Underground Storage Tanks Were Removed and Petroleum Contamination Was Found: How Are We Going to Pay For This?

closed service station

My phone rang. I didn’t recognize the number and was about to hang up when I inadvertently pressed the answer button. “Hi, this is Bob speaking, how can I help you?”, I said.

To my surprise an old family acquaintance answered, “Hi Bob, I’m the kid, well grown up now, who used to chase your sister around the yard. Anyway, I’m calling for some help. I remember you ended up doing environmental work.” “That’s right”, I said, “what’s up?” 

My former neighbor told me that his folks had left him and his sisters a piece of property that used to be a gasoline station. He told me the underground storage tanks (USTs) had been removed, but gasoline contamination was found. The county wanted cleanup, but the family didn't have the resources and no bank wanted to lend on the property.

“Well, you might be in luck”, I said. I let him know about the Underground Storage Tank Cleanup Fund, and told him that RRM has been helping clients use the Cleanup Fund for nearly 30 years. “We understand this complex program exteremly well and can help you through the process of eligibility and reimbursement of cleanup costs, even if you've already spent some money on cleanup.” A bit of our conversation is captured below as questions and answers.

What is the Underground Storage Tank Cleanup Fund and how can it help me?
The Underground Storage Tank Cleanup Fund (USTCF) is a program funded by a special tax on every gallon of gas purchased in California. This large pool of funds from the gasoline tax is used to provide financial assistance to underground storage tank (UST) owners if the tank has leaked, become damaged, or otherwise impacted the environment. This is a common occurrence, and there are thousands of UST owners who have taken advantage of this program. Any eligible UST owner can apply. The USTCF has assisted large corporations (such as Chevron), local government entities such as cities, counties, and state local parks, school districts, farm owners, residential property owners, and even "mom and pop" service station owners.

2012 06 08 10 40 29 654How much will the Fund pay me for cleanup if my UST(s) has impacted the environment?
Every claim is allotted one million dollars for reimbursement. Most claims do not require the full amount of funding available to reach case closure or be mitigated to the satisfaction of state and/or local regulatory requirements. Some cases do exceed this amount; overages are the financial responsibility of the UST owner. All claims have a deductible ($5,000 - $10,000). This means the UST owner must pay this amount out of pocket toward cleanup costs to their consultant before the USTCF begins reimbursement payments.

How do payments work? How long do I have to wait to get paid?
Once the UST owner is eligible, they become a claimant in the USTCF and can submit invoices from their consultant for reimbursement. The USTCF reviews the invoices to ensure costs are reasonable, submits a request to the State Controller’s Office for payment, and a check is mailed to the claimant for the amount of the invoice. It can take anywhere from a few weeks to several months to receive reimbursement.

Do I have to pay my consultant first and then wait? What if I don’t have the money to pay until I get reimbursed?
Most consultants require payment within the typical 30-day window for invoices, regardless of when the UST owner gets reimbursed. However,  the costs for environmental cleanup can be prohibitive, especially to small businesses owners. RRM does not require payment of invoices from USTCF claimants until the claimant is reimbursed - we don't get paid until you get paid - which relieves the financial burden on the claimant and allows them to remain on a reasonable timeline to case closure.

depth to waterWhat if the USTCF doesn’t pay everything or finds costs “unreasonable”?
RRM has been submitting reimbursement requests on clients’ behalf since we’ve been in business. We understand what costs are reasonable and ensure our invoices are 100% reimbursable. For invoices where some costs were not deemed necessary or reasonable by the USTCF, RRM appealed the reimbursements, which resulted in 80-100% cost recovery. We adhere closely to the USTCF’s guidance on labor rates, task rates, and subcontracting cost guidelines to stay within these parameters for reimbursement. Some costs are simply not deemed reasonable by the USTCF. If such costs are required for cleanup by the state or local regulatory agency, those costs are the financial responsibility of the UST owner.

How much time does this all take? Is there a lot of paperwork involved? What if I need help?
RRM has experience assisting claimants with their application to the USTCF and with ongoing reimbursements. The charge for this service is included in our labor rates. We assist with everything from the application process through the life of the claim, until the case is closed. The most time you’ll spend is during the eligibility process, when you will be gathering the requested information to submit with your application. Once you have a claim, the process only requires a small portion of your time. We are extremely knowledgeable about the USTCF and will manage most of the paperwork for you.

This sounds great. How do I sign up for this program and how do I determine if I am eligible?
There is an application process which determines eligibility. To learn more, visit the USTCF website at: https://www.waterboards.ca.gov/water_issues/programs/ustcf/


If this sounds like an overwhelming process, we are here to help and to answer any questions you have. Please get in touch to see how we can best serve you.

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