The nightmare in south Morgan Hill happened nearly 10 years ago:
a road flare plant contaminated the groundwater basin threatening
the rural community’s way of life, property values and health.
The nightmare in south Morgan Hill happened nearly 10 years ago: a road flare plant contaminated the groundwater basin threatening the rural community’s way of life, property values and health.
Since the disruption in 2002, Olin Corporation – the flare manufacturer that closed its plant in 1997 after 40 years on Tennant Avenue – has been forced by the Central Coast Regional Water Quality Control Board to clean the groundwater water.
And that buck has been passed to residents who bared the brunt of the contamination and residents who weren’t affected at all, and those residents will continue to pay surcharges into the foreseeable future.
“Many of us in San Martin had our wells tested and never had the perchlorate problem at our residence nor received any direct benefit from the SCVWD’s efforts,” Steve Coney wrote in a letter to the editor in June. “I don’t understand how they are allowed to continuously bill us for something we never received any benefit from. The district seems to think they can simply pass on their costs to anyone at will, without seeking voter approval to do so.”
Both the city of Morgan Hill and the Santa Clara Valley Water District have included “perchlorate response” fees in water bills that residents pay each month. In Morgan Hill, it’s a 3 percent surcharge for residents who are living off the city-owned wells. If it’s a SCVWD bill you’re receiving – which goes to South County’s estimated 4,000 private well owners – the charge is $4.5 million spread over two years or 14.8 percent of the total cost of groundwater costs.
The median water bill for city residents is about $22; so about $4 goes to the perchlorate response funds for both the city and the water district. The water bill is less than half of what residents in San Jose pay: an average of $55 a month.
The water district is a wholesale retailer that sells water for distribution like it does to the city of Morgan Hill, though it also sells water directly to residents who own and operate their own wells.
The water district’s spokesman Marty Grimes said the perchlorate response includes legal fees, water bottle distribution and cleanup costs, which has been inserted into residents’ groundwater fees for the next two years after it was approved by the water district board of directors last spring.
In July 2007, the water district sued Olin Corporation asking for reimbursements for what it paid to clean the ground basin and provide bottled water for owners of about 1,000 wells during the height of the contamination. The case was terminated June 8, 2010 and both parties agreed to pay their own legal fees.
Residents – both those who were affected by the perchlorate and those who were not – question why they are paying the water district’s legal debts.
“It’s totally and completely wrong,” said Sylvia Hamilton, a San Martin resident and member of the Perchlorate Community Awareness Group. “The community is the one that’s paid the biggest price, not necessarily in money – though we are paying a monthly fee – but just in the quality of life. People in the community did not contaminate the water, Olin did.”
The water district says it shouldn’t be defined as an “Olin debt” but rather the “costs associated with the benefits provided by the district.”
Hamilton did say she is appreciative for the water district and its board of directors who worked with the Regional Water Quality Control Board, a regulatory agency that stepped in during the perchlorate crisis and keeps tabs on water quality in California. As a member of PCAG, she said she’s received a good education on San Martin’s unfortunate relationship with perchlorate and the groundwater basin, and it’s helped her edify the San Martin community.
In 2003, Olin was spending $60,000 per month to supply the bottled water to about 1,000 residents south of Tennant Avenue and accepted responsibility for the 9.5-mile perchlorate plume that stretched south through San Martin and east of Gilroy, though the regional board cleared Olin for the perchlorate found further north.
Perchlorate is a chemical that affects the normal function of the thyroid gland if consumed by humans. Water that contains more than six parts per billion perchlorate is considered unsafe to drink and to cook with. Some of the wells in South County initially found to be contaminated in 2001 contained up to 50 parts per billion.
Today, nine private wells are still considered hot spots – that are stable with fewer than six ppb perchlorate – and are frequently monitored. Hamilton said flare-ups do happen, though now they’re focused on the long-term cleanup so future generations are safe.
