No preview available
02/07/2017 - Work Session - Sworn StatementSALT LAKE CITY CORPORATION SWORN STATEMENT SUPPORTING CLOSURE OF MEETING I, 6 HA 12 t-I6 LUlL6acted as the presiding member of the Salt Lake City Council, which met on -ate% 7`Z. Appropriate notice was given of the Council's meeting as required by §52-4-202. A quorum of the Council was present at the meeting and voted by at least a two-thirds vote, as detailed in the minutes of the open meeting, to close a portion of the meeting to discuss the following: ❑ §52-4-205(1)(a) discussion of the character, professional competence, or physical or mental health of an individual; ❑ §52-4-205(1)(b) strategy sessions to discuss collective bargaining; ❑ / §52-4-205(1)(c) strategy sessions to discuss pending or reasonably imminent litigation; §52-4-205(l)(d) strategy sessions to discuss the purchase, exchange, or lease of real property, including any form of a water right or water shares, if public discussion of the transaction would: (i) disclose the appraisal or estimated value of the property under consideration; or (ii) prevent the public body from completing the transaction on the best possible terms; ❑ §52-4-205(1)(e) strategy sessions to discuss the sale of real property, including any form of a water right or water shares if. (i) public discussion of the transaction would: ((A) disclose the appraisal or estimated value of the property under consideration; or (B) prevent the public body from completing the transaction on the best possible terms; (ii) if the public body previously gave public notice that the property would be offered for sale; and (iii) the terms of the sale are publicly disclosed before the public body approves the sale; ❑ §52-4-205(1)(f) discussion regarding deployment of security personnel, devices, or systems; and ❑ §52-4-205(l)(g) investigative proceedings regarding allegations of criminal misconduct. ❑ A Closed Meeting may also be held for Attorney -Client matters that are privileged pursuant to Utah Code §78B-1-137, and for other lawful purposes that satisfy the pertinent requirements of the Utah Open and Public Meetings Act. ❑ Other, described as follows: The content of the closed portion of the Council meeting was restricted to a discussion of the matter(s) for which the meeting was closed. With regard to the closed meeting, the following was publicly announced and recorded, and entered on the minutes of the open meeting at which the closed meeting was approved: (a) the reason or reasons for holding the closed meeting; (b) the location where the closed meeting will be held; and (c) the vote of each member of the public body either for or against the motion to hold the closed meeting. The recording and any minutes of the closed meeting will include: (a) the date, time, and place of the meeting; (b) the names of members Present and Absent; and (c) the names of all others present except where such disclosure would infringe on the confidentiality necessary to fulfill the original purpose of closing the meeting. Pursuant to §52-4-206(6), a sworn statement is required to close a meeting under §52-4-205(1)(a) or (f), but a record by tape recording or detailed minutes is not required; and Pursuant to §52-4-206(l), a record by tape recording and/or detailed written minutes is required for a meeting closed under §52-4-205(l)(b),(c),(d),(e), and (g): ❑ A record was not made. A record was made by: Tape recording ❑ Detailed written minutes under penalty of perjury that the above information is true and correct to the best of my Member all//7 Date of Signature SALT LAKE CITY CORPORATION SWORN STATEMENT SUPPORTING CLOSURE OF MEETING I, 4HA9 /9 ZUY� , acted as the presiding member of the Salt Lake City Council, which met on 79/7,47. Appropriate notice was given of the Council's meeting as required by §52-4-202. A quorum of the Council was present at the meeting and voted by at least a two-thirds vote, as detailed in the minutes of the open meeting, to close a portion of the meeting to discuss the following: ❑ §52-4-205(1)(a) discussion of the character, professional competence, or physical or mental health of an individual; ❑ §52-4-205(1)(b) strategy sessions to discuss collective bargaining; ❑ §52-4-205(1)(c) strategy sessions to discuss pending or reasonably imminent litigation; ❑ §52-4-205(1)(d) strategy sessions to discuss the purchase, exchange, or lease of real property, including any form of a water right or water shares, if public discussion of the transaction would: (i) disclose the appraisal or estimated value of the property under consideration; or (ii) prevent the public body from completing the transaction on the best possible terms; ❑ §52-4-205(l)(e) strategy sessions to discuss the sale of real property, including any form of a water right or water shares if: (i) public discussion of the transaction would: ((A) disclose the appraisal or estimated value of the property under consideration; or (B) prevent the public body from completing the transaction on the best possible terms; (ii) if the public body previously gave public notice that the property would be offered for sale; and (iii) the terms of the sale are publicly disclosed before the public body approves the sale; ❑ §52-4-205(l)(0 discussion regarding deployment of security personnel, devices, or systems; and ❑," §52-4-205(l)(g) investigative proceedings regarding allegations of criminal misconduct. 