ENVIRONMENTAL REGULATIONS

Environmental Regulations that can Cause Unforseen Construction Project Costs

Construction contractors realize the importance of well-crafted contract language to protect against owner claims related to delay or unanticipated conditions at the project site. Contracts should address unanticipated environmental risk as well with contingencies for such surprises on the job. Typically, if unanticipated hazardous waste is discovered during the job, the contractor is contractually protected from delay claims, and the owner-developer is responsible for the transport and disposal of the waste material as well as any related environmental services.

But an ounce of prevention is worth a pound of cure: both contractor and owner benefit from anticipating all potential environmental costs and delays before the job begins. If the owner-developer has retained a good environmental consultant during the site acquisition and preparation phase, then these issues may have been raised with the owner. But the contractor should not rely on such communication between the consultant and owner. Rather, the contractor’s knowledge of these regulatory traps and his or her communicating them at the pre-construction meeting and throughout the project may avoid project delays and cost overruns, and foster a long-term working relationship with the developer-owner.

These regulatory traps that the contractor should raise with the owner, as appropriate, include:

UTILITY HOOKUPS INTO STREETS

The job may require that the contractor extend water and sewer pipelines from the site to the main lines in the street. It is common for soil or groundwater contamination to underlie the paved street. Any contaminated soil in the excavation must be handled to protect worker safety and disposed of properly. Further, the street contamination may extend beyond the excavation and may have come from the project site. Though most Washington cities will accept a restrictive covenant on the contamination left in place, other cities, depending on the site conditions, may seek removal of the contamination or some engineered remedy, which could be very expensive and delay the project.

FORMER DRY CLEANER SITES

These sites often have soil and ground water contaminated with chlorinated solvents, such as perchloroethene (PCE). The Washington State Department of Ecology (Ecology), which regulates hazardous waste cleanups, recently adopted a new analytical method for these solvents. This method yields lower solvent detection limits and thus Ecology lowered the cleanup level by an order of magnitude for some of these solvents, such as PCE. The net result is an expanded soil volume that exceeds the cleanup level, and thus greatly increased disposal costs.

DISCHARGE OF GROUND WATER TO THE SANITY SEWER

The contractor or owner must obtain a local government permit for the discharge of contaminated ground water. In recent years, these permits have become more stringent. Depending on the contaminant and concentration levels, the water may have to be placed in Baker tanks for sampling and analysis to be certain that it meets discharge criteria. For example, the discharge criteria are very strict in King County for polychlorinated biphenyls (PCBs). If criteria are not met, then the water may have to be treated on or off-site before discharge or disposal. This process can add cost and delay to the project.

CONTAINED-IN POLICY

If the owner’s consultant determines that the soil at the project site includes a federally listed hazardous waste, such as PCE, then a regulatory process is triggered: If the waste meets certain criteria, then it must be disposed of at a hazardous waste landfill. If the waste does not meet the criteria, then the consultant must do a site-specific risk analysis to show that disposal of the soil at a solid waste landfill does not pose an unacceptable risk to human health and the environment. This risk analysis is put into a technical letter that requests, on behalf of the owner, a contained-in designation for the soil from the Washington State Department of Ecology. The consultant sends the letter to Ecology and awaits the agency’s decision. If Ecology grants the designation, then the soil can be disposed of at a solid waste landfill. However, because the soil contains a listed waste, it cannot be used for landfill cover, thus increasing the disposal costs above non-listed waste contaminated soils at landfills. Aside from increased disposal costs, the contained-in designation process may delay a phase of the project.

Peter Hapke is an attorney in Seattle, who counsels, negotiates and litigates on behalf of businesses and local governments in the areas of environmental, land use and natural resources law. He can be reached at 206-714-6444 or peter@hapkelaw.com.