Now the city could face steep fines because of shoddy work done by Penland’s company, which also may have exposed residents to health risks. The Ohio Environmental Protection Agency, which has the power to issue fines or refer the matter for criminal charges, is investigating.
The Regional Air Pollution Control Agency warned Dayton as early as February 2010 about lax oversight of its housing demolition program, and issued violations on 26 AR-controlled properties on Aug. 6, 2010.
But city documents show Dayton paid AR another $247,475 on Aug. 23, and $31,247 on Oct. 21. The city didn’t begin severing its ties with AR until Nov. 10.
RAPCA officials say asbestos material was found buried at the former Concord Foods site behind the Dayton Job Center on Aug. 30, 2011. Both the city and RAPCA allege that AR buried the material on the site. The city says AR used the property as a staging area for its equipment.
The Daily News investigation found AR demolished two apartment buildings in a heavily residential neighborhood in West Dayton without first removing all of the asbestos. The apartments sat one block apart, with the Dearborn Daycare Center, 532 Dearborn Ave., in between.
Penland is now in the Hamilton County Jail facing eight unrelated charges, including major drug trafficking and weapons charges. His company has been dissolved.
The city confirmed during its screening process in 2009 that AR was state certified to perform the demolition work and licensed to do asbestos removal, according to spokesman Tom Biedenharn.
He acknowledged the city did not do a criminal background check on Penland. Such checks, Biedenharn said, are “not standard industry practice.” A check with another area city found it follows the same practice as Dayton.
The Daily News uncovered Penland’s criminal record after about five minutes of online searching.
Biedenharn also said the city’s Aug. 23, 2010, payment to AR was processed by staff on Aug. 2 and 3 — before the city received notices of the RAPCA violations.
“The final payment on Oct. 21 was an oversight and should not have been made in light of our ongoing investigation,” Biedenharn said.
The city filed a lawsuit Friday in U.S. District Court to recover money paid to AR for work the company did not complete or performed improperly.
The lawsuit accuses AR of “bogus” asbestos surveys, fraudulent invoices, and illegal asbestos disposal, and says the city spent more than $10,000 on remediation efforts, including cleaning up the Concord Foods site.
“Sampling of the Concord Foods Property confirmed that the defendants had in fact buried a large quantity of asbestos,” the lawsuit says.
Calls and emails to an attorney for AR were not returned.
Dayton entered into three contracts with AR Environmental, including $506,675 for demolition work on March 31, 2010. Although AR was not the low bidder on that contract, Penland was given points for meeting the city’s request for minority or women’s business participation.
The contract was later expanded to $750,000, and AR was paid $1.03 million on its three contracts in 2009-10.
Since then, the city has had significant turnover in the positions that oversaw AR’s work. Building Services Director Max Fuller resigned on April 1 of this year, and Supervisor of Contract Compliance Fitz Murraine resigned Jan. 9, according to the city. Former Nuisance Abatement Supervisor Denver Williams now works for the city zoning department.
None of those three could be reached for comment, and city officials said they would not comment on whether any employees were disciplined as a result of the AR case.
'Numerous problems’
Penland incorporated AR Environmental with the Ohio Secretary of State’s Office in 2007, listing as the corporation’s purpose “to perform environmental clean-up (and) to provide lead abatement and asbestos abatement …”
Penland’s partner was Reuben Peppers, previously of Buckeye Asbestos Removal. RAPCA officials said Buckeye Asbestos had a history of environmental violations, and Peppers has Cincinnati convictions for failure to file tax returns.
In August 2009, AR landed its first two contracts with the city, which eventually authorized the company to perform asbestos surveys, remediation and building demolition on dozens of properties. Most asbestos removal requires a contractor to notify RAPCA, and demolition requires a city wrecking permit. The permits, and the speed in which they were issued, became a bone of contention between RAPCA, the city and the contractors doing demolition work.
“If there is asbestos, you have to remove it properly and dispose of it properly before you demolish,” RAPCA Administrator John Paul said. “And that’s because this is a very serious health threat.”
City records reviewed by the Daily News show a dispute began almost immediately after the first contract was signed. In a Sept. 3, 2009, letter to Williams, Penland argued that the city was “very unprofessional” in not calling for asbestos surveys on all of the homes AR was to demolish. Williams responded with a different interpretation of EPA rules, and said Penland could pay for surveys himself if AR wanted to do them.
By February 2010, James Kent, another contractor doing demolition in Dayton, was telling Penland, RAPCA and city officials that he had “encountered numerous problems” with AR Environmental.
“We have had to furlough our guys since Christmas because we have not been able to secure wrecking permits due to lack of proper documentation regarding the asbestos abatement of our contracted houses,” Kent wrote in an email, saying he had been unable to reach Peppers for three weeks. The Daily News was also unable to reach Peppers.
RAPCA’s Paul said he met with Penland and Peppers multiple times about violations. He also met with city officials both in early and late 2010, urging them to gain better control of their asbestos remediation and demolition program — not just relating to AR, but also other contractors who had violated asbestos regulations .
“We were concerned with the city’s degree of control on the situation,” Paul said. “We met with the city two times (and) we expressed our concern that they were exposing themselves to liability and exposing citizens to a public health problem.”
On Feb. 3, 2010, Dayton nuisance abatement specialist Bill O’Connell sent an email to RAPCA asbestos coordinator Sarah Gostomsky, suggesting RAPCA could speed up its review of demolition requests.
