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Four of the Nation’s Largest Home Builders Settle Storm Water Violations

Release Date: 06/11/2008
Contact Information: Roxanne Smith, (202) 564-4355 / [email protected]

(Washington, D.C. - June 11, 2008) Four of the nation’s largest home builders have agreed to pay civil penalties totaling $4.3 million to resolve alleged violations of the Clean Water Act, the Justice Department and Environmental Protection Agency announced today. The companies also have agreed to implement company-wide compliance programs that go beyond current regulatory requirements and put controls in place that will keep 1.2 billion pounds of sediment from polluting our nation’s waterways each year.

“EPA requires that construction sites obtain permits and take simple, basic steps to prevent pollutants from contaminating storm water and harming our nation’s waterways,” said Granta Y. Nakayama, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. “Today’s settlements set a new bar for the home building industry.”

“Today’s settlements mark an important step forward in protecting our waters from harmful storm water runoff from construction activities,” said Assistant Attorney General Ronald J. Tenpas. “In the future, these homebuilders will implement company-wide compliance programs that will provide better and more consistent protections at their construction sites across the country.”

The home builders are Centex Homes, based in Dallas; KB Home, based in Los Angeles; Pulte Homes, based in Bloomfield Hills, Mich.; and Richmond American Homes, based in Denver. The four separate settlements resolve alleged violations of storm water run-off regulations at construction sites in 34 states and the District of Columbia. Each company will pay the following penalties:

Centex: $1,485,000
KB Home: $1,185,000
Pulte: $877,000
Richmond: $795,000

Pulte Homes has also agreed to complete a supplemental environment project at a minimum cost of $608,000. The project will reduce the amount of sediment going into a northern California watershed and improve the habitat for aquatic life.

Along with the federal government, seven state co-plaintiffs have joined the settlements. Those states include Colorado, Maryland, Virginia, Missouri., Nevada, Tennessee, and Utah. Each of the seven states will receive a portion of the penalties based on the number of sites located within that state.

Combined, the four builders accounted for more than 124,000 home closings in 2006, and are ranked nationally among the top ten builders in terms of home closings and revenues.

The government complaints allege a common pattern of violations that was discovered by reviewing documentation submitted by the companies and through federal and state site inspections. The alleged violations include not obtaining permits until after construction had begun or failing to obtain the required permits at all. At the sites that did have permits, violations included failure to prevent or minimize the discharge of pollutants, such as silt and debris, in storm water runoff.

The settlements require the companies to develop improved pollution prevention plans for each site, increase site inspections and promptly correct any problems that are detected. The companies must properly train construction managers and contractors, and are required to have trained staff at each construction site. They also must implement a management and internal reporting system to improve oversight of on-the-ground operations and submit annual reports to EPA.
Improving compliance at construction sites is one of EPA’s national enforcement priorities. Construction projects have a high potential for environmental harm because they disturb large areas of land and significantly increase the potential for erosion. Without onsite pollution controls, sediment-laden runoff from construction sites can flow directly to the nearest waterway and degrade water quality. In addition, storm water can pick up other pollutants, including concrete washout, paint, used oil, pesticides, solvents and other debris. Polluted runoff can harm or kill fish and wildlife and can affect drinking water quality.

The settlements are the latest in a series of enforcement actions to address storm water violations from construction sites around the country. A similar consent decree, reached in February with Home Depot, required the company to pay a fine of $1.3 million and establish a comprehensive storm water compliance plan to prevent future violations.

The Clean Water Act requires that construction sites have controls in place to prevent pollution from being discharged with storm water into nearby waterways. These controls include simple pollution prevention techniques such as silt fences, phased site grading, and sediment basins to prevent common construction contaminants from entering the nation’s waterways.

The consent decrees, lodged in the U.S. District Court for the Eastern District of Virginia, are subject to a 30-day public comment period and approval by the federal court. The companies are required to pay the penalty within 30 days of the court’s approval of the settlement.

More information on the settlements: epa.gov/compliance/resources/cases/civil/cwa/homebuilders.html