PETROLEUM TANK RELEASE COMPENSATION BOARD MINUTES Business Meeting

PETROLEUM TANK RELEASE COMPENSATION BOARD
MINUTES
Business Meeting
April 20, 2015
Department of Environmental Quality
Metcalf Building Room 111, 1520 East 6th Avenue
Helena, MT
Board members in attendance were Jerry Breen, Kate Cassidy, Roy Morris, Roger Noble, and Susan Quigley joining
via telephone. Also in attendance were Terry Wadsworth, Executive Director; Ben Reed, attorney for the Board;
Ann Root, Board staff; and Garnet Pirre, Board Staff.
Presiding Officer Roger Noble called the meeting to order at 10:10am.
Approval of Minutes – February 2, 2015
Ms. Cassidy moved to approve the minutes of the February 2, 2015 meeting as written. Mr. Morris seconded the
motion. The motion was unanimously approved.
Dismissal of Contested Case - Crane Building, Facility #9995132, Release #4894, Billings
Mr. Wadsworth stated that Mr. Jack Stone, attorney for JEM, LLC, the owner of the facility, requested dismissal of
the MAPA contested case proceeding appealing the ineligibility determination of the Board. Mr. Wadsworth
recommended the Board accept the dismissal. The Department had issued a No-Further-Corrective Action letter for
Release #4894 on December 18, 2014, making the contested matter moot.
Mr. Morris moved to ratify the staff recommendation to accept the dismissal and Mr. Breen seconded the motion.
The motion was unanimously approved.
Dispute of Reimbursement Adjustment – Glacier Center, Facility#1510895, Release#2577 and #4398, Coram
The staff recommended zero (0) reimbursement for releases at this facility as a result of an Administrative Order on
Consent (AOC) issued by the DEQ Enforcement Division on January 8, 2015. The AOC remained unsatisfied for
more than 180 days. There were three violations identified:
1) The owner failed to obtain a compliance inspection in a timely manner per ARM §17.56.309(1)(a).
The owner is required to obtain a compliance inspection at least 90 days prior to the expiration of the
existing operating permit. The owner’s operating permit expired on June 2, 2014 creating an
inspection due date of March 4, 2014. Their compliance inspection was conducted May 28, 2014,
putting it 84 days past due.
2) The May 28, 2014 compliance inspection revealed that the owner did not have tank leak detection
monitoring records available for ten (10) of the previous twelve (12) months as required in ARM
§17.56.401(1), ARM §17.45.402(1) and ARM §17.56.409(1)(b) for one (1) of the underground storage
tank systems at the facility.
3) The Corrective Action Plan that resulted from the inspection, given to the owner in June of 2014,
contained a timeframe for compliance that did not provide the owner sufficient time to gather 12 full
months of tank leak detection records. This inability resulted in a continued violation. As a result of
the continued violation, the Board staff suspended all claims and recommended zero reimbursement.
Matt Kinsella, representing High Altitude Enterprises, Inc., owner of Glacier Center, stated that their ability to
obtain a timely inspection was impacted by the weather and the inspector’s inability to schedule them within the
required timeframe. Originally, the inspection was scheduled in time to meet the 90-day requirement. However,
scheduled inspections were later cancelled and rescheduled, creating this violation. They have completed their
inspection and are back in compliance regarding their operating permit.
Mr. Kinsella demonstrated that the tanks had been monitored, but Glacier was unaware that the methodology used
was not acceptable to DEQ. The facility is in an area that has limited traffic in the winter months, and the fuel level
in one of the tanks was too low to allow for the leak detection equipment to conduct an acceptable test. The Daily
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1
Fuel Volume Inventory records were used, but Glacier did not have a certified third party verify the accuracy of
their records. Once this inadequacy was pointed out, the owner immediately installed a CSLD chip, capable of
providing an automatic tank gauging test with low fuel volumes, to come back into compliance and provide the
accuracy needed. This was done following the inspection and before the violation letter was received from the
Underground Storage Tank Section. However, the requirements of the corrective action plan cannot be satisfied
until a full twelve (12) months of acceptable records have been accumulated.
