August 2, 2010

EPA Targets Stormwater Discharges on Construction Sites

Holland & Knight Alert
Dianne R. Phillips

In a move that will impact construction and redevelopment of hotel and resort projects, on December 1, 2009, the U.S. Environmental Protection Agency (EPA) issued a final rule establishing effluent limitation guidelines (ELGs) and new source performance standards (NSPS) for the discharge of pollutants at construction sites. The EPA promulgated these standards pursuant to the federal Clean Water Act. The new rule significantly increases the standard for managing discharge pollutants at construction sites. The rule became effective February 1, 2010, and is applicable to all stormwater discharge permits issued after that date, whether by EPA or states acting under delegated National Pollutant Discharge Elimination System (NPDES) permit programs. Owners and contractors should take notice because this is the first time that the EPA has imposed both national monitoring requirements and express numeric turbidity limitations. In addition, the new rule comes amidst increased enforcement by EPA at construction sites, including targeted enforcement against well known companies undertaking large or multiple development projects.

Construction Pollutants

Construction activity disturbs soils and exposes materials that can wash off during storm events. Organic pollutants discharged into these stormwaters, such as soil, sediment and other nutrients, can increase turbidity and thereby degrade aquatic ecosystems, drinking water supplies and surface water clarity. Sediment discharge can also reduce water depth and increase the need for expensive dredging in navigable waters. In addition, discharge from dewatering, wash waters and other various building materials (such as concrete, paints, fertilizers and trash) can also wreak havoc on surrounding aquatic ecosystems and water supplies. The new rule is intended to accomplish the following:

  • preserve and improve water quality on a national scale
  • reduce the amount of sediment discharged from construction sites by approximately four billion pounds each year

New Guidelines and Standards

This new rule requires construction site owners (developers) and contractors (referred to as “operators” in the rule) to implement a range of erosion and sediment control measures and pollution prevention practices to control sediment discharges from virtually all construction sites, including all sites in excess of one acre of disturbed area. Site owners, contractors and other operators must include such prevention practices and controls within their best management practices (BMPs). In addition, for the first time, the new rule imposes technology-based numeric effluent limits, which will be phased in over four years, on the pollutant “turbidity” for all construction sites in excess of 10 acres of disturbed area at any one time. Specifically, construction sites that disturb 20 or more acres of land at one time must comply with a maximum daily discharge limitation of 280 nephelometric turbidity units (NTU) within 18 months of the effective date of the final rule or by August 1, 2011, and sites which disturb ten acres or more must comply within four years or by February 2, 2014.

Increased Enforcement Activity

In addition to promulgating new, stricter rules for managing stormwater discharges from construction sites, EPA has increased its focus on enforcement in this area. EPA’s latest Clean Water Act Enforcement Action Plan specifically targets the estimated 200,000 construction stormwater sites, as one of the most important water pollution problems. Recent enforcement activity has targeted both developers and construction contractors. Several large developers of residential properties recently settled enforcement actions with EPA for penalties and increased compliance costs in the millions. The EPA made a similar splash in the retail sector, settling claims against a prominent retail chain for its alleged failure to: (i) obtain proper stormwater permits; (ii) develop adequate Stormwater Pollution Prevention Plans (SWPPPs); and (iii) properly implement best management practices (BMPs) in the construction of multiple retail stores. The retailer paid over $1 million in penalties and agreed to implement a nationwide compliance program for future construction projects. It is expected that large construction sites and developers with multiple operations around the country will face continued and increased scrutiny. Hospitality industry owners and developers must be aware of, and deal with, this potential cost exposure.

Proper compliance includes two key steps:

  1. Proper permitting. Design of a proper SWPPP, whose BMPs both coextend with the new rule and local requirements, creates a framework for success.
  2. Rigorous management of the SWPPP throughout the project. Owners and operators responsible for stormwater discharge must implement the BMPs and also maintain the appropriate training documentation, subcontractor certifications, construction activity logs, corrective action logs, inspection reports (periodically and after all storm events) and other necessary documentation. These key obligations should be the subject of specific construction contract provisions.

A SWPPP should also be periodically reviewed for a determination of whether any amendments are necessary as the site develops. To ensure compliance, professionals with proven track records in this area should be retained to design, implement and assist in managing a comprehensive and proper stormwater management plan. Selection of appropriate design professionals and consultants with the requisite experience and expertise is essential, in light of this enhanced risk to project economics.

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