Complete Guide - EnvironmentLA

Guide to Resolving Environmental and Legal Issues at Abandoned and Underutilized

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City of Los Angeles Brownfields Program Guide to Addressing Former Gas Station Sites

February 2004

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Guide to Resolving Environmental and Legal Issues at Abandoned and Underutilized

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Table of Contents Foreword Chapter 1

i Former Gas Station Sites: Introduction The Problem Federal Requirements Administration in California Table: Agencies and Their Jurisdictions Advice for UST Owners

Chapter 2

Gathering Information on a Site Property Identification Where to Obtain Addresses, APNs, and other information Site Reconnaissance Current and Past Owners' Names and Addresses Researching Underground Storage Tank (UST) Permits Tax Delinquency Identify Liens, Bankruptcies and Past Owners Contact the Owner

Chapter 3

Site Status Issues Abandoned Sites Tax Delinquent Properties Private Liens Holders Bankruptcies Liability of Current and Past Owners

Chapter 4

Conducting an Environmental Site Investigation Phase I Environmental Site Assessment Phase II Environmental Site Assessment Site Remediation

Chapter 5

Paying for Site Assessment, UST Removal and Remediation Funding Sources Table Federal Funding Sources HUD CDBG Funds US Environmental Protection Agency Grants

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(continued) Paying for Site Assessment, UST Removal and Remediation California State Programs California Petroleum Underground Storage Tank Cleanup Fund EAR Account Loans Insurance Policies Responsible Parties

Chapter 6

Gaining Site Access Permission of the owner Polanco Act CLERRA (SB 32) Bankruptcy Judgment Court Order Eminent Domain

Chapter 7

Putting it All Together

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Appendices Appendix A Appendix B Appendix C Appendix D Appendix E Appendix F

Information Resources Federal UST Program Overview Brownfields Site Information Report: Example Criteria for Selecting Contractor to Remove UST and Criteria for Selecting a Remediation Contractor California Underground Storage Tank Fund Summary Summary of CLERRA (California Senate Bill 32)

The City of Los Angeles Brownfields Program and the City of Los Angeles Environmental Affairs Department wish to acknowledge the following individuals and organizations who made this document possible. Primary Author: Maxine Leichter, City of Los Angeles Environmental Affairs Department Editors and reviewers: City of Los Angeles Staff: Wayne Tsuda, Environmental Affairs Department Craig Tranby, Environmental Affairs Department Noemi Emeric, US Environmental Protection Agency & LA City Brownfields Program Valerie Toney, Los Angeles City Fire Department Others: Carol Armstrong, Carol Armstrong Consulting State of California Water Resources Control Board Division of Financial Assistance Northeast Midwest Institute US Environmental Protection Agency, Region IX Tetra Tech Inc. Mary Salazar, Mary Salazar Consulting

Use of the information contained on these pages is at the user’s sole risk. The user is responsible for ensuring by independent verification its accuracy or completeness. The information and data on these pages is subject to change without notice. All materials contained herein are distributed and transmitted "as is" without warranties of any kind, either express or implied, including without limitation, warranties of title or implied warranties of merchantability or fitness for a particular purpose. The City of Los Angeles is not responsible for any special, indirect, incidental or consequential damages that may arise from the use of, or the inability to use, this document, the web site on which it is found and/or the materials contained on the site whether the materials contained on the site are provided by the City of Los Angeles, or a third party.

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Foreword

his guide was written to assist various agencies and stakeholders trying to redevelop abandoned gas stations. The City of Los Angeles Brownfields Program learned valuable lessons as we sought to resolve the complicated ownership and environmental issues at these sites. This document shares what we have learned.

The information found in this guide will be most useful to Los Angeles City staff. However, other cities within Los Angeles County will find the majority of the information applicable and California cities should find the information mostly helpful as well. Readers in other states should regard all references to state or local programs with caution since they may not apply to your locality. The guide has been written so that the reader can pick and choose those portions that will be useful. This guide may also be useful for private citizens concerned about former gas station sites or abandoned gas station sites in their community. Community members can help local government address such sites by making them aware of the problem and by helping to gather the information needed to address these sites as described in Chapter 1. Additionally, local government may not be aware of the funding sources described in Chapter 3. Finally, this guide may also be useful to owners of former gas station sites that want to remove tanks and bring their sites into compliance. We are interested in your comments, especially if you discover any incorrect or outdated information. Please contact us via email: [email protected].

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Chapter 1

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Former Gas Station Sites: Introduction

few miles south of the Los Angeles Civic Center, within site of the glass skyscrapers, museums, concert halls, and government offices, are many neighborhoods built in the 1930s and 1940s. Many streets have large old trees that provide welcome shade in the summer. These neighborhoods are crisscrossed by a grid of once-thriving commercial corridors which over the past 50 years have increasingly included empty buildings, vacant lots, unkempt automotive repair shops, and junk storage areas. Fifty years ago, many of these properties were gas stations. Today, most of these gas stations are gone, but many of the petroleum underground storage tanks (USTs) remain. Underground tanks are used to store gasoline and used oil that is removed from automobiles during maintenance. Most USTs are steel but older tanks were made from concrete or even wood. Now, some tanks are constructed from fiberglass. Newer tanks feature double walls and advanced leak detection systems. Based on research conducted by the City’s Brownfields Program, most of the obsolete and illegal petroleum underground storage tanks are clustered in the least affluent portions of the city. The City began investigating former gas stations because residents expressed concerns that contamination from such sites could be polluting their communities and that the presence of this pollution was inhibiting redevelopment of the sites. When the City started its gas station program, we expected to find a large number of former gas station sites that were vacant or abandoned by owners who could not afford to remove underground tanks or contamination. The reality was more complex. As it turned out, there were few vacant sites. There were a significant number of former gas station sites with old obsolete USTs still in the ground and no longer being used, but the sites were being used as auto repair businesses, tire sales, used car sales and storage. Often these sites present a poor appearance due to obsolete signage, buildings needing paint and otherwise in disrepair, weeds growing on site, and automotive repair activities not screened from view. When the City first reviewed these sites, it found that most were occupied, however as a first step, the City’s Program focused on redeveloping vacant sites and therefore this guide begins its focus there as well. Vacant sites are less complicated because they do not require the interruption or displacement of an ongoing business. Also, vacant sites produce a higher level of blight. Therefore, this guide will be most helpful for such sites but it also contains information that can be helpful in addressing any former gas station site.

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The Problem Until the mid-1980s, most USTs were made of bare steel, which is likely to corrode over time allowing the contents to leak. Faulty installation or inadequate operation and maintenance procedures also can cause USTs to release their contents into the soil or groundwater.1 Unused USTs remain in the ground because of the high cost to remove them – anywhere from $5,000 to $10,000 each. If the tank has leaked, remediation may cost anywhere from under $50,000 to over $500,000 with most sites falling in the under $200,000 range. However, such sites cannot be sold unless the USTs are removed. In neighborhoods with high property values, the cost to remediate a site can come out of the purchase price or rental income. However, in communities with lower real estate values, the cost to bring a site into compliance can exceed its value. Some owners have not used the tanks for many years and are not even aware of the regulations. Others use or lease the site hoping no one will force the issue. In some cases, owners who cannot afford to remediate simply abandon the site.

Federal Requirements In 1984, Congress added Subtitle 1 to the Resource Conservation and Recovery Act (RCRA) that required the U.S. Environmental Protection Agency (U.S. EPA) to develop a comprehensive program for regulating USTs used for storing petroleum and certain other hazardous substances. In 1986 the Superfund Amendments and Reauthorization Act (SARA) created the Leaking Underground Storage Tank Trust Fund and required owners of USTs to show they had the financial resources to clean up future potential contamination from USTs. Appendix B contains a summary of these federal regulations that is based on "Recycling America's Gas Stations" a report by the Northeast-Midwest Institute and the National Association of Local Government Environmental Professionals (NALGEP). See Appendix A Web Sites Table for link to the complete report.

Administration in California In California, the U.S. EPA has delegated the implementation of the Federal UST requirements to the California Water Resources Control Board which has in turn delegated certain responsibilities to its regional boards and other local enforcement agencies. The following table gives a summary of each agency's area of jurisdiction. Details on each will be in various chapters of this guide. Agency Local Agency (Fire Dept., Health Dept. or 1

Area of Responsibility Tracks registration of all USTs, assuring that notification and technical requirements (described above) are met including that

US EPA Office of Underground Storage Tanks web site http://www/epa/gpv/swerust1/overview.htm


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other)

Regional Water Quality Control Board California Department of Toxic Substances Control State Water Resources Control Board

out of service USTs are removed. If owners cannot or will not remove the tanks, local agencies may not have the funds to do so. How to address this problem is the subject of this guide. Steps in when groundwater contamination is discovered to assure it is remediated properly. Oversees groundwater remediation and other related remediation at sites. Oversees remediation of soil contamination beyond the scope that can be handled by the local agency. Administers California programs to implement the LUST Trust Fund, cost recovery, and Financial Responsibility requirements described above.

The local agency may be a City or County agency--usually a fire department or environmental health department. If not, these agencies should be able to direct you to the proper agency in your area. As this guide describes, these agencies work together to implement these programs. In addressing problem UST sites, it is important, to understand how the agencies work, to identify appropriate individuals within these agencies and cultivate a good working relationship with them.

Redevelopment Perspective Redeveloping old gas station sites may be facilitated by cooperation between the agency tasked with enforcing UST regulations and a redevelopment agency. The redevelopment agency may be able to contribute resources that the regulatory agency lacks. Such cooperation works best when each agency comes to the problem with the aim to achieve both compliance and redevelopment. However, redevelopers must remember that a regulatory agency's first responsibility is to protect public health and the environment by enforcing the law and they can only help to the extent that their goal is complimentary to the goal of site development. Finding that common ground is the key to success in addressing these sites.

Advice for UST Owners Many regulatory agencies were not able to identify all cases of non-compliance immediately after January 1999, when all unused USTs and UST delivery systems were required to be upgraded or removed. Increasingly as the years go by, these agencies are catching up on the backlog of non-compliant sites. Some agencies are issuing orders to owners to remove tanks. In some jurisdictions, those owners with the least financial resources to take action are now being contacted because they are the only sites left. Prior to receiving an order to remove the tanks, many of these owners had no idea that removal was required. Many are at a loss as to how to fund removal. To owners who find themselves the subject of such an order, we advise cooperation with the regulating agency whether you have the funds to remove the tank or not. The eligibility of a site to receive funds from the State UST Fund to pay for remediation (See Chapter 5 – Funding UST Removal and Remediation) may depend on whether the UST owner/operator was cooperative or knowingly avoided compliance. Some regulating Guide to Addressing Former Gas Station Sites

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agencies are working with owners to help them identify loans or other resources to comply. In some jurisdictions, non-cooperative owners are being referred to the District Attorney or City Attorney for legal action. Some jurisdictions are also applying for special state funding known as the Emergency Abandoned, Recalcitrant (EAR) Account of the California Petroleum UST Cleanup Fund, to remove USTs.

