SALINAS, Calif. -

California American Water Company and the Monterey County District Attorney's Office reached a civil settlement for violations of hazardous waste-related laws and regulation.

The violations stemmed from Cal-Am's handling of sludge waste at three of its facilities in the county, according to the prosecutors. In 2008, Cal-Am began treating some of its groundwater sources to remove naturally occurring arsenic in order to comply with revised federal and state regulations regarding the allowable limit of arsenic in drinking water.

The treatment process generates a waste sludge containing arsenic, which depending on its concentration, can make the waste hazardous under California law.

Cal-Am conducted some initial testing but didn't consistently test its sludge residuals for arsenic prior to disposal using required test methods. Later testing determined that some of the arsenic sludge did qualify as hazardous waste - meaning the company had disposed of, transported, and stored hazardous waste improperly.

County officials notified Cal-Am and the company took immediate action to handle its sludge wastes properly and prevent future violations. Cal-Am also hired new state and local environmental compliance staff and implemented statewide procedures for managing treatment plant residuals such as sludge.

The company has agreed to pay a total settlement of $389,420, which includes civil penalties, investigative costs and a $60,000 supplemental environmental project awarded to the California District Attorneys Association Circuit Prosecutor Project. That money will go to aid rural district attorneys in prosecuting environmental crimes.