Robert L. Hines (State Bar No. 123936) John R. … · 235 Montgomery Street, 17th Floor San...

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235 Montgomery Street, 17th FloorSan Francisco, CA 94104

(415) 9544400

Robert L. Hines (State Bar No. 123936)John R. Epperson (State Bar No. 183347)FARELLA BRAUN & MARTEL LLP235 Montgomery StreetSan Francisco, CA 94104Telephone: (415) 954-4400Facsimile: (415) 954-4480

Attorneys-for PetitionerFXI, Inc.

In re:

STATE OF CALIFORNIA

STATE WATER RESOURCES CONTROL BOARD

CLEANUP AND ABATEMENT ORDERNO. R2-2011-0033

Case No.

PETITION FOR REVIEW

Petitioner FXI, Inc., f/k/a Foamex Innovations Operating Company ("Petitioner") submits

this Petition for Review of the June 7, 2011 Cleanup and Abatement Order No. R2-2011-0033

(attached as Exhibit A) issued by the Regional Water Quality Control Board, San Francisco Bay

Region ("Water Board"). This Petition for Review is filed in accordance with Section 13320 of

the California Water Code and Section 2050 of Title 23 of the California Code of Regulations.

Petitioner provides the following information in support of its Petition as required by

Section 2050 of Title 23 of the California Code of Regulations:

1. Petitioner is FXI, Inc.. Petitioner's address is Rose Tree Corporate Center II, 1400

North Providence Road, Suite 2000, Media, PA 19063-2076, and its telephone number is (610)

744-2300. Petitioner requests that all communications be directed through its counsel, as

identified in the caption of this Petition.

2. Petitioner requests that the State Water Resources Control Board ("State Board")

review the above-referenced Order No. R2-2011-0033. Petitioner submits this petition for review

as a protective filing while it works in good faith with the Water Board to resolve its concerns and25778\2647836.1

PETITION FOR REVIEW

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requests that the State Board hold this Petition in abeyance pursuant to State Board practice.

3. The Water Board, through its Assistant Executive Officer, Thomas Mum ley,

issued the Order on June 7, 2011.

4. In the event this Petition is made active, Petitioner will submit as an amendment to

this Petition a fall and complete statement-6f reasons that Cleanup -dr-id Abatement Of-der No. R2-

2011-0033 is inappropriate and improper.

5. Petitioner is aggrieved because Petitioner is being ordered to undertake the burden

and expense of performing substantial work to clean up discharged plastic pellets from sensitive

wetland environments even though Petitioner is not a discharger under Water Code Section

13304. Petitioner did not use the plastic pellets in its operations and did not cause the release of

pellets that resulted in the pellets being discharged to the Oyster Bay Regional Shoreline.

Petitioner's sole connection to this matter is that it subleased a portion of premises that it leases at

2451 Polvorosa Drive in San Leandro, California, to Kaneka Texas Corporation ("Kaneka").

Petitioner has no ownership interest in the premises. Kaneka's operations included use of plastic

pellets and Kaneka's operations resulted in release of some of the pellets at issue in the Cleanup

and Abatement Order. Petitioner neither owns the property nor caused the discharge of the

pellets. Furthermore, as noted in Order No. R2-2011-0033, plastic pellets from Kaneka's

operations have already been successfully removed by Kaneka from the premises that Petitioner

leases and occupies at 2451 Polvorosa Drive in response to a prior Cleanup and Abatement Order,

No. R2-2010-0070. That prior Order, now superseded by this Order No. R2-2011-0033, did not

name Petitioner as a discharger because the pellets at issue were not released by Petitioner, and

neither should the current Order. There is even less basis for naming Petitioner as a discharger

under Order No. R2-2011-0033 now that the premises Petitioner occupies have been cleaned up,

so the premises are no longer a source of further releases and there is no need to access the

premises to perform corrective action. In the event this Petition is made active, Petitioner will

submit as an amendment to this Petition a full and complete statement of the manner in which

Petitioner is aggrieved.

6. Petitioner requests that the State Board set aside Order No. R2-2011-0033 or- 2 - 25778\2647836.1

PETITION FOR REVIEW

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modify it to remove Petitioner from the list of named dischargers or that the State Board direct the

Water Board to set aside or so modify the Order.


this Petition a complete statement of points and authorities in support of the legal issues raised in

this Petition.

8. A copy of this Petition for Review and the attached Exhibit A has been sent to the

Water Board and the other interested parties (see Exhibit B).


this Petition a copy of its request to the Water Board for preparation of the Water Board's

administrative record concerning this matter.


this Petition a statement that the substantive issues and objections raised in this Petition were

either raised before the Water Board or an explanation of why Petitioner was not required or were

unable to raise the substantive issues and objections before the Water Board.

11. Petitioner requests that the State Board hold a hearing at which Petitioner can

present additional evidence to the State Board. In the event this Petition is made active, Petitioner

will submit as an amendment to this Petition a statement regarding that additional evidence and a

summary of contentions to be addressed or evidence to be introduced and a showing of why the

contentions or evidence have not been previously or adequately presented, as required under 23

Cal. Code Regulations. § 2050.6(a), (b).

For all the reasons stated herein, Petitioner requests that the State Board set aside the

Water Board's Cleanup and Abatement Order No. R2-2011-0033 or modify it to remove

Petitioner from the list of named dischargers or direct the Water Board to set aside or so modify

the Order.

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///- 3 - 25778\2647836.1

PETITION FOR REVIEW

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Fare Ila Braun + Martel LLP235 Montgomery Street, 17th Floor

San Francisco, CA 94104(415) 954-1400

DATED: June 20, 2011 Respectfully submitted,

FARELLA BRAUN & MARTEL LLP

By: 7<2 2-Robert L. Hines

Attorneys for PetitionerFXI, Inc.

- 4 - 25778\2647836.1

PETITION FOR REVIEW

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EXHIBIT A

25778\2647836.1

PETITION FOR REVIEW

<1141 California Regional Water Quality Control Board1441-;4i San Francisco Bay Region

Linda S. AdamsActing Secretary for

Environmental Protection

1515 Clay Street, Suite 1400, Oakland, California 94612(510) 622-2300 Fax (510) 622-2460

http://www.waterboards.ca.govisanfranciscobay

CERTIFIED MAIL No. 7009 1410 0002 4300 8962 June 7, 2011

G. Brown, Jr.Governor,

Return Receipt Requested

Agent for Service of ProcessCT Corporation System818 West Seventh StreetLos Angeles, CA 90017

SUBJECT: CLEANUP AND ABATEMENT ORDER NO. R2-2011-0033FOR OYSTER BAY REGIONAL SHORELINE AND ORIGINATINGSITES, SAN LEANDRO, ALAMEDA COUNTY, CALIFORNIA

To Whom It May Concern:

Enclosed is a Cleanup and Abatement Order No. R2-2011-0033 (the Order) issued to KANEKATEXAS CORPORATION, DUDE, INCORPORATED, AND FOAMEX INNOVATIONSOPERATING COMPANY, ALSO KNOWN AS FIOX AND/OR FXI, forunauthorizeddischarges of pre-production plastic pellets into Oyster Bay Regional Shoreline and SanFrancisco Bay, and for the property at 2451 POLVOROSA DRIVE.

The Order is the legal document the San Francisco Bay Regional Water. Board (Water Board)will use to oversee the investigation and cleanup of the pre-production plastic pellets. It requiresthe responsible parties to cleanup and abate the sites where the pellets originated (OriginatingSites) and surrounding wetlands and related waterways where pellets have and continue todischarge.

Cost Recovery Program

Water Code section 13304 allows the Water Board to recover its reasonable expenses foroverseeing the investigation and cleanup of illegal discharges, contaminated properties, andother releases adversely affecting or threatening to adversely affect the state's waters. Theproperties involved in this matter fall into the category for which the. Water Board may recoveroversight costs. Our cost recovery program is more fully described in the enclosed"Reimbursement Process for Regulatory Oversight."

