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Apr 4, 2003 | Morgan Hill Times The Olin Corp. last week sent a check for $450,000 to the City of Morgan Hill, covering slightly more than half the cost of replacing a well closed in April 2002 because of high perchlorate levels from an Olin manufacturing plant.

On Thursday, City Attorney Helene Leichter said the city would be returning the check uncashed to Olin.

“We appreciate their good faith effort,” she said, “but we feel that, to accept the check at this time would send the wrong signal. We expect them to remain accountable for what they have acknowledged as their responsibility.”

Olin has frequently said it would accept the responsibility of the perchlorate plume that has contaminated hundreds of private wells and a few municipal wells - from Tennant Avenue south to Leavesley Road in Gilroy.

“We want them to own up to their responsibility, not only to San Martin well owners, but to Morgan Hill taxpayers,” Leichter said.

“Olin is a responsible company,” said Rick McClure, Olin’s project manager for the South Valley contamination cleanup project. The company has, so far, paid for bottled water to all residents with contaminated water or whose wells are being tested for the contamination.

The partial payment arrived without fanfare at the Los Angeles office of Hatch and Parent, the law firm retained by the City of Morgan Hill to negotiate the settlement.

City Attorney Helene Leichter said Tuesday that the check just appeared out of the blue.

“We sent documentation of the costs to replace the Tennant well ($710,000) but had not actually sent a bill,” she said. “They took forever to review (the paperwork) and then sent the check without ever calling us to talk.”

Leichter said Olin balked at paying some expenses, which included staff and legal expenses, and refused absolutely to “indemnify” the city at this time.

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.

“If there is any liability in the future,” Leichter said, “we want Olin to pay.” She said the company hasn’t actually refused to pay any damages that may appear but it won’t indemnify the city “up front”.

“We’ll wait and see,” Leichter said.

To shoulder the responsibilities of the Tennant well, which was permanently closed, the City Council voted in May 2002 to use city funds to construct a new well. Located on San Pedro Avenue at the soccer fields east of Hwy. 101, the new well has remained perchlorate free in subsequent tests.

However, during March 2003, the Condit, Nordstrom and one of the two Dunne Avenue wells all tested above the “action levels” of 4 parts per billion. All three were taken offline, though according to Jim Ashcraft, public works director, they could be reopened if they continue to test below 4 ppb.

“We’ll know more when we report to the council - probably on April 23,” Ashcraft said.

Though retests showed the contaminate levels on all three wells to have fallen below 4 ppb, the city has not put them back into use. The California Department of Health Services requires a second and confirming sample to be taken after a test shows levels at 4 ppb or above. Then the two results are combined and the water agency acts on that level.

Two weeks ago the City Council approved spending $640,000 to dig a second, emergency well to supply city users with water through the summer season. The site chosen is in the northeastern quadrant of the city, on Peet Road. A study showed, Ashcraft said, that the water east of Hwy. 101 and north of Dunne Avenue is of high quality with no signs of perchlorate.

There is no federally regulated level of safety for perchlorate though the California Department of Health Services must set a standard by Jan. 1, 2004. Currently the federal Environmental Protection Agency recommends 1 ppb though California is operating under the 2-6 ppb. Most laboratories that perform perchlorate testing cannot yet test reliably below 4 ppb.

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