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ITEM #12 CITY OF COLTON AGENDA REPORT FOR COUNCIL MEETING OF September 5, 2006 TO: HONORABLE MAYOR AND CITY COUNCIL FROM: DEAN DERLETH, CITY ATTORNEY SUBJECT: ADOPTION OF A RESOLUTION CALLING UPON: (1) THE SAN BERNARDINO COUNTY BOARD OF SUPERVISORS TO FINALIZE AND EXECUTE THE TENTATIVE SETTLEMENT AGREEMENTS WITH THE CITIES OF COLTON AND RIALTO, AND (2) THE REGIONAL WATER QUALITY CONTROL BOARD, SANTA ANA REGION TO ASSIST THOSE CITIES TO RECOVER CLEAN-UP COSTS FROM THE CORPORATE AND OTHER ENTITIES RESPONSIBLE FOR POLLUTING THE RIALTO/COLTON GROUNDWATER BASIN DATE: August 24, 2006 BACKGROUND: The City of Colton is responsible for maintaining a safe, potable water supply. The City owns water rights in the Rialto/Colton Groundwater Basin ("Groundwater Basin") and relies on this as its primary water source. In recent years, it was discovered that perchlorate has been released into the Groundwater Basin polluting three of the City of Colton's wells. City of Colton staff, consultants and attorneys have been working with regulatory bodies, including the Regional Water Quality Control Board, Santa Ana Region ("Regional Board"), to force the corporations and entities that polluted the Groundwater Basin, or are responsible for contamination by their predecessors -in -interest, to pay for the cleanup of the Groundwater Basin and to provide the City with a safe replacement water source. The Regional Board has found that the County of San Bernardino is responsible for discharging perchlorate into the Groundwater Basin through its operation of the Mid -Valley Sanitary Landfill. At mediation, the City of Colton, City of Rialto and the County reached a tentative agreement. The County agreed to pay the City of Colton $1,000,000.00 and the City of Rialto $2,500,000.00 as the County's share of the Cities' out-of-pocket expenses and damages. The County also agreed to advance the City of Rialto $3,500,000.00 to be repaid by the other polluters, if a global settlement is reached in this matter. In addition, the County agreed to join the City of Colton and the City of Rialto to force the other polluters to fund the clean-up of the Groundwater Basin. To date, the County Board of Supervisors has not adopted, approved, or taken any action on the tentative settlement made by its staff at mediation.