Mr. Morris asked to confirm his understanding that release #4398 was closed and #2577 was active. Both releases
were included in this action because the violations are applied to the facility, and release #4398 could be reopened at
a future date. His understanding was confirmed and the Board’s decision would therefore affect both releases.
Reed Miner, Remediation Division, stated that there were monitoring wells installed and data was collected, with a
report submitted in October 2014 resulting in an acceptance of closure for release #2577. The only work remaining
for this release is to abandon the monitoring wells.
Mr. Kinsella indicated that there will be some additional claims submitted for payment on this closure work. Mr.
Noble asked if Glacier Center was in compliance yet, and it was verified that they are not in compliance due to the
inability to produce twelve (12) months of monitoring records. The current records being generated from the CSLD
chip are what will be used to fulfill the Corrective Action Plan, and that will be completed by September of 2015.
Mr. Morris indicated that the missing tank release records were not as troubling to him as the owner operating
without a permit. However Mr. Morris felt the owner had acted in a timely, responsible manner, to the best of his
abilities, and should not be sanctioned. Mr. Noble agreed, but clarified that the owner had a shared responsibility
with the inspector to have inspections conducted in a timely manner.
Mr. Wadsworth reviewed past cases where the Board determined a penalty amount based on the number of months
of noncompliance multiplied by the number of tanks having missing records; for example, two (2) tanks out of
compliance for five (5) months would equal ten (10) tank-months, resulting in a 10% penalty.
Mr. Noble stated that the non-compliance had not presented a danger to the public or environment, did not result in
extra cost to the Fund, and was out of the owner’s control, satisfying the provisions of ARM §17.58.336(e) which
allows the Board discretion in application of the penalty.
Mr. Morris moved to not sanction Mr. Kinsella and Ms. Cassidy seconded the motion. The Board passed the
motion to not sanction Mr. Kinsella based on the rationale in doing so per ARM 17.58.336(7)(e)(i)(ii) in that the
owner’s noncompliance did not present a significant increased threat to the public health or the environment; and
there was no significant additional cost to the fund. The motion was unanimously approved.
Eligibility Dispute – Bank West Building, Facility#1512006, Release#528, Kalispell
Mr. Wadsworth notified the Board that the owner had requested this matter be moved to the June 22, 2015 board
meeting and that he had complied with the owner’s request.
Dispute of Reimbursement/Claim Adjustment – Prairie States Coop, Facility#4600762, Release#3619,
Dagmar
Mr. Wadsworth provided a synopsis of the reimbursement dispute regarding the Prairie States Coop facility. The
compliance inspection conducted on July 23, 2008 identified two (2) violations. The owner did not have tank leak
detection monitoring records available for twelve (12) of the previous twelve (12) months as required in ARM
§17.56.401(1), ARM §17.56.402(1) and ARM §17.56.409(1)(b), for one (1) underground storage tank system at the
facility. There were three (3) tanks missing twelve (12) months of records, which would suggest a penalty of 36%.
The compliance inspection also revealed that the owner or operator conducted business without a valid operating
permit from May 16, 2008 to July 22, 2008. The Staff recommended 0% reimbursement, consistent with the
Administrative Rules of Montana.
Tyler Etzel, New Fields LLC, spoke as a representative for the current owner of the facility, Horizon Resources
(Horizon). Mr. Etzel stated that Horizon did not dispute the general chronology in the Executive Summary. The
main matters of dispute that Mr. Etzel raised were: 1. the date of the discovery of release #3619 predates the
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Administrative Order (FID 1638); 2. the property ownership transfer as shown in the DEQ records and
correspondence, and 3. the compliance efforts made by the owner at this facility.
Mr. Etzel stated that the original release was discovered December 10, 1998 during removal of two (2) 1,000-gallon
underground storage tanks (USTs). Subsequent to that discovery, sampling was done and groundwater was
determined to be impacted. Contaminated soil was removed and a new 1,000-gallon UST was installed. In July of
2001, the remaining UST and additional contaminated soil was removed. Those actions all predated the issuance of
an operating permit for the three (3) UST systems (the systems are aboveground storage tanks with underground
piping) currently onsite. According to Mr. Etzel, the Administrative Order that was issued for release #3619
pertained to the three (3) new underground storage tanks and not to the actual release that occurred in 1998 and was
subsequently cleaned up.
