Bailiwick News – May 21, 2018

SCBWA May 17 easement vote, UAJA financial/legal liability for public water contamination, and the power to make things better. – 5.21.18 Bailiwick News (PDF)

Continuation from 5.1.18 Bailiwick News and 5.7.18 Bailiwick News

By Katherine Watt

The State College Borough Water Authority board voted on an easement request from Toll Brothers/PennTerra, on Thursday, May 17.

The result was a 3-3 tie on a motion to approve the easement, which had the effect of simply taking the issue off the table again.

SCBWA did not grant the easement, so Toll Brothers currently does not have permission to install a sewage line on SCBWA land.

Votes to deny the easement were cast by Rachel Brennan, Bill Burgos and Bernie Hoffnar. Votes to approve the easement were cast by Jeff Kern, Emory Enscore and Jason Grottini. Gary Petersen was absent.

The motion could be reintroduced at an upcoming meeting, in June at the earliest.

Figure 1 – Provided by Penn State, June 22, 2017 Press Release. Red = 46 acres. Blue = 60 acres. Green = 100 acres. Yellow = 402 acres: (237 acres north of Rt. 45, 165 acres south of Rt. 45)

Puzzle Pieces

Prior to the meeting, Bailiwick News published (online) a collection of information, including three risk assessments, five Right to Know requests, three DEP sewage planning module documents, 28 facts and probabilities, with caveats, and three costly contamination scenarios.

Three risk assessments

The three risk assessments included a geotechnical report prepared by CMT Laboratories regarding the construction plan for Whitehall Road Regional Park, based on park designs by Pashek Associates, and submitted Jan. 7, 2013.

The report concluded: “The presence of carbonate bedrock in itself renders the site susceptible to sinkhole development during or after construction. Evidence of potential sinkhole activity is shown the low Standard Penetration Test results in Test Borings TB-2, TB-15 and TB-16. Altering a site’s grading and drainage characteristics can result in sinkholes developing in areas where test boring data reflect little or no potential. Ground subsidence and collapse from sinkholes must be considered for this project.”

Although the CMT report on the regional park plan was only recently made public, the conclusions align with two additional infiltration studies by CMT Labs conducted on behalf of Toll Brothers’ engineering firm PennTerra regarding the proposed, adjacent “Cottages” development, previously made public.

Those two studies were dated May 28, 2013 and Dec. 22, 2014. For those, consultants were forced to use non-standard testing protocols because of the shallow depth to bedrock, and concluded, among other things, “altering a site’s grading and drainage characteristics can result in sinkholes developing even when surface/subsurface observations reflect little or no potential…the risk of sinkholes developing in carbonate bedrock/karst areas as a result of stormwater infiltration [Best Management Practices] is inherent…in terms of risk management, we do not believe there is an effective method for eliminating sinkholes in karst infiltration areas.”

Five Right to Know requests

On May 15, Bailiwick News submitted five Right to Know requests, two to Jim Steff (COG Executive Director, on behalf of the Centre Region Council of Governments and the Centre Region Parks & Recreation Authority); one to Brian Heiser (SCBWA director, for SCBWA); one to Cory Miller (University Area Joint Authority director, for UAJA); and one Dave Pribulka (Ferguson Township Manager, for Ferguson Township).

Requested documents included “complete, unredacted copies” of each entity’s “insurance policies, including any and all provisions voiding said policies if the insurer can prove misrepresentation, fraud and/or non-disclosure of risks and/or risk factor reports by the insured entity to the insurer, and/or negligence and/or gross negligence on the part of the insured party during engagement in project siting, design, review, endorsement, approval, permitting, financing, construction, operation and/or maintenance.”

The RTK requests further sought “emails, letters, reports, meeting minutes and all other written records relating to legal identification of responsible party and assignment of financial liability for potential public water contamination related to a sewage pump station, sewage transmission pipelines and/or stormwater basins to be located on or adjacent to facilities and/or land owned and controlled by each public entity – such records created, transmitted by and/or received by each public entity between Jan. 1, 2015 and the present.”

There has been significant public interest and concern about assignment of legal and financial liability for public water contamination, dating back at least to May 2015 during public comment at a standing-room-only Ferguson Township Board of Supervisors meeting.

No government official has been willing to clearly assign or accept liability until now, through the one RTK response received to date, from Cory Miller on behalf of the UAJA, on May 18, 2018. Further details below.

