San Juan Capistrano residents might have to pay a surcharge on water use to make up for costs related to fuel additive leaks from Chevron gas stations into the city’s water supply.

The additive, MTBE, was leaked into a well close to City Hall as well as one near Kinoshita Farms. The contamination of the well near city hall was traced to local Chevron gas stations.

Although MTBE is known to be a carcinogen in lab animals at certain levels, water tests at the wells showed levels to be safe for drinking. Though an Orange County Register story reported that at least one resident complained about a visitor smelling gasoline in her water.

Because the wells pump water into the city’s groundwater treatment plant, city officials say the leaks caused $1.6 million in one-time charges to treat the water supply. As of June 30, the city incurred another $3.6 million in other costs related to the leak.

City Council is scheduled to vote tonight on the whether to put the surcharge to a public hearing. City officials maintain that Chevron is at fault and should ultimately pay the bill.

“Until they [Chevron] resolve the issue and step up to the plate, we’re incurring those costs,” Assistant City Manager Cindy Russell said.

A staff report on the surcharge hasn’t been released yet, but Russell said the council is looking at a variety of options.

The City Council, at its Sept. 15 meeting, was to vote on putting the surcharge to a public hearing. But during the meeting, staff discussed the issue with attending Chevron officials, and the item was pulled from the agenda.

Russell said the item was pulled to give Chevron and the city more time to come to an agreement. But it doesn’t look like an agreement was reached.

“We’re coming to a point where we need to deal with it,” Russell said.

Juan Garcia, policy, government and public affairs manager for Chevron, said Chevron has been trying to “work with the city and resolve the differences.”

Garcia said he couldn’t disclose the details of the negotiations, but he did say that because the city’s work and shutting down of the wells were unnecessary, Chevron’s position is that the surcharge is also unnecessary.

“They [MTBE levels] pose no health risk to the public, and they’re at minute levels,” Garcia said.

We’ll keep you posted on what happens tonight.

Correction: A previous version of this post incorrectly stated that contamination at both the city’s wells were traced to local Chevron stations. It is also incorrect that Chevron insisted from the beginning that cleanup measures were unnecessary. And finally, Chevron denies that the city’s water supply was ever discolored or smelled like turpentine.

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