0 A Closed Meeting may also be held for Attorney -Client matters that are privileged pursuant to Utah Code §78B-1-137, and for other lawful purposes that satisfy the pertinent requirements of the Utah Open and Public Meetings Act. ❑ Other, described as follows: The content of the closed portion of the Council meeting was restricted to a discussion of the matter(s) for which the meeting was closed. With regard to the closed meeting, the following was publicly announced and recorded, and entered on the minutes of the open meeting at which the closed meeting was approved: (a) the reason or reasons for holding the closed meeting; (b) the location where the closed meeting will be held; and (c) the vote of each member of the public body either for or against the motion to hold the closed meeting. The recording and any minutes of the closed meeting will include: (a) the date, time, and place of the meeting; (b) the names of members Present and Absent; and (c) the names of all others present except where such disclosure would infringe on the confidentiality necessary to fulfill the original purpose of closing the meeting. Pursuant to §52-4-206(6), a sworn statement is required to close a meeting under §52-4-205(1)(a) or (0, but a record by tape recording or detailed minutes is not required; and Pursuant to §52-4-206(l), a record by tape recording and/or detailed written minutes is required for a meeting closed under §52-4-205(1)(b),(c),(d),(e), and (g): ❑ A record was not made. I---- ❑,r A jecord was made by: ❑ fape recording ❑ Detailed written minutes I k )enalty of perjury that the above information is true and correct to the best of my �;Il7117 ember Date of Signature SALT LAKE CITY CORPORATION SWORN STATEMENT SUPPORTING CLOSURE OF MEETING I, CKAP2L/ t-- Lul��, acted as the presiding member of the Salt Lake City Council, which met on a/ 7(Z 7. Appropriate notice was given of the Council's meeting as required by §52-4-202. A quorum of the Council was present at the meeting and voted by at least a two-thirds vote, as detailed in the minutes of the open meeting, to close a portion of the meeting to discuss the following: ❑ §52-4-205(1)(a) discussion of the character, professional competence, or physical or mental health of an individual; ❑ §52-4-205(1)(b) strategy sessions to discuss collective bargaining; ❑ §52-4-205(l)(c) strategy sessions to discuss pending or reasonably imminent litigation; ❑ §52-4-205(1)(d) strategy sessions to discuss the purchase, exchange, or lease of real property, including any form of a water right or water shares, if public discussion of the transaction would: (i) disclose the appraisal or estimated value of the property under consideration; or (ii) prevent the public body from completing the transaction on the best possible terms; ❑ §52-4-205(1)(e) strategy sessions to discuss the sale of real property, including any form of a water right or water shares if: (i) public discussion of the transaction would: ((A) disclose the appraisal or estimated value of the property under consideration; or (B) prevent the public body from completing the transaction on the best possible terms; (ii) if the public body previously gave public notice that the property would be offered for sale; and (iii) the terms of the sale are publicly disclosed before the public body approves the sale; []/ §52-4-205(1)(0 discussion regarding deployment of security personnel, devices, or systems; and ❑ §52-4-205(l)(g) investigative proceedings regarding allegations of criminal misconduct. ❑ A Closed Meeting may also be held for Attorney -Client matters that are privileged pursuant to Utah Code §78B-1-137, and for other lawful purposes that satisfy the pertinent requirements of the Utah Open and Public Meetings Act. ❑ Other, described as follows: The content of the closed portion of the Council meeting was restricted to a discussion of the matter(s) for which the meeting was closed. With regard to the closed meeting, the following was publicly announced and recorded, and entered on the minutes of the open meeting at which the closed meeting was approved: (a) the reason or reasons for holding the closed meeting; (b) the location where the closed meeting will be held; and (c) the vote of each member of the public body either for or against the motion