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Chevron to Pay San Juan Capistrano $1.5 Million by April 7

The settlement is available for inspection under California's public-records law.

Chevron will pay the city of San Juan Capistrano at least $1.5 million to recover costs associated with the leak of a gasoline additive into the city's water supply three years ago.

The payment is due April 7, according to a. The terms of that settlement were to be kept confidential, but the contract is available for inspection when requested under California's public-records law.

The settlement also states that Chevron could pay an additional $1.6 million in a series of payments under the following circumstances:

  • $50,000 if Chevron's name is removed from San Juan Capistrano's "Chevron MTBE Water Commodity Surcharge"—a surcharge levied by the City Council in the fall of 2010 to pay for the treatment of MTBE. 
  • $500,000 if the city "actively" participates in a meeting with the San Diego Regional Water Quality Control Board and Chevron to discuss the city's operation of its own granular activated carbon treatment system
  • $550,000 after the city has installed the GAC system.
  • $500,000 within 45 business days after the city gives Chevron notice that it has operated the treatment system for one year. During that year, the city is obligated to pump the Dance Hall well at least 80 percent of the time. 

The Environmental Protection Agency describes GAC treatments as the process of funneling contaminated water through a bed of activated carbon, because MTBE does not stick well to organics such as carbon.

In January 2008, MTBE was detected in groundwater samples collected from the Dance Hall well. A month later, the Orange County Health Care Agency mandated that the water be treated, but the city and Chevron could not come to an agreement over the design of a treatement system.

According to Councilwoman Laura Freese, it was Chevron that requested the confidentiality of the agreement. The settlement does stipulate that the city needed to give Chevron at least 72 hours' notice prior to disclosing the settlement.

TheJellyFish March 24, 2011 at 01:30 AM
The concern here is: Did the taxpayers get all of the money back that was spent by the City? It makes you wonder if last September if the City dropped the MtBE surcharge to the water bill because Chevron put up a fight and the City dropped it as part of the negotiating tool.
Mamie March 24, 2011 at 05:09 AM
Hi Jenna, Thank you for reporting this. Many of us have been waiting for a long time to get this information. I have the same question as JellyFish about how much the city spent on this lawsuit. Do you by any chance have this information? I know many of us would like to know this as well. BTW, you do a great job keeping the community informed. Keep up the great work. Thank you.
Jenna Chandler March 24, 2011 at 05:17 AM
Excellent questions ... I'll see what I can find out and will report back to you
TheJellyFish March 24, 2011 at 06:08 AM
Mamie, FYI the City had not filed a lawsuit against Chevron yet. This was only a settlement between the City and Chevron without a lawsuit filed. Keep in mind Mamie, that Chevron and the City did not want you to know this information. In fact, if you read the Press Release it states that it is Confidential Information. Thank you to Jenna for getting this information out. While a lawsuit was not filed, the City did spend allot of money on attorneys that were hired from Calabasas ( I am sorry but I cannot remember the firm name) who specialize in this type of potential litigation and of course Omar Sandoval's firm.
Mamie March 24, 2011 at 07:07 AM
JellyFish, Thank you for the correction. My brain automatically screams "lawsuit" wheneve attorneys are involved. LOL.
TheJellyFish March 24, 2011 at 07:19 AM
Mamie, I know how you feel.
TheJellyFish March 24, 2011 at 04:56 PM
Is it me, the Jelly Fish, or does it pretty much seem impossible that the GWRP can operate 80% of the time during the calender year, when in the past seven years it has hardly run at all?
Jenna Chandler March 24, 2011 at 05:13 PM
The settlement says that the "city has to operate the Dance Hall well and/or at least two of the three downgradient wells (Capistrano Valley Well D1, San Juan Basin A2 and San Juan Basin A4) on a continuous basis for at least 80 percent of the time during each calendar year, except for routine or emergency maintenance and repairs)."
TheJellyFish March 24, 2011 at 05:19 PM
The Jelly Fish read the Dashboard report given to the Utility Commission and it said that the GWRP only pumped 18% of the water used by the City in February. The Jelly Fish thinks that the City is going to be really swimming up stream to try and get any combination of things at that GWRP to work 80% of the time. Let's see, in 2003 the City had zero debt related to the water department. Now, we have 64 million in debt related to the water department and the darn thing still does not work. Thank you Miss Chandler for your help.
Dave Solt March 24, 2011 at 09:50 PM
The city was smart not to sue Chevron, as the corporate lawyers would have kept the suit tied up in court for 20+ years. Exxon-Valdez is not fully settled. Better off to settle for something now Vs. wait for full compensation in 2031.
TheJellyFish March 25, 2011 at 06:17 AM
What your missing is that the spill happened in 1988. It has been 20+ years since the spill. Unfortunately, Mr. Solt we are not even getting the expenses paid that we spent. The GWRP in the past seven years has not been operating to any extent, let alone get 2 of 3 wells to operate 80% of the time based on a calender year. I would also suggest to read the entire settlement. It is not very long only 14 pages. The City receives 3.1 million, but spent over 5 million. Who pays the difference Mr. Solt? It is you and I the taxpayer. We did not do anything wrong, but we are footing the bill. The City should have sued Chevron years ago and we would have been done with it along time ago. Instead of this panty waist type of settlement that Sam and Laura put together of let's all sit around the camp fire and sign Kumbaya. Come on Mr. Solt, let's get real. This settlement does not even cover the expenses now or in the future. Keep in mind Mr. Solt that the City in 2003 did not have any debt related to water, and now we are 64 million in debt and have literally nothing to show for it. Why don't you look at the January dashboard report that was provided to the Utility Commisioners, the GWRP only provided 18% of our water! Plllleeease Mr. Solt.

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