CA State Cleanup Fund News
Will the Pace of Environmental Cleanups Be Affected By the New California UST Cleanup Fund Business Model?
As you may already be aware, The California UST Cleanup Fund is in the midst of changing its business model in order to manage its cash flow based on projected revenues for fiscal year 2011/12 which begins July 1st. The Fund now requires each claimant to provide a budget for the upcoming year’s assessment or cleanup/remediation activities. If budgets have not been submitted to the Fund, those sites will not receive reimbursements in the coming fiscal year. It is not clear at this point if the Fund will reimburse moneys spent equal to the submitted budgets.
The Fund is anticipating a dramatic decrease in revenues when AB1188 expires at the end of this calendar year. When AB1188 expires, the per gallon fee charged to UST operators will decrease from 2.0 cents per gallon to 1.4 cents per gallon. This 30% decrease coupled with dropping fuel sales as the price of gasoline remains above $4.00 per gallon will leave the Fund with a $126 million shortfall in FY 2011/12. The budgeting process the Fund is initiating is meant to address this shortfall.
Fund management has stated they expect to reveal the details of the new business model in May of this year. It is likely the improved cash management at the Fund will not alleviate the shortfall. It is also likely that assessments and cleanups will suffer delays due to lack of funding. As claimants fall behind on regulatory requirements to investigate and remediate soil and groundwater contamination, they risk falling out of compliance with regulatory agencies’ requirements.
We have been closely tracking the goings-on at the Cleanup Fund and have submitted budgets on behalf of our clients who are claimants. If you would like more information about the status of the Fund or would like to know how we can help you, please fill out the CONTACT US page.