1. Archive

Some rush to meet gas tank rules

(ran PW, PS editions of PT)

Watching the steady flow of customers enter his convenience store Wednesday, Simon Sesturk could finally forget about the stress.

He wasn't going to be fined for non-compliance with the state's tough underground gasoline storage tank laws. He wouldn't have to shut down his gas pumps. He wouldn't lose business.

After spending two fruitless years searching for a loan to finance improvements to his underground tanks _ and meet the state's quality standards, some of the most demanding in the nation _ Sesturk finally found someone who would put up about $80,000 for the job.

"I'm pretty relaxed now," he said. "If you had talked to me a week ago, you would have seen a different me. It ruined my holidays."

Midnight Thursday was yet another state deadline for phased-in improvements to thousands of gas tanks across Florida. Tank owners across the county have been racing for weeks to meet the cutoff date and qualify for the state's 90-day grace period by obtaining permits or signing contracts with installers and suppliers.

Sesturk has operated Highlands Pure, his business off County Road 581, since 1993. He reached an agreement with a private investor on Tuesday.

The U.S. Environmental Protection Agency set a Dec. 22 deadline but is leaving enforcement to the states, said Bill Truman of the EPA's Water Management Division in Atlanta.

Standing by the coffee maker at his store, Sesturk said a variety of traditional lenders, including his own institution, the former Barnett Bank, had rejected the loan as too risky. A deal with a small Ocala bank he had considered a sure thing fell through a couple of weeks ago.

"Gas is such a big part of the operation. It brings people in," said Sesturk, who thinks the state should have offered small owners guaranteed loans or tax breaks. "We could survive, but it wouldn't be as profitable," he said.

Recognizing that unprotected steel tanks posed a threat to drinking water supplies, the state in 1984 passed one of the nation's most demanding sets of regulations for upgrades and eventual replacement. They were more stringent than those passed by the federal government two years later.

At that time, Florida began implementing a massive, taxpayer-funded program that eventually spent $1-billion cleaning up contaminated sites around the state.

Under the law, by 2009 all underground tanks systems will be required to have secondary containment for all parts. That means that equipment _ the storage tanks, for example _ will be encased in a protective outer wall, such as steel or fiberglass.

But the law also set up a series of upgrade deadlines based on the age of the tanks and whether they were rustproofed. Those who protected their tanks before June 1992 have until 2009 to get second containment. Others, such as Sesturk, had to arrange installation of the double-walled tanks by Thursday night.

Ed Pedigo, the plant manager at Modern Welding Co. of Florida, a tank supplier in Orlando, reported a 12- to 14-week waiting period for tanks, as opposed to the usual six to eight weeks.

"It's been very hectic, everybody trying to get that last-minute job done," he said. "There's a lot that won't make the December deadline, there's lot that won't get the 90-day deadline. There's a lot of tanks out there."

Tank owners who missed the deadline can shut down their pumps for a year without threat of penalties while they decide whether to continue with the service, said Mike Sole, director of the state Department of Environmental Protection's underground storage tank division. But if they continue to pump without the required paperwork in place, they can face fines of up to $10,000 a day, he said.

Officials are largely unsympathetic toward tank owners who struggled in recent weeks and months to arrange upgrades and installations. The state and federal programs have been well-publicized and, judging by the reductions in reported gas tank discharges across Florida, they are working, Sole said.

Florida, which employs about 200 inspectors, has a 93 percent compliance rate with basic tank maintenance.

Owners in Citrus have upgraded most of the county's 165 tanks, county tank inspector David Chronister said. About 70 tanks needed improvements at the beginning of 1998. On Wednesday, Chronister sat in his office at the county's public safety building off State Road 44 and counted 18 tanks without any definitive contracts.

"This deadline is nothing new," said Chronister, surrounded by shelves crammed with gas tank parts, reference books and inspections files. "The people caught by surprise are the people who procrastinated. They're panicking now. I suppose I would if I was looking at an upgrade that's going to cost me $70,000.

"Monday morning, believe me, I'll be on the phone wanting to know what's going on," he said.

Chronister and others acknowledged the law's heavy burden on small station owners. Chain-owned stations, such as FINA, Circle K and Shell, have the deep pockets to meet the requirements without threatening the overall bottom line.

Still, small owners should have accepted the law as the cost of doing business and budgeted for it, officials said.

"There's no question that people have gotten out of the gasoline business because of the high cost of compliance," said Richard McAllister, president and chief executive officer of the Florida Petroleum Marketers and Convenience Store Association.

But, "We've known this for 10 years. Anybody that hasn't gotten that job done by now is really not serious about the business."

Non-complying tank owners, "should be fined," he said. "Our members have spent the money. We have done the right thing."

Some gas dealers, such as Richard Martinis of Triple M Auto Service Inc. on U.S. 41 S, have chosen to throw in the towel. When told he would have to spend more than $5,000 upgrading tanks that he rustproofed in the early 1990s, Martinis spent $12,500 digging up the tanks and decided to stick to fixing cars, which accounts for most of his income.

"I was better off without the gas," said Martinis, who still owes $2,000 on the loan. "I'm more productive in the shop."

But he is angry at the state for implementing changes that allegedly allowed insurance rates to skyrocket, he said.

As the state gradually reduced the amounts available for each cleanup from $1-million to the current $150,000, insurance became more expensive.

Martinis said his monthly bill jumped from $100 to $176 in recent years. It was about to increase to $400, he said.

Despite the financial strains it is causing, the recent deadline may be a blessing in disguise for Sesturk, who owns the store and gasoline pumps off CR 581. Upgrading to more attractive pumps with a canopy and more gas choices will improve business, he hopes.

Meanwhile, his competition across the street at the Corner Store is simply wondering whether to continue with gas service.

While Sesturk followed the state's guideline, Corner Store co-owner Carol Bardwell chose to play it safe and stop pumping gas on Dec. 22, as the federal government asked. She and her husband plan to speak this week with a company that is offering to install new tanks and pay them 6 cents-per-gallon sold _ higher than their current profit margin _ for selling its gas.

Unfortunately, that choice has been a costly one.

"There's no way I was going to take a chance . . . on a fine," she said. "We have lost so much business since the 22nd, I can't tell you. Even though you're not making much money on gas, it brings people in. I see people across the street lined up.

"We hope we don't end up losing our business over this."