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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 10/05/2004 - FIRST READING OF ORDINANCE NO. 163, 2004, AUTH EXE ITEM NUMBER: 28 AGENDA ITEM SUMMARY DATE: October 5, 2004 FORT COLLINS CITY COUNCIL STAFF: Greg Byrne/ Carrie Daggett SUBJECT First Reading of Ordinance No. 163, 2004, Authorizing the Execution of an Administrative Order on Consent By the United States Environmental Protection Agency and a Related Environmental Covenant in Connection With Environmental Contamination and Remediation in the Cache La Poudre River Near the Northside Aztlan Community Center Property. RECOMMENDATION Staff recommends adoption of the Ordinance on First Reading. FINANCIAL IMPACT City cooperation with the parties to the Administrative Order on Consent(AOC)will require in-kind contributions of staff time, use of City property, conveyance of permanent easements over City property,and potential extraordinary costs in future City capital projects;e.g.,street construction and utility installation. City staff is negotiating AOC provisions that will provide for some portion of these costs to be offset by contributions from other parties to the AOC. In addition,the City will be protected in the AOC from certain claims for cost recovery or contribution. That is,the City will not be required to pay for EPA's past or future response costs, or the costs of implementing the remediation program. EXECUTIVE SUMMARY The implementation of an environmental removal and remediation work plan that EPA and Public Service Company of Colorado (PSCo) have been developing over the course of the past year to address contamination in the Cache La Poudre River in the vicinity of the City's Northside Azdan Community Center is currently pending. Prior to undertaking this work, EPA and PSCo have worked with the City and Schrader Oil Company to negotiate an Administrative Order on Consent (AOC) that will set out the rights and responsibilities of the relative parties to the AOC, including the apportionment of costs associated with the environmental cleanup and the related EPA oversight of the same,the future liabilities and protections from claims of liability amongst the parties related to the environmental condition addressed by the AOC,and the ongoing commitments of the parties related to prevention and mitigation of future impacts related to contamination that is within the October 5, 2004 -2. Item No. 28 scope of the AOC. The version of the AOC currently under negotiation would protect the City from certain claims for cost recovery or contribution, and would not require the City to contribute to the initial costs of the environmental cleanup, other than through the cooperation and property access on affected City property. It also requires that all parties owning property affected by the identified contamination record against the title of their respective property an environmental covenant limiting activities and use of the property so as to avoid disruption to the identified contamination that will remain in place after the remediation activities. The contamination has been determined to have originated from the Poudre Valley Gas manufactured gas plant that once operated on property south of Willow Street and now owned by Schrader Oil Company. The contamination passes across and under City-owned property, and enters the Poudre River. BACKGROUND The Environmental Protection Agency(EPA),Region VIII,has been negotiating with Xcel Energy's Colorado subsidiary,Public Service Company of Colorado(PSCo),to plan and design environmental cleanup activities to remove contaminated sediment and bedrock and to operate on the site into the future to intercept subsurface contamination approaching the River. EPA has proposed that PSCo, Schrader Oil Company and the City of Fort Collins negotiate an Administrative Order on Consent (AOC) with EPA and, if possible, the State of Colorado, that would allocate responsibility for cleanup costs and outline the parties' future responsibilities and commitments related to the environmental condition of the River,the City's Northside Aztlan Community Center property and the general area. While a final agreement has not yet been reached, the negotiating parties are currently working toward an AOC that would not require the City to share in the direct costs of the cleanup. The current negotiations would require the City to provide access required to carry out removal and remediation activities on its property, and to agree to certain other restrictions on the use of its property. City staff has been working to negotiate AOC provisions that would provide compensation to the City for at least a portion of the additional costs it may incur in constructing improvements in Willow Street and on other affected City property. Public Service Company is currently nearing completion of the design phase for the ongoing removal and monitoring remedial action. The selected remedial action involves sediment/upper bedrock removal over a stretch of river, a vertical physical containment barrier approximately 700 feet long on City property, vertical hydraulic containment, and a water treatment and discharge system. The estimated cost for the clean-up and operation and maintenance is$8 million.EPA will provide daily on-site coordination and oversight during the October 2004—April 2005 timeframe. At this time,parties committing to participate in the agreement are EPA,PSCo and the City of Fort Collins. Schrader Oil Company may or may not enter into the agreement. In any event, the AOC, as drafted by EPA,contains protections from contribution actions or claims against the City related to the costs being incurred by EPA and PSCo to carry out and oversee the removal and remedial work. The AOC conditions these protections upon the City's continued compliance with the terms of the AOC and the Federal statutes. Staff recommends that the City Manager be authorized to enter into the AOC, whether or not Schrader Oil Company is a party to the AOC. October 5, 2004 -3- Item No. 28 As noted in previous reports to the Council, time is critical if the remediation program is to be completed this year. The work will require diversion of the Poudre River into a system of pumps and pipes,and access to the river bed for a period of several weeks. This must occur during the low flow period, which is rapidly approaching. Delay of first reading of the Ordinance would cause a delay in the project of more than a month, due to the Council meeting schedule. Staff does not anticipate major substantive changes to the key provisions of the AOC,nor to the impacts upon the City. Nevertheless, Council will have the opportunity to review a more complete document at the time of Second Reading of the Ordinance, with the parties to the final agreement identified. The Ordinance presented is drafted so as to allow the City Manager, in consultation with the City Attorney,to enter into the AOC provided it contains terms and conditions determined necessary and appropriate to protect the interests of the City. Staff recommends adoption of the Ordinance