Mr. Wadsworth later clarified that the Administrative Order was issued against the facility (Prairie States Coop, Fac
ID #4600762), not to release #3619, and therefore the Administrative Order would still affect the current claims
being submitted on all releases at the facility.
The second disputed fact was the property ownership transfer. Multiple warning letters were sent by the DEQ to
Prairie States Coop during the period September 28, 2007 through March 6, 2008 without that owner responding.
Mr. Etzel contacted the head of the Energy Division and the CEO of Horizon before coming to this board meeting,
and both stated that they were surprised Horizon did not respond to the notices. They also did not remember ever
receiving the violation letter issued July 24, 2008. After investigation, it appeared that the correspondence was sent
to Prairie States Coop in Dagmar, MT and Dahl, ND. Both addresses were incorrect. Correspondence should have
been sent to Horizon Resources in Williston, North Dakota. The Board’s Executive Summary shows that
correspondence was being sent to Prairie States Coop from January 21, 2005 through January 2010. Horizon
purchased Prairie States Coop in January 2006. Mr. Etzel contended that, due to the incorrect address, Horizon
never received any of the correspondence. To further complicate matters, the long-time manager at Prairie States
Coop in Dahl, ND left the company in 2004 and the manager who took his place never followed up on any
correspondence between Prairie States and Horizon during the time of the property transfer. Mr. Etzel contacted
Redge Meierhenry, DEQ Underground Storage Tank Program, and found that the UST Program’s records show no
change of ownership on file for this facility. Prairie States Coop is still listed as the owner of this site and thus all
correspondence has been addressed to that owner of record. The relevant correspondence is likely still at the Prairie
States office in Zahl, North Dakota.
Current compliance-related activities at this site are: 1. the ASTs referenced in the Administrative Order are
currently out of service. Additionally, they have been permitted for closure as soon as possible per permit 15-0176
issued April 7, 2015. The piping existing there is double-walled secondary containment. These actions show
Horizon’s desire to come back into compliance and prevent any further releases. Horizon hopes to be reinstated to
100% reimbursement and to bring this issue to closure.
Mr. Morris asked Mr. Etzel where a letter sent by DEQ today would go. Mr. Etzel said he believed it would go to
Prairie States Coop but he was not sure. Mr. Morris pointed out that the ownership issue has not been corrected and
that it is the owner’s responsibility to ensure the records are correct. Ms. Cassidy concurred that it is the property
owner’s responsibility to make sure records and forwarding addresses are correct so nothing is missed. Mr. Etzel
pointed out that each cooperative was managed by individuals and the person who managed the site was not
involved in the property transfer and was not a Horizon employee. Mr. Etzel stated that when he contacted Horizon
concerning the adjustment to the claim, they did not even know about the Administrative Order.
Mr. Etzel stated that the claim that brought the issue before the Board was the first claim that was made since 2005.
The last work done was conducted in 2005, under a 2004 work plan. Mr. Etzel introduced Dave Hrubes, a
consultant working with NewFields, who had more knowledge of the history of the site and was attending the
meeting by telephone.
Mr. Morris asked if the new owner knew there was a release at this site. Mr. Etzel did not know.
Mr. Hrubes elaborated on the history of the Horizon purchase of the Prairie States Coop site. Horizon purchased
Prairie States Coop, based in Zahl, ND. There were two sites, one in North Dakota and one in Dagmar, MT, which
was an unattended site. Horizon was more interested in the North Dakota site than the Dagmar, MT site, so their
attorneys were working on the North Dakota property and the Dagmar, MT site fell through the cracks. Mr. Hrubes
stated that this is an active leak that contaminated all the way down the creek to the ball field and it affects third
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parties. There is still residual contamination that exceeds risk-based screening levels. The contamination is
underneath the tank basin. The cost of disposing of this contamination is going up and Horizon just became aware
of this problem when the Administrative Order was brought to their attention. Mr. Hrubes does not anticipate any
additional contamination occurring. He asked the Board’s indulgence and suggested that the Board, DEQ and
Horizon work together to clean up the site.
