United States Solid Waste And EPA 510-B-97-008
Environmental Protection Emergency Response August 1997
Agency 5403G
Session Higfnligfnts
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State Fund Administrators Conrerence
June 16 - 18, 199?
Sacramento, California
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Foreword
This document is a collection of highlights from notes taken by individual
attendees at the 6th Annual State Fund Administrators Conference, which
was held in Sacramento, California, on June 16 - 18, 1997. The Office Of
Underground Storage Tanks compiled these highlights for the benefit of state
staff members who were unable to attend the conference. These Session
Highlights are not an official record of the conference. They contain the
opinions of the presenters as recorded by session notetakers, do not
necessarily represent official local, state, or federal Agency position on any
issue, and should not be cited or quoted.
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State Fund Survey
Time: Monday, 9:15 - 9:45 a.m.
Moderator: Chuck Schwer (Vermont)
Notetaker: Bill Lienesch
Presenter: Chuck Schwer (Vermont)
I. Most important issues or topics actually discussed during this session.
1. State Funds' annual revenue increased to $1.31 billion. Thisisan 11-percent increase from the
1996 level of nearly $1.2 billion.
2. The current balance of all of the funds is $ 1.34 billion which represents a 3-percent increase from
1996.
3. The outstanding claims dropped to $2.32 billion from $2.83 billion in 1996, but the average cost
per site closure increased from $35,159 to $48,706.
4. Eleven states plan to transition to private insurance within 7 years. This contrasts with seven states
that reported such transition plans in 1996.
5. The number of sites with claims was 89,544 compared with 81,879 in 1996. The number of sites
with third-party claims increased to 598 from 458 reported in 1996.
EL. Qs and As
Q. Why did the average cost per site increase?
A. It is not clear from the data we have; perhaps some expensive claims were paid.
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The Rocky Fund Picture Show
Time: Monday, 9:45 a.m.
Moderator: Dennis Rounds (South Dakota)
Notetaker: Bill Lienesch
Presenter: Dennis Rounds (South Dakota)
I. Most important issues or topics actually discussed during this session.
1. At the first conference in 1992 in Rapid City, South Dakota, State Fund Administrators were
grappling with several issues including tracking claims, determining reasonable costs, figuring out "how
clean is clean," and (in some states) determining who the real Fund Administrator was.
2. By 1993 at the second conference in Burlington, Vermont, progress was being made on several
fronts. Some of the major issues covered in Burlington included cost control, issuing bonds to pay off
claims, private insurance, and how clean is clean. Discussions were also begun on establishing a State
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Fund Administrators Association
3. When the third annual conference was held in 1994 in Whitefish, Montana, some new issues came
to the forefront including risk-based corrective action (RBCA), third-parry claims, and a discussion of the
best place to house the State Fund-whether it should be part of the regulatory agency or located elsewhere
in state government.
4. The fourth annual conference in Colorado Springs, Colorado, in 1995 focused on change and
transition. Some of the more prominent topics included political changes, transitioning to private
insurance, the role of stakeholders, long-term financial projections, and pay for performance.
5. In Charleston, South Carolina, in 1996, topics included a real mix including success stories, RBCA
and remediation by natural attenuation, fraud and ethics, and 1998 and compliance.
IT. QsandAs.
None.
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Issues Shaping State Funds
Time: Monday, 10:30 - 11:40 a.m.
Moderators: Dave Deaner (California), Jana Harris (Oklahoma), and Randy Taylor (Utah)
Notetaker: Kate Becker
Presenters: Dave Deaner (California)
Jana Harris (Oklahoma)
Randy Taylor (Utah)
I. Most important issues or topics actually discussed during this session.
1. Dave Deaner discussed legislation: What has happened and what may happen. California Senate
Bill 562, which was passed in 1996, was directed at sites that were not an immanent threat or emergency.
It allowed for the suspension of work with a letter of commitment (LOG) as long as the site was
adequately characterized, the tank was pulled or filled, and any free product was removed. As of mid-
June 1997, 50 suspensions of work had been requested and 20 had been approved. The Bill also
authorized the State Fund Manager to automatically review claims that have an LOG older than 5 years
for possible closure. Any eligible responsible party can request the Fund Manager to review his/her case
for closure. The Bill also established a commingled plume program—primarily to utilize economies of
scale (e.g., for corner gas stations). What may happen in the next 3 months? In California, MTBE is a
very hot topic; there are four bills concerning MTBE in the state legislature, most are for the study of
health risks. Another hot topic: No person shall deposit petroleum in any UST after 1/1/99 unless the
tank has been upgraded to standards. In 1984, the state had 155,000 USTs at 60,000 facilities; in 1997, it
had 65,000 USTs at 25,000 facilities. In 1997, 91 percent of major oil USTs are in compliance; 83 percent
of state USTs are in compliance
2. California has several controversial issues to resolve. Should removal of petroleum contamination
be required prior to evaluation of risk or should an evaluation of risk be performed prior to determining
the need for removal of contamination? Should California establish numerical criteria or should general
criteria be utilized (consistency vs. flexibility issue)? If numerical criteria are established, how will they
be utilized?
3. Jana Harris recalled how we looked at cost recovery last year. Oklahoma has a subrogation statute
to help it regain the costs that it has expended (e.g., third-party costs). Consultants are forced to think
about costs because the state will try to get the money back. This statute is a tool that is used to try to
contain costs, but the state still has to go back to retrieve the money. Jana described a common con game.
The installer, who can also clean up leaks, tells the little old lady that he/she will take care of everything.
The little old lady signs off on his/her contract that says that she will only have ^> pay for that part of the
cleanup that the State Fund doesn't cover. It's a common game, and the con men/women move from state
to state. States need to work together and move toward a system of unit costs and pay-for-performance to
stop the con game. We need to enlist and educate a national investigative agency to help.
4. Randy Taylor talked about Utah's legal issues. The state had a surcharge of 0.5 cent per gallon of
gasoline, which was challenged; a surcharge is a fee and therefore unconstitutional. The Utah Supreme
Court ruled that such a charge would be unconstitutional in the future but accepted it for now so long as '
the money collected goes to the Department of Transportation. The State Fund has enough money to last
about a year. If an owner/operator lapses (he/she has to test for leaks, clean up, etc.), his/her name will be
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removed from the list. Utah wants to keep people on the list. The state is bound by purchasing law;
regulators will meet with purchasing officials. Utah is likely to change a lot.
II. Qs and As.
Comment: Jim Sims (Washington) re subrogation: The Washington Supreme Court had to make a
decision on what constitutes a "pollution exclusion" (in Olds v. State of Washington). The
Court said that groundwater is the property of the people. This kind of insurance law may
be a way for a State Fund to recover costs.
Q: For Jana. What about fraud across state lines via the U.S. Mail?
A: Jana: Meet with me and we'll try to put together a task force to look into this.
Q: Are there any states with bills that prevent the delivery of petroleum?
A: Kansas has one. Washington tried to get jobbers to be enforcers. Now, the DEC calls the jobbers
to tell them where they can't deliver, California has Bill 1491.
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MTBE Remediation
Time: Monday 1:30 - 3:00 and 3:30 - 5:00 p.m.
Moderator: Scott Whittier (Maine)
Notetaker: Robert Hitzig
Presenters: James Davidson (Alpine Environmental)
Patricia Ellis (Delaware)
Anne Happel (Lawrence Livermore Laboratory)
Fred McGarry (New Hampshire)
Scott Whittier (Maine)
I. Most important issues or topics actually discussed during this session.
1 . MTBE has already had a major impact on Maine. About 350 drinking water wells have been
contaminated with MTBE only, and another 156 drinking water wells have been contaminated with
MTBE and other contaminants. The Maine State Fund has spent $278,000 on the monitoring and
remediation of MTBE contamination.
2. MTBE is has been used as an octane enhancer since in 1979. It is also used in some areas to
reduce carbon monoxide emissions and in other areas to reduce smog and ozone. The health risks from
MTBE are still being researched.
3 . SW-846 Method 8020 (GC/PID) is a useful method of analyzing MTBE but false positives occur.
As a result, at least one sample from every site should be analyzed with SW-846 Method 8240 (GS/MS).
4. MTBE can be remediated. SVE works well when MTBE is in soil. Pump and treat can be
effective in groundwater. Treatment technologies can be more expensive than with BTEX because MTBE
biodegrades slowly; it does not adsorb to carbon very well, and it is difficult to separate from water.
