Yesterday, the Washington Department of Ecology (“Ecology”) released a draft of the new Construction Stormwater General Permit, which will become effective by the end of this year. Because the Construction Stormwater Permit impacts more than 2,000 construction sites in Washington, this new permit will almost certainly receive considerable attention from multiple stakeholders representing a variety of interests. Overall, Ecology describes the changes to the permit as “not substantial,” but, given that many of these types of permits have been challenged by a variety of interests, this draft permit may still receive considerable attention from stakeholders prior to being implemented. In addition, Ecology’s economic analysis of the draft permit concludes that small businesses will have a much higher per-employee compliance cost,

Background

The Construction Stormwater Permit is part of a class of sixteen general permits administered by Ecology as part of Washington’s implementation of the Federal Clean Water Act. These general permits regulate water discharges from a variety of industries, with the Construction Stormwater Permit regulating construction sites greater than one acre that discharge stormwater to surface waters in Washington. The primary focus of the Construction Stormwater Permit is the control of discharges of muddy water, measured as turbidity (i.e. the cloudiness of water created by suspended particles). In the past ten years, many of these general permits have been the subject of extensive litigation, including the last version of the Construction Stormwater Permit, issued in 2005.

Changes in the Draft Permit

The 2010 draft of the Construction Stormwater Permit incorporates changes emanating from litigation of the 2005 version of the same permit. The draft permit’s biggest change is the incorporation of newly-minted federal effluent guidelines for the construction industry, adopted by EPA earlier this year. More on those guidelines can be found here. In a nutshell, EPA’s new effluent guidelines for the construction industry require compliance with a 280-nephelometric turbidity unit limit (“NTU”) for stormwater discharges from construction sites. Turbidity is a measure of the transmission of light through water, and is a useful proxy for the amount of suspended sediment in the water column. Since one of the primary concerns with construction sites is runoff of surface soils (which can contain a variety of pollutants), the monitoring of turbidity allows for an understanding of the possible impact that stormwater runoff from construction sites is having on the receiving water body. In its effluent guidelines, EPA is phasing in this limit based on site size:

  • Beginning on August 1, 2011 all sites that disturb 20 or more acres of land at one time are required to comply with the turbidity limitation.
  • On February 2, 2014 the limitation applies to all construction sites disturbing 10 or more acres of land at one time.

Washington required monitoring of discharges from construction sites under the terms of the 2005 permit. In the draft permit, Ecology proposed to not adopt this phased approach, instead Ecology proposes to make this limit applicable to all sites greater than 10 acres when the new permit becomes effective on January 1, 2011. Ecology reasoned that operators at sites greater than 5 acres were already required to sample runoff from construction sites under the terms of the old permit. As a result, Ecology concludes operators in Washington are familiar with the turbidity-monitoring protocols. In addition, Ecology reasoned that phasing in the requirement—as EPA suggests in its guidelines—would lead to confusion and increased administrative problems. Finally, Ecology noted that over 99% of the samples taken under the old permit were below the 280-NTU level—which lead Ecology to conclude that compliance with this new limitation will not be an issue.

Economic Impact on Small Businesses

Ecology is required to perform an economic impact analysis of the draft permit, which includes an inquiry into whether the new permit’s requirements will disproportionately impact small businesses (defined as fewer than fifty employees). Relying on the rationale discussed above, Ecology notes in the materials accompanying the release of the draft that this new permit “will not require a substantial change” in how the construction industry operates sites in Washington. In the accompanying economic analysis, Ecology has determined that compliance with the 2010 Construction Stormwater Permit disproportionately affects small (fewer than fifty employees) businesses. Pursuant to state law, this determination requires Ecology to propose a series of mitigation measures within the 2010 Construction Stormwater Permit to lessen the impact on these small businesses. These measures include:

  • Exempting small businesses operating at sites smaller than 1 acre are exempt from turbidity and transparency monitoring, and allowing sites less than 5 acres to use a lower-cost transparency tube ($40) for stormwater monitoring, rather than a turbidity meter ($900).
  • Establishing performance rather than design standards that will allow operators to omit some Best Management Practices (“BMPs”) at sites where conditions make the BMPs unnecessary. Ecology reasons that this will allow small sites, or sites with less complexity, to have fewer BMPs than large or complex sites, which should result in lower BMP costs.
  • Rely on a permit exemption for small projects where those projects have site conditions that lead to low rainfall erosivity (the so-called “low rainfall erosivity waiver”). This waiver allows some sites (smaller than 5 acres) to completely avoid compliance costs with the Stormwater General Permit.
  • Obtain a permit fee reduction if the small business demonstrates “extreme hardship” as defined in Ecology’s wastewater discharge fee rules. This fee reduction only applies to businesses that have a gross revenue from a project of less than $100,000/year. So, even small construction sites most likely won’t meet this requirement.

    One of the most striking features of Ecology’s economic analysis is that it is made in reference to size of businesses (fewer than fifty employees), and concludes a disproportionate impact on those businesses. However, almost all of the mitigation measures are not necessarily specific to the size of the business, but to the size of the site. The economic analysis demonstrated that a small business operating at large (greater than 5 acres) sites are also disproportionately impacted, but I don’t see how such impacts are addressed in the mitigation measures. For large construction sites, the per-employee cost of compliance for small businesses is $573.00, higher than the small business costs for small sites ($344.00), and much higher than the large business per-employee costs ($20.85 for sites less than five acres, and $12.52 for sites greater than five acres). This oversight could be because most construction sites in Washington are less than five acres, and that small businesses generally do not operate large sites, but it nonetheless appears that Ecology has failed to address the compliance impact the permit has on small businesses operating at sites greater than five acres.

Next Steps

Ecology is accepting comments on the draft permit until September 10, 2010, and is holding a series of informational workshops in late August and early September. As mentioned above, because this permit covers more than 2,000 construction sites in Washington, the draft 2010 Construction Stormwater Permit will almost certainly receive considerable attention from various stakeholders. Importantly, the final version of the 2010 Construction Stormwater Permit will reflect the public input received by Ecology over the next few months, and will govern the way the construction industry addresses stormwater at construction sites in Washington for the next five years. For the construction industry, this is an opportunity to provide comments reflecting the past five years of operations under the 2005 Construction Stormwater Permit, and to provide comments on the changes being proposed by Ecology. For businesses with fewer than fifty employees, this is also an opportunity to evaluate and offer comments on Ecology’s proposed mitigation measures, in order to potentially lessen the disproportionate economic impact this permit will have on small businesses.