State of Colorado Employment by snj62624

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									                   Reasonable Cost
                     Guidelines
                          September 19, 2008




C olorado Department of Labor & Employment, Division of Oil and Public Safety, Remediation Section
               Colorado’s Reimbursement
                        Program
 Number   of Facilities Covered: 4,441
 Number of Tanks Covered: 11,647

 Deductible: $10,000 ($25,000 for
  Third Party Claims)
 Significant Decrease in the
  Environmental Response Surcharge
  in 2012 (major source of fund
  revenue)
 C olorado Department of Labor & Employment, Division of Oil and Public Safety, Remediation Section
                                                         Claims
 Received:  17,429
 Processed: 16,128

 Annual Amount Paid: $33.4 million

 Total Paid: $325 million

 Estimated Processing Time (CO): 1.9
  months
 Average Processing Time (US): 3.25
  months
C olorado Department of Labor & Employment, Division of Oil and Public Safety, Remediation Section
             Comparison to Other States
8  States have no State Fund. All
  costs paid through insurance or by
  Owner/Operator
 24 States have sunset dates for their
  funds before 2010
 Several states (AZ, FL, MN, NV) have
  deductibles of 10-25% of total costs


 C olorado Department of Labor & Employment, Division of Oil and Public Safety, Remediation Section
Other States Flat Rate Deductibles
     California – up to $20,000
     Florida – up to $30,000
     Idaho – up to $100,000
     Illinois – $10,000 to $100,000
     Indiana - $20,000 to $35,000
     Maine – up to $97,500
     Montana – up to $17,500
     North Carolina - $20,000 to $75,000
     New Hampshire – up to $30,000
     Ohio – $11,000 to $55,000
     Rhode Island - $20,000
     South Carolina - $25,000
     Tennessee - $20,000
     Texas – up to $80,000
     Virginia – up to $1,000,000


    C olorado Department of Labor & Employment, Division of Oil and Public Safety, Remediation Section
    New Releases No Longer Eligible
 Alaska (6/30/1993)
 Arizona (6/30/2006)
 Florida (12/31/1998)
 Iowa (10/26/1990)
 Maryland (12/1998)
 Maine (10/1/1998 non-conforming sites)
 Michigan (6/29/1995)
 Texas (12/23/1998)
 West Virginia (9/30/2000)


 C olorado Department of Labor & Employment, Division of Oil and Public Safety, Remediation Section
       New Releases Losing Eligibility
 Kansas (7/1/2014)
 Maine {10/1/1998 (12/31/2010)}
 Minnesota (6/30/2012)
 Missouri (12/31/2010)
 North Dakota (7/31/2011)
 Nebraska (6/30/2012)
 New Jersey (6/30/2010)
 South Carolina (12/31/2026)
 Vermont (7/1/2009)


 C olorado Department of Labor & Employment, Division of Oil and Public Safety, Remediation Section
         RCG Philosophy/Rationale
Section 1, 2, and 3: Obtained quotes from 4-5 vendors
Section 4: Identified activities and estimated labor and equipment
  costs to complete. Allows 1-hour per well (initially allowed 45
  minutes per well)
Section 5: Looked at both increases to other State’s reimbursement
  rates and CPI data. Blended results. Added 1% for office
  supplies.
Section 6: Obtained quotes from 14 labs
Sections 8, 11, 13, 14: developed from quotes but most RCGs not
  set (obtain bids/submit backup) due to extreme variability
  between season, location, and other factors.
Section 9: Tie mileage to IRS mileage rate for dates of travel. Tie
  lodging and meals to GSA rate for date and location.
Section 10: Eliminate most of section (include in labor rates) –
  Historically office expenses account for 0.86% of labor cost.
  Increased labor costs by 1% over rates developed from CPI and
  other state rates
Section 12: Developed from daily rental rates and other state’s
  reimbursement rates
 C olorado Department of Labor & Employment, Division of Oil and Public Safety, Remediation Section
Issues Related to Increasing RCGs
 May Cause Delays in Reimbursement
 May Drive the Fund Into Insolvency




C olorado Department of Labor & Employment, Division of Oil and Public Safety, Remediation Section
Source of Revenue for State Fund
     Tank Registration And Annual Renewal Fees
     Civil Penalties
     Penalties On Delinquent Registration And
      Renewal Fees
     Environmental Response Surcharge
     Reimbursement Of Emergency Response Charges
      Once A Responsible Party Has Been Identified
     Moneys Appropriated To The Fund By The
      General Assembly
     Moneys Granted To The Department For
      Administration Of The UST Program By Federal
      Agencies
     Money From Bonds

    C olorado Department of Labor & Employment, Division of Oil and Public Safety, Remediation Section
  Environmental Response Surcharge
       (Based on Fund Balance)

                                                                                 Surcharge
          Fund Balance
                                                                            (per tank truckload)
          > $12 million                                                                               $0
      $6 - $12 million                                                                               $50
        $3 - $6 million                                                                              $75
         < $3 million                                                                                $100



C olorado Department of Labor & Employment, Division of Oil and Public Safety, Remediation Section
 Current Environmental Surcharge
 Environmental  Response Surcharge
  Has Been $100 since July 1, 2005
 Fund Balance was $2.8 million as of
  6/30/2008 (There were unpaid
  claims of $3.8 million for companies
  that were over the $3 million
  aggregate amount paid per State
  Fiscal Year 2007-2008)

 C olorado Department of Labor & Employment, Division of Oil and Public Safety, Remediation Section
                                            July 1, 2012
 If Fund Balance > $8 million, no
  surcharge will be imposed
 If Fund Balance < $8 million,
  surcharge of $25 per tank truckload
 Result: 0-25% of current revenue
  stream would pay the same
  percentage of cleanups


 C olorado Department of Labor & Employment, Division of Oil and Public Safety, Remediation Section
                             Possible Solutions To
                               Funding Issues
     No Change to Reasonable Costs guidelines
     Set new Reasonable Cost Guidelines that do not
      cover all the increase in costs (salary, fuel, etc.)
      since 2002
     Industry led change to Statute to allow higher
      Environmental Response Surcharge based on
      State Fund balance
     Industry led change to increase deductible and/or
      increase tank registration fees
     Limit time allowed to request reimbursement to
      ensure all relevant costs are properly
      encumbered in an appropriate timeframe.

    C olorado Department of Labor & Employment, Division of Oil and Public Safety, Remediation Section
                     Comments/Questions
All comments/questions should be
  provided in writing to the following
  email address:

                 RCG.Comments@state.co.us




 C olorado Department of Labor & Employment, Division of Oil and Public Safety, Remediation Section

								
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