5 . Of 1 ,700 public drinking water wells in Connecticut, 29 reported MTBE present in concentrations
between 0.7 and 27 ppb (some with no identifiable source within 1 mile). Connecticut has used point-of-
use treatment, drilled new wells, and extended existing water mains to alleviate the problem. The State
Fund was recently impacted by an out of court settlement in excess of $100,000 for a third-party well that
never showed concentrations above 4 ppb.
n. . Qs and As.
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Comment: Kansas, where MTBE is used as an octane enhancer, is finding MTBE everywhere.
Q: When will a final report on the Lawrence Livermore study be issued?
A: It will be submitted for publication in a peer-reviewed journal by the end of June.
Q: Why can't EPA decide if MTBE is a "possible" or a "probable" human carcinogen?
A: EPA has been trying for months to evaluate an Italian study that showed carcinogenicity but has
been unable to access the data. Additional research, which would take about 3 years to perform
and evaluate, may be necessary.
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Common-Sense Closures
Time: Monday, 1:30 - 3:00 p.m.
Moderator: Jim Munch (California)
Notetaker: Hal White
Presenters: Dave Deaner (California)
Jim Munch (California)
Chuck Pryatel (San Diego County)
I. Most important issues or topics actually discussed during this session.
1. Chuck Pryatel (County of San Diego): The science of assessment/cleanup is dynamic. There is not
a consensus of the "right way." Economic forces are strong influences. California does not have a state-
defined cleanup level; it can't because the state is so large. San Diego County is not groundwater
dependent; it allows 1 ppb benzene. The County's program management is goal directed; one major goal
is to protect human health by protecting water resources (i.e., property values are not the issue). The
concern is that RBDM (risk-based decision making) leaves contamination in places. The managers seek
out new ideas and incorporate what they consider to be the best of them into the program. They strive to
involve the community and to keep the lines of communication open. Last year they closed about 150
cases; they have closed 1200 in the last 9 years. There are about 1200 open cases now; the county expects
300-400 more before the end of 1998. A goal is to streamline the process and close cases. In 1989, San
Diego created a Technical Group Forum of stakeholders from different programs with co-chairs from
private industry and government. They hold quarterly meetings and have ongoing guideline workgroups.
The County has a (200-page) SAM manual that contains forms that consultants use when submitting their
corrective action (CA) plans. It is available to the public thereby making the potential users aware of what
is expected of them which ultimately streamlines the County's process. San Diego has already published
a guidance document on natural attenuation; it is revised/updated annually. Current projects include
ERICA (Evaluating Risk in Corrective Action), which is state-specific RBCA; Vapor Transport (including
sampling and modeling issues); and Brownfields (including a Voluntary Assistance Program [VAP] to
reopen old, closed Brownfields sites). The bottom line is that because of uncertainty, San Diego has
integrated information and continues to move forward.
2. Jim Munch (California) noted that there are differences throughout the state in the implementation
and/or the size of the program and that the state's regulatory arena does not match what we know about
tanks and contamination. As much free product should be removed "as is practicable." The proposed
SWRCB (State Water Resource Control Board) UST Policy, which is in its second draft, focuses on low-
risk, soil-only sites (sites where the soil is not saturated with petroleum and where there is no petroleum
within 20 feet), sites with low-risk inhalation exposure pathways, and sites with ^low-risk to the
groundwater. He made three additional points. We need to change the way we are doing business; the
public demands it. UST regulatory agencies need to become more pro-active. Staff members must
evaluate all factors at a site.
3. Dave Deaner focussed on California Senate Bill 562 (SB 562). This Bill says that an eligible
responsible party can request the Fund Manager to review his/her tank case for possible closure. It allows
the Fund to pay claims which were subject of past completed corrective action when additional cleanup is
required. It establishes the Commingling Plume Act. Seven items are necessary for NFA. Cooperation
between the SWRCB and the County regulators is key to achieving closure. The proposed SWRCB UST
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Policy, which is in its second draft, is for low-risk sites only. It allows no saturation with hydrocarbons,
no hydrocarbons within 20 feet of groundwater, no vapor within 3 feet, no saturated soil in contact with
groundwater, no drinking water wells or surface water body affected, no MTBE in excess of 35 ppb. If
you want to consider closure, you must consider all questions—it's "common sense." California has an
Article 11 that discusses the cost effectiveness of this approach. All factors must be evaluated at each site,
not simply the MCLs.
EL. Qs and As. , J
Q: How is future use determined?
A: Coin toss at best; depends on how "imminent" the threat is perceived to be.
Q: Does California use institutional controls?
A: No. They have not been used in California before.
Q: How do people learn about whether a site has contamination or not?
A: San Diego County is going to post information on past and current sites on its web site.
Q: Will the Fund pay for work beyond what is required to get the site to an acceptable level of clean?
A: Yes. If the work has been directed by a regulatory official and has been pre-approved. There is a
review process and excessive work can be halted.
Q: When land use changes, does California need to deal with reopening and re-setting cleanup levels.
A: No. But, if new contamination is found, the new owner is eligible to apply back to the Fund
balance remaining (if any) from the previous owner. If the state/county closes a site based on a
projected use, and it that site is then reopened, the Fund would not pay for the cleanup.
Q: Has Califonia ever had a site where the cleanup has reached MCL 3 for groundwater?
A: Yes. In shallow water when the soil has been excavated below the water table.
Q: Are any states using the "Common Sense" approach — beyond RBCA?
A: Virginia is doing something similar (e.g., removing the source, removing contaminated soil).
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Cost Control: A Roundtable
Time: Monday, 1:30 - 3:00 p.m.
Moderator: Lori Cessna (Kentucky)
Notetaker: Steve McNeely
Presenters: Lori Cessna (Kentucky)
Robert Cohen (Florida)
Denny Hight (The Phoenix Group)
David Kelley (Oklahoma)
Mike Mosbacher (California)
I. Most important issues or topics actually discussed during this session.
1. Pay-for-performance (PFP) is a fixed-priced approach for shifting some of the burden associated
controlling costs (e.g., accountability) from the regulator to the responsible party. This method is a
results-oriented approach that rewards accomplishments (e.g., measurable progress in the remediation) not
paperwork processing. Most states using the PFP method have a "good" feeling about the effectiveness of
the concept, but data on sites closed using PFP sufficient to verify the assertions are not yet available.
2. One of the most challenging aspects of controlling costs is obtaining the necessary input from
outside sources. When their interests are involved, companies in the private sector can provide excellent
recommendations for improving cost control guidelines. Then, the task becomes maintaining a balance
between the parties to eliminate biased recommendations.
3. Once cost controls are established, a periodic re-evaluation of baseline data will be required to keep
costs current
4. Cost containment studies must be properly structured (e.g., evaluation criteria must be clearly
defined) and staffed (e.g., by reviewers with similar knowledge and understanding of the project goals).
Case studies must use comparable components (e.g., system designs, remediation technologies) in order
for the information to be useful.
H. Qs&As.
Q: How do you know that PFP is working?
A: Maintain information on sites from assessment to closure. In Oklahoma, we don't close the
evaluated sites.
Q: What happens when cleanup levels are not reached? $
A: Contractual clauses cover this contingency, but thus far it hasn't happened.
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Forecasting, Solvency, and Cash Flow: A Roundtable
Time: Monday, 1:30 - 3:00 p.m.
Moderator: Pat Erikson (Iowa)
Notetaker: Sammy K. Ng
Presenters: David Chambers (Nebraska)
Bruce Lindholm (South Dakota)
Jean Riley (Montana)
Jim Sims (Washington)
I. Most important issues or topics actually discussed during this session.
1. Making cash flow projections is not rocket science, but it must be done.
2. Knowing and keeping track of revenue, and the timing and payment of expenses and expenses are
very important.
• Releases will not be detected all at once.
• There may be a lag (perhaps up to year) between when a cleanup is started and when the
fund receives the first claim for that cleanup.
• Cleanups and, therefore, claims may be held down by the number of available consultants
to do the work.
• Knowing the number of tanks still to be upgraded can give you an estimate of how many
more claims will be forthcoming.
• If possible, set up reserves for known future claims. (Claims that are incurred but not yet
reported).
3. Actuarial studies are great for presentation to state legislatures, but remember that these studies use
very conservative assumptions. Actual experience may differ, and you may want to have "two" sets of
books.
