Chevron Settlement Most Unsettling

By Kim Lefner

Is the Chevron “settlement” merely a capitulation?

The recent announcement by the City that a settlement had been reached with Chevron over contamination of our drinking water with MTBE (a known carcinogen) was presented as a victory for SJC. Juan Garcia, Regional Manager, Chevron Policy, Government and Public Affairs said about the settlement, "We have always accepted responsibility for the unfortunate release of gasoline containing MTBE. We have consistently strived to do what is necessary to take the appropriate measures to address the situation… This agreement clears the way for us to fulfill our commitment to the people of San Juan Capistrano, which we have been eager to do for a long time.” A reading of the actual settlement agreement however, indicates that water ratepayers are stuck with picking up much of the tab resulting from Chevron’s “unfortunate release of gasoline containing MTBE” into our water supply. The question that comes to mind immediately upon reading the settlement is, why would our taxpayer-funded negotiators settle for only $3.1 million in incremental payments, when City documents indicate that our contamination-related expenses amounted to well over $6 million without legal fees?

This fact alone might explain why the City insisted the settlement agreement remain “confidential”. Fortunately for the community, several media sources were able to obtain a copy of the agreement through the California Public Records Act. The questions outlined in the letter below, sent to the City Council on April 4 by a number of concerned community members, are based on the clauses in the settlement agreement that generated more questions than answers.
“Dear Mayor Allevato and Council members Freese, Kramer, Reeve and Taylor; As you know, the settlement agreement with Chevron is now a public document that has been reviewed by many in the community. After reading the settlement agreement which was obtained through the California Public Records Act (“PRA”), we ask that you respond to the public’s need to know, by providing answers to the following questions which are of great concern to the water ratepayers in the City of San Juan Capistrano (“the City”). The figures below are based on our review of documentation obtained through PRA requests.
1. What is the current total of expenses related to the cost of replacing water contaminated with MtBE; is it true that it is over $6 million as our records indicate?
2. What is the current total cost of legal fees related to the Chevron settlement; is it true that the cost to the City is multi millions of dollars?
3. What are the plans to reimburse the ratepayers for the excessive water rates charged as a result of the MtBE contamination?
4. Is it true that the City is going to take on Chevron's obligations for MtBE clean-up?
5. Is it true that the City demanded that water be filtered at the intake to the Ground Water Recovery Plant instead of at the top of individual wells where MtBE was detected?
6. What if MtBE is found in a new well?
7. What if MtBE levels do not decline after years of pumping?
8. a).Where is the test and verification regime (monitoring) in the agreement? b). How do we know this is working?
9. Who will pay for the operation of this unnecessarily large GAC pre-filter after Chevron payments end in two years?
10. Is it true that the City agreed not to take any action or encourage others including other “government agencies” such as CalTrans, to take any action against Chevron for any contamination originating at Chevron stations?”
The letter requested an answer to the above questions within 10 business days. We at CCS will keep you posted in an upcoming issue should we receive answers to any or all of the above questions. In the meantime, should you wish to contact your council members with your own questions or comments, they may be reached via email c/o the City Clerk at: or by phone at City Hall: 493-1711.

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