Oxnard Scrambles for Dunes Cleanup Funding

When the state Legislature decided more than a year ago to qualify the Oxnard Dunes for cleanup money from the state’s Superfund, residents of the coastal neighborhood were pessimistic.

They predicted that the funds, earmarked for the state’s most hazardous toxic waste sites, would dry up long before they could be used to determine the extent of contamination in the subdivision that was built on an oil sump in the 1950s and early ‘60s.

Last week, it turned out they were right.

Officials with the state Department of Health Services, which is overseeing testing and any necessary cleanup at the Dunes, acknowledged that the state’s Superfund is, in the words of the department’s deputy director David Willis, “broke.” He also said his department had long foreseen the shortfall.

Could Be Postponed

With two tests complete, another in the works and at least two more needed, an investigation of potentially dangerous subterranean gases detected by previous studies could be postponed for as long as 2 1/2 years unless other funding is found, department spokesman Jim Marxen said.

Assemblyman Jack O’Connell (D-Carpinteria) may have found a way to bridge the gap with a bill that would appropriate $300,000 to pay for more studies in the area. Oxnard City Council members rushed Tuesday to support the measure, which would take effect immediately if passed.

“We’re as anxious as everybody else to find out the results” of testing in the area, said Ken Hampian, assistant to City Manager David Mora.

But for many Dunes residents, who complain that odors from gases are so strong that their neighborhood sometimes smells like the La Brea Tar Pits, the assurances of government officials rang hollow. As they approach the third anniversary of the discovery of petroleum-based contaminants in the soil beneath their homes, their desperation has reached a new pitch.

Homeowners have begun abandoning their mortgages and, in some cases, their dwellings. Meanwhile, in what some real estate specialists perceive as a first, some lenders are declining to foreclose on the properties because they perceive them as liabilities. Instead, the lending institutions have begun to pledge support for a $3.8-billion lawsuit that 140 residents are bringing against anyone even remotely connected with the subdivision.

“I’ve never heard of lenders joining with residents to sue a developer or to sue in a toxic-waste situation,” said Phil Nicholson, a partner with the Los Angeles law firm of Cox, Castle & Nicholson, which specializes in real estate and toxic litigation. “It sounds like a first to me.”

Paul Dolan, a leader of the Dunes residents who filed suit, said the move illustrates that “the banking and savings and loan industry is just as fed up as we are.” Another 45 residents of the subdivision who had resisted litigation last month filed a separate lawsuit, Dolan said. Their case this week was consolidated with the earlier lawsuit by Ventura County Superior Court Judge Kenneth R. Yegan.

The suits stemmed from the January 29, 1986, revelation of the discovery of DDT, benzene--a known carcinogen--and other poisonous chemicals in the sandy soil of the neighborhood 1 1/2 miles from the Channel Islands Harbor.

Soil Sample

A subsequent soil sample by the state Department of Health Services found no benzene or any other chemicals that had showed up in the first test, but it did reveal the presence of explosive gases. However, a scattered sampling of the neighborhood’s 55 dwellings detected no accumulations of gases.

The three companies that the state has said are responsible--the McGrath Trust, Oxnard Shores Development Co. and Chevron USA--have refused to finance contamination tests for fear this might be considered an admission of guilt.

A bill that qualified the subdivision for money from the state Superfund, which usually is off-limits to toxic sites tainted by petroleum, was hailed by government officials as the answer to the neighborhood’s problems when it was passed in September, 1987.

Since then, the state Department of Health has depleted $100 million from a 1984 bond measure, as well as money from other sources, with all but $10,000 of the total going toward sites other than the Dunes, said Arnold Peters, a staff member of the legislature’s Committee on Environmental Safety and Toxic Materials.

Larger Bill Required

State officials said the department cannot expect more funding until either a bill of larger scope than O’Connell’s is passed or voters approve another bond measure. Such a bill could be approved as soon as July, Peters said, but it would take two years for a bond issue to come before voters and longer still for the funds to become available.

Still, state officials said they are not worried about acquiring the money.

“This is too important to too many communities,” said Willis, of the state Health Department.

In the meantime, one more test is expected to be completed in the Dunes investigation, state officials said. Dunes residents can expect to learn the results at a meeting with state Health Department officials next month.

For some of the residents, however, such measures are too little, too late. Rather than continue investing in what they view as a losing proposition, 12 have stopped paying their mortgages, Dolan said.

Lynda Paxton, a 46-year-old financial planner, is one example. She said that sometimes fumes in her Dunes duplex make her so sick that “if I wasn’t too old and not married, I’d think I was pregnant.”

But it wasn’t until she decided to refinance that Paxton said she decided to stop paying off the mortgage on the apartment she bought for $160,000 eight years ago.

Her bank considered her property worth only what was left on the original loan--$97,000--and a second mortgage of $12,000.

Stopped Making Payments

In March, 1988, she stopped making mortgage payments, despite fears of ruining her credit rating. “I want out of here so bad,” she said.

Paxton’s bank, First Federal Savings Bank of California in Santa Monica, has responded by pledging to join in the Dunes lawsuit, said the bank’s counsel, James F. Clark. He said six other banks with mortgages in the Dunes agreed last week to join the suit.

“We stand pretty much in the same shoes as the homeowners,” Clark said. “The homeowners have lost their equity and the mortgages are of questionable value at best.”

In November, 1988, Stephen Blanchard, a 39-year-old electrical engineer, gave up altogether. Having stopped mortgage payments in September, he and his 14-year-old daughter moved out and rented a house elsewhere when he became convinced that soil contamination was responsible for symptoms including dizziness, shortness of breath and headaches suffered by both.

“I’m a responsible person and I didn’t want to default on my loan, but I felt like I didn’t have a choice,” he said.