State Auditor Releases Audit of Site Remediation Program –
Critiques NJDEP Delay in Ranking of Hazardous Discharge Sites
On June 13, 2016, the State Auditor in the New Jersey Legislature’s Office of Legislative Services (OLS) issued a report on its audit of the New Jersey Department of Environmental Protection’s (NJDEP) Site Remediation Program (SRP) for the period July 1, 2012 to January 31, 2016. The audit found that the SRP financial transactions examined by OLS were reasonable and properly recorded and the SRP was properly monitoring the Licensed Site Remediation Professionals; however, of particular significance to the regulated community, OLS found that NJDEP is five years overdue in meeting its statutory obligation to rank all hazardous discharge sites. Other findings related to the use of SRP funds to pay the salary of certain non-SRP NJDEP employees and shortcomings in NJDEP’s debt collection procedures, including delayed referrals to the Department of Treasury and failure to timely lien debtors’ properties.
The site ranking obligation was enacted as part of the enactment of the Site Remediation Reform Act in 2009 and NJDEP made a major effort to implement it through the development of a computerized remedial priority scoring system that it first rolled out to the public in May 2010. That effort was followed in 2012 by NJDEP’s distribution of draft scoring packages to parties with sites in the SRP based on information that NJDEP culled from its files for use in developing priority scores for each site. An opportunity was afforded to parties to obtain the information used by NJDEP and to correct the information or submit new information. Final priority system scores for each site were supposed to be issued by late 2012, which never occurred; nor have any scores been made public to date.
In a June 6 letter to the Office of the State Auditor responding to the audit, NJDEP Commissioner Martin indicated that NJDEP intends to develop a formal ranking system and generally described how sites would be scored for ranking without indicating any timeline for that to happen. He also noted the challenges presented by the substantial volume of qualifying sites and data gaps due to property abandonment and missing records.
At the time that the NJDEP first started down the road to develop the ranking system, concerns were expressed by the regulated community that priority scores might be improperly used by prospective purchasers, lenders, insurers, neighbors, litigants and others to evaluate and take action which could negatively impact the site, the owner or other party conducting the remediation. Although the actual rankings and scores have yet to come to light, those concerns remain.
Further, given the passage of time, the original information generated by NJDEP as well as any corrective or updated information submitted by those parties with sites being scored, is seriously out of date. Many sites have either submitted a large volume of technical information to NJDEP since the full-blown implementation of the LSRP program in 2012 (and solicitation of corrective or additional information by NJDEP that same year) or have completed their site remediation obligations since that time (presumably taking them out of consideration for ranking). In addition, many other sites have entered the SRP since the NJDEP solicited individual site input on its draft scoring packages in 2012. Consequently, it is obvious why the task of incorporating all of that new or additional information into the ranking system presents a series of significant challenges to NJDEP. When viewed in that light, the Commissioner’s considered avoidance of specifying any timeline as to when this task might be finished seems particularly revealing. Whether the audit gives rise to Legislative action to generate renewed pressure on the NJDEP to complete the ranking system remains to be seen.
Click here for more information on the NJDEP’s remedial priority scoring system. For questions or additional assistance, please contact MGKF’s Bruce Katcher (484-430-2320).