4drivers to use UST Cleanup Fund more effectively 2009 Audit and Task Force RecommendationsFraud, Waste, AbuseState Water Board Resolutions (5 since 2008)Low Threat PolicyRecent Laws: AB 358, AB 291, AB 1701, AB 1715Reduced RevenuesUnintended Consequences – Greenhouse gassesCurrent Fund Sunset Date < 3 years – Fiscal Cliff
5Challenges for Cleanup Fund AVERAGE case has been open 17 years – every year more costs are incurred that may not be reasonable and necessaryMany 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/claimCurrent claims averaging $500,000/claim and countingCurrent claims projected total > $750,000/claim# open claims >$1M reimbursed to date = 469 or 15%
6Recent 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
8QUARTERLY REPORT/ANNUAL REPORT Posted on Fund websiteQuarterly ReportFund Stats by QuarterStatus of claimsRRs received, reviewed, paidAccounts receivable owed to FundFive year reviewsYear-end SummaryAnnual Report
9CLAIMS BY PRIORITY CLASS since 1992 (July 2012) CLOSED CLAIMSACTIVECLAIMSPRIORITY LIST CLAIMSCLAIM REIMURSE-MENTSA40942$0.04BB3,5211,58540$1.40BC3,03096587$1.16BD1,2284444,562$0.60BTOTAL =15,9138,1883,0364,689$3.20B
11Recent FUND ACTIONS Active claims Reimbursed most costs incurred prior to July 2011Provide annual budget for ongoing workRequiring RRs include information required by lawPriority payments or budgets for site closeout claims, cases affecting water supply wells, cases with significant free product per ResPriority List claimsActivating A’s, B’s, and Schools as they come onto listActivating D’s as necessary to meet 14% law
123. AB 1715: 5-Year reviews & REVIEW SUMMARY REPORTS
13AB 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
14Fund Manager Determination Fund Manager Determination that Case Appropriate for ClosureDocument as Review Summary Report (RSR)Opportunity for Agency CommentFreeze Existing and New DirectivesExceptions to Freeze
15Fund Manager Recommendation Permission from O/O to closeFund Manager Recommendation to closeTriggers max. $10K/year corrective action costsAdds monitoring
16Fund Manager Recommendation 60 day comment period per Low-Threat PolicyClosure order signed by Exec Director if passes Low-Threat Policy criteria or by State Water Board if passes Res per Res
175-Year Review ProductsReview Summary Report, withChecklist for Policy (3 page) or, if fails, Checklist for Res , andSummary of Basic Case Information (Conceptual Site Model) using GT data
185-Year Review Products Review Summary Reports (RSRs) RSR-Concur RSR-Additional WorkRSR-Closure = Fund Manager DeterminationUST Case Closure RSR = Fund Manager Recommendation
204. RES. 2012-0062 FUND LOW-THREAT PoLICY CASE REVIEWS
21State Board prefers agency close cases that meet Policy STATE WATER BOARD RESState Board prefers agency close cases that meet PolicyGT Online Checklist not needed for cases that meet Policy
22STATE WATER BOARD RESFund staff review cases where Year Review has recommended agency pursue closureIf agency will NOT close case soon, Fund staff reviews case against Low-Threat Policy criteria and, if necessary Res
23Cases meeting CLOSURE criteria Fund Manager UST Case Closure RSR includes BOTHDetermination that freezes directives ANDRecommendation that limits reimbursement to $10KPublic notice 60 days
24Cases meeting CLOSURE criteria Executive Director OrderUp to 6 mos for waste removal & well destructionUp to 30 days for notification from agency that closure activities completedUp to 30 days for State Board closure letter
25Cases 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
27LOP FY 13/14 Contracts Transition administration to Cleanup Fund Res adopted “Underground Storage Tank Local Oversight Program Procedures and Criteria for Certification” on Jan 8Requires LOP certification applicants submit proposed budget for FY 13/14 by Feb 7 to Cleanup Fund Manager
28LOP FY 13/14 Contracts Expect LOP contract language to tie back to : LOP certification criteriaActivities required by ResPerformance measures developed pursuant to ResAs caseloads change from year to year, contract dollars may change.
30UST Cleanup FundWhere do we go from here?xxxLow-Threat Policy
31UST CLEANUP FUND Storage Fee (cents per gallon stored) Million Dollars FUND SUNSET1/1/2016Million DollarsFiscal Year0 .184.108.40.206.220.127.116.11Storage Fee (cents per gallon stored)
32FUND SUNSET/PROGRAM WIND-DOWN Current Fund sunset date now <3 years awayFocus on moving cases towards closure ORWhat cases are left whenever the Fund sunsets?Need for deadlines for an orderly wind-down:Switch to other financial assurances mechanisms for operating USTsDeadline for new claim eligibility and resolution of eligibility disputesDeadline for submittal and processing of requests for reimbursement
33CLEANUP FUND PROGRAMS THAT HELP WITH WIND-DOWN Schools Account = higher priority for reimbursementCommingled Plume Account = pools maximum availableOrphan Sites (OSCA) = BrownfieldsEmergency, Abandoned, Recalcitrant (EAR) = serious problem sites
35Fraud against UST Cleanup Fund Office of Enforcement’s investigations and/or arrests for alleged fraud against Fund: E2C, Hayden Environmental, Ami Adini & Assoc., PW EnvironmentalFraud against UST Cleanup Fund may be widespread & Fraud Unit continues numerous investigationsUST Cleanup Fund administration making adjustments with goal of fraud prevention
39AB 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.
40AB 1715Fund 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
41AB 1715Fund 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.
42AB 1715Fund 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:
43AB 1715Fund 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.
44AB 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) 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
45AB 1715Fund 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.
46AB 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.
47AB 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