28 facts and probabilities, with caveats:

The following information was compiled to shed light on possible legal and financial consequences for three potential contamination scenarios, seeking to answer the question: “Who will pay the costs of any public contamination resulting from the Cottages + WRRP land developments?”

Scenario 1 – Pump station, wet well and force main completed, UAJA begins operations, sinkhole forms under wet well or wet well otherwise malfunctions due to poor siting, design, construction, operation, maintenance; raw sewage enters Harter Thomas wells, public water is contaminated, wells are shut down temporarily or permanently.

Scenario 2 – Pump station, wet well and force main completed, UAJA begins operations, pipeline conveying sewage across SCBWA land to Stonebridge Drive breaks or malfunctions, due to poor siting, design, construction, maintenance and/or operations, raw sewage enters Harter and Thomas wells, public water is contaminated, wells are shut down temporarily or permanently.

Scenario 3 – Stormwater basins completed, Toll Brothers or their successor begins operations/maintenance, sinkhole opens under basins or stormwater basins otherwise malfunction and overflow due to poor siting, design, construction, maintenance and/or operations; unfiltered runoff enters Harter and Thomas wells, public water is contaminated, wells are shut down temporarily or permanently.

  1. The Ferguson Township Board of Supervisors, on Nov. 16, 2015, granted final approval to a Planned Residential Development (PRD) land development plan for construction of a 1,093-bed “Cottages” student housing development, on roughly 46 acres of land then owned by Penn State, but now owned by State College Apartments LLC.
  2. The approved Cottages land development plan did not include a sewage management system for the sewage from the 1,093 students to be housed at the site.
  3. All but 5.5 acres of the 46 acres were, since 2004, zoned Multifamily Residential (R-4) and, as of Nov. 16, 2015, all but 5.5 acres of the 46 acres were zoned PRD (Planned Residential Development). The remaining 5.5 acres were not made part of the PRD plan, but instead remain outside the PRD and remain zoned Rural Agricultural (RA).
  4. The Cottages development was designed with two large stormwater detention basins sited on those 5.5 acres that are not included in the Planned Residential Development zoning, and are zoned Rural Agricultural, but are still part of the 46-acre parcel-complex owned by State College Apartments LLC.
  5. The municipal zoning violation – stormwater detention basins as a primary use on RA land – was the subject of a lawsuit (land use appeal) filed by Nittany Valley Water Coalition in December 2015. The Ferguson Township approval was overturned in July 2016 by Centre County Court of Common Pleas Judge Jonathan Grine. Judge Grine’s ruling was reversed in May 2017 by Pa. Commonwealth Court. The Pa. Supreme Court declined a petition for appeal in November 2017.
  6. Under the Terms and Conditions of the Cottages PRD approval by Ferguson Township on Nov. 16, 2015, an executed Stormwater Management Agreement was to be signed and on file before approval of the PRD. As of April 9, 2018, Ferguson Township had no executed Stormwater Management Agreement on file.
  7. Under the Terms and Conditions of the Cottages PRD approval by Ferguson Township on Nov. 16, 2015, sections regarding responsibility for stormwater management facilities refer only to facilities “within the PRD.” However, the two main stormwater management facilities (large detention basins) are located on 5.5 acres that are not “within the PRD.” This strongly suggests that the private owner of the Cottages PRD land (State College Apartments LLC) and their successors are not legally responsible for the maintenance, operation and damages from failure of the stormwater detention basins and resulting public water contamination.
  8. The Centre Region Parks & Recreation Authority (CRPRA) submitted a Land Development Plan (LDP) to Ferguson Township for the Whitehall Road Regional Park several years ago. The LDP was withdrawn after several years of delays. There is currently no active LDP submitted to or under review by Ferguson Township. The CRPRA is currently working on design, permitting and construction plans to present to the Centre Region Council of Governments General Forum at General Forum’s late-May meeting.
  9. The WRRP land development is to be funded by taxpayers, through the Centre Region Council of Governments General Forum by way of the CRCOG Parks Capital Committee, through the Centre Region Parks & Recreation Authority, through a Fulton Bank loan.
  10. The Cottages land development is to be funded by private investors, through Toll Brothers, doing business as Springton Pointe, doing business as “State College Apartments LLC,” which was incorporated in Delaware on December 13, 2017, through registered agent “The Corporation Trust Agency,” headquartered at 1209 Orange Street, Wilmington, along with about 285,000 other shell corporations as of 2012, according to the New York Times: (“How Delaware Thrives as a Corporate Tax Haven,” June 30, 2012).
