The company hopes to drill a new community water well, which could deliver safe water via pipelines to 40 or more customers, all victims of well contamination by the gasoline additive MTBE.

Not everybody is happy about the proposal, however. Some residents want to maintain their independence and keep using their private wells.

"We've definitely got a big split right down the middle: those that want it and those that don't," said Mike Littrell, president of the new Glennville Mutual Water Co.

In 1996, oil companies began using the gasoline additive MTBE, or methyl tertiary butyl ether, to reduce air pollution. The next year, a leak at Glennville's only gas station thrust the town into the spotlight. Its 200 or so residents were among the first Californians to learn how readily MTBE contaminates groundwater.

The cancer-causing chemical made nearby private wells smell like turpentine. Before long, the underground plume began tainting surrounding wells.

Some of those wells recorded among the worst MTBE contamination ever seen in California -- thousands of times more than state health standards allow.

Water quality officials mopped up the leaks using state cleanup funds and began delivering water in trucks to affected residents. That has continued for years while the search for a solution goes on.

Glennville resident Freda Kubas said the new water company is the best solution.

"I think everyone will be happy, because it will be good, safe water at a reasonable price, and we can get our property values reinstated and get on with life," she said.

But one year ago, most Glennville residents voted for a different fix: individual wellhead filters installed at each affected home. This was estimated to cost $6,000 each, with annual maintenance costs around $1,000.

Pete Iverson said the problem has dragged on so long that contamination in many wells is starting to drop, including in his own well. Rather than get locked into a monthly bill from the new water company, he would prefer a wellhead filter system that he can remove when his own well finally clears up.

"Part of the reason I like living here is I like being independent," he said. "I don't really want to be forced into something that probably isn't going to be necessary 10 years down the road."

Wellhead treatment was ruled out for several reasons, Littrell said, most notably because a $500,000 settlement the town won from oil companies requires the money to be spent only on a new water system.

Littrell also said officials at the Central Valley Regional Water Quality Control Board originally supported wellhead treatment, but then began "backpedaling" not long after residents voted in favor of it.

Greg Issinghoff, an engineer with the water board, said liability was one concern, but not the only one.

"Our agency, as far as I'm aware, has always felt that the best, first choice for Glennville is to put in a community water system," he said. "If residents there can do it as a community, it's certainly a better thing than us doing it for them."

State officials once estimated a town water system would cost $1.2 million. Littrell hopes locals can do it for less.

He said the water company has identified 31 property owners in Glennville who have contaminated wells or are still at risk of contamination.

He does not expect that many to sign up, and he said no one will be required to join the group. But those who don't might have to find their own solution.

The system will be built to handle between 40 and 50 customers, and Littrell expects individual bills to run between $30 to $35 a month.

The system will also include water storage and hydrants for firefighting, something Glennville has never had. This may lower homeowners insurance rates for many residents.

"Everyone that is on it will actually own shares in it," said Littrell. "It's their company. It's not like it's some big company making money. It's all going to be governed by the board, which is all local people."

The water company is looking for a drilling site to lease on a long-term basis, and hopes to drill a new well and begin delivering water within a year.