The Guardian Trust

1
The Guardian Trust

• Long Term Stewardship Program For
• Land Use and Engineering Controls
• BRAC Program Management Office West
• United States Navy
• Presented By
• The MGP Group
• June 16, 2005

2
The MGP Group

• Mission To develop programs supporting
  brownfields redevelopment
• The Guardian Trust program for long term
  stewardship of LUCs and ECs
• State sponsored insurance programs
• Secondary loan markets for brownfields
• State registry database programs

3
Where are we today nationwide?

• No consistent approach to monitoring and
  reporting
• States may be restricted from taking property
  rights
• Financial and staff resources vary over
  administrations
• Remedies for breach of ICs not clearly defined

4
Concept Origin

• MGP, EPA, PA DEP
• Integrate and augment long term stewardship
  concepts with state and federal programs
• Critical mass provides advantages of pooling
• Advantages for private remediators to participate
• Programmatic solution for looming environmental
  issues
• Superfund sites
• RCRA Corrective Action sites
• Brownfield sites
• Other sites

5
The Pilot StudyA Public/Private Partnership

• EPA
• Pennsylvania
• MGP Environmental Partners LLC
• Pilot Study Advisory Committee Representatives
• EPA (Headquarters and Region 3)
• PADEP
• Department of Defense, Department of the Navy
• California
• Maryland

6
Program Objectives

• Establish The Guardian Trust as a public/private
  vehicle for long term stewardship of LUCs and
  ECs
• Design for integration with federal agencies and
  departments, states, municipalities and private
  parties
• Develop programs and procedures to address areas
  of concern

7
Guardian Trust Mission Statement

• The continued protection of public health and
  the environment, while facilitating the return
  of contaminated properties to productive use, is
  the primary mission of the Guardian Trust

8
Organization of The Guardian Trust

• Structure of The Guardian Trust
• IRS Section 501(c)(3) Not-For-Profit
• Earth Pledge Foundation Sponsor
• Trustees
• The MGP Group Manager

9
Oversight of the Trust

• Supervision of Trustees by Sponsor
• Trustees Establish Policies Provide Oversight
  of Management Company
• Supervisory Controls
• Financial Statement Audits
• Fiduciary Audits Operating Audits
• Judicial Supervision

10
Role of Management Company

• Day-to-day supervision of Trust operations
• Use of Protocols and Procedures
• Trustee review of exceptions
• Structuring transactions
• Review of transactions by Trustees
• Quality Control Program
• Supervision of contractors
• Database integrity

11
Relationship Model
12
Guardian Trust Services

• Inspection Of Sites Land Use Records
• Monitoring Of Sites, Land Use Changes, Zoning
  Building Permits
• Reporting To Prescribed Stakeholders
• Providing Financial Assurance For Long-Term
  Stewardship
• Utilizing A Comprehensive Information Management
  System To Track The Status Of The LUCs ECs
• Providing Programs For Local Governments

13
Inspection and Monitoring

• 1. Monitoring and Physical Inspections of the
  Site Physical inspection and monitoring of each
  site by qualified professionals will be conducted
  on a regularly scheduled basis to comply with
  agreed upon remedy.
• 2. Periodic Reviews of the Land Records Periodic
  updates of the land records to monitor transfers,
  recordations of land use restrictions and
  changes in zoning to assure compliance.
• 3. Other Outreach Activities Meetings with new
  owners, tenants, building inspectors, local
  zoning and land use planning officials to assure
  compliance with land use restrictions.

14
Reporting

• Periodic inspection and monitoring reports
  submitted to Authorized Stakeholders
• Copies submitted to regulatory agencies, as
  required
• Copies submitted to other stakeholders, as agreed
  or required
• Breach notices submitted to Authorized
  Stakeholders
• Copies submitted to regulatory agencies, as
  required
• Copies submitted to other stakeholders, as agreed
  or required

15
Information Services

• Inspection and monitoring reports stored in
  comprehensive database
• Other site information and real estate data
  included in database
• Data can be integrated with existing Navy LUCAS
  databases
• Related Services
• Call-in program
• Web site and links
• Information available to local planning and
  zoning officials

16
Commitment Letter and Term Sheet

• Goals of service, Trust obligations and tasks to
  be performed
• Duration of performance
• Financial terms
• Description of legal documents
• Additional terms and conditions
• Signing of Site Acceptance Agreement

17
Lessons Learned in the Real World

• Creating Documentation Systems
• Protocols (Underwriting, Implementing, Operating
  and Quality Control)
• Forms (Site Acceptance Review Form Baseline
  Database Input Form)
• Documents (Site Acceptance Agreements)
• Robust Database

18
Lessons Learned in the Real World

• Improving Efficiency of Processes
• Grantees vs. Third Party Beneficiaries
• Creating Controls Implementation Plan
• Creating Controls OM Plan
• Pricing
• Dynamic Nature of Implementation Plans
• Short Run vs. Long Run
• Control Costs vs. Other Site Costs

19
Lessons Learned in the Real World

• Resolving Cost Issues - Reliable Pricing
  
• Importance of Costing Model
• Use of Long Run Pricing Assumptions
• Pricing for Contingencies
• The Role of Insurance in Efficient Pricing
• Security of Lump Sum Pricing

20
Lessons Learned in the Real World

• Improving the Linkage Between Remediation and
  Redevelopment
• Economies of Scale in Providing Services
• Providing Long-Term Assurance

21
Key Advantages of The Guardian Trust

• Public/Private partnership allows for ongoing
  public oversight and private management expertise
• Guardian Trust focused solely on managing long
  term stewardship of land use controls and
  engineering controls
• Pooling enables most favorable pricing for
  services
• Disciplined stewardship and enhanced
  institutional memory
• Physical inspections of property land use
  records
• Automatic notices to land-use decision makers
• Can interface and support state registries with
  updates
• Funds placed outside reach of political process
• Provides first alert of remedy breach cure
  confirmation

22
Benefits to Navy

• Comprehensive approach for long term stewardship
• Delegate day-to-day responsibilities and certain
  liabilities
• Supported by regulatory agencies
• Facilitates transfer of properties for
  redevelopment

23
Guardianship
Public Health And Environment

Communities
States/EPA
Training and Outreach
Inspecting and Monitoring
Developers
Property Owners
Financial Assurance
Tracking and Reporting
Legal Access And Enforcement
Statewide Registry
Lenders and Insurers
Responsible Parties
Core Functions
Local Government