UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF NEW YORK

----------------------------------------------------------------------         X

HUDSON RIVERKEEPER FUND, INC.,                          )

                        Plaintiff, and                                                      )

                                                                                                )

VILLAGE OF HASTINGS-ON-HUDSON,                         )

                        Plaintiff-Intervenor,                                           )   94 Civ. 2741 (WCC)

                                                                                                )

                                    v.                                                         )

                                                                                                )

ATLANTIC RICHFIELD COMPANY,                               )

                        Defendant, Third Party Plaintiff,             )

                                                                                                )

                                    v.                                                         )

UNITED STATES OF AMERICA, THE UNITED                        )

STATES DEPARTMENT OF DEFENSE,                          )

THE UNITED STATES DEPARTMENT OF                     )

COMMERCE, and THE UNITED STATES NAVY,                      )

                        Third Party Defendants                         )

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SETTLEMENT TERM SHEET

 

BY AND BETWEEN THE RIVERKEEPER,

THE VILLAGE, AND ATLANTIC RICHFIELD COMPANY

                                                (Revised June 24, 2003)

 

 

 

            The following is an outline of the basic terms of a proposed Settlement with respect to the above-captioned litigation by and between the Hudson Riverkeeper Fund, Inc. (“Riverkeeper”), the Village of Hastings-On-Hudson (the “Village”) and the Atlantic Richfield Company (“AR” or the “Company”).

 

            1.         Site Remedy.  Subject to the conditions specified below, the Company would perform environmental remediation at the Site which meets the objectives set forth in Sections 2 through 7 below.  The precise manner and method of achieving these objectives would be left to the Company’s reasonable discretion, except as set forth below.  Of course, all remedial action would have to be performed in accordance with all applicable laws, statutes, ordinances, regulations, and permitting obligations. 

 

            2.         Installation of a Bulkhead.  Subject to compliance with DEC requirements, the Company would install a new bulkhead from the northernmost portion of the existing 330-foot steel sheet pile bulkhead (installed in 2000 along the southern shoreline of the Site) and along the entire remaining shoreline of the property to the northern point where the property meets the Hudson Valley Health & Tennis Club.  The bulkhead would consist of steel sheet pile (Waterloo Barrier or equivalent) and would be designed and installed in a manner similar to the design and installation of the southern bulkhead.  The Company would provide clean fill between the new bulkhead and the Site to meet the existing grade.

 

            3.         Contact Barrier and Cover.  Subject to compliance with DEC requirements, the Company would install a contact barrier and cover (collectively, a “cap”) over the entire Site consisting of the following (in ascending order from the Site surface):

 

(a)        a six (6) inch layer of low permeability asphalt, cement, or geosynthetics placed on top of an adequately prepared subgrade;

 

(b)        insert a demarcation layer (e.g., snow fence or equivalent) to indicate no excavation areas;

 

(c)        a four‑foot layer of clean fill; and

 

(d)        a six‑inch layer of topsoil.

 

The design of the contact barrier/soil cover system would include erosion control measures at the edge of the river to prevent fill from entering the river. The Site would also be graded to manage stormwater runoff.  For purposes of the Settlement, “clean fill” would be defined as construction and demolition debris consisting of: recognizable uncontaminated concrete and concrete products (including steel or fiberglass reinforcing rods that are embedded in the concrete), asphalt pavement, brick, glass, soil, and/or rock.  The term “uncontaminated” would be defined as set forth in NYCRR §360-7.1(c)(4).  Such clean fill would be sufficiently crushed, if necessary, to allow pilings or other foundational support to be driven through it, to inhibit subsidence that would materially impair reasonable future use and to support topsoil placed on top of it.  The parties agree that if DEC, in its ROD, directs that some or all of the contact barrier/cap be of greater or lesser permeability than set forth herein, DEC’s selection of that remedy shall be deemed consistent with the Term Sheet.

 

            4.         Excavation of Contaminated Soils.  For purposes of this Settlement, the Site would be divided into four subareas:  the Northwest Corner, the shoreline area near the Northwest Corner (the “Shoreline Area”), the remaining areas of PCB contamination in the northern portion of the Site (the “Northern Remainder”), and the remainder of the Site  (the “Southern Portion”).  The Agreement would specify the excavation requirements for the Northwest Corner and Shoreline Area under four alternative remedies that might be selected by DEC.  It is intended that the four alternatives subsume the full range of potential remedies at the Site.

