Public Works and Transportation Committee
October 13, 2026
AGENDA REPORT
TO: Elizabeth Lake FROM: Liam Garland
Interim City Administrator Director of Public Works
SUBJECT: EPA San Francisco Bay Program
Grant
DATE: September 21, 2026
City Administrator Approval Date:
RECOMMENDATION
Staff Recommends That The City Council Adopt A Resolution Authorizing 1)The City Administrator To Accept And Appropriate Grant Funds In An Amount Not To Exceed Three Million Dollars ($3,000,000) From The U.S. Environmental Protection Agency (EPA) San Francisco Bay Program For PCB Remediation In Arroyo Viejo Creek; And 2) Adopting Appropriate California Environmental Quality Act Findings.
EXECUTIVE SUMMARY
The City of Oakland (Oakland or City) has been awarded a three-million-dollar ($3,000,000) grant from the Environmental Protection Agency (EPA) to support the City’s efforts to address polychlorinated biphenyl (PCB) contamination in Arroyo Veijo Creek (AV Creek). The AV Creek has been identified as a significant source of polychlorinated biphenyl (PCB) contamination contributing to the San Francisco Bay watershed being an impaired waterbody. In 2017, 2022, and 2025, environmental investigations found elevated PCB concentrations within sediments and embankment soils located near industrial properties adjacent to the Creek corridor.
Both the City and Union Pacific Railroad (UPRR) own properties adjacent to the Creek area impacted by PCB contamination. Those properties are considered the primary contributing sources of PCB contamination to the AV Creek. In 2022, the San Francisco Bay Regional Water Quality Control Board identified the City and UPRR) as jointly responsible parties and subsequently issued Cleanup Order R2-2022-0032, requiring both entities to evaluate remedial alternatives and implement a cleanup action.
The proposed clean up area is located within the Oakland Coliseum industrial corridor and includes approximately 2,000 linear feet of the AV Creek between Union Pacific Railroad property and downstream areas near Lion Creek. The remedial effort will focus on reducing PCB migration into San Leandro Bay and supporting regional Total Maximum Daily Load (TMDL) reduction targets established for the Bay. In addition, this remediation will advance the Elizabeth Lake (Oct 2, 2026 09:09:39 PDT) Oct 2, 2026
Elizabeth Lake, Interim City Administrator
Subject: EPA San Francisco Bay Program Grant
Date: September 21, 2026 Page 2
Public Works and Transportation Committee
October 13, 2026
City’s environmental justice goals by directing federal investment and environmental restoration resources into frontline communities.
The project will be implemented collaboratively between the City and Union Pacific Railroad. The City and UPRR have agreed that UPRR will perform the investigation and remediation activities, and the associated costs will be shared equally, with each party responsible for 50 percent. This agreement will be formalized in a cost-sharing agreement that is currently in development. The City will use the EPA grant funds to cover a significant portion of the cost-sharing agreement associated with AV Creek remediation.
BACKGROUND / LEGISLATIVE HISTORY
The EPA’s San Francisco Bay Program is a federally supported environmental restoration and water quality initiative focused on protecting and restoring the San Francisco Bay Estuary. The program was established under Section 320 of the federal Clean Water Act (33 U.S.C. §1330), which created the National Estuary Program (NEP) and designated the San Francisco Estuary as an “estuary of national significance,” recognizing the Bay’s ecological, economic, and environmental importance. The program is administered primarily through EPA Region 9 in partnership with the San Francisco Estuary Partnership, local governments, state agencies, nonprofits, and regional organizations.