Mr. Morris asked if this was an operational site. Mr. Hrubes passed that question on to Jeff Watts, who was also on
the telephone and is the Energy Manager for Horizon.
Mr. Watts stated that the Prairie States Coop site has not been in operation for almost a year. Additionally, the pipes
have been drained at this site. Mr. Morris asked if the address has been changed. Mr. Watts was unsure. He
indicated that Horizon has received some correspondence beginning in December, 2013.
Mr. Morris asked how much had been paid to date for cleanup, and how soon the site could close. Mr. Wadsworth
indicated that $329,527.55 had been paid toward clean up.
Mr. Hrubes indicated that overall more than 5,000 yards of contaminated soil had been removed, though they could
not excavate around the new tank basin. When the tanks are removed, excavation of that area would need to be
done. There is no estimate of the extent of excavation still needed. Two to three rounds of monitoring will be needed
to ensure the ground water contamination is below the limits.
Mr. Noble asked if the current tanks were installed over the contamination. Mr. Hrubes indicated they were not.
The original site was burned in a fire in 1989. Two tanks were removed initially, and a temporary AST was
installed. Three ASTs were installed and the temporary tank removed. Mr. Watts indicated that the majority of the
site has been excavated. Mr. Hrubes indicated that there is a heavy clay base which makes remediation harder. It
was discovered that the release had affected a residence to the east of the site and monitoring results indicated the
creek on their property is contaminated. There is further contamination to the south and west of the site. The
current tanks are located on a different portion of the site than where the original contamination took place with the
original USTs.
Mr. Hrubes stated that Horizon did not learn of all this history until a round of sampling was conducted in December
2014, due to a work plan request from the DEQ in December of 2014, and the Administrative Order and 0%
reimbursement was communicated to Mr. Etzel, who then passed it on to Horizon Resource. Mr. Wadsworth
clarified that under Montana law tanks will be defined as underground storage if there is more than ten (10) feet of
underground piping associated with them.
Ms. Cassidy asked again who was responsible for notifying the DEQ of the transfer of ownership. Mr. Hrubes
stated that the loss of long time employees at Prairie States Coop created the communication breakdown. Mr. Watts
indicated that Horizon did not intend to leave important matters unattended.
Ms. Cassidy asked who in the Department is responsible to follow up if mail that is sent is returned to the sender.
Mike Trombetta, Hazardous Waste Cleanup Bureau Chief, stated that the business process in the Petroleum Tank
Cleanup Section is to send letters out certified mail, return receipt requested so they can follow up if correspondence
is not getting to the correct person. He could not speak for the process in Mr. Meierhenry’s groups, the UST
Program.
Mr. Morris summarized the history as he understood it. Horizon bought Prairie States Coop and became the
responsible party for the property. There is a question whether Horizon knew there was a release on the property.
With a minimum amount of due diligence, Horizon would have known there was an active release. After the
purchase, Horizon stops doing the usual duties an owner must do to stay in compliance. After a time an
Administrative Order (AO) is issued, but it is apparently sent to the wrong party, so the AO is not addressed.
Eventually, Horizon receives notice that the claim they filed for work done on the site will not be reimbursed due to
the AO, and then they come before the Board. It appears that all correspondence has been going to Prairie States
Coop since before the Coop was purchased by Horizon.
Mr. Etzel stated that the first correspondence he found that was sent to Horizon was a letter in February 2010
explaining that the AO had been satisfied.
April 20, 2015
4
Mr. Wadsworth stated that he found notes of a 2008 telephone communication between Paul Hicks of PTRCB and
Jeff Wagner of Horizon about the Prairie States Coop in Dagmar.
Mr. Morris asked if there were any claims submitted between February 2010 and January 2015. Mr. Etzel said he
believed the last work was done in 2006. Ann Root stated that a claim was filed in 2007 and the next claim was
submitted in January 2015. The claim in 2007 was paid in full. Mr. Morris asked what that claim was for. Mr.