to hold the closed meeting. The recording and any minutes of the closed meeting will include: (a) the date, time, and place of the meeting; (b) the names of members Present and Absent; and (c) the names of all others present except where such disclosure would infringe on the confidentiality necessary to fulfill the original purpose of closing the meeting. Pursuant to §52-4-206(6), a sworn statement is required to close a meeting under §52-4-205(1)(a) or (f), but a record by tape recording or detailed minutes is not required; and Pursuant to §52-4-206(1), a record by tape recording and/or detailed n minutes is required for a meeting closed under §52-4-205(1)(b),(c),(d),(e), and (g): We A record was not made. C;---Arecord was made by: ❑ Tape recording ❑ Detailed written minutes under penalty of perjury that the above information is true and correct to the best of my D-/7 1 7 PresidingMember Dat� f Signature JACQUELINE M. BISKUPSKI Mayor TO: FROM: DATE: RE: MEMORANDUM Mayor Biskupski City Council Members Margaret PIRusty Vetter; Megan DePaulis February 1, 2017 MARGARET D. PLANE OFFICE OF THE CITY ATTORNEY PRIVILEGED AND CONFIDENTIAL ATTORNEY WORK PRODUCT North Temple Landfill: Legal Framework and Strategies I. EXECUTIVE SUMMARY Salt Lake City Corporation leased property for the North Temple Landfill (NTL) as a municipal dump from about 1955 to 1979. Based on limited site investigation and a review of the historical records, the estimated costs for clean-up range from $65M to $111M depending on how the clean-up is performed and the anticipated use of the site. A new estimation of clean-up costs from Ninegret is anticipated to be shared with the City next week. Due to the City's operation of the NTL for decades, the City clearly has significant responsibility if clean-up were mandated by a federal or state agency. Estimating the share of the City's responsibility is difficult. Although we will argue that our allocation may be as low as 50%, it is likely that the City is responsible for 70-95% of any clean-up costs, whether that allocation is reached through litigation or negotiation. II. BACKGROUND The site of the NTL is approximately 770 acres, about 620 of which contain municipal waste. Throughout the twenty years of operation, more than 8 million cubic yards of household, commercial, and industrial solid and liquid wastes were deposited in unlined, cell shaped trenches. Many of the trenches were excavated below the groundwater table, suggesting that any waste placed in such trenches may have come in contact with area groundwater. Liquid wastes included leather tanning wastes, plating and polishing wastes, oil refinery wastes, oily wastes, acids, bases, solvents, septic tank pumpings, sewage, sump pumpings, chemical wastes, slaughterhouse wastes, and possibly dry cleaning, military/ammunition and insecticide wastes. The area is relatively flat and the soils in the area are generally low -permeability clays, silts, and fine sands, The groundwater in the area is typically less than ten feet below ground surface, and flows to the northwest toward the Great Salt Lake, except for in a few areas affected by drains and that are adjacent to canals. The City leased the property in 1955 (the 1955 Lease Agreement) from Bonneville -on - the -Hill, a private company. In three amendments to the 1955 Lease Agreement, the City leased additional property for the disposal of garbage. In 1975, Bonneville -on -the -Hill conveyed the 451 SOUTH STATE STREET, Room 505A WWW.SLCGOV.COM P.O. Box 145478, SALT LAKE CITY, UTAH 84114-5478 TEL 801-535-7788 FAX 801-535-7640 PRIVILEGED AND CONFIDENTIAL ATTORNEY WORK PRODUCT Saints (Church). After other conveyances in 1999 to some of the Church's other property holding companies and the Zions Securities Corporation, the property was conveyed to Suburban Land Reserve, Inc. (SLR), another of the Church's property holding companies, in 2007. There are no direct lease agreements between SLR and the City. SLR is the current owner of the property. The NTL and surrounding areas have been predominately used for grazing; the area is currently zoned for agricultural use, which allows for very limited residential use. It has been appropriate to leave the contamination in place because the groundwater in the area is very stable and there has not been any development, which means there was little risk to human health or the environment. Because of the new development in the Norwest Quadrant, however, the anticipated land use for the area is changing, and the stability of the contamination will likely become an issue. Multiple investigations of the site have been performed by various environmental consultants and through the Utah State Department of Environmental Quality's (DEQ), Division of Environmental Response and Remediation (DERR). The United States Environmental Protection