Environmental Liability and the Squannacook River Rail Trail

Jan. 8, 2007

At a recent Townsend Board of Selectmen's meeting, the Squannacook River Rail Trail Committee was asked to discuss the issue of environmental liability and potential financial risk to the town.  Environmental liability refers to contamination and who is responsible for its clean-up.  This is a key issue every town faces in deciding to build a rail trail.  In the following I discuss this environmental liability issue in great detail.  I apologize for my wordiness - however, this is a critical issue in Townsend’s decision, and I want all of the details to be clear.  

Rail bed ownership

Right now, the entire railroad bed in Townsend is owned "in-fee" by the Massachusetts Bay Transit Authority (MBTA).  There have been rumors in town that the railroad land is only a right of way or an easement, and that somehow it might revert in ownership to someone else if it were not used.  This is incorrect.  The MBTA did what is called a “confirmatory taking” on February 16, 1977, which taking is recorded in the South Middlesex Registry of Deeds, Book 13256, Page 34.  This deed gives full ownership to the MBTA.

In order for our town to build a rail trail the MBTA rail bed, the town must first sign the MBTA lease.  The MBTA lease costs one dollar for 99 years.  It provides that, if a town signs their lease, the MBTA will not pay for any environmental clean up that might be needed in building the rail trail.  Furthermore, the MBTA lease does not allow the town to perform soil testing before the lease is signed.  The MBTA’s reasons for including this in their lease are clear; the MBTA does not want to have to pay for cleaning up significant environmental problems on rail beds it is not planning to use, or for  which it receives only one dollar to lease.   

Environmental clean up required when building a rail trail

Almost all rail beds contain arsenic, which the railroads used to control weeds, and creosote, which they used to preserve railroad ties.  The standard way to handle these contaminants when building a rail trail is simply to build the trail over them.  A "significant environmental problem", one that would require additional clean-up if discovered, is one that is a hazard to people even with the short-term exposure that a rail trail user would have as they walked or biked the trail. 

Some environmental issues that one might think could effect building a rail trail actually would not. For example, at the Dec. 5, 2006 Townsend Board of Selectmen’s meeting, Mr. Shank discussed a gasoline leak that occurred across the street from his business a number of years ago.  Mr. Shank had tested the soil by his business which abuts the rail trail, and had found that it was still contaminated by that spill.  However, since gasoline evaporates rapidly when it reaches the surface out of doors, it does not present a short term exposure hazard to rail trail users.  Problems like this, though possibly serious for other reasons such as groundwater and aquifer contamination, would not effect the construction of a rail trail, and so present no lease-related liability to the town.  

Environmental liability and legislative history

First Resor Legislation

When this first version of the MBTA lease was presented in 2001 to towns interested in rails to trails projects, they naturally saw this environmental liability as a significant obstacle to their signing the lease.  Who would pay if these significant environmental problems were found?  For this reason, State Senator Pam Resor from Acton added language to the Municipal Relief Act, otherwise known as Chapter 46 of the Acts of 2003. This language amended Chapter 21E of the General Laws, which is the state’s hazardous materials release and response act.

With this first legislation introduced by Senator Resor (the First Resor Legislation), towns were exempted from having to pay for cleaning up significant environmental problems, as long as the town was pursuing building a rail trail.  This means that if a significant environmental problem was found while a rail trail was being built, the town’s only responsibility would be to apply for grants to clean up the problem, and not to directly pay for the clean up. 

As a follow-up to amending Chapter 21E, the Massachusetts Department of Environmental Protection issued Best Management Practices to eliminate or minimize potential exposures to residual oil or hazardous materials commonly found along railroad corridors being converted to rail trails.  This document made it clear that standard railroad contaminants could be covered over as part of standard construction procedure, and it also discussed situations where additional steps would be needed.  The goal of this document was to promote "rail-trail conversions that are both health-protective and cost-effective".

Based on this First Resor Legislation and the Best Management Practices document, some towns were willing to sign the MBTA lease, including  Salisbury and Topsfield.  However, even with these added protections, the MBTA lease still contained a clause requiring the towns to indemnify the MBTA for all liability relating to any pre-existing contamination.  Some towns simply believed it was unfair that they had to take on the burden of applying for grants in the case of severe environmental contamination.  This indemnification clause in the MBTA lease also raised the possibility that a town that signs the lease might even be liable for third-party suits, such as might arise if the environmental contamination from MBTA property affected an abutter's property.  

Second Resor Legislation

To address the MBTA indemnification clause and third party liability issues, Senator Resor introduced another amendment to the 2006 Economic Stimulus bill.  This amendment allows towns to purchase insurance to cover the cost of cleaning up rail trails found to be severely contaminated.  Towns with this insurance would not have to apply for grants to fund this clean-up, and would also be protected against third party suits.  However, under the insurance policy they would be liable for a $50,000 deductible per incident.  This amendment became law in July 2006. 

In order to purchase this insurance, our committee would first have to have a Phase 1 Environmental Assessment done.  A phase 1 environmental assessment includes a visual assessment of the rail bed by a Licensed Site Professional, along with a review of historical records.  It does not include soil testing, which is still prohibited until after the MBTA lease is signed.  Our committee plans to have the phase 1 environmental assessment done as part of our preliminary engineering study. The one-time cost of the environmental insurance policy is estimated at $50,000, with the state covering one half.  This policy would be in effect for five years, and so would cover the period of construction when any problem would occur.  Our committee has committed to paying the town's share of the cost of that policy if the town proceeds.

Since this is a complex issue, our committee brought in Attorney Steve Winslow to advise us on this issue. Mr. Winslow is an environmental attorney with Brown and Green, LLC, and has worked with numerous municipalities on rail trail and environmental contamination issues.  He is also a co-author of a national study on rail trails and contamination. Mr. Winslow gave an overview of this issue at a recent Townsend Board of Selectmen meeting.

Insurance deductible

The issue of the insurance policy deductible is a serious financial concern to both our committee and the Townsend Board of Selectmen.  We are investigating possible funding sources, and are optimistic a solution can be found.  It is also important to remember that this deductible would only need to be paid if a serious environmental issue not uncovered by the Licensed Site Professional was found, one that is causing a short-term health hazard right now to anyone walking on the rail bed.  In fact, since the MBTA now forbids testing on its land, proceeding with the rail trail is the only legal way such a hazard could be discovered and dealt with.

A rapidly changing issue

One final comment -clearly, this is a rapidly changing issue.  Two pieces of state legislation have been passed dealing with environmental contamination and rail trails in the past three years.  It is our belief that the environment for building rail trails in Massachusetts will only improve in the next few years.  In Townsend, we also have the great advantage that Congressman Olver, State Senator Antonioni, and State Representative Hargraves are all strong supporters of rail trails.  So while our committee feels that the environmental liability issue is one that needs to be taken seriously, we believe it is one for which we will eventually find a satisfactory solution.

For more information on this topic, see Senator Resor's description of this issue written before the legislation was passed.