SITE INFORMATION AND CORRESPONDENCE

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Mr. Joel Weiss February 15, 1996 Page 3 Proposed Modifications to Site Remediation Program The amount of lead-impacted soil identified at the Old Tracy Yard site through January 9, 1996 has exceeded the amount originally estimated by a factor of 10 (25,500 cy versus 2,400 cy). Approximately 15,600 cy of impacted soil is presently stockpiled on site awaiting disposal. Analytical results from additional characterization samples collected on January 10, 1996 indicate that a substantial amount of impacted soil remains in place. The actual amount of impacted soil remaining in place cannot be reliably estimated given the fact that prior characterization data have not been definitive, due presumably to the sporadic occurrences of lead in soil imported to the site and used as fill over a period of time that may extend from the late 1800s to the mid 1900s. Consequently, the potential, and the amount of additional effort to achieve the 220 mg/kg cleanup level over the entire site, as required for future residential development, is uncertain. However, a modified process to complete soil remediation in a manner that would not meet residential use requirements but would be protective of ground water can be defined and the level of effort and cost bounded. This is based on available data which indicates that the lead in the soil at the Old Tracy Yard is relatively immobile under normal conditions (WET with deionized water leach results for site soil samples) and that shallow ground water beneath the site has not been impacted with lead (ground water monitoring results) even though the lead-impacted soil may have been on the site for 30 to as long as 100 years. Based on the above considerations, SPTCo has decided to cancel the sale of the property and eliminate, at least for the foreseeable future, possible residential use of the property. In view of this change, SPTCo/Terranext propose to complete remediation of lead-impacted soil at the Old Tracy Yard site as follows: * Perform onsite treatment of the stockpiled soil to immobilize the lead. The soil will be treated by a proprietary process offered by Cunningham Davis Environmental, Inc. of Corona, California. The process and equipment will be fully permitted for treatment of contaminants on site. * Sample and test the treated soil in accordance with U.S. Environmental Protection Agency SW-846, Section III, Chapter 9 and using WET with a citrate leach. Twenty-five samples of the treated soil will be collected and analyzed (approximately one per 1,000 tons). Assuming all analytical results are less than 5 milligrams per liter (mg/L) lead, this number of samples will provide a 75 percent confidence level that 469-022.Itr/02-15-96/u/kevdam/oldtracy/letters TerraNext