reg on Kate Brown, Governor

January 19,2018

Department of Environmental Quality Office of Compliance and Enforcement

700 NE Multnomah Street, Suite 600 Portland, OR 97232-4100

(503) 229-5696 FAX (503) 229-5100

TIY 711

CERTIFIED MAIL: 7016 2140 0000 2409 6271

McFarland Cascade Holdings, Inc. c/o C T Corporation System, Registered Agent 780 Commercial Street, SE, Suite 100 Salem, OR 97301

Re: Notice of Civil Penalty Assessment and Order Case No. WQ/SW-NWR-2017-225

This letter is to inf01m you that the Oregon Department of Environmental Quality (DEQ) has issued you a civil penalty of $9,063 for failing to comply with the monitoring requirements of the stormwater discharge petmit for your log yard at 58144 Old P011land Road in Wanen, Oregon. Specifically, you failed to comply with Schedule B of your stormwater permit by failing to monitor your facility ' s stormwater discharge for Total Copper, Total Lead, Total Zinc, pH, Total Suspended Solids (TSS), Total Oil & Grease and Chemical Oxygen Demand (COD) on two occasions in 2016.

DEQ issued Expedited Enforcement Offer No. 2017-EE0-3011 on October 20, 2017, offering to settle these violations for a civil penalty of$1,600 (EEO). Because you rejected that EEO, this case was refened to DEQ's Office of Compliance and Enforcement. DEQ has determined that the inf01mation that you submitted does not meet the stormwater permit's criteria for a monitoring variance. More specifically, you have not demonstrated-with data and analysis-that a discharge or discharges did not occur from your Facility during the period July 1, 2016 through December 31, 2016. Such data and analysis must be submitted to DEQ with your annual Discharge Monitoring Report in support of a "no discharge" claim for each missed sample. Specifically, you have not evaluated the facility' s potential to discharge by calculating the retention capacity or infiltration rates of the vegetated ditches which lead to Outfall 001 nor have you compared the facility's potential to discharge to the actual rainfall events during the second half of 2016. In addition, you have not documented, with photographs or other inspection records, the site's potential to discharge under various weather conditions throughout the year.

DEQ issued this penalty because the system that protects water quality in Oregon is highly dependent on permittees complying with the monitoring requirements of their permits. Without monitoring data, DEQ and the public cannot determine whether permittees are complying with pollutant limits or the pollutant loadings to the state's waterways. Failing to comply with the monitoring requirements is therefore considered among the most serious of violations.

If you wish to appeal this matter, DEQ must receive a request for a hearing within 20 calendar days from your receipt of this letter. The hearing request must be in writing. Send your request to DEQ Office of Compliance and Enforcement:

Via mail - 700 NE Multnomah Street, Suite 600, Pot1land, Oregon 97232 Via email - DEQappeals@deq.state.or.us

McFarland Cascade Holdings, Inc. Case No. WQ/SW-NWR-2017-225 Page 2

Via fax - 503-229-5100 Once DEQ receives your request, we will arrange to meet with you to discuss this matter. If DEQ does not receive a timely written hearing request, the penalty will become due. Alternatively, you can pay the penalty by sending a check or money order to the above address.

The attached Notice further details DEQ's reasons for issuing the penalty and provides further instructions for appealing the penalty. Please review and refer to it when discussing this case with DEQ.

DEQ may allow you to resolve part of your penalty through the completion of a Supplemental Environmental Project (SEP). SEPs are environmental improvement projects that you sponsor instead of paying a penalty. Further information is available by calling the number below or at http://www. oregon. gov I deq/regulations/pages/ sep. aspx

DEQ's rules are available at http://www.oregon.gov/deq/Regulations/Pages/administrative-rules.aspx or by calling the number below.

If you have any questions, please contact Becka Puskas at 503-229-5058 or toll free in Oregon at 800-452-4011, extension 5058.

