COLORADO DEPARTMENT OF PUBLIC HEALTH AND ENVIRONMENT 

FINAL AGENCY-WIDE POLICY ON SETTLING ADMINISTRATIVE AND/OR 

CIVIL PENALTIES AGAINST ELIGIBLE GOVERNMENTAL ENTITIES

 

______________Signed_______________________ ____5/9/08____ 

Martha Rudolph, Director Date 

Environmental Programs 

 

______________Signed ________________________ ____5/9/08_____ 

Paul Tourangeau, Director Date 

Air Pollution Control Division 

 

______________Signed __________________________ ____5/9/08_____ 

Gary Baughman, Director Date 

Hazardous Materials and Waste Management Division 

 

______________Signed __________________________ ____5/9/08_____ 

Steve Gunderson, Director Date 

Water Quality Control Division 
Colorado Department of Public Health and Environment Revision Date: 5/5/08 

Subject: Agency-Wide Policy on Settling Administrative and/or Civil Revision No.: 2 

Penalties against Eligible Governmental Entities Page 2 of 4 

COLORADO DEPARTMENT OF PUBLIC HEALTH AND ENVIRONMENT 

AGENCY-WIDE POLICY ON SETTLING ADMINISTRATIVE AND/OR CIVIL 

PENALTIES AGAINST ELIGIBLE GOVERNMENTAL ENTITIES 

I. INTRODUCTION 

A. Definitions 

“Eligible Governmental Entity” means a county, municipality or eligible local governmental district.

“County” means those political, governmental or administrative subdivisions of the State of Colorado listed 

in Article 5 of Title 30 of the Colorado Revised Statutes. 

"Municipality" means a city or town or a city or town incorporated prior to July 3, 1877, whether or not 

reorganized, and any city, town, or city and county that has chosen to adopt a home rule charter pursuant to 

the provisions of article XX of the state constitution (section 31-1-101(6), C.R.S.). 

“Eligible Local Government District” is defined as a Special District, General Improvement District, Public 

Improvement District, or Metropolitan Sewage Disposal District that provides one or more of the following 

services: drinking water utilities, waste water utilities, solid waste disposal or collection and transportation 

of solid waste. 

“Special District” means a quasi-municipal corporation and political subdivision organized or acting 

pursuant to Article 1 of Title 32, C.R.S. 

“General Improvement District” means a quasi-municipal corporation and political subdivision organized 

or action pursuant 31-25-601 C.R.S. 

“Public Improvement District” means a quasi-municipal corporation and political subdivision organized or 

action pursuant to the Colorado Public Improvement District Act of 1968 (30-20-501 C.R.S.). 

“Metropolitan Sewage Disposal District” means a district formed under 32-4-501 C.R.S.

“Department” means the Colorado Department of Public Health and Environment. 

B. Purpose and Intent 

This policy sets forth the department’s approach to reaching settlement with eligible governmental entities 

for administrative and/or civil penalties. 

Eligible governmental entities confront unique constraints in complying with environmental requirements: 

• Public financing typically is more cumbersome than for regulated entities in the private sector; 

• Municipal functions can trigger large environmental obligations, which may overwhelm county or 

municipal tax bases; and 

• Despite noncompliance, some services provided by an eligible governmental entity are essential and 

must often continue to operate (e.g., provision of water and sewer service). 

Despite the unique constraints typically experienced by eligible governmental entities every eligible 

governmental entity is required to comply fully with the statutes and regulations administered by the 
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department, and will be regulated in a manner consistent with regulated entities in the private sector to the 

fullest extent possible. In recognition of the unique constraints experienced by eligible governmental 

entities, this policy is intended to achieve statewide consistency in responding to noncompliance by eligible 

governmental entities by providing guidance to department staff.

C. Applicability and Legal Effect 

This policy applies to all administrative enforcement actions against eligible governmental entities within 

Colorado, regardless of whether the noncompliance was detected through a department inspection, report 

from the public, a self-report resulting from regulatory or permit requirements, compliance assistance, 

environmental audit or documented, systematic due diligence, or otherwise self-disclosed. 

