You own a commercial property that currently has, or previously has had a leaking underground storage tank (LUST). Something about your situation is changing. Maybe you’re selling it, maybe your refinancing or maybe you just got a “nastygram” from the Illinois Environmental Protection Agency (IEPA) telling you you needed to address your open incident. You may have had a Phase I ESA and/or Phase II ESA performed and they found a tank.
You have two programs (potentially) to choose between. They represent the body of law that will regulate your contamination issue and affect how much your issue costs and how quickly you can put this issue in the rear view mirror.
Your two choices are between the Site Remediation Program (SRP) and the Leaking Underground Storage Tank (LUST) Program. But it’s not as easy as telling you about the differences between the two. The LUST program you need to qualify for, the SRP program you need to opt into. Let’s talk through your decision tree.
Did your property become contaminated from a storage tank that was underground?
No? Your only option is the SRP program.
Was the underground storage tank holding petroleum products such as gasoline, diesel, waste oil, Jet-A, aviation gas?
No? Your only option is the SRP program.
Was the underground storage tank holding fuel for sale to other people (retail sales)?
No? Your only option is the SRP program.
Was the volume of the tank more than 110 gallons?
No? Your only option is the SRP program.
Was your tank taken out of service before 1974?
Yes? Your only option is the SRP program.
At this point let’s assume you qualify for the LUST program because your tank was underground, held petroleum products in volume greater than 110 gallons, for retail sale and was still in retail operation after the last day of 1973. We need to further assume that you are the owner or operator of the tank.
The next question is do you want to be part of the LUST program or the SRP program?
There are considerations only you can value as the owner or operator of the tank. These considerations break down into which you find more valuable, your money or your time. As the old saying goes, time is money. In order to best explain it, I’ll start with the differences of the SRP Program.
SRP Program
Sometimes the SRP program is your only option. If you had a spill that was not from an underground tank, was not used for retail sales, did not contain petroleum, or was under 110 gallons you’ll have no choice but to enter into the SRP to remediate your property if you want a No Further Remediation (NFR) letter from the IEPA. In your mind, you should budget at least $20,000 – 30,000 and 1 year of time, to obtain a No Further Remediation Letter (NFR) which is the goal of going through either of these programs. If the project costs less money or takes less time, you should consider yourself lucky. The costs and timeframe are all dependent on the complexity of your Site and what is needed to investigate and/or remediate it.
All the costs in this program are yours to pay. You have to pay for the consultant, the laboratory samples, the drillers and even the project management time of the people at the State of Illinois. For your money, you’ll arrive at the NFR finish line much faster. When I say much faster, I mean years-and-years faster. The oldest open LUST incident in the IEPA database is from 1984. Vast numbers of projects are from the 1990’s and the 2000’s. If you have a loan or a sale of your property and you need it to close as soon as possible, you’ll want to be part of the SRP program.
LUST Program
The LUST program is essentially an insurance program paid by a fraction of a penny on every gallon of fuel pumped at a retail operation. If you qualify for the program, your costs are limited by your deductible which can be $5,000, $10,000, $15,000, $50,000 or $100,000 depending on factors like when your tank was taken out of service and when the “release” was called in by the Office of the State Fire Marshal (OSFM). As you can see by the deductible, sometimes it’s easier to option into the SRP program and pay the full costs of the cleanup than to stay in the LUST program.
More LUST Program Considerations
The State of Illinois is notoriously slow at paying their bills even though they have a cash flow-positive account (trust fund) with which to pay them. As a consultant, we’re happy to do the work but we have employees, drillers and laboratories to pay.
Old Model LUST Project Financing;
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- Consultant does the work
- Consultant submits the bills to IEPA
- State pays the operator of the tank
- Operator pays the consultant.
There were times in the state’s history when these bills took 2 years to get paid.
New Model LUST Project Financing;
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- Operator prepays to environmental consultant a retainer of $25,000
- Consultant performs the necessary work until the $25,000 runs out.
- Consultant submits the bills to the IEPA
- IEPA pays the owner / operator of the tank.
- Owner / operator of the tank pays the $25,000 to the consultant and a new round of work begins until the project is complete.
- The owner / operator keeps the last payment of $25,000 (is repaid the retainer)
This new model of financing projects lowers the risk of environmental consultants who perform this work. It allows them to take on more projects because they don’t have to “be the bank” for the State of Illinois or their clients and helps to make a cleaner Illinois faster than would otherwise be possible.
If you need help with your new release Leaking Underground Storage Tank, give A3 Environmental Consultants a call. We’ll work with the IEPA to get your environmental issue sorted out and behind you. If you have other current or future concerns regarding Leaking Underground Storage Tanks or the LUST Trust Fund, we’d love to talk with you, call us now! A3 Environmental Consultants can be reached at (630) 507-9002 or by email at Info@A3E.com.
