HomeMy WebLinkAboutCity Position on Legislation - Support for SB 658 - Correa - Dept.ID PW 13-025 Page 1 of 2
Meeting Date:5/6/2013
A4
CITY OF HUNTINGTON BEACH
REQUEST FOR CITY COUNCIL ACTION
MEETING DATE: 5/6/2013
SUBMITTED TO: Honorable Mayor and City Council Members
SUBMITTED BY: Fred A. Wilson, City Manager
PREPARED BY: Travis K. Hopkins, PE, Director of Public Works
SUBJECT: Approve City Position on Certain Legislation — ratify the submittal of Mayor
Boardman's letter of support for SB 658 amending Section 8 of the Orange
County Water District Act
Statement of Issue:
On April 22, 2013, the Intergovernmental Relations Committee recommended ratifying the submittal
of the Mayor's letter of support of SB 658 (Correa) amending Section 8 of the Orange County Water
District Act.
Financial Impact:
Not Applicable
Recommended Action:
Ratify the submittal of the Mayor's letter of Support for SB 658 (Correa) amending Section 8 of the
Orange County Water District Act.
Alternative Action(s):
Analysis:
Regional Issues
The City meets approximately 70% of its water demand with groundwater pumped from wells
located throughout the City. The Orange County Water District manages the Santa Ana River
Groundwater Basin and is requesting letters of support for SB 658 (Correa).
SB 658 (Correa) amends the Orange County Water District Act to clarify that the California
Legislature intended to provide that the Orange County Water District (OCWD) may recover from
polluters, through court proceedings, all of the costs of remediating contamination caused by
polluters without having to wait decades for remediation to be complete. Recent court decisions
have excluded investigatory work from expenses recoverable under the OCWD Act. Additionally,
SB 658 provides declaratory relief, thereby allowing OCWD to recover expenses from polluters
without having to wait until remediation has been completed.
Without this bill, the investigatory costs of remediation would be borne by local water ratepayers.
Moreover, as OCWD could be required to wait as long as thirty years to recover costs from
polluters, remediation costs would be paid upfront by ratepayers with no guarantee that the
polluters would even be in existence to pay once remediation is complete.
HB -109- Item 4. - I
Dept.ID PW 13-025 Page 2 of 2
Meeting Date:5/6/2013
The Intergovernmental Relations Committee also discussed the Sunset Beach Junior Lifeguard
Program. Council Member liaisons discussed their desire to continue to honor the terms of the
Memorandum of Understanding with the Sunset Beach Homeowners Association. Other potential
locations for the program were discussed. However, logistical concerns were raised such as
crowded parking at city beaches. No action was taken on this matter.
Environmental Status:
Not Applicable
Strategic Plan Goal:
Not Applicable
Attachment(s):
1. Mayor's letter of support of SB 658 (Correa)
2. SB 658 as amended in the Senate on April 11, 2013
3. OCWD Briefing Sheet
Item 4. - 2 HB -110-
ATTACHMENT # 1
The Honorable Lou Correa
California State Senate
State Capitol, Room 5061
Sacramento, CA 95814
Dear Senator Correa:
The City of Huntington Beach supports SB 658, which will clarify that the Orange County Water District
(OCWD) has the right to recover all investigatory, remediation and other clean-up related costs in a
reasonable time frame from those responsible for contaminating the Orange County groundwater basin.
During its groundwater monitoring and testing activities, OCWD detected the presence of pollutants,
commonly referred to as Volatile Organic Compounds or "VOCs" in the northern and southern portion of
our groundwater basin. A portion of a plume of VOC contamination has migrated into parts of the north
groundwater basin that is utilized as a drinking water supply source, necessitating the removal of three
drinking water wells from service. VOCs are known to cause a variety of harmful impacts to human
health and must be effectively remediated in order to preserve and protect public health, public safety
and local economic stability.
In 1989, the California Legislature amended the OCWD Act (Act) providing OCWD with the right to file
suit to recover from polluters its reasonable costs to investigate and clean up contamination of the
groundwater basin. Unfortunately, recent judicial decisions have interpreted the amended Act to exclude
investigatory work from remedial expenses that were intended to be recoverable under the Act.