 

(a)  In the event that Alternative 1, 2, or 3 set forth below govern this Settlement, the Company would remove:

 

(i) In the Northern Remainder soils containing PCB concentrations greater than 10 ppm, with depth of excavation generally up to 9 feet but in certain areas up to 12 feet (except for several limited outlier data points designated in Paragraphs 4(a)(ii) below);

 

(ii) For three limited outlier data points below Building No. 51 or 52 (SB-72, SB-84 and SB-85) at which PCBs are found substantially below the water table), excavation would occur at depths of up to approximately 12 feet, which would leave some residual PCBs greater than 10 ppm at depths of up to 22 feet below the surface, which would be subject to further action if required by DEC; and

 

(iii)  In the Southern Portion of the Site, lead hotspots (as outlined in the September 18, 2002 Feasibility Study Report) as well as soils containing PCB concentrations greater than 10 ppm.

 

(b)  The following alternatives would govern excavation in the Northwest Corner and Shoreline Area.

 

                        (i)  Alternative 1:  If the DEC Selected Remedy requires excavation of soils to depths of less than or equal to 7 feet in both the Northwest Corner and the Shoreline Area, the Company would excavate soils containing PCB concentrations greater than 10 ppm to the extent that such soils are present at depths of up to 7 feet in those areas, even if the DEC Selected Remedy requires excavation to lesser depths. 

 

                        (ii)  Alternative 2:  If the DEC Selected Remedy requires excavation of soils to depths of (i) less than or equal to 7 feet in the Northwest Corner and (ii) less than or equal to 9 feet in the Shoreline Area, the Company would excavate soils containing PCB concentrations greater than 10 ppm to the depths specified in the DEC Selected Remedy for those areas, provided that the depths specified in the DEC Selected Remedy exceed the excavation depths required in Alternative 1. 

 

                        (iii)  Alternative 3:  If the DEC Selected Remedy requires excavation of soils to depths of (i) greater than 7 feet but less than or equal to 9 feet in the Northwest Corner, and (ii) greater than 9 feet but less than or equal to 12 feet in the Shoreline Area, the Company would excavate soils containing PCB concentrations greater than 10 ppm to the depths specified in the DEC Selected Remedy. 

 

                        (iv)  Alternative 4:  If the DEC Selected Remedy requires excavation of soils to depths of (i) greater than 9 feet in the Northwest Corner or (ii) greater than 12 feet in the Shoreline Area, the Company would reserve the right to challenge DEC’s Selected Remedy in an appropriate court and/or DEC administrative hearing, and the Company would seek court and/or administrative approval for a remedy equivalent to Alternative 1, 2, or 3.  The remedy for which the Company would seek court and/or administrative approval would include the terms set forth in Paragraphs 2, 3, 4(a), 5, 6, and 7.

 

            5.         Placement of Clean Fill To Grade; Treatment and Disposal of Excavated Fill.  Upon completion of a soil excavation remedy consistent with Alternative 1, 2 or 3, the Company would place clean fill in excavated areas to return them to their original grade, and the Company would, as appropriate, treat and dispose of any wastes generated pursuant to the excavation activities.

 

            6.         Placement of Additional Fill Depending on Excavation Remedies.  Upon completion of a soil excavation remedy consistent with Alternative 1, 2 or 3, the Company would place additional clean fill on site and construct the contact barrier and cover as described in Paragraph 3 of this term sheet during the performance of the remedy. The Company would provide appropriate shoreline protection to retain such additional clean fill, by grading, rip rap, bulkhead, or a combination of these or other suitable shoreline protection measures.

 

            7.         Construction of Hydraulic Control and Containment.  Subject to compliance with DEC requirements, in order to complete a soil excavation remedy consistent with Alternative 1, 2, or 3, the Company would install a slurry wall or other hydraulic control device of comparable effectiveness and longevity on all upgradient sides of any remaining soils containing PCBs in concentrations greater than 10 ppm in the Northwest Corner and the Shoreline Area.  The slurry wall would connect with the bulkhead and, together, the slurry wall and bulkhead would encircle any remaining soils containing PCBs in concentrations greater than 10 ppm in this area.  Following excavation of the soils containing PCBs in concentrations greater than 10 ppm around each of the outlier data points identified in Paragraph 4(a)(ii) of this term sheet (i.e., SB-72, SB-84 and SB-85), AR would leave in place the steel sheeting installed around the grids containing such data points.  In addition, if required by DEC, the Company would install a slurry wall or other hydraulic control device of comparable effectiveness and longevity on all sides of the remaining soils containing PCBs in concentrations greater than 10 ppm around the outlier data points..      