4. Beware that there are external factors (legislative raids and third-party liabilities) that can blow up
your cash-flow projections.
»
5. Washington Supreme Court decision that said that cleaning up groundwater is third-party damages
(and therefore not subject to the "pollution exclusion") may open the way for the State Fund to recover
monies from insurance companies that it has spent cleaning up groundwater. Other states may also treat
groundwater as a common property (and not private property). All State Funds should, therefore,
investigate whether they can recover monies from insurance companies. £
n. Qs and As
Q: For Jean Riley, you speak of unlimited liability, but isn't the Fund's liability capped at $1 million
per occurrence?
A: In Montana, the Fund coverage is $ 1 million per release. Unfortunately, one leak can result in
multiple releases and therefore, multiple claims.
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Pay-For-Performance Workshop I: Let's Make a Deal
Time: Monday, 3:30 - 5:00 p.m.
Moderator: Bill Foskett (US EPA/OUST)
Notetaker: Sammy K. Ng
Presenters: Bill Foskett (US EPA/OUST)
I. Most important issues or topics actually discussed during this session.
In this session, participants developed and negotiated a pay-for-performance cleanup agreement
using the site information and worksheets provided. The comments were on the process and the results.
1. Pay-for-performance is supposed to result in a "win-win" contract, but we still saw a lot of
haggling. Both the State Fund and the contractor are supposed to be on the same team. We may need to
educate people on this type of contracting.
2. Requiring a performance bond may give some security to the state that the contractor will not
"walk off the job. However, be careful that it is structured so that the contractor is not barred from doing
new business. Florida has not seen the need for a bond yet.
3. If the same contractor did both the assessment and cleanup, you should not allow "unforseen
geologic conditions" as a cause for re-opening the contract.
4. A bonus for completing the job early or a penally for being late is not necessary because these are
already built in the-contract.
5. We need to specify the conditions for sampling. Who will pay for any extra sampling and
analysis? When will the sampling take place?
II. Qs and As.
Q. What happens if the technology doesn't work?
A. You need to do some up-front negotiation and come to an agreement that the technology works.
Q. Should the state step in and become a partner in designing the system?
A. In a way, yes. The state needs to review the technology to ensure that the price is appropriate.
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Living With Residual Contamination
Time: Monday, 3:30 - 5:00 p.m.
Moderator: George Matthis (North Carolina)
Notetaker: Hal White
Presenters: Herb Cross (Wm. Lyon & Associates)
Chet Clarke (Texas)
Stephen Morse (San Francisco Bay Water Quality Control Board)
Bob Richards (US EPA/Region 7)
I. Most important issues or topics actually discussed during this session.
1. Steve Morse started off by discussing vapor models; they tend to be more conservative than field
data - no one wants to clean up to levels indicated by models.
2. Chet Clarke noted that Texas has been using the RBCA approach since 1994. Texas does not
reimburse third-party claims for purely economic reasons. In early June, the Texas legislature passed an
"Innocent Owner and Operator" statement. An innocent owner or operator has no liability if the owner/
operator's property is contaminated from an off-site source; if he/she acquired the land unknowingly; if
he/she grants reasonable access for assessment of corrective action; if he/she has proved he/she did not
cause or contribute to the problem.
3. Texas'no further action (NFA) letters spell out the basic conditions for granting closure. As long
as these conditions are met, the letter is in effect. If, at any point in time, the conditions change, the letter
becomes null and void. The owner/operator has 120 days to notify the Agency. Deed recordation must be
with prior written consent from the land owner. If the owner/operator .will not agree, then he/she must
clean it up.
4. Bob Richards said that living with residual contamination is the "same old, same old." In
Brownfields context, there can still be a stigma associated with it. Brownfields is a "growth" field; using
it will enable you to tap into a large source of funds for cleaning up some sites. Properties will be
developed to create jobs or, at least, to create a public benefit. In conclusion, cleanup funds will be asked
to contribute their "fair share." These actions will remind the public of the "closer-than-ever" connection
between the environment and the economy (i.e., the jobs in your state).
5. Herb Cross said that the name of the game in real estate is "disclosure, disclosure, disclosure."
Realtors are stuck with dirty property when residual contamination is left on-site. Dirty property
obviously limits desirability, saleability, and value. State regulators have to con^municate in plain English
whether or not contamination on a site presents a risk; the risk must be quantified and explained carefully,
so that it is not overstated.
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n. Qs and As.
Q: What will Texas do about "due diligence"?
A: Immunity should not be tied to fund eligibility.
Q: Does it consider how contaminated the property is?
A: It is not specifically addressed. We are still digesting the implications.
Q: Who enforces institutional controls?
A: They have to be structured to be enforceable in Texas.
Q: What is the real estate position on RBCA?
A: We are worried because we just don't know about the risks.
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Remediation Equipment Inventory, Re-Use And Other Issues: A Roundtable
Time: Monday, 3:30-4:45 p.m.
Moderator: Chuck Williams (Florida)
Notetaker: Rick Mattick
Presenters: Gary Blackburn (Kansas)
Gil Cerrati (Nevada)
John Wright (Florida)
I. Most important issues or topics actually discussed or presented during this session.
1. Representatives from the states of Florida, Kansas, and Nevada discussed their programs or
proposals to manage remediation equipment and its re-use. Equipment ownership/control, pre-approval
and reimbursement issues, equipment contractors, purchasing and inventory management were the major
issues discussed relative to each program.
2. The question of which pieces of equipment were, in fact, re-useable arose during the session as a
major issue. The discussion centered around assessing the value of the equipment and fixing or
refurbishing used equipment in a cost-effective manner.
3. Kansas explained its performance guarantee program for buying remediation equipment. The state
issues performance bonds. Owner/operator reimbursement is tied to the performance of the equipment,
which gives the owner/operator an incentive to obtain good equipment and keep it in functioning order.
The state requires a minimum of 50 percent "up" time.
4. Nevada explained that it neither owns nor stores remediation equipment. The state tracks all items
over $500 in initial cost in a database. The State Fund reimburses the owner/operator who buys the
equipment and maintains it. Nevada controls the transfer of equipment to the next owner/operator. The
owner/operator is responsible for notifying the state about the condition of the equipment.
5. The Florida representative discussed the issues of equipment inventory, storage, maintenance, and
delivery as well as the benefits of outsourcing the management of this aspect of the program versus
managing it in-house. The major benefits anticipated include more efficient repair and re-use of used
equipment, more warehouse space for storage, and an inventory database developed by consultants who
are experts in the field of equipment management.
n. Qs and As.
?
Q: What kinds or pieces of equipment are reusable?
A: Some suggestions were air compressors, blowers, some control panels, air strippers, thermal
catalytic oxidizers, and vacuum extraction equipment. Assessing the condition of used equipment
is a major problem. Kansas noted that the re-use of air strippers, thermal catalytic oxidizers, and
vacuum extraction equipment presented the biggest cost savings.
Q: Can another state purchase pieces of equipment from Florida?
A: Yes.
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Q: Who owns the equipment at responsible party-led sites in Florida?
A: The contractor/responsible party owns it. The state doesn't get involved if the responsible party
purchases the equipment. If the state pays even $1.00, then the state owns the equipment.
Q: Where do you store equipment in Kansas?
A: We store it in the district office and on an old Air Force base. We need better storage/warehousing
space for the equipment.
Q: How does Kansas determine the value of the equipment?
A: The state reimburses on a line-item basis. The state sells air compressors because it would lose
money trying to re-use them.
Comment: Chuck Williams brought up the point that pay-for-performance eliminates many problems
involved when purchasing equipment.
Q: Explain Kansas' warranry/re-certification of used equipment.
A: A manufacturer's representative visits the site. He/she recertifies the equipment and provides a
warranty (on the used equipment) for approximately 5 percent of the value of the equipment.
Q: Does the state run into liability problems with the Attorney General with this type of program?
A: No, the owner/operator is liable if something were to happen.
Comment: Gil Cerruti identified one of the potential problems is having the consultants of the
owner/operator notify the state promptly that remediation is finished at the site.
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Reports From Roundtables: The Big Issues
Time: Tuesday, 8:30 - 9:00 a.m.