Hrubes believed the 2007 claim to be for monitoring that he did as a consultant with Eastern Montana
Environmental, the consultant for Prairie States Coop. Mr. Wadsworth verified that the claim was paid out for
monitoring.
Mr. Hrubes stated there had been no further remediation activities at this site due to the amount of money already
expended. The cost burden made further clean-up unjustifiable until the remaining tanks could be removed and the
release brought to closure. He further stated that they could not take out the liner and basin for those tanks at that
time.
Mr. Noble asked how many releases were at this site. Of the two releases referenced in the Board Meeting packet,
#3619 and #4398, only release#3619 is active. Release#4398 was closed in 2008.
Hr. Hrubes stated that the only releases at the site were from the underground storage tanks, not the ASTs. The
initial release was from a fuel truck that caught on fire. An additional release was for the USTs after they were
pulled and the third release was discovered the last 1,000-gallon tank was removed. There were no releases after
installation of the aboveground tanks.
Mr. Etzel reiterated that the releases occurred before the current system was installed and so the violations of the
current system had nothing to do with the releases.
Ms. Cassidy summarized that the PETRO Board has already paid out in excess of $325,000.00 for clean-up that had
not been completed, and there was no current estimate of what it would take to bring this to closure. Mr.
Wadsworth also pointed out that there are apparently third party impacts.
Mr. Breen asked if the third party impacts were due to discontinuation of the initial clean-up process and if the
release could have been contained to the site of origin had this been done. Mr. Noble stated that clay acts as a
sponge and so the petroleum release continues to leach out to the surrounding area. It was determined that the lack
of remediation at the time of the discovery created the third party impacts we see today. Mr. Hrubes concurred with
that analysis.
Mr. Morris indicated that any owner that had a known release should be extremely diligent to follow through on
clean-up and communication, and the owner remains obligated to finishing this remediation process. Mr. Morris
asked what percentage of penalty should be levied. Mr. Wadsworth referred to prior actions taken by the Board for
similar violations. There were two (2) violations. The first was failure to maintain leak detection records. There
were no records on site at time of the inspection. The owner is required to maintain twelve (12) months of records.
Mr. Wadsworth indicated that the missing twelve (12) months of leak detection records for three (3) tanks would be
a 36% sanction for this violation. The second violation was operating without a valid operating permit from May
16, 2008 to July 22, 2008. That time period would be a 50% penalty, in accordance with the ARM 17.58.336(7)(a).
Mr. Wadsworth recommended that the penalty options not be combined as a cumulative sanction of 86%, but rather
that the Board choose between the two percentages or select a different amount. Mr. Wadsworth indicated that there
had not been a release during the time period in question or anything that further compounded the problem at the
site, so combining the sanctions would probably not be fair. Mr. Wadsworth further indicated that ownership
transfer is the responsibility of the owner.
Ms. Cassidy asked if they got a new permit after the initial lapse. Mr. Wadsworth said he assumed that they had
renewed their permit in August of 2008 in order to still be operating until 2014.
There was further clarification that this particular owner only has one other facility in Montana, with the bulk of
their facilities in North Dakota. Due to the location of the owner, Horizon, and its other sites in North Dakota, they
may not understand how the Petro Fund works in Montana or our statutory definitions.
Mr. Morris asked if there was a permit in place to remove the existing tanks and Mr. Etzel indicated they had gotten
one on April 7, 2015.
April 20, 2015
5
Ms. Cassidy made a motion to ratify the staff recommendation of 0% reimbursement. The facility operated without
a permit for some period of time and had no tank leak detection records for at least twelve (12) months. There was
no second and the motion died.
Mr. Morris made a motion to impose a 50% penalty on Facility 46-00762. The staff had no choice but to
recommend 0% due to the laws in place. The rationale for the motion is that the Board was attempting to be
consistent with prior decisions concerning violations of tank leak detection requirements, and taking into account the
fact that the owner operated the facility without a valid operating permit for a period of time. Mr. Breen seconded
the motion.
The motion passed with a roll call vote of four (4) in accord and one (1) abstaining.
