All Quiet on UECA Front
I apologize to all my readers for the recent lull in postings, but it's been all quiet on the UECA front. It's still a subject of conversation in every meeting that I have with clients and with my friends at PADEP, but things are definitely in a holding pattern since the initial flurry of activity after the statute was enacted. PADEP has not posted any additional Q&A on UECA since April. My understanding in speaking with Troy Conrad at PADEP is that there are some things in the works, including the Department taking a long range look at the process for converting existing deed restrictions into environmental covenants. Hopefully, there will be more to report on that front shortly.
In terms of what is happening now, PADEP has posted the first wave of environmental covenants on the UECA page of its website, which is now functioning as the temporary registry. I've read through each of the covenants that have been posted. Here is what I have gleaned from a review of the posted covenants that may be useful to you:
- There are 12 covenants for Act 2 sites and 7 covenants for Tank Act sites.
- One of the covenants is for a property that is part of a federal superfund site in Montgomery County.
- All of the covenants except one use the format of the model covenant on PADEP's website.
- Most of the covenants are for sites using the Site Specific Standard that rely on pathway elimination.
- One of the covenants is for an SIA site.
- Two of the covenants specifically reference the fact that the sites are located in areas with local ordinances that prohibit groundwater use. One is for the City of Reading and the other is for the Borough of Emmaus. As you may recall, the fact sheets issued by the Department on UECA said that one alternative to getting covenants on off-site properties impacted by groundwater contamination would be to show that there was a local ordinance that prohibited private wells. The fact sheet seemed to imply that the ordinance needed to have specific language in it saying that the municipality would have to notify PADEP if the ordinance was changed, in order for the remediator to take advantage of the ordinance and not get off-site covenants. While I haven't read the City of Reading's ordinance, I can tell you that the covenant that the Department approved for the Act 2 site in the City of Reading said that it was the property owner's responsibility to notify the Department within 30 days if the local ordinance that restricted water use was modified so that it was no longer restricted. Although that puts the onus on the property owner to perpetually monitor the local water use ordinance in order to comply with the covenant, it may be a step further in the evolution of the Department's thinking which previously put the burden on the municipality to include notification language in its ordinance. A number of us told the Department in informal comments that we thought that requirement was unrealistic in that most municipal ordinances that require people to hook up to public water are done for economic reasons (getting more people to have to pay for local water service) than for environmental reasons, and that the Department's interests were probably an afterthought, at best, for local township supervisors.
- The compliance reporting requirements in the covenants are all over the place. What I mean by reporting requirements is that the model covenant on PADEP's website includes an optional provision requiring periodic certification that the activity and use limitations are being complied with. Several of the posted covenants have no provision on compliance reporting. Some of them require reporting to the Department every three years, while others require reporting on an annual basis. One of the covenants required monthly inspections of a capped area for the first six months after the covenant was signed, followed by six quarterly inspections, thereafter followed by annual inspections. The good news is that there is precedent for not including any compliance reporting in an environmental covenant. That's encouraging since the statute itself says compliance reporting is optional under Section 6504(b)(2), and there is no reason for it to be mandatory. It should be based on the facts and circumstances and the need for periodic reporting. The bad news is that it would appear that there are no set standards for the Department determining when no compliance reporting should be required, when it should be annual, or when it should be every three years. Maybe in the next round of the Q&A, or as the Department develops technical guidance on the implementation of UECA, it could provide some specific guidance for determining whether compliance reporting should be required and for determining the frequency of the reporting.
- One covenant was unusual in that it specifically allowed for an existing groundwater supply well on the property to be used but prohibited any drilling of new production wells. My reading indicated the site was using the statewide health standard and that there was contamination limited to the interior of the property. Ordinarily, I'd say that UECA might not have required that covenant inasmuch as the activity and use limitation was not needed to maintain the statewide health standard, which is measured at the POC well. While I don't know the specific underlying facts relating to the site, answer Number 11 on PADEP's UECA Q&A page addresses the situation where you have interior contamination only, and it states that since the property boundary is the POC, no environmental covenant is required.
I will continue to monitor the Department's implementation of UECA and report on any new developments.
Generally, on the brownfields front, it would appear that brownfield remediation work in Pennsylvania is continuing at a robust pace. The only area where I'd say that there has been any noticeable drop off is in the area of converting old industrial property to residential use. As with the residential real estate market in general, I sense that the market for residential property on brownfield sites has slowed temporarily. That's not to say that new homes aren't being sold, especially if they are condos or townhomes on brownfield sites and priced right. We continue to do work for developers on those types of brownfield sites. What we are seeing an increase in are developers that are looking for corner properties or properties in high traffic areas, looking to convert them into drug stores, restaurants, and banks. Those brownfield properties are being bought at a discount and developers that are looking for those types of sites are staying busy.
Happy Flag Day everyone.