City of Los Angeles Gas Station Program The City of Los Angeles Brownfields Program helps owners of sites that have or once had an underground storage tank bring their site into compliance and redevelop their property. The program offers over the phone technical assistance on accessing the various programs discussed in this guide. There also may be financial assistance available to qualifying owners who lack the financial resources to remove USTs or otherwise bring their site into compliance. Owners of USTs with property located in the City of Los Angeles are urged to contact the City’s Gas Station Program personnel for additional assistance. The contact number is listed in Appendix A of this document.


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Chapter 2 Gathering Information on the Site

his chapter lists the information that can should be gathered to determine the status of each property. This information is necessary to determine the appropriate remediation strategies and to identify funding sources for which the site may be eligible. The City of Los Angeles Gas Station Program gathers the information described below and enters it into a database. For each active site, a Brownfields Site Information Report (BSIR) is created that has a photograph of the site and maps showing the location and surrounding zoning. An example of a BSIR may be found in Appendix C of this document. For the purposes of this guide, unless indicated otherwise, the term UST refers to underground storage tanks that are no longer used to hold fuel at sites that were formerly operating as gas stations. This document assumes that the site is of interest because it appears to be abandoned, is vacant or is otherwise causing blight.

Property Identification The first task is to thoroughly identify the property. Street addresses are a useful but an inexact method to track properties. The post office may recognize a reasonable address given by the owner or tenant. In the City of Los Angeles, this address may or may not correspond to the address officially assigned by the City. A property may be composed of several parcels, each with a different address. A corner property may have a separate address for each street that it faces. Any of these addresses may be used by government agencies that have an interest in the property. A more precise way to track properties is by Assessor’s Parcel Number (APN). The California State Board of Equalization publishes standards for County Tax Assessors to follow in mapping and numbering parcels. This standard recommends a three-part number consisting of the Map Book number, the page number in the book and the number assigned to that specific parcel on that page. In Los Angeles County, the APN is a ten-digit number in the following format: xxxx - xxx - xxx. Many other government agencies also use the APN number to track properties. Note, there may be more than one parcel per APN, or more than one APN per parcel. Be sure to identify all APNs that apply to the parcel.

Where to Obtain Addresses, APNs and Other Property Identification Information The City of Los Angeles provides property identification information to the public on properties located within the City through two GIS-based systems, iMapLA and Navigate LA. Enhanced versions are available to City employees through the City’s intranet. (See Appendix A - Web Site List for web address.) A user can enter the address or cross Guide to Addressing Former Gas Station Sites

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streets and the system will map the parcels and give the APN numbers, assessed value, last change of ownership, City Council District, special zones, assistance designations the property falls within, and other useful information. One can print the map showing the parcels surrounding the site to help identify the site in the field. Readers not in the City of Los Angeles, can investigate sources of this information that are available in their own city. Often, the Planning Department, Building and Safety, or Public Works Department track this information. APNs and addresses can also be obtained through the Los Angeles County Tax Assessor's website which has a Property Assessment Information Module. The viewer can enter either the cross streets, address, or APN in order to access other data. This information as well as ownership information can also be obtained in person at the Los Angeles County Registrar-Recorder/County Clerk's office (See Appendix A for location). If the property is located outside of Los Angeles County, and your city doesn't have this information, we recommend contacting your County Tax Collector and/or Tax Assessor.

Site Reconnaissance We cannot overestimate the importance of visiting the site as soon as possible in the investigation process. It is important to identify whether the site is truly a former gas station site and whether there are USTs still in the ground. The presence of gas pumps or gas station canopies provide clues, but USTs may or may not be present. A better indication that USTs are still present is a round metal or concrete cover for the UST fill hole. When a UST is removed, the fill hole goes with it. There is normally one fill hole for each UST. Other features to note are the level of blight the site is causing, potential dangers to the community, surrounding uses, redevelopment prospects and many other issues beyond the scope of this document but of importance in prioritizing activities at the site.

Current and Past Owner's Name & Address Los Angeles City staff can consult i-map or Navigate LA that may list the current owner's name and address. Current and past owners are also available through the Los Angeles City Clerk's Land Records Division. Before going to this office, obtain the Book and Map numbers of the property from the Building and Safety Department Construction Services Center. (See Appendix A for locations) Always verify the location of any City office as these offices may have moved since this document was written. For properties in Los Angeles County, current and past property owners are available through a manual search at the Los Angeles County Registrar-Recorder/County Clerk in Norwalk. (See Appendix A for location.) There are also subscription-based internet access sources of property ownership information available such LEXIS/NEXIS. An agency within your city, such as the City Attorney may already subscribe to such a service. If your city does not have this information, try the Tax Collector or Tax Assessor. Another way to locate the owner is to pay for a professional Title Search. A Guide to Addressing Former Gas Station Sites

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real estate professional can advise you on how this done. If a Phase 1 is going to be conducted, ask for historical ownership information to be included.

Researching Underground Storage Tank Permits for the Site The type of environmental remediation that needs to be conducted at the site and what sources of funding may be available depends on whether or not the USTs are still in place, whether or not they were permitted, if so when and by whom, and other factors. Agency staff can gather this information themselves or pay for a Phase 1 Environmental Site Assessment to be conducted by an environmental engineering or similar firm. Chapter 4 provides a general description of Phase I and Phase II Environmental Site Assessments. A properly documented Phase I will have a photocopy of all relevant permits taken out on the property. These permits can also provide information on who owned the property at the time the permit was obtained. The information below describes how to gather some of this information yourself. Permit Records From the Local Agency that Regulates USTs In 1994, California passed a law authorizing local jurisdictions to unify the administration of six programs related to hazardous materials under one local agency now known as the Certified Unified Program Agency or CUPA. Regulation of underground storage tanks is one of these programs. In the City of Los Angeles, the Fire Department (LAFD) became the CUPA in 1998. LAFD has most historical UST permit records. LAFD files their records by street address, so bring all possible addresses for the site when visiting their office. Also, it may be helpful to talk to the inspector who oversees the geographic area where the site is located to determine if he/she has additional information or records on the site. Prior to 1998, the City Department of Finance collected the UST fees. If one asks at the Department of Finance office window, they will run a search on an address and then print a list of permits taken out on that property that are in their records. Other cities may have a similar history whereby the UST program was moved from one agency to another and records may be in two places. The fire department, building department, or city engineer should be able to direct you to the correct departments. The important information to gather is: the dates permits were obtained to install or remove USTs, who was the owner at that time, did the owner pay UST registration fees to the local agency (LAFD in LA), and for what years were these fees paid. It is possible to obtain a permit to remove a tank but then not actually remove it so try to determine if the UST was actually taken out. You may want also to photocopy the diagrams that indicate where USTs were installed. The local agency that regulates USTs also insures that all USTs have been either removed or upgraded as required by the Federal law. (See Appendix B for federal regulations.) However, the regulating agency may know of locations where old USTs are still in place.


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As explained in Chapter 1, USTs may remain in place because the owner does not know they are required to be removed or lacks the funds to remove them. Older UST Permits Older UST permit records may be held by the local agency that grants building permits. Older City of Los Angeles UST installation permits may be available at the Building and Safety Department (B&S) records counter. Locations and hours are on the City's web site under the Building and Safety Department. (See Appendix A for address and phone number.) If this will be your first visit, you may want to attend a brief training session offered by B&S to help individuals access their files. Call or consult the B&S web site for training times and locations.

Tax Delinquency In Los Angeles County, the APN number can be used to determine whether a property is tax delinquent. This information is available on the Los Angeles County Tax Collector's website. Information on tax delinquent properties is also available through a web site called Neighborhood Knowledge LA. If the property owner has been delinquent for five years, the property is subject to sale, with a minimum bid for the amount owed on back taxes, penalties, and fees. The significance of tax delinquency is covered in more detail in Chapters 3 and 7.

Identify Liens, Bankruptcies Chapter 3 discusses the significance of liens and bankruptcies. The best way to identify liens or bankruptcies against a property is through a professional Title Report. We recommend obtaining a historical title report (which gives past owners) as well. If you hire a consultant to conduct a Phase 1 on the property, you can request that it include a historical title report although it is not normally part of a Phase I. Bankruptcies can impose liens on a property even after the bankruptcy is no longer active in the conventional use of the term. One must consult the original bankruptcy settlement to determine if there are creditors who have an ownership interest in the property that can be exercised. For example, one of our sites had previously been mortgaged. The owner defaulted on the mortgage many years before the City began investigating the site but the bank still had certain property rights that had to be addressed before the City could take ownership of the property.

Contact the Owner When you have gathered as much of the above information as possible, contact the site owner. Our first step is usually to send a letter offering to assist the owner in complying with the law and asking them to call us. Some owners think that because they have stopped paying taxes, they no longer own the property. However, in California, the ownership of tax delinquent properties does not change until the property is sold by the Guide to Addressing Former Gas Station Sites

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Tax Collector to a new owner. Question owners about the history of the site. Relevant information would include any bankruptcy, liens, or loans against the property, dates the property was last used as a gas station, and how it has been used since. Ask if the USTs were registered and if there are orders from government agencies imposed on the property. Our experience ranged from an owner who was very difficult to locate to an owner who was anxious to work cooperatively with us in seeking a solution.


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Chapter 3 Site Status Issues ormer gas station sites usually pose a variety of issues that complicate redevelopment but may also present opportunities. This chapter describes several issues and how to evaluate the barriers and/or opportunities each may pose. The ultimate goal is to utilize a property's status to support redevelopment of the site.

Abandoned Sites Many vacant gas station sites appear to be abandoned. The term "abandoned" may be used to mean that no one is taking care of the site, the owner cannot be identified or located, or that the owner has stopped paying the mortgage and/or taxes on the site. In this Guide, the term “abandoned” means that the owner has both stopped paying taxes on the site and has stopped maintaining it. In some cases, the owner may think that because he or she has stopped paying taxes that the property has reverted to government ownership. In California, this is not the case. Ownership only changes if it is actively transferred to another owner. When an owner stops maintaining a property, it often becomes a site for illegal waste disposal, graffiti, or other activities that create blight and community problems. In Los Angeles, in order to control such activities, the City will fence the site and place a lien on the property to obtain repayment for the cost of the fence. Such a lien has the potential to speed sale of the site and may facilitate an agency in acquiring the site as described below under “Tax Delinquent Properties”. Opportunity Cleaning up an abandoned property may be easier than for a property that is blighted but has a current owner who is occupying or leasing the property and whose income will be interrupted by tank removal activities. Abandoned properties that have contamination resulting from an UST are eligible for EAR Account funding for cleanup. Chapter 4 Paying for Site Assessment, UST Removal and Remediation describes this program in more detail.

