On August 22, 2007, a new tool became available to those cleaning up or interested in redeveloping contaminated property in Houston. The City of Houston passed an ordinance allowing the city to participate in the Municipal Setting Designation (“MSD”) Program.1 An MSD is a state designation given to a property within a municipality or extraterritorial jurisdiction that certifies that groundwater within a particular area will not be used as potable water.2 Restricting the use allows property owners or volunteers to save time and money by limiting investigation and remediation to less stringent levels. Quicker and cheaper cleanups in turn can facilitate the sale or development of contaminated properties.

Statutory Requirements. To qualify for an MSD, (1) The property must be within the corporate limits or extraterritorial jurisdiction of a municipality that has a population of at least 20,000 and (2) there must be a public water supply system supplying or capable of supplying drinking water to the MSD property and all properties within one-half mile.

Certification Process. In order to obtain an MSD, the applicant must first obtain “firm” support from the city. Though the City of Houston has approved participating in the MSD program, it must still approve each individual application. Houston’s ordinance has procedural aspects that other cities do not. In addition to the notice requirements required by statute, the ordinance calls for a public meeting and a public hearing. This gives the community additional opportunities to participate in the application process, but also affords the applicant an opportunity to educate the community on MSDs and the protections built into the program. The city process will likely take a minimum of 5 months to complete.

If approved, the City will pass an ordinance or a resolution supporting the filing of a restrictive covenant prohibiting the use of groundwater in the MSD as potable water. If all public notice3 and other statutory requirements have been met, the TCEQ may consider the application and must either approve or deny4 the application in 90 days. If approved the TCEQ will issue an MSD Certification.

Limitations of an MSD. Consuming contaminated groundwater is the only risk an MSD addresses. Property owners are still required to address other exposure pathways such as inhalation of vapors, dermal contact during construction, and ecological impacts.

For links to the MSD statute and application, visit:  http://www.tceq.state.tx.us/remediation/msd.html