  11. After incorporation on Dec. 13, 2017, State College Apartments LLC closed a transaction with Penn State University on Dec. 21, 2017, purchasing the 46 acres for $13.5 million. The deed transfer was recorded Dec. 22, 2017. It’s possible that State College Apartments LLC is a wholly-owned subsidiary shell corporation of Penn State University formed to protect Toll Brothers from the financial risks of additional project delays; the names of the directors are not public information.
  12. PA-DEP and UAJA have both approved a “sewage planning module” related to the Cottages + Whitehall Road Regional Park sewage pump station and force main (i.e. uphill) sewage conveyance pipeline. As of February 2015 documents, the sewage pump station, wet well and pipeline were intended to process 46,900 gallons per day of raw sewage from the students living in the Cottages (268 Equivalent Dwelling Units @ 175 gpd), and 1,050 gallons per day of raw sewage from visitors to the Whitehall Road Regional Park (6 EDUs @ 175 gpd).
  13. The Cottages + WRRP Sewage Pump Station is not proposed to be constructed on private land owned by State College Apartments LLC.
  14. The Cottages + WRRP Sewage Pump Station is proposed to be constructed on public land owned jointly by Centre Region Council of Governments and Ferguson Township – on a portion of 100 acres slated for WRRP development, which is zoned Rural Agricultural (RA). (At the lower right corner of the green parcel on the attached map.)
  15. It is possible – nay, likely – that the Cottages + WRRP Sewage Pump Station and sewage conveyance pipeline – with a combined capacity of 47,950 gallons per day, of which 2% is for park visitors and 98% is for Cottages residents – will be included in a forthcoming Land Development Plan submitted by the Centre Region Parks & Recreation Authority to Ferguson Township for the Whitehall Road Regional Park development.
  16. The Borough of State College has the sewage capacity and has in the past indicated a willingness to accept up to 1,050 gallons per day of WRRP sewage through a gravity (downhill) line conveying the public, park visitor sewage along Whitehall Road to an interceptor near the intersection of Waupelani and Whitehall and from there to the UAJA treatment plant off Shiloh Road.
  17. The Borough of State College has in the past indicated an unwillingness to accept the 46,900 gallons per day of student sewage from the Cottages, preferring to reserve large volume private-development sewage capacity for Borough development, rather than expend it on Ferguson Township development.
  18. Apparently sometime after the Pa. Supreme Court declined to review the Nittany Valley Water Coalition case in November 2017, and the present, the Centre Region Parks and Recreation Authority issued a letter to State College Apartments LLC/Toll Brothers/Springton Pointe and/or the project engineer, PennTerra Engineering, consenting to State College Apartments LLC siting the Cottages + WRRP Sewage Pump Station and associated pipeline on the public land owned jointly by CRCOG and Ferguson Township for the future public park.
  19. Ferguson Township was not notified of the CRPRA planned action or given an opportunity to review or approve the consent action taken by the Parks Authority board.
  20. There is no DEP public notice requirement for sewage systems proposed to increase sewage flows by less than 50,000 gallons per day.
  21. State College Apartments LLC/PennTerra will site, design, fund and construct the Cottages + WRRP Sewage Pump Station and force main conveyance pipeline.
  22. After construction, UAJA will own, operate and maintain the Cottages + WRRP Sewage Pump Station and force main conveyance pipeline.
  23. By email May 10, 2018 in response to a question about “the contingency plan if a sinkhole opens under or near the extra-large wet well at the Toll Brothers pumping station, and breaches the holding tank” upslope and near the two main SCBWA public drinking water supply wellfields (Harter and Thomas) UAJA Director Cory Miller replied: “UAJA does not have a contingency plan for a sinkhole opening under or near this pump station, or any other pump station.”
  24. By email May 11, in response to the same question, SCBWA Director Brian Heiser replied, “There is a plan to address sinkhole issues on the approved Cottages site plan. SCBWA would not necessarily shut down wells because of a sinkhole. Each case would be evaluated as needed.”
  25. State College Apartments LLC is currently seeking an easement from the State College Borough Water Authority board to construct the 4,200-foot force main sewage pipeline [other estimates up to 5,100 feet have circulated] uphill and across the edge of 60 acres of SCBWA-owned land fronting Whitehall Road (blue parcel on attached map), along Whitehall Road to Stonebridge Drive. The easement would nullify a conservation deed restriction placed on the 60-acre parcel when Penn State sold it to SCBWA in 2008.
  26. All three parcels are topped by thin agricultural soils, underlain by bedrock and fragile, sinkhole- and fracture-prone limestone karst
  27. A numbered drainage tributary (intermittent stream No. 23045) to Slab Cabin Run crosses on or near to all three parcels: on the 60-acre SCBWA RA-zoned conservation parcel; on the 46-acre Cottages parcel-complex (R-4 + RA-zoned); and just above the 100-acre WRRP RA-zoned park parcel.
  28. The SCBWA board is likely to vote on the easement request on Thursday, May 17 at 4 p.m. at 1201 West Branch Road. [Result: 3-3 tie. See report above and critical analysis below.]

