Officials want $10 million fertilizer plant commitment

Officials want $10 million fertilizer plant commitment

URBANA — Now thinking they can get at least $2.3 million in new revenue annually, Urbana & Champaign Sanitary District officials continue to work toward a contract with a proposed Tuscola fertilizer plant for the sale of the district's treated wastewater.

According to proposed contract terms the district presented to its board of trustees on Monday, officials would seek a $1 per 1,000 gallons rate and a minimum $10 million commitment from the plant to cover construction costs associated with providing 6.3 million gallons per day of wastewater.

Illinois and Iowa are in a bidding war to attract Cronus Chemical, and a site near Tuscola is a leading contender. Officials have said that the $1.2 billion plant could produce roughly 1,500 construction jobs during the 36-month building project, and the Cronus plant would provide about 150 permanent full-time jobs.

The urea-based fertilizer producer would need the 6.3 million gallons of water per day in its manufacturing process, and Cronus Chemical has asked the Urbana & Champaign Sanitary District for a direct flow of treated wastewater instead of drawing clean drinking water. The sanitary district cleans about 20 million to 25 million gallons of sewage per day, and it discharges the treated wastewater into local streams.

Environmentalists have been vocal about the plan. They worry that the diversion of effluent to the plant instead of into local streams could hurt wildlife and recreational activities in the waterways. The sanitary district is working toward contract terms that ensure it would be able to provide a minimum daily flow to maintain adequate stream levels.

University of Illinois Professor Clark Bullard told the board on Thursday that he is worried the district's commitments to Cronus would overshadow efforts to conserve drinking water during the next 20 years, the proposed term of the contract. As people use less water, there would be less of it available to sell to Cronus.

But sanitary district Executive Director Rick Manner said he does not expect that to be a problem. He said that, even with water rates rising and water conservation becoming more popular, the amount of sewage the district processes has continued to rise.

Further, Manner said the deal with Cronus could actually enable the district to guarantee adequate flow to Cronus and to local streams even in times of extreme drought. With the money the district would have on guarantee from Cronus, it could build a 50 million-gallon storage lagoon to serve its needs when flows are low.

The district plans to discharge at least 1.5 million gallons of water per day to the Copper Slough and at least 4.5 million gallons to the Saline Branch before it starts sending water via pipeline to Cronus.

The district could also build a pump station and alter its sewers with part of the $10 million Cronus guarantee — work that the district had planned to do with or without the Cronus deal. Manner described it as "being paid for work we need and want to do anyway."

"This is very much financially in the best interest of the district," Manner said. "It's not even a very close call."

Board members have said the new revenue it would get from Cronus Chemical would not necessarily enable the district to lower the wastewater rates it charges to residents, but it very likely would offset the need for increases in the future. The board is scheduled to vote on the proposed contract terms during a meeting on Thursday.

The proposed terms are not the final deal, only a guide as officials from both parties begin to negotiate. The district would also need to secure financing and Illinois EPA permits for construction projects associated with the deal, and Cronus would need to secure right of way for a pipeline from Tuscola to Champaign before the transfer could begin.

Board member Jerry Lyke said this topic has gathered more public interest than any other since he has been on the sanitary board, and he plans to support the proposed contract terms.

"This is certainly an opportunity for ratepayers, let alone for jobs," Lyke said.

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