with these provisions. Staff will be working diligently with EPA and the other parties to negotiate the AOC between first and second reading of the Ordinance. Additional information will be provided to the City Council at that time, together with any revisions to the Ordinance, if appropriate. Public Outreach EPA has completed its Poudre River Communications Strategy. The final public outreach event was a public open house,held at the Northside Aztlan Community Center on September 28th. Staff will process the information received at this public outreach event, and will report to the Council on October 5th regarding any relevant information obtained from the open house. ORDINANCE NO. 163, 2004 OF THE COUNCIL OF THE CITY OF FORT COLLINS AUTHORIZING THE EXECUTION OF AN ADMINISTRATIVE ORDER ON CONSENT BY THE BY THE UNITED STATES ENVIRONMENTAL PROTECTION AGENCY AND A RELATED ENVIRONMENTAL COVENANT IN CONNECTION WITH ENVIRONMENTAL CONTAMINATION AND REMEDIATION IN THE CACHE LA POUDRE RIVER NEAR THE NORTHSIDE AZTLAN COMMUNITY CENTER PROPERTY WHEREAS, the City of Fort Collins (the "City") is the owner of various properties to the north, south and under the Poudre River between College Avenue and Linden Street, including Gustav Swanson Natural Area to the north of the River, the Northside Aztlan Center property, including additional adjacent property, such as the property on which the United Way Building is situated, together with the right-of-way for Willow Street (collectively referred to as the "City Property"); and WHEREAS, pursuant to various licenses to enter granted by the City Manager under the authority granted to him in Resolution 2003-119, on November 4, 2003, Public Service Company of Colorado ("PSCo") and the United States Environmental Protection Agency ("EPA") have conducted extensive investigation of a seep of tarry material in the Poudre River in the vicinity of the Aztlan Property identified by the City in late 2002, and the source and extent of related contamination, and have carried out certain initial remediation of the contamination; and WHEREAS, in light of the investigations and remedial activities completed to date, PSCo and EPA have developed and generally agreed upon a remedial action plan to be carried out in the Poudre River and on adjacent Aztlan Property; and WHEREAS, the detailed plans for the investigation and remediation work to be completed, including necessary backfill and restoration of the affected area upon completion of that work, are in the final development and review process, and are expected to include a 700 foot vertical wall in the south bank of the Poudre River, a small treatment building in which water collected in the wall structure will be treated, and other minor structures to support the operation and maintenance of these facilities and ongoing monitoring of the area; and WHEREAS, the City Council has previously adopted Ordinance No. 146, 2004, authorizing easements for PSCo and EPA that will allow them to install, operate, maintain and access the remedial facilities, and monitor the completion and status of that work; and WHEREAS, in order to proceed with the environmental cleanup activities as proposed, EPA and PSCo have requested that the City enter into an administrative order on consent (the "AOC") that will set out the rights and responsibilities of the relative parties thereto, including the apportionment of costs associated with the environmental cleanup and the related EPA oversight of the same, the future liabilities and protections from claims of liability amongst the parties related to the environmental condition addressed by the AOC, and the ongoing commitments of the parties related to prevention and mitigation of future impacts related to contamination that is within the scope of the AOC; and WHEREAS, as part of the AOC, EPA and PSCo have agreed that the City shall be protected from claims for cost recovery or contribution, and shall not be required to contribute to the initial costs of the environmental cleanup, other than through the cooperation and property access that the City has already agreed to provide; and WHEREAS, in addition, as part of the AOC, PSCo has agreed to pay to the City compensation in anticipation of additional costs the City may incur in redevelopment of Willow Street and other improvements on the City Property, in an amount yet to be finally negotiated; and WHEREAS, as a condition of the AOC, PSCo has required that the City agree to an environmental covenant on the City Property to limit the activities thereupon to activities that will avoid the aggravation of the environmental condition on the same (the "Restrictive Covenant"), and PSCo has agreed to the same restriction on PSCo's adjacent property to the south of Willow Street across from the current Northside Aztlan Community Center; and WHEREAS, Schrader Oil Company has also participated actively in the negotiation of the AOC, and may agree to enter into the AOC and related terms beneficial to the City, as described herein, although a final determination regarding Schrader Oil's participation has not been made; and WHEREAS, City staff has recommended that the City Council authorize the AOC and related environmental covenant, whether or not Schrader Oil participates in the same, based on representations by EPA, including EPA's determination that the environmental cleanup activities that are proposed to occur in the river and near and on the City Property will result in substantial benefits to the general public and will protect the Poudre River; and WHEREAS, Section 23-111 of the City Code provides that the City Council is authorized to sell, convey, or otherwise dispose of real property owned by the City, provided the Council first finds by ordinance that any sale or other disposition of real property owned by the City is in the best interest of the City of Fort Collins. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows: Section 1. That the conveyance of the Restrictive Covenant, as set forth herein, is in the best interest of the City of Fort Collins. Section 2. That the Mayor is hereby authorized to execute such documents of conveyance of the Restrictive Covenant as the City Manager, in consultation with the City Attorney, determines to be necessary or appropriate to protect the interests of the City, not inconsistent with this Ordinance. Section 3. That the City Manager is hereby authorized to execute an administrative order on consent with EPA and PSCo, and, if Schrader Oil agrees to participate in the same on terms and conditions acceptable to all parties, with Schrader Oil, in such final form as the City Manager, in consultation with the City Attorney, determines to be necessary or appropriate to protect the interests of the City, not inconsistent with this Ordinance. Introduced, considered favorably on first reading, and ordered published this 5th day of October, A.D. 2004, and to be presented for final passage on the 19th day of October, A.D. 2004. Mayor ATTEST: City Clerk Passed and adopted on final reading this 19th day of October, A.D. 2004. Mayor ATTEST: City Clerk