1 Land Use Controls (LUCs) The Trust concept for long term care Paul J. Yaroschak Director, Environmental Compliance & Restoration Policy Office of the Assistant Secretary of the Navy (Installations & Environment)

2 Background DoD has thousands of contaminated sites Remedies selected under CERCLA consider nine criteria E.g., Protectiveness, permanence, cost effectiveness If some contaminants are left in place, human exposure must be prevented Land Use Controls (LUCs) are used to limit exposure

3 What are LUCs? Engineering controls (ECs)…physical measures to protect the remedy Landfill caps, physical barriers, signs Institutional controls (ICs)…legal and administrative measures to protect the ECs and/or the remedy Deed restrictions, notifications, zoning, permits LUCs = ECs + ICs

4 Who’s responsible for LUCs? Subject of national debate and evolution of policy Current property owner Former property owner Environmental regulator Local government

5 The Issues DoD must ensure long term protectiveness of remedy per CERCLA Regulatory policy evolving – increasing long term process requirements DoD desires to outsource and privatize non- core functions

6 Is there a win-win-win solution that… Is better than current situation Ensures protectiveness Is cost effective Emphasizes regulators role Keeps local gov’t informed Reduces non-core functions for DoD/PRPs In other words, the solution would be liked by regulators and PRPs and the public

7 The Guardian Trust Concept A private, not-for-profit Trust to manage LUCs Fee for service Management of LUCs Liability for LUCs Established via a partnership among private industry, regulators and PRPs Pilot study in Pennsylvania nearing completion PA-DEP, EPA Region III, DoN key players MD, VA, CA also playing

8 Trust Menu of Services Management of LUCs –Maintain LUC database…interface with Miss Utility –Inspections –Notifications & outreach to owners & local gov’t…interface with permit agencies –O&M of engineering controls Liability for LUCs –Assume all liability for remedy and LUCs…via use of private insurance mechanism –Allows removal of liability from PRP financial statements

9 DoN Course of Action Participate on Pilot Program Oversight Board Six meetings and final report in JAN 02 Resolve issues regarding DoN/DoD use of Trust Funding…annual vs. lump sum…how to transfer? Insurance & indemnification Develop Cooperative Agreement w PA-DEP Develop list of pilot sites & LUC services NSY Philadelphia & NSWC Warminster Sign Agreement & fund Assign/Transfer property interest to PA-DEP Monitor actions & determine applicability nation-wide

10 Responsibilities & Funding Department of Navy Pennsylvania DEP Board of Directors Guardian Trust Funding & LUC tasks via Cooperative Agreement Contract w Trust Financial & performance oversight

11 Trust Benefits Provides a manager for LUCs with single purpose…long term Ensures protectiveness…minimizes potential for “exposure” litigation Economies of scale managing hundreds of sites Regulators have a role in Trust oversight and LUC enforcement Privatizes LUC management

12 Questions Is it really cheaper? –If all DoN costs are considered, Trust probably cheaper…even more so if regional/national in scope –Can’t determine accurately until we try one What if the Trust dissolves? –Oversight by underwriters & Board minimizes risk of failure –If failure, DoN would revert to existing CERCLA responsibilities