Preserving, enhancing, and restoring the San Francisco Bay Area's waters for over 60 years

Re cled Paper%cm,

Recycled

CAO Order No. R2 2011-0033 Transmittal Page 2 of 3

Estimate of Work to be Performed and Expected Outcome

Regional and State Water Board staff will be actively overseeing the cleanup and abatement ofthe Oyster Bay Regional Shoreline and the Originating Sites. We estimate that the followingwork has been or will, be performed by the Regional Water Board staff for your site during fiscalyear 2009-2012, ending June 30, 2012:

1) Draft and finalize the site's Order;2) Review submittals required under the Order and associated plans and correspondence

from you, your consultant(s), and/or interested parties;3) Conduct site inspections before, during and after drafting of the Order, including

following up on submittals required under the Order;4) Conduct meetings regarding the site on issues relevant to the Order; and5) Discuss issues related to the site and prepare written correspondence between the Water

Board and interested parties.

To date, we have expended approximately 100 hours in the preparation of the Order, whichincludes drafting the Order, site inspections, and investigating your Originating Site and thewetlands. We estimate that an additional 80 hours will be required for our oversight of the sitefor the next state fiscal year. This is an estimate. The actual time needed will depend on thenature, and extent of the necessary oversight. Based on our average billing rate of $150 per hour,our estimated oversight cost for this site during fiscal years 2009-2012 is about $27,000.

The "Billing Rates" enclosure lists the billing rates for employees expected to engage in theoversight of work on your site. In accordance with Water Code section 13365, we will identifymore detailed, specific outcomes in the future as work progresses and more site-specific databecome available.

If you have any questions, please contact me at (510) 622-2346 or via email tocboschen(@,waterboards.ca.gov. If you are represented by counsel, please contact LauraDrabandt, Staff Counsel, at (916) 341-5180 or Idrabandtawaterboards.ca.gov.

. Sincerely,

Digitally signedejAzty29,,L,.0 by Christine

Boschen

Christine Boschen,Section LeaderWaterShed Management Division

CAO Order No. R2 2011-0033 Transmittal

Enclosures:Cleanup and Abatement Order No. R2-2011-0033Reimbursement Process for Regulatory OversightBilling Rates

Page 3 of 3

cc (via U.S. mail):

Karl R. Morthole, Esq.Law Offices of Karl R. Morthole57 Post Street, Suite 801San Francisco, CA 94104

Dude, Incorporated4300 Phoenix AvenueP.O. Box 11373Fort Smith, AK 72017

Paul S. Kibel, Esq.Fitzgerald Abbott & Beardsley, LLP1221 Broadway, 21g FloorOakland, CA 94612

Foarnex Innovations Operating

49E.Miegt5atfit451 Polvorosa Ave.

San Leandro, CA 94577

Robert L. Hines, Esq.Farella Braun + Martel, LLPRuss Building235 Montgomery StreetSan Francisco, CA 94104

cc (via email):

East Bay Regional Park District2950 Peralta Oaks CourtP.O. Box 5381Oakland, CA 94605-0381ATTN: Oyster Bay Regional Park

Steven ChoiE* Poly Star, Inc.2085 Burroughs AvenueSan Leandro, CA 94577

Peter KungMetro Poly Corporation1651 Aurora DriveSan Leandro, CA 94577

Tommy LawUni Poly, Inc.1651 Aurora DriveSan Leandro, CA 9457

Yuri Won, SWRCB, Office of the Chief CounselGreg Gearheart, SWRCB, Division of Water QualityLaura Drabandt, SWRCB, Office of EnforcementRegional Water Board Lyris Enforceinent email listJohn Camp, City of San LeandroJanna Rinderneck, California Department of Fish and GameLr. Kyle Hiatt, California Department of Fish and GamePaul Hamilton, California Department of Fish and GameMike Roemer, Alameda County Office of the District AttorneyGreg Gohlson, United States Environmental Protection Agency

CALIFORNIA REGIONAL WATER QUALITY CONTROL BOARDSAN FRANCISCO BAY REGION

CLEANUP AND ABATEMENT ORDER NO. R2-2011-033

KANEKA TEXAS CORPORATION,DUDE, INCORPORATED,

ANDFOAMEX INNOVATIONS OPERATING COMPANY,

ALSO KNOWN AS FIOX AND/OR FXI

FOR THE PROPERTY LOCATED AT:2451 POLVOROSA DRIVE

SAN LEANDRO, ALAMEDA COUNTY, CALIFORNIA

E* POLY STAR, INCORPORATED

FOR THE PROPERTY LOCATED AT:2085 BURROUGHS AVENUE


METRO POLY, INCORPORATED

FOR THE PROPERTY LOCATED AT:1651 AURORA DRIVE


UNIPOLY, INCORPORATED

FOR THE PROPERTY LOCATED AT:2020 WILLIAMS STREET


AND FOR THE WATERS OF THE STATE LOCATED AT:APPROXIMATELY 4.7 ACRES OF TIDAL SALT MARCH, PARALLEL TO NEPTUNE

DRIVE ALONG THE SOUTHEASTERN EDGE OF OYSTER BAY REGIONALSHORELINE, SAN LEANDRO, ALAMEDA COUNTY, CALIFORNIA

This. Order is issued to KANEKA TEXAS CORPORATION; DUDE, INCORPORATED;FOAMEX INNOVATIONS OPERATING COMPANY; E* POLY STAR, INCORPORATED;METRO POLY, INCORPORATED; and UNIPOLY, INCORPORATED (hereafter"Dischargers"), based on provisions of California Water Code ("CWC") section 13304 and13267, which authorize the Assistant Executive Officer of the California Regional Water QualityControl Board, San Francisco Bay Region ("Regional Water Board") to issue a Cleanup andAbatement Order ("Order") where a discharger has caused or permitted waste to be dischargedor deposited where it is or probably will be discharged into waters of the state and United States,and to require a discharger to submit technical and monitoring reports.

1. Purpose of Order: This Order requires the cleanup and abatement of pre-production plasticpellets and miscellaneous refuse that the Dischargers have discharged into the estuary,wetland, and waterway areas of Oyster Bay Regional Shoreline, to prevent future wastedischarges of plastic pellets, and to submit technical and monitoring reports. Theseunauthorized discharges of plastic pellets in the waterway areas of Oyster Bay RegionalShoreline fill the wetlands. The Dischargers are thereby violating the Industrial Storm WaterGeneral Permit Order 97-03-DWQ ("Industrial General Permit") issued by the State WaterResources Control Board ("State Water Board"), violating the Water Quality Control Planfor the San Francisco Bay Basin ("Basin Plan"), and violating the federal Water PollutionControl Act (Clean Water Act) (33 U.S.C. § 1251 et seq.). In order for the cleanup of thereceiving water to proceed in an organized fashion with the least impact to the marsh habitat,this Order is issued to all responsible parties.

2. Supersedes Order No. R2-2010-0070: This order supersedes Cleanup and Abatement Order.No. R2-2010-0070, issued May 6, 2010, to KANEKA TEXAS CORPORATION("KANEKA") and CRAIN INDUSTRIES, INC. for the cleanup of the estuary, wetland, andwaterway areas of Oyster Bay Regional Shoreline and the industrial facility at 2451Polvorosa Drive. KANEKA and CRAIN INDUSTRIES, INC. have-successfully submittedand implemented a Corrective Action Plan for 2451 Polvorosa Drive and adjacent areas asrequired by Order No. R2-2010-0070. Neither KANEKA nor CRAIN INDUSTRIES, INC.presently requires coverage under the Industrial Storm Water General Permit since presentlyneither occupies nor operates industrial activity at the property.

3. Site Locations and Descriptions: The area requiring cleanup is about 4.7 acres of salt marshthat runs parallel to Neptune Drive, along the southeastern edge of Oyster Bay RegionalShoreline in San Leandro, Alameda County, California. The pre-production plastic pelletsdischarged from four properties in near Oyster Bay as described in Table 1. Attachment A isa photo with each facility identified.

Table 1. Site Locations and Descriptions

Sitelocation

Types of pellets used atsite Main pellet exposure pathways

Facility mapandtor sitelocation map

2451PolvorosaDrive

Expanded polypropyleneplastic pellets delivered bytruck

Warehouse designed for pneumaticconveyance to off-load materials from semi-trucks to internal storage.

SeeAttachment BLoading dockSeeAttachment .0Rail spur

2085BurroughsAvenue

High Density and LowDensity Polyethylene(HDPE and LDPE,respectively) pellets withprimarily rail deliveries

Warehouse designed for on and off loadingpellets from semi-trucks trailers (in frontparking lot) and from rail cars (on back siderail spur). The majority of the pellets arereceived by rail, and are off-loaded bypneumatic conveyance to internal andexternal storage.

1651AuroraDrive

The site uses LDPE inpellet form deliveredprimarily by rail

Warehouse designed for pneumaticconveyance to off load pellets from rail carsto internal storage.

