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September 2000
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Compliance Audits
By Ben Komrska, C.P.G.
Conducting
periodic compliance audits at an existing facility or for pre-acquisition
provides advantages to companies--advantages that can save money and time
while reducing potential liability.
Pre-acquisition audits are becoming vital prerequisites to property transfer. Audits can help identify existing or potential environmental liabilities. When contamination is discovered, cleanup alternatives can be assessed and liability protection measures can be put in place. This audit program is especially important for an owner who may be contemplating the sale of his company down the road, since typically if contamination if found, the current owner will need to address the situation prior to selling the property.
Conducting regular, thorough compliance audits at an existing manufacturing facility or at any site that handles wastes has many benefits. An audit helps identify when a firm is out of compliance and gives the owner a chance to rectify the situation, before a regulatory agency steps in and dictates how to correct the problem. This also reduces the likelihood that an agency will pursue enforcement action against the company and seek penalties for noncompliance.
Comprehensive audits identify situations where environmental liabilities or conditions exist that may create environmental problems. There are three levels of audits that can be performed: compliance audits, risk assessments and review of the overall management system(s) and practices. A compliance audit simply evaluates whether a facility is in compliance with applicable rules and regulations at the time the audit is conducted. It does not identify whether or not a facility has adequate systems in place to allow for continued compliance.
To help discover potential liabilities a company should also review their facility's operational management program. The review should evaluate whether operational procedures in place are adequate to maintain and ensure compliance on an ongoing basis.
Identifying an environmental problem will often allow the owner to retain control of the situation. Many times a company can simply clean up the problem before a regulatory agency becomes involved in the situation. This will result in saving money, since typically when a regulatory agency is involved, cleanups tend to be more costly.
Audits can also uncover liabilities that may not be obvious to managers or plant operators. Early identification of a problem often leads to a less costly solution, by avoiding a costly remedial action, before it becomes an environmental liability.
Concerns typically uncovered during an audit include incorrect storing and handling of hazardous materials, inadequate training of personnel, or a lack of understanding of the facilities regulatory requirements.
Audits should be conducted by a qualified consultant on a regular basis. These audits should take place every two to three years minimally and, ideally, every year. The audit procedure is a sort of preventive maintenance that could save substantial time and money for any facility that produces waste, and particularly when you are preparing to sell the property.
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Transaction
Information
Due
Care
By Lee Blodgett, R.E.P.A.
Purchasers
of contaminated property in Michigan have responsibilities referred to
as Due Care, which can require a new property owner to conduct further
investigations and remedies beyond a BEA. Although completing a BEA removes
the owner from the responsibility for clean up of existing contamination,
the owner remains responsible to eliminate exposure risk to site occupants
and visitors. Requirements include documentation that the site has been
evaluated from a health exposure standpoint, including direct contact,
drinking water, indoor and outdoor inhalation. Owners must demonstrate
that there is no exposure risk at their site, that there is a plan to
manage the exposure risk or they must undergo the processes necessary
to eliminate that risk, which can be costly. As part of the property assessment,
the consultant performing the sampling for the BEA should consider the
intended property use prior to developing a sampling plan, so that they
can incorporate a Due Care assessment into their investigation. In most
cases, compliance with Due Care can be incorporated at a minimal cost
beyond that of the BEA. Most lending institutions now require an assessment
of the Due Care plan. It is best to incorporate this planning into the
evaluation process and address it when the BEA is first undertaken. Doing
this will could render considerable savings and will also eliminate surprises
during redevelopment or reuse of the site.
What's
New at EC&S
EC&S
Welcomes New Team Members
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Richard Kral, P.S. |
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EC&S is pleased to announce the addition of two new staff members. First, Richard Kral, P.S. joined us on June 5th as our new Director of Surveying. Richard comes to EC&S with 26 years of survey experience and will be responsible for overseeing the entire survey department including quality assurance, cost estimating, and management of operations. Richard graduated from Central Michigan University and earned his P.S. registration in 1979. He has lived and worked in Northern Michigan throughout his entire career and his experience includes such high profile project as an ice rink/swimming pool complex, a multi-story office building, and numerous industrial sites as well as numerous residential survey projects.