Tax Delinquent Properties Distressed properties are often tax delinquent. Below is a summary of critical sections of state law governing disposal of tax delinquent property. Included are details of how Los Angeles County disposes of tax delinquent properties. Readers outside of Los Angeles County should verify procedures in their counties. We would appreciate your communicating with us if your County has procedures that may serve as a guide to others. Guide To Addressing Former Gas Station Sites

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State Law California law governing disposition of tax delinquent property is found largely in the Revenue and Taxation Code Section 3591 - 3731.1, 3841, 7063 and 15640-15646. Procedures for auction of tax defaulted property are published by the California State Controller in a three-volume document appropriately titled "Guide to the Sale of TaxDefaulted Property". This document can be downloaded from the State Controller's web site. (See Appendix A for information on obtaining this document.) When a property becomes tax delinquent, the Tax Collector must notify the owner about the delinquency for 5 years, after which the property is considered to be in tax default and may be offered for sale. The tax collector must offer tax defaulted properties for sale within four years of their being in tax default. One exception to this rule is Revenue and Taxation Code Section 3691 (b)(1)(A) which states "three years or more after the property has become tax defaulted and subject to a nuisance abatement lien, the tax collector shall have the power to sell and may sell all or any portion of tax-defaulted property…” However, the LA County Tax Collector does not have the ability to track liens by local government entities and is not currently implementing this provision. Opportunity Taxing agencies, revenue districts, and redevelopment agencies are eligible to acquire tax-defaulted property outside of the public bid/auction process if the property is needed for a "public use". Certain non-profit agencies are also eligible to purchase residential or vacant tax delinquent property to expand availability of low-income housing. This may be done after three years of tax delinquency if the property is subject to a nuisance abatement lien. (See Revenue and Taxation Code Section 3791.4.) The guide mentioned above explains the criteria and procedures for such purchases. Auction of Tax Delinquent Properties in Los Angeles County In Los Angeles County, tax delinquent properties are managed by the Treasurer and Tax Collector--a county agency that is separate from the Tax Assessor. Approximately every 6 months, the Tax Collector holds an auction of tax delinquent properties. A book listing the properties to be auctioned is published several weeks beforehand and can be purchased through the mail. Bidders must pre-register and make a cash deposit of $1,000 which is applied to a purchase or refunded if no property is purchased. Persons attending only to observe are not charged or required to register in advance. The minimum bid on each property is given in the book and represents taxes owed plus fees charged by the Tax Collector’s Office. When a property is purchased at an auction, the fee portion goes to the Tax Collector, the taxes owed go to the State, and any remainder goes to the previous property owner. The new owner is liable for liens owed to other agencies, but private liens are extinguished.

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Several factors can contribute to properties not being sold in the minimum time provided by law: The tax collector may choose to wait; owners can delay the auctioning of properties by agreeing to a payment schedule; and an ownership change or bankruptcy can delay the process. The tax collector may auction contaminated properties as long as they are not Federal Superfund sites.1 If someone buys a site and then finds out that it is contaminated, the Los Angeles County Tax Collector will take it back but other counties may not do so. The City of Los Angeles Brownfields Program informs the Tax Collector of properties with identified environmental problems. The Tax Collector then places a note on the property listing to inform potential purchasers of its condition. The Los Angeles County Tax Collector has no procedure in place to notify local agencies about properties that cannot be auctioned because of environmental contamination or uncertainty. Opportunity If a former gas station has USTs in place and no testing has been conducted to determine whether or not there is contamination, the property is unlikely to sell at auction. However, someone might purchase the property if the auction cost of the property together with the cost to remove the USTs and contamination (if there is any) is substantially less than the resale value of the property. In some cases, it may be possible for a city to test the property and then work with the tax collector to provide the testing results to prospective purchasers and thereby facilitate the sale of the property. Another option would be for a city to remediate the property so that it can be sold or purchase the property from the tax collector, remove the tanks, remediate the property and then resell it.

Private Lien Holders Another way that owners abandon sites is by not paying on a mortgage. The owner may believe that by not paying the mortgage, he or she is giving up the property to the bank. Although the bank has the option to repossess property that provided collateral on a loan, if the property is contaminated, the bank may determine that the cost to remediate the property exceeds its value and therefore refuse to foreclose. However, the right of a prior lien holder, such as a bank, must be considered in deciding how to approach redevelopment of such a property. The bank can exercise its lien at any time. For example, if a city were to purchase a tax delinquent property and remediate it, the bank could reclaim the property as payment on their lien. In such a case, it would be advisable for the city to work out a settlement with the bank before taking ownership of

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Superfund sites fall within the jurisdiction of the U.S. Federal government and are remediated under its oversight.


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the property. However, if the city obtains the property from the Tax Collector, private liens are extinguished.

Bankruptcy Many properties that are in tax default also have bankruptcy filings against them. Filing for bankruptcy is a way for property owners to obtain relief from debts that they cannot pay. Bankruptcy does not discharge taxes owed to the government. Bankruptcy may not discharge a lien held by a bank on property pledged as collateral for a loan. (See Chapter 2 for how to gather bankruptcy information.) Opportunities The LA County Tax Collector will not auction a property that has an active bankruptcy against it. However, you may be able to determine that the bankruptcy has been dismissed by the court or withdrawn by the petitioner. If so, you can inform the Tax Collector about this and thereby free the property to be auctioned by the Tax Collector.

Liability of Current and Former Owners This is too large and complex an issue to be dealt with here in any detail. For former gas station sites in the City of Los Angeles, if the current owner appears to have the ability to pay for removal of USTs, the City takes an enforcement approach. The Fire Department issues an order to the owner to remove the tank. If the owner fails to do so, the case is referred to the City Attorney who can file a civil or criminal complaint against the owner. If the site owner has substantial assets, consult with your regulating agency and/or your City Attorney regarding the proper action to take.


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Chapter 4 Conducting an Environmental Site Investigation

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his Chapter is intended to provide a brief introduction to the steps often taken to evaluate and remediate a former gas station site. The actual work outlined here should be supervised by an engineer, geologist or other qualified environmental professional. See Appendix D for guidelines on selecting a contractor. Before undertaking a Phase I and/or Phase II Assessment, we recommend gathering preliminary information on the site as discussed in Chapter 2. If a professionally conducted Phase I is not affordable, much of the information normally included in a Phase I can be gathered without professional assistance although this chapter is not meant as a guide on how to do that.

Step 1: Phase One Environmental Site Assessment (Phase I) The first step in evaluating a potentially contaminated property is to conduct a Phase I Environmental Site Assessment. As used in this context, a Phase I is a search for historical records that document prior activities at the site in order to identify uses that may have caused contamination and warrant further investigation. Normally, it is prepared by an engineering consulting firm or other firm experienced in conducting Phase I investigations. The firm will review all prior building permits, underground tank permits, Sanborn Fire Insurance maps, state and federal lists of contaminated properties, etc. A Phase I also normally includes a visual examination on the property to look for indications of potential contamination. The firm will also make recommendations regarding next steps. Normally, a Phase I is part of an investigation preceding the purchase of a property or the granting of a loan on a property. If a property was previously occupied by a gas station, that in itself indicates possible contamination and the need for further investigation because of the use of gasoline and motor oil which are toxic substances. A Phase I of a former gas station site will often identify when USTs were installed, where they may be located, whether and when they were permitted and/or removed, whether the removal was conducted under a permit, who owned the property and operated the USTs, and if there are previous indications of identified leaks from USTs or other contamination. It is important to review records not only from the current agency regulating USTs but also all agencies that had that responsibility in the past. It may be useful to identify all prior owners that may be responsible or able to pay for the removal of tanks and cleanup of contamination. Building department records will often include the names of prior owners but if an owner never took out a permit, their name would not be included in these records. Therefore, consider asking for a Historical Chain of Title Report including certificate of occupancy permits to be included in the Phase I to identify prior owners.


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Step 2: Phase Two Environmental Site Assessment (Phase II) A Phase I Assessment that discovers potential environmental concerns will recommend that a Phase II be conducted. A workplan for the Phase II should be based on the findings of the Phase I and should confirm the locations of any USTs and piping. A Phase II is an onsite investigation that may involve activities such as: sampling and testing soil on the surface and/or beneath the surface through borings, testing samples of soil gases from beneath the surface (soil gas survey), testing groundwater beneath the surface (if it is present at shallow depths), and using instrumentation to locate USTs. The exact plan for the Phase II depends on a number of sitespecific variables, including depth to groundwater, location of the USTs, and piping. When planning a Phase II, consider whether to do the Phase II testing first to see if there is contamination (usually from leaking USTs) or combine the tank removal with the soil testing. Conducting both activities at the same time allows the sampling of soil under where the tank was located which is less costly than soil borings from above. Deciding on which approach to use depends on the circumstances. For example, if an agency identifies a former gas station site for which the owner cannot be located, the agency may want to test for contamination first to see if the site will qualify for EAR Account funding. Identifying a mechanism to allow legal access to the site should be considered. See Chapter 6 on obtaining access. On the other hand, if the priority is on keeping costs down, performing the activities together may be the least expensive. If contamination is discovered, it is sometimes cheaper and less disruptive for the current occupant's business to remove contaminated soil when the hole is open rather than by other means once the hole is filled. The California Petroleum Cleanup Fund will not pay to remove USTs but will pay for some testing and cleanup of contamination to qualifying owners. We advise site owners to retain a consultant knowledgeable about this Fund prior to removing the USTs so that proper procedures can be followed to enhance the likelihood that cleanup can be conducted as tanks are removed and costs will be reimbursable by the Fund. If the site owner qualifies for Fund reimbursement, some consultant costs are covered. See Appendix E for more information on the California Petroleum UST Fund. Appendix A lists a web site that has information on the UST Fund. Site owners should obtain the appropriate UST removal permits and excavation permits (if needed). The UST regulating agency may be required to be onsite to observe the removal and order soil testing and possibly soil removal if indicated. Consultation with local air quality control district personnel is also recommended as they may also require a permit.

Site Remediation If contamination is discovered, the agency that regulates USTs will direct further action. Remediation could be as simple as removing and properly disposing of extra dirt under direction of the UST regulating agency. If contamination of groundwater is discovered, the site will usually be referred to the Regional Water Quality Control Board for further oversight. A site with significant soil contamination may get referred to the Department of Toxic Substances Control (DTSC). If contamination is extensive, one of these agencies will request that a workplan for cleanup be submitted. The workplan would be prepared by an environmental Guide To Addressing Former Gas Station Sites

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consulting firm and submitted to the appropriate agency. When the workplan is approved, work begins. Again, owners seeking UST Fund reimbursements should work closely with a consultant expert in the UST Fund to assure that correct procedures are followed to ensure reimbursement if the owner is otherwise eligible. Each regulating agency sets its own procedures for site remediation so it would not be useful to discuss those in detail here. But some of the procedures that may be required would be removal of gasoline floating on groundwater, excavation of contaminated soil, removal of soil gases with a vapor extraction system, and removal and treatment of groundwater. In rare cases, the Water Board only requires testing be conducted to identify the location of contamination in the groundwater to verify that drinking water sources are not impacted, followed up by quarterly monitoring for a period of time. It may be possible to proceed with development of the site after surface contamination is removed and a cleanup or monitoring plan is approved.