SeeAttachment DRail spur

2020WilliamsStreet

The site uses LOPE andHDPE in pellet formdelivered primarily by rail

Warehouse designed for pneumaticconveyance to off load pellets from rail carsto internal storage.

SeeAttachment ERail spur

Cleanup and Abatement Order No. R2-2011-033 Page 2 of 15

4. Responsible Parties: The named dischargers are responsible parties for dischargingpre-production pellets into Oyster Bay waterways. The following four properties are consideredthe "Originating Sites."

a. 2451 Polvorosa Drive

i. KANEKA occupied part of the property from at least April, 2003 throughapproximately June, 2009. During that time, KANEKA used expanded polypropyleneplastic pellets in manufacturing automobile bumpers.

ii. DUDE, INC. owns the property. After KANEKA vacated the premises in 2009,expanded polypropylene plastic pellets left on the property, continued to dischargethrough the storm drain and via wind into the waterways at Oyster Bay. In summer2010, KANEKA removed the remaining expanded polypropylene plastic pellets fromthe property and surrounding areas pursuant to Order No. R2-2010-0070.

iii. FOAMEX INNOVATIONS OPERATING COMPANY, INC. ("FOAMEX") is thepresent occupant with a limited partnership ownership rights.

b. 2085 Burroughs Avenue: E* POLY STAR occupies the property and continues to usehigh density and low density polyethylene (HDPE and LDPE, respectively) pellets intheir manufacturing process.

c. 1651 Aurora Drive: METRO POLY CORPORATION ("METRO POLY") occupies theproperty and continues to use LDPE pellets in their manufacturing process.

d. 2020 Williams Street: UNIPOLY, INCORPORATED ("UNIPOLY") occupies theproperty and continues to use HDPE and LDPE pellets in their manufacturing process.

5. Basis of Order: Pre production plastic pellets from the four Originating Sites continue topollute and fill waters of the state and. United States.

a. The various types and colors of plastic pellets, used at the Originating Sites, have traveledinto the wetlands of Oyster Bay Regional Shoreline. As Water Board staff, observed overthe course of three inspections of the marsh during the 2009-2010 winter, while somepellets remain in the marsh, many pellets have moved out to the San Francisco Bay andare unrecoverable. As pellets still remain in the marsh (to varying degrees) and areexposed to storm water at the Originating Sites, the threat of continued release of pelletsto the marsh remains. Furthermore, so long as pellets are in use at the Originating Sites, ifappropriate best management practices are not employed in perpetuity, the threat offuture pellet release is possible.

b. This Order requires the responsible parties to cleanup the marsh of remaining pellets theyhave discharged, and to cleanup miscellaneous trash as compensation for the pellets thathave moved through the wetland out to the San Francisco Bay. This Order also requirescleanup of the Originating Sites and implementation of best management practices at theOriginating Sites to abate ongoing and future pellet discharge.

c. Table 2 summarizes the compliance status and inspections at the Originating Sites.


Table 2. Originating Site inspections

SiteLocation

InspectionDate

Purpose ofInspection

Compliance Status at Time ofInspection

RelatedDocuments1

2451 10/27/2009 Initial visit Industrial General Permit violations.PolvorosaDrive

Follow up- inspection needed.01/13/2010 Follow-up to

initial visitIndustrial General Permit violations. Staffinspected the surrounding area andparking lot. Staff collected plastic pelletsin the loading dock areas, at the cyclone-fenced borders, and near the railroad lineborder.Staff lifted the grate covering thestorm drain inlet near the Site's loadingdocks and in the middle of the parking lotand observed plastic pellets inside thestorm drain inlet walls.

Daily logs andphotos

.

01/20/2010 Follow-up Industrial General Permit violations. Staffinspected the Site and observed a profuseamount of plastic pellets in the parking lot,in the drain inlet in the parking lot, andunder the loading dock.

Inspectionreport, dailylogs andphotos

08/11/2010and08/20/2010

Post-cleanupinspection .

Industrial General Permit violations. Staffobserved site clean up activities. Site asclean as is reasonable. Fedex property

. next door could not be accessed for cleanup.at that time (it was later cleaned up).

Staff daily log

2085BurroughsAvenue

03/24/2010 Initial visit Industrial General Permit violations; followup inspection needed

Inspectionreport

12/15/2010 Enforcementfollow up

Industrial General Permit violations; followup inspection needed

Inspectionreport

1651AuroraDrive


Inspectionreport


In compliance with the Industrial GeneralPermit and on-site cleanup requirements,

Staff daily Log

2020WilliamsStreet


Inspectionreport


In compliance with the Industrial GeneralPermit and on-site cleanup requirements.

Staff report

I All documents referenced are in the public files at the Regional Water Board and are available uponrequest. Should any interested party file a petition, the Prosecution Team will seek to include thesereferenced documents as incorporated herein and part of the administrative record.


d. Table 3 describes the Water Board staff inspections at the wetlands at Oyster BayRegional Park shoreline.

Table 3. Wetland Inspections

Specific Focus Area ofMarsh

InspectionDate

Purpose ofInspection

Summary ofObservations

RelatedDocuments

Upper area near pathentrance to parkland andtwo storm drain inlets

10/27/2009 Initial investigation Staff saw some pelletsembedded in thewetland vegetation andat the water line. Staffdetermined that theywould need to return formore information.

Upper (northern) area,approximately 100 squarefeet near path entrance toparkland and two stormdrain inlets; lower areawas another approximately100-square foot area atthe mouth of wetlandaccessible from businesson Neptune Drive.

01/13/2010 Formaldocumentation ofextent of pelletsusing modifiedRapid TrashAssessmentprotocol

Staff took samples and. photographs ofnorthern and southernportions of wetlands.At high tide, a personcould put her handdown into the waterand scoop up about100. pellets.

Photographs,daily logs

Mouth of wetlandaccessible from businesson Neptune Drive

01/20/2010 Additional wetweatherobservation ofstate of marsh

.

Significantly largerquantity andpervasiveness ofpellets accumulated atmouth of wetland,embedded in and underdebris

Photographs,daily logs

Mouth of wetlandaccessible from businesson Neptune Drive

.

05/25/2010

.

Additional wetweatherobservation ofstate of marsh

Significantly fewerpellets accumulated atmouth of wetland,evidencing that largequantity of pellets havemoved out of thewetland and into SanFrancisco Bay.

Photographs

6. Regulatory Status: After inspections, Water Board Staff determined that all four OriginatingSites require Industrial General Permit coverage because they have Standard IndustrialClassification (SIC) code 2673: Plastics, Foil, and Coated Paper Bags and having industrialmaterials exposed to storm water.

a. Permit Coverage: Three of the four facilities have recently obtained coverage underIndustrial Storm Water General Permit Order 97-03-DWQ ("Industrial General Permit")2in compliance with Notices of Violation issued by enforcement staff.3 FOAMEX

2 The Industrial General Permit and information about the program may be found at:www.waterboards.ca.rov/water issues/orograms/stormwater/industrial.shtml.3 All Notices of Violations and associated responses from the dischargers are in the public file with theRegional Water Board and are available upon request.


INNOVATIONS OPERATING COMPANY (FOAMEX) already had permit coveragefor 2451 Polvorosa Drive for its own foam recycling manufacturing process, and did notreceive a Notice of Violation. KANEKA no longer occupies any portion of 2451Polvorosa Drive, and thus does not require permit coverage. Table 4 describes permitcoverage for the four_sites_where_theiesponsible_parties_have_discharged_plastic_pelletsthat have transported to Oyster Bay. Regional Shoreline.

b. Violations: KANEKA, E* POLY STAR, INC., METROPOLY, INC., and UNIPOLY,INC. have all operated industrial facilities with plastic pellets exposed to storm waterwithout Industrial General Permit coverage, violating California Water Code section13376.

