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l�'�, Jy REQUEST FOR COUNCIL ACTION Department Approval �� Date: July 20, 2009 Item No.: 13.b City Manager Approval � / Item Description: Discussion of Environmental Cost Recovery within the Twin Lakes Area BACKGROUND The City Council received a memorandum from Attorney Larry Espel in December 2007 that described federal and state laws that allow for third parties to seek reimbursement for environmental assessment and remediation activities from the parties responsible for causing the contamination, discussed practical considerations that Council might take prior to moving forward on this path, and identified a potential series of next steps. (See Attachment A: Espel Memorandum to review this document.) City council members requested discussion of possible environmental cost recovery for environmental activities within the Twin Lakes area. On May 11, 2009, this item was brought forward and discussed. During the conversation, the Council requested that staff provide them with previous materials on this topic. (See Attachment S to review the discussion from this meeting.) Staff reviewed the City's files and records and did not find any additional information on cost recover beyond the Espel memorandum. To date, the City has expended very limited amounts of City dollars on environmental activities within this area. The work that was undertaken in the early 2000s was funded through U.S. EPA grants and a Metropolitan Council grant paid for assessment activities conducted in 2006 on the Xtra Lease and Old Dominion parcels. As part of the roadway project, the City will spend some funds on environmental assessment, planning, and cleanup, which will were funded by tax increment balances and did not come from the general fund; staff will be seeking grant reimbursement for some of these costs through available regional and state grants. STAFF DISCUSSION Barriers to Seeking Environmental Cost Recovery There are several barriers to the City moving forward with attempting to recover environmental costs from potentially responsible parties. The following is a summary of these barriers. Limited Understanding of Environmental Conditions: Over the last decade, there have been extensive environmental assessment activities within the Twin Lakes redevelopment area. Initiated by both the City and the private sector, these studies have identified widespread petroleum-related contamination and areas of hazardous substances. Unfortunately, these studies only provide a general overview of environmental conditions of the overall area and have never Page 1 of 2