Polychlorinated biphenyls (PCBs) are highly persistent environmental contaminants commonly associated with historical industrial and railroad-related activities that typically transport through the environment through stormwater runoff and accumulate in sediment. PCBs are a toxin where exposure can lead to serious negative health impacts, including increased risk of cancer, immune system suppression, and reproductive issues. PCB contamination in the AV Creek was conclusively determined in a March 17, 2017, soil and sediment investigation and report. The investigation and subsequent regulatory findings linked the contamination to historical industrial activities at adjacent properties, including an electroplating facility with documented chemical mishandling on a property at 710 73rd Avenue, a parcel that the City later purchased, and a former railroad and automobile-salvage operations at 700 73rd Avenue, a UPRR-owned property. PCBs have been detected in upland soils, the AV Creek banks, and AV Creek sediments and have migrated downstream, posing risks to aquatic organisms, wildlife, and to people who consume fish from the Bay.
On October 14, 2022, the San Francisco Bay Regional Water Quality Control Board Adopted Site Cleanup Requirements Order No. R2-2022-0032 (Order) (Attachment A), naming the City of Oakland and Union Pacific Railroad as dischargers. The Order requires the City, together with UPRR, to perform the following tasks: 1) clean up and abate the PCB contamination; 2) prevent further releases and downstream migration; 3) evaluate remedial alternatives; 4) prepare and implement an approved remedial action and design plan; 5) document completion of the cleanup; 6) monitor the remedy’s performance; 7) conduct additional investigation or remediation when required; 8) and submit technical and status reports to the Water Board.
Elizabeth Lake, Interim City Administrator
Subject: EPA San Francisco Bay Program Grant
Date: September 21, 2026 Page 3
Public Works and Transportation Committee
October 13, 2026
ANALYSIS AND POLICY ALTERNATIVES
Planned implementation of the EPA grant funds represents a significant opportunity to advance the remediation of PCB contamination within Arroyo Viejo Creek to provides a funding source for the City to meet its regulatory obligation to the Water Board. The project is environmentally and strategically important because the AV Creek ultimately drains into the San Francisco Bay, making contamination within the AV Creek a regional water quality concern.
A key component of the remediation action that will be funded by EPA grant funds is the costsharing agreement between the City and UPRR. Under the agreement, which is in the process of being finalized, the City and UPRR will each be responsible for 50% of the cleanup costs associated with the investigation and remediation work. The maximum estimated cost of the project is eight-million-dollars ($8,000,000). In addition, the partnership with UPRR may help reduce future disputes regarding liability allocation and establish a more efficient framework for project execution.
This project is also critical for regulatory goals related to PCB Total Maximum Daily Load (TMDL) reduction requirements established by the San Francisco Bay Regional Water Quality Control Board.1 The EPA grant significantly reduces the financial burden that would otherwise fall entirely on the City, which has significantly limited funds to meet its regulatory compliance obligations under its Municipal Regional Stormwater Discharge NPDES Permit.
From a policy perspective, the project demonstrates Oakland’s commitment to environmental restoration, regulatory compliance, and protection of communities impacted by historical industrial pollution. Successful completion of the remediation effort will improve sediment and water quality conditions within the AV Creek while contributing to broader San Francisco Bay restoration objectives.
Overall, the EPA San Francisco Bay Program grant provides critical financial and institutional support for a major watershed remediation effort. Approval of the EPA grant funds will allow the City to advance the investigation, design, and implementation of the AV Creek PCB cleanup and fulfill its obligations under the Order. Success will be measured by completion of required project milestones, reductions in PCB concentrations and downstream migration, and Water Board acceptance of the remedial work and monitoring results.
Policy Alternatives
Alternative # 1 Do not Accept EPA Grant
Pros City will not need to spend administrative time on reporting, ensuring compliance with federal grant funding requirements
Cons Seeking other funding or refusing will significantly delay or limit the City’s ability to complete project. Also, the City will incur significant additional costs. Delaying efforts may also increase long-term environmental liabilities and risk of litigation from UPRR and regulatory agencies. Lastly, not accepting these funds will negatively impact regional water quality and watershed restoration goals for the San Francisco Bay.
Reason for not
recommending
This is not recommended given the substantial increased costs to the City and the additional delay to commence remediation.
