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ERCI SSP Example

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ERCI SSP Example

  1. 1. CONFIDENTIALSite Strategic Plan (EXAMPLE)JIS LandfillSouth Brunswick, New Jersey Contact: John Rosengard (415) 982-3100 www.erci.com © 2012 Environmental Risk Communications, Inc.
  2. 2. Project Scope“In S“I Scope” Issues and Al ”I d Alternatives i “Out of Scope” I “O fS ” Issues and Alternatives d Al io End state vision / risk and land ownership o Asset operation strategyo Properties covered by this document o Statewide policy issueso Pace to closure o Litigation strategyo Revenue and cost recovery opportunities o Staffing, contractor selectiono NRDA o Accounting treatment of remedial costso Effect on nearby operations (reserves, CapEx, etc.)o Unit costso Remedy selection / endpoints Key Assumptions 1 Property zoning remains Industrial 2 CERCLA site; no duplicative RCRA closure process© 2012 Environmental Risk Communications, Inc. 2
  3. 3. Current Regulatory / Counterparty Status  New Jersey Department of Environmental Protection Lead Agency (NJDEP)  RFI complete (per DEQ expectations)Current Regulatory  Final Remedy Selected – 09/2009  Construction complete – 09/2009Status  Risk assessments, CMS, and CMI to be done as conditions of AOC (1988) and in accordance with VRP guidancePrincipal Regulatory  DEQ: Non-degradation of river / waters of the state  Potential Region 2 RCRA re-opener and/or additionalRisk Drivers requirementsLand Ownership  Site wholly owned by Jones Industrial Services (JIS)  High risk property owner (bankruptcy filing possible in 2 years)  Insurer are Travelers and Liberty MutualCounterparty StatusC t t St t  PRP Group allocation is in place; currently 5th by volume at 8%; largest is privately-held metals processor, 3rd largest is oil refiner owned by hedge fund© 2012 Environmental Risk Communications, Inc. 3
  4. 4. Stakeholder Analysis Level of Level of Stakeholder Influence Support Key Drivers Management Strategy (0 – 5) (0 – 5) Protection of wild and  Free product recovery systemNJDEP 4 4 scenic river, protection of  Assessment of historic drinking water aquifer d i ki if releases, possible d l ibl data gaps Protection of human healthEPA 3 0 Comply with EPA requirements and the environment  Resolve all outstanding property management issues and position ourselves to leverage property transfers toAdjacent Potential impact on 1 0 reduce remedial requirementsLandowners development potential / costs  Maximize the sale and alternate use of other surplus property Potential sheen on river,Town Residents 1 0 GW system trespass riskNGOsNGO N/A N/A None id tifi d N identified NRDA impacts and Leverage settlement throughNRDA Team 3 4 credibility property sale to stateJones Industrial 5 5 -- --Services Routine monitoring andPRP Group 5 5 Allocation prepayment into escrow account© 2012 Environmental Risk Communications, Inc. 4
  5. 5. Physical Setting – Site Location JIS Landfill JIS Landfill© 2012 Environmental Risk Communications, Inc. 5
  6. 6. Site Specifics – Ownership Information Vulture City Wakefern Food Furniture Cannon Corporation Sunoco S Cary Compounds Residential JIS L dfill Landfill Plume Area Residential Monroe Collision Drive Medical Center New Jersey Turnpike I-95© 2012 Environmental Risk Communications, Inc. 6
  7. 7. General Site Information JIS Landfill EPA REGION 2 901-999 Cranbury South River Road Middlesex, South Brunswick, New Jersey EPA ID#: NJD097400998  Located in South Brunswick Township, near the border of Monroe Township  Approximately 24 acres, includes a 7.8 acre landfill and a waste transfer operation  Approximately 50,000 cubic yards of waste were disposed 50 000 of annually until landfilling operations ceased in 1980  Ground water is contaminated with metals and volatile organic compounds (VOCs), including vinyl chloride, JIS Landfill methylene chloride, acetone, tetrachloroethene, trichloroethane, chlorobenzene, benzene and Aldrin, a pesticide  Concentrations of contaminants are above Federal and State drinking water standards Plume Area  Contaminants have been detected in the groundwater from the site to Manalapan Brook, 1.5 miles downgradient of the site; contamination is present from the water table to the base of the aquifer, a thickness of roughly 60 feet© 2012 Environmental Risk Communications, Inc. 7
  8. 8. Historical Images 1995 2002 2006 2007© 2012 Environmental Risk Communications, Inc. 8
