Did you know that stormwater running off your construction site (active or inactive) can place you in the cross-hairs of EPA and State regulators?

More importantly, just because you think you have the pieces in place to comply with the stormwater requirements, doesn’t mean you do.  The permitting requirements are very specific and failure to comply results in significant penalties.  Just ask Toll Brothers, one of the nation’s largest home builders.  In June 2012, they were the latest in a long list of home builders that were penalized for violating the stormwater requirements.  Toll Brothers agreed to pay over $740,000 in penalties for violations of the stormwater requirements.  And if you think that was just a fluke, then you need to take a closer look at stormwater enforcement over the years.

Here is a brief list of some of the major penalties that have been dished out by EPA over the last four of years.

1)      Toll Brothers – $741,000 in civil penalties, including a comprehensive compliance program to prevent future violations.  (2012)

2)      The Ryland Group - $625,000 in civil penalties, including a comprehensive compliance program to prevent future violations. (2011)

3)      Lindsey Construction Company – $430,000 in civil penalties since construction was completed as the site, no injunctive relief was requested. (2011)

4)      Beazer Homes USA, Inc. - $925,000 in civil penalties – Additionally, EPA required the implementation of a “compliance program” to prevent future violations.  EPA values that compliance program at over $9 million dollars.  Additional money that Beazer will have to spend to comply with stormwater rules. (2010)

5)      Hovanian Enterprises - $1 million in civil penalties, including a comprehensive compliance program to prevent future violations. (2010)

6)      Centext Homes - $1.485 million, including a comprehensive compliance program to prevent future violations. (2008)

7)      KB Homes – $1.185 million, including a comprehensive compliance program to prevent future violations. (2008)

8)      Richmond American – $795,000, including a comprehensive compliance program to prevent future violations. (2008)

9)      Pulte Homes - $877,00, including a supplemental environmental project valued at $608,000 and a comprehensive compliance program to prevent future violations. (2008)

10)   Home Depot – $1.3 million, including a comprehensive compliance program to prevent future violations.  (2008)

So what does this mean for me?

It means that you need to pay attention to something as simple as stormwater, or risk significant penalties.  The stormwater program covers many aspects.  The one we are talking about here today, is “construction activities.  According to the rules, Stormwater discharges from construction activities (such as clearing, grading, excavating, and stockpiling) that disturb one or more acres, or smaller sites that are part of a larger common plan of development or sale are regulated under the National Pollutant Discharge Elimination System (NPDES) stormwater program.  Prior to discharging stormwater from a construction site, operators must obtain coverage under the NPDES permit.  In Arizona, depending on where the site is located, you will either comply with ADEQ or EPA rules.  Now if the site is less than 1 acre but is part of a common plan of development or sale it must comply with these rules.  If the site is less than 5 acres, there are exemptions that can apply.

Compliance versus Complacency

With all environmental regulations it is important to follow the rules to the letter.  Regulators love to find the missing piece.  In other words, a lot of the violations that take place are not 100% woeful disregard of the law.  Most are actually ineffective, or mistaken attempts to do it right.  But since there are so many moving parts, so many details and requirements, it makes it very difficult to be certain you are in compliance.

Paperwork can sink you.  A large part of most environmental laws is “paperwork”.  Too often businesses are short-staffed and paperwork issues get put on the back burner.  Or worse yet, with the significant slow down in construction activity, it is likely many of the people “responsible” for compliance were laid off from their job, leaving important paperwork and compliance issues uncompleted.  The result is easy pickings for regulators.  Since the laws are strict liability (in other words, they don’t care about your intent or whether the paperwork was “accidentally forgotten”) they get to penalize you from day one of failing to comply 100% with the regulations.

This is where you can’t afford not to have expert help.  You need to make sure you have a team that is on top of the requirements and the law.  It goes without saying the Home Depot, Ryland, KB, Beazer, Toll Brothers, and the rest likely had people who were responsible for stormwater compliance, but rather than relying upon legal experts in the field, it would appear they tried to deal with this issue in-house or worse yet, left it up to construction managers.  The result was that they paid millions in penalties, to learn what their lawyers should have told them before it was too late.  And worse yet is that they did not see the steamroller coming at them.  When your competitors are getting hit with million dollar stormwater violations, you are being given a wonderful opportunity to quickly take stock of your practices and to get it right before the EPA or state regulators find you.

Michael Denby is the founder of Denby Law, PLLC an exclusive environmental and natural resources law firm in Phoenix, AZ focusing on regulatory compliance law for all the major environmental programs, CERLCA, RCRA, CAA, CWA, & TSCA. In his 18 years of environmental representation, Michael has written and presented on numerous environmental topics, sat on 3 gubernatorial appointments, and represented large and small clients before local, state and federal regulators. Learn more about Denby Law, PLLC or to contact the author click here www.denbylaw.com