Choosing the right Environmental

Vendor To Keep You and Your

Client Out of Trouble2016 Mid America Lenders Conference

Hyatt Regency, Houston, TexasAugust 18, 2016

Melanie Edmundson, P.G.Licensed Professional Geoscientist

Licensed Asbestos & Mold ConsultantCertified Lead Based Paint Risk Assessor

1

Who We Are Incorporated since 1993. Principals are James Dismukes, P.E. and

Melanie Edmundson, P.G.

Operate from a central office and perform work nationally with

“In House Licensed and Certified” Environmental Professionals.

Have Performed over 20,000 environmental site assessments and

related services and counting...

2

Phase Engineering is Texas

licensed and certified:

Registered Professional Engineering P.E. Firm

Licensed Professional Geoscientist P.G. Firm

Licensed Asbestos Consultant Agency

Licensed Mold Assessment Company

Certified Lead Firm

Storage Tanks - Corrective Action Specialist (CAS)

& LPST Corrective Action Manager (CAPM)

Wetlands - United States Army Corp of Engineers

Delineation Course Certified

Stormwater & Pollution Prevention -Certified

Preparer of SWPPP (CPSWPPP) and (CCIS)3

Not Everything That Looks Like a

Rainbow Leads to a Pot of Gold!

TRUE Or FALSE?

1. Because there are regulations and standards that are required to be followed all SBA

Environmental Reports are created equally and follow the applicable current SBA SOP,

EPA regulations, ASTM standards and Federal & State regulations?

2. All SBA Records Search with Risk Assessment (RSRA) reports contain the same

comprehensive data?

3. All SBA Phase I reports are required to be performed by a licensed individual?

4. All consultants have current required applicable licenses when conducting

Environmental Consulting OTHERWISE THAT WOULD BE AGAINST THE LAW?

5. SBA allows for a Phase II to be conducted instead of a Phase I if the subject property is

already a known potential environmental concern i.e. gas station?

6. Every environmental consultant carries at least $1,000,000 professional liability “Errors

and Omissions” insurance?

7. Financial Institutions third party vendor selection is only the responsibility of the

person ordering the environmental report at the institution?

Current Regulatory Compliance Concerning Third Party

Vendors: Dodd Frank Wall Street Reform and Consumer

Protection Act And the FDIC

6

*The board of directors and senior management of an institution

are ultimately responsible for managing activities conducted

through third-party relationships, and identifying and controlling

the risks arising from such relationships, to the same extent as if

the activity were handled within the institution.

SBA Levels of Due Diligence and Related

Required Licenses in Texas (Laminate)*Statements from non licensed / certified individuals is Against the law!

Type Explanation

Records Search with

Risk Assessment

Report (RSRA)

No license required to conduct these reports except the

Environmental Professional is required to be licensed as a

certified Lead Risk Assessor to determine if the property is also

possibly considered contaminated by “Hazardous Substances”

such as lead if the property is a SBA “Special Use facility” which

includes all Child Occupied Facilities.

Transaction Screen

(TSA); ASTM 1528-14

Same as RSRA requirements.

Phase I ESA

ASTM 1527-13

Same as RSRA Requirements and may also include a licensed

Professional Engineer (P.E.) or Professional Geologist (P.G.) if

the property is a current or historical gas station or dry cleaner.

Texas also requires another related license for UST consulting

which is a CAS and CAPM.

Phase II ESA Phase II performed on a gas station loan must be conducted by a

P.E. or P.G.

Automatic Phase I to include a Phase II of an on site dry cleaners

over 5 years old conducted by a P.E. or P.G.

Related licenses and certifications include Asbestos, Lead

Based Paint, Mold, Wetlands, P.E., P.G., CAPM and CAS Firm

7

RSRA “Buyer Beware”

*The choice of historical records to be reviewed on any particular site is

at the discretion of the Environmental Professional.

If consultant has No License = No Real Risk to consultant!