Sincerely,

Sarah G. Wheeler, Acting Manager Office of Compliance and Enforcement

Enclosures

cc: Jon Younce, McFarland Cascade Holdings, Inc., P.O. Box 1496, Tacoma, WA 98421 Roland Mueller, McFarland Cascade Holdings, Inc., P.O. Box 1496, Tacoma, WA 98421 E. Jay Murphy, DEQ Christine Svetkovich, DEQ Shaumae Hall, Accounting, DEQ John Koestler, WQ, DEQ

1

2

3

4

5

BEFORE THE ENVIRONMENTAL QUALITY COMMISSION

OF THE STATE OF OREGON

IN THE MATTER OF: ) MCFARLAND CASCADE HODLINGS, INC,) a Washington corporation, )

Respondent. )

NOTICE OF CIVIL PENALTY ASSESSMENT AND ORDER CASE NO. WQ/SW-NWR-2017-225

6 I. AUTHORITY

7 The Depattment of Environmental Quality (DEQ) issues this Notice of Civil Penalty Assessment

8 and Order (Notice) pursuant to Oregon Revised Statutes (ORS) 468.100, ORS 468.126 through 468.140,

9 ORS Chapters 183 and 468B and Oregon Administrative Ru1es (OAR) Chapter 340, Divisions 011,012,

10 and 045.

11 II. FINDINGS OF FACT

12 1. On April24, 2015 DEQ assigned Respondent coverage under National Pollutant Discharge

13 Elimination System Industrial Stormwater Discharge General Permit No. 1200-Z (Permit) for the

14 facility located at 58144 Old Portland Road in Warren Oregon and known as "MCHI- McCormick

15 Yard" (the Facility). The Pe1mit was in effect at all material times. 1

16 2. The Permit authorizes Respondent to construct, install, modify or operate stormwater

17 treatment or control facilities, and to dischat·ge stmmwater and non-stormwater discharges specifically

18 authorized by the Permit to public waters in confmmance with all the requirements, limitations and

19 conditions set fmth in the Permit.

20 3. According to Respondent's Stormwater Pollution Control Plan (SWPCP), stormwater from

21 the Facility drains to onsite vegetated ditches that lead to Outfall 001, which discharges to an urmamed

22 ditch that leads to Scappoose Bay.

23 4. Schedule B.1.a of the Permit requires Respondent to monitor for the "statewide benchmark"

24 pollutants identified in Schedule A.9 of the Permit and applicable "sector-specific" benchmarks

25 identified in Schedule E of the Permit. According to Schedule A.9, Table 3, the "statewide

26

27 1 All of the references in this Notice are to the 1200-Z Permit effective through July 31, 2017 because the violations pertain to the 2016-2017 monitoring year (July 1, 2016 through June 30, 20 17). DEQ issued a new 1200-Z permit, effective August 1, 2018 through July 31, 2022, which cunently applies to Respondent's Facility.

NOTICE OF CIVIL PENALTY ASSESSMENT AND ORDER CASE NO. WQ/SW-NWR-2017-225 Page 1 of5

1 benchmarks" include Total Copper, Total Lead, Total Zinc, pH, Total Suspended Solids (TSS), and

2 Total Oil & Grease.

3 5. Schedule E, Table E.A-1 of the Permit establishes Chemical Oxygen Demand (COD) as a

4 sector-specific benchmark pollutant for timber products facilities subject to the Permit with SIC code

5 2449.

6 6. Under the Permit, effective through July 31, 2017, Respondent's Facility was classified as a

7 timber products facility with a primary SIC Code 2449 (Wood Products, Not Elsewhere Classified).2

8 7. Schedule B.2.e.i of the Permit establishes a stmmwater monitoring year of July I to June 30.

9 8. Schedule B.2.e of the Permit requires Respondent to monitor its storm water discharge for

I 0 statewide benchmarks and any applicable sector-specific benchmark pollutants four times per

11 monitoring year in accordance with Schedule B, Table 4, with two samples on or before December 31

12 and two samples on or after January 1.

13 9. During the 2016-2017 monitoring year, Respondent was required to monitor the Facility's

14 stormwater discharge for Total Copper, Total Lead, Total Zinc, pH, Total Suspended Solids (TSS),

15 Total Oil & Grease and Chemical Oxygen Demand (COD) at Outfall 001, four times a year, with two

16 samples taken on or before December 31 and two samples on or after January I.