Three Feb. 6, 2015 DEP Sewage Planning Module documents

Along with the 28 facts and probabilities, the three CMT reports, and the five RTK requests, Bailiwick News also published three sections of a Feb. 6, 2015 “sewage planning module” submitted by Toll Brothers/PennTerra to the Pennsylvania Department of Environmental Protection (DEP). See Items 12 and 20 in the above numbered list.

A concerned citizen read the post online, and concluded “the number of wastewater gallons referred to in the article (47,950 gallons per day/gpd) seemed a little suspicious given that the limit for DEP approval without public notice is 50,000 gallons.”

She therefore spent a few hours digging around and determined that Toll Brothers may have left out a few key factors in their calculation, namely their outbuildings, offices, and swimming pool.

She compiled the information below.

*   *   *

“According to the UAJA updated flow rate sheet and the “Cottages” planning diagrams, the following amounts should have been included in the application to DEP:

Additional buildings including clubhouse and pool maintenance building equal to 19,499 sq. ft. according to the proposed plan. UAJA counts one EDU per 3,000 feet of building, so 19,499 square feet/3,000 square feet = 6.5 EDU

If the clubhouse has showers, there should be an additional 2 EDU added.

Office space that employs fewer than 10 people should be included as 1 EDU.

The swimming pool should be calculated at 2 EDU per filter (I could not find information on the number of filters) but there is also a hot tub so probably two or more filters involved. In addition to the 2 per filter, swimming pool EDUs are added for the average number of patrons x 10 gpd.

There is an outdoor bar which, I assume has a water supply but I couldn’t find any info on how that would be calculated by UAJA.

The number of 5-bedroom units is total bullshit as the UAJA calculates all EDUs the same regardless of number of bedrooms. This is very convenient for Toll Brothers.

These additional EDUs may or may not add up to 50,000 but either way, if their application is incorrect, it should be brought to the attention of the DEP.

The DEP website states that it will not review the applicants’ information for accuracy and relies on the truthfulness of the applicant. I think we all can agree that Toll Brothers is less than trustworthy.

Further, the amount of gallons per day (175 per EDU) that was used for calculation is coming from the UAJA rate sheet which is used to calculate utility cost.

However, Pennsylvania code calculates the rates of wastewater usage much differently. For the purposes of building a new sewer or septic system, the calculations are 100 gpd per person plus additional for outbuildings, swimming pools, etc.

[Editor’s Note: The citation Concerned Citizen listed is to state law for on-lot sewage systems, not connections to community-wide municipal or regional sewage treatment systems. Act 537 covers those municipal and regional wastewater treatment rules. Nonetheless…]

This number – 100 gpd –  is consistent with many other communities [i.e. Pittsburgh] and with the EPA estimate.

Here is the breakdown of units at The Cottages:

  • 1-bedroom apartments = none;
  • 2-bedroom apartments= 17;
  • 3-bedroom apartments = 35;
  • 4-bedroom apartments = 126;
  • 5-bedroom apartments = 90.

I would not put it past Toll Brothers to increase the number of high bedroom units knowing that no matter how many bedrooms, they are only required to count each apartment as 1 EDU….for the purposes of billing.

Now, considering that college students typically double and even triple up on occupancy and that PA code requires calculating 100 gpd of wastewater usage per person…the math is scary.

At 1,093 people, which is the total number of bedrooms, they are already at least double the volume of wastewater usage than what they reported to DEP. [1,093 x 100 gpd = 109,300 gpd as compared to the 47,950 reported to DEP.]

