Changes Coming to DEP’s Petroleum Cleanup Program

To: Interested News Media

Re: Department Changes to the Petroleum Cleanup Program

The following is a brief  history of the Florida Department of Environmental Protection’s Petroleum Cleanup Program. Also included are steps DEP Secretary Herschel T. Vinyard Jr. and senior leadership are taking to fix a system that needs improving. The current payout model for cleaning leaking petroleum storange tanks has remained largely unchanged since it was created in 1996.

News media should direct questions to the DEP Press Office at 850-245-2112.

About the Bureau of Petroleum Storage Systems:

Since 1984, the State of Florida has been crafting rules, guidance documents and statutes to deal with petroleum storage tank contamination. From 1984 to now, trust funds and programs have been established to aid in this endeavor. For instance, in 1986, the Inland Protection Trust Fund was established by the Florida Legislature to pay for the cleanup of petroleum contaminated sites. The trust fund generates money from an excise tax per barrel of petroleum products produced or imported into the state.

The bureau’s mission has been to pre-approve the scope and costs of cleanup activities for all state-funded eligible sites. The goal is to clean up all known petroleum-contaminated sites eligible in one of the five legislative cleanup programs and ensure they are cleaned up according to Chapter 62-770, Florida Administrative Code.

In 1996, the Florida Legislature required risk-based corrective action at petroleum contamination sites. This considers risk to human health, public safety and the environment when determining whether alternative cleanup strategies can be used for more cost-effective cleanups. Each site is scored and ranked based on contamination and proximity to drinking water wells. Scoring determines priority for funding and funding is determined based on legislative appropriation.

There are currently five state-funded petroleum cleanup programs within the bureau:

Petroleum Cleanup Participation Program

(Section 376.3072, F.S.). Discharges eligible from: July 1, 1996 – December 31, 1998

 -5,145 potentially eligible discharges as of 6/2003. 497 are awaiting review.

 Innocent Victim Petroleum Storage System Restoration Program

(Section 376.30715, F.S.)

 -Program started 6/2005 – 122 applications have been received, 77 determined eligible. No cap on the amount of cleanup, no application end date.

 Petroleum Liability and Restoration Insurance Program

(Section 376.3071(13), F.S.). Discharges eligible from: January 1, 1988 – December 31, 1998

 -148 potentially eligible PLRIP discharges for the period of 1/1/1995 – 12/31/1998. $400,000 cap for 1/1/95-12/31/96 discharges. $300,000 cap for 1/1/97-12/31/98 discharges.

 Early Detection Incentive Program

(Section 376.3071(9),F.S.).  Discharges eligible from: July 1, 1986 – December 31, 1988

-6 eligible applications since 2005. No cap on the amount of cleanup for these sites.

 Abandoned Tank Restoration Program

(Section 376.305(6), F.S.). Discharges eligible from: June 1, 1990 – June 30, 1996

 -Latest eligible application completed 12/2004. No cap on the amount of cleanup. Application date is waived if financially unable to perform proper tank closure. No application end date for this program.

*Only the Innocent Victim Petroleum Storage System Restoration Program and Abandoned Tank Restoration Program are currently accepting new discharges.

Key statistics:

Cleanups completed by calendar year:

2013: 92 (as of Feb. 2013)

2012: 579

2011: 601

2010: 629

2009: 653

2008: 694

*Peak of 753 in 2002

Dollars spent by year:

FY 12/13: $98 million (as of March 2013)

FY 11/12: $120 million

FY 10/11: $109 million

FY 09/10: $115 million

FY: 08/09: $161 million

FY: 07/08: $167 million

*Peak of $181 million FY 06/07

Cleanups underway:

FY 12/13: 3,701 (as of Feb. 2013)

FY 11/12: 3,163

FY 10/11: 2,866

FY: 09/10: 2,588

FY: 08/09: 3,488

FY: 07/08: 3,957

*Peak of 4,700 in 05/06

Changes for improvement:

The Florida Department of Environmental Protection has been undergoing deliberate reviews of its divisions, districts and programs during the past two years in an effort to determine the effectiveness and efficiency of each area and to make improvements. As part of the most recent review of this program, questions surfaced about the financial operation of the petroleum storage tanks program. The program has remained largely unchanged since it was created in 1996, with sporadic operating manual changes and the last significant rule changes happening in 2005.

As the program has been run since the mid 1990s, the Department pays contractors for work based on a fixed price schedule for each task completed. There is no motivation for contractors to finish the work quickly and there is inadequate oversight by the Department because site owners choose contractors from a preapproved list, who choose their own subcontractors.

Ongoing evaluations of the program indicate that personal relationships, rather than qualifications, can lead to prime and subcontractor selection and an overall inefficient use of taxpayer dollars in paying for cleanups without fixed target date goals and no competitive bidding exists. Taxpayers deserve efficient and smart use of money for such an important cleanup, as 90 percent of Florida’s groundwater is used for drinking water.

During the last six months, senior leadership at the Department has interviewed staff, studied reports, contracts, Florida Statutes and rules in order to ensure the program is using taxpayer dollars efficiently. Staff has also communicated with other states to compare Florida’s operations. For instance, in Texas as of January 2013, 24,849 of the 26,549 leaking petroleum storage tank cases have been closed. Meanwhile, Florida has 25,181 cases, with approximately 6,000 cases closed since the program inception in the early 1980s, 6,907 cases awaiting cleanup, more than 3,600 cases with cleanup underway, and approximately 8,000 cases ineligible for state funding that are undergoing cleanup by private parties.

Leadership’s review led DEP Secretary Herschel Vinyard to request that his Inspector General review the program and identify areas for improvement in financial accountability and site remediation times. The evaluation is ongoing, but as a result of the evaluation, the Department will take several initial steps to improve the program, including:

  • Improving DEP’s requirements for contractors regarding payment documentation
  • Tightening subcontractor selection and bidding procedures
  • Providing more accountability over costs paid by the Department
  • Exploring bringing in outside procurement experts to review the program and its processes
  • Seeking legislative support to competitively bid all petroleum storage tank cleanup projects

In order to make these much needed changes as quickly and effectively as possible, the Secretary has temporarily appointed U.S. Navy Rear Admiral Valerie Huegel, as Acting Bureau Chief. Rear Admiral Huegel is a Program Administrator in DEP’s Northwest District office, where she oversees all administrative and budget functions. She will work to establish better fiscal controls to eliminate taxpayer dollar waste within the program.

She has more than 25 years of experience related to conflict resolution, change management, strategic planning, human resources and budget issues. Rear Admiral Huegel is also currently serving our Nation in the U.S. Navy Reserve as the Deputy Commander for the Navy Supply Systems Command Global Logistics Support. An official U.S. Navy biography can be found here.

While the Department works on internal steps to make improvements, Sen. Evers has supported this effort through legislation. Senate Bill 1416 gives the Department legislative support to competitively bid site remediation contracts and allow the Department to focus on cleanup milestones rather than just the activities associated with cleanup.

Department leadership believes these efforts will result in the cleanup of sites more quickly and cost-effectively. Soil and groundwater cleanup standards will not be lowered. Site remediation will still be performed to existing cleanup objectives, and standards for the quality of work will not be reduced.

It is estimated that DEP could save significant taxpayer dollars with these changes in the program, and these savings would be invested in the significant backlog of contaminated sites still awaiting cleanup. The result is improved protection for people and the environment.

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