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Chapter 5 How to Pay for Site Assessment, UST Removal, and Remediation Funding Sources for Remediation of Former Gas Station Sites California Petroleum UST Fund

Calif. Petroleum UST Fund – EAR Account

US EPA Brownfields Pilot Grant

Amount

$1.5 million / site

$1.5 million / site

$200,000 / grant

Activities Covered

- Assessment ordered by Regulator - Remediation from leaking USTs

- Assessment - UST Removal - Remediation

- Assessment - Remediation - UST removal if needed for assessment

Key Eligibility Criteria

- Contamination ID’d - UST owner reimbursed for expenses - Site is in compliance - Owner eligible for Fund

- Potential contamination indicated Owner is either - not found - has no money - recalcitrant

Contamination indicated or suspected

Time Schedule

Application to UST Fund by May is best.

Application to Regional Board by February

See US EPA web site for application deadline.

CDBG Funds Depends on population of the jurisdiction - Assessment - UST Removal - Remediation Site must be in a CDBG eligible census tract. Municipality must allocate CDBG funds for this purpose. Funds budgeted by local government on an annual basis.

Federal Funding Sources Community Development Block Grant (CDBG) Funds Community Development Block Grant funds are provided by U.S. Department of Housing and Urban Development (HUD) to cities and counties to improve housing and economic development opportunities in low-income communities. The City of Los Angeles Brownfields Program is primarily funded by CDBG funds allocated each year for this purpose. Funds can be spent for site assessment, remediation, agency oversight costs, legal support, and other expenses related to economic development of sites in qualifying census tracts. Consult with the agency in your city that handles CDBG funds for details. The HUD website also has information on this program.


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U. S. Environmental Protection Agency Brownfields Assessment, Revolving Loan Fund, and Cleanup Grants US EPA offers $200,000 grants to local governmental agencies for assessment and cleanup of Brownfields. Additional funds are available to initiate a revolving loan program. Starting in 2003, about $50 million per year will be set aside for petroleum sites. These grants will cover Phase Is, Phase IIs, cleanup and reuse plans, cleanup costs, community involvement, purchase of environmental insurance, and removal of USTs if needed to complete an assessment. The grants are available to states, local government, tribes, and non-profit organizations. Check the US EPA web site for deadlines. Targeted Brownfields Assessments The US EPA also performs Phase Is and Phase IIs (see Chapter 5 for explanation of these terms.) for cities, redevelopment agencies, and non-profit organizations for qualifying brownfields sites The US EPA has various other funding sources available for Brownfields Projects. See their web site for an explanation of these programs at: www.epa.gov/brownfields. Click on "money matters" for grant information. This web site also has information on funding and other support available from other federal agencies that are participating in the brownfields redevelopment effort. Also check the web site of your local US EPA Regional Office.


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California State Funding Sources California Petroleum Underground Storage Tank Cleanup Fund (Fund) This program, administered by the California State Water Resources Control Board (SWRCB), may be thought of as an insurance program that enables UST owners to satisfy federal and state financial responsibility requirements and to assist with the costs of cleanup of contaminated soil and groundwater caused by leaking petroleum USTs. The Fund will reimburse up to $1.5 million in eligible expenses per site and provides coverage for third-party liability due to releases, but does not pay for UST removal. Eligible recipients are grouped into categories that have different priorities for payment. For a UST owner to be eligible, the tanks must be in compliance with all regulations, i.e. removed or upgraded to local regulatory requirements by December of 1998. Sites with USTs still in place can only qualify for the Fund under a waiver provision. Consult Appendix E for a summary of Fund provisions, including waiver provisions. In California, UST removal contractors are familiar with the Fund and can advise on the eligibility of particular sites. The Fund provides up to $3,000 to pay a consultant to prepare the documentation for application to the Fund. Fund staff can provide the names of such consultants. Consult the Appendix A - List of Resources for how to contact the Fund office. The Fund also includes provisions for owners of USTs to pass their rights to the Fund to future owners. Municipalities that are considering taking ownership of sites need to take great care to review all the regulations thoroughly to determine if they will be eligible to receive reimbursement from the Fund. It is worth noting that this is a reimbursement program. Owners that qualify for the Fund may be able to find a UST removal contractor that will forgo payment until the reimbursement payment is received. Otherwise, a loan may be needed. This program can be of great benefit by providing funding for remediation of former gas station sites, but criteria for qualification are complex. The City’s Redevelopment Agency retained the services of an UST Fund consultant to advise on eligibility issues. There are limitations on the expenses that qualify. For example, the UST Fund will not reimburse costs of removing USTs and Fund staff can only determine a site’s eligibility after tanks have been removed and contamination has been identified. Emergency, Abandoned, Recalcitrant (EAR) Account This is a specific pool of money allocated each year by the SWRCB for use at sites that present an emergency situation (Emergency), at sites whose owners have no resources or cannot be located (Abandoned), or at sites whose owners refuse to undertake cleanup (Recalcitrant). In past years, this fund was only available for emergency sites. In 2001, the availability of these funds for abandoned and recalcitrant sites was expanded. Local UST regulating agencies can nominate sites to receive funds to cleanup sites that have identified contamination. Funds are allocated each year by the SWRCB starting in May or June. The local agency that oversees USTs must nominate sites to their Regional Water Quality Control Board (RWQCB) in time for the RWQCB staff to review the nomination, present it to


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their governing board for approval, and send it to the SWRCB by March 1st. The RWQCB reviews staff funding recommendations and then makes recommendations to the SWRCB starting in May. Funds are available after approval by the RWQCB assuming the following year's State budget has been signed by the Governor. We worked closely with our Fire Department and RWQCB to prepare and submit the nomination. In 2002, there were sufficient funds for all sites that were nominated statewide. For more information contact the EAR Account staff in Sacramento. See Appendix A for contact information.

Loans In many cases, a bank will not accept a property with an non-compliant UST as collateral on a loan. This is because if contamination is found, the costs to remediate it may exceed the value of the property. If the borrower defaults on the loan, it is difficult for the bank to recover its loan. Because of this, it is difficult to find buyers for such properties. If an owner has no other property to use as collateral, he or she is unlikely to obtain a conventional loan to pay for the removal of USTs. However, there are some non-profit community development corporations that will provide a loan to remove USTs based on the owner's credit history and other factors. This is because the non-profit's goal is to support redevelopment in low-income neighborhoods. To obtain a referral to a community development corporation in your area, check with the California Community Economic Development Association. Also, the California State Department of Community Services can provide the name of an economic development agency that can refer you to a nonprofit organization that makes loans to small businesses. A list of agencies is available on their web site. Contact information on these organizations can be found in Appendix A.

Insurance Policies Sometimes it is possible to receive payment through a business liability insurance policy held by a former owner of the site. Prior to approximately 1972, most general liability insurance had no exclusions related to pollution. After that, some policies had some exclusions. After 1986, most policies had total exclusions for pollution related claims. At the same time, pollution insurance began to develop as a separate product although few UST owners obtained it. In the 1990’s federal law began to phase in a requirement that UST obtain pollution insurance. Since 1998, all UST have been required to have pollution insurance. It is possible to hire the services of an insurance archeologist who searches for old insurance policies that can be used to cover the cost of contamination cleanup. The City’s Brownfields Program has not tried this strategy but has heard that the cost to retain the expert can be cost effective on larger sites. Appendix A lists web sites with more information on insurance archeology.

Responsible Parties Sites with owners who have the ability to address contamination but refuse to do so can be dealt with through enforcement actions by the appropriate agency ranging from the local UST Guide To Addressing Former Gas Station Sites

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regulator to the RWQCB, DTSC, or occasionally through the USEPA. For cities that cannot undertake these actions, the EAR Account (see above) may be a beneficial resource. For sites that are in Redevelopment Areas, the Polanco Act can be used to gain access and force recalcitrant owners to pay. Chapter 6 provides more information on the Polanco Act.


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W

Chapter 6 Gaining Site Access

hen attempting to redevelop abandoned and contaminated properties, one of the most difficult challenges can be gaining legal access to the property. Without permission of the owner, a government agency cannot legally enter the site, conduct testing, or remove USTs. For example, here is a typical situation: A city identifies a former gas station site that appears to have USTs in place. It is vacant or occupied by someone who does not have permission to be there. The owner has not paid taxes in years but the county has not been able to sell the property. The owner of record has not been located. If the site has contamination, it may be eligible for EAR Account Funding but in order to test for contamination, the city would need to get on the site. How does the city get access?

By Permission of the Owner If the owner can be found, he or she may choose to grant access rights. An attorney should draw up an agreement between the owner and the agency to grant the agency the right to enter the property to take specific actions. Owners should be encouraged to seek their own legal counsel if they are able to do so. If they are not able to obtain legal representation, the city should attempt to design an access agreement that protects their rights as well as the city’s.

Polanco Act If a site is in a California redevelopment agency designated redevelopment area, the redevelopment agency can get access to property for which it has a redevelopment plan through a state law known as the Polanco Act (California Health and Safety Code 33459 - 33459.8). This law provides a procedure by which a redevelopment agency can order responsible parties to perform needed actions such as testing and cleaning up contamination. If the owner (or other responsible party) does not cooperate, the redevelopment agency can test and remediate the property itself or through a contractor and seek cost recovery and attorney's fees thorough a civil action. The redevelopment agency can also require the responsible parties to provide environmental information that they may possess. These actions can be taken on property owned by the redevelopment agency or on property owned by others. The cleanup plan must be approved by the applicable state agency such as the Regional Water Quality Control Board or Department of Toxic Substances Control. For properties on which the Polanco Act is used, the redevelopment agency and any future owners (but not persons responsible for the contamination) receive immunity for liability for the contamination. The Polanco Act process requires the assistance of an attorney knowledgeable about using this mechanism and the process can require substantial legal assistance. However the law is a powerful mechanism to bring about remediation and redevelopment of contaminated properties.


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California Land Environmental Restoration and Reuse Act of 2001 (CLERRA) In 2001, the California Legislature passed SB 32 also known as the California Land Environmental Restoration and Reuse Act of 2001 which established a procedure through which municipal governments to access the same powers granted by the Polanco Act for use in geographic areas not in redevelopment areas. However, the powers can only be used on very small sites that are vacant. Each city or county must pass an ordinance implementing the legislation and designating an implementing agency and geographic areas that will be included. The notice and public participation aspects are also extensive but in certain circumstances, this law may be the best way to gain access to abandoned properties.

Bankruptcy Judgment If the bankruptcy is active, creditors are trying to gain access to assets of the debtor. It may be possible for the bankruptcy judge to grant the city access to the site to conduct investigations and remediation that would enhance the value of the property so that it could be sold or transferred to pay off debts of the debtor. An attorney would probably be needed to help sort out bankruptcy issues for a particular property. Perhaps creditors could fund a search for an insurance policy that covered the site. See paragraph on Insurance in Chapter 5.

Court Order Under certain circumstances it is possible for a governmental agency to get a court order to enter a site to correct a danger to public health. Most abandoned gas station sites do not present a hazard to public health sufficient to obtain such an order. The City of Los Angeles has been able to get a court order to enter and test potentially contaminated property that the City is considering purchasing for a public use under authority of eminent domain. Redevelopment agencies also have certain authorities to enter properties they are considering purchasing. This is a complex area of law, utilization of which will require assistance of an expert.

Eminent Domain If the agency is planning to take ownership of the property through an eminent domain process, it is possible to ask the court to approve access to the property to assess the level of contamination because it would be necessary to determine the value of the property. Determining the value of property is a normal part of such a procedure. Redevelopment agencies and the city or county agency that acquires property for public use are familiar with this process. In the City of Los Angeles, this is General Services Department.