If their bedrooms become double occupancy (very likely that many of them will) The Cottages sewer pump and new pipeline will need to handle 218,600 gallons of wastewater per day.

A pump that is built to handle just a fraction of that, only 47,950 gpd, doesn’t stand a chance.

And with no contingency plan in place in case of failure…you know the rest.”

*   *     *

Editor’s Note: It’s my understanding that the sewage volume counter-analysis was forwarded to Miller at UAJA and Heiser at SCBWA, and that Miller provided a response to Kelli Hoover of Nittany Valley Environmental Coalition. As of press time, I hadn’t seen that response.

UAJA Ratepayer Financial and Legal Liability

On May 18, Cory Miller of UAJA provided an electronic copy of the UAJA insurance policy, in response to RTK request 1. (Details below).

In response to request 2, Miller wrote: “UAJA is always responsible for any environmental impact of any sewer infrastructure that we own.  To my knowledge, there are no records of the type requested, since who is responsible was never in question.”

In response to a follow-up question about legal and financial liability for the service lines transmitting sewage from the apartment buildings to the gravity mains, and through the gravity mains to the pump station, Miller wrote: “UAJA will be the owner of all of the sewer mains within the development, and thus assumes all liability for those facilities. That does not include the customer service lines from the main to each building.  Those are owned and maintained by the property owner.  Thus, UAJA has no liability for those customer service lines.”

Initial review of the insurance policy strongly suggests that the policy will not cover damages from contamination of public water attributable to failure of the UAJA sewage management infrastructure.

The insurer is Selective Insurance, 40 Wantage Avenue, Branchville NJ 07890, (973) 948-3000.

Keyword searches on “void” “sewage” “pollution” “potable” and “sinkhole” identified several relevant sections, which grant and exclude coverage through a tangled web of verbal statements and reversals.

It will take time to unravel what’s covered and what’s not more fully. In the meantime, here are some of the relevant provisions.

“Covered property does not include transmission and distribution lines.” (p. 70).

At p. 117, the policy states “We will not pay for loss or damage caused directly or indirectly by any of the following. Such loss or damage is excluded regardless of any other cause or event that contributes concurrently or in any sequence to the loss.”

And then lists, at section g on p. 118, “Water” including (1) Flood, surface water, waves (including tidal wave and tsunami), tides, tidal water, overflow of any body of water, or spray from any of these, all whether or not driven by wind (including storm surge); (2) Mudslide or mudflow; (3) Water that backs up or overflows or is otherwise discharged from a sewer, drain, sump, sump pump or related equipment; (4) Water under the ground surface pressing on, or flowing or seeping through: (a) Foundations, walls, floors or paved surfaces…”

At p. 126, the policy states “ ‘Specified causes of loss’ means the following: fire; lightning; explosion; windstorm or hail; smoke; aircraft or vehicles; riot or civil commotion; vandalism; leakage from fire-extinguishing equipment; sinkhole collapse; volcanic action; falling objects; weight of snow, ice or sleet; water damage,” and defines “Sinkhole collapse” as “the sudden sinking or collapse of land into underground empty spaces created by the action of water on limestone or dolomite. This cause of loss does not include: (1) The cost of filling sinkholes; or (2) Sinking or collapse of land into manmade underground cavities.”

“Water damage” means: “(1) Accidental discharge or leakage of water or steam as the direct result of the breaking apart or cracking of a plumbing, heating, air conditioning or other system or appliance (other than a sump system including its related equipment and parts), that is located on the described premises and contains water or steam; and 
(2) Accidental discharge or leakage of water or waterborne material as the direct result of the breaking apart or cracking of a water or sewer pipe that is located off the described premises and is part of a municipal potable water supply system or municipal sanitary sewer system, if the breakage or cracking is caused by wear and tear.”

The policy continues:

“But water damage does not include loss or damage otherwise excluded under the terms of the Water Exclusion. Therefore, for example, there is no coverage under this policy in the situation in which discharge or leakage of water results from the breaking apart or cracking of a pipe which was caused by or related to weather-induced flooding, even if wear and tear contributed to the breakage or cracking. As another example, and also in accordance with the terms of the Water Exclusion, there is no coverage for loss or damage caused by or related to weather- induced flooding which follows or is exacerbated by pipe breakage or cracking attributable to wear and tear. To the extent that accidental discharge or leakage of water falls within the criteria set forth in c.(1) or c.(2) of this definition of “specified causes of loss,” such water is not subject to the provisions of the Water Exclusion which preclude coverage for surface water or water under the surface of the ground.”