  9. 9. Operating & Remediation Timeline Operating History 1960-1970s The landfill accepted chemical, 1983 municipal, and industrial wastes JIS placed a 1959: including broken battery casings, cap over the • Landfilling Operations northern half began within a former paint sludges, solvents, and of the landfill borrow pit pesticides • Excavated material from the borrow pit provided fill 1980 1985 needed for the construction Operations ceased, JIS placed a cap over the approximately 50,00 cubic southern half of the of the New Jersey Turnpike yards had been disposed of landfill annually ‘59 -- ‘60 ‘-- ‘77 ‘80 ‘83 ‘86 ‘89 ‘92 ‘95 ‘98 ‘01 ‘04 ‘07 ‘10 1994-1995 2005 2007-2009 Notice letters issued 1982 • Five Year Remedial RI / FS combined • Remedial Action da o Review Report investigation of Plan submitted completed l d the Secondary h d 1990-1992 • Full Scale In- plume • Proposed to NPL Removal 1997-1998 situ biosparge conducted in assessment GW monitoring of pilot study 2007, 1989 three wells indicates implemented Completed in NJDEP requested 1993 - 1994 chemicals of 2008, 1983 that EPA conduct an concern are below addendum Final listing on NPL g NJDEP collected assessment of agency action levels submitted i b itt d in data on drinking 2004 groundwater water wells to 2009 • RI / FS contamination supplement the RI / Negotiations FS Remediation History© 2012 Environmental Risk Communications, Inc. 9
  10. 10. Site Conceptual Model (EXAMPLE)Human Risk: Low 3rd-party Liability Risk: LowEcological Risk: Low o ACME Ranch immediately offsite in direction of o Nothing off-site groundwater flow, but trench intercepts bulk and o River sediment: Suspect low probability of NRDA stream acts as natural barrier claim o Aquifer unproductive for residential use o USFWS (NRDA trustee) studied 7 site: Minimal o No current or pending class action or corrective d l contamination found, some control area results action-related litigation or property claims higher than industrial / municipal reach of river; o No environmental justice issues no T&E species on South Property o Prelim. risk assessment indicates no eco risk o Possible legal issues with leased property and/or drivers on South Property SE NAPL plume o Ponds: Suspect low probability of NRDA claim o USFWS collected plant / sediment / tissue samples: No definitive© 2012 Environmental Risk Communications, Inc. 10
  11. 11. Current Risks (EXAMPLE) Description Risk Actualization Potential Likeli-Source Qualitative Volume / Magnitude Threat Impact Drivers hoodNAPL Plumes affect ~ 3 million gallons NAPL intrusion into 3rd-party Low Medium, potential majority of south already pumped; ~ 1 South Brunswick lawsuit property purchases property; mostly – 8 million gallons and/or more aggressive contained on site; left; probable that GW treatment some has been large percentage is pumped; intra- <= residual Regulatory Low High, aggressive plume mobility saturation and not driven investigation and exists in some easily removed with work treatment of GW or areas; conventional maximize CAMU to technologies remove smear zones Ultimate regulatory Long-term Med High, escalation of clean-up is “non- O&M remedial cost degradation”SWMUs & Multiple on Currently 380 million Additional cleanup Regulatory Med High, escalation ofsoils property; in process yds3 excavated and required of North & driven remedial cost of removing and 0-200 million yds3 South properties work putting in CAMU planned for excavation; could Dermal contact to Worker / Low Low, full security range as high as workers and trespasser controls trespass, all 1,300,000 yds3 trespassers; vapors p ; p exposure p dust actively controlled y during constructionSediments River and North Estimated volume of Environmental NRDA Low Medium, dredging may property ponds 200,000 yds3; damage claim be required USFWS found no environmental Regulatory Med Medium, reverse damage at ponds dredging or dredging may be required Trespass (river only) 3rd-party Very Medium, damages and lawsuits low dredging© 2012 Environmental Risk Communications, Inc. 11
  12. 12. Other Significant Risks (EXAMPLE) Likelihood Cost Expected Range (%) ($ millions) ($ millions) Technical RisksExisting containment requires re-building within 10yrs 5% $5 $0.25Passive system fails to protect off-site areas 50% $6 $3RiverRi e sediment clean p requirements clean-up eq i ements 10-50% 10 50% $0-2.5 $0 2 5 $0-$1.25 $0 $1 25 Non-Technical RisksSE NAPL Plume liability 0-50% $0-6 $0-3NRDA d damages 10% $0-0.3 $ $0-0.03 $South Brunswick, New Jersey citizen / 3rd party lawsuit 0-10% $0-10 $0-1© 2012 Environmental Risk Communications, Inc. 12
