BALTIMORE (June 8, 1999) - The Maryland Department of the Environment (MDE) has completed its first loan transaction for $65,000 under the Linked Deposit Program to replace underground storage tanks for a gasoline station in Montgomery County.
This loan transaction is being made with the Farmers and Mechanics Bank of Damascus. The recipient of the loan is a U-Save Service Station, also of Damascus. The site for the new tanks was inspected and approved by officials from MDE's Oil Control Program. The new tanks will meet all state and federal standards to protect against leakage of petroleum products into surrounding soil, where the potential exists to pollute groundwater. In turn, the bank and MDE have entered into an investment agreement in which the department agrees to a below market rate of interest on an investment equal to the loan amount. This unique public/private partnership, which was established in the 1998 legislative session, allows this borrower a rate of interest on the bank loan to be 5.81 percent, which is 3.69 percent below the market rate.
Under this program, private property owners may borrow funds from private lending institutions located in their neighborhoods to finance projects to control non-point source pollution. These loans may be used for design and construction of a wide variety of water quality improvements to protect groundwater and surface water from pollution attributed to non-point sources, such as leaking underground storage tanks, failing septic systems, and rainfall runoff from farms, suburban and urban areas around the state. Rainfall carries oils, greases, chemicals and other pollutants as it travels into groundwater or streams and rivers in Maryland. In 1991, MDE began operating a low-interest loan program for owners of underground storage tanks to assist them with upgrades or replacements as required by a December 1998 federal mandate. That loan program was discontinued by law in June 1998. The Linked Deposit Program continues to facilitate funding to upgrade or replace leaking tanks.
In many Maryland residential subdivisions, homeowner associations are responsible for keeping stormwater management ponds in good repair. Homeowners on septic systems must maintain, repair and replace systems from time to time. Property owners along many miles of shoreline around the Chesapeake Bay and its tributaries must provide some form of erosion control to reduce the loss of land and control excess sediments to the Bay. The Linked Deposit Program can assist in financing these capital costs.
Funding for the program comes from the Maryland Water Quality Revolving Loan Fund, which is administered by MDE. For more information about the Linked Deposit Program, contact the local Soil Conservation District, local health department, or MDE at (410)631-3574. Information also is available on MDE'’s web site at http://mde.maryland.gov/wqfa