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Chapter 7 Putting It All Together This chapter is directed primarily at local or state government agency personnel working to bring former gas station sites into compliance.

Each Site is Different The primary characteristic that non-compliant former gas station sites have in common is that they are all different. Each site represents the personal story of its owners, former owners, and their financial ability (or lack of ability) to pay costs of UST removal and remediation. In many cases, owners were not aware of environmental regulations when they acquired the sites. Many sites were inherited, left to them by well-meaning relatives who were themselves unaware of the liabilities involved. We have found that there is no formula that can be applied to these sites. Instead, each one must be evaluated individually, keeping in mind the sources of funding that may be available given the circumstances of each case. Two primary issues are paramount – 1) Funding and 2) Site Access. Strategies to address funding and site access are discussed in detail in other chapters. This chapter walks you though the steps of evaluating a site to demonstrate how various strategies can be used.

Sites Eligible for the State UST Fund The first goal on most sites where USTs are no longer being used is to have them removed. If the owner can pay to have this done, he or she should do so. Following UST removal, if contamination is identified, the owner can be assisted in obtaining reimbursement for cleanup expenses from the State UST Fund. Since this is a reimbursement program, remediation expenses need to paid up front. If the owner does not have the funds to do so, some contractors will forgo payment until the UST Fund payment is received. This is possible because the UST Fund will provide pre-approval for expenses. Once pre-approval is received, the owner and contractor know that the reimbursement will be paid. Otherwise a loan may be needed. Chapter 4 and Appendix E have more detailed information on the UST Fund. Appendix A gives additional sources of information on this Fund. To be eligible for the UST Fund, the owner must have cooperated with enforcement officials and the site must be in compliance, including UST removal. If the owner is absent, not cooperative, or financially unable to address contamination, utilizing the EAR Account should be considered.

Recalcitrant and Absent Owners If the site owner is unable or unwilling to address contamination, Emergency, Abandoned Recalcitrant Account (EAR Account) should be considered. The California Water Resources Control Board makes funds available to address such sites. EAR Account funds can be requested by a UST regulating agency for qualifying sites where contamination is indicated. These funds can be requested each year by nominating a site or sites to the local Regional Water


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Quality Control Board in January or February. The EAR Account is described in detail in Chapter 4 of this Guide and Appendix A has contact information. On many of these sites, an agency may know that a UST is present but testing is required to determine whether or not it has leaked and caused contamination. Most likely the owner cannot or will not provide this testing. In this case, CDBG funds may be used for this purpose if the site is located in a CDBG eligible census tract and the project will correct blighted conditions. Additionally, if the owner will not grant site access, obtaining legal access can be difficult. A summary of methods for obtaining site access is located in Chapter 6.

If No Contamination is Found If tests are conducted and no contamination is found but the owner lacks funds to remove the tanks, the environmental threat of leaving the USTs alone is not great. However since such properties cannot easily be sold, they often end up blighted. Therefore, CDBG funds can be used to remove the UST. Other potential strategies are: 1) funding for tank removal could be loaned to the owner to be paid back when the property is sold; 2) an agency could conduct the tank removal and place a lien on the property to be repaid when ownership changes; 3) the information gained from a site investigation can be made available to encourage someone to purchase the property at a reduced price and then remove the tanks; 4) occasionally the regulating agency may allow the UST to be filled with an inert substance and abandoned in place. See Appendix B for information on legal requirements. At this writing, we are considering adopting some of these strategies. If any other jurisdictions have experience with these or other strategies, we request they share their experience with us. We plan to post such information as a further appendix to this publication.

Government Taking Ownership If an agency desires to acquire the site for a public use, other strategies can be utilized. Note that government ownership will disqualify the site from EAR Account funding as the government agency will become the responsible party. If ownership is pursued, the agency and owner can cooperate in accessing funds from State UST Fund either before the purchase or afterwards. Accomplishing this is complex, so consult with an UST Fund specialist and an attorney before undertaking this approach. Where a cooperative approach is not feasible, a jurisdiction can undertake condemnation action against the owner. The law requires that the jurisdiction pay fair market value for the property, minus the cost of remediation. In consideration of this, several approaches can be taken. If the remediation can be expected to cost less than the market value of the property, the jurisdiction can purchase the property for its market value minus the cost to remediate. If remediation will cost more than the market value, the jurisdiction may be able to obtain ownership through eminent domain at no cost and pay for the cleanup.


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Sites in Designated Redevelopment Areas If the site is located in a designated redevelopment area, there are mechanisms such as the Polanco Act held by Redevelopment Agencies in California that are especially useful in forcing removal of USTs and contamination resulting from them. It is hoped that this publication will assist redevelopment officials in planning how to combine their normal operating procedures with legal and financial methods specific to UST properties in order to redevelop these difficult sites. The Polanco Act is discussed in Chapter 6.

Sites Not in Designated Redevelopment Areas If the site is small and vacant, it may be addressed under provisions of a new California law, SB 32. This law gives local jurisdictions the same powers of the Polanco Act but the power can be used in non-redevelopment areas. This law is discussed in more detail in Chapter 6 and Appendix F.

Getting Through the Process Addressing a particular site will most likely utilize more than one of the strategies described in this Guide. Activities such as enforcement, funding, and site access will be addressed simultaneously at various points in the process. Dealing with uncooperative owners entails substantial time and legal expense. Unexpected events can and do occur. The City of Los Angeles Brownfields Program experience with former gas stations has been one of the most challenging we have faced. It is hoped that this Guide will make it easier for others.


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Appendix A Information Resources US ENVIRONMENTAL PROTECTION AGENCY US EPA Region 9 Underground Storage Tank Program 75 Hawthorne Street San Francisco, CA 94105 Phone: 415-972-3368 Website: http://www.epa.gov/region09/waste/ust/index.html US EPA Underground Storage Tank Program U.S. EPA/OSWER/OUST, 1200 Pennsylvania Avenue, N. W. Mailcode: 5401G, Washington, DC 20460 Phone: 703-603-9900 Fax: 703-603-0175 or 703-603-9163 Website: http://www.epa.gov/swerust1/overview.htm

CALIFORNIA STATE FUNDING & INFORMATION SOURCES California Emergency, Abandoned, Recalcitrant (EAR) Account State Water Resources Control Board, Division of Clean Water Programs 1001 “I” St. PO Box 944212, Sacramento, CA 94244 Contact: Jennifer White 916-341-5716 [email protected] Website: None California Underground Storage Tank Cleanup Fund California Water Resources Control Board, Division of Clean Water Programs, State Underground Storage Tank Cleanup Fund 1001 I St. PO Box 944212, Sacramento ,CA 94244 Website: http://www.swrcb.ca.gov/cwphome/ustcf/fundhome.htm Click "download" for guides and forms related to the Fund.

INFORMATION SOURCES FROM LOS ANGELES CITY City of Los Angeles Brownfields Program / Environmental Affairs Department 200 N. Spring St. Room 1905 Los Angeles, CA 90012 Phone: (213) 978-0871 Website: http://www.lacity.org/ead/labf/ LA City Building Permit Records Los Angeles City Building and Safety Department Building and Safety Records Section 201 N. Figueroa St., Los Angeles, CA 90025 Construction Services Center, Room 460, Counter M for property description


Appendix A - 1

3rd Floor for Building Records Also: Building and Safety Records Section 14425 Erwin Street Mall, Van Nuys, CA 91401 Phone: (888) 524-2845 Website: http://www.lacity.org/LADBS/index.htm Underground Tank Permit Records for Properties within City of Los Angeles Los Angeles City Fire Department City Hall East 201 N. Main St. 8th Floor, Los Angeles, CA 90012 (Records are filed by address) Phone: (213) 485-7545 Website: http://www.lafd.org/prevention/ For permits issued prior to 1998 also check LA City Department of Finance City Hall 200 N. Main St., Room 100 Los Angeles CA 90012 (Ask for a records search for USTs. Records are searched by address)

PROPERTY OWNERSHIP RECORDS Los Angeles County Registrar-Recorder/County Clerk 12400 Imperial Highway, 2nd floor, Norwalk, CA 90650 Official records of deeds, change of ownership, liens, etc. Website: http://regrec.co.la.ca.us/ Los Angeles City Clerk Land Records Division 201 N. Figueroa St. Room 730, Los Angeles, CA 90012 Unofficial records of deeds & change ownership. Official City property boundaries. Website: http://www.lacity.org/CLK/index.htm

PROPERTY TAX STATUS INFORMATION Los Angeles County Tax Assessor Website has a Property Assessment Information Module with addresses and APN for each property. Website: http://assessor.co.la.ca.us/ County Treasurer and Tax Collector 225 N. Hill St. Los Angeles 90051 Website has module with tax delinquent properties and properties eligible for auction. Phone: (213) 974-2474 Web site: http://ttax.co.la.ca.us/main.htm


Appendix A - 2

Neighborhood Knowledge Los Angeles (NKLA) GIS Tool for identifying properties that are tax delinquent or have liens on them. Web site: http://nkla.sppsr.ucla.edu Tax Defaulted Property Collection Guide California State Controller Guide to the Sale of Tax-Defaulted Property Volume 1: Public Auction, Volume II: Sealed Bid Sale, Volume III: Agreement Sale, January, 2001 Phone: 916-323-2351 Website: http://www/sco/ca/gov (Tax Information - Property Tax Collection Standards and Procedures Main Page - Tax Sale Guides) e-mail: [email protected]

PRIVATE SOURCES OF INFORMATION Community Development Corporations California Community Economic Development Association Southern California Office 1541 Wilshire Blvd. #407, Los Angeles, CA 90017 Phone: 213/353-1676 Website: http://www.cceda.com; e-mail: [email protected] Northern California Office 1430 Franklin St. #101, Oakland, CA 94612 Phone: 510/251-8065 e-mail: [email protected] Community Development Agencies California Department of Community Services and Development PO 1947, Sacramento, CA 95814 Phone: 916/341-4200 Small business liaison 916/341-4200 Website: http://www.csd.ca.gov/ Gas Station Programs in Various States Northeast Midwest Institute & National Association of Local Government Environmental Professionals (NALGEP), Recycling America's Gas Stations: The Value and Promise of Revitalizing Petroleum Contaminated Properties, 2002 Website: http://www.nemw.org Phone: 202/544-5200


Appendix A - 3

WEB SITES Organization State Web Sites California State Legislature California State Codes California State Controller California EPA

Information Available Current & past bills including SB 32 (2001-2002 Session) Polanco Act, SB 32 Procedures for disposing of tax delinquent properties Text of the Polanco Act and information on SB 32

Website Address http://www.leginfo/bilinfo.html http://www.leginfo/calaw.html http://www/scp/ca/gov http://www.calepa.ca.gov/Brownfields/

Calif. Water Resources Control Board

UST Fund Program documents

http://www.swrcb.ca.gov/cwphome/ustcf/f undhome.htm

Calif. Dept. of Community Services and Development

Referrals to local economic development agencies that can refer to non-profit organizations making small business loans

http://www.csd.ca.gov/

General Brownfields Information Property information

http://www.lacity.org/ead/labf.htm http://lacity.org/lacity197.htm

Building Permit Records

http://www.lacity.org/LADBS/index.htm

UST permits

http://www.lafd.org/prevention/

Deeds, chg of ownership, liens, etc.

http://regrec.co.la.ca.us/

LA City Web Sites Environmental Affairs Dept. i-map LA & Navigate LA LA City Building & Safety Department LA City Fire Department L.A. County Web Sites Los Angeles County RegistrarRecorder/County Clerk Los Angeles County Treasurer and Tax Collector Los Angeles County Tax Assessor US Government Web Sites

GIS-based tool for identifying tax delinquent properties in LA county Property Assessments, module with addresses & APN for each property.