The corporation must report its strategy to the Regional Water Quality Control Board periodically, which is to remove and treat the highest perchlorate concentrations south of Morgan Hill. City Manager Ed Tewes said the city remains concerned that the regional board has not required Olin to “fully characterize” the plume in the northeast area, where the city draws its water supply.
Olin also is performing “monitored attenuation” or “wait to see if the perchlorate goes away,” Tewes said. “The regional board … believes that if a pump and treat system is installed there by Olin that it will keep perchlorate from flowing northeasterly into the area of the well field that serves 40,000 people,” Tewes said.
The Regional Quality Control Board is now monitoring Morgan Hill and Olin Corp. during the Butterfield Boulevard South Extension Project, which will extend Butterfield to Watsonville Road. The extension does complicate the water flow and it was determined that Olin needed “to make major revision to their engineering design drawings” to accommodate the project.
The preferred strategy is to use “re-use” water or “effluent that would otherwise be discharged without being put to direct use,” and not re-inject with treated water, which is more expensive and less environmentally friendly. Construction on the south extension is expected to start this fiscal year.
The discovery of the revisions required put a dent in PCAG’s meeting plans for this quarter, Hamilton said, because they were unaware the extension would complicate the cleanup. The meeting has been rescheduled for 2 to 4 p.m. Jan. 21 at the San Martin Lion’s Club.
“I’m happy about the change to reuse as long as Olin and Morgan Hill can work things out very quickly, so it doesn’t postpone the long-term cleanup,” Hamilton said.
Since about 2003, the city has treated the water from its contaminated wells before distributing it to customers. Jim Ashcraft, the city’s former public works director, said after the contamination that Olin should be required to help the city pay for that treatment. In 2003, the city was billing customers a 10 percent surcharge on their monthly water bills.
The water district has done it’s own cleanup procedure with the expectation that it would be reimbursed by Olin. Since the contamination and response, the water district has provided free water sampling, funded distribution of bottled water, held public meetings, formed PCAG with staff support and assisted the city of Morgan Hill with wellhead treatment, though not to Tennant Avenue well, the city has said. The total cost to the district was about $6.9 million.
Recovery of the costs for the water district’s response was sought through litigation with Olin Corp., and the district did recover $2.7 million and obtained a grant for $450,000, though about $4.5 million was not recovered.
That’s where the rate-payers enter. Over the next two fiscal years (through 2011), the $4.5 million has been inserted into the groundwater production fees, something that was approved by the water district board of directors in spring 2010 and the new board will look at again when they approve the groundwater fees in early in 2011.
Groundwater rates have remained at $275 per acre foot for the last three years. The last increase was 2007, though staff projects that it will rise to $365 by 2020 in South County and $1,070 in North County. Revenue from the current rate is about $61 million this year.
The city of Morgan Hill owns and operates 12 wells serving about 11,500 people in Morgan Hill. The city pays the rate of $275 per acre foot for about 8,400 acre feet of water a year or about $2.3 million. One acre-foot is enough water to provide water for a family five for one year.
In order to abide by the District Act, which was the law that created the SCVWD, the groundwater production charge is imposed uniformly across the zone for all activities “performed by the district to benefit the zone, such as recharging the groundwater basin,” according to Darin Taylor, senior project manager at the water district.
The district’s response, Taylor said, was an overall response and an indirect benefit to all well owners with the zone since the groundwater basin is interconnected.
Former South County water district Director Rosemary Kamei approved the groundwater charges in May.
“When we told South County residents we would recoup the costs, I think we were highly optimistic. The results did not turn out that way. We made decisions thinking we would get reimbursed,” Kamei said.
Jim Fiedler, the water district’s chief operating officer, said the water district “envisioned that we would get reimbursed, but we didn’t recover the costs that we envisioned.
“We spent a great deal of time and effort at the time – trying to maintain property values and health concerns. We distributed bottled water and reached out to the community,” Fiedler said.
The city hasn’t seen any of its costs recovered – about $4.78 million – and will have to continue to apply the surcharge as long as it has treatment costs for the Tennant Avenue well, and legal and technical costs to oblige Olin’s cleanup.