Agency (EPA) identified the NTL as "active" under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), commonly known as Superfund, but the NTL is not listed as a National Priorities List (NPL) site. Rather, the NTL is listed as "other" remedial status and a state -led clean-up under the State of Utah's voluntary clean-up plan (VCP). The VCP does not implement CERCLA nor does it take the place of CERCLA, but the DERR, the Utah State agency that administers the VCP, and the EPA work together. The basic framework of CERCLA and the VCP is discussed below. III. FEDERAL AND STATE ENVIRONMENTAL LAW. A. Comprehensive Environmental Response. Compensation, and Liabilitv Act. In 1980, Congress enacted CERCLA, and amended it in 1986. CERCLA focuses on the cleanup of inactive hazardous waste sites and the allocation of liability for cleanup costs. Allocations are made among arrangers and transporters of hazardous substances, as well as current and former owners of facilities where hazardous substances were disposed (all referred to under statute as "potentially responsible parties" or PRPs). The EPA has three basic options under CERCLA when confronting a situation requiring a response. The EPA: (1) may conduct the response itself and seek to recover its costs from the Potentially Responsible Parties (PRPs) in a subsequent cost -recovery action; (2) can compel PRPs to perform the cleanup themselves through either administrative or judicial proceedings; or (3) can enter into a settlement with PRPs to perform all or portions of the work. Private parties and states may also bring "citizens suits" to enforce CERCLA's provisions and natural resource trustees may bring actions for damages to natural resources. Another general area of CERCLA authority concerns the Hazardous Substance Superfund (the Superfund), which provides financing for cleanup and enforcement actions (including oversight). The Fund consists of monies generated by taxes imposed upon the petroleum and chemical industries. Primarily, the Fund pays for EPA's cleanup and enforcement expenses. Although the 2 PRIVILEGED AND CONFIDENTIAL ATTORNEY WORK PRODUCT goal is to have polluters pay all these expenses, EPA often must use Fund monies to clean up sites where there are no PRPs or to respond expeditiously to a release. The intention is to recover these expenditures later through cost -recovery actions. In addition, the Fund provides up -front funding to EPA, and in certain specified situations funds to reimburse private party expenses. In the case of the NTL, the EPA identifies the site as "active" under the CERCLA Information System (CERCLIS), but has not listed it on the National Priorities List (NPL). When EPA begins to investigate a potential release of a hazardous substance, the location of the release is placed on the CERCLIS. This is an EPA database of potential Superfund sites and releases of hazardous substances that either need to be addressed or have been addressed. The CERCLIS database codes the current action regarding the NTL as "other" and "state -led clean- up." An eastern portion of the NTL was excavated prior to 1996 and relocated to other portions of the NTL. EPA issued a Certificate of Compliance (COC) for that portion of the NTL in 2000, but has not taken any action since. The liability for PRPs under CERCLA is generally joint and several. Courts are given the authority to allocate response costs among liable parties using equitable factors as the court determines. 42 U.S.C. § 9613(f)(1); see also Goodrich Corp. v. Middlebury, 311 F.3d 154,170 (2d Cir. 2002). Courts considering allocation under CERCLA generally consider one of two sets of factors —the "Gore Factors" or the "Torres Factors."' Id. at 247. Courts often consider other factors, including: status as a landowner; whether the property was purchased "as is"; 'The Gore Factors include: (1) The ability of the party to demonstrate that his contribution to the release can be distinguished; (2) The amount of hazardous substance involved. Of course, a small quantity of highly toxic material, or above which releases or makes more dangerous another hazardous substance, would be a significant factor; (3) The degree of toxicity of the hazardous substance involved; (4) The degree of involvement of the person in the manufacture, treatment, transport, or disposal of the hazardous substance; and (5) The degree of cooperation between the person and the Federal, State, or local government in preventing harm to public health or the environment from occurring from a release. This includes efforts to mitigate damage after a release occurs. Niagara Mohawk Power Corp. v. Chevron US.A., Inc., 596 F.3d 112,130 (2d Cir. 2010) (quoting S. Rep. No. 96- 848, at 345-46 (1980)). The Torres Factors include: 1. The extent to which cleanup costs are attributable to wastes for which a party is responsible. 