HomeMy WebLinkAbout05/01/2007, C6 - USE OF CITY RESERVES FOR CLEAN-UP COSTS OF A HAZARDOUS MATERIALS SPILL AT LAGUNA LAKE counat `�"D� May 1,2007
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CITY OF SAN LUIS OBISPO
FROM: John Callahan,Fire Chief
SUBJECT: USE OF CITY RESERVES FOR CLEAN-UP COSTS OF A HAZARDOUS
MATERIALS SPILL AT LAGUNA LAKE
CAO RECOMMENDATION
Appropriate $47,400 from the unreserved General Fund balance to pay for clean-up costs of a
hazardous materials spill at Laguna Lake.
DISCUSSION
On March 10, 2006 at approximately 10:00 a.m. the driver of a Dodge pick-up truck caused a
traffic accident, colliding with a Home Depot Freightliner commercial truck. The Freightliner's
right side fuel tank was sheared off in the accident. When the fuel tank was lifted by the tow
operators, the fuel tank was found to be nearly empty. The truck driver reported he had filled the
truck the day before. It was estimated that 40-50 gallons of diesel had gone into the storm drain
system. Also, heavy rain was falling causing most of the fuel to end up in Laguna Lake. Fuel
was found in the storm drain culvert, the southerly portion of the lake and throughout the
spillway to the creek.
The Fire Department's Hazardous Materials Coordinator was requested to respond to the scene.
Upon his arrival, he made contact with the driver of the Dodge pick-up truck and his insurance
carrier (Farmers Insurance). A claim number was issued, at which point several clean-up
contractors were contacted. Lack of available contractors delayed the clean-up of the lake until
Pacific Petroleum out of Santa Maria responded with approximately fifteen laborers and spill
clean-up materials. They arrived on scene at approximately 3:00 pm and worked until 10:00 pm.
One person was on watch to monitor lighting at the site that was used to keep wildlife away from
the diesel fuel. No wildlife was found to have been injured or killed during the duration of the
incident. Contractors returned on March 11, 2006 at 8:00 am and worked until approximately
6:00 pm.
The scope of work included removing sediment from each of four drop inlets, removing sediment
and vegetation from a concrete lined ditch from the road to Laguna Lake and deploying
absorbent booms in the lake near the shore. Contaminated soil, vegetation, and absorbent
materials were properly disposed of as hazardous waste at a state licensed facility. Total cost for
the operation was $47,400.
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Use of City Reserves to Pay eur Clean-Up at Laguna Lake J Page 2
FISCAL IMPACT
Pacific Petroleum charged the City $47,400 to clean-up the spill. The City has attempted to
recoup these costs from the driver of the Dodge pick-up truck that caused the accident and his
insurer: Thus far, the City has been unsuccessful in recovering these monies through Farmers
Insurance Company. (Also, the driver carred the bare minimum property damage coverage of
$10,000).
The vendor has not received payment, as staff believed Farmer's Insurance would pay for all
clean-up expenses. The vendor performed services in good faith and should receive payment.
Unfortunately, the Fire Department does not have adequate funds in its operating budget to cover
this large of an expense.
Staff recommends funding this unexpected cost through an appropriation from the unreserved
General Fund balance. As set forth in the mid-year budget presented to Council in February
2007, we predict ending 2006-07 with an ending General Fund balance that is 29% of operating
expenditures, well above our policy minimum of 20%. Accordingly, adequate reserves are
available to cover this cost, while still ensuring strong reserves as we move into the 2007-09
Financial Plan process.
Staff has asked the City's Risk Manager (with assistance from the City Attorney) to pursue any
and all means to recoup these costs from the driver of the Dodge pick-up truck, his insurer, and
any other party that might share responsibility for this accident.
CONCURRENCES
The City Attorney and the Finance and Information Technology Department concur with this
recommendation.
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