Loading...
Memo- Proposed Settlement w/ the MPCA for the Reimbursement of Costs Associated w/ the 7th St Landfill Cleanup Act MEMORANDUM To: Mayor Redepenning and Hopkins City Council From: Dick Nowlin, Doherty, Rumble & Butler Jim Gessele, City Engineer Re: Proposed Settlement with the MPCA for the Reimbursement of Costs Associated with the 7th Street Landfill Under the Landfill Cleanup Act Date: May 15, 1997 This memo provides a summary and recommendation concerning the possible settlement with the Minnesota Pollution Control Agency for the reimbursement of certain costs incurred in connection with the investigation of the? Street LandfilI (the LandfilI) pursuant to Minnesota's Landfill Cleanup Act (LCA or the Act), Minn. Stat. ~ 115B.39, et seq. The LCA, enacted in 1994, authorizes the reimbursement of environmental response costs to public and private entities which acted to close permitted sanitary landfilIs in a timely and responsible manner in accordance with the provisions of the Act. The Hopkins 7th Street Landfill was a qualified facility, and the City officially complied with the closure requirements and received a Notice of Compliance on October 2, 1996 establishing that it had taken all necessary actions to close the facility under the Act. The process of investigating and remediating the? Street Landfill has been lengthy and unique. See the attached Chronology. The LandfilI physically ceased operating in 1979. The City acted to place final cover on the Landfill and install long term monitoring wells shortly thereafter. It notified the MPCA and Hennepin County in 1980 of the actions which had been taken to physically close the LandfilI. The MPCA never formally acknowledged the receipt of the closure communication and did not formally approve the 1980 closure. With the passage of Minnesota's Superfund law in 1981, the MPCA began to study both closed and operating landfilIs to determine whether the release of contaminants to the environment was occurring at these facilities. Beginning as early as 1975, studies had indicated that contaminants were being released from the Landfill to the environment. Monitoring in the mid 1980s documented that these releases were continuing and involved both methane migration and groundwater contamination. Based on this information, the MPCA placed the Landfill on the State Superfund List - Permanent List of Priorities. Under the Superfund law, the MPCA had the authority to demand the performance of contaminant investigations and remedial action at Superfund sites. In 1988, the Agency approached the City and essentially demanded that a comprehensive groundwater and methane NOWLID 912582. [ migration study be performed on the Landfill and that appropriate response actions be taken to remediate contaminant impacts. A Closure Order was negotiated and executed by the Agency and the City which required the performance of an extensive groundwater and methane migration investigation. The MPCA could have chosen to negotiate a Superfund Consent Order but chose a Closure Order instead. This was acceptable to the City because a Consent Order would have necessitated a more elaborate study and procedure. In connection with the performance of this study, it was learned that significant amounts of methane were migrating off site from the Landfill to the Westbrooke homes. The City immediately proposed the development and implementation of a methane remedial measures plan designed to mitigate/prevent this migration and alleviate the potentially dangerous situation. After considerable interaction, the Agency authorized the development of this interim remedial measures plan and the implementation of an elaborate interim remedial measures program involving the excavation of a 50' buffer area between the eastern edge of the waste deposit and the Westbrooke homes and the installation of a passive methane barrier. Faced with the excessive cost of this remedial project, the City petitioned the Agency and eventually the legislature for financial assistance for this effort. Special legislation was passed which provided the City with $1.6 million for the construction of the methane mitigation project, with payment coming from the Metropolitan Landfill Contingency Action Trust Fund (MLCAT). The cost of the project exceeded projections and supplemental legislation was passed in 1994 to provide an additional $800,000 to fund the methane remedial action program. Approximately $2 million was eventually received by the City from the Agency after the submission of invoices and proof relating to the expenditures. A $400,000 deductible had been provided in the legislation. FolIowing completion of the methane remedial measures program, the City undertook to qualify the Landfill as a closed facility under the LCA. After considerable negotiation, the Agency issued a Notice of Compliance. Incident to the effort, the City was required to reacquire land owned by Rutledge and AB Johnson located to the north of the Landfill under which waste was located and from which methane was emanating. Following issuance of the Notice, the Agency assumed the responsibility for performing further remedial action at the Landfill and proposed, and eventually instalIed, an active methane recovery system with vacuum piping around the perimeter of the Landfill and a flare for the incineration of the collected gases. This system was installed in 1996 and is now in operation. The City has recently received information relating to the success of the active methane recovery system. The Agency has promised to transmit copies of the annual reports relating to the system in the future. The City prepared and submitted an application for the reimbursement of certain costs associated with the investigation of the Landfill for which it had not been reimbursed from MLCAT funds in March, 1995. In large part, the application requested reimbursement of costs associated with the groundwater and methane migration investigation performed as a result of the Closure Order beginning in 1988. NOWLID 912582.1 2 Since the City had received funding under MLCAT, the Agency's assessment and the negotiations for cost reimbursement were complex. Complexity was inevitable because Hopkins was the only entity to receive landfilI remediation funding pursuant to MLCA T. In addition, the Agency's records relating to MLCAT reimbursement left questions as to just which costs had been paid by MLCAT funds. The Agency spent a great deal of time reviewing the City's application so as to insure that there were no double payments to the City as a result of the previous reimbursement. The LCA provides reimbursement only for out-of-pocket investigation and response costs associated with environmental response actions at a qualified facility. The Act does not allow reimbursement of costs associated with expenses which were required by a landfill permit and also specifically precludes the payment of costs for administrative and legal expenses associated with investigation and remediation. The Act also provides that there is to be no reimbursement for: "The acquisition of real property ifrequired of the owner or operator in order to carry out requirements of the facility permit or applicable solid waste rules." Minn. Stat. 9 I I5BA3, subd. 3(b)(2). and that: "The Commissioner shall not issue reimbursements for expense statements filed after October 15, 1996, and shall approve or deny all reimbursement requests by October 15, 1997. The Commissioner shall fully reimburse all persons eligible for reimbursement no later than six years after the date of notice of compliance for the facility under Section 115BAO, subd. 7." Minn. Stat. 9 I15BA3. The Act also provides a $250,000 deductible applicable to political subdivisions that own or operate facilities. Minn. Stat. Section 115BA3, subd. 3(a)(1)(i). Intense negotiations vis-a-vis the cost reimbursement application began in November and continued through April 28, 1997. The City's initial application requested the reimbursement of approximately $700,000 of eligible environmental response costs over and above the $250,000 deductible. A portion of these costs involved the resubmission of costs which had been subject to the MLCA T deductible of $400,000. The Agency's first proposal was to disallow much of the MLCAT eligible deductible. After repeated communication and correction with regard to decisions made under MLCAT, the Agency agreed to consider all of the costs and expenses included in the MLCAT deductible as eligible for reimbursement under the Act. At the most recent meeting, Agency staff eventualIy proposed to reimburse the City $650,000 for environmental response costs and to waive costs associated with groundwater monitoring responsibilities which the City should have performed in 1995. Because of the delay experienced in resolving the cost reimbursement request and as a result of the additional costs incurred in the acquisition of the Rutledge and ABJ properties ($25,000 Rutledge land acquisition; $130,000 ABJ land acquisition; and $20,000 relocation), we amended our NOWLID 912582.1 3 reimbursement application in December 1996 to request $175,000 in addition to the initial $700,000. The Agency staff has refused to provide any reimbursement for the $175,000 in land acquisition and relocation costs stating that this request was not eligible because it was submitted after October 15, 1996 and because payment for the acquisition of real property to repurchase land within the initial permitted landfill footprint would be contrary to the provisions .of the Act. The total amount spent by the City in performing all of the landfill investigati.on and remedial action work since 1988 is approximately $4,000,000. The City has received reimbursement from the State/MPCA in the amount of $2,030,000. Accepting the settlement offer would raise the reimbursement total to $2,680,000. If the City were to accept the MPCA's proposed settlement for cost reimbursement under the Act, the first-partial payment would be received this June. The remaining amount would be paid in annual installments over the next 4 years. The MPCA does not pay interest on the reimbursement. Litigation Alternative The City could reject the proposed $650,000 settlement- The Agency staff has stated adamantly that this number is their final offer and that they would contest even this amount in litigation. I believe both statements to be true. Thus far, the Agency has not been sued under the Act in relation to a reimbursement payment. City litigation, if brought, would need to contest the Agency interpretati.on vis payments for the Rutledge and ABJ land acquisitions. Challenging the Agency's determination regarding eligible investigati.on costs would only increase the reimbursement by, at most, $50,000. Litigation costs - District Court and Court of Appeals - could amount to $50,000. Though we believe that the Agency staff is misinterpreting the real property exclusion (Minn. Stat- ~ 115B.43, subd. 3(b )(2), in excluding payment for the Rutledge and ABJ land, the circumstances surrounding this sale and reacquisition would be "paraded" before the Court and the equities would not be favorable. The fundamental "right" or doctrine that an administrative agency's interpretation of "its" rules and statutes would also come into play and a judge would have difficulty in siding with the City's relatively technical contention that the land acquisition was not required by permit or the solid waste rules. Recommendation In light of the significant costs .of litigation, the difficulty of significant financial success and the possibility that a judgment would come in below the $650,000 figure, it is our recommendation that the City accept the proposed settlement for the Landfill Cleanup Act reimbursement- Information re: Property Acquisition See Attached NOWLlD912582.1 4 1964 1971 1972 1974 1975 1975 1975-76 1979 1981 1984 1987 1988 (June) 1988 1988 (summer) 1988 (July) 1989 (Jan) 1989 (May) 1989 (Aug) 1990 (Mar) 1990 (Mar) 1990 (Mar) 1990 (Mar) 1990 (Mar) 1990 (May) 1990 (May) 1990 (Aug) NOWLJF 272850.2 HOPKINS 7TH STREET LANDFILL CHRONOLOGY City began operating Solid Waste disposal facility at Landfill site Solid Waste Facility Permit and License issued by MPCA and Hennepin County for the Landfill City conveyed 11 unused acres on east side of Landfill to Centurion Construction for a townhome construction Landfill gas monitoring began east of waste deposit near townhomes Passive gas venting system and monitoring probes installed between waste deposit and townhomes MPCA required and City performed hydrogeo-groundwater monitoring and contamination study MPCA initiated methane generation and migration study Landfill closed per closure agreement: closure plan approved by MPCA Disposal Site Closure Record submitted to MPCA MPCA required and City installed groundwater monitoring system and performed monitoring Landfill placed on MPCA Superfund list: PLP MPCA and City negotiate and execute Closure Order by Consent requiring extensive methane and groundwater study and Remedial Measures/Remediation Plan Work regarding Closure Order begins: decomposition gas investigation and groundwater investigation Extensive gas monitoring performed along east boundary; additional monitoring wells/probes installed: gas (18); groundwater (7) Preliminary Evaluation Reports submitted to MPCA: Site Assessment and Decomposition Gases Investigation Methane and VOC Soil Gas Survey Report submitted to MPCA Geotechnical Investigation and Installation Report submitted to MPCA Quality Assurance Project Plan for Gas Monitoring submitted to MPCA Phase I groundwater investigation submitted to MPCA Environmental Investigation Report (Opus Property) submitted