Moderator: George Matthis (North Carolina)
Notetaker: Kate Becker
Presenters: Lori Cessna (Kentucky)
Pat Erikson (Iowa)
Chuck Williams (Florida)
1. Chuck Williams moderated the roundtable on Remediation Equipment Inventory, Reuse, And
Other Issues. In it, three states shared how they use remediation equipment. They discussed the question
of whether a state or a responsible party (RP) should own the equipment and concluded that because of the
liability issues for the state if it owns the equipment, it is better if the RP owns it. If the RP owns the
equipment, he/she has control over its use and disposal. Two states who owned equipment agreed. There
is a possibility of a windfall to the RP who owns equipment. He/she could make money off of it by
renting it out, and he could use appreciation schedules to transfer equipment to the site. Tracking the
equipment requires the development of a data base. The contractor could submit forms, the state could
contract out for an equipment management services outfit. Some equipment is short lived (e.g., pumps
burn out) or becomes obsolete. The state would need to figure out which kinds of equipment to track.
There may be an incentive for contractors to run up costs; a 2-year warranty forces contractors to keep
costs down. Some states have penalties and bonuses. Pay-for-performance solves lots of problems. Some
contractors/site managers don't like using old equipment. Better bidding procedures would affect the
equipment-use situation greatly.
2. Pat Erikson reviewed his session, Forecasting, Solvency, and Cash Flow. Four states were
represented. Understanding cash flow is not rocket science, but it is necessary for planning purposes.
Each state's cash flow is unique. The timing of claim payments is very important. States without sunset
dates will have claims drifting in for some time; these states will need to factor in the payments. Cost
controls are essential to maintaining fund solvency. Actuarial studies by outside firms are a good idea if
you are planning on asking your state legislature for more money, but the results can be conservative.
There are external factors to try to watch out for: The legislature can raid your fund if it so desires-that is
hard to anticipate. One claim can destroy your budget.
3. Lori Cessna's session was called Cost Control; two states were represented. The major issue the
group discussed was how to get the RP to be responsible. Oklahoma, which uses pay-for-performance,
uses a red pen. At one site, the state saved about $160,000. California uses Bid Requirements or a Cost
Guideline.
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Life With RBCA And Natural Attenuation
Time: Tuesday, 9:00 - 10:00 a.m.
Moderator: Dennis Rounds (South Dakota)
Notetaker: Robert Hitzig
Presenters: Dennis Rounds (South Dakota)
Hal White (OUST)
I. Most important issues or topics actually discussed during this session.
1. OUST is working with other EPA offices to develop a Monitored Natural Attenuation (MNA) EPA
Directive.
2. MNA is defined as the use of natural attenuation processes within the context of a carefully
controlled and monitored site cleanup approach that will reduce contaminant concentrations to levels that
are protective of human health and the environment within a reasonable time frame.
3. ASTM is developing a Remediation by Natural Attenuation (RNA) standard.
4. MNA is what you do when remediating with natural attenuation; RNA is the remediation method
that you select.
5. If a RBCA evaluation indicates that remediation is necessary but there is no immediate risk, RNA
may be an appropriate remediation option that could be further evaluated.
. Qs and As
None.
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Taking A Hard Look At Corrective Action: Part I
Time: Tuesday, 10:30 -12:00 a.m.
Moderator: Sandy Stavnes (EPA/Region 8)
Notetaker: Peg Rogers
Presenters: Steve Acree (US EPA/ORD)
Ryan Dupont (Utah State University)
Blayne Hartmann (Transglobal Environmental Geochemicals)
Kevin Kratina (New Jersey)
Steve McNeely (US EPA/OUST)
Dennis Rounds (South Dakota)
Chuck Schwer (Vermont)
Curtis Stanley (Shell Development Co.)
Hal White (US EPA/OUST)
I. Most important issues or topics actually discussed during this session.
1. Sandy Stavnes led off the session by taking a look at some hard, corrective action questions on
state policy issues and technical issues. The state policy issues dealt with: Who in your state actually
makes the policy decisions or initiates the rules and statutes regarding corrective action; does your fund
administrator have input; are the decisions conducive to a cost-effective program; are you satisfied with
them; can they be changed; have you tried to change them; etc. Technology questions included: Does
your state use a consistent and sound logic (described in writing) to determine assessment needs and did
your fund administrator have input into it; does your state use consistent and sound logic to determine
cleanup goals, can your staff interpret it, and did your fund administrator have input into it; does your state
use consistent and sound logic to select remediation technologies, who decides which technology to use,
and did your fund administrator have input to the decision.
2. Curt Stanley discussed controlling life-cycle costs through integrated site management. The term
"life cycle" as used here, encompasses the entire cleanup process and consists of components from first
release to site closure (including property transfer issues). To Curt, risk-based decision-making is not just
a method for establishing risk-based cleanup goals; rather, it is a philosophy for incorporating risk into all
aspects of the corrective action process including conducting site assessments and selecting remediation
technologies. It can even affect the degree of Quality Assurance/ Quality Control (QA/QC) necessary for
a site. "Integrated site management" involves seeing the cleanup process holistically. Three critical areas
in the integrated approach include site assessment, risk assessment/management, and remediation. Three
critical questions relating to these areas are a reoccurring theme at every site. By using an "integrated
approach" to help answer these questions, fund and site managers should be mop effective. The three
questions are: How much investigation is necessary? How clean is clean? What form of remediation is
appropriate?
3. Blayne Hartman talked about site assessment. Objectives should be determined up front, and re-
evaluation of the data requirements should be an ongoing process. Expedited site assessment (ESA) is a
relatively new approach to site characterization. It differs from traditional assessment methods by
incorporating innovative sampling techniques, on-site analysis, and real time decision making. Sampling
is expedited by the use of (for example) direct-push sampling systems in place of conventional drilling
rigs. Analysis is conducted by appropriate field screening techniques and/or an on-site laboratory, which
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follows EPA approved methods and meets EPA data quality objectives. ESA is applicable for the
assessment of soil, groundwater, or soil vapor. Typical situations include simple excavations, assessment
of the spatial extent of contamination, and assessment of the vertical extent of contamination in which
simple measurements (TPH, & BTEX) are made. Reimbursement programs should contain provisions to
•enable the use of ESA. This includes reimbursements for direct push sampling, on-site laboratory
analysis, and higher-educated, on-site personnel.
4. Steve McNeely and Kevin Kratina discussed risk management and institutional controls. Steve
started off by noting that many cleanup decisions are driven by the assessment of risk and subsequently
the generation of site specific cleanup numbers. Risk assessment is entirely site specific. Expenses
incurred as the result of risk assessment represent a trade-off between site assessment and remediation.
Kevin focused on institutional control noting that the goal of any state and federal cleanup program should
be a regulatory structure in which cost-effective remedial decisions protective of human health and the
environment can be made for current and future land uses. Using institutional controls as a risk based
decision making tool provides added flexibility protective overtime, especially when risk based decisions
are made and funds expended to protect current and future land and resource use. Institutional controls
should be designed to remain protective over time, especially when risk-based decisions are made upon
current land and resource use. Institutional controls must be enforceable to be effective. The key to
specifying site-specific goals is risk reduction and contaminant control. Contaminant reduction to a
specific concentration is not always necessary in all remediations and is usually driven by state policy.
n. Qs&As.
Qs and As were covered above.
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State KBCA Decision Making And Implementation: A Roundtable
Time: Tuesday, 10:30 -12:00 a.m.
Moderator: John Podolinsky (Montana)
Notetaker: Rick Mattick
Presenters: Chet Clarke (Texas)
Mark Malander (Mobil Oil)
Art Shrader (South Carolina)
I. Most important issues or topics actually discussed or presented during this session.
1. The results of the RBCA Policy Issues Survey and Database were presented by Mark Malander.
Mark mentioned that the survey contained questions regarding the key policy decisions that states have
made while implementing a RBCA program. These questions were compiled from the RBCA State Risk
Policy/Strategy Issues Workbook, a useful resource to the states. Twenty-five states responded to the
survey as of October 1996. The survey was refined and re-issued in April 1997; 17 states responded. The
results of the survey are contained in the RBCA Policy Issues Database, which can be accessed through
the Internet through EPA/OUST Home Page or through the URL address http://www.gsi-
net.com/RBCAPOL/. The database allows the data and policy decisions to be compared on a nationwide
basis.
2. Two key policy decisions associated with RBCA implementation—points of compliance selection
and remediation by natural attenuation—were discussed by representatives from Texas and South Carolina.
Mark Malander pointed out that these two decisions have the greatest impact on cleanup levels relative to
the other policy decisions that must be made during a RBCA determination.
