Clarification of Site Manager (On-scene coordinator) Role

<000001000> <000001000> <000001000> <000001000>Clarification of Site Manager (On-scene coordinator) Role <000001000> <000001000> <000001000>

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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

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WASHINGTON, D.C. 20460

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[original dated <000001000> July 7, 2000]

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<000001000> OFFICE OF
<010001000> SOLID <000001000> WASTE AND EMERGENCY
<010001000> RESPONSE <010001000> <000001000>

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MEMORANDUM

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SUBJECT: Clarification of <010001000> Site Manager (On-scene coordinator) Role, "Lending to Yourself," and Obligation <000001000> Requirements Under the Brownfields Cleanup Revolving Loan Fund Program

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FROM: Linda Garczynski, <000001000> Director /s/
<010001000> Outreach <000001000> and Special Projects Staff

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TO: Regional National Superfund <000001000> Policy Manager, Regions 1-10

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On November 4^th, 1999, <010001000> Assistant Administrator Fields testified before the U.S. House of Representatives, <010001000> Committee on Commerce, Subcommittee on Oversight and Investigations, on U.S. <010001000> EPA's Brownfields Cleanup Revolving Loan Fund (BCRLF) program. Mr. Fields was <010001000> asked numerous questions about the various requirements imposed on program recipients. <010001000> As a result of his testimony, Assistant Administrator Fields made a commitment <010001000> to Congress that U.S. EPA would clarify requirements of the BCRLF program and <010001000> identify possible ways to streamline program implementation. This memorandum <010001000> seeks to clarify three important program issues under the Brownfields Cleanup <010001000> Revolving Loan Fund (BCRLF) program: (1) the role of the Site Manager (On-scene <010001000> coordinator -OSC); (2) clarification of the "lending to yourself" policy; and <010001000> (3) elimination of the eighteen month obligation requirement currently required <000001000> in the BCRLF Administrative Manual (EPA 500-B-98-001, May 1998).

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1. Role of the Site Manager <000001000> (OSC) Under the BCRLF Program

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BCRLF award recipients (the State, <010001000> tribe, or political subdivision) are the "lead agency" responsible for managing <010001000> BCRLF response actions. As the lead agency, the award recipient is responsible <010001000> for ensuring that BCRLF response actions are conducted in accordance with Comprehensive <010001000> Environmental Response, Compensation, and Liability Act (CERCLA) and consistent <010001000> with the National Oil and Hazardous Substances Pollution Contingency Plan (NCP). <010001000> The lead agency must identify a government employee as its OSC (hereinafter <010001000> referred to as "site manager"). The lead agency's site manager helps the lead <010001000> agency carry out its responsibilities on a site-specific basis. The site manager <010001000> works on behalf of the lead agency. Thus, the lead agency remains legally responsible <010001000> to EPA for ensuring BCRLF response actions are conducted in accordance with <000001000> CERCLA and consistent with the NCP.

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Typically, the site manager is <010001000> an employee of the lead agency (i.e., award recipient). The following are other <000001000> options an award recipient has for choosing a site manager:

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(2) Political subdivision, <111001000> state, or federal employee of a government other than the award recipient's <111001000> serves as site manager. For example, a political subdivision award recipient <111001000> may utilize a state employee as its site manager. Other examples of intragovernmental <111001000> site managers include U.S. Army Corps of Engineers or Bureau of Reclamation <111001000> employees. Under this option, award recipients need to ensure that the intragovernmental <101001000> employee will work on behalf of the award recipient.
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(3) Political subdivision <111001000> uses a city ordinance(s) that permits the temporary hire of city personnel. <111001000> For example, a city hired a licensed site professional (LSP), on a temporary <111001000> part-time basis, to be the site manager for the BCRLF pilot via a city ordinance. <111001000> Although LSPs are not usually government employees, under this ordinance the <101001000> temporary part-time hire gains status of government employee.
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(4) <111001000> The lead agency designates an employee as site manager and utilizes technical <111001000> support from EPA regional staff. For example, an EPA Region provides technical <101001000> support to BCRLF pilot site managers.
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(5) The lead agency designates <111001000> an employee as site manager and contracts for technical support. For example, <111001000> the local government contracts with an LSP to provide technical assistance. <101001000>
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Any site manager utilized by a <010001000> lead agency must have experience with on-site coordination, direction, and review <010001000> of environmental response activities and experience with or knowledge of the <010001000> non-time critical removal requirements in the NCP (40 CFR <000001000> 300.415). Ultimately, <010001000> the lead agency must be comfortable with the knowledge, experience, and background <010001000> of the government employee serving as site manager, even if the site manager <000001000> will be utilizing technical support.

