ERCI SSP Example

CONFIDENTIAL

Site Strategic Plan (EXAMPLE)JIS LandfillSouth Brunswick, New Jersey

Contact:

John RosengardJohn Rosengard(415) 982-3100

www.erci.com

© 2012 Environmental Risk Communications, Inc.

Project Scope

“I S ” I d Al i “O f S ” I d Al i“In Scope” Issues and Alternativeso End state vision / risk and land ownershipo Properties covered by this documento Pace to closureo Revenue and cost recovery opportunities

“Out of Scope” Issues and Alternativeso Asset operation strategyo Statewide policy issueso Litigation strategyo Staffing, contractor selectiono Revenue and cost recovery opportunities

o NRDAo Effect on nearby operationso Unit costso Remedy selection / endpoints

o Staffing, contractor selectiono Accounting treatment of remedial costs

(reserves, CapEx, etc.)

Key Assumptions

1 Property zoning remains Industrial

2 CERCLA site; no duplicative RCRA closure process

© 2012 Environmental Risk Communications, Inc. 2

Current Regulatory / Counterparty Status

Lead Agency New Jersey Department of Environmental Protection (NJDEP)

RFI complete (per DEQ expectations)

Current Regulatory Status

RFI complete (per DEQ expectations) Final Remedy Selected – 09/2009 Construction complete – 09/2009 Risk assessments, CMS, and CMI to be done as conditions

of AOC (1988) and in accordance with VRP guidance

Principal Regulatory Risk Drivers

DEQ: Non-degradation of river / waters of the state Potential Region 2 RCRA re-opener and/or additional

requirements

Land Ownership Site wholly owned by Jones Industrial Services (JIS)

C t t St t

High risk property owner (bankruptcy filing possible in 2 years)

Insurer are Travelers and Liberty MutualCounterparty Status Insurer are Travelers and Liberty Mutual 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


Stakeholder Analysis

StakeholderLevel of

Influence (0 – 5)

Level of Support (0 – 5)

Key Drivers Management Strategy

NJDEP 4 4Protection of wild and scenic river, protection of d i ki if

Free product recovery system Assessment of historic

l ibl d drinking water aquifer releases, possible data gaps

EPA 3 0Protection of human health and the environment Comply with EPA requirements

Resolve all outstanding property management issues

Adjacent Landowners 1 0

Potential impact on development potential

property management issues and position ourselves to leverage property transfers to reduce remedial requirements / costs

Maximize the sale and alternate use of other surplus property

Town Residents 1 0Potential sheen on river, trespass risk GW system

NGO N/A N/A N id tifi dNGOs N/A N/A None identified

NRDA Team 3 4NRDA impacts and credibility

Leverage settlement through property sale to state

Jones Industrial Services 5 5 -- --


PRP Group 5 5 Allocation Routine monitoring and prepayment into escrow account

Physical Setting – Site Location

JIS Landfill


JIS Landfill

Site Specifics – Ownership Information

S

Wakefern Food Corporation Cannon

Vulture City Furniture

Sunoco

Cary Compounds

JIS L dfill

Residential

JIS Landfill

Plume AreaResidential

Drive Medical

Monroe Collision Center


New Jersey Turnpike I-95

General Site Information

JIS LandfillEPA REGION 2

901-999 Cranbury South River RoadMiddlesex, 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 Approximately 50,000 cubic yards of waste were disposed of annually until landfilling operations ceased in 1980

Ground water is contaminated with metals and volatile organic compounds (VOCs), including vinyl chloride, methylene chloride, acetone, tetrachloroethene, trichloroethane, chlorobenzene, benzene and Aldrin, a

JIS Landfill

pesticide

Concentrations of contaminants are above Federal and State drinking water standards

Contaminants have been detected in the groundwater from the site to Manalapan Brook, 1.5 miles downgradient

Plume Area

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


Historical Images

1995 20021995 2002

2006 20072006 2007


Operating & Remediation TimelineOperating History

1959: •Landfilling Operations began within a former borrow pit

1960-1970sThe landfill accepted chemical, municipal, and industrial wastes including broken battery casings, paint sludges, solvents, and pesticides

1983JIS placed a cap over the northern half of the landfill

borrow pit•Excavated material from the borrow pit provided fill needed for the construction of the New Jersey Turnpike

1985JIS placed a cap over the southern half of the landfill

pesticides

1980Operations ceased, approximately 50,00 cubic yards had been disposed of annually