Elizabeth Lake, Interim City Administrator
Subject: EPA San Francisco Bay Program Grant
Date: September 21, 2026 Page 4
Public Works and Transportation Committee
October 13, 2026
Recommended Action: Accept EPA Funding, Appropriate the funds for the intended objective of Arroyo Viejo Creek PCB remediation.
RELATED PLANNING EFFORTS
This agenda item supports multiple Strategic Priorities outlined in the City’s Strategic Plan (2025–2028). Specifically, the project aligns with the following priority:
Align Budget with Citywide Priorities: Acceptance of EPA funding leverages federal resources to strengthen environmental compliance and remediation efforts, ensuring that City budgeting aligns with strategic priorities while maximizing program impact.
EQUITABLE CLIMATE ACTION PLAN
The City’s 2030 Equitable Climate Action Plan (ECAP) is closely related to environmental remediation because both focus on protecting communities that have historically carried the greatest environmental burdens. The ECAP commits Oakland to reducing greenhouse gas emissions, adapting to climate change, and making sure that frontline communities benefit first from climate action. Environmental remediation of the AV Creek supports this goal by cleaning up contaminated land, reducing exposure to legacy pollution, and making sites safer for housing, open space, green infrastructure, and economic reuse. In this sense, remediation is not only a cleanup activity; it is also a climate-equity strategy.
ECONOMIC DEVELOPMENT ACTION PLAN
The City’s 2025–2029 Economic Development Action Plan (EDAP) relates to environmental remediation because it treats economic growth, neighborhood investment, climate goals, and public infrastructure as connected priorities. The EDAP is an equity-centered, five-year roadmap intended to stabilize Oakland’s economy and promote inclusive growth across all neighborhoods. Its goals include attracting key industries, supporting small businesses, building the workforce, and investing in places, especially business corridors and under-resourced neighborhoods. These goals are directly supported by environmental remediation because contaminated or underused properties can limit development, discourage private investment, create public health concerns, and prevent productive reuse of land. Environmental remediation of Arroyo Viejo Creek helps convert contaminated adjacent sites into usable land for housing, commercial activity, public spaces, transit-oriented development, and jobgenerating projects.
FISCAL IMPACT
The total amount of the EPA Grant award is $3,00,000.00, funded over five years. These funds will be accepted and appropriated into the Environmental Protection Agency (2125) fund, a new Project (to be created), Environmental Services: Environmental Remediation Organization (30683), and Sustainable Oakland Program (SC26).
Table 1: Project Appropriation
Elizabeth Lake, Interim City Administrator
Subject: EPA San Francisco Bay Program Grant
Date: September 21, 2026 Page 5
Public Works and Transportation Committee
October 13, 2026
(2125)
Environmental
Protection Agency
Environmental
Services:
Environmental
Remediation
Sustainable
Oakland
Program
The City is also required to provide matching funds of 25% of its portion of the total estimated cost of $8 million (split between the City and UPRR). The City will provide these funds from the Monsanto Settlement as shown in Table 2.
Table 2: Project Funding Sources
Source
Monsanto
Settlement
TBD
Environmental
Services:
Environmental
Remediation
TBD
Recycling and
Solid Waste
Contracts
City Facilities
Fund
(30683)
Environmental
Services:
Environmental
Remediation
(1001642)
Environmental
Compliance
Sustainable
Oakland
Program
PUBLIC OUTREACH / INTEREST
No outreach was deemed necessary for the proposed policy action beyond the standard City Council agenda noticing procedures because the EPA grant funds are needed for the City to meet its obligations pursuant to the Order.
COORDINATION
The Office of the City Attorney and the Budget Office have reviewed this report.
Oakland Public Works has been working in close coordination with the Office of the City Attorney on the development of the cost sharing agreement with UPRR and compliance steps to meet the Order.