Using a firm that identifies that your property is listed on the NAICS codes

as a potentially environmentally sensitive business or as another

potentially environmental concern i.e. asbestos prior to conducting the

RSRA can save you and the client time and even $$$.

8

Phase I Environmental Site Assessment

(ESA) & ASTM Standard E1527-13

SBA requires AAI compliant Phase I ESA’s conducted by an

Environmental Professional in accordance ASTM E1527-13.

Environmental Professional have a minimum of the equivalent of ten (10)

years of full-time relevant experience. *No License Required!

The consultant is allowed 20 calendar days to complete the process

Watch for disclaimers from consultants if the process is completed in less

than 20 calendar days especially if a real quick time frame.

*SBA does not allow for a Phase II to be conducted instead of a Phase I if

the subject property is already a known potential environmental concern

i.e. gas station.

9

TBPG Rules for Professional Geoscience

Licensure & Services, March 15, 2016

(25) Geoscience services (also professional geoscience services, and professional geoscience)--Services which must be performed by or under the direct supervision of a Professional Geoscientist and which meet the definition of the practice of geoscience as defined in the Texas Occupations Code, §1002.002(3). A service shall be conclusively considered a professional geoscience service if it is delineated in that section; other services requiring a Professional Geoscientist by contract, or services where the adequate performance of that service requires a geoscience education, training, or experience in the application of special knowledge or judgment of the geological, geophysical or soil sciences to that service shall also be conclusively considered a professional geoscience service. These services may include consulting, investigating, evaluating, analyzing, planning, mapping, and inspecting geoscientific work, and the responsible supervision of those tasks.

You Need A

Qualified And

LICENSED

P.G. or P.E.

Undeveloped

/Agriculture

PHASE I *

CRE

Renovations

PHASE II

P.G. or P.E.Industrial

Underground

Storage

Tanks

Hospitality

/ Churches

Asbestos

Retail /

C-Stores

Lead

Oil & GasMold

Multifamily

/ Childcare

Wetlands

Office /

Healthcare

Stormwater

ENVIRONMENTAL DUE DILIGENCE & LICENSE/CERTIFICATION REQUIREMENTS

* No Federal or

State License or

Certification

required to

perform a Phase I

DO YOU REALLY

WANT TO START THE

ENVIRONMENTAL

PROCESS WITH A

NON QUALIFIED

CONSULTANT?

Be Empowered!

Qualify Your

Vendors The links provided to the

right will help you qualify your environmental vendors in Texas.

Or go to www.PhaseEngineering.com and hit the “Dare to compare” button for these links.

You can qualify a firm and also individuals in minutes.

15

The Take Away Know your EP/consultant – are they qualified & have the applicable licenses and or

certifications and are up to date on the current regulations and standards? If you have a license you have something to lose, conversely if you don’t have a license what do you have to lose?

Do you want a licensed/ qualified firm that is full service with “in house” qualified EP’s or do you want a firm that is not full service and/or may use sub contractors that may not even be licensed/qualified?

Check with Insurance Carrier on type of insurance (professional liability – E & O) and current status of the Environmental Vendor.

RSRA, TSA, Phase I, Phase II, Asbestos, Lead reports meet or exceed the SBA, ASTM standard and EPA AAI Rule? All Environmental Reports are not created equally!

RSRA, TSA, Phase I, Phase II, Asbestos, Lead reports meet or exceed the SBA, ASTM standard and EPA AAI Rule? All Environmental Reports are not created equally!

The board of directors and senior management of an institution are ultimately responsible for managing activities conducted through third-party relationships.

Know your internal Lender Policy - Know your internal Lender Policy – Your “In House” Policy may be more stringent than the SBA requires…

16

Help Is Here to Update Your Environmental

Policy & to Qualify Your Vendors!

Questions / Comments

Thank You For Your Time!

Melanie Edmundson, P.G.

Licensed Professional Geoscientist (Geology)

Licensed Asbestos & Mold Consultant

Certified Lead Based Paint Risk Assessor

Melanie@PhaseEngineering.com

832-485-2247

www.PhaseEngineering.com

18