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Intro (00:00):
Welcome to the Alliant In The Public Eye Podcast, a show dedicated to exploring risk management topics and challenges faced by today's public sector leaders. Here is your host, Carleen Patterson.

Carleen Patterson (00:17):
Welcome back everyone, to another episode of In The Public Eye. The last couple of months we've been focusing on some unique issues that are facing our public entity risk managers, and one of the things that came up back in July with some of my renewals, were some exclusions that were put on some of our liability policies, and it was excluding PFAS. And I said, what are PFAS? So, to answer that question for all of you public entity risk managers, I have invited Katrina Seese and Jessica Plummer to the show to talk a little bit more about them, what the issues are and what as risk managers we can do to protect ourselves. But before we get started, just want to let Katrina and Jessica introduce themselves.

Jessica Plummer (01:05):
I'm Jessica Plummer. I've been with Alliant for a little over nine years, and I've been in the environmental space for about 22 years doing the environmental and supporting the environmental practice and the Alliant Specialties and Americas for the past almost 10 years now.

Carleen Patterson (01:24):
Great. And Katrina?

Katrina Seese (01:27):
Yes, my name's Katrina Seese. I head up the environmental practice within the public entity practice. I've been with Alliant for just over four years. I've been in environmental for almost 15 years, started on the carrier side over the past 10 years.

Carleen Patterson (01:44):
Well, we sure are happy to have you on our team, especially me as more of a general broker specializing in public entities, but when it comes to pollution and environmental issues, I'm sure happy to have you all on our team. So, let's just dive right into the subject. Just what exactly are PFAS and what are the issues behind it, I guess?

Jessica Plummer (02:07):
Sure. PFAS stands for per- and polyfluoroalkyl substances and what those are, are basically a group of chemicals used to make fluoropolymer coatings and products that resist heat, oil, stains, grease and water. So, if you think about Teflon pans, waterproof boots, jackets, pretty much anything that repels water, grease. PFAS were developed as a chemical that's bound together and it really doesn't break apart. Once they're together, they won't break apart, which is great for your products, but not great for the environment.

Carleen Patterson (02:47):
From a Public entity standpoint, where would we see these being used? What kind of entities are going to see these more than others?

Jessica Plummer (02:59):
Yeah, sure. Airports. Local fire departments will sometimes use airports to stage a fire and use training, and then to put the fires out. they use this aqueous film-forming material, and that, AFF is what they're called, is loaded with PFAS. So definitely airports.

Katrina Seese (03:23):
Really just the water supply in general across the country has been impacted by these PFAS. So, maybe there is a manufacturing facility upgrading and some of these PFAS have leached into the soil, then into the groundwater migrated onto your location. They affect any properties, and they affect the water supply in general. So, a lot of cities, counties, municipalities are having a lot of difficulty getting these under control. They're finding them in the water supply, they're then having to upgrade their water treatment facilities to be able to detect and filter out these PFAS. And then these municipalities are left with this PFAS sludge, which is basically a waste product and it's the PFAS that's then been extracted out of the water that now needs to be disposed of. Then there are only certain landfills that are accepting PFAS-contaminated sludge because of the risk to the groundwater. So, if it were to penetrate the liner of that landfill, that would then become an issue.

Jessica Plummer (04:35):
Carleen, I'd also add that other clients of ours have had issues with it, not necessarily public entities, but also the private sector- real estate owners, light industrial. The private sector is also at risk. Tenants that they have could be storing these PFAS, contaminated kind of materials. You know, they may have firefighting foam systems within their buildings. So, underwriters are starting to get savvy and ask questions about who the tenants are, what sorts of materials are kept at the properties. Those are questions that have always been asked, but they're really starting to narrow in on that. And some carriers even will go so far as to say, if you're in this certain geographic area, we're going to exclude it. Not all carriers, but you know, some carriers are taking a more conservative approach to that. So, owners and private sector companies will probably want to start looking at this from their tenant perspective and how they might want to manage that either through contracts or certain O&M plans.

Carleen Patterson (05:40):
So, Jessica, can you tell me a little bit about the current state of the science on these chemicals?

Jessica Plummer (05:46):
Sure, sure. The current scientific research suggests that exposures to high levels of certain PFAS, there are several, may lead to, you know, adverse health outcomes. But there is some research still ongoing to determine how different levels of exposure to different PFAS can lead to a variety of health effects. Potential adverse effects include liver damage, thyroid disease, decreased fertility, high cholesterol, obesity, hormone suppression, and cancer. Most people at risk are certain adults that would be predisposed to these conditions and children, children are very much at risk from this.

Carleen Patterson (06:28):
All right. What about the people who are using the chemicals? What are the levels, are there acceptable levels versus not acceptable levels? And then my immediate question becomes, what about these folks who are, you know, like I mentioned, firefighters who are using those types of chemicals and what is the, you know, their increased exposure and because then it becomes a worker's comp issue for our clients too.