US EPA

Grants available from US EPA

US EPA Office of Underground Storage Tanks

Federal UST regulations and UST programs Overview of the Federal UST Program Flyer on closing USTs

US EPA Office of Underground Storage Tanks US EPA Region IX UST Program US Dept. Housing & Urban Development – CDBG Program Other Web Sites Calif. Community Economic Development Association Foley Lardner (Law Firm) NKLA - Neighborhood Knowledge Los Angeles Brownfields 2002 Web Site Daehnke & Cruz Northeast Midwest Institute

http://ttax.co.la.ca.us/main.htm http://assessor.co.la.ca.us/DataMaps/pais.a sp www.epa.gov/brownfields . Click on "money matters" http://www.epa.gov/OUST/aboutust.htm www.epa.gov/swerust1/overview.htm www.epa.gov/swerst1/pubs.clo.pdf

Region IX UST Program

http://www.epa.gov/region09/waste/ust/index.h tml

CDBG Program Information

http://www.hud.gov/offices/cpd/communitydev elopment/programs/cdbg.cfm

Non-profit organizations making small business loans Article on the Polanco Act GIS based tool for identifying tax delinquent properties and code violations Information on Insurance Archeology Information on Polanco Act Publications: “Recycling America’s Gas Stations”


www.cceda.com www.foleylardner.com http://nkla.sppsr.ucla.edu http://www.brownfields2001.org/proceedi ngs-old/4-19h.pdf http://ca-redevelopment.org/Polanco.html www.nemw.org/recyclegas_stations.pdf

Appendix A - 4

Appendix B Federal Underground Storage Tank Program Overview 1

T

he United States Environmental Protection Agency (US EPA) administers the Underground Storage Tank (UST) program through its Office of Underground Storage Tanks (OUST). Specifically, OUST has the responsibility for overseeing the Resource Conservation and Recovery Act (RCRA) Subtitle I program regarding USTs. OUST can also be expected to take the lead in the implementation of the petroleum cleanup portions of the Brownfields Revitalization Act. OUST provides technical and administrative support to US EPA’s regional, state, and territorial regulatory programs. Currently, some 85 percent of the funds that Congress allocates to OUST go directly to the states and tribes. Under the Brownfields Revitalization Act, passed in January 2002, US EPA will provide funding directly to states, local governments, and non-profit organization for petroleum site assessments and cleanups. Most OUST programs are administered through one of the ten US EPA regional offices, so your first step should be to contact the UST office in your region. California is in Region IX. The Region IX UST office web page can be found in Appendix A.

Establishment of the UST Program OUST was created in 1985 in response to a congressional mandate to regulate UST activities nationally. Subtitle I was added to RCRA through the 1984 Hazardous and Solid Waste Amendments (HSWA) to provide federal funds for assessments and cleanups to address petroleum releases from UST systems. In 1986 Congress amended Subtitle I to establish the Leaking Underground Storage Tank (LUST) trust fund, and detail financial responsibility requirements for system owners and operators.

Definitions and Scope of the UST Challenge An UST system is a tank and any underground piping connected to it with at least 10 percent of its combined volume underground. The vast majority of USTs store petroleum products at retail establishments, such as at stations, petroleum refining facilities, and in tanks holding heating oil for homes and offices. Federal UST regulations apply to UST systems storing either petroleum or certain hazardous, “regulated” substances, as defined under CERCLA § 101 (14). However, heating oil USTs for on-site uses are specifically exempted from federal regulation.

1

Based on “Recycling America’s Gas Stations: The Value and promise of Revitalizing Petroleum Contaminated Properties” Published by the Northeast-Midwest Institute and the National Association of Local Government Environmental Officials 3/25/02 http://www.nemw.org/recyclegas_stations.pdf


Appendix B - 1

As of 2002, US EPA estimated that some 2 million federally regulated USTs were buried at over 269,000 sites throughout the United States. Nearly all contain petroleum. Approximately 30,000 releases are reported each year. Until the mid-1980s, most USTs were made of bare steel, which is likely to corrode over time and leak. Faulty installation or inadequate operating and maintenance procedures can also cause leaks. The greatest potential hazard from a leaking tank is that substances can contaminate soil and groundwater. The latter is especially serious, since groundwater is the source of drinking water to nearly half of the nation’s residents.

Regulatory Requirements States play a central role in UST program administration and work with local governments to oversee UST activities. US EPA can approve state programs if they meet certain requirements regarding performance, enforcement, and scope of tanks covered. Once approved, states take the lead role in program enforcement; thus, owners and operators need only comply with their state regulations. The State of California has a program administered through the State Water Resources Control Board, the Regional Water Resource Control Boards, and local government agencies. This program is not US EPA approved although State officials do cooperate with US EPA to enforce both Federal and State regulations. Key UST requirements include the following: NOTIFICATION — Owners and operators of tanks that were in the ground on or after May 8, 1986 were required to notify state or local officials of the tank’s existence within 30 days of operation, unless the tank was taken out of operation on or before January 1, 1974. States or delegated local agencies now must maintain a registry of all currently operating USTs. TECHNICAL — UST technical requirements (set forth in 40 CFR Part 280) govern design; operation and installation; release detection; release reporting investigation and confirmation; corrective action; closure; and financial responsibility. All USTs and piping in current operation must meet the following requirements • Automatic leak detection --The tank must have an electronic system that signal the operator if it leaks. • Corrosion protection – Bare steel is prohibited. Steel tanks must be protected from corrosion through a non-corrosive coating or a “cathodic protection system.” Nonsteel tanks must be made of non-corroding material, such as fiberglass. • Overfill protection – The tank must have an alarm or other system to prevent an environmental release due to overfilling the tank. • Spill protection – The tanks fillport must have a containment system to prevent an environmental release due to careless filling operations. Any regulated UST system that did not meet these requirements was required to be properly closed by December 22, 1998. Proper closure means: 1) Either a) Completely removing the tank, OR b) Cleaning it out and filling it with an inert substance such as sand or concrete Guide to Addressing Former Gas Station Sites

Appendix B - 2

AND, 2) Performing an assessment to determine if the tank contents have been released, and 3) If necessary, performing a corrective action under regulatory oversight. Note that even if these requirements are met, some contamination could remain, complicating efforts at revitalization. Guidance documents on Federal UST requirements are available at http://www.epa.gov/oust. States may add their own requirements over and above federal regulation. California added the requirement that all tanks and piping in current use have “secondary containment” (i.e have a double wall or be placed in a vault). California also allows local agencies to add additional requirements. FINANCIAL RESPONSIBILITY — Owners and operators must demonstrate they have the financial resources to pay for corrective action (i.e., control and cleanup of releases), as well as compensate third parties for bodily injury and property damages stemming from leaking tanks. UST operators who sell a small enough quantity of petroleum product to qualify as “small marketers” must have at least $500,000 in coverage and larger marketers at least $1,000,000. This requirement can be followed by obtaining insurance and surety bonds. In addition, many states have “financial assurance funds” to cover cleanup and liability costs. California’s fund is operated by the California Water Resources Control Board. COST RECOVERY — Federal UST regulations require that efforts be made to recover petroleum site cleanup costs from the responsible owners or operators of the site before public funding can be used. While this “polluter pays” principle is appropriate, in many cases the cost recovery requirement has hindered states and localities from addressing blighted sites where the responsible parties are difficult to find, recalcitrant, or unable to contribute significantly to cost recovery. LUST TRUST FUND — Capitalized through various fuel taxes, the Leaking Underground Storage Tank (LUST) Trust Fund has a balance of more than $1.5 billion, and collects hundreds of millions of dollars in fees and interest each year. Congress has allocated approximately $70 million annually in Trust Fund monies toward program implementation in recent years. Such Trust Fund resources can pay for: • • •

corrective action assessments, cleanups, or monitoring; cleanup at sites where the owner and operator is unknown, unwilling, or unable to respond, or at sites that require emergency action; administrative activities for US EPA, state, and tribal program implementation


Appendix B - 3

Appendix C – Example of a Brownfields Site Information Report Los Angeles Brownfields Program

Lula Washington Dance Theater

General Information Ownership and Tenancy

3773 S. Crenshaw Boulevard 900016; also 3761, 3767, 3775 Lula Washington Dance Theater, Vacant

Developer

Same as above

Size (Acres)

.54

Current Use/s

Vacant

Recent Use/s

Transportation services company

Neighborhood Uses/s Redevelopment Area Zoning/ Planning Empowerment Zone, State Enterprise Zone

Commercial corridor, residential adjacent

APN/s

5045-018-035, 036, 043

Address/Intersection

Shopping Center

COLISEUM ST

#

CRENSHAW BLVD

8, Councilmember Parks

S VICTORIA AV

Council District

N Pontiac Dealers (Closed)

Offices

Fast Food

Yes, Crenshaw [Q]C2-1, West Adams-Baldwin Park-Leimert Park No, Yes (Mid-Alameda)

BROWNFIELD SITE INFORMATION REPORT (BSIR)

Brownfield Site

Residential

Commercial

Parking over Ö

Appendix C – Example of a Brownfields Site Information Report Lula Washington Dance Theater Los Angeles Brownfields Program Environmental Information Current regulatory actions

None.

Prior regulatory actions

LAFD letter requesting further investigations. Additional BF Program assistance has been made available as part of lawsuit settlement.

Documents available

Site photographs. USEPA grant application.

Identified environmental concerns Prior uses of potential concern

Actions identified and costs ($)

UST removed in 1995, contamination identified but no MTBE. Possible additional UST. Hydraulic lift, 3 above ground tanks. Transportation services company—Existing auto bay with hydraulic lifts and 2 former USTs A Phase II site assessment will be provided along with recommendations for remedial action. Federal USTFields grant funds will be partially fund these efforts. BF Program is also advising owner on how to incorporate other energy efficiency and sustainable design features as possible.

CRA Project

k

R AN C H O C IE N E G A S P O R TS C E N T E R P A R K

k

RODEO R D

CRENSHAW BLVD

k W J EF F E R S O N B L V D

LE S LIE N SH A W P A RK

Lu la W a s h in g to n D a n c e T h e at e r

k k k k

W M A R T IN LU TH E R K IN G J R B LV D Sa n t a B a rb a ra P la za

k

k k

N

k

Reuse Proposals Proposed City projects

Owner undertaking development of dance studio and possible arts center.