3. The selection of a point of compliance is a policy decision that has a major impact on the cleanup.
The desires of the responsible parry and the community for the future use of the site (e.g. restoration,
transfer, sale) will affect this decision.
4. Chet Clarke discussed how the role of the RP and the interests (i.e., interests other than protecting
human health and the environment, such as property value) of any third party affect the selection of
remediation alternatives and fund reimbursement for RBCA driven cleanups. If it is technologically
feasible, Texas will limit cleanup and fund reimbursement to RNA only, especially for lower risk sites. If
a third party would like to use a remediation technology with a more active or expensive approach, the
additional cost is not reimbursable by the fund.
5. Mark Malander pointed out that there are four major policy alternatives $o consider when making
a point of compliance decision. The point of compliance could be considered at the source, property line
or road, nearest well or stream discharge, or the nearest receptor.
n. Qs and As.
Q: Do third-party issues drive points of compliance back?
A: Texas doesn't reimburse third-party claims.
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Q: How did Texas sell the RNA program to management and the state?
A: Most RNA sites are of lower risk to human health and the environment. Texas wishes to spend its
resources and fund dollars on sites that pose a higher risk to human health.
Q: How do you establish a monitoring period at a point of compliance?
A: When you have conclusive evidence that the plume is shrinking.
Q: In South Carolina, if natural attenuation is approved for sites with soil and groundwater above
cleanup standards but with no risk, the site is included on the "Registry of Releases' and is
maintained by the freedom of information office. How easy is it to maintain the "Registry of
Releases"?
A: Very easy—the list includes all pertinent information about the site as well as information important
to the real estate industry.
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Cost Recovery: Methods & Links
Time: Tuesday, 10:30 - 12:00 a.m.
Moderator: Bill Alpine (Massachusetts)
Notetaker: Josh Baylson
Presenters: Mary Ellen Kendall (Virginia)
Ron Markle (California)
Dan Neal (Texas)
Julie White (Zurich Insurance)
I. Most important issues or topics actually discussed during this session.
1. It is possible to reduce the Fund's financial liability through other sources of contributions.
2. Virginia requires claimants to state if they have insurance coverage or have received payment from
another source on the original claim application. Virginia recovered about $100,000 last year through
claims audits that revealed mistakes, overpayments, and offsets.
3. California's emphasis is to prevent double payment (vs. cost recovery). The claimants transfer and
assign to the state any and all rights to recover from any person responsible or liable. To detect double
payments, California requires a disclosure certification by the claimant and discloses to all parties that the
claim has been filed.
4. Zurich Insurance doesn't subrogate against State Funds, but it will write policies with high
deductibles. It avoids double-dipping by sending investigators to ask if State Fund claims have been filed
and submits a FOIA request for each site
5. Texas allows insurance companies to receive assignment from the State Fund. Texas uses a "desk
audit" approach, based on its pre-approval (scope of work and cost) process and requires those doing the
work to also sign the claim.
n. Qs and As.
Q: Does the Virginia State Fund pay the contractor or the owner/operator?
A: We pay the owner/operator, but he/she can assign payment to the contractor.
Q: How many states have gone after the major oil companies for historical releases?
A: Maine has, Iowa has ($30 million in recoveries).
Q: What does Zurich Insurance do to establish mat the site is clean?
A: We exclude past problems from coverage (cost allocation) and send out our own investigators.
Q: Do field inspectors in Texas review work in the field as the project is underway, or do you (in
Texas) audit the work after the fact?
A: Field inspectors are involved periodically.
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Applied Science of Natural Attenuation
Moderator: Richard Spiese (Vermont)
Time: Tuesday, 10:30 - 12:00 a.m.
Notetaker: Bill Foskett
Presenters: Tom Conrardy (Florida)
George Mickelson (Wisconsin)
Matt Small (EPA/Region 9)
I. Most important issues or topics actually discussed during this session.
1. Is RNA less costly than active treatment technologies? The results are mixed so far. The answer
may depend on the method of analysis and the quality of the data. In some cases, RNA may not be the
lowest-cost remedy.
2. How RBCA and RNA are related.
3. Advantages and disadvantages of RNA.
4. Source (soil) removal appears to not affect the size of the plume in studies done to date. But this
finding is in conflict with the Florida data and may be an artifact of bad data or poor data collection.
5. In what circumstances is RNA the right technology to use?
II. Qs and As.
Q: In Connecticut, we had a hard time finding a site that would meet the criteria [for example, "no
potential receptors"] that Matt Small set out. How did Wisconsin find a site that had no potential
receptors?
A: Wisconsin threw out lots of proposed sites. A lot of these determinations are just site-specific
professional judgement.
A: The criteria were for no further action. An issue is that you are allowing contamination to stay in
place without any engineering measures to control it. You can find such sites in urban areas
because people use surface water or deep well water to supply their drinking water.
Q: Regarding the relationship between RNA and RBCA: RBCA may say that a site needs
remediation and RNA is an option. If you have no impacted receptors associated with this site,
when do you make the risk-based decisions?
A: Corrective action is not always driven by RBCA. A decision may be based on future use. Some
states are saying that in shallow groundwater, you don't have to do anything. If you have a future
use in mind for the site, RNA can help you.
A: Florida does look at future use and tries to protect resources. We would have to implement
institutional controls to protect future use.
Q: Which State Funds are paying for or looking at nonstandard site data at/for RNA sites?
A: Montana. Vermont. (Show of hands among the 11 persons in audience and on panel.)
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Q: . [Long question about relative amount of site assessment at new and old cleanup sites.]
A: If you have a new site, you need to do extra work like look at the geochemical indicators.
Q: What are State Funds requiring in prospective RNA sites?
A: In Montana, it depends on the case manager.
A: The Lawrence Livermore study said that petroleum plumes are not growing as fast as chlorinated
solvent plumes. There was a similar finding in a Texas study.
A: You need to consider that you'll get more bang for your buck with a quicker response rather than
wailing to see what the plume is going to do.
A: That's why RNA is not a "presumptive remedy."
Comment: Wisconsin is not a big proponent of doing soil removal if it is not attacking the problem. If
you are just getting small amounts out, it may not help. If you are getting relatively more,
RNA may help. You just have to look at a site and see how much to take out now to cut
monitoring costs later. Lots of times, this will be a best guess of what the costs will be.
Q: As we become more sophisticated about site investigations, will we have more or less need for
RNA?
A: People feel we need to hold RNA sites to a higher standard for site assessment. Policy, economic,
and political considerations are pushing RNA. People will continue to come in with minimal data
and ask for RNA.
Q: How many of you have had sites in an enforcement case dragging out? (For example, you get to
the sampling phase and find that the site samples are nearly clean?)
A: Two hands raised.
Comment: Dragged-out enforcement turns a site into natural attenuation site, whether the state
intended it or not.
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Taking A Hard Look At Corrective Action: Part II
Time: Tuesday, 1:30 - 3:00 p.m.
Moderator: Sandy Stavnes (EPA/Region 8)
Notetaker: Peg Rogers
Presenters: Steve Acree (US EPA/ORD)
Ryan Dupont (Utah State University)
Blayne Hartmann (Transglobal Environmental Geochemicals)
Kevin Kratina (New Jersey)
Steve McNeely (US EPA/OUST)
Dennis Rounds (South Dakota)
Chuck Schwer (Vermont)
Curtis Stanley (Shell Development Co.)
' Hal White (US EPA/OUST)
I. Most important issues or topics actually discussed during this session.
1. During Part n, Curt Stanley led off with a discussion of cleanup technology selection, which he
defined as identifying those parameters that must be quantified in order to determine the effectiveness of
the implemented remediation technology, making these parameters a necessary expense which should be
eligible for reimbursement. To determine the most appropriate technology, one must ask several
questions: What degree of remediation is necessary, what remedial options can achieve the contaminants
of concern cleanup goal for the pathways of concern at the point of compliance; will reduction of mass
result in significant reduction of risk; what are potential alternatives for consideration if remediation
technology is unable to reduce concentrations to an acceptable level. Site-specific factors to consider
include: Type of soil; condition of groundwater; type and amount of contaminants; and proximity to
receptors, exposure pathways and levels.