2. The party's level of culpability. 3. The degree to which the party benefitted from disposal of the waste. 4. The party's ability to pay its share of the cost. United States v. Davis, 31 F. Supp, 2d. 45, 63 (D.R.I. 1998). PRIVILEGED AND CONFIDENTIAL ATTORNEY WORK PRODUCT • principles of caveat emptor—whether the landowner knew the use of the property at the time of purchase, the landowner's experience and sophistication; • whether the purchase price was reduced due to the nature of the tenant's activities; • whether the landowner conducted an environmental assessment before purchasing the property; • the presence of a release or indemnification provision in the lease; • whether the landowner benefitted from the lease, whether the landowner will benefit from the cleanup; • comparative fault of the parties, and whether the landowner took steps to address known contamination. Estimates of costs for clean-up range from 65 million dollars to 111 million dollars, depending on how the clean-up is performed and the anticipated land use. Another estimation of clean-up costs based on Ninigret Group's investigation for SITLA should be available soon as well. Although an allocation of the City's share of the clean-up costs could be judicially determined or reached through negotiation, a precise dollar amount simply will not be known until the clean-up is completed. This is because it is impossible to predict with certainty what will be in the ground until remediation is active. Some of the factors identified above weigh in favor of attributing liability to the current property owner, SLR. Other factors, such the 1955 Lease Agreement, which states the City will "assume full responsibility for any damage or injury occurring (or claim to have occurred) by reason of the operation of the garbage disposal upon the above leased premises," weigh in favor of liability for the City. Salt Lake County may also have some liability as a PRP, but to a much lesser extent than the City or SLR. B. Utah State (VCP). Denartment of Environmental Quality — Voluntary Clean -Up Prolaram - - - - - - The VCP was created in Utah in 1997 by the Utah Legislature.2 The purpose of the statute was to encourage and accelerate investigation and clean-up of sites where there is suspected or confirmed contamination that threatens public health and the environment. The VCP program has a few advantages over property being listed as a Superfund site on the NPL. Some of these advantages are: • DERR oversees the process and ultimately can issue a Certificate of Completion (COC) allowing for development (with or without controls) of the property after clean up. • The limited liability release is transferrable to subsequent property owners. • It is a faster, less intensive public process than CERCLA. • It can be applied in phases or sections on one property — allowing sections to be cleaned and a COC issued on that action. • The program is voluntary, so may be terminated by either party (state or applicant). • The VCP does not offer protection from federal liability — however, UDEQ believes federal enforcement is highly unlikely if cleanup is performed as outlined. • EPA regional screening levels are used for soil and groundwater. z Utah Code § 19-8-108. d PRIVILEGED AND CONFIDENTIAL ATTORNEY WORK PRODUCT • Sites that are on the CERCLIS database and are issued a COC may be designated "No Further Remedial Action Planned" (NFRAP) by EPA. A prospective property purchaser or developer can be an applicant for the VCP (unless there has been an enforcement action on the property). The process for application is fairly simple and straightforward and there is a $2,500 application fee. If the City wants to maintain some level of control and oversite of the clean-up process, it may want to consider the role it would play in the VCP going forward with the current owner, future owner or future developer. The City would only be a "party" to the VCP if it was the program applicant. It is anticipated that the Applicant would be paying the costs of the clean- up. The VCP does not limit cost recovery, allowable by law, from other potential responsible parties. IV. IIISTORICAL STRATEGIES AND CURRENT DEVELOPMENTS A. City's Historical North Temple Landfill Strateay. • Historically, the City has viewed the NTL as a contingent liability. This view made sense because there was no development in the area, no threat to human health, and the contamination has been relatively stable. Furthermore, neither State nor federal regulators had been pushing for cleanup of the landfill. • To date, the City's costs related to the landfill since it closed have been minimal, making the status quo desirable. B. Current Developments Rea_ ardiniz North Temple Landfill Ownership and Development. • The State prison development is bringing development to the area that