Jessica Plummer (06:54):
The current health advisory levels for PFOA compounds are 0.004 parts per trillion, those are different. And then PFAS, I know this gets really technical, but I don't want to split any hairs on it. There are two different levels of what's acceptable. So, for PFOA compounds, it's 0.004 parts per trillion. And for PFAS compounds it's 0.002 parts per trillion. Now those may sound like really technical terms, but if you imagine one drop of something in a trillion, I think it's gallons, it's a really, really low amount that's acceptable. And they've really only recently gotten to these levels being really low. The original health advisory levels were set, I think at 0.007. So, within the past year and a half, the levels that are acceptable have been drilled down quite a bit. So really no exposure amount is acceptable. And you're right, I think employers have to start thinking about employee compensation claims. You can see something similar in what's happening with the glyphosates, which is the lead ingredient in Roundup. There have been a lot of class action lawsuits and people being awarded damages from the use of Roundup. So, this is kind of the same exposure pathway.

Carleen Patterson (08:16):
All right. So, I guess the question that I have is, you know, who's going to be held responsible for cleanup of this kind of thing? You mentioned, you know, private industry where it's leaching into the groundwater and you know, as public entity risk managers, our clients are responsible for filtering out the water, but ultimately, you know, who's going to take the bigger responsibility for it?

Katrina Seese (08:39):
Yeah, and I'll take that Carleen. That's the big question right now. And unfortunately, we don't have the answer and it seems that nobody really knows. It looks like the main offenders are companies like DuPont or 3M, and there are thousands of lawsuits now out there against them. And the hope there is to hold the polluters accountable. However, it's turning up in the water supply and a lot of cities and municipalities are having to do something about it now. So, as of right now, they're really left with the burden of remediating the PFAS at least from the water. And this, then it gets transferred to elevated costs of disposal for disposing of that sludge, and in turn, the taxpayers could be held responsible also.

Carleen Patterson (09:36):
How long have PFAS been in existence?

Jessica Plummer (09:40):
It's been a while. It's been - the EPA has known about PFAS since about 19, well, they were first alerted to the health hazards, I should say, of these chemicals since 1998. They've been around a long time before.

Katrina Seese (09:55):
Yeah, the first PFAS, I believe were invented in 1930.

Carleen Patterson (10:00):
Okay.

Katrina Seese (10:01):
So, it's been a long time.

Carleen Patterson (10:03):
All right. So, I'm thinking of a particular client that took over some land that they put a cap on it, right? It was a super fund site. They put a cap on it. It's now a beautiful park in, you know, with a lot of activities on it. Would that mitigation that was done, would it have contemplated PFAS or not necessarily?

Jessica Plummer (10:25):
I would say not necessarily, because the science behind this has been very slow to come to light, and it's taken a while for the EPA to get their hands around it. And as we were reported in our newsletter in October, the EPA has just laid out a strategic roadmap for their commitments to action. So, I would say it's been a long time coming.

Carleen Patterson (10:53):
So, what can our public entity clients do to mitigate their exposure to PFAS?

Katrina Seese (10:59):
Yeah, good question. So, the main thing would be, of course, to stop using PFAS if you're currently using it or containing it on your site. For the airports to switch to PFAS-free firefighting foam. Identify, you know, where you have it or where it's being used in your operations and if it's ever been used. And we would ask that you consider this, especially before purchasing a property.

Jessica Plummer (11:29):
I've had several clients say they've had a few deals die when PFAS were raised. And you know, it may be a concern of their own as business management practice. And then there are also lenders that have their say in it, and some lenders might back out of a deal because of PFAS. So, there are a lot of varying factors in the private sector too that are complicating the PFAS.

Carleen Patterson (11:54):
Yeah, it sounds that way. I really appreciate your time, you know, because it's a really complicated subject that we've tried to tackle in about 20 minutes. Any final thoughts or recommendations for risk managers, either one of you, before we close today?

Jessica Plummer (12:10):
I would say from a risk manager standpoint, start asking questions and see what evolves. See, like Katrina had said, what are your alternatives to using firefighting foam, like a lot of the foam or firefighting suppression systems within the buildings, there might be some big overall changes that are needed, but it's better to address it head on than wait to see what's going to happen.

Katrina Seese (12:38):
Just pay attention. We're expecting some rulings at the end of this year or early next year, which will determine who is being held accountable out of all of these lawsuits. It'll be interesting just to see what the verdicts are.

Carleen Patterson (12:53):
Sounds like we'll have an opportunity for a chapter two on PFAS after some of the litigation starts, you know, working its way through the court system. So, thank you very much to both of you for joining us today. As always, you know, we recognize it's a challenging time for public entities, a challenging time in risk management, and here at Alliant, we are trying to provide information that will help you navigate these complicated waters.