‘59 ‘92-- ‘60 ‘-- ‘77 ‘80 ‘83 ‘86 ‘89 ‘95 ‘98 ‘01 ‘04 ‘07 ‘10

1982

•Remedial Action

2005• Five Year Review Report

l d

1994-1995Notice letters issuedRI / FS combined

2007-2009Remedial investigation of h d

d a oPlan submitted•Proposed to NPL

1989NJDEP requested that EPA conduct an assessment of

1983Final listing on NPL

1997-1998GW monitoring of three wells indicates chemicals of concern are below agency action levels

completed• Full Scale In-situ biosparge pilot study implemented

1990-1992Removal assessment

1993 - 1994NJDEP collected

the Secondary plume conducted in 2007, Completed in 2008, addendum

b itt d i


assessment of groundwater contamination

g agency action levels

Remediation History

data on drinking water wells to supplement the RI / FS

2004• RI / FS Negotiations

submitted in 2009

Site Conceptual Model (EXAMPLE)

Human Risk: LowEcological Risk: Low

o Nothing off-siteo River sediment: Suspect low probability of NRDA

claim

3rd-party Liability Risk: Lowo ACME Ranch immediately offsite in direction of

groundwater flow, but trench intercepts bulk and stream acts as natural barrier

o Aquifer unproductive for residential used lo USFWS (NRDA trustee) studied 7 site: Minimal

contamination found, some control area results higher than industrial / municipal reach of river; no T&E species on South Property

o Prelim. risk assessment indicates no eco risk drivers on South Property

Ponds: Suspect low probability of NRDA claim

o No current or pending class action or corrective action-related litigation or property claims

o No environmental justice issueso Possible legal issues with leased property and/or

SE NAPL plume


o Ponds: Suspect low probability of NRDA claimo USFWS collected plant / sediment / tissue

samples: No definitive

Current Risks (EXAMPLE)

Description Risk Actualization

Source Qualitative Volume / Magnitude Threat Potential Drivers

Likeli-hood Impact

NAPL Plumes affect majority of south

~ 3 million gallons already pumped; ~ 1

NAPL intrusion into South Brunswick

3rd-party lawsuit

Low Medium, potential property purchases majority of south

property; mostly contained on site; some has been pumped; intra-plume mobility exists in some

already pumped; 1 – 8 million gallons left; probable that large percentage is <= residual saturation and not easily removed with

South Brunswick lawsuit property purchases and/or more aggressive GW treatment

Regulatory driven work

Low High, aggressive investigation and treatment of GW or maximize CAMU to areas; conventional

technologies

maximize CAMU to remove smear zones

Ultimate regulatory clean-up is “non-degradation”

Long-term O&M

Med High, escalation of remedial cost

SWMUs & Multiple on Currently 380 million Additional cleanup Regulatory Med High, escalation of SWMUs & soils

Multiple on property; in process of removing and putting in CAMU

Currently 380 million yds3 excavated and 0-200 million yds3

planned for excavation; could range as high as 1,300,000 yds3

Additional cleanup required of North & South properties

Regulatory driven work

Med High, escalation of remedial cost

Dermal contact to workers and trespassers; vapors

Worker / trespasser exposure

Low Low, full security controls trespass, all dust actively controlled p ; p p yduring construction

Sediments River and North property ponds

Estimated volume of 200,000 yds3; USFWS found no environmental damage at ponds

Environmental damage

NRDA claim

Low Medium, dredging may be required

Regulatory Med Medium, reverse dredging or dredging


damage at pondsmay be required

Trespass (river only) 3rd-party lawsuits

Very low

Medium, damages and dredging

Other Significant Risks (EXAMPLE)

Likelihood(%)

Cost($ millions)

Expected Range($ millions)

Technical RisksTechnical Risks

Existing containment requires re-building within 10yrs 5% $5 $0.25

Passive system fails to protect off-site areas 50% $6 $3

Ri e sediment clean p eq i ements 10 50% $0 2 5 $0 $1 25River sediment clean-up requirements 10-50% $0-2.5 $0-$1.25

Non-Technical Risks

SE NAPL Plume liability 0-50% $0-6 $0-3

d $ $NRDA damages 10% $0-0.3 $0-0.03

South Brunswick, New Jersey citizen / 3rd party lawsuit 0-10% $0-10 $0-1


End State Vision (EXAMPLE)

