Tina Huff’s “Duly Diligent”

ASTM - Use, Users, and You

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  • Duly Diligent
    How valuable is your Phase I ESA?415.0
    Entry posted June 26, 2012 by Duly DiligentContributor 
    Title:
    How valuable is your Phase I ESA?
    Entry:

    Clients often ask me why the costs associated with preparing a Phase I ESA Report vary so widely among consultants.  Since ASTM has specific requirements that must be adhered to, how can some EPs fulfill ASTM E1527 Standard requirements charging as little as $1,500 while others charge $3,500 for the same property?  Clients are left wondering “is my Phase I ESA less valuable because I selected the lowest bid?”

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    Because the ASTM 1527-05 Standard allows a minimum level of effort for some of its requirements, it is possible for an EP to do a bare minimum assessment and still claim compliance with the Standard.  The table below compares the level of effort often involved for a $1,500 versus a $3,500 Phase I ESA for each of the three major sections.

    Section

    $1,500 Phase I ESA

    $3,500 Phase I ESA

    Records Review

    Physical Settings based on review of USGS topo map

    Physical Settings based on review of:

    • USGS topo map
    • Soils maps
    • Groundwater reports
    • Geological maps

    Review of standard environmental record sources

    Review of standard environmental record sources plus alternative source records such as:

    • Building department
    • Fire department
    • Health department
    • Planning department
    • Local environmental agencies

    Historical review of one or two sources (the ASTM minimum)

    Historical review of multiple sources, including:

    • Aerial photos
    • Fire insurance maps
    • City directories
    • Topo maps
    • Property tax files

    No historical review of adjacent properties unless historical information is discovered during site research (e.g., via aerial photos, fire insurance maps)

    Historical review of adjacent properties, including:

    • City directories
    • Property tax files
    • Aerial photos
    • Fire insurance maps
    • Topo maps

    No additional sources for the site or adjacent properties reviewed

    Additional current and historical sources for the site and adjacent properties may be reviewed, including:

    • Internet
    •  Newspapers
    •  Historical societies
    • Local libraries

    Site Inspection

    Staff conducting site inspection is under the supervision of an EP

    EP conducts site inspection

    Photographs not included (ASTM does not require)

    Photographs included

    Interviews

    Staff conducting interviews is under the supervision of an EP

    EP conducts interviews

    One reasonable attempt made to interview persons knowledgeable about the site

    As many attempts as reasonably possible made to complete the interviews

    At least one staff member from one agency interviewed

    Staff member(s) from multiple agencies interviewed

     

    The real value of a Phase I ESA is the EP’s professional opinion regarding environmental risks associated with a property.  Although a $1,500 Phase I ESA may technically qualify as an ASTM-conducted assessment, the amount of information obtained during a minimal property search could be significantly less than that obtained by an EP who far surpassed minimum requirements.  How “informed” an opinion can an EP provide using only the barest minimum of information?

    Here’s the bottom-line question for Users to ask themselves:  Is it really the best business decision to try to save a couple thousand dollars on a Phase I ESA for a property valued at hundreds of thousands of dollars or more?  Property transactions are hardly the place to be penny wise and pound foolish.  A value-based Phase I ESA may not be the “value” Users are seeking.

    Keywords:
    ASTM, price, value, cost, Phase I ESA, 1517
  • Duly Diligent
    De minimus conditions and HRECS: Clarification coming24.5
    Entry posted May 13, 2011 by Duly DiligentContributor 
    Title:
    De minimus conditions and HRECS: Clarification coming
    Entry:

    I have been a member of ASTM for several years now.  During the recent meetings held in Anaheim last month, the general consensus of the ASTM E1527 Standard Task Group is that clarification of the terms “de minimis conditions” and “HRECs” is needed to bring about consistent use in Phase I ESA Reports.  The new and improved language that has been suggested (which will be sent to ballot in the near future) is intended to correct industry-wide misunderstanding and misuse of the terms de minimis and HRECs.  The intent is not to change the Environmental Professional’s current practice of identifying a condition and considering its impact on the property.

     

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    Simply stated, “de minimis” is the term used for a present release that is so minor that—for lack of a better expression—it “doesn’t matter.”  The Task Group as a whole favored retaining the historical definition of de minimis in the E1527 Standard, but recommended:

    • Removing the definition of de minimis conditions from its current inclusion with the definition of “REC” in Section 3 (Terminology) of the 1527 Standard;
    • Including de minimis conditions as a stand-alone definition in Section 3; and
    • Providing additional discussion relating to HRECs.

