As of April 16, 2021, the Petroleum Storage Tank Fund has a low cash balance for several reasons. These reasons include lower revenue from the Environmental Response Surcharge, scheduled repayment of money from the Fund to the General Fund, and the submission and payment of two separate claims totaling approximately $1 million each. As a result of these conditions, the Petroleum Storage Tank Committee met in executive session to discuss legal questions with its counsel regarding what constitutes “insufficient moneys” in the Fund as that term is used in Colo. Rev. Stat. § 8-20.5-104(4) (h) (I) (A) “…if a claimant cannot be reimbursed in a timely manner because insufficient moneys in the petroleum storage tank fund prevent the issuance of a reimbursement check within thirty days after approval of the disbursement, interest shall not begin to accrue on the claim until thirty-one days after sufficient moneys are available in said fund.” Following executive session, the Committee formally authorized the following directions to Fund staff to address the current low cash balance.
The Committee concludes that insufficient moneys are available when the cash balance of the Fund drops below $1 million, therefore, applications for reimbursement may be held without interest accrual until the Fund balance is such that payments may resume. The Committee bases this conclusion on the minimum financial responsibility of $1 million that owners and operators in Colorado must maintain pursuant to EPA regulations at 40 C.F.R. 280.93.
The Committee recognizes the actual cash balance of the Fund fluctuates throughout each month. The Committee requests Fund staff to obtain the cash balance as of the day before the Committee’s regularly scheduled meetings on the third Friday of each month. Fund staff should present that balance at the Committee’s meeting. If the reported cash balance of the Fund is below $1 million, the Committee determines there are insufficient moneys in the Fund as that term is used in Colo. Rev. Stat. § 8-20.5-104(4). In these circumstances, the Committee authorizes Fund staff to use its best judgment to stagger the processing of applications to the Fund and the processing of disbursement payments from the Fund, giving priority to older applications and disbursement requests. The Committee determines there will be sufficient moneys in the Fund, as that term is used in Colo. Rev. Stat. § 8-20.5-104(4), when the cash balance as of the day before the Committee’s regularly scheduled meeting equals or exceeds $1 million.
The Committee further recognizes that Colo. Rev. Stat. § 8-20.5-104(8) requires the Committee to set aside twenty percent of the total budget of the department to protect the integrity of the Fund. The Committee recognizes that depleting moneys in the Fund to below twenty percent of the total budget risks the integrity of the Fund for several reasons. These reasons include subjecting the Fund to increased risk of a negative balance due to fluctuations associated with the collection and deposit of the Environmental Response Surcharge, fluctuations possible through the receipt of multiple claims or high dollar claims or both, and fluctuations based on external factors such as those associated with the Covid virus. The Committee recognizes that the Fund has historically maintained an average cash balance of approximately $3 million prior to the economic and social disruptions caused by the Covid virus. Based on these factors, the Committee determines that if the cash balance of the Fund falls below $600,000 (which is twenty percent of $3 million) at any time, then in order to maintain the integrity of the Fund, Fund staff are authorized to delay the disbursement of payments altogether until such time as the cash balance of the Fund equals or exceeds $600,000.