Site in 1960s and 70sRemediation ESV

Residential – No potential for future homeowners to see or smell residual hydrocarbons during normal homeowner activities (including installing

f fswimming pools, fence posts, foundations, piping, landscaping)

Recreational / Public Open Space and common areas with administrative and engineering controls to prevent users and workers from 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 20172017

Market property by 2018


Evolution of Spending Forecasts –Graphed with Cumulative Actuals (EXAMPLE)

$100

$110

$120

2011

$70

$80

$90

2008

20102009

$40

$50

$60

$

($ M

M)

Cumulative

20062007

$20

$30

$40 Cumulative Spending

$0

$10


Cumulative Spend Budget Remaining 2006 2007 2008 2009 2010 2011

Alternative Strategy Analysis (EXAMPLE)

Regulatory Framework Disposal Option Degree Of Source

RemovalRegulatory Re-

opener End-State Vision Recovery Of Costs

Current Consent Order Onsite

Complete (RBCA State Only Unrestricted

Use Sell Cash OutConsent Order Residual) Use, Sell

Amend Consent Order Trucks Pits & Lagoons + County for

Groundwater

Mixed or Non-Residential

Use, SellCo-Pay

Consent Decree Truck & Rail RBCA Optimal + EPARecreational Use, Sell /

Donate

Enforcement After Exiting

State Superfund

Slurry Line to Barge

Pits Removed, Stabilize the

Rest

Eminent Domain No Sale

Aggressive Remediation StrategyLow Risk Remediation StrategyEPA led Remediation StrategyPRP Committee Led Strategy


Summary of Alternatives (EXAMPLE)

NAPL Endpoint & Attenuation GW Non-Degradation Passive Contain and Monitor (1) NAPL Endpoint & Attenuation Zone (2)

GW Non Degradation Driven Clean-up (3)

Soils Excavate and remove RA identified soils; place in CAMU

Same Strategy Same Strategy

North Property Leachate collection MNA or air sparging Same Strategy Same strategyNorth Property Groundwater

Leachate collection, MNA or air sparging, and passive soil venting under CAMU (through 2021); no NAPL issues

Same Strategy Same strategy

South Property Groundwater

Extend wall if needed; switch off trench system; demonstrate immobility of NAPL plume; F&T modeling-pilot if needed

Switch off trench system; remediate to interim or TI determined endpoint using excavation and establish

Remediate complete smear zone to endpoint such that GW returned to R

em

ed

iati

on

p ; g p gattenuation zone to allow transition to passive / MNA

MCLs within 50 years using NMA

Sediments (River / Pond)

Ecological risk assessment only Same Strategy Same Strategy

Land Use Maintain current zoning (Commercial / Same Strategy Same Strategy

R

Land Use Maintain current zoning (Commercial / Industrial); explore potential uses


Risk and Land Ownership

Sale or lease of property to 3rd party for alternate uses



Reg lato Obtain VRP emed decision and Same Reg lato St ateg Same Reg lato St ateg

En

d U

se

Regulatory Strategy

Obtain VRP remedy decision and agreement by 2005

Use current voluntary efforts (i.e., CAMU) to obtain favorable regulatory outcomes

Same Regulatory Strategy Same Regulatory Strategy

Community St t

Notify adjacent landowners of di ti ti iti


Ad

vo

cacy


Strategy remediation activities

Counterparty Strategy

Monitor fellow PRPs for long term Use escrow accounts to accelerate cash call collection and avoid financial monitoring

Monitor fellow PRPs for long term

A

Summary of Financial Results: Simplified (EXAMPLE)

FINANCIAL SUMMARY

C a s e C a s e C a s e C a s e

R 1 2 3R 1 2 3Strategy Description Reserve Case

Passive Contain and Monitor

NAPL Endpoint & Attenuation Zone

GW Non-Degradation Driven

Clean-upNotes

FUTURE VALUE 5-YR (2011-2015) ($10 373 851) ($534 745) ($16 152 056) ($10 940 989)Budgeted costs, inflated,

FUTURE VALUE 5-YR (2011-2015) ($10,373,851) ($534,745) ($16,152,056) ($10,940,989) undiscounted - 5 years

FUTURE VALUE 10-YR (2011-2020) ($17,754,275) ($15,048,505) ($24,062,848) ($20,096,002)Budgeted costs, inflated, undiscounted - 10 years

FUTURE VALUE 30-YR (2011-2040) ($27,957,759) ($31,923,532) ($34,266,332) ($28,998,297)Budgeted costs, inflated, undiscounted - 30 years