At p. 214, the policy excludes coverage for bodily injury and property damage related to pollution, stating:

“this insurance does not apply to…(f.) Pollution, defined as (1) “Bodily injury” or “property damage” arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of “pollutants”… (a) at or from any premises, site or location which is or was at any time owned or occupied by, or rented or loaned to, any insured.”

The policy lays out three narrow scenarios which for the subparagraph does not apply, and then continues listing scenarios in which the non-coverage does apply, including “(b) at or from any premises, site or location which is or was at any time used by or for any insured or others for the handling, storage, disposal, processing or treatment of waste; (c) which are or were at any time transported, handled, stored, treated, disposed of, or processed as waste by or for: 
(i) Any insured; or
(ii) Any person or organization for whom you may be legally responsible; or (d) At or from any premises, site or location on which any insured or any contractors or subcontractors working directly or indirectly on any insured’s behalf are performing operations if the “pollutants” are brought on or to the premises, site or location in connection with such operations by such insured, contractor or sub- contractor.”

Then there are another three conditions rendering the exclusionary subparagraph inapplicable, and the section continues with “(e) At or from any premises, site or location on which any insured or any contractors or subcontractors working directly or indirectly on any insured’s behalf are per- forming operations if the operations are to test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, or in any way respond to, or assess the effects of, “pollutants.” ”

A second section (following “bodily injury or property damages”) states that the policy excludes coverage for “(2) Any loss, cost or expense arising out of any: (a) Request, demand, order or statutory or regulatory requirement that any insured or others test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, or in any way respond to, or assess the effects of, “pollutants”; or (b) Claim or suit by or on behalf of a governmental authority for damages because of testing for, monitoring, cleaning up, removing, containing, treating, detoxifying or neutralizing, or in any way responding to, or assessing the effects of, ‘pollutants.’ ”

The policy then states that the “paragraph does not apply to liability for damages because of “property damage” that the insured would have in the absence of such request, demand, order or statutory or regulatory requirement, or such claim or “suit” by or on behalf of a governmental authority.”

Then at p. 243, there’s a whole section reversing some of the p. 214 language, through “Pollution Exclusion Exceptions.”

The exclusions don’t apply, meaning coverage is required, for “Claims or “suits” against the [UAJA], which allege actual or threatened “bodily injury” or “property damage”, proximately caused by [UAJA’s] usage, handling or storage of those chemicals intended to be and commonly used for the treatment of water or wastewater at or from any premises, site or location which is or was at any time, owned or occupied by, or rented or loaned to the [UAJA]” and for “Claims or “suits” against the [UAJA,] which allege actual or threatened “bodily injury” or “property damage”, and arise from the water utility operations conducted by the UAJA, provided that” three conditions are met:

“1) The actual or threatened “bodily injury” or “property damage” is proximately caused by the “potable water” that you supply to others for human consumption; and
2) The actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of “pollutants” affecting the “potable water” must be accidental, unintended; and 
3) The insured must take reasonable steps to address the conditions described in 2., immediately above, as soon as reasonably possible.”

“…All claims or suits that allege actual or threatened “bodily injury” or “property damage” covered by this provision B. shall be deemed: To arise from a single “occurrence” regardless of the length of time over which the “pollutants” are released; and 
to have occurred at the date of the earliest “occurrence.”

Potable water is defined at p. 247 “water intended and provided for human consumption.”

At p. 249, the policy provides a “Limited Extension of Coverage for Sewage Overflow or Backup” stating that “Exclusion (f) Pollution” also doesn’t apply to sewage overflow or backup provided that all of the following apply: a) There was a construction, maintenance, operation or repair defect in [UAJA’s] “sewage disposal system;“ 
b) The defect was the substantial proximate cause of the “sewage disposal event;” 
c) The overflow or backup is a “sewage disposal event,” as defined in this Coverage Extension.”

That extension is then reversed by a set if exclusions, reinstating the non-coverage for losses related to “the overflow or backup of sewage, the proximate cause of which is any of the following: An obstruction in a “service lead” that was not caused by [UAJA]; 
any connection from the affected real property to the “sewage disposal system” including but not limited to a sump system, backflow preventer, building drain, surface drain, gutter or downspout.”

