With unanimous approval, the Fremont City Council Tuesday approved a resolution enabling tax-increment financing to be used to build a portion of three covered lagoons south of the Fremont Wastewater Treatment Facility -- 6325 Morningside Road -- rather than on the site of the Lincoln Premium Poultry/Costco Wholesale chicken processing plant.
The lagoons as a whole will cost $10 million, with the cost being divided equally among industrial clients and Costco. The Council had to approve use of the TIF because the 40-acre plot of land that will be purchased is outside of the blight and substandard area, City Administrator Brian Newton said during a Thursday interview with the Tribune.
Because it’s within three miles of that area, though, Costco is still eligible to use tax-increment financing.
“Technically the Wastewater Treatment isn’t within that area,” Newton said. “But it is within three miles and as long as Council says it (TIF) can be used, it can be used.”
Newton said that the city, not Costco, made the decision to move lagoon sites. Initially, he said, the original plan of having three, 200-foot by 400-foot lagoons at the processing plant, made perfect sense because it would benefit numerous businesses near Cloverly Road; such as Hormel Foods, the Costco plant, Fremont Beef Co. and Purina Animal Nutrition Co.
“When it started out we thought this was a great opportunity to put the industrial (waste) in a second pipe and have a lagoon there right on site so that all the industrial customers could go to the lagoon,” Newton said. “And then we were going to sell the methane back to the industrial customers to burn in their boilers. It sounded really good.”
As the design and engineering process continued, however, Newton and his staff learned just how valuable the methane produced inside of the lagoons truly is.
“It’s five-times the price of natural gas, that’s how valuable it is,” Newton said of produced methane. “Where natural gas sells for $3 BTU (British thermal unit), renewable natural gas sells for $15 – just incredible. So the engineers came to us and said that we would be just nuts if we didn’t take those lagoons and put them out there.”
Currently, methane is already being produced at the Fremont Wastewater Treatment Facility, Newton said.
“We burn some of it and the rest we flare in the air,” he said. “There is a flare going out there 24 hours daily, and that will increase with the new plant. So there’s lots of methane there, and there was going to be lots of methane over here at the lagoon (at Costco). Well to put a pipe between was going to be cost prohibitive, so that’s why the engineers said we should have them at one site; to move them out by the Wastewater Treatment plant.”
When the covered lagoons are complete by the end of 2018, Newton said they will produce large quantities of methane over approximately a 10-day time period as the industrial waste breaks down. Microorganisms will break down the solid waste at the bottom of the lagoons and methane rises as it’s produced.
“That cover on the lagoons is expandable and the cover will start flat, and as it works it will start ballooning up,” he said.
The methane will be scrubbed and have sulfur and moisture removed. It will then be funneled into pipes and sold, Newton said, potentially for quite a hefty sum.
Newton highlighted how even without the lagoons being brought south of the Wastewater Treatment Facility, substantial construction would have needed to be completed at the facility to have its permits renewed by the state. Having lagoons at the new location will be a benefit, he said.
“In fact it’s positive, when we were looking at building onto the Waste Water Treatment before Costco came the engineering estimate was $20-25 million. And now they just approved the Waste Water Treatment Plant upgrade for $12.9 million.”
Eriksen Construction, based out of Blair, is contracted to complete the Wastewater Treatment Facility upgrades. The project will be underway shortly.
One concern that people have raised in regard to the lagoons is how they will affect water flow from the facility into the Elkhorn River. Newton said that the lagoons will improve the flow.
“The lagoons will actually even the flow,” he said. “Right now Hormel slaughters five days per week, so we see volumes go way up and then weekends they drop. We won’t have that anymore because it will sit in the lagoons and flow out of the lagoons seven days per week, which will make us much more efficient.”
Once complete, the lagoons will be quite the spectacle for those passing by.
“I tell people it will kind of look like a sports complex,” he said. “They are about 25 feet in the air with this big rubber tarp cap – almost like there’s tennis courts or something under there. Of course there won’t be, but that’s what it will look like from the road.”
In other Council news:
The Council approved and had the first reading of an ordinance approving the vacation of South Yager Road from East Cloverly Road to East Hills Farm Road.
Costco Wholesale, which owns both sides of Yager Road, is turning the stretch of gravel into its own private access road. A bit of tension arose from the approval of the ordinance, however, because one property owner who will be affected by the permanent closure was not previously notified.
The property owners, Councilmember Susan Jacobus said, live just west of Yager Road and will be affected by this. While she said she believes the road closure makes sense, she doesn’t believe the situation was handled the right way.
“By closing that, one would think somebody should have been duly notified,” she said. “It may not be a legal requirement, but to do the proper and respectful thing they should have been notified and fully informed about what was going on.”