Planning and development costs are soaring above expectations for a planned trash-to-biofuel plant in Hampden that would serve more than 100 central Maine communities, largely because the group underestimated how much it would take to educate municipalities about the project and how long obtaining permits would take, officials said this week.
The Municipal Review Committee’s board of directors voted Wednesday to increase threefold the budget for project development and engineering services for the Fiberight project, increasing the total from $140,000 to $479,462. The money is coming out of the MRC’s reserve fund.
Officials from MRC, which represents 187 municipalities that take their trash to the Penobscot Energy Recovery Co., underestimated how much legwork would be involved in explaining the Fiberight project to residents and officials in its member communities, and a longer-than-expected state permit process compounded the problem. The MRC contract with PERC expires in March 2018.
The board also voted to stick with a planned $4 increase in the tipping fee it charges member communities, despite a plea from board member and Waterville City Manager Mike Roy that it stay the same because the city’s budget is suspended and can’t absorb any cost increases.
The board disagreed, though, and effective July 1, the cost per ton of trash — or tipping fee — goes from $59 to $63 for MRC municipalities.
Maryland company Fiberight plans to build a first-in-the-nation organic waste-to-energy plant in Hampden, and so far, 108 MRC communities have signed on to the plan, and a few towns are still waiting to vote at Town Meeting. But others have said they plan to send trash to the Crossroads Landfill in Norridgewock or continue working with PERC, citing uncertainty about the cost and feasibility of Fiberight.
Tied up in the controversial plan are millions of dollars and thousands of tons of trash from the central Maine towns.
One of the biggest costs that’s been higher than expected has been educating member communities about the Fiberight project over the past year, said MRC board treasurer Sophie Wilson. The MRC spent a large amount of time and resources giving the municipalities information on the Fiberight plan, visiting towns to speak to residents and municipal officials, and sending its consultant and lawyer to speak with municipalities.
The post-2018 plan is one of three components that make up the operating budget, along with general operations and the capital asset management budget.
To pay for the adjustments, the board voted to take about $229,000 from the operating budget stabilization fund, which is used as a reserve fund. The board tries to keep it around $500,000, Wilson said, but this adjustment will deplete that amount down to about $193,000.
Fiberight “is a public-private partnership,” Wilson said. “The MRC would own the land and we have to put in the infrastructure, so there’s some engineering services. It’s not around us paying for Fiberight’s project. It’s about us making sure we’re developing a good project for members.”
Costs for project development involve MRC vetting the project, Wilson said, to make sure the board made the right choice for its members. Permitting costs also jumped higher than the MRC expected.
“The length of the permit review processes was considerably longer than anticipated,” MRC Executive Director Greg Lounger said.
The MRC originally thought it would take six to seven months to get the permits from the Maine Department of Environmental Protection, but it ended up taking about a year.
“There were concerns raised by the project’s opponents,” Lounder said in an interview Friday. “I think the department just took the extra care and time that it needed.”
Lounder said that while there is always a “general concern” about spending money, he’s confident that the framework of the Fiberight plan is doing well. He also said the board doesn’t think it needs to revisit the amount of money it set aside for the road infrastructure and utilities part of the plan, which is up to $5 million — money that comes from the tipping fee stabilization fund.
The capital asset management budget is funded through the tipping fee fund, and has $5 million for the road infrastructure and $232,370 for legal fees related to a lawsuit started in 2014 between PERC’s general partner, USA Energy Group, the MRC and five municipalities.
Waterville’s Roy said scheduled tipping fee hike will hurt Waterville which is operating under a suspended budget as the proposed $38 million city budget hangs in limbo after a veto, an override and a citizens petition to repeal the override vote. Waterville is among some communities pulling out of the MRC arrangement. Those communities that are pulling out will be reimbursed in 2018 for money that now goes into a tipping fee stabilization fund that will help pay for the road into Fiberight, among other things.
“We (the city of Waterville) have no authority to spend money at this point, in late July, and won’t have any authority until late August,” Roy said. “At this point in time, revenues are important to us now — not in 2018, but now.” The city sends about 2,000 tons of trash a year to PERC, city officials have said in the past..
But Wilson, the MRC treasurer, said that while she understands Roy’s situation, she didn’t want to manipulate further the reserve accounts they already have tapped into.
“I’m not sitting here to represent one municipality. I’m sitting here to think about the long-term solid waste disposal options for all municipalities,” she said. “Those are options that every single member had a choice to join into. … I don’t think (reversing the increase) is in the best interests (of the MRC).”
The rest of the board agreed with Wilson to keep the scheduled increase. Since the increase was already part of a preconceived plan, it did not require a motion to continue.
The MRC alleges that USA Energy Group misused shared partnership money for lobbying purposes of which the MRC did not approve. A judicial settlement conference, which is closed to the public, is scheduled for Aug. 24 and a trial date has been set for Oct. 3 if those settlement efforts fail.
The board also recommended increasing legal advocacy spending by $23,000 to a total of $71,000. The board approved all of the committee’s recommendations unanimously.
Madeline St. Amour – 861-9239
mstamour@centralmaine.com
Twitter: @madelinestamour
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