1. Underground Storage Tank Cleanup Fund
Lisa Babcock
State Water Resources Control Board
CUPA Conference
February 4, 2013

2. Presentation OUTLINE OVERVIEW OF RECENT CHANGES
Fund stats – QUARTERLY & ANNUAL REPORTS
AB 1715 AND REVIEW SUMMARY REPORTS
LOW-THREAT PoLICY CASE REVIEWS
LOP Contracts
Looking forward
FRAUD

3. 1. OVERVIEW OF RECENT CHANGES

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

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%

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

7. 2. Fund stats – QUARTERLY & ANNUAL REPORTS

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

9. CLAIMS BY PRIORITY CLASS since 1992 (July 2012)
CLOSED CLAIMS
ACTIVE
CLAIMS
PRIORITY LIST CLAIMS
CLAIM REIMURSE-MENTS A
409 42
$0.04B B
3,521
1,585 40
$1.40B C
3,030
965 87
$1.16B D
1,228
444
4,562
$0.60B
TOTAL =
15,913
8,188
3,036
4,689
$3.20B

10. UST Cleanup Fund Annual Expenditures

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

12. 3. AB 1715: 5-Year reviews & REVIEW SUMMARY REPORTS

13. AB 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

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

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

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

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

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

20. 4. RES. 2012-0062 FUND LOW-THREAT PoLICY CASE REVIEWS

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

22. STATE WATER BOARD RES
Fund staff review cases where 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

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

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

26. 5. LOP Contracts

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

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.

29. 6. Looking forward

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

31. UST CLEANUP FUND Storage Fee (cents per gallon stored) Million Dollars
FUND SUNSET
1/1/2016
Million Dollars
Fiscal Year
0 .6
0.7
0.9
1.2
.1.3
1.4
2.0
Storage Fee (cents per gallon stored)

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

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

34. 7. FRAUD

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

36. REPORT FRAUD

37. Referenced Websites
UST Cleanup Fund including Quarterly Report: UST Program:

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

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.

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

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.

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:

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.

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
) 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.

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.

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