A White Bear Township manufacturer will pay more than $7 million in fines and environmental projects for emitting high levels of a toxic chemical into the air over many years.

Water Gremlin’s settlement is the second-largest in the history of the Minnesota Pollution Control Agency (MPCA), topped only by the $8 million settlement in 1999 with Koch Petroleum Group over violations at its Rosemount refinery.

The excessive emissions from Water Gremlin went on for more than 15 years and reached a peak last year, as the company struggled with its pollution control equipment, according to the MPCA.

“Not only was this a permit violation, it put people’s health at risk,” MPCA Commissioner Laura Bishop told reporters Friday. “This should not have happened.”

Bishop acknowledged that the penalty is a “small consolation” to concerned local residents.

Water Gremlin makes fishing sinkers and electrical contacts for batteries at its plant at 4400 Otter Lake Road. It used trichloroethylene, a widely used metal degreaser that is also a known carcinogen, to coat its battery leads to prevent corrosion.

Last summer the MPCA discovered the company was violating its air pollution permit. In January, it asked Water Gremlin to shut down part of its operation because it was emitting high levels of trichloroethylene into the air.

At times, the emissions nearest the plant were found to be as high as 100 times the state’s health guidance value for trichloroethylene, which is 2 micrograms per cubic meter of air. The MPCA said it thinks the pollution was worst in 2018 but that excessive levels of the chemicals have been released as far back as 2002.

The affected area extends 1.5 miles from the plant in all directions, including at least two schools and the homes of about 5,500 residents.

A Water Gremlin spokesman provided a copy of a letter being mailed to residents that says it has been approved to restart operations and that it’s finalizing the replacement of its pollution control equipment.

“We would like to reiterate how deeply sorry we are for these circumstances — we have been working hard to make things right and we hope to regain your trust as a member of this community going forward,” said Carl Dubois, vice president of international manufacturing.

The Minnesota Department of Health has said it thinks the public’s exposure is “low” and only announced the problem out of a sense of caution and because it thought the public deserved to know. Trichloroethylene has never been detected in the public water supplies of nearby communities, said Jim Kelly, the department’s environmental surveillance and assessment section manager.

A number of people have contacted the Health Department with concern about a range of health problems, including cancer, Kelly said. It’s possible some of the health issues could be associated with the exposure, Kelly said, but the department doesn’t really know. He urged residents to contact a physician if they suspect a link.

“We will be looking at a state cancer reporting system just to see if there is anything unusual going on,” Kelly said.

Residents had mixed reactions to the settlement.

“I’m just in shock that there’s a decision made so quickly,” said Leigh Thiel, who has three children. She said she couldn’t understand how a settlement could have been finalized without a better understanding of the amount of exposure and possible associated health effects. “We’re all scared,” she said.

Dawn Ronnan, who lived near the plant for years, said she was pleased by the substantial fine. But she, too, wondered how a dollar figure was calculated without a clear understanding of the damages. The fine, she said, “brings to my mind a high level of alert and concern for the many, many years of exposure for myself and my family.”

Some lawmakers and local elected officials including White Bear Township Board Chairman Ed Prudhon issued a statement saying they were very concerned that they had not been consulted before the final settlement.

The settlement includes paying a civil penalty of $4.5 million; taking corrective actions at the plant; conducting air monitoring for several years; running an outreach campaign to manufacturers using trichloroethylene and planting 1,500 trees. Also, the company can no longer use trichloroethylene.

The agreement resolves numerous violations: exceeding emission limits, failing to properly operate pollution control equipment, failing to obtain the correct permit, having record keeping and reporting issues and failing to act in good faith with “complete truthfulness.”

Long-term exposure to high levels of trichloroethylene can increase the risk of certain cancers, according to the state Health Department. Exposure during the first eight weeks of a woman’s pregnancy can elevate the risks of heart defects in the baby.

Water Gremlin plans to restart its coating operations using a different solvent called FluoSolv WS.

Sarah Kilgriff, who manages the land and air compliance section of the MPCA, said FluoSolv is “less toxic than TCE.”

The state’s pollution regulatory program is based on self-reporting, Kilgriff said. MPCA monitoring of air and emission levels at individual facilities would be far too expensive and time-consuming, she said.

Instead, the MPCA relies on inspections, following up on complaints, and reviewing business records and required reports from companies.

“We trust that they are experts in operating their equipment and that they let us know when there’s a problem,” Kilgriff said.