THE OHIO FINANCIAL ASSURANCE FUND

Fund Facts

Direct Payment Agreements

What is direct pay?

· The Petroleum UST Release Compensation Board’s claims process
   allows for a responsible person (RP) to transfer his rights to
   reimbursement for corrective action work performed as a result of a
   release from an assured UST system.

Why does the Board allow direct pay?

· The direct pay process allows RPs to proceed with clean-ups who
   otherwise would not have the financial resources
   to expend money and then wait for reimbursement from the Fund. 
· Multiple site owners can initiate and complete remediations at more
  than one site at the same time than may otherwise be financially
  feasible. 
· Direct pay can be used when property transfers. If a new owner
  performs the clean-up, the RP can transfer the reimbursement rights to
  the new owner. 

What should an RP consider before entering into a direct pay agreement?

· All liability for corrective actions remains with the RP.
· The corrective action to be performed must be authorized by the
  rules of the Fire Marshal.
· The RP should review all work plans before approving them, 
  maintaining
  an active role in the clean-up process.
· Any work performed in excess of the Fire Marshal’s rules and costs in
  excess of the usual and typical rates of the
  Board are not eligible for reimbursement.
· A consultant has no standing to file an appeal of the Director’s
  determination.

What should an RP look for and require in a contract?

· Who is responsible for costs not reimbursed by the Fund? Many
  consultants offer a hold-harmless contract
  which means any non-reimbursable costs are not passed on to the RP.
· Require the consultant to obtain voluntary pre-approval of costs for all
  phases of the project.
· Require the project to be performed in well defined stages rather than
  an open-end contract for the entire project. 
· Require that the consultant limit mark-up and unit rates consistent
  with current Fund reimbursement policies.
· Require open communication between the RP, the consultant, the
  Fund and BUSTR.

Who is ultimately responsible for clean-up?

· As a responsible person, an owner or operator is responsible for all
  actions, including costs, as a result of a
  petroleum release.
· By staying actively involved in the clean-up an RPs can make more
  informed decisions regarding their 
  responsibilities and their ability to ensure cost-effective remediations
  are performed.