Prospects for Compliance

1. Prospects for Compliance Jerimiah Luckett

2. Introduction • Ensuring compliance is central to the negotiation process. • Issues of compliance may create hesitation to approach the negotiation table. • Trusting others and being trustworthy are two completely different things.

3. Case Study: Jackson, Wyoming • Northwestern Wyoming • County population nearly doubled between `70 and `80 • Severely over taxed current WWTP needed to be replaced. • South Park deemed the prime location for a number of reasons which included future growth and cost benefits and a proposal to build was begun. • The county vs. town dispute begins and the EPA becomes involved with their own issues.

4. Jackson’s Plan • Was opposed by the Game & Fish Commission • In May `76 the county published & distributed to all county residents a summary of alternatives and included a questionnaire. • Results [of questionnaire] indicated widespread concern about excessive growth & development in unincorporated areas. • The county issued a statement in the fall… • New urban dev. be compact to minimize cost to county • Should avoid environmental damage • Growth should be limited • Placement of sewage plants should be located so as not to foster scattered development. • Clearly in direct opposition to the town’s South Park plan.

5. The Gap Widens – Nov. `76 Elections • Ralph Gill elected mayor of Jackson • Major South Park landowner & former commission member • Firmly agrees with South Park location • Mary “Muffy” Moore elected to the County Commission • Elected on strong growth control platform • July `77 county issues final draft of the comprehensive plan stressing earlier draft requirements and low-density development

6. Draft Environmental Impact Statement (DEIS) • Meanwhile EPA was preparing their DEIS • Like the county they favored expansion of the existing facility. • New republican appointee Green trying to avoid conflict agreed with his staff. • The DEIS concluded… • The elk feedground posed serious legal difficulties • Site located in 100 year floodplain • Conflicted with Wild and Scenic River Study goals • Proposal would open up South Park area to more development • EPA announced that it did not intend to fund a new plant • US Department of the Interior agreed with EPA’s position

7. Town vs. County Dispute • July `77 Jackson releases final draft including a new site just north of the feed ground and on private land • A few town council members now had some concerns… • Concern that a South Park plant would become a county facility • Worry about the distribution costs and fear that town would be paying for county residents sewer service • The rest of the town council believed that the plant had to be as far south as possible to be served by gravity-flow interceptor lines • Sept. `77 the county formally announces it opposition to the South Park plant • The commission made clear its intention to withhold approval

8. EPA Involvement • Sept. `77 Alan Merson appointed regional administrator. • Former Admin. Green had been following advice of staff to disapprove any South Park plans and threaten withdrawal of funds if Jackson would not agree to expand existing plant. • Oct. `77 Project Officer Wilson proposed two options… • One was to upgrade existing plant and set a waste-load allocation. • The other was a lagoon system at South Park and include a tap restriction intended to limit the number or rate of hookups. • The county agreed that the tap restrictions addressed their concern but had doubts regarding compliance by future town councils. • The Rafter J. Project, the first South Park development, with 500 potential units is sent to the county for approval. Lacking grounds to deny it the county had to approve. • The town intended to use this approval as evidence of the need for central sewer in South Park.

9. Mediation • By mid Nov. `77 EPA is pressuring both sides to come to a South Park compromise and placed a deadline of Nov. 28 after which South Park would no longer be considered an option by the EPA. • EPA offered to finance an outside mediator and both town and county accepted. In response the EPA lifted the Nov. 28 deadline. • The county declared that approval of South Park was contingent on several conditions… • 1. Deferred development for 5 years along interceptor line • 2. Town and county must agree on number of taps • 3. All landowners were to agree to abide by the density restrictions • 4. That all conditions be legally binding until 1995 • The town could not guarantee #’s 1 and 4, the county’s biggest priorities

10. Mediator Mix-up • In mid Dec. Merson hired a new mediator, Andrew Briscoe, who was to obtain an agreement binding all 3 parties and… • 1. required county approval of new out-of-town taps • 2. specified maximum annual out-of-town taps • 3. required new-tap development to comply with county comprehensive plan • 4. was enforceable by EPA or any citizen of Teton County • He was also informed that an upgrade of the existing site was no longer a viable option • Due to Briscoe’s neutrality both town and county openly shared what they wanted and what they could accept in compromise.