Table 4. Permit Coverage at Originating Sites

Site LocationResponsible PartyNamed in PermitCoverage

Date Permit CoverageObtained

WDID (site tracking.number)

2451 Polvorosa Drive FOAMEX 07/07/2009 2 011022211 Active

2 011013970 terminatedon 11/16/2010

2085 BurroughsAvenue

E* POLY STAR 05/04/2010 2 011022621

1651 Aurora Drive METRO POLY, INC. 04/06/2010 2 011022583

2020 Williams Street UNIPOLY, INC. 04/06/2010 2 011022584

7. Federal Clean Water Act: The Federal Water Pollution Control Act (a.k.a. "Clean WaterAct'.') requires any person who discharges any pollutant into a water of the United States tohave a National Pollutant Discharge Elimination System ("NPDES") permit. The purpose ofthe Clean Water Act is to restore and maintain the chemical, physical, and biologicalintegrity of the nation's waters. (33 U.S.C. §§ 1251 et seq.)

a. Violation: All five Dischargers are violating Clean Water Act section 301 in that theyhave discharged and/or are likely to discharge plastic, pellets into and filling the waters ofthe state and United States without complying with the NPDES program. (33 U.S.C.1311.)

8. Basin Plan Discharge Prohibitions: The December 22, 2006, Water Quality Control Planfor the San Francisco Bay Basin ("Basin Plan") designates beneficial uses and water qualityobjectives for waters of the state, and includes programs to achieve water quality objectives.4The existing beneficial uses for the wetlands near and in Oyster Bay Regional Shorelineinclude: Estuarine Habitat, Preservation of Rare and Endangered Species, Water ContactRecreation, Non-Contact Water Recreation, Saltwater Habitat, Spawning, and WildlifeHabitat.

4 The Basin Plan may be found at www. waterboards. ca. gov/ sanfranciscobay /basinjlanning.shtml


a. Discharge Prohibition 6: Prohibits all conservative toxics and deleterious substances towaters of the Basin above those levels which can be achieved by a program acceptable tothe Regional Water Board. The plastic pellets are deleterious in that fish, birds and othermarine animals eat the pellets but are unable to digest them, thus starving to death. Thisprocess is described further in the following Adverse Impacts to Animals section. Theplastic pellets will take decades or centuries to fully degrade and may concentrate andtransport other, persistent, organic pollutants that may have toxic effects on plants, fishand wildlife.5

b. Discharge Prohibition 7: Prohibits the dischar'ge of rubbish, refuse, bark, sawdust, orother solid wastes into surface waters or at any place where they could contact or wherethey would eventually be transported to surface waters, including flood plain areas. Theplastic pellets are a solid waste in that they are associated with human habitation frommanufacturing operations in accordance with California Water Code section 13050(d).

c. Violations: The Dischargers are violating these Basin Plan Prohibitions by dischargingplastic pellets, a deleterious solid waste, into and filling the wetlands. The plastic pelletsare negatively impacting the wetlands' beneficial uses by impacting the habitat andwildlife in the estuary.

9. Adverse Impacts to Animals: The plastic pellets that have discharged and threaten todischarge into the wetlands are potentially deleterious to birds, fish, and other marineanimals. Wildlife may feed on small plastic pieces because they resemble food, and fieldstudies have linked consumption of plastic with negative biological impacts. Accumulationof plastic pieces in an animal's stomach can cause feelings of satiation, potentially leading tothe animal's malnutrition or starvation.6 Plastics can also adsorb persistent organic pollutantsfrom their surrounding aquatic environments, with studies finding that persistent organicpollutants adsorbed by plastics mirror levels of the pollutants found in sediment-dwellinginvertebrates, such as mussels.? Plastic debris may then mediate the transfer of thesepollutants to wildlife, as the ingested mass of plastic material has been observed to correlatepositively to the persistent organic pollutant concentration in birds.

10. Endangered Species Acts: United States Geological Survey ( "USGS ") has surveyed andmapped a 7.5 foot topographic quad that includes the wetland area of Oyster Bay RegionalShoreline. In the area, USGS has identified certain species that may be present that arefederally designated as threatened and endangered under the Endangered Species Act (16U.S.C. §§ 1531-44) and the California Endangered Species Act (CA Fish and Game Codesec. 2050 et. al.). See Table 5.

5 Interagency Marine Debris Coordinating Committee, National Oceanic and AtmosphericAdministration, U.S. Department of Commerce, Interagency Report on Marine Debris Source, Impacts,Strategies & Recommendations, (August, 2008), p. 24. See also National Oceanic and AtmosphericAdministration.6 Id.

'National Oceanic and Atmospheric Administration, U.S. Department of Commerce, Proceedings of theInternational Research Workshop on the Occurrence, Effects, and Fate of Microplastic Marine Debris,(September 9-11, 2008), p. 9.


Table 5. Endangered and Threatened Speciess

Scientific Name Common Name Federal California

Rallus longirostris obsoletus California clapperrail

Endangered Endangered

Sternula antillarum brown' California least tern Endangered Endangered

Reithrodontomys raviventris salt-marsh harvestmouse

Endangered Endangered

Ambystoma californiense California tigersalamander

Threatened CandidateEndangeredNoneCharadrius alexandrinus nivosus western snowy

ploverThreatened

11 Future Changes to Cleanup Standards: The goal of this Cleanup and Abatement Order isto restore the beneficial uses of the wetlands area affected by the discharges from theOriginating Sites. Due to the nature of the discharges, it is unknown at this time whether fullrestoration of beneficial uses to the wetlands is possible. If full restoration of beneficial usesis not technologically or economically achievable within a reasonable period of time, then theDischargers may request modification to the cleanup standards. Conversely, if new technicalinformation indicates that cleanup standards can be surpassed, the Regional Water Boardmay decide that further cleanup actions should be taken. Any requests to modify thestandards set pursuant to this Order must be submitted in writing to the Regional WaterBoard for approval.

12. CEQA: This enforcement action is being undertaken by a regulatory agency to enforce awater quality law. Such action is categorically exempt from provisions of the CaliforniaEnvironmental Quality Act ("CEQA") according to Guidelines section 15321 in Article 19,Division 3, Title 14 of the California Code of Regulations. This Order requires.the submittalof detailed work plans that address cleanup activities. The proposed activities under the workplans are not yet known, but implementation of the work plans may result in significantphysical impacts to the environment that must be evaluated under CEQA.. The appropriatelead agency will address the CEQA requirements prior to implementing any work plan thatmay have a significant impact on the environment.

13. Conclusion: Based on the above findings, Water Board enforcement staff concludes that theDischargers have caused or permitted waste to be discharged, or deposited where it can beand has been discharged, or threaten to discharge waste into waters of the state and theUnited States, and have created and threatened to create a condition of pollution. Thedischarged wastes have resulted in unnecessary and avoidable adverse impacts to beneficialuses of waters of the state and United States in historic violation of the Industrial GeneralPermit, and in violation of the federal Clean Water Act and the Basin Plan. This Order,therefore, contains tasks for investigating, cleaning up, and abating existing and futureimpacts to Oyster Bay Regional Shoreline.

8 California Natural Diversity Database, California Department of Fish and Game.


IT IS HEREBY ORDERED, pursuant to California Water Code sections 13304 that theDischargers, or their agents, successors, or assigns, shall clean up and abate the effects describedin the above findings as follows:

A _Prohibitions

1. Discharging any pollutant, including plastic pellets, without coverage under the IndustrialGeneral Permit is prohibited.

2. Discharging any pollutant, including plastic pellets, without complying with the NPDESpermit program is prohibited.

3. Discharging any wastes, including solid wastes such as plastic pellets, that will degrade, orthreaten to degrade, water quality or adversely affect, or threaten to affect beneficial uses ofthe waters in violation of the Basin Plan is prohibited.

B. Cleanup and Abatement Tasks

1. Submit and Implement Corrective Action PlanShoreline

SUBMIT CORRECTIVE ACTION PLAN

SELECT APPROVED BIOLOGICAL MONITOR BY

BEGIN IMPLEMENTING APPROVED PLAN.