17 1 0. Schedule B.3. b of the Permit provides that Respondent "may request a monitoring variance

18 for missed samples due to no discharge from the site if one of the following criteria is met:

19 a. State or federal authorities declared the year a drought year.

20 b. Demonstrate that rainfall in the area where the permit registrant's facility is located was

21 20% or more below the three-year average rainfall for that area.

22 c. Demonstrate to DEQ or Agent's satisfaction that discharge did not occur due to the use

23 of on-site retention system or other stormwater treatment system, or infrequent stmm events

24 of sufficient magnitude to produce run-off during normal business hours and safe

25 conditions."

26

27 2 With its application for coverage under the current 1200-Z permit, effective August I, 2017 through June 30, 2022, Respondent revised its primary SIC code to 2411 (Log Storage and Handling). This sub-sector is not required to monitor for COD. NOTICE OF CIVIL PENALTY ASSESSMENT AND ORDER CASE NO. WQ/SW-NWR-2017-225

Page 2 of5

1 11. In order to obtain a monitoring variance pursuant to Schedule B.3.b of the Permit based on

2 one of the criteria described in Paragraphs 14.a through 14.c above, Respondent must "for each missed

3 sample, report in the Discharge Monitoring Report form that no discharge occurred and include

4 suppmiing data and analysis demonstrating why the monitoring did not occur."

5 12. Schedule B.8.a requires Respondent to submit a "DEQ-approved Discharge Monitoring

6 Report (DMR) form to DEQ or Agent by July 31st of each year" which includes sampling results from

7 the previous monitoring year (July 1 through June 30).

8 13. On July 3, 2017, Respondent submitted the Facility's DMR to DEQ for the reporting period

9 July I, 2016 through June 30, 2017. The DMR reports results for all of the required parameters for

10 samples taken on January 18, 2017 and February 1, 2017. The DMR states that there was "No

II Discharge" at Outfall 001 for the two missed samples during the period from July 31, 2016 through

12 December 31, 2016 and no sampling data was reported for that period. The DMR submission did not

13 include any supporting data and analysis demonstrating why monitoring did not occur at Outfall 001

14 for the two missed samples during the second half of2016.

15 14. As of the date of this Notice, Respondent has not submitted supporting data and analysis to

16 DEQ demonstrating why monitoring did not occur at Outfall 001 for the two missed samples during the

17 second half of2016. More specifically:

18 a. Respondent has not demonstrated that state or federal authorities declared the year a

19 drought year;

20 b. Respondent has not demonstrated that rainfall in the area where the Facility is located

21 was 20% or more below the three-year average rainfall for that area; and

22 c. Respondent has not demonstrated to DEQ's satisfaction that a discharge did not occur

23 due to the use of an on-site retention system or other storm water treatment system, or

24 infrequent storm events of sufficient magnitude to produce run-off during normal business

25 hours and safe conditions.

26 \\\

27 \\\

NOTICE OF CIVIL PENALTY ASSESSMENT AND ORDER CASE NO. WQ/SW-NWR-2017-225 Page 3 of5

I III. CONCLUSIONS

2 Respondent has violated ORS 468B.025(2) by violating a condition of a stormwater permit.

3 Specifically, Respondent violated Schedule B of the Permit by failing to monitor for Total Copper,

4 Total Lead, Total Zinc, pH, Total Suspended Solids (TSS), Total Oil & Grease and Chemical Oxygen

5 Demand (COD) at Outfall 001 on two occasions during the period July I, 2016 through December 31,

6 2016, as described in Section II, Paragraphs 1-14, above. Respondent is not exempt from the Permit's

7 monitoring requirements because Respondent has not met the criteria for a monitoring variance,

8 pursuant to Schedule 3. b of the Pe1mit, by establishing that there was no discharge during the second

9 half of2016. More specifically, Respondent has not "demonstrated to DEQ's satisfaction that a

I 0 discharge did not occur due to the use of an on-site retention system or other storm water treatment

II system, or infrequent storm events of sufficient magnitude to produce run-off during normal business

12 hours and safe conditions," as required by Schedule 3.b.iii of the Permit. As of the date of this Notice,

13 Respondent has not submitted supporting data and analysis to DEQ to support its claim of "No

14 Discharge" for the two missed samples during the second half of2016. These are Class I violations,

15 according to OAR 340-012-0055(l)(o). DEQ hereby assesses a $9,063 civil penalty for these

16 violations.

