I live and work in Morgan HIll. I understand your concerns relating to perchlorate in the water. In my case, I simply use bottled water that is delivered. As others have said, the issue comes from an old flare factory that used to be at the south end of town. While the concerns focused mostly on areas south of that, I have read reports of perchlorate being found in some waters north of that location.
Your best defense here is knowledge. By simply entering 'perchlorate' into google, you are going to get plenty of info on the subject.
I had to make the same decision you are contemplating and decided that the issue was manageable enough by using bottled water for drinking. We use it for everything else. Frankly, I know folks who have been drinking the local water for decades and I have not heard of any issues. If it were just me, I would probably just drink the stuff - but with 3 little boys, I wanted to err on the side of caution.
Hope that helps in some way. It seems like there is always "something" to get concerned about in any area. I would not let this put you off of Morgan Hill.