Michael A. Prager responded to me directly and he
summarizes my concerns (second paragraph).
Hi Beth-
I am not an expert on this but if you have not already
heard about this, a man from Ft. Worth TX was recently speaking about his
concerns about this new standard on a NALGEP call held a few weeks ago. He
raised many concerns some of which I think may not be correct interpretations of
the standard but you should get his notes. More information including a
link the the audio recording of the call are available:
http://www.nalgep.org/about/news.cfm?Page=1&NewsID=30687
In my opinion, it is not yet clear how detrimental the
standard may be for brownfields because what constitutes an obligating event is
not entirely clear. Different states have different liability standards
for local governments who acquire land. One scenario to consider that
could be a problem, a city negotiates with a large corporation that owns a
brownfield in the city. They work out a deal where the city agrees to
cleanup the land if the company gives the property to the city for a $1 (or some
variation). Under the terms of the agreement with the company, the city is
obligated to clean up the land. They plan to use a big TIF and grants and
work with a private developer to get the site redeveloped. If the city has
a reasonable estimate that it will cost $3 million to cleanup that land they may
need to report that on their books which could impact their bond rating or
ability to take on additional debt. Worst case scenario, city would not
want to take on brownfield projects because of these concerns.
Michael A. Prager
Land Recycling Team Leader
Wisconsin Department of Natural Resources
Box 7921
101 S. Webster Street
Madison, WI 53707-7921
Phone - (608) 261-4927
Fax - (608) 267-7646
michael.prager@dnr.state.wi.us
Website: http://dnr.wi.gov/org/aw/rr/
Beth A. Grigsby, LPG
Brownfields Outreach Program Manager
Purdue Center for Regional Development
Burton D. Morgan Center for Entrepreneurship, Room 220
1201 West State Street
West Lafayette, IN 47907-2057
765.494.9928
cell: 317.430.6514
From: SusanNeumanEsq@aol.com
[mailto:SusanNeumanEsq@aol.com]
Sent: Thu 4/20/2006 3:22
PM
To: JMcritch@dtsc.ca.gov; lsiegel@cpeo.org;
brownfields@list.cpeo.org; Grigsby, Beth A
Subject: Re: [CPEO-BIF]
GASB Accounting for Pollution Remediation
I agree. How can it be detrimental? In fact, isn't the ability
to accurately account for environmental liabilities, e.g. under Sarbanes Oxley
and Fin 47, the basis for being able to transfer the risks?
Susan Neuman, Esq., Ph.D.
Environmental
Insurance Agency, Inc.
138 Chatsworth Ave., Suite 2
Larchmont, NY
10538
914-833-5100 (phone)
914-833-5102 (fax)
www.enviroinsurance.com
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