    The definition of de minimis conditions still mirrors the definition provided in AAI; no changes to the definition were made when it was moved from its former location as part of the REC definition to a stand-alone entry.  The primary objective of the Task Group in repositioning and augmenting these definitions is to clarify that de minimis conditions are not to be applied to HRECs involving continuing obligations, or for sites containing risk‑based concentrations of hazardous substances and/or petroleum products remaining in-place.

    “HREC” is one of the most misused 1527 Standard terms and the source of considerable confusion.  As defined in the 1527 Standard, an HREC is an environmental condition that in the past would have been considered a REC, but currently may or may not be so considered.  The term has not always been included in the 1527 Standard, but eventually was developed to deal with “issues” identified on a property that have since been addressed.  HREC is not to be used to describe the potential for a past release.  For example, a gas station operating on a property 40 years ago would not be considered an HREC if it had not been addressed previously.  An HREC would include a past release on a property that has been identified, cleaned up, and/or reported.  In this instance, the Environmental Professional must provide an opinion on whether the condition is an HREC or a REC, and whether it carries continuing obligations.  An HREC can also be a REC, as in the case where a site met old cleanup levels, but does not meet current levels.

    Another aspect of HRECs under consideration is whether they should be included in the Conclusions section of a Phase I ESA Report.  Although the current 1527 Standard does not require inclusion, the Task Group will propose retaining HRECs in the Findings/Opinions section and carrying them forward to the Conclusions section only if they are “likely” to include continuing obligations.  HRECs that have been resolved to residential or unrestricted use standards would not be included in the Conclusions.  The reason for this proposal is that Users tend to focus on the Conclusions, and may not read the Findings/Opinion section, when HRECs are identified.  Because a Phase I ESA Report is considered a risk-management tool, HRECs—just as RECS—can help manage risk, especially when HRECs involve continuing obligations such as due care, notification requirements, and use limitations.

    There is still on-going discussion between the Task Group members and changes to 1527 have NOT been finalized.

    Keywords:
    De minimis, HREC, ASTM
  • Duly Diligent
    What’s Really “Reasonable”?65.0
    Entry posted March 23, 2011 by Duly DiligentContributor 
    Title:
    What’s Really “Reasonable”?
    Entry:

    I recently read a Seattle Times article on the impact the Freedom of Information Act is having on public agencies in the Northwest, including city and county departments, the Department of Ecology, and the regional EPA office.  Due to recurring budget cuts and employee layoffs, these agencies are unable to keep up with the growing demand for public records from both businesses and private parties.  The enormity of the resulting production backlog is impacting the environmental due diligence world.  How?

    Image:
    More:

    Environmental Professionals are aware that they are required to review “reasonably ascertainable information” about the subject property when conducting a Phase I ESA.  Reasonably ascertainable information falls into three categories.  Information that is:

    1)      Publicly available;

    2)      Obtainable from the source within reasonable time and cost constraints; or

    3)      Practically reviewable.

    Information is considered reasonably ascertainable if it is provided from the source within 20 calendar days of the request at a normal cost to cover the source’s retrieval and duplication costs.  But acquiring information that falls into the second category has become a long shot.  Why?

    It has been reported that 20 percent of the annual budget for several Seattle-area agencies is spent fulfilling requests for information—a substantial amount of money that many agencies can’t afford to divert from business operations during these lean economic times.  Several local agencies have responded to the influx of requests by limiting the number of hours their employees devote to researching, retrieving, and copying records for the public—in some cases setting a cap as low as 6 hours a month.  Since that limit may be reached in fulfilling a single request, what happens to those of us who truly need these records to fulfill ASTM requirements?  According to some agency representatives, the currently out-of-control production backlogs will lead to a waiting-list system of first-come, first-served.  No special privileges.  Because you may not see your requested files for several months, records required for a Phase I ESA are no longer “reasonably ascertainable.”

    I recently requested information from a public agency in Seattle and was surprised to receive a letter stating my requested information would be provided within 90 business days and at the hourly rate of the agency employee researching, retrieving, and copying the file.  I was asked to submit a check for $100 to cover the estimated cost of providing the approximately 25-page file I requested before they would process my request.  Ninety business days?  One hundred dollars?  Seriously?

    Although the ASTM E1527 Task Group has discussed the 20-day limit and the possibility of revising related language in the Standard, such a revision wouldn’t help the Users of Phase I ESA reports.  The majority of Phase I ESAs are completed during property transactions with shortened due diligence periods.  Rarely do we have 20 days to produce the entire report.  So changing the Standard language to allow more time to receive requested information wouldn’t address the real issue.