Eligibility Ratification
Mr. Wadsworth outlined the applications for eligibility that were before the Board (See table below). There were
three eligibility applications. However, Bank West requested a postponement, leaving Tom’s Body Shop and
Cascade County recommended for eligibility at this meeting.
Board Staff Recommendations Pertaining to Eligibility
From January 20, 2015 through April 8, 2015
Location
Site Name
Kalispell
Bank West Bldg.
Facility ID
#
1512006
DEQ Release #
Release Year
528
Harlowton
Great Falls
Eligibility Determination –
Staff Recommendation Date
Ineligible – 2/12/2015
Release discovered before Fund
Action on this item was
postponed until the next meeting.
Eligible – 3/24/2015
Eligible – 3/26/15
Tom’s Body Shop
6015222
4990
Cascade County Weed
0704562
5055
& Mosquito
Mr. Morris moved to ratify the staff recommendations presented in the table, with the Bank West release postponed.
Mr. Breen seconded. The motion was unanimously approved.
Weekly Reimbursements and Denied Claims
Mr. Wadsworth presented the summary of weekly claim reimbursements for the weeks of January 21, 2015 through
April 1, 2015, and recommended that the Board ratify the reimbursements. These 177 claims totaled $1,125,627.60.
(See table below)
RATIFICATION OF WEEKLY CLAIM REIMBURSEMENTS
January 21, 2015 through April 1,2015
Week of
Number of Claims
Funds Reimbursed
January 21, 2015
19
$75,240.73
February 4, 2015
27
$168,204.74
February 11, 2015
26
$100,151.32
February 25, 2015
26
$202,124.29
March 4, 2015
14
$45,290.28
March 11, 2015
1
$177,666.92
March 18, 2015
12
$93,820.55
March 25, 2015
15
April 20, 2015
6
$133,397.67
Continued….
Continued from Page 6…
RATIFICATION OF WEEKLY CLAIM REIMBURSEMENTS
January 21, 2015 through April 1,2015
Week of
Number of Claims
Funds Reimbursed
April 1, 2015
37
$128,731.10
Total
177
$1,125,627.60
Mr. Morris moved to ratify the weekly claims as presented. Ms. Cassidy seconded the motion. The motion was
unanimously approved.
Board Claims – Claims over $25,000
Mr. Wadsworth presented the Board with the claims for an amount greater than $25,000 that had been reviewed by
Board staff since the last Board meeting (See table below). There were eight (8) claims with an estimated total
reimbursement of $273,843.04. Mr. Wadsworth recommended ratification of these claims.
Location
Facility
Name
Havre
Flying J
Miles City
Great Falls
MDT 4th
& Main
Former
Magruder
Motor Co
United
Parcel
Service
Flying J
Great Falls
Flying J
Great Falls
Flying J
Drummond
Cenex
Harvest
States
Glasgow
Billings
Total
FacilityRelease
ID
Numbers
2108665475
56141244330
60152284934
Claim#
Claimed
Amount
Adjustments
Penalty
Co-pay
Estimated
Reimbursement
20141126J
$31,339.72
$2,404.59
-0-
-0-
$28,935.13
20150114H
$27,468.20
$12,131.29
-0-
-0-
$15,336.91
20150115E
$46,036.09
$16,383.47
-0-
$14,826.31
$14,826.31
5604542111
20150202B
$75,533.78
$30,297.46
-0-
$15,474.58
$29,761.74
7069261636
7069262051
7069262159
56139261584
20150211G
$38,412.52
-0-
-0-
-0-
$38,412.52
20150211H
$76,825.07
-0-
-0-
-0-
$76,825.07
20150211I
$38,412.52
-0-
-0-
-0-
$38,412.52
20150311C
$31,332.84
-0-
-0-
-0-
$31,332.84
$337,892.54
$273,843.04
Ms. Cassidy asked about the co-pay amounts and if insurance was covering them. Mr. Wadsworth clarified that the
co-pay indicated was the remainder owing from that owner out of the $17,500 co-pay established by the Board’s
law. The other owners have already met their co-pay amounts.
Mr. Morris asked about the adjustments of $7,100.00 on Former Magruder Motors. Mr. Wadsworth indicated this
amount was for activities done outside a DEQ-approved Work Plan, which made them ineligible for reimbursement
by the Fund.
