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UNDERGROUND STORAGE TANK CLEANUP FUND Lisa Babcock State Water Resources Control Board CUPA Conference February 4, 2013 1.

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Presentation on theme: "UNDERGROUND STORAGE TANK CLEANUP FUND Lisa Babcock State Water Resources Control Board CUPA Conference February 4, 2013 1."— Presentation transcript:

1 UNDERGROUND STORAGE TANK CLEANUP FUND Lisa Babcock State Water Resources Control Board CUPA Conference February 4,



4 DRIVERS TO USE UST CLEANUP FUND MORE EFFECTIVELY 2009 Audit and Task Force Recommendations Fraud, Waste, Abuse State Water Board Resolutions (5 since 2008) Low Threat Policy Recent Laws: AB 358, AB 291, AB 1701, AB 1715 Reduced Revenues Unintended Consequences – Greenhouse gasses Current Fund Sunset Date < 3 years – Fiscal Cliff 4

5 CHALLENGES FOR CLEANUP FUND AVERAGE case has been open 17 years – every year more costs are incurred that may not be reasonable and necessary Many cases not yet assessed, therefore not being either remediated (if necessary) or closed (17 yr X $30K/yr monitoring only = $510K) Dramatic increase in corrective action costs over time: – Closed claims averaged $180,000/claim – Current claims averaging $500,000/claim and counting – Current claims projected total > $750,000/claim – # open claims >$1M reimbursed to date = 469 or 15% 5

6 RECENT STATE WATER BOARD STEPS AFFECTING CLEANUP FUND State Water Board moving aggressively to close low- threat cases so that resources can be used to clean up the remaining high-priority cases (especially cases without viable responsible parties) - Res. No directed actions to review and close cases - Res. No adopted UST Low-Threat Closure Policy - Res. No delegated closures that meet Policy criteria to Executive Director - Res. No approved Plan for Policy implement- ation and additional program improvements 6


8 QUARTERLY REPORT/ANNUAL REPORT Posted on Fund website Quarterly Report – Fund Stats by Quarter – Status of claims – RRs received, reviewed, paid – Accounts receivable owed to Fund – Five year reviews – Year-end Summary Annual Report 8

9 CLAIMS BY PRIORITY CLASS since 1992 (July 2012) 9 PRIORITY CLASS CLOSED CLAIMS ACTIVE CLAIMS PRIORITY LIST CLAIMS CLAIM REIMURSE -MENTS A $0.04B B 3,5211,58540$1.40B C 3, $1.16B D 1, ,562$0.60B TOTAL = 15,913 8,1883,0364,689$3.20B


11 RECENT FUND ACTIONS Active claims Reimbursed most costs incurred prior to July 2011 Provide annual budget for ongoing work Requiring RRs include information required by law Priority payments or budgets for site closeout claims, cases affecting water supply wells, cases with significant free product per Res Priority List claims Activating A’s, B’s, and Schools as they come onto list Activating D’s as necessary to meet 14% law 11


13 AB 1715 Health & Safety Code “The Legislature finds and declares that the State Water Resources Control Board should expediently process underground storage tank cases…” Added to 5-year review process 13

14 FUND MANAGER DETERMINATION Fund Manager Determination that Case Appropriate for Closure Document as Review Summary Report (RSR) Opportunity for Agency Comment Freeze Existing and New Directives Exceptions to Freeze 14

15 FUND MANAGER RECOMMENDATION Permission from O/O to close Fund Manager Recommendation to close Triggers max. $10K/year corrective action costs Adds monitoring 15

16 FUND MANAGER RECOMMENDATION 60 day comment period per Low-Threat Policy Closure order signed by Exec Director if passes Low-Threat Policy criteria or by State Water Board if passes Res per Res

17 5-YEAR REVIEW PRODUCTS Review Summary Report, with Checklist for Policy (3 page) or, if fails, Checklist for Res , and Summary of Basic Case Information (Conceptual Site Model) using GT data 17

18 5-YEAR REVIEW PRODUCTS Review Summary Reports (RSRs) RSR-Concur RSR-Additional Work RSR-Closure = Fund Manager Determination UST Case Closure RSR = Fund Manager Recommendation 18

19 AB 1715 & REVIEW SUMMARY REPORTS DRAFT RSR - Concur DRAFT RSR – Addl Work DRAFT RSR - Closure 45-day Regulator Review RSR - Concur RSR – Addl Work RSR - Closure Case Closure RSR Freeze Directives Limit $10K/year RP Permission to Close Case Closure Order 60-day Public Comment <6 months <60-days <365-day s Closure Letter Submit Final RR Abandon wells Dispose waste FIVE- YEAR REVIEW FIVE- YEAR REVIEW Requested consultation


21 STATE WATER BOARD RES State Board prefers agency close cases that meet Policy GT Online Checklist not needed for cases that meet Policy 21

22 STATE WATER BOARD RES Fund staff review cases where 5-Year Review has recommended agency pursue closure If agency will NOT close case soon, Fund staff reviews case against Low-Threat Policy criteria and, if necessary Res

23 CASES MEETING CLOSURE CRITERIA Fund Manager UST Case Closure RSR includes BOTH Determination that freezes directives AND Recommendation that limits reimbursement to $10K Public notice 60 days 23

24 CASES MEETING CLOSURE CRITERIA Executive Director Order Up to 6 mos for waste removal & well destruction Up to 30 days for notification from agency that closure activities completed Up to 30 days for State Board closure letter 24

25 CASES NOT MEETING CLOSURE CRITERIA Issue a revised 5-Year Review recommendation (“RSR-Concur” or “RSR-Further Work”) Make GT Online Checklist available for agency to document impediments to closure and Path to Closure 25


