Connecticut To Reduce Funding to UST Program Even Further

Richmond, Virginia, June 12, 2009 – NatLUST’s Lindsay Trittipoe will present at the Independent Connecticut Petroleum Association’s (‘ICPA’) annual meeting on June 25^th at the Water’s Edge Resort in Westbrook, Connecticut.

Connecticut’s UST program, administered by the Department of Environmental Protection ('DEP'), is  likely facing further reductions in annual appropriations as the legislature and Governor Rell grapple with the state’s budget deficit.  Connecticut’s UST program has, by statute, historically received $10 million each year to reimburse petroleum fund claims.  But beginning in January 2009, in response to the state's budget deficit, the legislature reduced the annual funding to $9 million. NatLUST has recently learned from Chris Herb, Associate Director of ICPA, that the annual funding for the UST program could be cut to $6.9 million, or even less.   

A year ago, NatLUST was experiencing claim turnover of 45 to 120 days, with most claims being reimbursed by DEP in less than 100 days. Since December 2008, the reimbursement cycle has slowed substantially, and it is now taking DEP at least six months to reimburse newly approved claims (as measured from the date of the Review Board meeting until the reimbursement is received).  NatLUST expects the current six month time lag to increase substantially once the effect of the proposed budget cut is realized.  

In 2005, DEP, ICPA, and GASDA, worked with Connecticut's legislature  to make a statute change to grant DEP the authority to recognize claim assignments.  NatLUST has been financing claims in Connecticut since 2006 using a credit facility provided by JPMorgan Chase's New York Government Banking Division.  NatLUST's program costs have been running about 3.25% on an annualized basis in recent months, making the program financially attractive, as evidenced by the financially sophisticated owner/operators that participate. NatLUST currently holds approximately $2.8 million of the state’s backlogged claims, and participating regulated tank owners include, among others, Chevron, Cumberland Farms, Drake Petroleum, Motiva Enterprises (Shell Oil),  and Wesson Energy.  In recent months, NatLUST has also financed a substantial amount of claims for Connecticut local governments, real estate developers, and families that have sold their petroleum businesses but are still cleaning up contaminated sites.  NatLUST expects demand for its program to increase substantially as more owner/operators realize that the days of quick reimbursement by DEP are over. 

NatLUST, organized in 2004,  is a 501(c)(3) nonprofit financing program that was created to become the national successor to a similar Virginia governmental UST claim financing program.  NatLUST's mission is to help state sponsored UST funds keep their clean up programs going by providing immediate liquidity to the marketplace when the fund cannot reimburse claims in a timely manner.  NatLUST's financing program is not debt to the participating states, tank owners, or consutlants. NatLUST and its predecessor Virginia program have financing over 9,000 claims totalling more than $90 milllion, and NatLUST currently operates programs in Connecticut, Georgia, Illinois, and Massachusetts.

Contact Information:

Lindsay Trittipoe
President
NatLUST
804.358.6661
lt@natlust.org

Chris Herb
Associate Director
Independent Connecticut Petroleum Association
(860) 613-2041
chris@icpa.org

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