    I don’t see an easy fix to this problem any time soon.  As long as Grandma continues to request thousands of pages of genealogy files and Mr. Johnson pursues his new hobby of researching every water line in his neighborhood, I remain on the endless waiting list of public requests.  Is this really reasonable?

    Keywords:
    ASTM E1527
  • Duly Diligent
    Limitations and limiting conditions and deviations, oh my!24.0
    Entry posted April 27, 2011 by Duly DiligentContributor 
    Title:
    Limitations and limiting conditions and deviations, oh my!
    Entry:

    Do you know the difference between ASTM E 1527-05 limitations and limiting conditions?  How about the difference between limitations and deviations?  These terms can be easily confused, so let’s break them down and establish a general understanding.

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    I’ll begin with Limitations, often referred to as the Statement of Limitations.  This section—usually one of the first or final paragraphs of a Phase I ESA Report—provides the language limiting the Environmental Professional’s (EP’s) liability.  The Limitations section typically states that the Phase I ESA Report has been prepared in accordance with current industry standards (ASTM E 1527-05); however, there is no guarantee that the Site is free of hazardous or potentially hazardous materials or conditions.  The exact wording of this section may vary among EPs, but its general meaning and intent are the same.

    Limiting conditions can be a little more challenging to define, but in general are physical and/or client-imposed restraints encountered by an EP during completion of a Phase I ESA.  Physical limiting conditions include obstructions such as buildings, bodies of water, paved areas, parked cars or equipment, snow, and overgrown vegetation that prevent the EP from viewing the entire site.  Client-imposed limiting conditions may be encountered when the User does not provide the EP with access to all interior portions of a building, or provide the EP with known and helpful documents for review during completion of the Phase I ESA.

    Finally, deviations are departures from E1527-05 requirements, either in the form of failing to fulfill a required scope of work item (e.g., not completing the User Questionnaire, not reviewing historical sources) or going beyond scope of work requirements (e.g., including business risk elements such as asbestos, lead-based paint, radon, regulatory compliance).  Some may not realize that recommendations themselves are a deviation from the Standard in that they are not required by E1527-05, but are in addition to the Standard.  Deviations are elements that can be controlled by the EP, and/or may be client-imposed constraints, as in the case of a User requesting that the EP not conduct interviews.

    Limiting conditions and deviations must be defined and documented before data gaps can be identified… but that’s a topic of discussion in itself for another time.  For now, how far do we take these limiting conditions and deviations when preparing a Phase I ESA Report?  Do we need to start documenting the physical constraints of the EP such as height and vision?  Are photographs taken during the site inspection and included in the Phase I ESA Report considered a deviation because they are not required and go beyond the E 1527-05 scope of work?  If a Phase I ESA report is peppered with limitations and deviations, does it still meet the requirements of AAI?  These are the kinds of questions the ASTM E 1527-05 Committee has been grappling with since identifying the need to clarify “limiting conditions” as contained in the Standard.  The Committee will continue gathering input and working toward greater clarity and consistency among EPs and Phase I ESA Reports in the proposed changes to the Standard.

    Keywords:
    ASTM E1527, AAI, Limitations, Deviations
  • Duly Diligent
    The ballot is out!8
    Entry posted September 21, 2011 by Duly DiligentContributor 
    Title:
    The ballot is out!
    Entry:

     

    A shorter blog this time to announce a long-anticipated event:  After months of meetings, discussions, and negotiations, the first ballot containing proposed revisions to the ASTM E1527 Standard Practice for Environmental Site Assessments has now been submitted for vote.  This initial vote is the first step in a series of balloting that is part of the approval process involving related task group, subcommittee, and committee members.

     

    More:

     

    A ballot return rate of 60 percent from the voting members of the ASTM E50 Committee is required for a valid ballot.  Any negative vote cast must include a written explanation of the voter’s objection.  All negative votes will be carefully considered before the ballot is submitted to the next level in the process.

    If you’re curious about the proposed revisions and were hoping to get your hands on a copy of the ballot, I hate to disappoint you, but ASTM voting members are under agreement to not reproduce, circulate, or quote any part of a ballot item document outside ASTM activities.  What I can tell you is that some of the proposed revisions relate to:

    • De minimis conditions;
    • Historical recognized environmental conditions;
    • Regulatory file review;
    • Non-scope business environmental risk;
    • The role of the User; and
    • The table of contents

    Comments received during the balloting process will be reviewed by the ASTM E50 Committee during its semiannual meeting in Tampa the first week in November.  So watch for updates in future blogs as this ASTM Standard chain of events unfolds.