In addition, some polluters are attempting to exploit perceived legal loopholes to avoid declaratory relief
which could result in numerous lawsuits over time for the same act and the delay in recovering the costs
of all remediation activities until after the cleanup has been completed. This delay, which could last for
up to thirty years, could allow those responsible to escape the financial responsibilities of their
contamination by shifting the cost of the clean-up onto blameless ratepayers and hampering the clean-up
process.
SB 658 clarifies that investigation costs must necessarily be incurred as part of the remediation process.
In addition, SB 658 clarifies that OCWD may proceed in accordance with existing law to recover the costs
and legal expenses it has incurred as of the time of the litigation and may also obtain equitable and
declaratory relief to assign liability for OCWD's future costs and expenses.
SB 658 protects local taxpayers and the region's valuable groundwater basin by ensuring that OCWD
can recover from polluters the costs associated with remediating groundwater contamination, including
investigatory costs, without having to wait decades for the remediation activities to be complete. Polluters
alone must be held responsible for their actions and pay the full cost to address the impacts of their
behavior. As such, the City of Huntington Beach supports SB 658 and looks forward to working with your
office and OCWD to ensure the bill's passage.
Sincerely,
Connie Boardman
Mayor
Item 4. - 4 HB -112-
ATTACHMENT #2
AMENDED IN SENATE APRIL 11, 2013
SENATE BILL No. 658
Introduced by Senator Correa
(Coauthor: Senator Wyland)
(Coauthors:Assembly Members Hagman, Harkey, Mansoor, and
Wagner)
February 22, 2013
An act to amend Seet o 1 3 3 04 of the Az late roa ,Section 8 Of the
ti7l+li llVll 1JJV
Orange County Water District Act(Chapter 924 of the Statutes of 1933),
relating to water quality, and declaring the urgency thereof, to take
effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
SB 658, as amended, Correa.
orders. Orange County Water District Act: investigation, cleanup, and
liability.
Existing law, the Municipal Water District Law of 1911, authorizes
the formation of a municipal water district to acquire and sell water,
and species the powers and purposes of a municipal water district.
The Municipal Water District of Orange County is a district established
pursuant to that law.
The Orange County Water DistrictAct establishes the Orange County
Water District, consisting of specified lands in the County of Orange,
including the Cities of Anaheim, Fullerton, and Santa Ana. The act
authorizes the district to investigate the quality of the surface and
groundwaters within the district to determine whether the waters are
contaminated or polluted and authorizes the district to expend funds
to perform any cleanup, abatement, or remedial work to prevent, abate,
or contain the contamination of, or pollution to, the surface or
98
Item 4. - 6 HB -114-
SB 658 —2—
groundwaters of the district. The act requires the person causing or
threatening to cause the contamination or pollution to be liable to the
district for reasonable costs actually incurred in cleaning up or
containing the contamination or pollution, abating the effects of the
contamination or pollution, or taking other remedial action.
This bill would require the person also to be liable for the costs
actually incurred in investigating the contamination or pollution. The
bill would provide that these remedies are in addition to all other legal
and equitable remedies available to the water district, including
declaratory relief.
This bill would declare that it is to take effect immediately as an
urgency statute.
diseharges waste into the waters of the state in violation of waste
diseharge fequirements of an order or prohibition issued by a Califomia
regional water quality eontrol board or the State Water Resottrees
Gor&ol Board to elean ttp the waste or to abate the effeets of the waste.
available money to perfom any eleanup, abatement, or remedial wo
This bill would make teehnieal, nonsubstantive ehanges to these
pi-e�-isiens-:
Vote: ntajerity-2/3. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
The people of the State of California do enact as follows:
1 SECTION]. The Legislature finds and declares that, in adding
2 Section 8 to the Orange County Water District Act in 1989, the
3 Legislature intended that (1) the costs incurred by the district in
4 conducting investigations to study, monitor, and evaluate the cause,
5 and the nature and extent of any existing or threatened
6 contamination, would be part of the cleanup, abatement, and
7 remedial costs recoverable against the persons causing, or
8 threatening to cause, contamination of the surface orgroundwaters
9 within the district, and (2) the district would be entitled to
10 commence a civil action against, and recover damages from, the
11 persons causing, or threatening to cause, the contamination,
12 investigation, cleanup, abatement, and remedial costs incurred,
98
xB -115- Item 4. - 7
—3— SB 658
1 or to be incurred, by the district at the time the liability of the
2 persons was determined in litigation, regardless of whether all
3 investigative, cleanup, abatement, and remedial work was
4 completed by that time. The Legislature further finds and declares
5 that this act is declaratory of existing law.
