SITE INFORMATION AND CORRESPONDENCE

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USTCF Budget Allocations -2- All active Priority Class A, B and C claims that are expected to incur costs during FY 11/12 were allocated a budget, with the exceptions noted above. Unfortunately, due to the limited amount of funding available for claim budgets, some significant individual claim costs, such as system start-up costs for Priority B and C claims, were not able to be accommodated in the budget allocation process. Those claims were allocated a minimal annual budget amount of$10,000. This minimal annual budget amount should be sufficient for limited-scope, semi-annual groundwater monitoring events or other minimal site work as necessary. This allocation is intended to allow the claimant to conduct a minimal amount of work to document current site conditions until the next budget cycle. The claim budgets are based on our revenue forecasts under current conditions. The Fund understands that legislation has been introduced to extend the Chapter 649, Statutes of 2009 (AB 1188) $0.006 increase to the Fund fee for another two years. If, and when, this proposed fee extension is passed, the Fund will revisit the claim budgets and adjust them accordingly. Similarly, the Fund will monitor expenditures against the amount of money set aside for contingencies throughout the upcoming year. If this contingency funding is not being used, we anticipate being able to distribute the money to claims budgets incrementally through the course of the year. These claim budgets are being used as administrative tools to help the Fund manage both our short-term claim-specific cash flow, as well as our overall program cash flow. They are not meant to limit regulatory directives, and should not be used as justification that regulatory directives on a site cannot be complied with. Claimants must continue to comply with existing regulatory directives, regardless of whether the Fund can reimburse those costs or not. The Fund recommends that claimants and regulators discuss strategies to continue corrective action work, perhaps at a smaller-scale or in a phased approach, for those sites with reduced available budgets from the Fund. Implementation of successful cost-saving strategies such as remedial process optimization and long-term monitoring optimization is also strongly encouraged by the Fund. Future Years The Fund anticipates that, under current conditions, the amount of funding available for claim budgets will stabilize in future fiscal years as costs from previous fiscal years are paid off. California Environmental Protection Agency Ca ,4ectcleecaper