1. Allan Bakalian, Zeno Drake Bakalian What happens when things go wrong Puget Sound Area Safety Summit

2. abakalian@zdblaw.com 2 STORMWATER ENFORCEMENT AND COMPLIANCE Allan Bakalian Zeno Drake Bakalian P.S. 4020 Lake Washington Blvd. Kirkland, WA 98033 425 822-1511

3. Allan Bakalian is a partner with Zeno Drake Bakalian P.S. in Kirkland, WA. He has practiced law in Washington and Oregon for over twenty years, specializing in environmental law, real estate and land use, regulatory compliance, hazardous waste investigations and cleanup, natural resource protection and environmental litigation. He earned his J.D. degree, with honors, from Lewis & Clark Law School in Portland, Oregon. He was an Assistant Regional Counsel for the U.S. Environmental Protection Agency in Seattle, Senior Corporate Counsel for Univar USA and has been in private practice since 2001. Mr. Bakalian has counseled and successfully represented individuals and business clients in numerous environmental, land use, regulatory enforcement and permitting matters, administrative appeals and litigation.

4. Stormwater - The Big Picture

5. STORMWATER LEGAL ISSUES Federal Enforcement by EPA State Enforcement by Dept. of Ecology Local Enforcement by counties and cities Citizen Suits and Enforcement Contractual Issues – (Owner/Developer/)Contractor

6. Federal Enforcement by EPA Clean Water Act National Focus and Priorities Multi-State Actions Consent Decrees

7. EPA National Enforcement Priorities, 2008- 2010 Target stormwater discharge violations Residential construction (national builders) Big box store construction Ready-mix concrete Sand and gravel

8. Federal Enforcement by EPA Nationwide Cases Civil Penalties Consent Decree – Settlement – Agreed Compliance Steps – Stipulated Penalties

9. US DOJ/EPA Stormwater Enforcement Actions Home Depot - $1.3M, Feb 2008 Pattern of Stormwater Violations – Unpermitted discharges to storm sewers – Failure to maintain SWPPP – Silt Fence violations Consent Decree with Nationwide Compliance Program

10. US DOJ/EPA Stormwater Enforcement Actions Centex, Pulte and KB Homes – Unpermitted discharges to storm sewers – Failure to develop adequate SWPPP – Failure to install SWPPP BMPs – Incorrect installation of BMPs – Failure to maintain BMPs – Failure to routinely inspect BMPs

11. US DOJ/EPA Stormwater Enforcement Actions Centex ( VA, MD, TN, MS, CO, UT, NV) – $1.485 Million civil penalty KB Homes ( VA, MD, CO, NV) – $1.185 Million civil penalty Consent Decree with Nationwide Compliance Program Implement a management and reporting system to ensure greater oversight and compliance Trained site managers Three stormwater management tiers – SWPPP criteria – Pre-construction inspections (on EPA forms) – Stormwater training programs

12. US DOJ/EPA Stormwater Enforcement Actions KB Homes ( VA, MD, CO, NV) – $1.185 Million civil penalty – Implement a management and reporting system to ensure greater oversight and compliance – Trained site managers – Three stormwater management tiers – SWPPP criteria – Pre-construction inspections (on EPA forms) – Stormwater training programs

13. EPA Stormwater Settlement Policy Expedited Settlement Offer for Stormwater Construction Violations Sites up to 50 acres Penalty calculation worksheet not greater than $15,000 No evidence of significant impacts (turbidity) First time violators No ‘non-allowable’ stormwater discharges

14. US DOJ/EPA Stormwater Enforcement Actions Pulte ( VA, MD, TN, CO, NV) – $877,000 penalty / $608,000 SEP – Implement a management and reporting system to ensure greater oversight and compliance – Trained site managers – Three stormwater management tiers – SWPPP criteria – Pre-construction inspections (on EPA forms) – Stormwater training programs

15. EPA Region 10 Enforcement Idaho DOT and Contractor (May 2006) $895,000 settlement – 2004 lawsuit re construction runoff – Failure to adequately maintain BMPs – Compliance schedule

16. EPA REGION 10 Enforcement Tamarack Resort, ID (Jan 2008) $185,000 settlement – Failure to timely apply for permit coverage – Discharging concrete truck wash to wetland – Discharging turbid water to creeks – Failure to adequately maintain BMPs – Failure to update SWPPP

17. EPA REGION 10 Enforcement September 2008 Civil Penalties at 2 Boise Construction Sites $13,000 settlement – Failure to apply for permit coverage – Failure to adequately prevent erosion – Failure to include permanent stormwater controls in SWPPP