6 SEC. 2. Section 8 of the Orange County Water District Act
7 (Chapter 924 of the Statutes of 1933), as added by Section 4 of
8 Chapter 802 of the Statutes of 1989, is amended to read:
9 Sec. 8. (a) The district may conduct any
10 investigation of the quality of the surface and groundwaters within
11 the district-whieh that the district determines to be necessary and
12 appropriate to determine whether those waters are contaminated
13 or polluted.
14 (b) The district may expend available funds to perform any
15 investigation cleanup,abatement,or remedial work required under
16 the circumstances whie that, in the determination of the board of
17 directors, is required by the magnitude of the endeavor or the
18 urgency of prompt action needed to prevent, abate, or contain any
19 threatened or existing contamination of,or pollution to,the surface
20 or groundwaters of the district.This action may be taken in default
21 of, or in addition to, remedial work by the person causing the
22 contamination or pollution, or other persons. The district may
23 perform the work itself, by contract, or by or in cooperation with
24 atty other another governmental agency.
25 (c) If, pursuant to subdivision (b),-+ke any contamination or
26 pollution is investigated, cleaned up, or contained, the effects
27 thereof of the contamination or pollution abated, or in the case of
28 threatened contamination or pollution, other necessary remedial
29 action is taken, the person causing or threatening to cause that
30 contamination or pollution shall be liable to the district to the extent
31 of the reasonable costs actually incurred in investigating, cleaning
32 ttp up, or containing the contamination or pollution, abating the
33 effects of the contamination or pollution, or taking other remedial
34 action. The amount of those costs, together with court costs and
35 reasonable attorneys' attorney's fees, shall be recoverable in a
36 civil action by, and paid to, the district. In—atry-stu+, this action,
37 the necessity for the investigation, cleanup, containment,
38 abatement, or remedial work, and the reasonableness of the costs
39 incurred therewith, shall be presumed, and the defendant shall
9s
Item 4. - 8 xB -116-
S>B 658 —4-
1 have the burden of proving that the work was not necessary, and
2 the costs not reasonable.
3 (d) The remedies provided under this section are in addition to
4 all other legal or equitable remedies available to the district under
5 statute or common law, including declaratory relief regarding
6 liability for the district's future costs.
7 SEC. 3. This act is an urgency statute necessary for the
8 immediate preservation of the public peace, health, or safety within
9 the meaning of Article IV of the Constitution and shall go into
10 immediate effect. The facts constituting the necessity are:
11 In order to ensure that the Orange County Water District may,
12 at the earliest possible opportunity, investigate, clean up, and
13 rmmediate groundwater contamination that affects the quality of
14 drinking water resources of approximately 2,400,000 Orange
15 County residents, it is necessary that this act take effect
16 immediately.
17 SEGTION i o t _ 13304ft NNE tef G e is , ,edamto
18 feadt
19 13304. (a) Amy person who has diseharged of diseharges waste
20 into the waters of thiT state inviolation of Q waste U1JvllCrge
21 . . ftt of other order of pfohibition issued by a regional board22 ot the state board, ,
23 permits,or tIffeatens to eftse or pennit any waste to be diseharged
24 or deposited whefe it is, of pfobably will be, diseharged into
25 waters of the state and ereu`es, ortlffertensto feate, a e0nditio
26 ,
27 waste,
28 ,take other neeessary retn
29 aetion, inelading, but t. limited LIU,
30
31 state board or a regional Zqrd may fequire th ,
32 payment 4 replaeemenf water sefviee,whieh may
33 ineittde w Read treatment,
34
35 r abatement ofdef,the Attorney General,at the request
36 of the board, shall petition the superior eottft for that eottnty
37
38 the order in the suit, the eottrt�hall'have jttfisdietion to grant
39 , either pfelitninary Of
40 .
98
BB -117- Item 4. - 9
—5— SB 658
1 (b) (1) The regional board may ex-pend available mottey to
2 perform any eleanup, abatement,or remedial work reqttired tttider
3 ,
4 limited to, sttpefvisiott of eleanup and abatement aetivities that—,ffii
5 its jttclgfnent, is required by the magnitttde of the endeffvof or the
6 ,
7 , ir�ttry to any waters of the state. The aetion may-be
8defiattit of, or in addition to, remedial work by the waste
9 diseharger or othef persotts, and regardless of whethef iqjttnetive
10 relief is being sought.