 

8.         Court Ordered Remedy.  For the purposes of the Settlement, “Final Decision” shall mean a judgment entered by a state or federal court or a final decision issued by an administrative body after all of the Company’s rights of appeal have been exhausted or waived.  If the DEC Selected Remedy requires excavation beyond the depths set forth in Alternative 3, in any judicial or administrative challenge to the DEC Selected Remedy, the Company shall advocate the remedies set forth in Alternatives 1, 2, or 3.  Nonetheless, if a Final Decision requires excavation beyond the depths set forth in Alternative 3, the Company’s remediation obligations will be governed by the Final Decision.  In such event, with the exception of Paragraphs 3 and 4(b)(iv), the provisions of Paragraphs 2 through 7 and Paragraphs 18 through 19 of the term sheet shall be void.  Except to the extent that the contact barrier and/or cover set forth in Paragraph 3 are/is inconsistent with or duplicative of remedial actions or protections provided for in the Final Decision, the Company shall be required to install the contact barrier and cover set forth in Paragraph 3.

 

            9.         Consent Order.  This Settlement would be embodied in a judicially enforceable Consent Order or Decree (“Consent Order”). Subject to DEC’s authority over the remedy, the court would have continuing jurisdiction to enforce the Consent Order and resolve any disputes arising out of it, including its interpretation and implementation.

 

            10.       Dismissal With Prejudice of Riverkeeper and Village Claims.  Subject to enforcement of the Consent Order, the Parties would execute a Stipulation of Dismissal of all of the Riverkeeper’s and the Village’s claims against the Company in the litigation with prejudice.  The Riverkeeper and the Village would reserve their right to enforce the terms of the Consent Order, including their right to compel the Company to perform any remedy that a court may order as part of a Final Decision within the scope of paragraph 8 and to require DEC to allow AR to implement the minimum cleanup required under the settlement.

 

            11.       Attorneys Fees and Costs.  The Company would pay the Village and Riverkeeper $600,000 to resolve all claims of costs and/or attorneys fees in the litigation. 

 

            12.       Preservation of Claims vs. United States.  The dismissal would not in any way impair the Company’s pending claims against the United States. 

 

            13.       Public Support for a Remedy.  The Village and Riverkeeper would support publicly the Alternative 1 remedy as an appropriate remedy for the Site, and as sufficiently protective of the environment and human health. 

 

            14.       DEC’s Selection of an OU1 Remedy.  The Village and Riverkeeper would agree not to challenge DEC staff’s selection of a remedy in any judicial or administrative proceeding.

 

            15.       Remedial Monitoring.  AR shall pay the reasonable costs for the Village to retain an independent consulting firm to conduct periodic inspections of the site, monitor the principal elements of remediation, have access to AR’s consultants’ data,  and conduct other important monitoring tasks that the parties will determine.

 

            16.       Assessment  of Potential for Preserving Some or All of Site Structures.  AR shall assess the feasibility of: (a) whether the water tower, located in the Shoreline Area, has sufficient structural integrity to allow it to be disassembled, stored and reassembled on the site; (b) reusing the Administrative Building, Building No. 51 and/or Building No. 52, consistent with any remedy directed by DEC, considering the cost and any constraints to future development/use of the site; and (c) saving one or more facades from the Administrative Building, Building No. 51 and/or Building No. 52, which will include consideration of the structural integrity of the subject element, as it must be able to survive being lifted, transported, stored and then installed in a new structure. 

 

            17A.    Environmental Trust Fund.  The Parties would execute a Trust Fund Agreement establishing an interest bearing account for the completion of environmental projects.  Upon acceptance by the Company of the Record of Decision issued by DEC or a Final Decision, the Company would place the following sums into such an account established pursuant to the Trust Fund Agreement, depending on whether Alternative 1, 2, or 3 as set forth in Paragraph 4 of this term sheet governs excavation in the Northwest Corner and Shoreline Area.  The Company shall place the sum of One Hundred Thousand ($100,000) Dollars into the Trust Fund upon court approval of the Consent Order, which amount shall be credited against any further payment required by this Agreement to the Trust Fund.

