Note from Doug Steding:
This post arose out of a meeting over coffee with James Peale and Jackie Gruber, where we discussed Ecology’s recent Remedial Action Grant rulemaking. James and Jackie highlighted Maul Foster & Alongi, Inc.’s deep experience representing public entities in the pursuit of Remedial Action Grant money. Michael Stringer at Maul Foster was the lead author of this post.
One of my hopes when I started this blog a few years back was that it would become a forum for discussion of current environmental issues, and I appreciate Maul Foster taking the time to compose this post. I think you’ll find their perspective and insight useful in understanding the new Remedial Action Grant rule:
The Department of Ecology has finalized new Administrative Rules that set the guidelines for the Remedial Action Grant program. This robust grant program (ranging from $50-65M/biennium in the last 10 years) is the primary funding source for publicly lead cleanups of contaminated sites in the State. The Administrative Rule update implements reforms of the Model Toxics Control Act passed last year in Senate Bill 5296.
So what do these changes mean to the local governments that rely on these grants? Ecology has prepared a fact sheet summarizing the changes. Below are some of the changes that are likely to have the most important implications for local governments.
Recognition of the Economic Importance of Cleanup
As so clearly shown in the transformation of South Lake Union, the financial incentive of redevelopment can be a powerful driver of cleanup. Ecology’s Toxics Cleanup Program has historically operated on a “worst first” policy of prioritizing resources to address sites with the greatest threat to human health and the environment. The new rule provides additional factors for prioritization of grant funds including economic potential for redevelopment, as well as:
- Environmental justice—Whether a project is located in disproportionately impacted community
- Ability for a grant to expedite cleanup
- Ability to leverage other public or private funding for cleanup and reuse
- Distribution of grants throughout the state
Predictability and Certainty for Large Cleanups
For local governments, taking on large scale, multi-year cleanups, the current grant program poses a fundamental challenge. These governments take on a legal requirement to conduct cleanups, that may cost millions of dollars and take years to complete, but the state can only allocate funds to be used in the current biennium. This creates the potential for local government to be left in a lurch in out years of a lengthy and expensive cleanup. Several changes have been made to provide more certainty and reduce financial risk.
- Extended Grant Agreements—For projects forecasted to span multiple biennia with costs over $20M, Ecology can provide an extended grant agreement that essentially guarantees funding in future. The state share of total project costs is limited to 50% for these extended grant agreements.
- Funding Priority—The rules require Ecology to allocate Remedial Action Grant funds in the following order of priority:
- Existing Extended Grant Agreements
- Ongoing cleanups conducted under Agreed Orders and Consent Decrees
- Only after these first two categories of needs are met, can new projects be funded
Limited Opportunity for New Projects?
While these changes address the fundamental financial concern of local governments taking on large cleanups, it may have the unintended consequence of making it more difficult for Ecology to meet the needs of small projects that are driven by real estate opportunities. For example, if a city or port has the opportunity to acquire a vacant, contaminated property, it will have to wait until the annual grant cycle comes around to apply for funding. Many property transactions are based on short windows of opportunity and the need to wait months to even apply, let along obtain a grant, may scuttle the deal. If an application is submitted, it will fall to the bottom of the priority list no matter how contaminated the site or how strong the redevelopment potential because Ecology has required itself to fund existing projects first.
There are a number of more detailed, but important changes to the Remedial Action Grant program in the updated rule. For the most part, these are all positive, much needed changes to update a highly effective program to changing needs. Time will tell if these reforms also come with unintended consequences.