2. Chuck Schwer discussed a case study called, "Corrective Action Feasibility Investigation in
Vermont." In the late 1980s and early 1990s, Vermont made decisions about which type of corrective
action to take in a very rapid manner, with little design data. The investment in this decision was minimal
but was often too costly to modify or change when the original didn't work as intended. Today, unless it is
an emergency response (e.g., vapors in a building), Vermont applies a much more thoughtful and
informative approach to selecting a corrective action technology. Before approving a Corrective Action
Plan, Vermont requires that a Corrective Action Feasibility Investigation (CAFI) be completed. The intent
of a CAFI is to evaluate possible remedial alternatives when it is determined that corrective action is
necessary. This CAFI includes a general review of all appropriate remedial alternatives, followed by a
formal evaluation of one or more of the most appropriate options. This includes^completing on-site pilot
tests. The cost for a CAFI can range from $10,000 to $40,000. In the old days, state staff would have
cringed at this cost. Today they realize it is money well spent. Vermont's lesson learned: "It pays to
know what you are getting into!"
3. Steve Acree talked about free product recovery. Systems may be implemented using a variety of
technologies which vary in cost and effectiveness. Conventional recovery techniques include recovery of
product only, recovery of a combined stream of product and water, recovery of volatile components in the
vapor phase, and variations of these general techniques. In general, these technologies can recover up to
50 percent of the total volume of product released to the subsurface depending on site conditions and time
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since release. Although recovery of free product and other source control measures increase initial
remediation expenditures, significant cost savings may be realized over the "life-cycle" of a cleanup at
some sites, particularly those sites where product is recovered soon after release. Experience has proven
that unmitigated, large-scale product releases may still result in groundwater contamination above health-
based standards decades after release.
4. Ryan Dupont gave an overview of natural attenuation, intrinsic bioremediation, and enhanced
bioremediation. Natural attenuation refers to a variety of physical, chemical, or biological processes that,
under favorable conditions, act without human intervention to reduce the mass, toxicity, mobility, volume,
or concentration of contaminants in soil and groundwater. These in-situ processes include biodegradation,
dispersion, dilution, sorption, volatilization, and chemical or biological stabilization, transformation, or
destruction of contaminants. Other terms associated with NA in the literature include "intrinsic remedia-
tion," "natural recovery," and "natural assimilation." The terms "intrinsic bioremediation" and "passive
bioremediation" refer strictly to biological processes (which are a subset of the processes included under
the broader, more inclusive term "natural attenuation"). Intrinsic bioremediation is defined as the
degradation of organic compounds by indigenous microbes without artificial enhancement. A properly
implemented natural attenuation process involves a sequence of steps that lead to a decision regarding the
applicability of natural attenuation for plume management at a site, and how aggressive the source
remediation efforts should be after the recoverable free product has been removed from the subsurface. If
the time frame required for long-term monitoring is not acceptable to regulatory agencies, decisions can be
made about the need for and effect of aggressive source removal activities (beyond free product recovery)
on the projected lifetime of the source area and resultant dissolved plume. Enhanced bioremediation refers
to a variety of technologies that use engineered systems to promote growth and reproduction of indigenous
microbes to biodegrade organic contaminants. Enhanced bioremediation relies on natural processes with
human intervention; intrinsic bioremediation relies on natural processes without human intervention.
5. In her wrap-up, Sandy Stavnes reiterated the goals of the two corrective action sessions:
• To demonstrate that all of the components of a cleanup should be integrated and that cost-savings
should be measured (and controlled) over the life-cycle of the site, not only at the end of the
process, and
• To provide this information as an aid to help State Fund Administrators answer the "Hard
Questions" presented at the beginning of the sessions.
For State Fund Administrators, arriving at site closure--w/H'c/z can be defined as the point where
legitimate, reimbursable expenditures stop—is the goal. Getting there depends upon reasonable and
realistic cleanup goals being set using risk-based decision-making in conjunction with adequate site
characterization; appropriate technology(ies) being properly implemented and operated; and sufficient
performance monitoring being conducted to demonstrate beyond the shadow of a doubt that cleanup goals
which are protective of human health and the environment have indeed been me|.at any particular site and
that additional work (and expense) is no longer necessary. The reality is that there will be some
contamination left at every site. Where there are no immediate threats to either human health or the
environment, higher levels of contamination can be left in place.
. Qs&As.
Covered above.
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State RBCA Decision Making And Implementation: A Roundtable
Time: Tuesday, 1:30 - 3:00 p.m.
Moderator: John Podolinsky (Montana)
Notetaker: Kate Becker
Presenters: Chet Clarke (Texas)
Mark Malander (Mobil Oil Co.)
Art Shrader (South Carolina)
I. Most important issues or topics actually discussed during this session.
1. Mark Malander led off by agreeing that it is hard to get RBCA training and strongly reminding the
audience that the RBCA Standard was/is a framework. RBCA trainers address target risk limits in Module
3. The goal is to have a simple document for the user to use to explain why he/she did things the way
he/she did. Another good idea is a workbook that has items that users just check off. Twenty-five states
responded to our original (October 1996) survey; 17 were back for the second time; states are somewhat
reluctant. GSI has updated the data base. Policy decisions, especially those regarding point of compliance
and natural attenuation, have a major impact on RBCA. Point of compliance really affects cleanup costs.
2. Chet Clarke discussed Texas' use of point of compliance. Texas has had RBCA since 1994. The
state uses the terms Plan A (analogous to Tier I of RBCA) and Plan B (analogous to Tiers II/III of RBCA).
In Plan A, the point of compliance is right at the source area. In Plan B, the point of compliance has some
flexibility; it can be the boundary of the property or the other side of a roadway. For groundwater, it is 15
feet or within typical construction depth. For construction work, it is related to workers' inhalation of
gases. From a fund management point of view, the point of compliance can be used to stretch dollars. In a
closure situation, the responsible party who wants an NFA letter will want to place the point of compliance
as far away from his site as possible. Some responsible parties (not the land owner) might want the point
of compliance to be the source area. Texas is considering the possibility or streamlining the process by
reducing the flexibility of point of compliance.
3. Art Shrader said that in South Carolina, point of compliance is based purely on the location of the
receptor and the future or potential use of the groundwater. He cautioned that point of compliance will
"...drive your train." South Carolina reimburses third parties. This session was a roundtable discussion; at
this point other people started making comments. Matt Small (US EPA/Region 9) commented that
regulators adjudicate regulations by property boundary. Mark Malander commented that monitored
natural attenuation may be the answer in some cases; industry needs some relief. RBCA says you have to
notify your neighbor if contamination is likely to reach the property line. Tom Conrardy (Florida) said that
in Florida, point of contamination can be off-site with notification of the landowner. An owner/operator
can receive an NFA letter without any conditions only if he/she can clean the water to pre-condition
standards (without institutional controls) and can confine the plume to his/her own property. Monitored
natural attenuation is acceptable.
4. The discussion moved to remediation by natural attenuation. Chet Clarke said that the Texas
program was shut down in 1992 because of financial problems; in 1995, staffers from the program went
back to some of the sites and found that they were essentially the same size—they had not grown. Texas
conducted a study similar to the Lawrence Livermore National Laboratory (LLNL) study; the results
concerning plumes were essentially the same as the in the LLNL study. Kentucky and South Dakota have
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similar studies with similar results. Texas went back to its low-risk/no-risk sites, but it needed a
remediation solution. In February 1997, the state instituted an exit criteria mostly for metropolitan areas.
The ratio of groundwater case closures has increased 175 percent. The study showed that it is very
important to not let the plume get any bigger. In about 96 percent of the cases, the BTEX plume was as
bad as it would be likely to ever become. Dorothy Malaier said that 70 percent of Alabama's sites are
"monitoring only," which is why the fund is still in existence today; Texas and South Carolina said the
their sites were "about the same."
Qs and As.
Covered in the discussion.
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Planning for Sunsets
Time: Tuesday, 1:30 - 3:00 p.m.
Moderator: Robin Hanson (Minnesota)
Notetaker: Bill Lienesch
Presenters: John Alberts (Wisconsin)
Jim Sims (Washington)
Chuck Williams (Florida)
I. Most important issues or topics actually discussed during this session.
1. There are various approaches for making a transition from a State Fund program to other financial
assurance mechanisms. One approach is to gradually reduce the coverage provided by the State Fund over
a few years until it no longer provides any coverage.
2. A second approach is to establish a date after which the State Fund will no longer cover claims,
although it may still pay for remediation of releases reported before the cut-off date.
3. Another approach is to pay for only one remediation at a site. Once the site is clean, the owner/
operator is no longer covered by the State Fund and is then required to use some other financial assurance
mechanism.