Elizabeth Lake, Interim City Administrator
Subject: EPA San Francisco Bay Program Grant
Date: September 21, 2026 Page 6
Public Works and Transportation Committee
October 13, 2026
RACE AND EQUITY
The AV Creek PCB remediation project presents important race and equity benefits. The project area is located in East Oakland, a community that has historically experienced disproportionate environmental burdens associated with industrial activity, pollution, and underinvestment.
Reducing PCB contamination within the AV Creek will improve environmental and public health conditions for nearby residents who have long been impacted by poor water quality and cumulative environmental stressors. The remediation efforts also support environmental justice goals by directing federal investment and environmental restoration resources into underserved communities. In addition, the cleanup effort contributes to safer, healthier, and more resilient neighborhood environments for current and future East Oakland residents.
CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA)
Staff recommends the Council find that the acceptance and appropriation of grant funds is a government fiscal activity and funding mechanism that does not commit the City to any specific project that may result in a potentially significant physical impact on the environment, and therefore, does not constitute a “project” subject to the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines section 15378(b)(4).
Independently, and to the extent this action is deemed to facilitate the AV Creek PCB Remediation Project, the City Council finds that the action is exempt from CEQA pursuant to CEQA Guidelines section 15061(b)(3) (common sense exemption), because the project consists of the investigation and remediation of existing PCB contamination performed pursuant to, and under the regulatory oversight of, San Francisco Bay Regional Water Quality Control Board Cleanup Order No. R2-2022-0032, will restore and enhance water quality in AV Creek and San Francisco Bay, and it can be seen with certainty that there is no possibility the action may have a significant effect on the environment.
As separate and independent grounds, the action is exempt from CEQA pursuant to CEQA Guidelines sections 15306 (information collection, including site investigation and characterization activities) and 15308 (actions taken by regulatory agencies, as authorized by state or local ordinance, to assure the maintenance, restoration, or enhancement of the environment, with no expansion of use beyond that existing at the time of the determination), because the investigation and remediation activities are undertaken pursuant to and in compliance with Cleanup Order No. R2-2022-0032 for the purpose of protecting and restoring the environment.
In addition, none of the exceptions to the categorical exemptions set forth in CEQA Guidelines section 15300.2 applies, in that the purpose and effect of the project is itself the abatement of the existing hazardous condition under the direction and oversight of the Regional Water Quality Control Board, the project will not have a significant effect on the environment due to unusual circumstances, and the remediation will reduce, not create or exacerbate, hazards at the site.
Staff recommends that Council find that each of the foregoing findings constitutes a separate and independent basis for the City Council’s determination that this action is not subject to, or is exempt from, CEQA, and the City Council’s determination reflects its independent judgment and analysis based on the whole of the record before it.
Elizabeth Lake, Interim City Administrator
Subject: EPA San Francisco Bay Program Grant
Date: September 21, 2026 Page 7
Public Works and Transportation Committee
October 13, 2026
ACTION REQUESTED OF THE CITY COUNCIL
Staff Recommends That The City Council Adopt A Resolution Authorizing 1)The City Administrator To Accept And Appropriate Grant Funds In An Amount Not To Exceed Three Million Dollars ($3,000,000) From The U.S. Environmental Protection Agency (EPA) San Francisco Bay Program For PCB Remediation In Arroyo Viejo Creek; And 2) Adopting Appropriate California Environmental Quality Act Findings.
For questions regarding this report, please contact Belew Yifru, Environmental Program Specialist, at [email protected] or (510) 238-7431.
Respectfully submitted,
LIAM GARLAND
Director, Oakland Public Works
Reviewed by:
Kristin Hathaway, Assistant Director
Bureau of Environment
Britteny Jenkins, Manager
Environmental Services Division
Prepared by:
Belew Yifru, Environmental Program Specialist
Environmental Services Division
Attachments (1):
A: San Francisco Bay Regional Water Quality Control Board Adopted Site Cleanup Requirements Order No. R2-2022-003f