  13. 13. End State Vision (EXAMPLE) Site in 1960s and 70s Remediation ESV  Residential – No potential for future homeowners to see or smell residual hydrocarbons during normal homeowner activities (including installing swimming pools, f fence posts, foundations, f piping, landscaping)  Recreational / Public Open Space and common areas with administrative and engineering controls to prevent users and workers from exposure above acceptable health risk-based levels during normal use, construction, and maintenance activities End State Vision How do We Get there?  Generate redevelopment plan by 2015  Complete environmental compliance activities by 2017  Market property by 2018© 2012 Environmental Risk Communications, Inc. 13
  14. 14. Evolution of Spending Forecasts – Graphed with Cumulative Actuals (EXAMPLE) $120 $110 2011 $100 $90 2010 2009 $80 2008 $ $70 ($ MM) $60 2006 2007 $50 $40 Cumulative $30 Spending $20 $10 $0 Cumulative Spend Budget Remaining 2006 2007 2008 2009 2010 2011© 2012 Environmental Risk Communications, Inc. 14
  15. 15. Alternative Strategy Analysis (EXAMPLE) Regulatory Degree Of Source Regulatory Re- Recovery Of Disposal Option End-State Vision Framework Removal opener Costs Complete Current Unrestricted Onsite (RBCA State Only Cash Out Consent Order Use, Use Sell Residual) Mixed or Non-Amend Consent + County for Trucks Pits & Lagoons Residential Co-Pay Order Groundwater Use, Sell RecreationalConsent Decree Truck & Rail RBCA Optimal + EPA Use, Sell / Donate Enforcement Pits Removed, After Exiting Slurry Line to Eminent Stabilize the No Sale State Barge Domain Rest Superfund Aggressive Remediation Strategy Low Risk Remediation Strategy EPA led Remediation Strategy PRP Committee Led Strategy© 2012 Environmental Risk Communications, Inc. 15
  16. 16. Summary of Alternatives (EXAMPLE) NAPL Endpoint & Attenuation GW Non-Degradation Non Degradation Passive Contain and Monitor (1) Zone (2) Driven Clean-up (3) Soils Excavate and remove RA identified soils; Same Strategy Same Strategy place in CAMU North Property Leachate collection MNA or air sparging, collection, sparging Same Strategy Same strategyRemediation Groundwater and passive soil venting under CAMU (through 2021); no NAPL issues South Property Extend wall if needed; switch off trench Switch off trench system; remediate Remediate complete Groundwater system; demonstrate immobility of NAPL to interim or TI determined endpoint smear zone to endpoint p plume; F&T modeling-pilot if needed ; g p using excavation and establish g such that GW returned toR attenuation zone to allow transition MCLs within 50 years to passive / MNA using NMA Sediments Ecological risk assessment only Same Strategy Same Strategy (River / Pond) Land Use Maintain current zoning (Commercial / Same Strategy Same StrategyEnd Use Industrial); explore potential uses Risk and Land Sale or lease of property to 3rd party for Sale or lease of property to 3rd party Sale or lease of property Ownership alternate uses for alternate uses to 3rd party for alternate uses Regulatory Reg lato Obtain VRP remedy decision and emed Same Reg lato Strategy Regulatory St ateg Same Reg lato Strategy Regulatory St ateg Strategy agreement by 2005Advocacy Use current voluntary efforts (i.e., CAMU) to obtain favorable regulatory outcomes Community Notify adjacent landowners of Same Strategy Same StrategyA Strategy St t remediation activities di ti ti iti Counterparty Monitor fellow PRPs for long term Use escrow accounts to accelerate Monitor fellow PRPs for Strategy cash call collection and avoid long term financial monitoring © 2012 Environmental Risk Communications, Inc. 16
  17. 17. Summary of Financial Results: Simplified (EXAMPLE) FINANCIAL SUMMARY Case Case Case Case R 1 2 3 GW Non- Passive Contain and NAPL Endpoint & Strategy Description Reserve Case Degradation Driven Notes Monitor Attenuation Zone Clean-up Budgeted costs, inflated, FUTURE VALUE 5-YR (2011-2015) ($10,373,851) ($10 373 851) ($534,745) ($534 745) ($16,152,056) ($16 152 056) ($10,940,989) ($10 940 989) undiscounted - 5 years Budgeted costs, inflated, FUTURE VALUE 10-YR (2011-2020) ($17,754,275) ($15,048,505) ($24,062,848) ($20,096,002) undiscounted - 10 years Budgeted costs, inflated, FUTURE VALUE 30-YR (2011-2040) ($27,957,759) ($31,923,532) ($34,266,332) ($28,998,297) undiscounted - 30 years Budgeted costs, inflated, PRESENT VALUE 30-YR (2011-2040) ($21,688,188) ($23,188,252) ($27,599,029) ($23,131,890) discounted - 30 years Recoveries from all sources, COST RECOVERIES $6,808,649 $7,800,092 $11,740,109 $7,233,993 inflated, undiscounted Increases or decreases in OPERATING BUSINESS IMPACTS $0 $0 $0 $0 operating company profit, inflated, undiscounted Net total of budget, recoveries PROJECT CASH FLOWS NPV ($16,348,461) ($17,473,509) ($18,054,616) ($17,356,012) and operating company impacts; inflated, discounted Financial Assumptions: 3.20% In flat io n 2.75% Disc o u n t rat e All values shown are USD© 2012 Environmental Risk Communications, Inc. 17