includes the NTL. It appears that leaving the landfill alone will no longer be an option. • Currently, SITLA is in negotiations with the State and SLR to acquire title to the NTL. It is anticipated that the State would bond to cover clean-up costs, then potentially use tax increment to pay back the bonds. The City has not been part of these conversations, and important decisions regarding levels of clean-up and types of development permitted are being decided by others without input from the City. V. LEGAL OPTIONS AND IMPLICATIONS A. Acquire Title to NTL. • To the City's knowledge, SITLA and SLR have not entered into a purchase agreement yet. The City could approach SLR to begin discussions regarding the City acquiring title. 5 PRIVILEGED AND CONFIDENTIAL ATTORNEY WORK PRODUCT • The City may be able to acquire title for a nominal amount, but SLR would likely require the City to indemnify it for any portion of remedial costs that it may be allocated through any federal, State, or private action. • Advantages: o The City is likely to pay the lion's share of the costs or remediation. Holding title allows the City to be the applicant in the State's Voluntary Clean -Up Program (VCP), which allows it to control the timing and process of remediation to a greater extent. o The City could dictate the timing and type of future development on the NTL. Leaving more open space, for instance, would allow the City to cap some of the contamination in place and would decrease overall clean-up costs. o The City could reap the economic benefits from the increased property value. o Cleaning the property will significantly increase the land value. It is likely it will also increase the value of the adjacent properties. o The City will likely never be fully released of all liability. Assuming the State will issue a certificate of completion, it is unlikely that the City would be subject to a future enforcement action by EPA or other third party litigation. o The City would likely receive reputational benefits for participating in clean-up. • Disadvantages/Risks: o Because the NTL site is potentially valuable land if it can be developed, SLR could request a higher purchase price for the property, in addition to the indemnification. Given SLR's activities on the landfill, this may be unlikely. o The City would not be able to allocate any costs to SLR or its predecessor for the deposit of waste from the beginning of remediation of the NTLE. o If the City were to acquire the property from SLR, the City would be responsible to pay for the majority of the remediation costs. o The cost of any remediation project is impossible to identify at the outset. Although the City can better control costs if it is the applicant, they are still unknown. (Note: the costs are (unpredictable regardless of the applicant.) o Demand for the property is unknown. B. Participate in Clean -Up with Prol,erty Owner. • The City could work with SLR, SITLA, or whomever the property owner is, as a co -applicant in the Utah State Voluntary Clean -Up Program. The 0 PRIVILEGED AND CONFIDENTIAL ATTORNEY WORK PRODUCT applicants would likely need to create a binding agreement regarding allocation of costs. The property owner would have less incentive than the City to create such an agreement, and could refuse. • Advantages: o The City could share some of the clean-up costs with any co - applicant. o The City could still receive reputational benefits for participating in clean-up. o Future enforcement action by EPA or third party litigation would be unlikely. • Disadvantages/Risks: o The City would not reap the economic benefits from the increased property value. i o The City and other PRPs may not be able to reach agreement about allocation, which could lead to litigation. I o The City would not be in control of timing of remediation or of the level of development, which will likely increase costs. j C. Refrain from Participation in Clean -Up and Wait for Allocation of Costs. • Primary purpose would be to minimize City's allocated portion of responsibility. Secondary purpose would include delay of City incurring significant expense for cleanup. • Advantages: o The City has valid defenses based on SLR's more recent activities on the property and the voluntary arrangement under the original lease to accept landfill waste, and other defenses. o The City would not need to address funding for remediation, only litigation costs. • Disadvantages/Risks: o Would likely be a lengthy and costly process. o The uncertainty of litigation may not justify the cost. o Would require immediate funds for litigation, but would delay inevitable significant clean-up cost. o Possible reputational damage. o Highly atypical -for a major PRP to sit on sidelines during clean-up, o No ability to control level of clean-up. o No ability to dictate timing or type of development. 7