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Otter Tail County mulls incinerator ownership -- Becker, Cass counties express interest in Peham incinerator

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Ownership and expansion of the Perham Resource Recovery Facility are on the agenda for a joint county meeting in Wadena on Monday. The meeting is part of a continuing discussion among officials from Wadena, Todd and Otter Tail counties regarding changes to the governance and operation of the incinerator.

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The No. 1 decision that needs to be made at the upcoming meeting is whether or not the counties will form a true joint powers board, said Wadena County Commissioner Bill Stearns, who serves on the Perham Resource Recovery Board.

Wadena County Solid Waste Director Deana Skov agreed.

"The sooner we can work through establishing the joint powers, the sooner we can proceed with everything else," she said.

If this step is approved, the counties will take over full ownership of the facility from the city of Perham, Stearns said.

A major consideration is that while the city of Perham owns the facility, the counties carry most of the debt, Skov said.

"People lose sight of the idea that ... it might be city owned and operated but the counties are footing the bill," she said.

At a Jan. 28 special meeting in Parkers Prairie, the solid waste directors of the three counties were assigned the task of drafting language for a joint powers agreement. They finished a draft within weeks of the January meeting, Skov said. If approved, bylaws will be added later that will outline how things will operate. After ownership and operation of the facility is figured out, expansion versus no expansion is the major issue, Skov said.

This decision falls largely on the shoulders of Otter Tail County, according to Stearns.

Wadena County already sends all of its burnable solid waste to the incinerator, he said, while Otter Tail County landfills a significant amount.

"They're going to have to be the lead investor in this," Stearns said. "The facility is located in their county and they're the ones with the most immediate amount of extra solid waste to bring there."

Getting other counties to be part of the expansion would also help to meet the required tons of waste that would need to be burned.

Mike Hanan, director of Otter Tail County Department of Solid Waste, and Kelcey Klemm, Perham city manager, were asked to approach other counties about joining the ownership of the facility at the last joint county meeting. Becker and Cass counties are both interested in talking, Stearns said.

Stearns County, whose contract with the PRRF ends in 2009, has essentially eliminated itself from the discussion, Skov said, although nothing has been decided yet for sure.

Another important equation in the expansion of the incinerator is establishing a long-term agreement with Bongards' Creameries in Perham, Stearns said. Bongards' purchases steam generated by the incinerator.

"With them being a large source of revenue that's going to be pretty crucial to bringing other counties to the table," Skov said.

The facility either has to sell electricity or steam, Stearns said. It's more profitable to sell steam.

The PRRF is buying $1 million worth of natural gas from the city of Perham to run the auxiliary boiler to provide steam for Bongards' and Tuffy's, Stearns said. If the facility expanded to have a second waste burner, that cost could decrease to $500,000, according to an engineer's study done two years ago. That leaves around $600,000 in savings a year, he said. That money is roughly what it would take to finance the new bonds for the expansion.

"Of course that all looks well and fine on paper ... but we want to make sure that before (the expansion's) done that's the case," Stearns said.

The Perham Resource Recovery Board voted to spend $45,000 to update the engineering report on the facility. That is necessary to qualify them for grant money from the state and to entice other counties to join.

Another element of the expansion is the possible use of environmental equipment the Minnesota Pollution Control Agency bought for the now closed incinerator in Fergus Falls, Stearns said.

The citizens of Wadena County would not be committed to any greater debt than they are already committed to if this expansion works out, he said.

"We would own a smaller percentage of the total but that's OK," Stearns said. "Because that means (we) own a smaller percentage of the bonded indebtedness."

(Sara Hacking works for the Wadena Pioneer Journal, a Forum Communications Co.)

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