18. EPA REGION 10 Enforcement September 2008 Civil Penalties at 2 Boise Construction Sites $7,150 settlement – Failure to design adequate erosion and sediment controls – Failure to manage water from fire hydrant flushing and dust control discharges – Minor self-inspection deficiencies

19. WASHINGTON STATE ENFORCEMENT Chapter 90.48 RCW WAC 173 Dept. of Ecology administers the NPDES permit program Local Jurisdictions (counties and cities) Code Enforcement

20. DEPARTMENT OF ECOLOGY STORMWATER PERMITS Construction General Stormwater Permit Municipal Stormwater General Permit Industrial Sand and Gravel

21. WA Dept of Ecology Construction General Stormwater Permits Compliance Inspection Enforcement Punishment Publicity

22. Inspection Target Points Permit and SWPPP Tracking in Roadway Soil stabilization- Lack of Cover Sediment controls – Broken silt fence Catch basins – sediment in street

23. Inspection

24. Soil Stabilization

25. Sediment Entering Catch Basin

26. Sediment bypassing hay

27. Improper Cover/Stabilization

28. Unstabilized Soils? Unprotected Catch Basin?

29. What happens when things go wrong Inspection report – No corrective action 2nd inspection – Possible 2 nd chance possible Admin order Administrative order – Deadline for corrective

30. Ecology Enforcement The Red Zone – Administrative Order 14 days to stabilize all soils and maintain BMPs Includes yards and common areas unless sold or permit terminated Permanent Stabilization required on all lots sole or built out

31. Ecology Administrative Orders Formal Action – Comply or Appeal – 30 days to file answer & request for hearing – Pollution Control Hearings Board (PCHB) – Citizen or homeowner intervention – Ongoing construction under microscope – Transfer or terminate no longer and option

32. Ecology Administrative Orders File Answer Prehearing Statement and Issues Ecology Settlement Negotiations Homeowner negotiations Hearing on Order Increased costs Publicity Public record

33. Ecology Enforcement Notice of Violation and Order Civil penalties – up to 10,000 per day – No permit – No SWPPP – No Docs – inspection reports, DMRs – If water quality or environmental impacts, less likely to mitigate civil penalties

34. Response to Ecology Administrative Orders Inspection reports, orders and NOVs Management Team – VP or President – Stormwater manager(s) – Lawyer – Consultant

35. Ecology Administrative Orders Address and comply with order Prepare settlement proposal Draft settlement agreement Judicial Enforcement of Order No admission of violations (no record) Terminate permit if possible

36. Ecology Administrative Orders Alternate Actions if Settlement Not accepted – Comply with order – Voluntary dismissal of appeal – Stops Interveners – Stops Appeal – Accept the order on record

37. Ecology Notice of Violation and Civil Penalties Must appeal to mitigate Must still comply Penalty Policy SEP Ecology follow up action Judicial Enforcement

38. Ecology Enforcement Actions $24,000 to Terra Venture (Feb 2008) for muddy stormwater discharges $12,000 to Camas Heights, LLC for muddy stormwater runoff at construction site $5,000 to Johns Port Homes for runoff

39. Enforcement Issues and Pitfalls Operator and/or Owner liability Employee and/or manager liability Homeowner Association and homeowner involvement and/or intervention Incomplete construction during marketing and sale Incomplete stabilization (liability for private property) Transfers (subject to written Agr. and approval) Termination (100% stabilization or sale)

41. Lessons learned Avoid problems – Have Documentation – Permit and SWPPP on site – Maintain site stabilization on private property and common areas – Maintain inspection reports and DMRs – Keep it simple! – Oversight and inspection is critical – Address ALL homeowner complaints

42. Lessons learned – Plat conditions Homeowner Association – Maintain control until permit terminated Work in Easements & Common areas – Access after sale difficult – Private property » Include in sale agreement – Leave native vegetation and soils in place Know and comply with city ordinances and codes

43. Contract Considerations – Duties and liabilities of Owner, Developer, and Contractor for stormwater violations – Developer and homeowner duties regarding maintenance of Low Impact Development features – Control over Native Growth Protection Areas and Soil and Vegetation Protection Areas – Yard soils and lawn maintenance

44. 44 FIVE POINT COMPLIANCE SUMMARY 1.Develop SWPPP Before Construction 2.Implement SWPPP During Construction 3.Maintain or Update BMPs (and SWPPP) 4.Respond timely to inspection reports and compliance orders (and homeowner complaints) 5.Terminate or transfer permit as soon as possible

45. 45 DUE DILIGENCE (how to avoid liability for permit violations) 1.Review stormwater permit and SWPPP before purchasing existing projects 2.Inspect BMPs 3.Determine who has responsibility for day to day permit compliance (owner, developer, contractor) 4.Terminate permit upon completion of development or transfer stormwater permit as a condition of sale of any lots or site