City drops longtime perchlorate surcharge

Work continues Tuesday on the Aquatic Center through rainy weather.

Morgan Hill residents will no longer be seeing a surcharge on their water bills for perchlorate cleanup – a monthly charge that some years climbed as high as 15 percent of each customer’s water usage invoice.
The City Council voted last week to discontinue the surcharge, which has remained at 1 percent of the monthly water bill since 2012, due to the declining need to treat the groundwater for perchlorate removal, according to a City staff report.
The City installed treatment equipment on two municipal wells in 2002 to reduce perchlorate in the water to the federal and state maximum standards of six parts per billion. That was about the time that water regulators discovered a massive plume of the harmful chemical in the groundwater basin in Morgan Hill and San Martin. The chemicals had leaked into the ground from a road-flares manufacturing plant on Tennant Avenue owned and operated by Olin Corporation at the time.
Starting in 2004, the City added a surcharge of 5 percent to water customers’ monthly bills to offset the City’s treatment costs. In 2005, the surcharge climbed to 10 percent and was as high as 15 percent in 2006.
By 2012 the surcharge dropped to 1 percent, according to City staff.
By 2008, due to cleanup efforts and changes in regulatory standards, only one of the two wells – on Tennant Avenue – required perchlorate treatment, City staff said.
But now, the Tennant Avenue well is no longer in use and thus the perchlorate treatment activity is not required, City staff said.
“The Tennant well produces a very low level of water and thus since September 2011 has not been used to meet demand,” the City staff report said.
The Tennant well will continue to be part of the City’s “reserve system,” and if it is ever used again it would only be for emergency purposes, City staff said.
The removal of the 1 percent surcharge took effect in January, and customers will see the change starting with their February water bills.