4. A fourth approach is, in essence, to sell the State Fund to a private insurance company. There are
various ways that the sale and transfer might be structured. In general, the state would transfer its State
Fund "business" including all existing and incurred but not yet reported claims to the insurance company.
5. There are many issues involved in the transition of a State Fund. Among the most important are
questions involving the transfer of public funds residing in the State Fund to a private entity as well as the
amount of liability that remains with the state.
II. Qs and As.
X
Q: Once you've transitioned to private insurance as the major financial assurance mechanism, how do
you ensure that owners and operators keep up their insurance?
A: That's a problem. It helps to make proof of insurance an annual requirement to receive an opera-
ting permit. The state may need to collect some form of revenue to deal with orphan tanks when
there is a leak but no other financial assurance mechanism is available to pay for remediation.
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Applied Science Of Remediation By Natural Attenuation
Time: Tuesday, 3:30 - 5:00 p.m.
Moderator: Richard Spiese (Vermont)
Notetaker: Hal White
Presenters: Thomas Conrardy (Florida)
George Mickelson (Wisconsin)
Matt Small (US EPA/Region 9)
I. Most important issues or topics actually discussed during this session.
1. Matt Small led off with a definition of remediation by natural attenuation (RNA) as a remedy in
which naturally occurring physical, chemical, and biological processes achieve remediation goals without
human intervention. RNA workgroup members include representatives from the federal government (e.g.,
OUST, research laboratories, U.S. Air Force), state, and local governments. The ASTM RNA Guide
determines where it is appropriate to use RNA (including site characterization) and how to use it. RNA
may be appropriate to use as the sole process, after other processes have been applied, or in combination
with other processes. When applying RNA, the regulator needs to consider three lines of evidence.
Primary evidence—the direct, observed evidence of contamination—can be used for old sites; secondary
evidence—geochemical indicators—can be used for new sites. Tertiary lines of evidence involve
microcosm studies but are not usually required for petroleum contamination. There are some caveats
involved when using RNA: Degradation byproducts must be not harmful, and recalcitrant compounds
(those compounds that do not breakdown easily) must be immobile or not bioavailable. The key criteria
for using NFA letters at RNA sites include the following: There must be no existing or potential receptor
impacts; the remediation goals must be met or demonstrated; RNA must continue and must meet the goals;
the plume must be stable or shrinking; and if needed, institutional controls must be in place and must be
maintained. Some of the limitations of RNA are that it can be sensitive to changes in conditions; that it can
take a long time; that it can be perceived by the public as the "do nothing alternative," and that some
compounds of concern may not biodegrade.
2. George Mickelson focused on economics issues in order to help the states validate the process
because they (states) often don't trust what they read. The memo sent out 5 years ago did not say that
states could or could not use NA for soil and/or groundwater. MTBE plumes continue to expand when
other compounds have stabilized or are shrinking. Wisconsin is in the process of developing a standard for
trimethylbenzene, which is a recalcitrant compound that takes longer to clean up. Contaminant plumes
typically submerge with distance along the flow path (because of the infiltration of rainwater). Their
submergence may cause these plumes to escape detection by conventional monitoring wells allowing the
plume to migrate undetected and potentially impact receptors. j,
3. Tom Conrardy briefly described a new Florida Department of Environmental Protection Rule that
will cause the implementation of a more strategic approach to source removal. Source removal is
necessary to reduce the time required for a site to achieve remedial objectives using natural attenuation.
Florida is also lowering its standard for dissolved MTBE from 50 ppb to 35 ppb.
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n. QsandAs.
Q: How extensive should a contingency plan be?
A: That answer is not given in the standard, but we need one. It is especially important when you
figure that you will not be able to meet the goals.
Q: When will the standard be issued?
A: In about 6 months; the draft standard is out.
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1998 and Beyond: A Roundtable
Time: Tuesday, 3:30 - 5:00 p.m.
Moderator: Bill Lienesch (US EPA/OUST)
Notetaker: Josh Baylson
Presenters: Stan Clark (South Carolina)
Pat Rounds (Iowa)
Art Zontini (Massachusetts)
I. Most important issues or topics actually discussed during this session.
1. There is concern that the State Funds will be jeopardized by the eventual financing of upgrades for
those not in compliance after December 1998 because of political concerns about driving people out of
business.
2. In Massachusetts, the Board is poised to reopen the Fund to 600 to 1000 additional sites, and it's
estimated that they will cost $61,000 each.
3. No single thing will get you ready for 1998. South Carolina has instituted pre-approval
requirements, has conducted an actuarial study which led to a fee extension, is working to ensure the
integrity of the data base so that owner/operators have financial responsibility for the deductible amount
($25,000), denies eligibility if the facility is not in substantial compliance, and conducts a rigorous
inspection program on registered sites.
4. Iowa essentially had an earlier deadline for upgrading; tanks had to be upgraded to remain in the
Fund after January 1, 1995. Common "urban myths" that have been disproved by Iowa's experience
include: The 1998 compliance deadline will devastate rural communities (operating facilities remain
within a 15-mile radius); Mom & Pop stations cannot afford to upgrade (75 percent have put in new tanks
within the last 10 years); and all upgrades are equal (premiums vary based on tank age, material,
construction, product delivery, and leak detection system).
n. Qs and As.
Q: Has Iowa worked with municipalities?
A: We've done extensive outreach to counties, municipalities, and school districts. Public entities have
the worst compliance rates.
f
Q: Has the number of new releases in Iowa gone down?
A: There have been very few valid claims (less than 100).
Q: Most of those not upgraded yet are non-marketers. How did you reach them?
A: We did mailings to all registered tank owners and did TV and radio spots.
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Forecasting, Solvency, and Cash Flow: A Roundtable
Time: Tuesday, 3:30 - 5:00 p.m.
Moderator: Pat Erikson (Iowa)
Notetaker: Sammy K. Ng
Presenters: David Chambers (Nebraska)
Bruce Lindholm (South Dakota)
Jean Riley (Montana)
Jim Sims (Washington)
I. Most important issues or topics actually discussed during this session.
1. Cash flow projections can be made based on past experience as to when claims will be filed for a
known release.
2. Must account for claims incurred but not yet reported (TBNR); it can be a big factor in forecasting
cash flow.
3. Develop a good relationship with other departments (e.g., ecology, environmental quality) as they
set the cleanup standards and certifying compliance. Their mission is different than yours.
4. The public views the state as the true ".deep pocket."
n. QsandAs.
Q: During its upgrade, how many tanks did Iowa find leaking?
A: Around 70 percent.
Q: Does any state encumber (set aside) money for a particular site?
A: Nebraska does not; it pays the bill when it is filed. Montana preapproves the cost but does not set
aside money for it.
Q: Do your Fund balances earn interest?
A: All states answered yes. Alabama said that the interest on its Fund balance pays the Fund's
administrative cost.
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Harnessing the Power of Stakeholders
Time: Tuesday, 3:30 - 5:00 p.m.
Moderator: Steve Crimaudo (ASTSWMO
Notetaker: Robert Hitzig
Presenters: Bill Alpine (Massachusetts)
Dave Arrieta (DNA Associates)
Chet Clarke (Texas)
Jim Sims (Washington)
I. Most important issues or topics actually discussed or presented during this session.
1. "Stakeholders" is a term that describes a very diverse group of individuals/organization holding a
vested interest in a particular activity. Their interest could be very specific or general in nature but,
securing their input (e.g., insights/perspective) provides an invaluable contribution which can help shape
the direction of change. Sometimes difficulties arise when some members of the regulated community are
• omitted from stakeholder groups. The composition of a stakeholders groups can shape the direction and
extent of change.
2. The clear identification and communication of the project goals, objectives, and ground rules are a
vital component of the process to harness the power of stakeholders. When members of the regulated
community understand the components of the process, they're able to determine whether or not they
should be involved; to identify specific areas to focus their resources/attention; to understand the
ramification of their actions/inactions; and to determine whether or not the composition of the stakeholders
group is appropriate to address identified needs.
3. One of the many challenges facing a stakeholders group is the need to show accomplishment. If
the stakeholder groups can resolve a small issue and build on that accomplishment, other stakeholders may
be more inclined to participate. This is especially true when these stakeholders are acknowledged for their
contribution to the effort. Acknowledgment not only fosters participation, it can be used to deflect
criticisms when non-participants object to the results of the stakeholders group.