11. Final Negotiations • On April 12, 1978 Acting Regional Counsel Raisch meets with both town and county and brings the EPA’s draft agreement as a starting point for negotiations. • Jackson officials pressed for a larger plant capacity. • Unconvinced, Raisch leaves the 6% growth estimate unchanged. • The remainder of the meeting was centered on the issue of the number of taps to allow. • The following day parties reconvened to ratify the agreement.

12. Final Agreement • The terms of the Final Agreement are as follows… • Specified plant size using 6% growth rate until 1995 • It required the county to limit annual out-of-town taps as part of the comprehensive plan • It required the town to develop a policy for distribution of out-of-town taps based on a system of customer classes as well as a policy for sewage hookup fees • Both of the towns requirements must be approved by the EPA • EPA was also given power to enforce the terms of the agreement • Chairman Ashley stated that, “all three parties had to give up something—the result was truly a compromise”

13. Outcome • The town chose an aerated lagoon/rapid infiltration system • The plant was completed and began operating in December of 1980 • The County commission finally selected an annual limit of 150 out-of-town sewer taps in cooperation with the town. This # being much higher than the previous 51 taps that had caused so much debate earlier.

14. Compliance Binding Issues • The general rule in the US is that municipalities cannot contract away their policymaking powers. They cannot agree to exercise their policymaking powers in the future in a particular way in return for a legal consideration for several reasons... • First, it gives the impression that policy decisions are for sale • Second, most policymaking authority derives from the police policy • Third, governments should not bind themselves in ways that prevent them from making policy changes in the future in response to changing conditions • Large organizations with diffuse memberships also may have problems when binding contracts are on the table. • The organization itself can bind but each individual member does not have to accept

15. Compliance Binding Issues Cont’d • Thomas Schelling… • The inability to bind sometimes weakens the hands of the leaders who cannot give assurances that the deal struck at the table will be supported by the rank and file. On the other hand, savvy leaders…cannot accept any agreement that would cause a coalition within the organization to bolt the group. So this can sometimes be a strength as well. • Mutual Simultaneous Performance Concurrent with Agreement • Once buyer and seller agree on price, the deal is closed swiftly. • An Exchange of Promises for Mutual Simultaneous Performance • Whenever performance and agreement are separated in time, a potential compliance issue exists. • Exchange of Promise for Performance • One party exchanges performance on his part in return for a promise of future performance by the other. • Continuing vs. One-Time Negotiations • Compliance problems arise less often when the parties have a continuing negotiation relationship than when they do not.

16. Noncompliance • Intentional Noncompliance • Just as a person may initially calculate the costs and benefits so as to conclude that settlement is better then non-agreement, so it is also possible to decide that the costs of breaching the agreement are exceeded by the benefits of doing so. • Selective repudiation – a party may break an agreement after it has begun when he realizes that he has received most of the expected benefits and has yet to incur the bulk of the costs. • When one party suspects a deliberate breach by the other. • Unavoidable Breaches – variety of reasons • Unintentional Noncompliance • The unwitting blunder is not tainted with the malice of a double cross, but it may be viewed that way and may have similar consequences.

17. Enforcement Mechanisms • Grievance and Arbitration Provisions • Issues of interpretation • Structured Implementation • Each needs to have a continuing interest in fulfilling the contract. • Contingent Agreements Coupled with an Escrow Account • The project is backed by money set aside in an escrow account to cover the cost should the first option fail or noncompliance occurs. • Monitoring Devices • The parties may monitor themselves or engage the services of a neutral third party to monitor. • Performance Bonds • Commercial and real estate contracts often contain bonds to provide a remedy in case of breach. • Penalty Clauses • It is necessary to specify the precise circumstances under which the penalty can be collected. • Consent Decrees • A party violating its terms may be found in contempt of court

18. “You can negotiate with the devil if you can make sure he can’t get out of the deal.”