Cenco_REC Explanation Letter

January 5, 2009

Max Towry
Honbarrier, Inc.
Post Office Box 7027
High Point, North Carolina 27263

Subject: North Carolina REC Program Overview

Dear Max:

The State of North Carolina has implemented changes in their site
management strategy for petroleum and non-petroleum impacted properties.
Delta Consultants (Delta) has had recent conversations with personnel of the
North Carolina Department of Environment and Natural Resources
(NCDENR), Division of Waste Management, Inactive Hazardous Waste Sites
Branch (IHWSB) regarding how the Registered Environmental Consultant
(REC) program relates to sites previously managed by the NCDENR’s
Division of Water Quality. Delta has discussed the changes with Charlotte
Jesneck, IHWSB Supervisor; Bruce Parris, IHWSB Western Regional
Supervisor; and Kim Caulk, Registered Environmental Consultant (REC)
Program leader. Delta provides the following details for the program.

Petroleum Incidents

All petroleum incident sites (typically surface releases and releases associated
with above ground storage tanks) previously regulated by the Division of
Water Quality will be transferred to the Underground Storage Tank (UST)
Section under the Division of Waste Management. Those sites will be
managed under the UST rules except that site closure criteria for soil and
groundwater will not change (health based/protection of groundwater for soil
and NCAC 2L standards for groundwater).
REC Program Overview
Honbarrier, Inc. Site
January 5, 2009
Page 2 of 4
Non-Petroleum Incidents

Non-petroleum incident sites previously regulated by the Division of Water Quality will be transferred to the
IHWSB under one of two programs: the Registered Environmental Consultant (REC) Program or the State-
Lead Cleanup Program, depending upon the severity of contamination and site sensitivity. It is our
understanding that non-petroleum UST releases will continue to be managed by the UST Section. Parties
entering the IHWSB program(s) must complete a voluntary cleanup checklist (checklist) to determine what, if
any, exposure concerns are known to be present (see attached flowchart).

Sites with less public concern, where contamination exposure to the general public can be controlled, and
sensitive environments are not affected are placed in the REC Program. In the REC Program, the remediating
party is required to hire an approved REC and enter into an Administrative Agreement with the IHWSB.
Payment of a program entry fee ($2,500) and yearly fees (estimated at $1,800 to $2,800) to the NCDENR are
required under the REC Program. The REC then performs and certifies that the remedial investigation and
remedial action has been performed in accordance with State law. The State audits a portion of these cases.

Checklist requests have been sent or will be sent to the site contacts of record requesting completion of the
required information. In the very near future, the IHWSB will resend checklists to those who have not
responded to the initial transmittal as well as send requests to additional incident site contacts. According to
our discussions, the upcoming requests will be more forceful regarding responsiveness and entry into the REC
program. Upon completion of the information required in the checklists, the IHWSB will determine if an
individual site qualifies for the REC or State-Lead program.

The IHWSB goal, due to current staffing challenges, is to transition as many of these sites as possible into the
REC Program. Based on our conversations with representatives of the IHWSB, very few sites are expected to
qualify as State-Lead. The responsible party will not have the flexibility of deciding whether to enter into the
REC program. A Consent Order will be required for all sites, whether IHWSB-directed or in the REC
Program.

The NCDENR expects the process of transitioning sites into the IHWSB to take approximately two years to
complete based on the number of open groundwater incidents formerly regulated by the Division of Water
Quality. The IHWSB indicated that they would not require “re-work” at sites entering the program from the
Division of Water Quality, however, RECs will need to re-visit current remedies at sites entering the program.
REC Program Overview
Honbarrier, Inc. Site
January 5, 2009
Page 3 of 4

We expect that non-responsive parties may be subject to penalties; however the extent of those penalties is
unknown.

The latest Annual Groundwater Monitoring Report dated January 5, 2009 was sent to Mr. Andrew Pitner of
the NCDENR, Division of Water Quality. However, based on the NCDENR re-organization, it is likely that
he will not review the report but forward it directly to Mr. Bruce Parris or Mr. Kim Caulk with the IHWSB.
REC Program Overview
Honbarrier, Inc. Site
January 5, 2009
Page 4 of 4

As such, it is likely that Honbarrier, Inc. will receive a request from the IHWSB to enter into the REC
Program.

Please call me to discuss any additional details or questions you may have regarding the REC Program as it
pertains to your site.

Sincerely,

DELTA CONSULTANTS

John D. Reuscher
Project Manager