NO LATER THAN

COMPLETE CLEANUP No LATER THAN

for Cleaning Up Oyster Bay Regional

COMPLIANCE DATE

JULY 31, 2011

JULY 31, 2011

SEPTEMBER 01, 2011

FEBRUARY 1, 2013

Corrective Action Plan: The Dischargers shall submit a Corrective Action. Plan to cleanup the plastic pellets and miscellaneous trash in the marsh areas of Oyster Bay RegionalShoreline. The plan shall include the following requirements, which are intended to reducethe likelihood of "take" of the endangered California clapper rail (Rallus longirostrisobsoletus), salt marsh harvest mouse (Reithrodontomys raviventris), and the potential foradverse effects to the California seablite (Suaeda calt/ornica) during the required cleanupactivities in the marsh. These requirements were stipulated by U.S. Fish and WildlifeService and the California Department of Fish and Game in consultation with East BayRecreation Park District staff biologist:.

a. Cleanup activities may not occur from February 1 through August 31 to avoid theCalifornia clapper rail breeding season. Trash and plastic pellet removal must be doneby hand with crews limited to 25 people, working two weeks per month, for a period ofthree months each year. Removal of vegetation, in the course of the marsh cleanup, isstrictly prohibited.

b. Cleanup events must start at high tide (estimated for the specific site location) andcontinue for two hours. California clapper rails and salt marsh harvest mice are mostvulnerable to disturbance and predation during extreme high tides when they are forcedout of the marsh into upland areas that often lack cover. Therefore, cleanup activities


shall cease within two hours of extreme high tides (e.g., within two hours before andafter high tides exceeding 6.0 feet NGVD at the Golden Gate Bridge adjusted to thetiming of focal tidal peaks).

c. Before marsh cleanup commences, the Dischargers shall hire a qualified wetlandbiologist to survey the cleanup area for the California seablite. If California seablite-is---found in the marsh, the location of the California seablite must be flagged, and 'aminimum 50-foot buffer must be maintained around the California seablite plants.

d. The Dischargers must provide the results of the California seablite surveys to the U.S.Fish and Wildlife Service before cleanup commences. If the California seablite isfound, then cleanup activities must not commence until the Service has given approvalto proceed. The results of the surveys should be reported to the California NaturalDiversity Database. Unless new information reveals effects of the proposed project thatmay affect listed species in a manner or to an extent not considered, or a new species islisted, no further action pursuant to the Endangered Species Act is necessary for theproposed project.

e. Cleanup activities must be conducted in the presence of and under direct supervision ofa biological monitor, specifically approved by the U.S. Fish and Wildlife Service, whois familiar with the California clapper rail, salt marsh harvest mouse, Californiaseablite, and any other special status species known or-suspected to be in the area.

i. Prior to starting clean up activities overall and prior to starting cleanup activitieseach day, the cleanup crew must hold a "tail gate" meeting, led by the U.S. Fish andWildlife Service-approved biological monitor, to discuss specific precautions andprocedures to protect the special status species that may be on site.

ii. The biological monitor will look out for (and train the cleanup crew to assist inlooking out for) raptors, herons, and gulls. This is particularly importantconsidering the proximity of a waste transfer station (which attracts gull's) to thecleanup area. If raptors, herons, .or gulls are present, the biological monitor shouldhalt the cleanup activities and assess the risk to sensitive species before decidingwhether to continue the cleanup.

iii. The biological monitor has the authorityto shut down operations at any time ifhe/she finds that operations endanger any sensitive species in the vicinity.

iv. The biological monitor shall report to the East Bay Regional' Park District,California Department of Fish and Game, the U.S. Fish and Wildlife Service, theU.S. Environmental Protection Agency, and the Regional Water Board regardingtheir observations of wildlife activity in the area, including California clapper rails,salt-marsh harvest mouse, and other general wildlife such as wandering shrews, etc,and how the cleanup activities are affecting wildlife behavior.

f. To the extent possible, the cleanup crew shall access the salt marsh by non-motorizedboat such as canoe or kayak. This is a precaution to creating sudden disturbances,which may cause clapper rail to flush and become vulnerable to predators.

g. While moving through the marsh, the cleanup workers shall do the following:

i. Keep noise to a minimum.


ii. At all times, observe the environment they are walking/boating through to avoiddisturbance.

iii. Avoid using multiple pathways through the marsh. Use trails if they exist.

iv. Plan and map their route to minimize environmental impacts and decrease runninginto hazards/barriers such as large channels.

v. When looking for a suitable place to jump a channel, do not walk along the edge ofthe channel/slough because these areas provide nesting habitat for many speciesincluding the endangered California clapper rail. To find an alternate jump site,walk parallel to the channel at a distance where vegetation is lower in height andwhere visibility of the ground surface is greater. Choose channel jump sites wherevegetation is lower or you can clearly discern what you are jumping onto.

vi. In general, avoid walking adjacent and parallel to channels/sloughs.

2. Cleanup the Originating Site at 2085 Burroughs Avenue

COMPLETE CLEANUP NO LATER THAN

COMPLIANCE DATE

AUGUST 31,2011

To abate ongoing discharges from 2085 Burroughs Avenue, E* POLY STAR shall removeall plastic pellets from the entire Originating Site, and surrounding upland areas where

. pellets have discharged. This may include vacuuming the storm drains immediatelyaccessible to the Originating Site, and cleaning railroad ballast and other such cleanupactivities.

3. Install, Implement, Maintain, and Update Best Management Practices (BMPs) thatMeet Best Available Technology Standard

INSTALL AND IMPLEMENT BMPs

MAINTAIN AND UPDATE BMPs

COMPLIANCE DATE

OCTOBER 31,2011

ONGOING

a. To abate ongoing discharges at 2085 Burroughs Avenue, 1651 Aurora Drive, and 2020Williams Street, E* POLY STAR, METRO POLY, INC., and UNIPOLY, INC. shallimplement the following BMPs.

i. Pellet Handling. When handling pellets, care must be taken to avoid spills. If spillshappen indoors or outdoors, they must be cleaned up immediately and disposed of(or recycled) in a leak proof container.

ii. Pellet Storage. Pellets stored outside, such as in a rail car or silo, must be in a vesselthat is completely enclosed from wind and rain. Pellets stored inside may becontained in Gaylord boxes or sacks, but care must be taken to avoid the punctureor rupture of the storage containers. If spills happen indoors or outdoors, they mustbe cleaned up immediately and disposed of (or recycled) in a leak proof container.


iii. Pellet Loading and Unloading. If vacuum unloading from outside storage area isused, there must be a complete seal between the storage container and the tubebeing used to offload the pellets. Secondary containment (such as a drip pan) mustbe used under the connection mechanism. A broom and dust pan or vacuum mustbe available at all times to allow for immediate cleanup of any spills.

iv. Spill and Leak Response. If spills happen indoors or outdoors, they must be cleanedup immediately and disposed of (or recycled) in a leak proof container.

v. General Housekeeping. Pellets must not be stored in a precarious manner thatwould increase the likelihood spilling or leaking pellets. Indoors, floors must beswept on a regular basis to avoid pellets leaving the building through opendoorways. Outdoors, any release of pellets must be immediately cleaned up anddisposed of (or recycled) in a leak proof container.

vi. Employee Training. All employees involved in the handling and/or use of pelletsmust be trained in "Zero Pellet Loss" activities.

b. E* POLY STAR, METRO POLY, INC., and UNIPOLY, INC. shall continue to operatebest available technology ("BAT") procedures and equipment to avoid future dischargesand to comply with the Industrial General Permit. BAT is a changing and evolvingrequirement. Thus, E* POLY STAR, METRO POLY, INC., and UNIPOLY, INC. mustkeep abreast of improvements in their industry through active involvement in tradeindustry organizations, communication with City of San Leandro and Water Board staff,and/or their own research and innovation. E* POLY STAR, METRO POLY, INC., andUNIPOLY, INC. shall then maintain and update their BMPs to meet BAT procedures andequipment to avoid discharges.

4. California Wetlands Portal

SUBMIT COMPLETE WETLANDS TRACKER FORM

COMPLIANCE DATE

WITHIN SEVEN (7) DAYSFROM CORRECTIVE ACTIONPLAN APPROVAL

It has been determined through regional, state, and national studies that tracking ofmitigation/restoration projects must be improved to better assess the performance of theseprojects, following monitoring periods that last several years. To effectively carry out theState's No Net Loss Policy for wetlands, the State needs to closely track both wetlandlosses and mitigation/restoration project success. Therefore, this Order requires theDischargers to use a standard form to provide site information related to impacts andmitigation/restoration measures for their Originating Sites and for Oyster Bay RegionalShoreline.

