MORGAN HILL
– The city of Morgan Hill has not returned a check from Olin
Corp. for costs associated with replacing a municipal well as it
previously said it would do.
MORGAN HILL – The city of Morgan Hill has not returned a check from Olin Corp. for costs associated with replacing a municipal well as it previously said it would do.
The Tennant Avenue well was closed in April 2002 because the perchlorate levels exceeded the 4 parts per billion action level; the well was instead replaced by the new San Pedro well.
The city then notified Olin of its expenses.
“We sent documentation of the costs to replace the Tennant well ($710,000) but had not actually sent a bill,” City Attorney Helene Leichter said earlier. “They took forever to review (the paperwork) and then sent the check without ever calling us to talk.”
Olin, the acknowledged source of the contamination, said in a statement Monday that it has reimbursed the city for all its documented costs spent to date to develop the San Pedro well.
The firm also announced that the city has not returned a check to Olin that the company sent to cover expenses related to constructing the new well.
The check, sent to the city this spring, was for $450,000; Leichter said the complete cost of replacing the well was closer to $710,000. Leichter said Olin balked at paying some expenses, which included staff and legal expenses.
City Manager Ed Tewes confirmed Monday that the check had, indeed, not been returned.
Leichter explained that the city originally planned to return the check because, by accepting the money, the city might have waived “all claims,” leaving Morgan Hill liable for future claims from citizens harmed by the chemical in city water even though the harm came from Olin. The city wanted Olin to indemnify it against future claims.
“We expect them to remain accountable for what they have acknowledged as their responsibility,” Leichter said when she announced the check would be going back, uncashed. “We want them to own up to their responsibility, not only to San Martin well owners, but to Morgan Hill taxpayers.”
Olin, for its part, has always accepted verbal responsibility for the presence of perchlorate in wells southeast of its Tennant Avenue site.
“Olin is a responsible company,” said Rick McClure, Olin’s project manager for the South Valley contamination cleanup project.
Indemnification of the city by the company would protect the city against future claims resulting from any harm the perchlorate-tainted water from the well may have caused consumers.
It now seems that Olin might indemnify the city but has not yet been clear enough about its intentions to satisfy Leichter.
“It’s still up in the air,” Leichter said. “If we think that accepting the check is not a waiver of claims for the city, we will keep it but we need to be real clear, and we’re not there yet.”
Leichter said the city sent Olin a letter on June 26 asking for clarification that accepting the check would not be interpreted as a waiver for all claims. Olin, she said, replied on July 30 that they did not agree that accepting the check would be such a waiver but the city was not reassured.
“If there is any liability in the future,” Leichter said, “we want Olin to pay.”
The San Pedro well increased the city’s total water supply capacity by 200 gallons per minute over and above the capacity of the Tennant Avenue well.
