Municipal Settings Designation (MSD)- Is it right for my site?

The real estate you own has been declared contaminated through the performance of an environmental study.  The concentrations of Chemicals of Concern (COCs) exceed the Texas Commission on Environmental Quality’s (TCEQ)  Protective Concentration Levels in groundwater.  Now what do you do?

One option which is available in some cities in Texas is called the Municipal Setting Designation – MSD.  Instead of remediating the site and cleaning up or removing the water-borne contaminants, which can be extremely costly , the Responsible Party and their consultant can choose to go through a series of defined procedures in order to leave the contamination safely in-place.  An MSD can applied for if the following conditions are met:  the source of the contamination is removed; the contamination has been vertically and horizontally delineated as to its extents in the soil and groundwater; the contaminant concentrations in the groundwater are relatively stable as proven through sampling over time; no water wells, surface water bodies, or other sensitive receptors have been adversely impacted; area water well owners and land owners have been properly notified of the contamination; and the only route that the contaminant can harm people is through ingestion.  The MSD process involves completing the TCEQ and municipality applications, holding stakeholder meetings, field assessment work, and of application fees.

The factors to be first considered by the land owner are:

  • The cost for an MSD runs between $75,000 to $125,000 depending on complexity
  • There will be meetings with stakeholders such as nearby municipalities,  City officials, and nearby water well and land owners where issues must be explained.
  • Municipalities and nearby utilities must agree to the MSD.
  • Contaminant stability of groundwater concentrations must be demonstrated through quarterly sampling
  • A letter must be prepared explaining the type of contamination and extents and sent to nearby stakeholders, namely water well and land owners.  The mail-out process must be well-documented as three attempts must be verified for delivery and acceptance by each identified stakeholder.
  • Both the local municipality and the TCEQ must have the completed MSD applications, the required fees, and proof of the mailings.
  • Some municipalities do not have MSDs.
  • Other issues such as health issues from soil contamination or vapor impacts from the groundwater are not covered.
  • The ultimate goal is the issuance of a  “No Further Action Letter” which may not satisfy some lenders or land potential buyers.

If these steps seem ominous due to facts the process increases the visibility of the contaminant issue, involves several governmental bodies’ oversight, may be too timely, than remediation or other institutional or engineering controls may be more suited for your real estate.

In the end, your risk tolerance and financial capabilities will be major driving forces towards the proper decision.

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