The Dischargers are required to use the standard California Wetlands Project (formerlyknown as "Wetlands Tracker") form to provide Originating Site and Oyster Bay RegionalShoreline information describing impacts and mitigation/restoration measures. Withinseven days from the approval of the Corrective Action Plan, complete the standard formand submit electronically to [email protected]_gov, or submit a hard copy to


both: 1) San Francisco Bay Regional Water Quality Control Board, to the attention of"California Wetlands", and 2) San Francisco Estuary Institute, 7770 Pardee Lane, Oakland,CA 94621-1424, to the attention of "California Wetlands". Instructions are availableat www.waterboards.ca.gov/sanfranciscobav/water issues /procrams/401 certs/Wetlands Instructions.doc.9

C. Provisions

1. Cost Recovery: The Dischargers are and shall be liable, pursuant to California Water Codesection 13304, to the Regional Water Board for all reasonable costs actually incurred by theRegional Water Board and associated agencies to investigate unauthorized discharges ofwaste and to oversee cleanup of such waste, abatement of the effects thereof, or otherremedial action, required by this Order. Such costs include, but are not limited to, staff timefor investigation of the discharge, preparation of this Order, review of reports andcorrespondence submitted pursuant to this Order, work to complete the directives specified inthis Order, and communications between Water Board staff and parties associated with thecleanup and abatement of the discharged waste, including the Dischargers, City of SanLeandro, interested members of the public, and other regulatory agencies. These fourOriginating Sites have been enrolled in a State Water Board managed reimbursementprogram. Reimbursement shall be made pursuant to this Order and according to theprocedures established in that program. Any disputes raised by the Dischargers overreimbursement amounts or methods used in that program shall be consistent with the disputeresolution procedures for that program.

2. Shared Submissions: Regional Water Board enforcement staff encourages the Dischargersto share correspondence, technical reports, and other documents in an effort to accomplishthe tasks assigned in this Order in the most efficient, resource saving manner. For example,one Corrective Action Plan may be submitted instead of four individual plans if allDischargers are adequately represented in the submitted plan. ,

3. Contractor/Consultant Qualifications: Dischargers' reliance on qualified professionalspromotes proper planning, implementation, and long-term cost-effectiveness of investigation,and cleanup and abatement activities. Professionals shall be qualified, licensed whereapplicable, and competent and proficient in the fields pertinent to the required activities.California Business and Professions Code sections 6735', 7835, and 7835.1 require thatengineering and geologic evaluations and judgments be performed by or under the directionof licensed professionals.

4. Report Any Changes in Ownership or Occupancy: The Dischargers shall file a writtenreport on any changes in an Originating Site's ownership or occupancy associated with thesite described in this Order. This report shall be filed with the Regional Water Board within30 days following a change in site occupancy or ownership.

9 If you have further questions, please contact Mike May of the San Francisco .Estuary Institute at (510)746-370 or by e-mail to [email protected].


5. Document Distribution: The Dischargers shall provide electronic or hard copies of allcorrespondence, technical reports, and other documents pertaining to compliance with thisOrder upon request within two weeks of the established directive deadline to the followingrecipients. The Assistant Executive Officer may modify this distribution list as needed.

a. City of-San Leandrob. California Department of Fish and Gamec. -U.S. Environmental Protections Agencyd. -U.S. Army Corps of Engineerse. U.S. Fish and Wildlife Service

6. Delayed Compliance: The Dischargers shall notify the Regional Water Board AssistantExecutive Officer if they are delayed, interrupted or prevented from meeting any of thecompliance dates specified in this Order or a key milestone in their approved CorrectiveAction Plans. The Dischargers may request in writing an extension for compliance dates,stating the basis for their request and what new compliance dates they are requesting. TheRegional Water Board has the authority to revise this Order.

7. Enforcement: If, in the opinion of the Assistant Executive Officer, the Dischargers fail tocomply with the provisions of this Order, the Assistant Executive Officer may pursue furtherenforcement action. The Assistant Executive Officer may refer this matter to the AttorneyGeneral for judicial enforcement, issue a complaint for administrative civil liability, or anytake any other applicable enforcement action. Failure to comply with this Order may result inthe assessment of an administrative civil liability up to $10,000 per violation per day,pursuant to California Water Code sections 13350, 13385, and/or 13268. The Regional WaterBoard reserves its right to take any enforcement actions authorized by law.

8. Evidentiary Hearing before the Regional Water Board: Any person affected by thisaction of the Regional Water Board may request an evidentiary hearing before the RegionalWater Board. The Regional Water Board's Executive Officer may elect to hold an informalhearing or a "paper hearing" in lieu of scheduling a hearing before the Regional Water Boarditself. If you decide to request an evidentiary hearing, send your request to the San FranciscoBay Regional Water Board Executive Officer, Attn: Bruce Wolfe. Please consider thefollowing carefully:

a. The Regional Water Board must receive your request within 30 calendar days of the dateof this Order.

b. Your request must include all comments, technical analysis, documents, reports, andother evidence that you wish to submit for the evidentiary hearing. However, please notethat the administrative record will include all materials the'Regional Water Board haspreviously received regarding these Dischargers. You are not required to submitdocuments that are already in the record.

c. The Executive Officer or Regional Water Board may deny your request for a hearingafter reviewing the evidence.

d. If you do not request an evidentiary hearing, the State Water Board may prevent youfrom submitting new evidence in support of a State Water Board petition.


e. Your request for an evidentiary hearing, if you submit one, does not stay the effectivedate of the Order, whether, or not a hearing is scheduled.

f. A request for a hearing does not extend the 30-day period to file a petition with the StateWater Board (see below). However, you may ask the State Water Board to hold thepetition in abeyance-while-your-request-for-a-hearing-is-pending7-(Refer to CCR Title 23section 2050.5(d).)

9. State Water Board Petition: Any person aggrieved by this action may petition the StateWater Board to review the action in accordance with California Water Code section 13320and Title 23, California Code of Regulations, section 2050 et al. The State Water Board,Office of Chief Counsel, must receive the petition by 5:00 p.m. 30 days after the date thisOrder becomes final (if the thirtieth day falls on a weekend or state holiday, the petition mustbe received by the next business day).1° This Order is effective upon the date of signature.

10. Periodic Cleanup and Abatement Order Review: The Regional Water Board may reviewthis Order periodically and may revise it when necessary.

Thomas MumleyAssistant Executive Officer

Attachment A: Overview Originating SitesAttachment B: 2451 Polvorosa Drive Site Location MapAttachment C: 2085 Burroughs Avenue Site Location MapAttachment D: 1651 Aurora Drive Site Location MapAttachment E: 2020 Williams Street Site Location

June 7, 2011Date

1° Instructions for petitioning will be provided upon request or you may view them at:www.waterboards.ca.gov /public notices/petitions/water quality/index.shtml


Attachment A

Map of San Leandro, Alameda County, California, indicating the approximate location of:

(1) KANEKA TEXAS CORPORATION, DUDE, INCORPORATED, 2451 POLVOROSADRIVE

(2) E* POLY STAR, INCORPORATED, 2085 BURROUGHS AVENUE

(3) METRO POLY, INCORPORATED, 1651 AURORA DRIVE

(4) UNIPOLY, INCORPORATED, 2020 WILLIAMS STREET

(5) WATERS OF THE STATE, APPROXIMATELY 4.7 ACRES OF TIDAL SALT MARCH,SOUTHEASTERN EDGE OF OYSTER BAY REGIONAL SHORELINE

Cleanup and Abatement Order No. R2-2011-033 A-1

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Attachment B

Kaneka & Dude, Inc., 2451, 2461, and 2465 Polvorosa Drive. Kaneka occupied 2465Polvorosa. Expanded polypropylene plastic pellets were offloaded from truck trailers at the arealabeled "Loading Docks."

Cleanup and Abatement Order No. R2-2011-033 B-1

Attachment C

E* Poly. Star, 2085 Burroughs Avenue

ij

11

1

Cleanup and Abatement Order No. R2-2011-033 C-1

2

Attachment D

Metro Poly, 1651 Aurora Drive

I

Slprrn draiooUtfall

T.. r.- '._.._.:.,.._..-,...:.:. .-

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Cleanup and Abatement Order No. R2-2011-033 D-1

Attachment E

Uni Poly, 2020 Williams Street. Rail cars are unloaded u derroofinAm«o drawing.

Cleanup and Abatement Order No. R2-2011-033 E-1

REIMBURSEMENT PROCESS FOR REGULATORY OVERSIGHT

We have identified your facility or property as requiring regulatory cleanup oversight. Pursuantto the Porter-Cologne Water Quality Control Act, reasonable costs for such oversight can berecovered by the Regional Water Quality Control Board (Regional Water Board) from theresponsible party. The purpose of this enclosure is to explain the oversight billing processstructure.