17 IV. ORDER TO PAY CIVIL PENALTY

18 Based upon the foregoing FINDINGS OF FACTS AND CONCLUSIONS, Respondent is

19 hereby ORDERED TO:

20 Pay a total civil penalty of$9,063. The determination of the civil penalty is attached as Exhibit

21 I and is incorporated as pmt of this Notice.

22 If you do not file a request for hearing as set forth in Section V below, your check or money

23 order must be made payable to "State Treasurer, State of Oregon" and sent to the DEQ, Business

24 Office, 700 NE Multnomah Street, Suite 600, Portland, Oregon 97232. Once you pay the penalty,

25 the Findings of Fact, Conclusions and Order become final.

26 V. NOTICE OF RIGHT TO REQUEST A CONTESTED CASE HEARING

27 You have a right to a contested case hearing on this Notice, if you request one in writing. DEQ

NOTICE OF CIVIL PENALTY ASSESSMENT AND ORDER CASE NO. WQ/SW-NWR-2017-225 Page 4 of5

1 must receive your request for hearing within 20 calendar days from the date you receive this Notice. If

2 you have any affirmative defenses or wish to dispute any allegations of fact in this Notice or attached

3 exhibit(s), you must do so in your request for hearing, as factual matters not denied will be considered

4 admitted, and failure to raise a defense will be a waiver of the defense. (See OAR 340-011-0530 for

5 further information about requests for hearing.) You must send your request to: DEQ, Office of

6 Compliance and Enforcement, 700 NE Multnomah Street, Suite 600, Portland, Oregon 97232, fax

7 it to 503-229-5100, or email it to DEQappeals@deq.state.or.us. An adminish·ative law judge

8 employed by the Office of Administrative Hearings will conduct the hearing, according to ORS

9 Chapter 183, OAR Chapter 340, Division 011 and OAR 137-003-0501 to 0700. You have a right to be

10 represented by an attomey at the hearing, however you are not required to be. If you are an individual,

11 you may represent yourself. If you are a corporation, prutnership, limited liability company,

12 unincorporated association, trust or govemment body, you must be represented by an attorney or a duly

13 authorized representative, as set forth in OAR 137-003-0555.

14 Active duty service-members have a right to stay proceedings under the federal Service

15 Members Civil Relief Act. For more information, please call the Oregon State Bar at 1-800-

16 452-8260 or the Oregon Militru·y Depmtment at 1-800-452-7500. Additional information can be found

17 online at the United States Aimed Forces Legal Assistance (AFLA) Legal Services Locator website

18 http:/ /legalassistance.law .af.mil/ content/locator. php.

19 If you fail to file a timely request for hearing, the Notice will become a final order by default

20 without further action by DEQ, as per OAR 340-011-0535(1). If you do request a hearing but later

21 withdraw your request, fail to attend the hearing or notify DEQ that you will not be attending the

22 hearing, DEQ will issue a final order by default pursuant to OAR 340-011-0535(3). DEQ designates

23 the relevant p01tions of its files, including infotmation submitted by you, as the record for purposes of

24 proving a prima facie case.

25

26

27 Sarah G. Wheeler, Acting Manager Office of Compliance and Enforcement

NOTICE OF CIVIL PENALTY ASSESSMENT AND ORDER CASE NO. WQ/SW-NWR-2017-225 Page 5 of5

EXHIBIT 1

FINDINGS AND DETERMINATION OF RESPONDENT'S CIVIL PENALTY PURSUANT TO OREGON ADMINISTRATIVE RULE (OAR) 340-012-0045

VIOLATION:

CLASSIFICATION:

MAGNITUDE:

Violating a condition of a storm water discharge pe1mit by failing to conduct Schedule B monitoring, in violation of ORS 4688.025(2).