11 , or with the
12 ,and may ttse rente
13 .
14 Notwithstanding any other law, the regional board may enter into
15 ofal eontraetsf6r the-v ofk, and theeontractswhethef written o
16 oral, may ineittde pfovisions for eqttipment rental and in addition
17 the furnishing of labor atid materials neeessafy to aeeotnplish the
18 work.The eontfaets are not subjeet to approval by the Department
20 (3) The regional board shall be penmitted reasonable aeeess to
21 ,
22 abatement, or other remedial=wofk. The aeeess shall be obtdine
23 with the eonsent of the owner of possessof of the pfoperty or, '
24 the eonsent is withheld,with a warrant duly issued purstant to the
25
26 , ill
27 the event of an emefgettey affeeting publie health or safety,—thfe
28 regional boafd may enter the property without eonsent or the
29 1 f n,
30
31 perform, under the direetion of the regional board, '
32
33 '
34 reimbursed by the regional board from the first available fttnds
35 obtained from eost reeovefy aetions for the speeifie site. The
36
37 limited to a water ageney that draws groundwater From the affeete
38 aquifer, a metropolitan water distriet,
39 respottsible for water sttpply or water quality in a gfoundwate
40 fir.
98
Item 4. - 10 HB -118-
SB 658 —6—
1 (e) (1) if the waste is elea-ned up or the effeets of the waste are
2 abated, or, in the ease of thfeatened pollution ' othe
3 ,
4 the person or persons who diseharged the waste, diseharges the
5 , — ffireatened to eattse of permit the diseharge of the waste
6 , afe liable to th"at,
7 goventmenfal ageney to the extent of the reasonable eosts aetuaRy
8 itieumd in eleaning up the waste, abating the effeets of the waste,
9 , or taking othef
10 Te;edial-aetien. The amount of theeostsjs reeo erable in a�e
11 ,the governmental ageney and the state boar
12 to the extettt of the state boafd's
13 from the State Water Pollution Gleatrdp and Abatemeftt Aeeotmt,
14 or other available fun4s-.
15
16
17 , that idet-Aifies the
18 property on whieh the eondition was abated, the amount of the
19 lieti, and the ow-ner of reeard of the property-, in the offiee of the
20 .
21 , and pri0fity
22 as a jttdgment lien, exeept that it aftehes only to the prope
23 posted and deseribed in the notiee of lien, and shall eontititte fo
24 10 years ffotn the titne ofthe reeording of the notiee,unless soone
25 released or otherwise diseharged. Not later than 45 days afte
26 , the owner may petition the eottrt for an
27 order releasing the property from the liett of redueing the atnoun
28 of the lien. itt this eotirt aetion, the governmental ageney that
29 ineurred the eleafmp eosts shall establish that the eosts were
30 reasonable atid neeessary. The lien may be f-oree4osed by an aetion
31 brought by the state board on behalf of the regional boafd for -a
32 money jttdgment. Money reeovered by a judgment in ftwor of the
33 state board shall be deposited itt the State Water Pollution Cleanup
34 and Abatement AeeottrA-.
35 ,despite reasonable effort by the regional boafd to identify
36 the person responsible for the diseharge of waste or the eondition
37 of polluti ee, the person is flot identified at the ttime
38 ,
39
40 seetion..
98
HB -119- Item 4. - 11
—7— SB 658
1 (e) For purposes of this seetion, «
2 ereating a sttbstantial probability of hafm, when the probability
3 and potential extent of ham make it reasonably neeessary to t
4 immediate aetion to prevent, fecluee, or rattigate damages Ao
5 ,
6
7 , and loeal drinking water
8 statidards, and shall have eomparable quality to that pttrnped-by
9 the pt+lie water system of private well owner prior to the diseharge
10 of waste
11 (g) (1) A pttblie water supplier or private well owner Pee-i
12 replaeemetit water by reasort of an order issued pursttant-te�
13 , of a persort or entity that is ordered to provide
14 , may request
15 ftonbinding mediation of all replaeement water elaims.
16 , the publie water suppliers reeeiving the
17 feplaeement wafer and the persons or entities ordered to provide
18 the feplaeement water, within 3 0 days of the submittal of a wate
19 replaeement plart, shall . at least one eonfidential
20
21
22 elaims resulting from partieipation in the notibinding mediation
23 proeess shall be eonsistent with the r of any elean"
24 and abatement
order.