    Keywords:
    ASTM, E1527, ballot
  • Duly Diligent
    ASTM E1527-05: Differing opinions, same goal
    Entry posted April 20, 2011 by Duly DiligentContributor 
    Title:
    ASTM E1527-05: Differing opinions, same goal
    Entry:

    I just returned from the Semi-Annual ASTM E50 Committee Meetings in Anaheim, California, where the future of the E1527-05 Standard and possible revisions were discussed.  I have to say that this meeting was one of the more productive and informative in my 9 years of participation as an active ASTM member.  Among the approximately 40 members attending were Users, Producers, Attorneys, Regulatory Agencies, and General Interest groups, all of whom provided valuable input regarding the proposed changes.  Hearing first-hand the opinions and needs of both the User and Producer communities was very beneficial.

    More:

    During the discussions it struck me that although the two groups sometimes express differing opinions, their common ground is the desire for an improved Phase I Environmental Site Assessment (ESA) deliverable.  The clear consensus was that the purpose of any proposed revisions is to improve the quality of the deliverable rather than change its content, since the Phase I ESA Report is intended to meet AAI requirements.

    What it all comes down to is this:  we all want and benefit from clarity in the Standard and consistency among Phase I ESA Reports.  Producers of Phase I ESA Reports are requesting detailed definitions, clarified requirements, and specific guidance for Report preparation.  While Producers have always used their professional judgment to interpret the Standard, they would benefit from a new and improved Standard that is easier to understand and implement.  Users of Phase I ESA Reports want detailed and informative reports that meet the requirements of E1527‑05 and AAI.  Not all Phase I ESAs are created equal, and Users are beginning to understand the significant differences between a 3-page Phase I ESA Report and one containing 20 pages.

    My bottom-line conclusion from last week’s meetings is that Users and Producers ultimately want the same thing:  an improved Phase I ESA deliverable.  The ASTM E50 Committee is committed to making that happen.

    A single blog entry can’t adequately recap the hours of discussions centered around E1527-05 Standard concerns and proposed changes, so stay tuned for future updates!

    Keywords:
    ASTM E1527, Phase I ESA, Environmental assessment, AAI
  • Duly Diligent
    "Environmental Professional" - The name...14.5
    Entry posted August 9, 2011 by Duly DiligentContributor 
    Title:
    "Environmental Professional" - The name doesn't say it all
    Entry:

    As the 1527 Task Group wraps up proposed revisions to ASTM Standard E1527-05 (which will go to ballot in the near future), I have come to the conclusion that the majority of the proposed revisions to the Standard are the result of inconsistent work on the part of those claiming the title “Environmental Professional” (EP).  Some are not adequately trained or do not have the experience to use and apply ASTM E1527-05 to meet AAI.  Other EPs simply cut corners when preparing Phase I ESAs to reduce costs.

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    Over the past several months, I have participated in the monthly (and sometimes bi-monthly) 1527 Task Group teleconferences and have listened to the opinions of EPs, users, regulatory agencies, and attorneys regarding which sections of the Standard should be edited for improvement and why.  While I admit that many sections would benefit from improvement and clarification, several of the proposed edits and recommended changes have been brought to the table because of the overall consensus that there is considerable inconsistency in the areas of EP training and experience, formulating of opinions, Phase I ESA Report preparation, and pricing.

    Although the definition of an EP is clearly stated in AAI and ASTM E1527-05, just meeting the EP qualifications on paper does not guarantee that an EP has received adequate training or guidance and the required experience to accurately formulate opinions in a Phase I ESA.  Some EPs learn by watching others; some attempt to read the Standard and apply it as they interpret it; others receive formal due diligence training provided by their employer, directly from ASTM‑sponsored classes, or through a reputable online program.  There are no formal standardized “Environmental Professional tests,” and no certification program has been created by ASTM or EPA to determine who legitimately qualifies as an EP.  So whether they like it or not, the bottom line is, it is up to users to verify that the EP they select genuinely meets the definition of an EP, and they are confident the EP has the essential training and sufficient experience to adequately fulfill project requirements.