Environmental
Bulletin
Regulatory
Update
By Rich Micklin, C.P.G.
As
part of EC&S's continuing education program, I attended the Michigan
Chamber of Commerce Environmental Seminar held in Lansing on May 25, 2000.
These types of seminars help EC&S employees remain current with changes
in environmental regulations. One of the main purposes of this seminar
was to outline revisions to Part 201of PA 451, which regulates cleanup
of hazardous substance releases from sources other than registered USTs.
Draft changes were rumored to be extensive.
The draft rules have been presented to the Department of Environmental Quality (DEQ) Executive Division. Finalization of the new rules has been delayed because of "role of government" issues. These issues generally revolve around industry's right to self-implement remedial actions vs. the DEQ's right to protect pubic interest by requiring supervised remedial actions.
The proposed rules are designed to clarify issues such as requirements for documentation of risk-based response activity, actions required of persons who have obligations to "diligently pursue" response activity, and activities that require DEQ approval as well as those which can be undertaken without DEQ approval or oversight.
Industry has proposed revisions that would enable parties to transfer ongoing remedial actions to the purchaser to facilitate property sales. Such actions might involve groundwater monitoring after remediation.
Once the DEQ Executive Division finishes its review, the package will be sent to the Legislative Services Bureau for legal editing. It will then be reviewed by the Office of Regulatory Reform for constitutionality and consistency with enabling legislation. The package will then be subject to public review. This process typically takes at least a year to complete so don't look for implementation before late 2001.
Brownfield
Redevelopment Funding
New
Brownfield Legislation Passed
By Mark Chilcott
On
June 6, 2000, Governor Engler signed legislation (a four bill package),
which substantially improves and expands Michigan's brownfields program.
Included are amendments to the Brownfield Redevelopment Authority (BRA)
and the Single Business Tax (SBT) Credit legislations, new legislation
concerning Obsolete Property Rehabilitation tax exemptions, and MEGA's
(Michigan Economic Growth Alliance) involvement with SBT and Brownfield
Redevelopment.
EC&S has been retained by a Kalamazoo developer to work on the City of Kalamazoo's largest downtown brownfield redevelopment, the Speareflex Project. The new legislation will bridge many of this project's brownfield and economic development impediments. EC&S is on the forefront of this new legislation and felt it was important to update you as to how it is being implemented at the local and state level.
To date, most local Brownfield Redevelopment Authorities have not had adequate time to review and incorporate this legislation into their existing brownfield plans. The MDEQ, MEGA, and the State Treasurer are meeting on a regular basis in an effort to clarify their understanding of the legislation. They hope to define their approval process as well as have program applications available by the end of August
For at least the next six to twelve months, the project approval process will be slower and more cumbersome. Developers and local BRAs who desire to take advantage of this new legislation are urged to plan ahead and act early to account for these increased time delays. Developers may need to provide proactive leadership and resources to help local communities implement the new brownfield legislation in a time frame that meets their projects needs.
State government should be commended for passing this legislation and for their implementation efforts. We will keep you advised as to the implementation of this new legislation.
Land
Development News
Land Use Permits: Understanding = Timely Projects
By Garth Greenan, P.E.
Development
of land requires completing a series of regulatory agency approvals. In
addition to the state and county requirements, most communities require
permits from the zoning or planning departments. These permits are normally
called land use permits. The permitting process is different in each community,
and is usually detailed in the communities' zoning ordinance. Some communities
have a single step approval process, while others provide both a preliminary
and final approval. Typically, the final land permits are not issued until
all other regulators have approved the project. It pays to meet with the
zoning administrator in the Township or City where you are planning a
project very early in the development process so you can understand the
process. When a Township Board approval is required, a time frame of 30
to 60 days may be required for the review process, and there is often
no way to accelerate the process. Understand the Land Use Permit process
and you'll be able to schedule the design and approval tasks to meet your
schedule.
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Phone 231-941-2366
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