  18. 18. Scenario Comparison – NPV ($ millions) (EXAMPLE) Four Campus Alternatives - (Excludes 120 Off-campus Acreage) Best tive Probability Cum Alt 5c mulative Fre EV = $(16.9) MM Alt 5d EV = $(20.9) MM equency Cumulat Alt 5a EV = $(28.9) MM Follow Dashed Lines to x-Axis Alt 5b for P50 Values EV = $(27.3) MM (values shown on Tornado diagrams)© 2012 Environmental Risk Communications, Inc. 18
  19. 19. Costs for Preferred Strategy – NPV ($ millions) (EXAMPLE) 335 Units @ $150 / 335 U it @ $270 Units SF / SF; 24 of 30 Acres Residential / Commercial Residential / Standards to 5’; No Commercial CAMU Standards to 1’ ; CAMU Extreme P&T Design, Build; Simple P&T 30 yr 30-yr O&M Design, Build; 10- yr O&M 60% of 12 Units / Acre; Pad 160% of 12 Units Ready for 335 / Acre; Pad Ready Units for 335 Units; 24 of 30 Acres No Risk 28.5K CY Assessment Sediment Removal @$200/CY; 50% -$47.00 -$37.00 -$27.00 -$17.00 -$7.00 $3.00Trigger Chance Alt 5c – Value of Tax Credit, Properly Sale, Development Alt 5c – Soils, CAMU P50 = $(19.2) MM Alt 5c – Groundwater Alt 5c – Infrastructure Construction Alt 5c – Upstream Sediment, Wetlands and Bank Sediment Alt 5c – Land Entitlement Alt 5c – Stakeholder management© 2012 Environmental Risk Communications, Inc. 19
  20. 20. SWOT Analysis of Preferred Strategy (EXAMPLE) Strengths Weaknesses o Better NPV than alternatives o Uncertainty of buyer acceptance o Qualified buyer identified; has experience with o Data is subjective, based on team’s best other contaminated properties and can qualify estimates for f RCRA permit modification it difi ti o Buyer is an LLC o Compatible development plan has been o Includes some residential reuse presented o Company will be remediating property owned o Ability to quantify intangible issues by others; no longer controls the property Opportunities pp Threats o Dispose of an orphan site in NY o Possibility town could use eminent domain to o A site is redeveloped and our public image is condemn or take the property enhanced o Unable to fulfill our environmental obligations o Neighborhood may get a sewer line (not on to the agencies and/or the buyer sewer now) ) o Buyer unable to fulfill obligations to Company y g p y or others o Unable to negotiate less restrictive clean up levels with Agencies Key Takeaways  Important that sale strategy meshes with the environmental assessment knowledge  It’s very hard to align a remediation plan with a redeveloper’s schedule  Demolition is important to resale value and implementation of the end state vision© 2012 Environmental Risk Communications, Inc. 20
  21. 21. Decision Sequence (EXAMPLE) Year 1 Year 2 Year 3Critical Tasks Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 70,000 CY $50 million $40 million (driven by Implementation stabilization 90,000 90 000 CY volume) $50 million Remediation 30% Design: N 110,000 CY $60 million Decide whether $40 million to stabilize marsh Y $90 million 110,000 CY $60 million area (driven by Implementation stabilization 220,000 CY volume) $120 million Ownership Strategy St t Define Explore Decide timing, risk decision legal transfers, etc roles aspects Cost Access Recovery impact of Strategy optimal Finalize cost remedy on d recovery strategy t t cost recovery Preferred Pathway© 2012 Environmental Risk Communications, Inc. 21
  22. 22. Path Forward (EXAMPLE)  Reserve:  Current reserve (end of current year): $3.45 million  Recommended reserve (end of current year): $3.8 million  Watch List:  SVE/AS or similar remediation system fails alternative technology necessary: $2.0 fails, $2 0 million by Year 3  Further characterization offsite reveals hot spot areas above risk assessment limits: >$1.0 million by Year 2  Closure costs, not paid by the site operation, such as site security and utilities: >$1.0 million by closure announcement  Peer Review:  Within 1 year, complete technical peer review for remedy selection  Within 2 years, decide property’s end state vision and pace to closure© 2012 Environmental Risk Communications, Inc. 22

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