 

Excavation Governed By

 

Amount in Environmental Trust

Alternative 1

$4.5 million

Alternative 2

$3 million

Alternative 3

$1 million

Alternative 4

$100,000

 

            17.B.    Environmental Trust Fund Priorities.  Subject to Paragraph 17.A, the Parties would agree on how the funds deposited in the Trust Fund could be used, including for the payment of administrative costs and fees incurred by the Trust Fund, and the funding of environmental projects that meet certain criteria. The parties shall determine the use of the Trust Fund monies by majority vote, which shall be binding unless a party believes that the proposed use contravenes the Consent Order, in which case that party can seek relief from the Court.

 

            17.C.   Environmental Trust Fund Project Criteria.  The following criteria would be included for environmental projects subject to the Environmental Trust Fund:

 

 Any such project must improve public access, use, or enjoyment of the Hudson River or improve the ecology of the Hudson River.  Such projects might include, but are not limited to, acquisition and/or improvement of open space, creation of walking or hiking trails along the Hudson, construction of boat launches or ramps, creation of habitat for Hudson River Valley wildlife, the improvement or creation of wetlands, or the restoration of indigenous fauna along the Hudson River. Projects located in the Village shall be given priority, and other projects should be located proximate to the Village.

 

            18.       Deed Restrictions.  If excavation in the Northwest Corner and Shoreline Area are governed by Alternative 1, 2, or 3, the Company would place restrictions on the deed to the Site that restrict the future use of the Site in the following ways:

 

(a)        The height of any buildings remaining on the Site or to be constructed on the Site in the future would not exceed 65 feet above elevation 10 established in National Geodetic Vertical Datum (1929) and all new buildings shall be constructed with a minimum of a 100 foot setback from the River (60 feet at coves), unless a variance or other local land use approval from this setback has been obtained from the Village.

 

(b)        New pilings, pillars, or other subterranean support structures would not be installed (i) through the contact barrier or cover in the Northwest Corner or Shoreline Area, and this area would be designated as open space as set forth below and (ii) within sheeting to be left in place around the outlier data points and, if required by DEC, the slurry walls or comparable structures surrounding any of the outlier data points identified in Paragraph 4(a)(ii) of this term sheet (i.e., SB-72, SB-84 and SB-85). 

 

(c)        Utilities (except for sewer lines and the underground stream on Site) would be placed above the low permeability layer of the contact barrier set forth in Paragraph 3 of this term sheet.

 

(d)        Wells would not be installed to make use of groundwater at the Site for drinking, irrigation, or domestic purposes.

 

(e)        Detached single family residential homes would not be constructed on Site.

                                                                                  

(f)         The Company would designate as open space not to be developed (“Open Space”), and allow public access to the following:

 

(i)  1.25 acres constituting the Northwest Corner;

 

(ii)  Approximately 2.5 acres consisting of a strip of land 30 feet in width on average paralleling and abutting the Hudson River for the length of the Site; and

 

(iii)  an additional 2.5 acres consistent with the location of Open Space on a development proposal for the Site formally submitted to the Village for its approval prior to completion of the remediation at the Site or, if no such proposal is submitted, the conceptual development plan contained in “A Redevelopment Plan for the Hastings-On-Hudson Waterfront” issued by the Regional Plan Association in Fall 2001; and

 

(iv)  up to an additional 8 acres, upon agreement of the Company and the Village on a development plan for the Site.  It is the Company’s expectation that such additional Open Space will be designated in accordance with future development and pursuant to further discussions regarding such Open Space and other matters under Paragraph 21.

 

(g)        The Village would assume responsibility for the following matters with respect to the Open Space designated in Paragraph 18(f) above:  (i) planting vegetation (with the exception of any vegetation required to be planted by the Company as part of the DEC Selected Remedy or a remedy required in a Final Decision); (ii) mowing, pruning, trimming and similar upkeep activities associated with all vegetation planted on any Open Space; and (iii) enforcement of the institutional controls set forth in the preceding Subparagraphs 18(b)-(d).  Nothing in the settlement would be construed as imposing on the Village any responsibility for maintenance of the bulkhead or cap required to be installed by the Company in accordance with Paragraph 2.

