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UNION PACIRC ROULROAD Ernie Sirotek,Mgr.CTS-1400 Middle Harbor Road-Oakland,CA 94607-(510)891-7729 01/27/98 Mr. Kurt Neuharth, Safety Coordinator Western Farm Service 509 W. Weber Ave. Suite 201 Stockton, CA 95203 Fax: 209-438-7602 Dear Mr. Neuharth, Thank you for your assistance and involvement with our project at Lodi, CA. It is enlightening to know that Industry can work together in areas such as this even with all the regulatory sensitivities that we all deal with. The following summation of activities should give an idea of where we are at in this point in time. A more detailed report will be available in the future if necessary. As you are aware, Union Pacific Railroad had a derailment/accident in Lodi, CA on 01/18/98 which involved JR Simplot properties and in addition, Western Farm Service property in which Western Farm Service is the Leasee and Union Pacific Railroad is the Leasor. The derailmentlaccident resulted in the release of miscellaneous non regulated material along with paint related materials i.e. Latex Paint and Aerosol Paint These materials are being properly disposed of in accordance with applicable regulations. The derailment/accident also resulted in a small release of Phosphoric Acid, approximately 300 gallons, when the derailed train collided with three tank cars that were parked in the siding adjacent UPRR mainline and JR Simplot properties. The Phosphoric Acid was contained in a stormwater collection pond approximately 150 feet west of UPRR mainline and derailment/accident site, and is maintained by JR Simplot. Approximately 40,000 gallons of solution was recovered from the stormwater collection pond and is currently contained in two Baker Tanks. The contaminated soil has been removed with verification samples taken, and will be disposed of in accordance with applicable regulations. Western Farm Service was contacted to explore alternatives to disposal of the Phosphoric Acid Solution. It was decided that the recovered solution could be utilized as a fertilizer providing issues with the State of California and San Joaquin County Health Department were addressed. At this point in time, Union Pacific Railroad contacted Mr. Kelvin Yamata of the California Department of Toxic Substances Control, Sacramento, CA and requested verbal permission to neutralize the Phosphoric Acid Solution on site without being considered or defined as a TSD Facility. A verbal authority was given as long as his department receives a certified letter from Western Farm Service stating that the neutralized material will be used as fertilzer. Mr.Yamata advised UPRR that he would be contacting the appropriate agencies involved to avoid any confusion in this issue. To verify, Mr. Yamata can-be reached at 916-323- 3666. As previously mentioned, Union Pacific Railroad sincerely appreciates your involvement and assistance regarding this matter. Ernie Sirotek