For the purposes of the “coverage extension” on p. 249, “Service lead” means “an instrumentality that connects an affected property, including a structure, fixture, or improvement on the affected property, to the “sewage disposal system” and that is neither owned nor maintained by the insured.” “Sewage disposal system” means “all interceptor sewers, storm sewers, sanitary sewers, combined sanitary and storm sewers, sewage treatment plants and all other plants, works, instrumentalities and properties used or useful in connection with the collection, treatment and disposal of sewage and industrial wastes and includes a storm water drain system under the jurisdiction and control of a governmental agency.”

A “Sewage disposal system event” or “event” means “the overflow or backup of a “sewage disposal system onto real property.”

And “Substantial proximate cause” means “a proximate cause that was 50% or more of the cause of the “event” and the property damage or bodily injury.”

Several sections deal with fraud. At p. 114 and 349, the policy is voided by “concealment, misrepresentation or fraud,” and is also void “if UAJA or any other insured, at any time, intentionally conceal or misrepresent a material fact concerning 1. This Coverage Part; 2. The Covered property; 3. Your interest in the Covered property; or 4. A claim under this Coverage Part.

At p. 337, the policy voids coverage “if, before or after a loss: a) [UAJA] or any other insured have willfully concealed or misrepresented: 1) A material fact or circumstance that relates to this insurance or the subject thereof; or 2) [UAJA’s] interest herein, or b) There has been fraud or false swearing by “you” or any other insured with regard to a matter that relates to this insurance or the subject thereof.

CRITICAL ANALYSIS

That’s the policy we citizens will be working with when our public drinking water supplies are contaminated by the conveyance and storage of tens of thousands of gallons of raw sewage each day in the Zone 2 recharge area for the Harter and Thomas wellfields and Slab Cabin Run.

Who knows? Maybe public water supplies aren’t defined as “property” sufficiently to qualify as “property damage” when contaminated.

I also don’t have information at this time about what information has been provided to Selective Insurance underwriters regarding the content of the CMT Laboratories reports laying out the inherent sinkhole risks presented by construction activities at the Cottages and WRRP sites as those risks relate to UAJA’s insurance coverage for public water contamination “events.”

So there’s no way, for the time being, to assess whether UAJA has committed “concealment, misrepresentation or fraud.”

The gist appears to be that Toll Brothers, and their successor entities, and COG and Ferguson Township taxpayers, will be responsible for contamination caused by the individual customer lines from the apartment buildings and regional park bathrooms to the gravity mains, respectively.

UAJA and its ratepayers will be liable for any and all contamination of SCBWA water wells resulting from sewage system malfunctions from the point where sewage enters the gravity mains on the Cottages and WRRP sites (via small customer lines), to the pump station and wet well, and through the force main proposed to take the sewage up the hill, along Whitehall, to Stonebridge and on to the treatment plant.

If the attorneys for Selective Insurance are any good at all, UAJA ratepayers will pay those damages out of pocket, because the contamination won’t meet the limited conditions that shift the burden to the insurer.

The discussion prior to the SCBWA vote to deny the easement on May 17 was pretty interesting. SCBWA Board Member Bill Burgos explained that the Source Water Protection Committee met on May 8, and decided on a 2-1 vote (Burgos and Peterson in favor; Hoffnar opposed) to refer a motion to approve the easement to the full board.

Hoffnar commented that his dissent in committee was based on his position that SCBWA should formally ask the Borough of State College to conduct a capacity study regarding conveying the sewage the shorter distance to the Waupelani/Whitehall intersection (1,900 feet), instead of the current plan to run the sewage 5,100 feet (more than a mile) to the Whitehall/Stonebridge intersection in Ferguson Township.

Jim Steff at COG laid out one version of the history that led to the Whitehall Road Regional Park plan as it stands today, backed by Steve Miller (Ferguson Township supervisor), Dan Klees (former College Township supervisor) and Pam Salokangas (current director of Centre Region Parks & Recreation department).

Some SCBWA board members and concerned citizens talked about heightened public awareness and concern about source water protection; the clear intent of Penn State and Toll Brothers to push for additional development in the area, after the pump station is in place; counter-narratives about SCBWA’s role in prior park planning; and the NVEC memo sent to the SCBWA Source Water Committee on May 7.