As with any other regulated entity, eligible governmental entities that have conducted a voluntary selfevaluation and discovered potential noncompliance issues, have the ability to use the Environmental Audit 

Privilege and Immunity Law. (See “Policy Regarding Implementation of the Colorado Environmental 

Audit Privilege and Immunity Law sections 13-25-126.5, 13-90-107, 25-1-114.5, and 25-1-114.6, C.R.S.”.) 

This policy supplements the principles and presumptions in the “Colorado Department of Public Health and 

Environment Agency-wide Supplemental Environmental Projects Policy” and in each environmental 

division’s enforcement policies, and should be read in conjunction with these policies. 

This policy does not apply to settlements of claims for stipulated or suspended penalties for violations of 

consent orders or other settlement agreement requirements. 

II. ADMINISTRATIVE PENALTY CALCULATION AND SETTLEMENT 

The department, through its Air Pollution Control Division, Water Quality Control Division, and Hazardous 

Materials and Waste Management Division, periodically conducts inspections of eligible governmental 

entities to determine compliance with environmental laws. If any violations are discovered that are 

considered serious violations or otherwise warrant the assessment of an administrative penalty, the 

department will assess a penalty that is consistent with those assessed against regulated entities in the 

private sector for violations of the same or similar requirements. 

The department will not waive an administrative penalty simply because the regulated entity is an eligible 

governmental entity. However, the department, at its sole discretion, may exercise flexibility in settling 

administrative penalties against these entities as follows: 

A. Penalty Calculation 

As provided in each division’s penalty calculation policies, department staff will calculate all upward 

adjustments to the penalty base numbers on the basis of all facts known about the violations (aggravating 

factors). The department will then calculate any downward adjustments based on relevant facts to mitigate 

the penalty (mitigating factors) and arrive at an appropriate final penalty amount. 

B. Penalty Settlement 

1. An eligible governmental entity may claim an inability to pay the full penalty, or claim other 

financial constraints. The burden is on the eligible governmental entity, in these cases, to 
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Penalties against Eligible Governmental Entities Page 4 of 4 

demonstrate why such constraints result in an inability to pay a full penalty or significantly impede 

its ability to comply or perform a remedial measure. CDPHE will not accept claims of, or assume, 

financial constraints on an eligible governmental entity without detailed substantiation from an 

eligible governmental entity official, normally the chief fiscal officer, with direct responsibility for 

that entity’s financial status. (See EPA’s Munipay Model for guidance on demonstration of an 

inability to pay.) 

2. If an eligible governmental entity satisfactorily demonstrates an inability to pay the penalty, in 

whole or in part, department staff should first consider the use of an alternative payment plan to 

obtain an appropriate penalty prior to considering suspension or waiver of a penalty. 

3. The department should consider whether implementation of a supplemental environmental project 

by the eligible governmental entity is an appropriate mechanism with which to resolve some, or all, 

of the administrative penalty. Implementation of a supplemental environmental project shall be in 

accordance with the procedures and requirements set forth in the “Colorado Department of Public 

Health and Environment Agency-wide Supplemental Environmental Projects Policy” 

(www.cdphe.state.co.us/el/cross_media/seps.html). 

The department may resolve the entire administrative penalty (including the economic benefit 

portion of the penalty) against an eligible governmental entity through the completion of a SEP, 

provided that all of the following conditions are satisfied. The eligible governmental entity: 

i. Agrees to return to compliance promptly and remedy any adverse impacts of noncompliance 

within a reasonable period of time; 

ii. Has not been found to have committed serious violations, which are defined as follows: 

a) Violations that are prone to cause significant impact to human health or to the 

environment; 

b) A pattern of violations that demonstrate management systems are not adequate to address 

environmental issues; or 

c) Convictions for violations of environmental laws or out-of-court settlements of formal 

charges of such criminal violations. 

iii. Demonstrates a good faith intention to maintain future compliance with all applicable 

environmental requirements, including, but not limited to, conducting periodic compliance 

audits; and 

iv. Agrees to investigate pollution prevention, source reduction and resource conservation 

opportunities, and implement them, as established to be feasible by the eligible 

governmental entity and agreed to by the department. 

If an eligible governmental entity does not satisfy all of the conditions for mitigation described 

above, the department will not settle the entire penalty through a SEP, but may mitigate the penalty 

consistent with the degree to which the conditions are satisfied, and with the factors set forth in each 

division’s penalty policy.