4. Stakeholders must include representatives from both supportive and detractive groups if effective
change is anticipated. Not only do these groups balance each other, they also foster information
exchanges amongst their peers. Because most of these parties have established lines of communication
and support networks, their participation can enhance communications and outreach efforts.
n. Qs and As.
Q: How do you deal with an obnoxious participant?
A: Establish ground rules and time limits; use a facilitator if the issue is contentious and, maintain
meeting notes that convey the purpose and outcome of each meeting.
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Reports From Roundtables: The Big Issues
Time: Wednesday, 8:30 - 9:00 a.m.
Moderator: George Matthis (North Carolina)
Notetaker: Kate Becker
Presenters: Steve Crimaudo (ASTSWMO)
BiU Lienesch (US EPA/OUST)
John Podolinsky (Montana)
I. Most important issues or topics actually discussed during this session.
1. John Podolinsky reported on both sessions of State RBCA Decision Making And Implementation.
Mark Malander updated survey results (17 states responded), discusses point of compliance and
remediation by natural attenuation (RNA). John said that Mark reminded everyone to check OUST's
home page for survey results.
2. Bill Lienesch reported on 1998 and Beyond. During this session, Pat Rounds (Iowa) discussed the
concern in his state about the rural delivery network; to date the network is performing adequately. Iowa,
which is all upgraded, licenses its installers and upgrade technicians. A large (more than anticipated)
number of Mom & Pops did upgrade. Pat cautioned the federal government to not change the deadline.
. He has found that the most difficult groups can be the so-called "sister" agencies like schools. There was a
lot of discussion about outreach (one state visited sites to physically hand the owners/operators material);
about the 1998 deadline; about politics (it can help you); and about outreach to the legislature.
3. Steve Crimaudo reported on Harnessing The Power Of Your Stakeholders. During this session,
Jim Sims (Washington) said that his state's heating oil program was up and running. Bill Alpine
(Massachusetts) said that his state had an executive order to make precise regulations and that they had to
pass the "grandmother" test (be understood by somebody's grandmother). Chet Clarke said that in his
state the regulations were peer reviewed by all of the involved groups.
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Unconstitutional State Funds and Other Legal Follies
Time: Wednesday, 9:00 - 10:00 a.m.
Moderator: Mary-Ellen Kendall (Virginia)
Notetaker: Bill Lienesch
Presenters: Mary-Ellen Kendall (Virginia)
Dean Lerner (Iowa)
I. Most important issues or topics actually discussed during this session.
1. hi Safeway, Inc. v. Montana Petroleum Release Compensation Board, the Montana Supreme Court
ruled that since the State regulatory agency and the Montana Petroleum Release Compensation Board used
the same definition for an underground storage tank, there must be consistency within the State agencies in
its interpretation. If a person is determined to be the UST owner for purposes of cleanup, then that person
should be deemed to be the UST owner eligible for reimbursement, absent some other statutory basis for
denying eligibility. Interpretations of statutes should be consistent between regulations and between
regulators and fund administrators.
2. hi Farm Bureau Mutual Insurance Co. v. Porter & Hechman, the Michigan Court of Appeals
refused to interpret the term "operator" to include repair companies that service aboveground storage tank
because the repair company did not control the system which had the release. The court noted that the
repair company might be liable to the insurer if it negligently caused the release, but it refused to extend
tank operator liability to someone who failed to take action that might have prevented contamination.
3. In City of St. Louis v. Michigan Underground Storage Tank Financial Assurance Policy Board, the
Michigan Court of Appeals ruled that failure to meet the reporting eligibility requirement made a potential
claimant ineligible and an ineligible claimant is not automatically entitled to reimbursement. This case is
important for two reasons in that: The court recognized that a State has the right to impose eligibility
requirements on claimants, and the creation of a State Fund does not create a benefit entitlement program
that gives claimants a constitutional right to receive reimbursement regardless of the circumstances
surrounding their claims.
4. In Ken Moorehead Oil Company v. Federated Mutual Insurance Co. v. South Carolina Department
of Health and Environmental Control, the court ruled that an insurance company was not entitled to dictate
how and to whom a State disbursed money from its Fund and that a private contract to which the State was
not a party did not give an otherwise ineligible person an automatic right to distribution from a State Fund.
5. In a third-party claim case, Peters v. Brants Grocery, an individual filed a^class action lawsuit in
Alabama's Coosa County Circuit Court in May 1996 against all of the major oil companies seeking
damages for property devaluation for any property located within 250 feet of a petroleum UST. This case
has grave implications for the State Funds because of its potential for third-party liability reimbursement
claims. The court originally certified this case as a class action. However, the major oil companies
objected, and the judge has agreed to allow a period of discovery in which the people filing the suit can
identify all of those in the class. The court required both parties to attend two mediation sessions to try to
resolve the matter without litigation.
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6. There are four cases challenging the constitutionality of State Cleanup Funds. There are several
common threads in these cases. First, the person or entity who sues must have "standing," which means
that the person has a personal stake in the outcome and an interest in the outcome. Second, the fund
assessment must truly be a tax and not a fee or something else. A "tax" is a general revenue-raising
measure for governmental purposes. A "fee" is a charge used to compensate the government for a specific
service or benefit to the payer or to defray costs of governmental regulation of that industry. Third, a tax is
unconstitutional if it is collected for a defined purpose and the State assigns the revenue to other projects,
unless the State replaces the same sum which was taken for another use. Fourth, if a person wins a lawsuit
and the tax is declared unconstitutional, the person may be able to obtain attorney's fees, based on either a
private attorney's general theory or the inability of the State to provide substantial justification for taxation.
n. Qs and As.
None.
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State Funds: Talk Back Live with Dan and Dennis
Time: Wednesday, 10:30 -11:30 a.m.
Moderators: Dan Neal (Texas) and Dennis Rounds (South Dakota)
Notetaker. Bill Lienesch
Presenters: Dan Neal (Texas)
Dennis Rounds (South Dakota)
I. Most important issues or topics actually discussed during this session.
During this session, several generalized case studies were discussed. Five of the more interesting
are summarized below. !
1. Your state auditors recommend that you only review 10 percent of the claims in order to speed up
efficiency and save administrative costs. Most states would not accept this recommendation. One state
noted that mistakes are found in virtually every claim review. Another state believes that public funds are
being expended for a promised level of performance and that all claims should be reviewed to ensure that
the promised performance is delivered.
2. MTBE has been discovered in a local well. The regulatory agency directs each of 10 local service
stations to sample existing wells (where available) for MTBE even though some of the stations had
completed cleanup activities based on BTEX analysis required by the regulatory agency at that time.
Generally, the State Fund Administrators who expressed opinions believed that because the state was
ordering that the MTBE samples be taken that the state should pay for it.
3. A newspaper reporter contacts you and asks you to name one thing you would like to change with
your program. What would it be? There were various opinions expressed: Make the Fund an
autonomous program; increase the revenue; increase staff resources.
4. The city is upgrading its sewers and its contractor encounters vapors near a remediation site. The
city's contractor will incur extra costs for protective equipment, and the city plans to pass along the added
costs through the tank owner to the Fund. Will the Fund pay? The general feeling is that it would pay
especially if it had third-party coverage responsibilities.
5. The Fund requires preapproval of costs. Will it pay for work that is not preapproved? One state
responded that it would immediately stop work at the site but would probably pay. Another state
responded that it pays up to 20 percent over preapproved levels. A third state has an ironclad rule—it will
not pay for any work that is not preapproved. $
n. Qs and As.
Covered above.
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The Fund Awards: State Fund Success Stories
Time: Wednesday, 11:30-12:00 a.m.
Moderators: Ellen Frye (NEIWPCC) and Steve Crimaudo (ASTSWMO)
Notetaker: Kate Becker
Presenters: Ellen Frye (NEIWPCC)
Steve Crimaudo (ASTSWMO)
1. For Best Financial Achievement: The runners up were Wisconsin, North Carolina, and Vermont
The winner was South Dakota, for its excellent long-term cash flow projections and great claims review
processes.
2. For Best Policy and Management: The runners up were Missouri and Louisiana. The winner was
Ohio for implementating a well-designed and extremely effective communication program that included
fact sheets and articles in magazines and targeted owners and operators throughout the state.
3. For Best Overall Fund: The winner was the South Carolina Department of Health and
Environmental Control. These folks masterminded the move from time-and-materials to pay-for-
performance and risk management in cleanup decisions.
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