NVEC advocated in the memo that 1) as conditions for easement approval, SCBWA should require Toll Brothers, UAJA and Penn State (owner of adjacent land, shown in the map below in yellow) to legally prohibit additional hookups to the proposed sewage pumping station and 2) SCBWA should continue working to facilitate a land swap for the WRRP park (the blue and green parcels in the map below), to protect more fragile, more sloped land from grading, save COG money that would otherwise be spent on grading, place the park closer to the road, reduce the amount of land excavation and keep impervious surfaces further away from the wells, and strengthen the Regional Growth Boundary.

At the SCBWA meeting, UAJA Director Miller stated that, should more development be proposed, UAJA will be required to accept that additional sewage, so long as the property is located within the Sewer Service Area (SSA) and the sewage would flow by gravity to the pump station, because the pump station will be there.

SCBWA board members expressed skepticism that the board has the “regulatory” power to block further development, and concern about the cost differential for UAJA repairs of pipe malfunctions under the grass frontage of Whitehall Road (SCBWA land) as compared to costs for pipe repairs under the half-gravel, half-paved PennDOT right-of-way along Whitehall Road (PennDOT land).

Laura Dininni, Bernie Hoffnar, David Stone, Mike Costello, Andrew McKinnon and I addressed many of those issues.

I commented that the power the SCBWA holds with the easement is not regulatory, it’s ownership-based. To the extent that SCBWA has full discretion to grant or deny the easement request, they have the power to set binding conditions on parties in exchange for their grant. In response, SCBWA Board Chair Jeff Kern observed that SCBWA has already set one such condition on Toll Brothers – use of HDPE pipe – which Toll Brothers is prepared to accept.

There was also some discussion of whether, if SCBWA endorses the siting of the pump station and force main by approving the easement request, it also assumes financial liability for contamination incidents.

SCBWA Robert Mix opined that the sewer easement wouldn’t violate the deed restriction on the SCBWA land – contradicting environmental attorney Jordan Yeager’s position as laid out in his May 3 letter to the SCBWA on behalf of NVEC. Mix also mentioned that he checked with Penn State officials, and Penn State officials share his view that digging up water conservation land and installing a high-pressure sewage pipeline don’t violate the deed restrictions.

If the easement request comes back next month, the SCBWA board could use its power of ownership of the SCBWA land (blue on the map) to implement a land swap, placing WRRP on the 60-acres of land fronting Whitehall Road, and placing the current COG/FT land (100 acres, green on the map) into a conservation easement akin to the nearby, 300-acre Meyer-Everhart parcels now protected by ClearWater Conservancy.

SCBWA could further use its power, and Penn State’s interest in seeing the Toll Brothers project move forward, to force Penn State to place its remaining 402 acres (yellow on the map) into a similarly restrictive conservation easement, removing development rights from the land.

SCBWA could further use its power over the easement to force Toll Brothers, UAJA and DEP to site the sewage pump station farther up the hill, farther from the Harter-Thomas wells, and closer to the UAJA hookup either in the Borough of State College (Waupelani/Whitehall) or in Ferguson Township (Stonebridge/Whitehall).

UPCOMING MEETINGS

These issues will likely be on public meeting agendas for the COG General Forum on May 29, and the State College Borough Council on June 4.

 

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Sunk Cost Fallacy

Update 5/21/18 –

Content has been folded into May 21 Bailiwick News: 5.21.18 Bailiwick News.

Source documents below.

Three risk assessments

Three DEP Sewage Planning Module documents from 2015

 

Disciplinary Board hearing update

I attended the Office of Disciplinary Counsel hearing regarding former District Attorney Stacy Parks Miller’s violations of Rules of Professional Conduct and potential sanctions. See 4.20.18 Bailiwick News for more detail.

I’m working on a full report, hoping to publish by the end of the week. In the meantime, briefly, at the start of the hearing, the chair of the three-person hearing panel informed the room that, whatever the hearing panel decides is a recommendation only, made to the full Disciplinary Board.

The full Disciplinary Board reviews the record and then makes its own recommendation to the Chief Justice of the Pennsylvania Supreme Court. The D-Board can accept, reject, increase, or decrease the penalties recommended by the hearing panel.

The Chief Justice then passes the recommendations on to the full state Supreme Court, which again, can accept, reject, increase, or decrease the penalties recommended by the Disciplinary Board.

At the close of the hearing, the panel chair directed the parties – Disciplinary Counsel Anthony Czuchnicki and Respondent’s attorney, James Kutz – to file briefs after they receive transcripts of yesterday’s 6-hour hearing.

So, months of procedural hoops lie ahead.