Mr. Breen moved to ratify the claims exceeding $25,000. Ms. Cassidy seconded the motion. The motion was
unanimously approved.
Discussion Items – Senate Bill (SB) 49 and Senate Bill (SB) 335
Senate Bill 49 is the Petroleum Mixing Zone bill signed March 23, 2015 by the Governor. The chapter number has
been assigned and there is anticipation it will be written into law. This Bill changed the statutory reference
regarding a recorded easement and was expanded to include a restrictive covenant or other institutional control. In
addition, the “unconfined aquifer” language was removed. Mr. Morris asked how many sites would be impacted by
April 20, 2015
7
the bill. Mr. Miner stated that two (2) sites have been submitted and over forty (40) sites have been evaluated to
date. There are no firm numbers, but Mr. Miner estimated over forty (40) sites could potentially reach closure as a
result of SB 49. Mr. Miner clarified that the previous law only took into consideration 500 feet from a water well
and left no room for interpretation. Jenny Chambers, Remediation Division Administrator, stated that this bill
allows a broader scope of evaluation, making the Petroleum Mixing Zone to be site specific.
Senate Bill 355 Changes the language pertaining to co-pays, allowing monies spent from grants to be 100%
attributable to meeting an owner’s co-pay with the Petro Fund, if spent on Fund-eligible costs. The bill also allows
the owner to designate the Grantor for reimbursement so the owner is not unduly enriched. Owners will be able to
leverage monies from multiple sources in remediating a release. Ms. Chambers felt the bill was very beneficial in
helping owners clean-up sites and provided them more incentive. Mr. Wadsworth also felt it was very beneficial in
leveraging funds where the cost of cleanup exceeds the value of the property. In those cases, the land comes back to
the state to clean up and this bill provides a way for the owner to complete remediation and keep their property.
Senate Bill 355 passed its third reading on April 15, 2015 and was headed to the Governor for his action.
Board Attorney Report
Ben Reed, Agency Legal Services, acting as attorney for the Board, presented the Board Attorney Report.
Location
Facility
Facility # &
Release #
Disputed/
Appointment Date
Status
Miles
City
Billings
Miles City
Short Stop
Crane
Building
Dismissed
09-04443
Release #4800
99-95132
Release #4894
Dispute of reduced
reimbursement
Release ineligibility
contested – Sept 20, 2012
Hearing date has been extended to
November 12, 2015.
Board granted extension of time for
hearing to February 28, 2015. Owner
requested dismissal. Jan 19, 2015
Great
Falls
Cascade
County
Shops
07-05708
Release 3051-C1,3051C2,3051-C3 AND 3051-C4
Denial of applications
Scheduling order is in effect and
informal proceedings are ongoing
As already took place earlier in the meeting, the Crane Building had been dismissed.
The Miles City Shortstop case is more complicated than when it was originally filed, due to the involvement of the
United States Post Office as an affected third party. This resulted in a duplicate case being created at the Federal
level along with the one currently pending with the State. Mr. Reed did not expect a resolution of the cases until at
least mid-November 2015, or longer. There is not much movement on the case, as it is still in the discovery phase.
The Cascade County case involves over sixteen (16) years of releases, with multiple releases being combined into
one (1). Cascade County was aware of the releases and the DEQ combined them into one (1) according to their
numbering convention. Cascade County wants the DEQ to break them out into multiple release numbers so they can
receive higher compensation. This case has been briefed and the responses are expected in May 2015. The MAPA
hearing will take place in June 2015 with a decision following shortly thereafter.
Fiscal Report
Mr. Wadsworth presented the fiscal report to the Board. He highlighted the MDT fees from the March 31, 2015
Monthly Expenditure/Projection Summary Report and noted that there has been reduction in revenue due to the
downturn in activity in the Bakken Shale production, as discussed at the February 2, 2015 board meeting. The
revenue for February and March was a little under the projected revenue for that time period. Mr. Wadsworth
expected that the revenue received will be lower than projected revenue by as much as $300,000.00.