Other proposed projects

Development potential for former auto dealership site across street.

Other economic development information

The Studio received a $200,000 U.S. EPA cleanup grant in 2003. EAD staff are assisting with the workplan and processing of the grant. Updated: July 17, 2003 For more information, contact: (213) 978-0871.


Appendix C – Example of a Brownfields Site Information Report Los Angeles Brownfields Program

D D VV LL BB W W AA H SS N N EE R C C

E VV A A II R R O O TT C C I VV

LISEUM LISEUMST ST

E VV A AA II R R O O TT C C II VV

COLISEUM ST

COLISEUM ST

COLISEUM

45

03760 03766

44

1 2

03770

03761 03767

03773 43 3

03776

03777 42

D D VV LL BB W W AA H H SS N EE R R C C



4

03782

03781 41

5

03783 03791

0 3786 40

6

Updated July 17, 2003 For more information, contact: (213) 978-0871.


Appendix D Criteria for Selecting a UST Removal Contractor 1. Does the Contractor hold all appropriate licenses? All UST contractors must be appropriately licensed with the State of California. Contractors must hold a General Contractor “A” license with hazardous materials certificate. The contractor should also have other licenses that are essential to performing the work, including: •

Cal-OSHA1 Permit (requires contractor to follow safety standards)

•

SCAQMD2 Permit for Rule 1166 (requires contractor to follow air quality protection protocols)

Make sure the contractor has all appropriate licenses and that they have not expired.

2. Does the Contractor have a Registered Geologist or Professional Engineer for the project? The Los Angeles Fire Department (LAFD) requires that a certified professional, either a Registered Geologist (RG) or Professional Engineer (PE), supervise the UST closure and sampling process. The RG or PE must also sign and stamp the final closure report for submittal to LAFD. Find out who the registered professional is. Get their certification number and make sure their certification is current. The validity of a license can be checked through the Contractor’s State License Board. You can check online at: http://www.cslb.ca.gov/contractors/index.html, then look under the heading “License Status Check.” There you can check by company name, personnel name, or license number. Or, you can also call the automated service at 1-800-321CSLB. Any complaints or lawsuits filed against the contractor are listed online and on the automated telephone service. If you need to speak with a representative you may call 916-255-3900.

3. How much experience does the Contractor have removing USTs in the City of Los Angeles and with Los Angeles Fire Department Underground Tank Enforcement Unit (LAFD)? Find out how long the contractor has been in business. Ask for examples of projects and references for projects that the contractor has completed within the City of Los Angeles. You may also wish to check with the LAFD regarding the contractor’s reputation.

1 2

California Occupational Health and Safety Administration. South Coast Air Quality Management District


Appendix D - 1

4. Will the Contractor be responsible for obtaining all required permits? A contractor’s cost estimate should include all permitting for the UST closure. A UST closure permit is required from the LAFD and a grading permit is required from the Los Angeles Department of Building and Safety. However, a contractor’s cost estimate will generally not cover tank registration fees or the SCAQMD 1166 permit.

5. Does the Contractor’s cost estimate cover the standard UST removal components? A contractor’s cost estimate should include all labor, materials and equipment for performing the UST closure in accordance with state and local regulations. Make sure that that the contractor’s bid includes the following basic elements: •

Permits;

•

Excavation equipment (backhoe, excavator, and/or crane) to dig, expose, and remove the UST(s), piping, and dispensing system;

•

Pressure washer and vacuum truck for cleaning and pumping out UST contents (liquids, sludges, etc.);

•

Degassing system to remove gasoline vapors (for gasoline USTs only);

•

Equipment to backfill excavation, which may include backhoe, compaction wheel, etc. Clean import backfill may be needed to fill in the void created by the UST;

•

Surface re-paving (asphalt or concrete);

•

Closure report.

Atypical or unforeseen site conditions may cause the costs of UST closure to increase. Examples include: •

If the UST is buried deep or is set on a concrete pad, more sophisticated construction equipment may be required;

•

If the UST is immersed beneath a shallow groundwater table, dewatering and/or special backfill material may be required;

•

If the UST is beneath a building structure or in an area of restricted access, demolition may be needed, or the UST may need to be abandoned in-place;

•

If active utilities are near the UST, utility relocation may be needed;

•

If contaminated soil is encountered during excavation, the soil may need to be hauled to a treatment /disposal facility.


Appendix D - 2

These cost items are usually not included in a Contractor’s cost proposal. However, a good contractor will attempt to identify unusual conditions ahead of time so that contingency costs can be incorporated in the proposal.

6. How does the Contractor plan to address contaminated soil, if encountered? If the soil excavated during the UST removal appears contaminated (based on odors or discoloration), the contractor should collect and analyze soil samples to “characterize” the soil (by comparing detected concentrations to disposal criteria). Contaminated soil should be transported to an appropriately permitted disposal or treatment facility. Ask for the name and contact information for the disposal facility that the contractor proposes to use. You should contact the LAFD to check the credibility of the disposal facility. For more information, call the City of Los Angeles Brownfields Program Gas Station Program Coordinator at (213) 978-0871. Use of the information contained on these pages is at the user’s sole risk. The user is responsible for ensuring by independent verification its accuracy or completeness. The information and data on these pages is subject to change without notice.


Appendix D - 3

Criteria for Selecting a Remediation Contractor 1. Does the Contractor hold all appropriate licenses? The Contractor should hold a valid California State Contractor’s License and any licenses necessary to operate the remediation equipment.

2. How can I check if the Contractor’s license is valid? You can check on the validity of a license through the Contractor’s State License Board. You can check online at: http://www.cslb.ca.gov/consumers/, then look under the heading “License Status Check.” There you can check by company name, personnel name, or license number. Or, you can also call the automated service at 1-800-321-CSLB. Any complaints or lawsuits filed against the contractor are listed online and on the automated telephone service. If you need to speak with a representative you may call 916-255-3900.

3. How much experience does the Contractor have in remediation in the City of Los Angeles and with the Los Angeles Regional Water Quality Control Board (LA-RWQCB) ? Find out how long the contractor has been in business. Ask for examples of projects that the contractor has completed within the City of Los Angeles. You may also wish to check with the LA-RWQCB regarding the contractor’s reputation.

4. What is included and not included in the Contractor’s cost estimate? A Contractor’s cost estimate should include all labor, materials, equipment and laboratory analysis for remediation. Make sure the Contractor’s bid includes the following basic elements: • • • • • •

Permits; Excavation equipment to dig, hold soil, drill, etc. Soil sampling and laboratory analysis; Equipment to backfill excavation; Surface re-paving; Final report


Appendix D - 4

5. How will the Contractor treat the waste? What methods will the contractor use to remediate the problem. There are many methods of remediation and the cost can vary greatly depending on the method used. Make sure to research your options and determine which will be the most cost effective.

6. Will the Contractor obtain all necessary permits? Make sure that the contractor’s proposal includes his responsibility to obtain all necessary permits.

7. Does the Contractor have experience in obtaining money for the client from the UST reimbursement fund? The UST reimbursement fund provides reimbursement for corrective action costs. The Contractor should be knowledgeable in the requirements for obtaining reimbursement from this fund and experience in obtaining access to the fund for the client.

8. How can I check the Contractor’s experience record? Ask for references and contact them. For more information, call the City of Los Angeles Brownfields Program Gas Station Program Coordinator at (213) 978-0871. Use of the information contained on these pages is at the user’s sole risk. The user is responsible for ensuring by independent verification its accuracy or completeness. The information and data on these pages is subject to change without notice.


Appendix D - 5

Appendix E Summary of Petroleum UST Cleanup Fund Regulations State of California State Water Resources Control Board Division of Financial Assistance In accordance with federal regulations, owners/operators of underground storage tanks (UST) are required to demonstrate through insurance coverage or other acceptable mechanisms that they can pay for for cleanups resulting from leaks that may occur from their leaking USTs. The State of California created a UST Cleanup Fund (Fund) to help UST owners/operators meet financial responsibility requirements and receive partial reimbursement for these cleanups. UST owners/operators who qualify for Cleanup Funds are deemed to have complied with the financial responsibility requirements.

Objective The Fund regulations are found in the California Code of Regulations (CCR) Title 23, Division 3, Chapter 18. The Fund is designed to allow eligible UST owners/operators to: 1) Comply with federal and state financial responsibility requirements regarding coverage of cleanup costs; 2) Obtain reimbursement for cleanup costs, incurred after January 1, 1988, resulting from an unauthorized release of petroleum; and 3) Obtain reimbursement for damages awarded to third parties (such as an adjacent property owner), which may include medical expenses, actual losses of wages or business income, actual expenses for remedial actions, and damages equal to the fair market value of any property rendered unsuitable for beneficial use. Third party compensation costs are costs for which a UST owner/operator is legally obligated to pay, whether or not the owner/operator receives reimbursement from the Fund, for bodily injury or property damage resulting from a release of petroleum from a UST. Compensation must be made pursuant to a court-approved settlement, a final judgment (other than a default judgment), or an arbitration award. Funds are disbursed only after costs are incurred and do not cover the removal, repair, retrofit or installation of USTs.


Appendix E – 1

Federal Financial Responsibility Requirements As stated in 40 Code of Federal Regulations (CFR), Section 280.90, Subpart H, Part 280, the U.S. EPA requires that UST owners/operators meet certain minimum financial responsibility requirements. The UST Cleanup Fund is designed as a mechanism to allow UST owners/operators to comply with the financial responsibility requirements up to $1,000,000. To use the Fund, the following requirements must be met: 1) Demonstrate financial responsibility for at least the following amounts: $0 for Priority Class A, $5,000 for Priority Class B and C, and $10,000 for Priority Class D. The reason for this financial responsibility is that when the claimant begins to receive reimbursement, a deductible will be applied for the appropriate amount in the claimant’s Priority Class. When applying, the claimant must submit proof of ability to pay the deductible. Priority Classes are discussed below. 2) Maintain eligibility to participate in the Fund. UST owners/operators that own 101 or more USTs are required to demonstrate their own financial responsibility for the amount above $1,000,000.

Eligibility Requirements To be eligible for the Fund, the following requirements must be met: 1) The claimant must be or have been the owner or operator of the UST which is the subject to the claim (federal and state governments are not eligible); 2) The tank must meet the state definition of a petroleum UST (hydraulic lift tanks, vaults, and farm tanks are not eligible); 3) The claimant must have been in compliance with applicable permit requirements to own / operate the UST; Waiver Criteria for above permit requirement – All must apply prior to submitting claim: 1. Claimant was unaware of permit requirements prior to 1/1/90 and there was no intent to avoid requirements 2. Claimant has complied with the financial responsibility requirements 3. Claimant must obtain and pay for all currently required permits. 4. Claimant must pay all due UST fees. (Applies if tank had product inside after 1/1/91) 5. For a claimant who is granted a waiver, the deductible is doubled.


Appendix E – 2

4)

An unauthorized petroleum release must have occurred and been reported to the responsible regulatory agency;

5)

The claimant must undertake necessary cleanup actions in accordance with state requirements.