27 LOP FY 13/14 Contracts Transition administration to Cleanup Fund Res adopted “Underground Storage Tank Local Oversight Program Procedures and Criteria for Certification” on Jan 8 Requires LOP certification applicants submit proposed budget for FY 13/14 by Feb 7 to Cleanup Fund Manager 27

28 LOP FY 13/14 Contracts Expect LOP contract language to tie back to : – LOP certification criteria – Activities required by Res – Performance measures developed pursuant to Res As caseloads change from year to year, contract dollars may change. 28


30 UST Cleanup Fund Where do we go from here? xxx Low-Threat Policy

31 UST CLEANUP FUND FUND SUNSET 1/1/ Storage Fee (cents per gallon stored) Fiscal Year Million Dollars

32 FUND SUNSET/PROGRAM WIND-DOWN Current Fund sunset date now <3 years away Focus on moving cases towards closure OR What cases are left whenever the Fund sunsets? Need for deadlines for an orderly wind-down: —Switch to other financial assurances mechanisms for operating USTs —Deadline for new claim eligibility and resolution of eligibility disputes —Deadline for submittal and processing of requests for reimbursement 32

33 CLEANUP FUND PROGRAMS THAT HELP WITH WIND-DOWN Schools Account = higher priority for reimbursement Commingled Plume Account = pools maximum available Orphan Sites (OSCA) = Brownfields Emergency, Abandoned, Recalcitrant (EAR) = serious problem sites EAR Account = 33

34 7. FRAUD 34

35 FRAUD AGAINST UST CLEANUP FUND Office of Enforcement’s investigations and/or arrests for alleged fraud against Fund: E2C, Hayden Environmental, Ami Adini & Assoc., PW Environmental Fraud against UST Cleanup Fund may be widespread & Fraud Unit continues numerous investigations UST Cleanup Fund administration making adjustments with goal of fraud prevention 35

36 REPORT FRAUD rograms/ustcf/fraud.shtml 36

37 REFERENCED WEBSITES UST Cleanup Fund including Quarterly Report: water_issues/programs/ustcf/ water_issues/programs/ustcf/ UST Program: water_issues/programs/ust/ water_issues/programs/ust/ 37

38 AB 1715: Sections shown in logic/ process order 38

39 AB 1715 Five Year Review: Existing Provision (a) (1) The manager responsible for the fund shall notify tank owners or operators who have an active letter of commitment that has been in an active status for five years or more and shall review the case history of their tank case on an annual basis unless otherwise notified by the tank owner or operator within 30 days of the notification. 39

40 AB 1715 Fund Manager Determination – Appropriate for Closure: New Provision (a) (1)(A) If the manager determines that closure of the tank case is appropriate based upon that review, the manager shall provide a review summary report to the applicable regional board and local agency summarizing the reasons for this determination and 40

41 AB 1715 Fund Manager Determination – Opportunity for Agency Comment: New (a) (1)(A) … shall provide the applicable regional board and local agency with an opportunity for comment on the review summary report. 41

42 AB 1715 Fund Manager Determination - Freeze on Existing and New Directives: New (a)(4) After the manager provides a review summary report to the applicable regional board and local agency in accordance with subparagraph (A) of paragraph (1), the regional board or local agency shall not issue a corrective action directive or enforce an existing corrective action directive for the tank case until the board issues a decision on the closure of the tank case, unless one of the following applies: 42

43 AB 1715 Fund Manager Determination - Exceptions to Freeze on Directives: New (a)(4)(A) The regional board or local agency demonstrates to the satisfaction of the manager that there is an imminent threat to human health, safety, or the environment. (B) The regional board or local agency demonstrates to the satisfaction of the manager that other site-specific needs warrant additional directives during the period that the board is considering case closure. (C) After considering responses to the review summary report and other relevant information, the manager determines that case closure is not appropriate. (D) The regional board or local agency closes the tank case but the directives are necessary to carry out case- closure activities. 43

44 AB 1715 Fund Manager Recommendation – Case Closure to Board: Old (a) (1) (B) If the manager determines that closure of the tank case is appropriate, the manager, with approval of the tank owner or operator, may make a recommendation to the board for closure. (C) The board may close any tank case or require the closure of any tank case where an unauthorized release has occurred if the board determines that corrective action at the site is in compliance with all of the requirements of subdivisions (a) and (b) of Section and the corrective action regulations adopted pursuant to Section

45 AB 1715 Fund Manager Recommendation - Opportunity for Public Comment: Revised (a)(1)(D) Before closing or requiring closure of an underground storage tank case, the board shall provide an opportunity for reviewing and providing responses to the manager's recommendation to the applicable regional board and local agency, and to the water replenishment district, municipal water district, county water district, or special act district with groundwater management authority if the underground storage tank case is located in the jurisdiction of that district. 45

46 AB 1715 Fund Manager Recommendation - Limit on Reimbursement: Revised (a)(2) Except as provided in paragraph (3), if the manager recommends closing a tank case pursuant to paragraph (1), the board shall limit reimbursement of subsequently incurred corrective action costs, including costs for groundwater monitoring, to ten thousand dollars ($10,000) per year. 46

47 AB 1715 Fund Manager Recommendation – Exceptions to Limit: Old (a)(3) The board may allow reimbursement of corrective action costs in excess of the ten thousand dollar ($10,000) limit specified in paragraph (2) if the board determines that corrective action costs related to the closure will exceed this amount, or that additional corrective action is necessary to meet the requirements specified in subdivisions (a) and (b) of Section

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