25 (4) A regional board or the state board is not required to
26 partieipate in nortbinding mediation requested pufstiant -to
27 paragraph (I)-.
28 (5) The part 'eqttesting the mediation shall pay Fo
30 (h) As part of any elean" and abatement order that require-s
31 the provision of replaeement water-, a regional board or the state
32 board shall reqttest a water replaeement plan from the disehafger
33 1 �here replaeetnent water is to be provided for more than
34 �0 days. The water feplaeement plan is sttbjeet to the approval o
35 the regional board of the state board prior to its implementati
36 "means
37
38 water in aeeordanee with a elearmp and abatement order
98
Item 4. - 12 HB -120-
SB 658 —8—
1 This seetion does not impose a" new liability for aets
2 ,
3 of existing laws or regulations at the time they oeeufred.
4 (k) This seetioti does not limit the authority of any state agefley
5
tmder any other law or regulation to enforee of administer —an.!Y-
6 eleatmp or abatement aetivitr.
7
8
9
10 ,
O
98
HB -121- Item 4. - 13
ATTAC H M E N T #3
ORANGE COUNTY WATER DISTRICT ACT
AMENDMENT PROPOSAL
IN BRIEF As a result of these recent rulings water rate payers in
3 the District may have to pay as much as $300 million
SB 658 (Correa) brings parity to to remediate contamination caused by known
Orange County ratepayers by polluters. The District would then have to wait up to
,< clarifying that the Orange County thirty years, until remediation has been completed,
Water District (OCWD) has authority before seeking to recover these costs from polluters.
to recover all costs related to remediating If OCWD has to wait thirty years before it can even
contaminated groundwater from established seek to recover from polluters, as a practical matter it
polluters. will be nearly impossible for the District to succeed in
such actions. Evidence will have gone stale, parties
In 1989, Section 8 of the Orange County Water will have disappeared, and ultimately rate payers will
District Act(the "OCWD Act") was amended to be stuck paying the costs related to remediation.
allow the District to recover from parties who
contaminate groundwater the District's costs in THE SOLUTION
remediating contamination. These remediation
costs were intended to include all costs of Existing hazardous waste state law in California,
investigation, cleanup, and abatement. including the Hazardous Substances Account Act,
recognizes that investigatory work, such as
SB 658 amends the OCWD Act to clarify that the determining the sources, extent and movement of the
California Legislature intended to provide that contamination, identifying the existing and projected
OCWD may recover from polluters, through court future impacts of the contamination, evaluating
proceedings, all the costs of remediating alternative methods of remediating the contamination,
contamination caused by those polluters without and designing remedial solutions, is a critical
having to wait decades for remediation to be component of the groundwater remediation process.
complete. SB 658 clarifies that investigation costs must
necessarily be incurred as part of the remediation
THE ISSUE process and were never intended by the Legislature
to be excluded as recoverable costs under the OCWD
The California Legislature enacted the OCWD Act Act. SB 658 ensures that Section 8 will be applied in a
in 1933 to create OCWD. The Act authorizes manner that is consistent with the other hazardous
OCWD to manage and protect the groundwater waste laws in California.
basin. The district's jurisdictional boundary
underlies north and central Orange County and SB 658 also clarifies that OCWD may proceed in
provides two-thirds of the drinking water to accordance with existing law to recover the costs and
approximately 2.4 million residents. legal expenses it has incurred as of the time of the
litigation and may also obtain equitable (i.e.,
OCWD has detected significant contamination of declaratory) relief to assign liability for OCWD's future
groundwater at various locations throughout the costs and expenses. This is a simple
basin. This contamination has already forced the acknowledgement that, in adopting Section 8, the
closure of a number of drinking water wells. The Legislature never intended to exclude other available
contamination resulted from the use and storage of remedies, such as declaratory relief, because without
chemical solvents and petroleum products by such a remedy, OCWD would have to file multiple
industrial and manufacturing facilities. Since clean lawsuits to recover its incremental costs of
groundwater is critical to water users in the basin, remediating contaminated groundwater over a period
OCWD has determined that the contamination must of two or three decades.
be remediated without delay, and has initiated
regional remediation projects. SB 658 protects local taxpayers and the regions
valuable groundwater basin by ensuring that OCWD
Recent judicial decisions have misinterpreted the can recover from polluters the costs associated with
OCWD Act as excluding investigatory work from remediating groundwater contamination, including
remedial expenses recoverable under the OCWD investigatory costs, without having to wait decades for
Act, despite the fact that hazardous waste statutes remediation to be complete.
and remediation professionals consider such FOR MORE INFORMATION
investigatory work to be an integral part of the Robert Ennis ( Legislative Affairs Liaison
remediation process. Orange County Water District
rennis(aD-ocwd.com ® 714.378.8232
xB -123- Item 4. - 15
r .