“As you know, the city is getting a lot of federal dollars. We are willing to share some with you,” O’Connell’s email said. “I have been asked to see if you & your organization would like some assistance in regards to processing our demo applications. We are in a position to fund a temporary/intern position for a year or so for you.”
RAPCA declined the offer and recommended instead that the city use the money to hire “a licensed and experienced individual or company” to oversee the city’s demolition contracts.
“Violations of the asbestos EPA regulations have occurred during the 2009 demolition project,” Gostomsky wrote to O’Connell. “Miscommunication and no oversight of the project has caused problems as well as delays in the permit process.”
More than nine months later, after a host of further violations, the city told RAPCA that Kevin Powell, formerly of Dayton’s police department, was being hired to oversee demolition. RAPCA meeting notes from that Nov. 23 session say Powell admitted he had no experience with asbestos or EPA regulations.
The last straw
On Aug. 19, 2010, RAPCA and the city of Dayton inspected an apartment building at 2800 Jerome Ave., where AR stated it had removed several types of asbestos materials. RAPCA’s notice of violation says inspectors were “unable to locate an area where 2,890 linear feet of TSI pipe insulation was removed,” as AR had claimed.
There was a reason for the confusion over the pipe insulation, which AR stated was in the basement of the property. The apartment building at 2800 Jerome Ave. didn’t have a basement.
A Dec. 28 letter from the city of Dayton to AR’s attorney terminating AR’s contract, says the company “performed either a fraudulent or grossly deficient asbestos survey” at the Jerome Avenue site.
When RAPCA officials returned to the apartment building on Aug. 24, they discovered it was no longer there. Sometime between Aug. 19 and 24, while city and RAPCA officials searched documents to determine how much asbestos was on the site, AR demolished the building.
RAPCA officials inspected the debris pile Aug. 24 and found “friable” asbestos-containing material “mixed throughout all the demolition debris.” Friable asbestos refers to material that is crushed or crumbled sufficiently to release fibers into the air.
One block south, at 614 Dearborn Ave., inspectors found a second apartment building that had been demolished by AR. The debris pile there contained “extensively damaged” floor tiles containing asbestos, according to RAPCA records.
Mark Needham, asbestos program supervisor for the Ohio Department of Health, said asbestos exposure can lead to mesothelioma and other lung cancers; children are more susceptible to exposure because their lungs are still developing, he said.
Needham said the biggest threat is when asbestos fibers are friable and airborne — as could occur in demolition — but he said there’s no way to know the level of exposure at the Jerome and Dearborn Avenue sites, because there was no air monitoring.
Needham also said there’s no test that could reveal today whether someone near the site is at elevated risk for asbestos-related illness, because those cancers have a 20- to 40-year latency period.
“There were improper notifications, there were (missing) notifications, there were work practice violations, there were disposal violations — (AR) seemed to cover the entire field on ways you can violate our asbestos rules,” Paul said. “I think the Jerome Street thing was the straw that broke the camel’s back. As soon as that happened, we said, we’ve got to refer this to the state. We’re apparently not being very effective in communicating.”
Changes from city
The city began moving to terminate its relationship with AR last November. On Nov. 10, Fuller informed city inspectors and clerks that AR was not to be paid or assigned more work until further notice. Then on Dec. 28, Fuller wrote to AR’s attorney to terminate the company’s contract “for cause.” Fuller resigned three months later, and a Dayton Daily News review of his city personnel file revealed no negative reports about his work performance. City officials would not comment on why he left.
Dayton continues to demolish hundreds of homes per year, but in recent months it has changed several procedures, according to Biedenharn.
For example, on new contracts Dayton no longer allows the same company to survey a property for asbestos, remove the asbestos and demolish the structure. Three different companies now must perform those functions separately.
Also, before any payment is issued for asbestos remediation, Dayton now requires landfill receipts from the contractor showing that the asbestos was properly disposed of at an approved asbestos waste facility. These manifests previously had been due only at the time of final payment.
This week Dayton solicited bids for inspections to verify that asbestos abatement has been done correctly at more than three dozen Dayton properties.
Ohio EPA spokeswoman Heather Lauer said local asbestos violations can be handled by RAPCA if the penalty is less than $50,000. But EPA has issued its own orders on three asbestos cases in Montgomery County in the past five years, the most recent being a $227,700 penalty against RLR Investments in 2008 for violations at the former Days Inn, 330 W. First St., in downtown Dayton.
Lauer confirmed RAPCA referred the AR case to the EPA, which is investigating.
In its violation notices sent to AR and the city, RAPCA cites 20 structures where AR allegedly did asbestos remediation work without notifying RAPCA, and 17 structures that were demolished by AR and other contractors without notification.
In a Jan. 5, 2011, email, city inspector Dennis Zimmer said inspections revealed AR skipped some or all of the asbestos remediation at 416-418 N. Williams St., 1221 W. Fifth St., 916-918 Catalpa Drive and 302 Xenia Ave. — work that AR said was complete and for which the city had already paid.
Asked if RAPCA knew how many buildings may have been demolished with asbestos still inside, Paul said, “The short answer is no.”
Matthew Phoenix, an asbestos abatement worker who lives two blocks from the Jerome and Dearborn sites, says asbestos health risks are severe enough that he wears a mask and protective suit on the job, changing clothes in a sealed containment area.
But he said that caution wasn’t used at 2800 Jerome Ave.
“There were large rocks out there, and you could see the asbestos dust on them, and the pile wasn’t covered all the way,” he said. “It’s sad; kids run by here all day long, and nobody was really caring about it.”
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