Common use of Potential for Harm Clause in Contracts

Potential for Harm. Moderate The failure to implement adequate BMPs for spill and leak prevention and response posed a substantial potential for harm. Leaking milk and propylene glycol cooling fluid were captured in a bucket in close proximity, approximately 15 feet, to an onsite storm drain inlet. Overflow or spillage entering the storm drain system and not recovered at the oil/water separators would discharge to the City of Fairfield storm drain system that eventually leads to an outfall near ▇▇▇▇▇▇▇ Canyon Creek located approximately 200 yards to the north of the Facility. The biochemical oxygen demand (BOD) of milk and propylene glycol cooling fluid poses a significant threat to available oxygen in this creek. Deviation from Requirement: Moderate The General Permit requires spill and leak response procedures to prevent industrial materials from discharging through the stormwater conveyance system and for the prompt clean up and proper disposal of spilled or leaked materials. Using a bucket to catch a leak is an inadequate BMP and not accepted industry practice. It took almost three months to complete repairs or replace the heat exchanger and stop the source of the leak. The continued use of a bucket as spill response over the three-month period to repair a known piece of leaking equipment is considered a moderate deviation from the requirement. Adjustment for Multiple Day Violations No There is no adjustment for multiple days of violation. Initial Liability $216,000 The initial liability is calculated as follows: per-day factor (0.30), multiplied by the maximum per-day amount of liability allowed ($10,000), multiplied by the number of days of violation (72). The violation started as early as September 17, 2017, and continued until December 9, 2015, for a total of 84 days. Saturdays and certain other days were not included as days of violation because SSI reported that the Facility did not operate on these days. The resulting number of days of violation is 72. Culpability 1.2 SSI was aware of the leak and did not take immediate action to fix it. The leak was reported on or before September 17, 2017, when it was noted during a stormwater inspection, and was documented in Facility log books on November 1, 4, 8, 19, and 23, and December 1 and 3, 2015. SSI continued to try and capture leaking milk and propylene glycol in a bucket during this time. SSI neglected to stop the source of the leak over a period of months, which allegedly resulted in a prohibited discharge to ▇▇▇▇▇▇▇ Canyon Creek. Cleanup and Cooperation 0.9 A reasonable response to address an inadequate BMP (in this case, spill and leak prevention and response) would be improving BMP development and implementation. SSI went beyond enhancing BMPs and made significant capital improvements across the Facility in excess of $200,000. Some of the capital improvements eliminated the need for BMPs (e.g., installing trench drains to route spills to an onsite treatment plant and installing cover to eliminate stormwater exposure). History of Violations 1.0 The Facility does not have a history of similar violations. PENALTY FACTOR ASSESS- MENT DISCUSSION Total Base Liability $233,280 The initial liability is multiplied by each factor related to SSI's conduct to determine the total base liability as follows: $233,280 = $216,000 x 1.2 (culpability) x 0.9 (cleanup and cooperation) x 1.0 (history) Ability to Pay and Continue in Business No adjustment The Enforcement Policy provides that if there is sufficient financial information to assess the violator's ability to pay the total base liability or to assess the effect of the total base liability on the violator's ability to continue in business, then the liability may be adjusted downward if warranted. Current estimates by the Prosecution Team show SSI has an annual revenue of $10 to $20 million for this Facility. A downward adjustment is unwarranted. Economic Benefit No adjustment The Regional Water Board Prosecution Team did not find a significant economic benefit associated with the violation. The economic benefit would be the time-value of money for the cost of the heat exchanger repair (reported as $7,672.21) during the days of violation. The proposed liability is far in excess of the calculated economic benefit (plus 10 percent) and is therefore above the minimum liability. Maximum Liability $720,000 Water Code section 13385 allows up to $10,000 for each day in which the violation occurs. The maximum liability is based on 72 days of violation. Final Liability $233,300 (rounded) The final liability amount is the total base liability after adjusting for ability to pay, economic benefit, other factors, and maximum and minimum liabilities. SSI allegedly violated Water Code section 13385(a)(2) and General Permit section III.B by discharging milk and propylene glycol to ▇▇▇▇▇▇▇ Canyon Creek on November 5, 2015, and from November 7 through 19, 2015. SSI is subject to administrative civil liability pursuant to Water Code section 13385(c)(1) for this violation. The calculated liability, prior to applying settlement considerations, is $40,000 based on the following factors in the Enforcement Policy. PENALTY FACTOR ASSESS- MENT DISCUSSION Harm or Potential Harm to Beneficial Uses for Discharge Violations 3 Harm or Potential for Harm: Moderate The alleged discharges of milk and propylene glycol cooling fluid to ▇▇▇▇▇▇▇ Canyon Creek on November 5 and from November 7 through 19 impaired water quality. The Prosecution Team estimates that the total volume of the discharge was at least 5,800 gallons (5,800 gallons of water, milk and propylene glycol were removed from the creek during cleanup). According to a November 2015 California Department of Fish and Wildlife Investigation Report, the discharge lowered dissolved oxygen levels in the creek to concentrations ranging from 0.15 to 0.33 milligrams per liter (mg/L) from an ambient, upstream concentration of 4.12 mg/L. This ambient concentration was consistent with the desired concentration for warm water habitats (5 mg/L). This observed impairment is reasonably expected to have harmed or suffocated aquatic species, but cleanup efforts were relatively timely once the leak was discovered, no actual injuries to identified aquatic organisms were documented, and appreciable medium or long-term acute or chronic effects are not expected to have occurred.