    I highly recommend that a user interview an EP before selecting one to begin work on a project.  Users hire EPs to formulate opinions regarding the environmental risk associated with a property—not something to be taken lightly.  I also advise that in addition to fulfilling the user responsibilities documented in ASTM E1527-05, users conduct some research of their own and interview EPs to make sure they are qualified to work on a project.  This is your property on the line, so before selecting an EP to assess it, I suggest asking a potential EP a few simple questions up front:  What kind of training have you received?  What qualifications do you have to consider yourself an EP?  How many years of experience do you have?  Do you stay up to date on new standards and editions?  Why is the cost of your Phase I ESA so low (or high)?

    I am a firm believer that users get what they pay for.  So do your homework at the outset; in the case of “Environmental Professionals,” the name may not say it all.

    Keywords:
    ASTM, 1527, environmental professional, user, AAI
  • Duly Diligent
    User Questionnaire for Risk Management?1
    Entry posted January 31, 2012 by Duly DiligentContributor 
    Title:
    User Questionnaire for Risk Management?
    Entry:

     I just returned from the 3-day Environmental Bankers Association Meeting in Santa Fe.  These semiannual meetings provide an opportunity for Phase I ESA Producers and Users to come together and discuss topics related to environmental due diligence, risk management, and current trends in the marketplace.  It also is an occasion for the ASTM E1527 Task Group members at the Meeting to provide a summary of proposed revisions to the E1527 Standard, and relay recent updates.  One area of revision that was a hot topic of discussion at the Meeting was Section 6 dealing with User responsibilities.

     

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    At the request of several lenders, the ASTM E1527 Task Group began revisiting Section 6 back in 2010, when revisions to the entire Standard got underway.  Phase I ESA Users have advocated for reducing the User’s responsibility to provide information, particularly when a Phase I ESA is being used strictly as a risk management tool and is not impacted by the requirements for Landowner Liability Protections or Brownfields Grantees.  

    Currently approximately 90 percent of Users and Producers support modifying Section 6 of the Standard, seeing it as reasonable to revise the language so those not seeking landowner protection will not have to comply with all of the User responsibilities necessary to meet AAI requirements.  The proposed revisions to E1527 would make clear the components required for those seeking Landowner Liability Protections or Brownfields grants.  Meeting AAI requirements will still require Users to fulfill the User responsibilities that are defined in the current Standard.

    Keywords:
    ASTM, User, AAI, Phase I ESA
  • Duly Diligent
    What's up with E1527?
    Entry posted November 18, 2011 by Duly DiligentContributor 
    Title:
    What's up with E1527?
    Entry:

    The E1527 Task Group for Phase I just completed its semiannual meeting in Tampa, Florida with approximately 40 attendees from the User, Producer, and General Interest groups.  The purpose of the meeting was to review the comments and negatives submitted following the first ballot that recently went out to Real Estate Assessment and Management Subcommittee members for a vote.  The ballot contained proposed revisions to E1527, intended to strengthen and clarify E1527 requirements.

    More:

    The Task Group received approximately 30 pages of comments and negatives requiring follow‑up.  During its productive session in Tampa, the Task Group was able to address the majority of the editorial comments.  Remaining comments and negatives were organized by E1527 section and assigned to specific focus groups.  While some negative commenters will be contacted to discuss their concerns in greater detail, other issues raised cannot be considered due to AAI requirements.

    Once the comments and negatives have been fully addressed, a second ballot will be sent to Subcommittee members for the next round of voting, anticipated for February 2012.  Here’s to a busy holiday season!

    Keywords:
    E1527, Phase I, AAI
  • Duly Diligent
    E1527-05 Balloting - Round 23
    Entry posted March 14, 2012 by Duly DiligentContributor 
    Title:
    E1527-05 Balloting - Round 2
    Entry:

    The second ballot containing proposed revisions to the E1527-05 Standard was submitted to E.50.02 subcommittee members March 2, 2012.  This ballot reflects new and revised language recommended by the E1527 Task Group in response to feedback
    from the User and Producer communities generated by the August 2011 ballot.  Some of the recent revisions were devised to address negative ballots and comments; others are a response to Focus Group recommendations to clarify E1527-05 language.

    More:

    Noteworthy revisions introduced in the March ballot include:

    • A simplified definition of “REC”;
    • Additional guidance relating to User
      Responsibilities; and
    • The addition of the term “Controlled Recognized
      Environmental Condition” to the existing HREC definition to address the wide variety
      of site closures.

    This second ballot will close April 2, 2012.  Comments received during the balloting period will be reviewed prior to and during the ASTM E50 Committee semiannual meeting April 16 through 20, 2012.  The Task Group is still on track to complete the ASTM balloting process by the end of 2012, with the revised E1527-05 Standard anticipated by the end of 2013.

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