Introduction

The Porter-Cologne Water Quality Control Act authorizes the State Water Resources ControlBoard (State Water Board) to set up Cost Recovery Programs. The Budget Act of 1993authorized the State Water Board to establish a Cost Recovery Program for the Site CleanupProgram (SCP). The program is set up so that reasonable expenses incurred by the State WaterBoard and Regional Water Boards in overseeing cleanup of illegal discharges, contaminatedproperties, and other unregulated releases adversely impacting the State's waters can bereimbursed by the responsible party. Reasonable expenses will be billed to responsible partiesand collected by the Fee Coordinator at the State Water Board in the Division of FinancialAssistance.

The Billing System

Each cost recovery account has a unique charge number assigned to it. Whenever any oversightwork is done, the hours worked are charged to the account number on the employee's time sheet.The cost of the hours worked is calculated by the State Accounting System based on theemployee's salary and benefit rate and the State Water Board overhead rate.

State Water Board and Regional Water Board administrative charges for work such asaccounting, billing preparation, general program meetings and program specific training cannotbe charged directly to an account. This work will be charged to administrative accounting codes.The Accounting Office totals these administrative charges for the billing period and distributes

them back to all of the accounts based on the number of hours charged to each account duringthat billing period. These charges show as State Water Board Program Administrative Chargesand Regional Water Board Program Administrative Charges on the Invoice.

The Overhead Charges are based on the number of labor hours charged to the account. Theoverhead charges consist of rent, utilities, travel, supplies, training, and personnel services. ifthere is no labor charged to the account during the billing period, there will be no overheadcharges for that billing period with the exception of the last month of each fiscal year. This isdue to the fact that the labor charges end June 30 for the current fiscal year. However, severalkinds of overhead charges such as supply orders and travel, expenses are paid after the fiscal yearends. The State Water Board Accounting Office keeps track of these charges and distributesthem back to all of the accounts based on the number of hours charged to each account for thewhole fiscal year that has just ended. Therefore, the quarterly statements for the last month ofthe fiscal year could show no labor hours charged for the billing period, but some overheadcharges could be charged to the account.

1

Invoices are issued quarterly, one quarter in arrears. If a balance is owed, a check is to beremitted to the State Water Board with the invoice remittance stub within 30 days after receipt ofthe invoice. The Accounting Office sends a report of payments to the Fee Coordinator on aquarterly basis.

Copies of the invoices are sent to the appropriate Regional Water Boards so that they are awareof the oversight work invoiced. Questions regarding the work performed should be directedtoward your Regional Water Board project manager. If the responsible party becomesdelinquent in its quarterly payments, oversight work may cease immediately. Work will notbegin again unless the payments are brought up-to-date.

Daily Lags

A detailed description (daily log) of the actual work being done at each specific site is kept byeach employee in the Regional Water Board who works on cleanup oversight at the property.This information is provided on the quarterly invoice using standardized work activity codes todescribe the work performed. Upon request, a more detailed description of the work performedis available from the Regional Water Board staff.

Removal From The Billing System

After the cleanup is complete, the Regional Water Board will submit a closure form to the StateWater Board to close the account. If a balance is due, the Fee Coordinator will send a finalbilling for the balance owed. The responsible party should then submit a check to the StateWater Board to close the account.

Agreement

No cleanup oversight will be performed unless the responsible party of the propertyacknowledges that it agrees to reimburse the State for appropriate cleanup oversight costs. Youmay wish to consult an attorney in this matter. As soon as the letter is received, the account willbe added to the active SCP.Cost Recovery billing list and oversight work will begin.

Regional Water Board Dispute Resolution

Based on the Regional Water Board's review and comment, the following section has been addedas a San Francisco Bay Regional Water Board attachment to the SC? Cost Recovery Program's"Guide to the Billing Process" enclosure, "Reimbursement Process for Regulatory Oversight".

The Regional Water Board staff proposes to provide each responsible party (upon request) withdaily logs of actual oversight work done and supporting accounting information for theresponsible party's site. If, upon the receipt of the billing statement, the responsible partydisputes the amount due, the responsible party may follow the dispute resolution proceduredescribed below. If the responsible party follows the procedure, the Regional Water Board willnot initiate, except as noted, enforcement action for failure to reimburse the State Water Board.During this procedure, the responsible party is encouraged to confer with Regional Water Boardstaff at any time to discuss the areas in question and attempt to resolve the dispute.

1. The responsible party must notify the Regional Water Board in writing within 30 calendardays of receipt of the billing statement to indicate that it disputes the billing statement andrequests a meeting with the Regional Water Board Assistant Executive Officer. Thisnotification must indicate the specific areas of dispute and provide all appropriate supportdocumentation. Upon completion of the meeting, the Assistant Executive Officer willprovide a recommendation to the RegionalWaTei- Board-Executive Officer on the dispute andrecommend an amount due, based on documentation provided by both the responsible partyand the Regional Water Board staff at the meeting. The Executive Officer will submit awritten decision and resultant amount due to the responsible party and specify the new duedate by which the resultant amount due must be paid to avoid enforcement action.' This duedate will be not less than ten working days from the date of the Executive Officer's writtendecision.

2. If, upon receipt of the Executive Officer's written decision, the responsible party still disputesthe amount due and so notifies the Executive Officer by the new dtie date, the ExecutiveOfficer will schedule an appeal hearing of the decision before the Regional Water Board atthe next appropriate monthly meeting. The Executive Officer may also considerrecommending that the Regional Water Board take enforcement action for the responsibleparty's failure to pay the resultant amount due by the new due date if the Regional WaterBoard finds the responsible party's appeal without basis. Any amount due and not appealedto the Regional Water Board will be considered a violation of the Regional Water Board'sorder.

California Code of Regulations - Dispute Resolution

If a dispute regarding oversight charges cannot be resolved with the Regional Water Board,Section 13320 of the California Water Code provides an appeal process to Regional Water Boarddecisions. Regulations implementing Water Code Section 13320 are found in Title 23 of theCalifornia Code of Regulations, Section 2050.

3

BILLING RATES

SITE CLEANUP PROGRAM (SCP)BILLING COST EXPLANATION

Employee Salary and Benefits by ClassificationAssociate GovemmentalProgram AnalystEngineering GeologistEnvironmental ScientistOffice Assistant(G)Office Assistant(T)Office Technician (G)Office Technician (T)Principal Water Resources Control EngineerSanitary Engineering AssociateSanitary Engineering TechnicianSenior Engineering, Water ResourcesSenior Engineering GeologistSenior Environmental ScientistSenior Water Resources Control EngineerStaff CounselStaff Counsel IIIStaff Counsel IVStaff Environmental ScientistStudent AssistantStudent Assistant EngineerSupervising Engineering GeologistSupervising Water Resources Control EngineerWater Resources Control Engineer

ABRAGPAEGESOAOAOTOTPWRCESEASETSWRCESEGSRESSRWRCESTCOUNSTCOUNIIISTCOUNIVSESSASAESUEGSUWRCEWRCE

SALARY SCALE5,852 7,1139,213- 11,2014,092 7,5962,758 3,6842,850 3,7593,509 - 4,2683,572 - 4,34113,090 14,4346,597 8,0164,543 - 6,3399,811 13,09010,802 - 13,1277,248 - 8,74910,802 - 13,1276,216 10,41110,217 - 12,606.11,286 13,9347,242 8,7452,663 2,9382,663 3,98510,769 13,09010,769 13,0907,883 - 11,144

Operating Expenses and Equipment 2 (both Headquarters and Regional Board offices)

Indirect Costs (Overhead cost of doing business)

Billing Example

Water Resources Control EngineerSalary: . $ 11,144Overhead (indirect costs): $ 15,044Total Cost per month $ 26,188.

135%

Divided by.176 hours per month equals per hour: $ 148.80(Due to the various classifications that expend SCP resources, an average of $ 150 per hour can be usedfor projection purposes.)

1 The name and classification of employees performing oversight work will be listed on the invoice you receive.

2 The examples are estimates based on recent billings. Actual charges may be slightly higher or lower.

Revised-01-29-09

<1111 California Regional Water Quality Control BoardSan Francisco Bay Region




http://www.waterboards.ca.gov/sanfranciscobay


Edmund G. Brown,Jr.Governor

Return Receipt.ReqUested

Steven ChoiE* Poly Star2085 Burroughs AveSan Leandro, CA 94577



Enclosed is a Cleanup and Abatement Order No. R2-2011-0033 (the Order) issued to E* POLYSTAR, INCORPORATED, for unauthorized discharges of pre-production plastic pellets intoOyster Bay Regional Shoreline and San Francisco Bay, and for the property at 2085BURROUGHS AVENUE.