Board Staff Report
There are several plans awaiting obligation. There are approximately $1,700,000 in unobligated work plans, which
is slightly higher than normal. Mr. Noble noted that the work plan for Miles City Shortstop adds a significant
amount to the unobligated work plan total. That work plan has not been obligated due to the contested case.
April 20, 2015
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Petroleum Tank Clean Up Section Report
Reed Miner, Kalispell Remediation Office, presented the section report. Mr. Miner noted that the report provided to
the Board contained some errors. The corrections to the report, starting with reporting since the last board meeting,
are: there were 10 closures submitted, four (4) were reviewed and approved, and six (6) are pending review. There
are eight (8) confirmed releases that are mostly related to tank removals or upgrades. The activity since January 1,
2015 shows 12 confirmed releases, 18 submitted for closure, 12 approved, six (6) pending review and 14 have been
resolved. Since the legislature mandated 90 releases closed per year, PTCS has closed 376, which is well over the
quota and ahead of schedule. PTCS created a work group to begin a process to look at Remedial Alternative
Analysis. They recognize that most analyses look at only the first step of remediation and not necessarily all the
way through to closure. This work group is focused on improving the evaluation to gain better plans and cost
estimates for obtaining closure.
Mr. Miner spoke about the work plans over $100,000.00 before the Board.
Keith’s Country Store, Great Falls, Facility #0701418, Release #3212
The work plan covers two (2) years of monitoring and maintenance for a cost of $138,858.83. There were no
questions from the Board.
Kwik Way 18, Billings, Facility #5604955,Release #2853
The remediation at this site is being done through excavation. Laser induced florescence technology (LIF) used at
this site indicated hydrocarbon impacts at numerous locations, including the dispenser area, UST basin and along the
piping trench. The contaminated soil will be disposed of at the landfill and the cost to remove the soil is
$125,241.00. It is clay rich soil so it made the LIF technology necessary to evaluate the impact. LIF is a probe that
is pushed into the soil and excites the petroleum hydrocarbons; it has to be in the presence of petroleum
hydrocarbons in order to work. Ms. Cassidy asked how deep the probe could go. Mr. Miner said it depended on
what type of probe and soil you were working with. At this site the probe was used from seven (7) to 14 feet below
ground surface. Mr. Noble asked if there was calibration done with actual soil samples. Mr. Miner didn’t know.
There were no further questions.
Public Forum
Reuben Vincent, Eastern Montana Coalition, had wished to postpone processing of Claim #20150115E or request a
place on the agenda to represent the owner, Magruder Motors in Glasgow, but was not in time to do that. Mr.
Vincent’s focus was on the amount of the adjustment for the report production. He felt that the report that was
produced was better than what the DEQ would normally get, and hoped that the Board would be willing to
reimburse some of the cost of the report. The owner of this site passed away and Valley County took ownership due
to back taxes. Valley County is trying to remediate this space and reclaim it for public use. Mr. Vincent argued that
resubmitting this claim and awaiting the process would put more burden on the DNRC to redeploy the funds for
continued clean up and asked the Board to assign a value to the report production that was included in Claim
#20150115E.
Mr. Noble asked about the Board’s process for this type of case. Mr. Wadsworth explained that the process is set up
for the owner to appeal to the Board staff on proposed adjustments. In this case, the staff never got any response
from Valley County or a request to contest the adjustment to reimbursement before the Board, and the claim was
processed with the adjustment. Mr. Wadsworth thought that Valley County may not have sent a request for the
Board to hear their objections of the adjustments because a DNRC grant was reimbursing the costs and there were
deadlines that needed to be met for the grant. Also, there has been other activity at this site that could have been
claimed against the co-pay if the work had been conducted according to a Department Approved corrective action
plan. The claim in question was adjusted because the report that was received by the Department was not
considered acceptable by the Department.
Mr. Vincent specified that the reimbursement they are requesting is not for the RAA but for the RIR-01. They felt
that it got mixed up with the RAA and was thrown out because of this confusion. Mr. Vincent felt that the value of
$2,900.00, as assigned in the past for an RIR-01, should be reimbursed for this report because it was better quality
than normally seen on other submittals.
April 20, 2015
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