Priority Classes Because claims for the Fund will exceed available funding for a number of years, the Fund utilizes a priority system, which is established by law, to first reimburse those claimants that are least able to pay the cleanup costs. Claims will be placed in one of four priority classes (A through D, from highest to lowest priority). 1) Priority Class A – Residential This class applies to (1) owners/operators of a tank which is located at the residence of a person on property used exclusively for residential purposes at the time of discovery of the release; or (2) owners/operators of a tank at a residence with a capacity of 1,100 gallons or less that contained heating oil. The UST must have been used exclusively for residential purposes. 2) Priority Class B – Small Businesses Local Governmental Entities Nonprofit Organizations The second class applies to a “small business” which is independently owned and operated and not dominant in its field of operations. The business cannot have gross annual receipts for the three years preceding its application to the Fund that exceeds the maximum receipts specified for that industry group by the State Office of Small and Minority Business (OSMB). Cities, counties, districts, and nonprofit organizations with a total annual revenue of less than $7 million are eligible for Priority Class B. 3) Priority Class C – Small Businesses Local Governmental Entities Nonprofit Organizations The third class applies to a business that employs fewer than 500 full-time and part-time employees, is independently owned and operated, and not dominant in its field of operations. Cities, counties, districts, and nonprofit organizations that exceed the annual revenue of $7 million, but have less than 500 full-time and part-time employees, are eligible for Priority Class C. 4) Priority Class D – All Other UST Owners and Operators


Appendix E – 3

Deductible All claimants are subject to a deductible which is based on the priority class. Where the claimant failed to meet the eligibility requirement with regard to permitting but has met the criteria for a waiver of such requirement, the deductible is double the amount otherwise applicable. See Eligibility Requirements, Section 3 for critera. Priority Class Class A Class B Class C Class D

Deductible $0 $5,000 $5,000 $10,000

Deductible with Permit Waiver $0 $10,000 $10,000 $20,000

Claims Processing and Three-Bid Requirement A claims application must first be provided in order for the Fund to determine reimbursement eligibility. If the claim is determined to be eligible for funding, it will be placed on the priority list in the appropriate priority class by the date the completed claim was received by the Fund. When a claim becomes reachable on the priority list and funding is available, a Letter of Commitment (LOC) is issued to the claimant. The LOC is the legal document used to obligate funds toward cleaning up a contaminated site. Issuance of a LOC does not guarantee that the costs claimed in the application are eligible or will be reimbursed by the Fund. After being issued a LOC, a claimant may submit a request for reimbursement of costs incurred to date. Claimants are required to obtain at least three bids or proposals for future work if they file a claim with the Fund. At a minimum, claimants should receive three bids for subsurface investigations and three bids for conducting corrective action. Where three bids have been obtained, the Fund will generally limit reimbursement to the lowest bid or proposal. The claimant may request the Fund to preapprove reimbursable costs prior to starting cleanup actions. If the proposed project activities are completed as presented for those preapproved costs, then reimbursement is virtually assured. If the costs requested exceed the preapproval amount, justification must be provided with the reimbusement request. The Fund will review the request to ensure compliance with regulatory agency directives and ensure that the costs are reasonable and necessary.


Appendix E – 4

Appeals Process There are three levels of appeals that may be taken by a claimant that disagrees with a Division staff decision. 1) The Fund Manager may be requested to review a decision rendered by Fund staff. A Fund Manager Decision is rendered within 30 days of the appeal request. 2) A claimant may appeal to the Division Chief for review of a Fund Manager Decision. A Final Division Decision is rendered within 30 days of the appeal request. 3) A claimant may petition the State Water Resources Control Board for review of the Final Division Decision. The petitioner may request a hearing with the Board to present an oral argument or to present new factual information not presented to the Division Chief.

State Water Resources Control Board Location and Phone Number State Water Resources Control Board Division of Financial Assistance UST Cleanup Fund Program 1001 I Street Sacramento, CA 95814 (916) 341-5700 Mailing Address State Water Resources Control Board Division of Financial Assistance UST Cleanup Fund Program P.O. Box 944212 Sacramento, CA 94244-2120 Web Site http://www.swrcb.ca.gov/cwphome/ustcf/index.html References 1. California Environmental Protection Agency, State Water Resources Control Board, Division of Clean Water Programs, Petroleum Underground Storage Tank Cleanup Fund Regulations, November 27, 2000.


Appendix E – 5

Appendix F Summary of the California Land Environmental Restoration and Reuse Act (SB 32, Escutia) Health and Safety Code Chapter 6.10, Div. 20, Sections 25401, 25402 & 57008, 57009, 57010 (This is a summary only and should not be relied upon as legal advice. )

Terms Local Agency - City agency designated by City Council to implement this act Oversight Agency - Either Department of Toxic Substances Control (DTSC) or Regional Water Quality Control Board (RWQCB) will oversee site investigation and remediation Owner - means owner or operator of contaminated or potentially contaminated site

Cal EPA Shall Establish Guideline for Selecting an Oversight Agency which Shall (Section 25401.2 (B))1 (1) Be completed by 4/1/02 (2) Specify address at Cal EPA to which local agency shall send Environmental Assessments (3) Include the provision that on or before the 10th of each month, SWRCB and DTSC will jointly review all Phase Is received by Cal EPA, select an oversight agency and refer site to that agency for review. (Sec. 25401.2 (d)) (4) Require oversight agency be either DTSC or RWQCB (5) Specify criteria for selection of oversight agency (6) Set guidelines for speedy transfer of oversight from one agency to another when indicated (7) Set conditions under which oversight of site may be delegated to and withdrawn from a local agency

Act applies to properties that are idle and smaller than 5 acres. Does NOT apply to the following: • Federal NPL or State Superfund sites • Past or present federal properties • Property currently owned by state, public agency, properties dedicated to public use by a public utility • Property acquired or proposed to be acquired for school site • Property which has a no-further-action determination • Property subject to an enforcement action or corrective action order • Properties in redevelopment areas • Contiguous properties of one ownership larger than 5 acres • Property with an active business with at least one full-time equivalent employee on annualized basis, excluding security personnel • Property occupied by family-owned business with no employees other than family members • Property in productive agriculture • Residential property with owner-occupied dwelling 1

These guidelines can now be found at http://www.calepa.ca.gov/Brownfields/documents/2002/Guidelines.pdf


Appendix F - 1

• • • •

Property for which owner or operator (within 60 days, following receipt of notice from local agency) requests designation of an oversight agency or enters into voluntary agreement with an oversight agency to commence and complete a site investigation Property subject of continuous expansion or improvement owned or operated by operating industrial or commercial activity Property that is the subject of a response or cleanup of an oil spill in coastal waters Property that is or was a solid waste facility

City Council Must Adopt an Implementation Ordinance that Does at Least the Following: (Section 25401.2 (a)) • “Designate a department, office or other agency of the city or county as the local agency responsible for implementing and enforcing this chapter.” • “Delineate the geographic areas of the city or county to which this chapter shall apply”. • Specify administrative or civil penalties that apply to a person who does not comply. • Require that the local implementing agency obtain the approval of its governing body before it initiates a remedial action under the act. • "Authorize the local agency to enter into an agreement" to provide oversight of remediation and related activities and to provide cost reimbursement to the implementing agency.

Process by which Local Agency Addresses a Property •

Local agency makes one or more of these findings (Section 25401.3): (a) Hazardous materials are or were used, handled, stored, treated, transported, or disposed of on the property (b) Current or former owners were engaged in activities commonly associated with use, handing, storage, treatment, transport or disposal of hazardous materials (3) Information from current or former owners, operators, employees or neighbors provide a reasonable basis for believing hazardous materials release may have occurred

•

Local agency issues a notice to owner requiring him/her to provide information to determine if a release has occurred or information relevant to preparation of Phase I or PEA. Section 25401.3 gives process by which City gives notice to owner who prepares Phase I, PEA, and Remedial Action Plan which is then submitted to oversight agency for approval. Notice periods apply at various stages in the process.

•

If the owner does not submit a Phase I or PEA on schedule, local agency issues a notice of noncompliance and that the local agency will undertake work in 30 days. (Starting with Section 25401.6)

•

If no response after 14 days, local agency prepares the environmental studies. Local agency may prepare a Phase I either itself or through a qualified professional. If Phase I recommends a PEA, owner shall reimburse local agency for costs of conducting Phase I.

•

Local agency submits Phase I to Cal EPA for determination of oversight agency

•

Oversight agency determines if work is adequate and what needs to be done next

•

If owner refuses to undertake investigation or remediation, or fails to meet schedule without good cause, local agency notifies owner that it will proceed in 30 days and charge owner for costs.


Appendix F - 2

Oversight agency issues written determination. If long term remediation is needed, financial assurance documentation is required. •

If local agency is handling work, it shall enter into an agreement with oversight agency and perform work as directed by oversight agency.

(Section 25402.1) Local agency shall inform the community by: (1) Mailing a fact sheet to organizations and individuals who have requested copies, contiguous property owner, agencies on site designation committee, owners and occupant within 500 feet of property boundary and all other interested parties (2) Publish public notice in area newspaper in English and other appropriate languages (3) Post notice on property (4) Mail notice to agencies on committee (5) For at least 45 days, provide access to interested persons access to review Phase I, PEA, site investigation, remedial action documents (6) For at least another 30 days, accept written comments to local and oversight agencies regarding adequacy of assessment, investigation, and remedial action. (7) Respond in writing to person who sent written comment and include in written record for property (8) Holding a community meeting to gather comments and prepare a summary of significant comments and responses in public record (9) These participation requirements are in addition to CEQA requirements •

If oversight agency closure prohibits some uses, local agency shall require owner to record a land use control. Conditional determination is valid so long as use confirms to land use control, if not, immunities do not apply

•

Local agency can pursue cost recovery under scope and standards the same as CERCLA. Action for cost recovery from owner shall begin within 3 years after completion of remedial action and with certain exceptions.

Immunities (Sections 25402.0 and 25402.1) Local agency is granted certain immunities if it conducts work according to certain oversight agency requirements, meets conditions of determination of completion with certain exceptions. Immunities extend to employee or agent of local agency and developer of property if certain criteria are met.

Screening Numbers

(Activities to be Carried out by State) 2

(Section 57008) Cal EPA in cooperation with DTSC, SWRCB, and the Office of Environmental Health Hazard Assessment shall publish a list of screening numbers of certain contaminants. Numbers are advisory numbers only, and cannot be used to determine no further action levels. Draft to be released by 3/1/04, final by 12/31/04 (Section 57009)

2

A task schedule for these activities and a brochure on this program can be found at http://www.calepa.ca.gov/Brownfields/SB32.htm


Appendix F - 3

Between 3/1/02 and 3/1/04, Cal EPA shall conduct a study to evaluate usefulness of pilot screening numbers in encouraging remediation at 25 pilot contaminated properties in study area and post findings on web sites of DTSC and RWQCB (Section 57010) Cal EPA shall before 1/1/03, publish and publish on the web a guide to assist the public, governmental officials, developers, and others to understand the factors that are taken into account and procedures followed in making site investigation and remediation decisions.


Appendix F - 4

Complete Guide - EnvironmentLA

Complete Guide - EnvironmentLA

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