to MPCA Environmental Investigation Report (Opus Property) submitted to MPCA Decomposition Gases Investigation Report submitted to MPCA Geotechnical Investigation and Environmental Monitoring System (EMS) Installation Report Decomposition Gases Investigation Report approved by MPCA. Agreement regarding performance of methane control FS Landfill Gas Remediation Feasibility Study 1990 (Aug-Nov) 1990 (Sept) 1990 (Nov) 1990 (Dec) 1990 (Dec) 1990 (Dec) 1991 (Jan) 1991 (Feb) 1991 (Mar) 1991 (Apr) 1991 (Apr) 1991 (May) 1991 (May) 1991 (Mar-July) 1991 (June) 1991 (June) 1991 (July) 1991 (July) 1991 (July) 1991 (Aug) 1991 (Sept) 1991 (Oct-Nov) 1991 (Oct) 1991 (Oct) 1992 (Feb-Nov) NOWLIF 272850.2 Methane Feasibility Study and alternatives analysis with passive methane control/remediation barrier proposal submitted to and approved by MPCA. Water Monitoring Proposal and Geotechnical Investigation Addendum Award Consultant Contract to Rieke Carroll Muller (RCM) Associates for barrier design Preliminary Environmental Monitoring Plan and Contingency Action Plan submitted to MPCA 7th Street South Landfill Gas Remediation - Project Manual (Bid Specifications) City/Braun submitted Site Safety Plan for Trench Excavation and HDPE Sheet Installation to MPCA Gas Control and Recovery Remedial Measures Plan and Alternatives Report Submitted to MPCA Environmental Monitoring Plan including Westbrooke relocation reviewed and approved by MPCA Revised Plans for construction of Interim Methane Control (IMC) System to submitted to MPCA Site Assessment Report submitted to MPCA Water Monitoring Plan (revised) submitted to MPCA Legislation enacted authorizing $1.3 million MLCAT Funds for Interim Methane Control System City submits work plan to MPCA for IMC System Waste excavated along east side of Landfill and Interim Methane Control System installed Groundwater Investigation: City/Braun submit report to MPCA requesting authorization to install six more GW wells NE, E and SE of LandfilL Site Assessment Report (revised) submitted to MPCA Gas Control/Recovery Remedial Measures Plan and Alternatives Report submitted to MPCA Earth Protectors/town home owners litigation vs. City. TRO to prevent excavation and installation of IMC System denied. Methane Feasibility Study/Remedial Action Report for entire Landfill submitted to MPCA MPCA transmits requirement to City to correct barrier deficiencies City retains Lockman & Associates to assist with correcting barrier deficiencies Braun/MPCA communications regarding Gas Control/Recovery Remedial Measures Plan and Alternatives Report Phase II Geotechnical Investigation/Environmental Monitoring System Work Plan submitted to MPCA Phase II groundwater investigation (Braun) submitted to MPCA: Authorization requested to install six additional off site wells Braun/RCM/City and MPCA interaction regarding Methane Monitoring focusing on problems regarding IMC System 1992 (Nov) 1992 (Nov) 1993 (Jan) 1993 (J an) 1993 (Feb-June) 1993 (Apr) 1993 (June-July) 1993 (June) 1993 (Aug) 1993 (Sept-Dec) 1993 (Nov) 1993 (Nov) 1993 (Nov) 1993 (Sept) 1994 (Feb) 1995 (Jan) 1995 (Jan) 1996 (Jan) 1996 (Jan) NOWLIF 272850.2 Phase II Geotechnical Investigation EMS Installation Report Summitt Enviro Solutions conducts soil-gas vapor survey of residential area adjacent to Landfill Braun Phase II Site Assessment Report submitted to MPCA Geotechnical Investigation and EMS Installation Report submitted to MPCA Braun/Lofy (Lockman & Associates) methane monitoring, modeling and assessment focusing on problems with IMC System Work Plan for Additional Wells and Proposal for EMS Monitoring Submitted to MPCA Braun, Ames, City and MPCA meet; discussions regarding continued Landfill gas migration toward Westbrooke. MPCA transmits letter regarding failure of IMC to work effectively. Spring Groundwater Monitoring Report submitted to MPCA Summit Environmental performs Gas/Vapor Assessment to identify specific source of failure Braun/Lofy gas monitoring and assessment information sent to MPCA Phase II Site Assessment Report (Revised) submitted to MPCA Phase II Geotechnical Investigation and EMS Installation Report (Revised) submitted to MPCA Annual Groundwater Monitoring Report submitted to MPCA Summer Landfill Gas Monitoring Report submitted to MPCA Phase II Geotechnical Investigation and Site Assessment Report (revised) 1994 Annual Groundwater Monitoring Report submitted to MPCA 1994 Annual Landfill Gas Monitoring Report submitted to MPCA 1995 Annual Groundwater Monitoring Report submitted to MPCA 1995 Landfill Gas Monitoring Report submitted to MPCA