MtBE Settlement Funds Available to Municipalities
The information contained in this article is not intended as legal advice and may no longer be accurate due to changes in the law. Consult NHMA's legal services or your municipal attorney.
Methyl Tertiary Butyl Ether (MtBE) is a gasoline additive that was used in New Hampshire gasoline from the late 1970s until it was banned in New Hampshire on January 1, 2007. It is recalcitrant to biodegradation, highly soluble in water and extremely mobile. These factors have made MtBE the most common contaminant in groundwater that is not naturally occurring. MtBE is a key contaminant in over 600 New Hampshire sites, and treatment systems are installed at over 100 properties to address MtBE contaminated drinking water supplies.
In 2003, the Department of Justice (DOJ) sued gasoline manufacturers seeking damages for their role in the statewide problem of MtBE contamination. The State settled with all but one of the defendants. After deductions from the settlement payments for legal fees, costs, and administrative fees, the state has $81,630,000 available for remediation of MtBE contamination. The settlements, entered as orders of the court, require that the money be spent solely on MtBE-related activities.
The Department of Environmental Services (DES) has developed a conceptual plan for the use of the settlement funds. This plan was presented to and approved by the Fiscal Committee of the legislature and Governor and Executive Council. A total of $22,316,661 of the funding is available for implementation of the plan during the current biennium. DOJ and DES have entered into a Memorandum of Understanding (MOU) that allows DES to implement this plan, while DOJ retains the right to review DES expenditures quarterly and to review any single expenditure over one million dollars.
The activities that were identified as being potentially eligible for funding are: (1) investigation and remediation of existing contamination sites, (2) testing at-risk private drinking water wells in the area of known MtBE contaminated sites, (3) providing safe, clean drinking water to impacted citizens, (4) installation and improvement of public water supply infrastructure in areas having significant MtBE contamination, and (5) implementation of measures to prevent future MtBE contamination.
A number of these potentially eligible activities could be of interest to a municipality. For example, there are private drinking water wells that are contaminated by MtBE that are within reasonable distances of existing municipal water distribution systems. The funding could be used to extend water lines to these impacted properties. The private well testing program will concentrate on areas likely to be contaminated with MtBE. Such testing will help to characterize water quality problems in affected areas of municipalities. The MtBE contamination prevention activities could be used to remove abandoned underground storage tanks or to upgrade an auto recycling facility’s fuel management and storage practices. These prevention activities could help protect high value municipal aquifers. DES believes that these potential funding eligible activities and others could be of interest to a municipality.
DES has held a series of three public informational sessions (Concord, Portsmouth and Lancaster locations) and a number of more tightly focused meetings with regional planning commissions and certain impacted municipalities. Additional meetings and outreach efforts are currently ongoing. DES is actively assimilating input from these meetings and will incorporate the feedback into a project plan that will be submitted to DOJ. The plan must be approved by DOJ prior to implementation of the full program because the settlement agreement specifies that DOJ has the sole discretion on how the funds are spent.
DES is also developing protocols for this new program. DES believes that it would be prudent to maintain the ability to provide direct services through state contractors for abandoned, orphaned or similar sites. These sites would lack an individual, government or commercial entity with the expertise necessary to perform the required work. DES would also like to be able to reimburse municipalities or other entities that are capable and have the desire to complete these types of remediation projects. DES believes that a reimbursement system will better leverage State resources and will ensure speedier implementation of projects. A reimbursement system requires the development of cost control and payment systems to ensure program accountability and cost effectiveness. This could be implemented in a similar fashion to the State’s existing petroleum reimbursement funds or revolving loan funds. The existing systems typically require pre-approval of project work scopes and budgets and the submission/processing of claims. The State is currently exploring whether a similar system would be appropriate for this new program.
In summary, the State of New Hampshire is implementing a large, new program related to the cleanup of MtBE contaminated sites. Ideally, DES would like to initiate projects this construction season. If you would like to provide comments, discuss potential projects or have any questions, please contact DES’s Gary Lynn at Gary.Lynn@des.nh.gov or 603.271.8873.