Aerojet, Boeing agree to $35 million settlement for Sacramento County groundwater contamination
By Loretta Kalb, Sacramento Bee - Apr 22nd, 2012
Without fanfare, Sacramento County has reached a $35 million settlement with Aerojet-General Corp. and Boeing Co. to put to rest years of negotiations over the costs of replacing groundwater contaminated a half century ago in eastern Sacramento County.
The agreement reached in October closes a 2009 federal suit the county filed against the aerospace companies for the costs of dealing with contamination at the site.
Under the terms of the settlement, the county collected $17.5 million from each defendant late last year. The agreement also released Aerojet and Boeing from any further claims by the county tied to known water contamination.
Contamination problems at the site began in the early 1950s, soon after Aerojet began making propellants for rocket engines in Rancho Cordova.
As part of that work, the company started dumping solvents and other chemicals in landfills and deep wells.
The suit also had named McDonnell Douglas Corp., the predecessor to Boeing. In 1961, McDonnell Douglas acquired nearly 4,000 acres from Aerojet, but later sold them back to the company, a Boeing spokeswoman said. When Boeing merged with McDonnell Douglas in 1997, Boeing acquired the liability for the McDonnell Douglas contamination.
The primary chemicals of concern for groundwater are perchlorate, an oxidizing component of solid rocket propellant known to cause thyroid disorders; NDMA, a cancer-causing combustion product of liquid rocket fuel; and trichloroethylene, an industrial solvent linked to brain damage, liver cancer, skin diseases and immune disorders.
Herb Niederberger, division chief of the Sacramento County Department of Water Resources, said the agreement is significant for the county.
"We have been able to negotiate a mutually agreeable settlement that compensates the water agency for the wells lost and allows the agency to fund improvements to mitigate future contamination," Niederberger said.
Chris Conley, Aerojet vice president of environmental health and safety, said last week that the company is pleased to have reached agreement and to "have it behind us. We're looking forward to working with Sacramento County in the future."
The suit wasn't the county's first to seek funds to underwrite the costs of dealing with the effects of groundwater contamination in the area.
A previous suit by the county against the aerospace contractors yielded a $20 million settlement in 2003. But the county unilaterally terminated that pact and, a year later, filed the 2009 suit.
Yet another suit was filed last fall, this one in Sacramento Superior Court, by a dozen Sunrise-Douglas development partnerships seeking compensation for millions of dollars in infrastructure and other costs tied to establishing alternative water supplies.
That suit names, among others, Aerojet, Boeing and McDonnell Douglas.
The developers' attorney, Carl J. Calnero of the Porter Scott law firm in Sacramento, said in a letter to The Bee that recent developments, including the county's settlement, made this the right time to go forward.
The parties, he said, "anticipate sincere settlement efforts."
Aerojet officials say their remediation work is proactive.
"Aerojet has been very active in remediating this site and cleaning up soils and groundwater," Aerojet's Conley said. "We're pumping about 23 million gallons a day" from 10 groundwater extraction plants for treatment.
About 6,000 acres, half of Aerojet's acreage, have been removed from federal Superfund designation or state environmental restrictions, Aerojet officials said.
In the latest quarterly report to the Securities and Exchange Commission, Aerojet's parent, GenCorp Inc., reported it has been required by the federal Environmental Protection Agency to guarantee that up to $95 million is available to fully fund the cleanup.
Cleanup at the contaminated sites – governed by the EPA – is expected to take generations. Environmental regulators in past years have calculated that groundwater plumes will require 240 years to be cleansed of contaminants.
A number of water purveyors in the area have sought their own compensation for costs tied to finding replacement water.
Paul Schubert, district manager for Golden State Water Co. in Rancho Cordova, said the agency reached a settlement with Aerojet in 2004.
"Aerojet has been really good about taking responsibility for the increased costs and providing alternative water supplies," Schubert said. "They've been paying the infrastructure costs. Not our customers."
For Sacramento County, efforts to reach an agreement were more protracted.
Niederberger of Sacramento County Department of Water Resources said the county had sought for years to negotiate new terms after the 2003 settlement proved inadequate for the county to fund a replacement water supply project and related work.
"Aerojet and Boeing have yet to take responsibility," Niederberger said when the 2009 suit was filed. "We needed to do something."
In the current settlement, Niederberger said, the county is shutting down five wells and having them destroyed. The wells were contaminated some time ago, he said, and have not produced water in some years.