sell out,” he says.

1. The Souza dairy, called the Lucky S, occupied more than 1,800 acres of rocky land owned by the state between Yokohama Bay, on the Wai`anae Coast, and Mokuleia, on the North Shore. In 1994, the Board of Land and Natural Resources terminated the permit after efforts to get the Souza’s to cure several violations of permit terms and the Humane Society found that livestock had no water and little forage. For details, see “Poor Management, Inhumane Conditions On State Lands Used by Ranch, Dairies.”

— Teresa Dawson

Volume 11, Number 3 September 2000