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Erardi Ventures 2- Claim No. 16768 Background FEB 2621 By a letter dated October 23 , 2008 , the Fund issued a notice ( Important Notice — Delay in Fund Reimbursements) to all active claimants notifying them that there would be a delay in reimbursements due to a low cash flow balance , and that some claimants would be receiving a letter suspending their LOC based on priority class and date of application . By a letter dated November 7 , 2008 , the Fund issued a notice to the first group of 612 Priority Class C claimants suspending their LOCs until funds become available. This notice also stated the Fund would accept RR packages from the first group of claimants with suspended LOCs that contained costs incurred through November 17, 2008 . By a letter dated January 7 , 2009 , the Fund issued a notice to the second group of an additional 617 Priority Class C claimants suspending their LDCs until funds become available . This notice also stated the Fund would accept RR packages from the second group of claimants with suspended LDCs that contained costs incurred through January 17 , 2009 . Because of the ongoing cash flow issues and increased payment demand , the Fund has had to suspend over 1 ,200 LOCs on Priority Class C claims this fiscal year. These LOC suspensions have affected almost 75 percent of the active Priority Class C claims . The LOC suspensions are based on the reverse order of the Fund claim application filing date. Some LOCs have been suspended for Priority Class D claimants as well Discussion The Fund understood that suspending these claims could prove challenging with respect to continued corrective action activities at the affected sites . However, given the current fiscal situation , the Fund must ensure that the limited available funding is reimbursed to claimants in an equitable, effective, and timely manner, and in accordance with the established priority ranking system mandated in the Fund Statutes . All claims currently being reimbursed by the Fund are considered to pose some health and environmental risk by the UST regulatory :agencies directing the site cleanurs . The Fund 's priority ranking system established by the California Legislature was intended to first reimburse claimants who are least ableto pay corrective action costs by creating the four different priority classes ,. A through D . Summary In summary, we understand the financial difficulties that will be faced by many claimants as a result of the LOC suspensions : We have received numerous appeals from claimants with suspended LOCs with financial hardships similar to yours . While I sympathize, I cannot ignore the statutory requirements for prioritizing claims and payments that were established by the California Legislature when it created the Fund in 1989 . California Enyironmenta/Protection Agency Coi Recyc/ed Paper