Impact of E 1527-13: Agency File Reviews

Now that E 1527-13 is in effect—and blessed by the U.S. EPA as AAI-compliant—the majority of environmental professionals (or 61 percent) are now using it for all of their Phase I ESAs. What has the swift implementation of E1527-13 meant specifically for conducting agency file reviews as part of Phase I ESAs? EDR conducted a survey to find out, and the results may surprise you.

E 1527-13 Recap of AFR Language

When the ASTM Phase I ESA Task Group tackled revisions to the E 1527-05, one of the issues raised was that many consulting firms were following the standard’s flexible approach to conducting agency file reviews. Yet what was missing from Phase I ESA reports many times was documentation on the environmental professional’s rationale in cases when a review of agency records was not conducted (e.g., files were not available during reasonable time and cost constraints, data from environmental records was deemed sufficient for making a REC determination, alternative source used, etc.)
In response, the Task Group included a new section in E 1527-13 that seeks to clear up ambiguities in the previous version that may have allowed some EPs to avoid conducting the proper research required for agency file reviews.

In E 1527-13, the language clearly states that:
•    If the subject property or an adjoining property is identified in any of the standard environmental records sources, then performing an agency file review is not optional.
•    If the EP decides not to undertake such a file review on a particular project, the justification for not conducting one must be included in the Phase I report.
•    Section also allows the EP to rely on alternative sources (e.g., onsite records, local government agencies, etc.) and document the findings in the report.

Agency file reviews can bring valuable information to a Phase I ESA investigation, but are not without their challenges. Thus, the complexity and level of effort behind conducting an agency file review can range from easy to onerous, depending on distance, the level of sophistication at the agency office, access to files, geographic location and myriad other factors. The new language allows environmental professionals to exercise flexibility given these factors, provided the rationale is documented in the report. [For some of the factors that determine whether an AFR is conducted, see the accompanying text box.]

Word on the Street

Leading into the final run of the Due Diligence at Dawn workshops in Irvine and San Francisco in early March, EDR led a targeted, capsule survey, mainly of California environmental professionals, to collect data on current AFR practices and to assess what, if any, impact the new standard was having in the marketplace. Here are some of the key findings:

•    Two-thirds of EPs are aware of the changes that E 1527-13 made to the AFR language;
o    yet one in three is not.
•    74% of EPs “always” attempt to access agency files on Phase I ESA projects.
o    Another 18% “often” do.
•    83% of EPs have not found it necessary to change their AFR practices since ASTM published E 1527-13 in November.

Two years ago, EDR Insight conducted a survey to support ASTM’s efforts and found that 60% of environmental professionals “always” or “often” perform agency file reviews as part of Phase I ESAs. Today, just a few months after the new standard became effective, this stat stands at 92%. The general consensus based on the February 2014 survey is that AFRs are–and have been–a routine component of any Phase I ESA. As one respondent noted:

“I am always surprised that there are people who DON’T do agency file reviews. I don’t believe they are fully complying with the standard if they don’t talk to every possible agency.”

Given that most respondents were based in California, many also made reference to the availability of files online from state and local agencies. Systems like California’s GeoTracker make the file review process easier. A lender speaker at the California DDDs, however, cautioned consultants about stopping there, noting that a GeoTracker search is “not a substitute for conducting a review of paper files at the appropriate agency. Our institution always requires our consultants an AFR.” Also, many of the local CUPAs (i.e., Certified Unified Program Agencies) do not put their data online, so files are only accessible via a visit to the appropriate agency. Another lender panelist has not seen an impact on pricing related to the new AFR language, but has seen Phase I ESAs taking longer to complete due to having more AFRs conducted.

Bottom Line

The results of the AFR survey support the Task Group’s belief that most consultants were conducting AFRs already, but for the rest, the new language is serving its purpose—making it harder to ignore this requirement.  AFRs are being more commonly conducted today, with more emphasis being placed on available files for adjoining properties.

About the Survey

EDR’s Agency File Review Survey was conducted in late February 2014. The survey sample consisted of 261 respondents, primarily environmental professionals based in California.