ORANGE COUNTY
BUS 111-:E&S COUNCIL-_ 2 Fay k flan,Suite 100 1 Irvine,CA 926141 F 949.476.2242 F 949 476.0443 vvvwv.ocbc.org
April 26, 2013 SUPPLEMENTAL
Honorable Lou Correa
COMMUNICATION
California State Senate
State Capitol, Room 5061 Meeting Date:,.. 1 ._.�_..
Sacramento, CA 95814
Agenda Item tdo. .
SUBJECT: SB 658 — Oppose 1--rZ/
Dear Senator Correa:
Orange County Business Council (OCBC) is the leading voice of business for
America's sixth largest county, advocating for business, working with government and
academia, to enhance the economic prosperity and high quality of life for the region
and state.
First and foremost, OCBC strongly contends that polluters must clean up,pollution.
However, OCBC is opposed to SB 658 because it emboldens Orange County Water
District (OCWD) and its contingency fee attorneys' abusive tactics that, to date, have
solely focused on prolonged litigation, shakedown settlements from weary defendants
and resulted in not a single drop of water contamination being remediated.
In fact, dozens of businesses and family trusts are victims of OCWD's lawsuits. In
one set of cases, over $21 million has been paid to OCWD in "settlements"—more
than enough to cover so-called investigation costs. Recently, two well respected OC
Superior Court judges have ruled against OCWD in five separate decisions. This
legislation is designed to support future litigation appeals and future fishing
expeditions with no standards or timelines--not contamination remediation.
In terms of specific issues of concern, OCBC opposes SB 658 for the following
reasons:
• SB 658 is framed as "clarifying" the prior version of the Act, which
means it would be retroactive and would apply to prior decisions by the
courts, which violates the due process rights of those who have spent time
and money litigating these issues in OCWD's cases.
• SB 658 would give powers to OCWD that far exceed those of any other similar
water agency or district. No other water agency in California has the powers
OCWD now has, let alone the new powers it would gain under SB 658.
• SB 658 would give OCWD the power for the first time to recover its
investigation costs. This change is unnecessary since OCWD can already
recover its investigation costs under federal law (CERCLA). SB 658 does not
include any limits.on what investigation costs are reasonable, necessary, or
when OCWD can sue.for cost recovery. Not even true cleanup agencies like
Environmental Protection Agency and Department of Toxic Substance Control
have such unlimited power.
SB 658 would give OCWD the power to recover ALL of its investigation
remediation costs,:without requiring OCWD to first prove its costs are
consistent with the rules that other true clean-up agencies must follow in order
to recover their costs, known as the National Contingency Plan. It has no
deadline for filing suit, and no standards for how to perform remediation
correctly. SB 658 would create a super-agency with no rules to follow and
unfettered power to win every case and recover every dollar no matter
how technically flawed its approach.
• SB 658 is an urgency measure, so it would take effect when signed, and is
designed to apply to ongoing cases (North Basin and South Basin) to change
their outcome. At its core, SB 658 is meant to turn the losses that OCWD
has experienced into wins.
• SB 658 would give OCWD new powers it,could choose to use against water
purveyors and cities within its boundaries, requiring them to conduct water
remediation.
• If SB 658 allows OCWD to recover future damages (not yet incurred), and
OCWD continues to retain contingency-fee counsel in future cases, the result
would be that.a substantial percentage of the future costs of remediation
projects would be paid to the attorneys, leaving rate-payers responsible for
completing the remediation.
It is the position of OCBC that polluters must clean up pollution, but SB 658 as
currently amended is not the answer.
Sincerely,
Bryan M. Starr
Senior Vice President, Government Affairs
Cc: Members of Senate Environmental Quality Committee
SB 658 Page 2 of 2
ORANGE COUNTY
BUSINESS COUNCIL
The Lej. inc_.,4 Voice of Bus nes-
Facts about SB 658 (Correa) OPPOSE
Amendments to the CICWD Act
What is the Orange County Water District?
