Because perchlorate will cost the city $4 million through 2007
and the water district may raise pump taxes 100 percent over four
years, water rates are going up again in Morgan Hill.
Because perchlorate will cost the city $4 million through 2007 and the water district may raise pump taxes 100 percent over four years, water rates are going up again in Morgan Hill.
After hearing a dispiriting explanation Wednesday from Jack Dilles, the city’s finance director, the City Council approved another 2 percent increase to cover the pump taxes and an additional 5 percent to cover perchlorate costs, effective Jan. 1, 2005.
The 5 percent perchlorate surcharge will be added to the current 5 percent imposed in April and will pay for perchlorate treatment for the Nordstrom and Tennant wells and other costs stemming from the chemical in the underground water table – from which all city water comes.
By January, city residents will be paying a 10 percent perchlorate surcharge on their monthly water bills.
Olin Corp. has assumed responsibility for perchlorate in wells south but not north of its former Tennant Avenue flare plant where most city wells are located.
Water from the replacement well – the San Pedro well northeast of the Olin site – now shows signs of perchlorate and could be taken off line causing further stress in the city water supply. Five of the city’s 13 production wells are north of Tennant. Four of those have shown detectable levels of perchlorate.
Morgan Hill’s costs for dealing with perchlorate in city wells are nearing $4 million; Olin will soon have reimbursed the city $780,000 to replace Tennant, the one well it accepts responsibility for. The city hopes to eventually get reimbursed for digging the new Butterfield well to the tune of $600,000 but, said Jim Ashcraft, public works director, it’s only a hope. Olin has not agreed to that.
Until the city can prove that the northern perchlorate comes from Olin’s site – a matter in process – the city and its ratepayers will have to cover the costs, Dilles said.
The council has promised to refund the surcharge to ratepayers when and if Olin reimburses the city. The fees the Santa Clara Valley Water District charges the city – pump taxes – were raised from $160 to $200 per 100 cubic feet of water in July. They will increase from $200 to $240 in July 2005.
Dilles said water district staff is projecting the need for further increases to $280 in July 2006 and $320 in July 2007.
In January the water rate for a single family will rise from $28.22 a month to $30.16 a month.
“Most of the increase is related to the surcharge,” Dilles said.