The Order is the legal document the San Francisco Bay Regional Water Board (Water Board)will use to oversee the investigation and cleanup of the pre-production plastic pellets. It requiresthe responsible parties to cleanup and abate the sites where the pellets originated (OriginatingSites) and surrounding wetlands and related waterways where pellets have and continue todischarge.


Water Code section 13304 allows the Water Board to recover its reasonable expenses foroverseeing the investigation and cleanup of illegal discharges, contaminated properties, andother releases adversely affecting or threatening to adversely affect the state's waters. Theproperties involved in this matter fall into the category for which the Water Board may recoveroversight costs. Our cost recovery program is more fully described in the enclosed"Reimbursement Process for Regulatory Oversight."


Vic;'Paper'44



Regional and State Water Board staff will be actively overseeing the cleanup and abatement ofthe Oyster Bay Regional Shoreline and the Originating Sites. We estimate that the followingwork has been or will be performed by the Regional Water Board staff for your site during fiscalyear 2009-2012, ending June 30, 2012:





To date, we have expended approximately 70 hours in the preparation of the Order, whichincludes drafting the Order, site inspections, and investigating your Originating Site and thewetlands. We estimate that an additional 100 hours will be required for our oversight of the sitefor the next state fiscal year. This is an estimate. The actual time needed will depend on thenature and extent of the necessary oversight. Based on our average billing rate of $150 per hour,our estimated oversight cost for this site during fiscal years 2009-2012 is about $25,500.


If you have any questions, please contact me at (510) 622-2346 or via email [email protected]. If you are represented by counsel, please contact LauraDrabandt, Staff Counsel, at (916) 341-5180 or [email protected].

Sincerely,

Digitally signedby ChristineBoschen

Christine Boschen,Section LeaderWatershed Management Division


Enclosures:Cleanup and Abatement Order No. R2-201.1-0033'Reimbursement Process for Regulatory OversightBilling Rates.

cc (via U.S. mail):



Paul S. Kibel, Esq.Fitzgerald Abbott & Beardsley, LLP1221 Broadway, 20 FloorOakland, CA 94612

Foamex Innovations OperatingCompany2451 Polvorosa Ave.San Leandro, CA 94577


cc (via email):





Yuri Won, SWRCB, Office of the Chief CounselGreg Gearheart, SWRCB, Division of Water QualityLaura Drabandt, SWRCB, Office of EnforcementRegional Water Board Lyris Enforcement email listJohn Camp, City of San LeandroJanna Rinderneck, California Department of Fish and GameLr. Kyle Hiatt, California Department of Fish and GamePaul Hamilton, California Department of Fish and GameMike Roemer, Alameda County Office of the District AttorneyGreg Gohlson, United States Environmental Protection Agency

<1411k California Regional Water Quality Control Boardalw; San Francisco Bay Region




http://www.waterboards.ca.goy/sanfranciscobay


Edmund G. Brown, Jr.Governor





Enclosed is a Cleanup and Abatement Order No. R2-2011-0033 (the Order) issued to METROPOLY CORPORATION, for unauthorized discharges of pre-production plastic pellets intoOyster Bay Regional Shoreline and San Francisco Bay, and for the property at 1651 AURORADRIVE.





Cc, Recycled Paper








To date, we have expended approximately 70 hours in the preparation of the Order, whichincludes drafting the Order, site inspections, and investigating your Originating Site and thewetlands: We estimate that an additional 80 hours will be required for our oversight of the sitefor the next state fiscal year. This is an estimate. The actual time needed will depend on thenature and extent of the necessary oversight. Based on our average billing rate of $150 per hour,our estimated oversight cost for this site during fiscal years 2009-2012 is about $22,500.


If you have any questions, please contact me at (510) 622-2346 or via email [email protected]. If you are represented by counsel, please contact LauraDrabandt, Staff Counsel, at (916) 341-5180 or [email protected].

Sincerely,

Digitally signedby ChristineBoschen



Enclosures:Cleanup and Abatement Order No. R2-2011-0033Reimbursement Process for Regulatory Oversight.Billing Rates

Page 3 of 3

cc (via U.S. mail):



Paul S. Kibel, Esq.Fitzgerald Abbott & Beardsley, LLP1221 Broadway, 21st FloorOakland, CA 94612

Foarnex Innovations OperatingCompany2451 Polvorosa Ave.San Leandro, CA 94577






cc (via email):


California Regional Water Quality Control Board1;07 San Francisco Bay Region

Linda S. AdamsActing Secretatyfor



http://www.waterboards.ca.gov/sanfranciscobay


Edmund G. Brown, Jr.Governor


Tommy LawUni Poly, Inc1651 Aurora DriveSan Leandro, CA 94577



Enclosed is a Cleanup and Abatement Order No. R2-2011-0033 (the Order) issued to UNI POLYINCORPORATED, for unauthorized discharges of pre-production plastic pellets into Oyster BayRegional Shoreline and San Francisco Bay, and for the property at 2020 WILLIAMS STREET.





(5 Recycled Paper








To date, we have expended approximately 70 hours in the preparation of the Order, whichincludes drafting the Order, site inspections, and investigating your Originating Site and thewetlands. We estimate that an additional 80 hours will be required for our oversight of the sitefor the next state fiscal year. This is an estimate. The actual time needed will depend on thenature and extent of the necessary oversight. Based on our average billing rate of $150 per hour,our estimated oversight cost for this site during fiscal years 2009-2012 is about $22,500.


If you have any questions, please contact me at (510) 622-2346 or via email tocboscbenwaterboards.ca.gov. If you are represented by counsel, please contact LauraDrabandt, Staff Counsel, at (916) 341-5180 or [email protected].

Sincerely,

Digitally signedetc, by ChristineBoschen



Enclosures:Cleanup and Abatement Order No. R2-2011-0033Reimbursement Process for Regulatory OversightBilling Rates

Page 3 of 3

cc (via U.S. mail):



Paul S. Kibel, Esq.Fitzgerald Abbott & Beardsley, LLP1221 Broadway, 21st FloorOakland, CA 94612

Foamex Innovations OperatingCompany2451 Polvorosa Ave.San Leandro, CA 94577


cc (via email):






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28Farclla Braun + Martel LLP

235 Montgomery Strcct, 17th FloorSan Francisco, CA 94104

(415) 954-4400

EXHIBIT B

PETITION FOR REVIEW

FARELLA BRAUN+MARTEL LLP

Attorneys At Law

Russ Building / 235 Montgomery StreetSan Francisco/CA 94104

T 415.954.4400 / F 415.954.4480www.fbm.com

ROBERT L [email protected] 415.954.4935

June 20, 2011

Via Federal Express

Thomas Mum leyAssistant Executive OfficerCalifornia Regional Water Quality Control BoardSan Francisco Bay Region1515 Clay Street, Suite 1400Oakland, California 94612

Re: Cleanup and Abatement Order No. R2-2011-0033 For Oyster Bay RegionalShoreline and Originating Sites, San Leandro, Alameda County, California

Dear Mr. Mum ley:

Enclosed please find a copy of FXI, Inc.'s Petition for Review of the Water Board'sCalifornia Water Code Section Cleanup and Abatement Order No. R2-2011-0033. We havetransmitted the original Petition and exhibits today to the State Water Resources Control Boardfor timely filing.

We are filing this protective petition to meet California Water Code deadlines. However,we look forward to working with Water Board staff to resolve FXI, Inc.'s concerns regarding theOrder. Thank you.

Sincerely,

rgu.,(42-Robert L. Hines

EnclosurePetition for Review

-25778\2649257.1

Thomas Mum leyJune 20, 2011Page 2

cc: (Via U.S. Mail w/encl.)

Christine BoschenSection LeaderWatershed Management DivisionCalifornia Regional Water Quality Control BoardSan Francisco Bay Region1515 Clay Street, Suite 1400Oakland, CA 94612



Paul S. Kibel, Esq.Fitzgerald Abbott & Beardsley, LLP1221 Broadway, 21st FloorOaldand, CA 94612


25778\2649257.1

Laura Drabandt, Staff CounselOffice of EnforcementState Water Resources Control Board1001 I St., 16th Fl.,P.O. Box 100Sacramento, CA 95812




Foamex Innovations Operating Company2451 Polvorosa AvenueSan Leandro, CA 94577

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