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November 24, 2008 n EC O J Mr. Michael Infurna Ditl Ji 6 2008 Environmental Health Department ENVIRONMENT HEALTH 600 E. Main PERMIT/SERVICES Stockton, CA 95201 at+ Jew l On- Subject: Valley Motors Dear Mr. Infurna: I have spoken with Dr. Victor Cherven of Upgradient Environmental Consultants concerning your letter of October 9 regarding additional environmental work to be done on the Hyduke's Valley Motors property. While I understand your position that this work should be done because the work plan that Upgradient submitted in March was appropriate at that time, I feel that it is important for all parties to take into consideration the significant changes that have occurred in the financial situation at the State's Underground Storage Tank Fund Program and in the economy in general since that work plan was approved. Under these dire economic conditions, I can see no way for Valley Motors to implement that work plan at this time. I have not received reimbursement from the UST Cleanup Fund since July 2007- That 007That payment covered costs that were incurred between March and August 2006. Since that time, Valley Motors has incurred approximately $60,000 in additional charges. Requests for reimbursement of portions of this amount were submitted to the UST Fund in September 2006 and March 2007, but no payments have been received. In late October I received a form letter from the Cleanup Fund informing me that future payments will be delayed several months longer than normal. As I have already waited more than 2 years for payment of the reimbursement request submitted in September 2006,this means that I can expect to wait 3 years for future payments. This is unacceptable. For more than a year, I have attempted to secure a short-term loan with which to pay Upgradient Environmental, without success. As you are aware, now that credit markets have tightened, it has become nearly impossible for anyone to obtain a loan. Dr. Cherven estimates that the work requested in your October 9 letter will require third- party (subcontractor) charges in excess of$25,000. If it becomes necessary to continue groundwater remediation for several months or more,the cost could rise to $100,000. Valley Motors does not have the cash reserves or the cash flow necessary to pay for that work. Upgradient Environmental has informed me that their financial situation is also suffering and they are unable to extend further credit while waiting indefinitely for reimbursement from the Cleanup Fund. They have also informed me that performing a test on one of the existing wells at my site, as they had proposed in a report in November 2006, might provide the needed data at a far lower cost. It would be possible to provide you with a modified work plan for such a test in the very near future, and the plan could be implemented soon after I receive the reimbursement that is currently pending at the Cleanup Fund. Dr. Cherven has been informed that this payment is currently on hold in