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EPA fines rain down on builders


About a dozen Central Iowa developers and builders face substantial fines from the U.S. Environmental Protection Agency – some possibly reaching six figures – for water runoff violations that were discovered during a round of surprise inspections at construction sites last April.

“It’s an absolutely huge topic of conversation in our world,” said Steve Staub, executive vice president of the Home Builders Association of Greater Des Moines. “We’ve been working under the same guidelines for 12 years, and we assumed as an industry that we were in compliance.”

The maximum penalty for an “expedited” case, in which the violator simply pays the fine, is $15,000. If a company accused of a violation chooses to protest the fine, creating an administrative action, the maximum penalty reaches $137,500, according to Chuck Becker, an attorney at the Belin Lamson McCormick Zumbach Flynn law firm who represents several developers who have been fined.

In extreme situations, Becker said, “the EPA has two more layers above administrative action. Civil action allows penalties of up to $32,500 per day per violation; and on top of that, in theory, could be criminal action.”

According to Becker, a specialist in environmental work, any company that moves dirt on at least one acre at a construction site must get a permit and create a Storm Water Pollution Protection Plan. Such plans typically call for fabric fences to retain silt and other methods to prevent erosion until the site is sodded or seeded.

“In many of these cases, the inspectors determined that a silt fence was in the wrong spot or was more than half full, or the inlets to storm drains were not plugged as they’re supposed to be,” Becker said. “Holding back water creates problems, but that’s what the rules provide for.”

The primary objective is simple: to keep soil in place and silt out of storm water drainage systems. Achieving that objective is more complicated. “There are a number of very detailed technical requirements that are part of the program,” Becker said, and Staub noted that a National Association of Home Builders book on the topic, “Storm Water Permitting: A Guide for Builders and Developers,” runs to 183 pages.

“Our gripe is not so much the enforcement end of it,” Staub said. “But we thought we were in compliance. We would like to have someone come in and say something’s wrong, and we’ll give you 30 days — or three days — to correct it. But rather than giving us an opportunity to correct the problem, they’re issuing fines. And they’re fining for a lot of different things. In some instances, if you filled out the paperwork incorrectly, they’re issuing fines.

“They’ve been in virtually every part of the metro area,” Staub said. “Potentially, every developer in the metro area could be involved.”

Most of the time, building site inspection is handled by the Iowa Department of Natural Resources. “Typically in the Des Moines metro area, we assess fines for storm water violations one to three times per year,” said Joe Griffin, the DNR’s storm water coordinator. In those cases, “we issue an order with a flat fine, which can run between $2,000 and $10,000,” Griffin said.

When the EPA decides to visit, however, the federal agency can “overfile” whatever actions that have been taken by the state. “That’s true of most environmental regulatory programs,” Becker said.

Kristina Kemp, an attorney in the EPA’s Kansas City, Mo., regional office, said the enforcement of storm water regulations is one of a half-dozen current priorities for the agency. “It became a priority in 1999 and will continue to be one at least through 2007,” she said. “We’ll be back [to inspect construction sites] in all of the four states in our region.”

The EPA’s Web site lists four West Des Moines companies that are involved in expedited penalties: The Somersby Group L.C., Stephen R. Grubb Construction Inc., AmerUs Land Development Inc. and Rottlund Homes of Iowa.

“Some other companies weren’t offered expedited settlements, and were slapped with heavy-duty fines,” Staub said. EPA spokesmen said they couldn’t comment on specific cases.

“We have 200-plus members, and most of them build six to 20 houses a year,” Staub said, referring to the Home Builders Association of Greater Des Moines. “If they get whacked with a $40,000 or $50,000 fine, that has the potential to put them out of business.”

However, Staub and other industry insiders acknowledged that most of the cost of such penalties will be passed on to customers.

Several dozen developers and builders attended a September meeting to hear from an EPA field representative and ask questions. Staub said, “We asked him why the EPA won’t allow us to correct the problem and told him we thought we were doing things right. He said that it’s policy, and there was nothing he could do about it.”

Kemp said the EPA typically finds violations on about half of the building sites it inspects. “I believe all of our sites in Des Moines got potential notice of violation. They did get warnings,” she said. However, a company that has been warned can’t avoid a penalty if the agency decides a penalty is justified by the inspection findings.

“The regulations are printed in the Federal Register as public notices,” Kemp said. “The violations in Des Moines were based on the state permit. If the developers and builders are permitted, they have copies of the requirements.” The money the EPA collects in fines goes to the U.S. Treasury.

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