■ OCWD was created in 1933 by a special act of the California legislature to protect and
ensure an adequate and safe water supply for its jurisdictional area.
■ OCWD does not own or operate groundwater production wells does not pump ground
water, or serve or sell water.
■ OCWD is not an environmental agency like the many federal, state, and local
environmental agencies -- U.S. EPA, the California Department of Toxic Substances
Control (DTSC), the regional water quality control boards, and the Orange County Health
Care Agency — that hire scientists and remediation experts to oversee and regulate the
cleanup of contaminated sites.
■ In 1989, OCWD's enabling act was amended to allow OCWD to seek recovery costs
incurred on remediation of contamination (without specifying any standards that must be
met for OCWD's cleanups or remedy selection decisions or any other of the standard
"checks and balances" that environmental agencies such as EPA and DTSC must meet if
they are conducting cleanups).
• No other water district or water agency like OCWD (having the duty to ensure an
adequate water supply in an area) has such a cost-recovery provision in its enabling act,
(which now allow OCWD to seek reimbursement of incurred remediation costs, court
costs, and attorneys' fees).
➢ Instead, other water districts that have needed to address contamination in their
service areas have relied on existing cost-recovery provisions in federal and state
law (CERCLA and the state Hazardous Substance Account Act).
■ To date, OCWD has not cleaned up or remediated a single drop of contamination!
Instead, OCWD has been filing lawsuits..
■ In 2004, OCWD hired a contingency law firm (Miller, Axline & Sawyer) to bring three
massive cases against Orange County property owners and businesses (the MTBE case, the
North Basin case, and the South Basin case).
➢ Many of the sites in the cases were already being cleaned up by environmental
agencies that normally oversee and order site investigation and cleanup, such as
DTSC and the regional water quality control boards. Even property owners that
have already spent millions of dollars on cleanup were dragged into these cases.
Even parties that had received site closure or"no further action" decisions from
these environmental agencies were sued by OCWD.
OCWD did not ask the environmental agencies that oversee cleanup of
contaminated sites in Orange County to intervene or require faster or better
cleanups before it filed its law suits.
OCWD did not test the sites before filing suit.
➢ OCWD did not ask the site owners to work cooperatively with them to ensure that
the drinking water aquifer was being adequately protected before filing suit.
➢ In the South Basin case, OCWD hired an expert to design cleanup plans without
using standard methods that EPA or DTSC would have been required to use, such
as considering a range of remedial options and their cost and feasibility. Instead,
OCWD's litigation-driven plan presented only a single option at each site, designed
to maximize the litigation damages award, not to select the best remedy for the
site.
■ The vast majority of the claims in the North Basin case and the South Basin case have
been decided against OCWD after years of litigation in recent court rulings by two
separate judges in Orange County.
■ OCWD is now seeking to change the outcome in the cases it is now losing by changing
the law (via SB 658) in the middle of the cases.
If SB 658 were passed in its current form, what would it do?
■ SB 658 is framed as "clarifying" the prior version of the Act, which means it would be
retroactive and would apply to prior decisions by the courts, which violates the due
process rights of those who have spent time and money litigating these issues in OCWD's
cases.
■ Through SB 658 OCWD is seeking powers that exceed those of any other similar water
agency or district. No other water agency in California has the powers OCWD asserts it
now has, let alone the new powers it seeks under SB 658.
➢ Through SB 658, OCWD seeks a new power for the first time to recover its
investigation costs. But OCWD can already seek to recover appropriate, qualifying
investigation costs under federal law (CERCLA) and state law (HSAA). In contrast,
SB 658 does not include any limits on what investigation costs are reasonable
Page 2 of 3
and/or necessary. Not even true cleanup agencies like EPA and DTSC have such
unlimited power.
➢ SIB 658 would not require OCWD to first prove its costs are consistent with the
rules that other agencies must follow in order to recover their costs, known as the
National Contingency Plan. It has no deadline for filing suit, and no standards for
how to perform remediation correctly.
➢ OCWD does not have the staff to direct site cleanups. EPA and DTSC are the
experts in this area and follow detailed rules when directing cleanups They have
hundreds of employees trained in geology and groundwater remediation to work on
site remediation. So far OCWD has only relied on its litigation counsel and hired-
gun experts to dictate the terms of cleanups — based on arbitrary, ad hoc
standards.