<000001000>2. "Lending to Yourself" and <000001000>the BCRLF Program <000001000>

Generally, there are two levels <010001000> of redevelopment potential for brownfields sites. The first level includes contaminated <010001000> properties located in areas with strong economies. These properties, once assessed, <010001000> are more easily redeveloped as result of the economic benefits of the surrounding <010001000> community. The benefits of redeveloping on the location outweigh the costs of <010001000> cleanup. The second level of contaminated properties do not have as high a redevelopment <010001000> potential. These are properties at which the cost of cleanup outweighs the benefits <010001000> of redevelopment. Generally, these properties that must be cleaned up before <010001000> a redeveloper will consider locating on the site. Quite often, these marginal <010001000> properties are owned by local governments as a result of tax foreclosure or <010001000> condemnation. As a result, BCRLF recipients have asked EPA to consider the concept <010001000> of "lending to yourself," a scenario in which the pilot recipient lends BCRLF <010001000> monies to, e.g., another branch of its government to clean up the property. <010001000> The theory is that once the property is cleaned up, the recipient will be able <000001000> to raise the property to the "first level" of redevelopment potential.

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The BCRLF Administrative Manual <010001000> states that "a cooperative agreement recipient may not lend to itself ...unless <010001000> a state or local law establishes that the agency may borrow money from the political <010001000> jurisdiction of the cooperative agreement recipient and raise funds to pay the <010001000> loan back." The policy stated in <010001000> the manual recognizes that there may be circumstances in which two public agencies, <010001000> that are administratively part of the same governmental unit, may enter into <010001000> a loan agreement. This memorandum <010001000> sets out the requirements that must be met in order for a pilot to "lend to <000001000> itself."

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To "lend to itself," the pilot <000001000> must demonstrate the following:

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(3) that the borrowing <111001000> entity has the legal authority to enter into a legally <111001000> binding obligation to repay. For example, a memorandum <111001000> from the city's legal counsel citing the statutory authority or a city council <111001000> resolution that obligates the repayment from a particular funding source. <111001000> The obligation to repay must be more than a "moral" obligation to repay or <101001000> a simple "promise" to do so.
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(4) that there is an identifiable <111001000> source of income/repayment. For example, PILOT (payment in lieu of <111001000> taxes) funds, proceeds from a TIF (tax increment financing), or funding from <101001000> the sale of the property.
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(5) that <111001000> there is an enforcement entity who can ensure that the loan <111001000> does not turn into a grant. For example, the comptroller's office of the cooperative <111001000> agreement recipient. This entity will help avoid potential conflicts of interest. <101001000>
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<010001000> If a recipient chooses to "lend to itself," borrower eligibility requirements <010001000> would apply and the substantive terms of the agreement must be reviewed by EPA. <000001000>

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<000001000>3. Restructuring of the Obligation Requirements <000001000>

In light of experience <010001000> gained since publishing the BCRLF Administrative Manual, this memorandum will <010001000> act as a change to the current obligation requirements imposed on the BCRLF <010001000> cooperative agreement recipient. The current policy requires the cooperative <010001000> agreement recipient to obligate all funds awarded within three years. The manual <010001000> established a "schedule of obligation," requiring "no less than 50% of the amount <010001000> awarded [be obligated] within 18 months; 80% within two years; and 100% within <000001000> three years."

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<000001000>Recognizing the administrative and <000001000>procedural requirements of establishing and implementing the BCRLF program may <000001000>require more time than originally anticipated, EPA is changing the "obligation <000001000>schedule" to the following:
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"The recipient must provide evidence <010001000> that it is making significant progress towards loaning the amount available <010001000> under this agreement through its quarterly reports. If the loan funds are not <010001000> used by the end of this agreement, and the term is not extended by EPA, the <000001000> funds will be withdrawn."

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cc: Timothy Fields, Jr., Assistant Administrator
Mike Shapiro, Deputy Assistant Administrator
Steve Luftig, Acting Deputy Assistant Administrator
Paula Fitzsimmons, Region Vince Pitruzzello, Region 2
Jim McCreary, Region 3
Rosalind Brown, Region 4
Joe Dufficy, Region 5
Betty Williamson, Region 6
Cecilia Tapia, Region 7
David Ostrander, Region 8
Dave Croxton, Region 10
Bob Cianciarulo, Lead Region
Regional Brownfields Coordinators, Region 1-10
James Drummond, Office of General Counsel
Karen Kraus, Office of General Counsel
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