This is a Class I violation pursuant to OAR 340-012-0055(l)(o).

The magnitude of the violation is moderate pursuant to OAR 340-012-0130(1), as there is no selected magnitude specified in OAR 340-012-0135 applicable to this violation, and the infmmation reasonably available to DEQ does not indicate a minor or major magnitude.

CIVIL PENALTY FORMULA: The formula for determining the amount of penalty of each violation is: BP + [(0.1 x BP) x (P + H + 0 + M +C)]+ EB

"BP" is the base penalty, which is $4,000 for a Class I, moderate magnitude violation in the matrix listed in OAR 340-012-0140(3)(b)(A)(ii) and applicable pursuant to OAR 340-012-0140(3)(a)(E)(iii) because Respondent has coverage under NPDES Stormwater Discharge General Permit No. 1200-Z.

"P" is whether Respondent has any prior significant actions, as defmed in OAR 340-012-0030(19), in the same media as the violation at issue that OCCUlTed at a facility owned or operated by the same Respondent, and receives a value of 8 according to OAR 340-012-0145(2)(a)(C) and (D) because Respondent has one Class I violation in Case No. WQ/I-WR-2015-129 and six Class I violations in Case No. WQ/I-WR-2016-043.

"H" is Respondent's histmy of correcting prior significant actions, and receives a value of 0 according to OAR 340-012-0145(3)(c) because there is insufficient information on which to base a finding under paragraphs (3)(a) or (b).

"0" is whether the violation was repeated or ongoing, and receives a value of2 according to OAR 340-012-0145(4)(b) because there was more than one but less than seven occurrences of the violation. Respondent failed to monitor on two occasions dming the period July 1, 2016 through December 31, 2016.

"M" is the mental state of the Respondent, and receives a value of2 according to OAR 340-012-0145(5)(b) because Respondent had constmctive knowledge (reasonably should have known) of the requirement. The requirements to monitor the Facility's stormwater discharge--or to provide data and analysis in support of a monitoring variance in the case of no discharge-are express conditions of the Pe1mit. Respondent is aware that its Facility may not generate a stormwater discharge dming all required sampling periods. Respondent's SWPCP, submitted to DEQ on October 31,2016, states that: "Because of the

Case No. WQ/SW-NWR-2017-225 Exhibit 1 Page I

site characteristics there is not always stmmwater runoff at the sampling point during nmmal scheduled sampling periods. Stmmwater is absorbed into the ground of the yard and in the low area to the nmthwest and southwest of the site which minimizes the amount of stormwater at the sampling location." Thus, Respondent reasonably should have !mown that it needed to either monitor its discharge or prepare and submit data and analysis sufficient to support of its claim of"No discharge" on the DMR for the two missed samples in the second half of 2016.

"C" is Respondent's efforts to cmTect or mitigate the violation, and receives a value of 0 according to OAR 340-012-0145(6)(£) because the violation could not be conected. Respondent cannot correct missed monitoring that should have taken place during the 2016-2017 monitoring year.

"EB" is the approximate dollar value of the benefit gained and the costs avoided or delayed as a result of the Respondent's noncompliance. It is designed to "level the playing field" by taking away any economic advantage the entity gained and to deter potential violators from deciding it is cheaper to violate and pay the penalty than to pay the costs of compliance. In this case, "EB" receives a value of$263. This is the amount Respondent gained by avoiding spending $3 82 to collect two storm water samples during the second half of 2016 and analyze those samples for Total Copper, Total Lead, Total Zinc, pH, Total Suspended Solids (TSS), Total Oil & Grease and Chemical Oxygen Demand (COD). This "EB" was calculated pursuant to OAR 340-012-0150(1) using the U.S. Environmental Protection Agency's BEN computer model.

PENALTY CALCULATION: Penalty= BP + [(0.1 x BP) x (P + H + 0 + M +C)]+ EB = $4,000 + [(0.1 X $4,000) X (8 + 0 + 2 + 2 + 0)) + $263 = $4,000 + ($400 X 12) + $263 = $4,000 + $4,800 + $263 = $9,063

Case No. WQ/SW-NWR-2017-225 Exhibit 1 Page2