■ SIB 658 is an urgency measure, so it would take effect when signed, and is designed to
apply to OCWD's three ongoing cases to change their outcome. At its core, SIB 658 is
meant to turn the losses that OCWD has experienced into wins.
■ OCWD might assert such new powers against water purveyors and cities within its
boundaries, seeking them to pay for OCWD's groundwater investigations and conduct
remediation.
• If SIB 658 allows OCWD to recover future damages (not yet incurred), and OCWD
continues to retain contingency-fee counsel in future cases, the result would be that a
substantial percentage of the future costs of remediation projects would be paid to the
attorneys, leaving rate-payers responsible for completing the remediation.
SIB 658 is not needed to give OCWD the right to hold polluters accountable.
■ OCWD can hold polluters liable under its current statute to recover remediation costs and
can also use the federal Superfund Act (CERCLA) and state Superfund Act (HSAA) to
seek recovery of investigation and remediation costs under those laws, just as other
water agencies have done in the past.
■ OCWD can and should respect and participate in the cleanup processes beinq conducted
by the true cleanup agencies that have the staff and expertise to handle site cleanups
within its jurisdictional area, by cooperating and coordinating on existing site cleanups to
ensure its concerns are being met.
■ The real impact of SIB 658 is a windfall to contingency fee lawyers for OCWD in cases
they are losing by moving the goalposts mid-game.
Page 3 of 3
Esparza, Patty
From: Baker, Teri
Sent: Monday, May 06, 2013 2:44 PM
To: Flynn, Joan
Cc: Wilson, Fred; Esparza, Patty; Estanislau, Robin; Hopkins, Travis; Davis, Chris
Subject: FW: OC Water District's SB 468 OPPOSE
Attachments: OCBC 658 Oppose Fact Sheet 4 26 13.pdf; Senator Lou Correa SB 658 - Oppose.pdf
Joan,
Fred asked that you include this in the Supplemental Communication to Council this afternoon. It relates to Item
number 4 on the consent calendar. A letter of Support has already been sent, but now we are finding that businesses
Oppose the bill.
Thank you,
SUPPLEMENTAL
Teri Baker COMMUNICATION
Assistant to the City Manager
City of Huntington Beach Wetlng Date:
(714) 536-5482
teri.baker(ksurfcity-hb.or Agenda hwn No.
From: Wilson, Fred
Sent: Friday, May 03, 2013 4:36 PM
To: Baker, Teri
Subject: Fwd: OC Water District's SB 468 OPPOSE
Did we send letter?
Sent from my iPad
Begin forwarded message:
From: "Lucy Dunn" <LDunn2ocbc.org>
To: "Wilson, Fred" <Fred.Wilson(a�surfcity-hb.org>, "dsullivan(a&socal.rr.com"
<dsullivan(a�socal.rr.com>, "Jim Katapodis (katapodis4hbcitycouncil(& ahoo.com)"
<katapodis4hbcitycouncil(&yahoo.com>
Subject: OC Water District's SB 468 OPPOSE
Dear Councilmembers Sullivan and Katapodis, and City Administrator Wilson:
The Orange County Water District is asking the City of HB to support a very BAD bill: SB 468.
Attached is OCBC's FACT Sheet and letter of opposition to Senator Correa. Please OPPOSE
instead and send a strong message that water districts must play by the rules and not risk
ratepayer increases.
This bill is opposed by Orange County Taxpayer Association, Citizens Against Lawsuit Abuse,
1
numerous trade and business organizations, and even water districts! It is an attempt by OCWD
to leverage their losses in two courts, five substantive summary judgment and other motions.
Please do not let your council support this very bad bill. Please call me or Bryan Starr at 949-
476-2242 to answer any questions.
Lucy Dunn
President and CEO
Orange County Business Council
2 Park Plaza, Suite 100 1 Irvine, CA 92614
Tel: 949.476.2242 1 ldunnnocbc.ora<mailto:ldunn(c ocbc.org>
[cid:image002.jpggOICE481A.BB660CEO]201'): Breaking Free
Join the Leading Voice of Business in Orange County...
www.ocbc.or�4<http://www.ocbc.org> and
www.LocationOC.com<http://www'.LocationOC.cotn>
See what makes Orange County a great place to do business.
z