St. Louis to get $26.5 million from Velsicol and others in water settlement

St. Louis to get $26.5 million from Velsicol and others in water settlement

Source:, March 30, 2011
By: Linda Gittleman

After five long years of negotiations, St. Louis has reached a $26.5 million settlement in its suit against Velcisol Chemical Co. and others over contamination of the city’s water supply.

In special meetings on Sunday and again on Tuesday, the St. Louis City Council unanimously approved the agreement, city manager Bob McConkie said.

“It’s a monumental and historic occasion and it’s a gigantic step forward in our quest to provide reliable and quality water so the citizens won’t fear it,” McConckie said.

In 2005, as the city and the nearby townships continued its struggle to clean up the pollution left by Velsicol, St. Louis officials were warned by the state’s Department of Environmental Quality to find a new source of water.

Traces of pCBSA, a by product of DDT, was found in heavy concentrations in the test wells of the city and in much smaller concentrations in the drinking water.

Studies of the affects of pCBSA on humans are incomplete, but pCBSA is known as a precursor of other, more deadly chemicals like DDT, and PBB, which the company produced. Those chemicals follow in the path created by pCBSA.

In 2007, the city filed suit against Velsicol, insurance companies and the Fruit of the Loom Successor Liquidiation Trust, which is the successor to Velsicol’s now bankrupt former parent company, Fruit of the Loom.

The suit was filed in order to obtain money from the polluter for a new water system.

Exactly $20.5 million will come from Chartis Speciality Insurance Co., the insurance company for Velsicol.

The other $6 million will come from the Fruit of the Loom Trust and that money is closely tied to the upcoming Environmental Protection Agency’s Remedy Review Board and its decision.

The EPA and the DEQ are preparing to offer five remedies for the clean up of the Velsicol plant site in St. Louis. Included in the cost of the clean ups is a new water source.

Total cost for a new water supply, if it hooks up with Alma’s system or not, is estimated at about $35 million, McConkie said.

It is the belief among most that the EPA will pick up the rest of the cost of the new water system, since it is included in all of the suggested remedies.

At a three hour executive session of the city council on Sunday afternoon, the city’s lawyers, Vic Sher and Jeff Shopoff, outlined the agreement, line by line, to the board. McConkie said.

On Tuesday, the board agreed to the settlement.

The agreement has still to be OK’d by federal judge Thomas Ludington, and his approval is expected this week or next, McConkie said.

Once that is completed, St. Louis will receive the first $10 million check within 30 days. The other will be received in a year. The $6 million from the trust is tied to the decision made by the Remedy Review Board.

That decision will likely be made several months after it meets in May to review the St. Louis clean up proposals.

Although forbidden to discuss the five-year long negotiations which took place in New York and in Detroit, along with sessions in Bay City’s federal court, both McConkie and Sher said the first inkling that an agreement might be reached came at a mediated session in December.

“That’s when the parties came to an agreement –it was all verbal,” McConkie said. “We were hopeful then. But I never got my hopes up until last night, really.”

Sher and his firm specialize in litigation involving public drinking water and he said he was very pleased by the outcome.

“We’ve been honored to work with St. Louis,” Sher said from his office in California.

For Sher, a big issue is that St. Louis has been put in the driver’s seat regarding its water supply. The city, rather than the state, has control. That, he said, is unique when it comes to Superfund sites.

The amount of money received is also significant.

And while McConkie is “elated, now my work really begins. There’s a lot to do to replace the city’s water. There’s a long way to go. But this settlement allows us to move forward.”

And, the best news: the taxpayers won’t have to pay for it.

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