PRESENT VALUE 30-YR (2011-2040) ($21,688,188) ($23,188,252) ($27,599,029) ($23,131,890)Budgeted costs, inflated, discounted - 30 years

COST RECOVERIES $6,808,649 $7,800,092 $11,740,109 $7,233,993Recoveries from all sources, inflated, undiscounted

OPERATING BUSINESS IMPACTS $0 $0 $0 $0Increases or decreases in operating company profit, inflated, undiscounted

PROJECT CASH FLOWS NPV ($16,348,461) ($17,473,509) ($18,054,616) ($17,356,012)Net total of budget, recoveries and operating company impacts; inflated, discounted

Financial Assumptions: 3.20% I n f l a t i o n


2.75% D i s c o u n t r a t e All values shown are USD

Scenario Comparison – NPV ($ millions) (EXAMPLE)

Four Campus Alternatives - (Excludes 120 Off-campus Acreage)

Alt 5c

Best

ilit

y Cu

m

Alt 5d EV = $(20.9) MM

EV = $(16.9) MM

tive P

rob

ab

mu

lativ

e F

re

Alt 5b EV = $(27.3) MM

Alt 5a EV = $(28.9) MM Follow Dashed

Lines to x-Axis for P50 Values (values shown

on Tornado

Cu

mu

lat

eq

uen

cy

diagrams)


Costs for Preferred Strategy – NPV ($ millions)(EXAMPLE)

335 U it @ $270 335 Units @ $270 / SF; 24 of 30

Acres

Residential / Residential / Commercial

335 Units @ $150 / SF

Simple P&T Design, Build; 10-

Residential / Commercial

Standards to 1’ ; CAMU

Commercial Standards to 5’; No

CAMU

Extreme P&T Design, Build;

30-yr O&Myr O&M

160% of 12 Units / Acre; Pad Ready for 335 Units; 24

of 30 Acres

60% of 12 Units / Acre; Pad

Ready for 335 Units

30 yr O&M

-$47.00 -$37.00 -$27.00 -$17.00 -$7.00 $3.00

No Risk Assessment

of 30 Acres

28.5K CY Sediment

Removal @ $200/CY; 50% Trigger Chance

Alt 5c – Value of Tax Credit, Properly Sale, Development

Alt 5c – Soils, CAMU

Alt 5c – Groundwater

Alt 5c – Infrastructure Construction

Alt 5c Upstream Sediment Wetlands and Bank

P50 = $(19.2) MM

© 2012 Environmental Risk Communications, Inc.

Alt 5c – Upstream Sediment, Wetlands and Bank

Alt 5c – Land Entitlement

Alt 5c – Stakeholder management

19

SWOT Analysis of Preferred Strategy (EXAMPLE)

Strengths

o Better NPV than alternativeso Qualified buyer identified; has experience with

other contaminated properties and can qualify f RCRA it difi ti

Weaknesses

o Uncertainty of buyer acceptanceo Data is subjective, based on team’s best

estimates for RCRA permit modification

o Compatible development plan has been presented

o Ability to quantify intangible issues

o Buyer is an LLCo Includes some residential reuseo Company will be remediating property owned

by others; no longer controls the property

Opportunities Threatspp

o Dispose of an orphan site in NYo A site is redeveloped and our public image is

enhancedo Neighborhood may get a sewer line (not on

sewer now)

o Possibility town could use eminent domain to condemn or take the property

o Unable to fulfill our environmental obligations to the agencies and/or the buyer

o Buyer unable to fulfill obligations to Company ) y g p yor 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


Decision Sequence (EXAMPLE)

Year 1 Year 2 Year 3

Critical Tasks Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

$50 million (driven by

stabilization

70,000 CY$40 million

90 000 CYImplementation

volume) 90,000 CY$50 million

Remediation 30% Design:Decide

whether to

N 110,000 CY$60 million

$40 million

stabilize marsh area

Y $90 million (driven by

stabilizationvolume)



Implementation

Ownership St t Define Explore Strategy Define

decision roles

Explore legal

aspects

Decide timing, risk transfers, etc

CostRecovery Strategy

Access impact of optimal

d Finalize cost

t tremedy on cost

recovery

recovery strategy


Preferred Pathway

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 SVE/AS or similar remediation system fails, alternative technology necessary: $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


Documents

ERCI SSP Example