 

            19.       Bulkhead and Cap Maintenance.  If excavation in the Northwest Corner and Shoreline Area is governed by Alternative 1, Alternative 2, or Alternative 3, the Company (or its successors and assigns) shall maintain the entire bulkhead at the Site, as well as the contact barrier and hydraulic controls, in good and effective condition for a period of 100 years from the completion of the remedy and shall provide adequate financial assurance for such obligation.  The Company could elect to fulfill this obligation by establishing a trust, insurance policy, or other financial assurance mechanism to provide for adequate funding for the maintenance of the bulkhead, contact barrier and hydraulic control, the choice of which shall be at the Company’s sole discretion but consistent with sound and accepted fiscal practices.

 

            20.       Timing of Implementation.  The Village and/or Riverkeeper would have the following rights to seek court involvement in the timing and implementation of performance of the remedy:

 

(a)  If DEC has not issued a Record of Decision setting forth the DEC Selected Remedy within one year of the date of the Consent Order, the Village and Riverkeeper could seek to have the Federal Court order performance of a remedial action consistent with either Alternative 1, Alternative 2, or Alternative 3 of this Agreement; or

 

(b)  If DEC timely selects a remedy and excavation pursuant to the DEC Selected Remedy is governed by Alternative 1, Alternative 2, or Alternative 3 in the Consent Order, the Company would implement a Site remedy pursuant to a schedule agreed to with DEC to perform the DEC Selected Remedy.  However, the Village and/or Riverkeeper could seek court involvement if remedial design has not been initiated within 3 months of the date that DEC’s selection of a remedy has become final, if remedial design is not proceeding on a reasonably expeditious schedule, or if implementation of the remedy is not proceeding on a reasonably expeditious schedule after remedial design is complete.

 

(c)  If DEC timely selects a remedy and excavation pursuant to the DEC Selected Remedy is governed by Alternative 4, the Company would initiate the remedy required by a Final Decision, according to a schedule required by DEC or by a court as part of its Final Decision.  In the case of Alternative 4, the Village and/or Riverkeeper would retain the right to seek court involvement in the performance of remedial action if the Company fails to meet the work schedule required by DEC or the court.

 

            21.       Potential Transfer to Village or its Designee.  For a period of one year after the entry of the Consent Order, the Company and the Village shall meet on a periodic basis and engage in good faith negotiations to explore possible mechanisms for redevelopment of the Site for nonindustrial purposes.  Mechanisms to be discussed include, but are not limited to, a possible transfer of certain assets and responsibilities to either the Village or a designee approved by the Village and the Company, such as:

 

(a)  Title to the property;

 

(b) A trust fund, insurance policy, or other financial assurance mechanism established under paragraph 19 for maintenance of the bulkhead and Site cover, along with primary responsibility for maintaining the bulkhead and Site cover;

 

(c) Primary responsibility for enforcing the deed restrictions set forth in paragraph 18, and any other use restrictions that NYSDEC may require as part of the remedy; and

 

(d)  Such other responsibilities as the parties may agree to transfer.

 

In connection with any transfer of some or all of the assets and responsibilities set forth above, the Company and the Village shall evaluate reaching an agreement with a mutually acceptable remedial management contractor and an insurance company providing for the performance of a remedy within the scope of Alternatives 1, 2, 3, or 4 and insurance coverage for the associated risks of that remedy  (the “Risk Contract”).  Failure to reach agreement on the terms of the Risk Contract or on the transfer of responsibilities under this paragraph shall not affect the other terms of the Settlement.

 

            22.       Dispute Resolution.  The parties would agree to a dispute resolution provision with respect to alleged breaches, differences in the interpretation, or other issues regarding implementation of the agreement. 

 

            23.       Force Majeure.  The parties would agree to a force majeure provision. 

 

            24.       Successors and Assigns.  The Agreement would be binding upon and would inure to the benefit of the successors, assigns, parents, subsidiaries and affiliates of each Party.

 

            25.       Governing Law.  The Agreement would be interpreted and enforced under the Laws of New York.

 

 

So Agreed this ____ day of June, 2003

 

 

 

__________________________

For the Plaintiff Hudson Riverkeeper Fund, Inc.

 

 

 

____________________________

For the Plaintiff-Intervenor

Village of Hastings-on-Hudson

 

 

 

____________________________

For the Defendant Atlantic Richfield Company