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Corn Plus forces speical meeting

By Staff | Jul 14, 2008

High corn and fuel prices have cut into the profits of ethanol plants. Now, Corn Plus in Winnebago can add wastewater treatment rates to the list.

The City Council voted Tuesday night to increase the ethanol producer’s user fee rate by 50 cents per 1,000 gallons two times in the next year. That translates into an added cost of $40,000 a year.

However, Corn Plus officials don’t like the council’s action and have refused to sign a new two-year wastewater treatment agreement.

City Administrator Jennifer Feely says company officials contacted her Thursday in opposition to the new rate.

A special city council meeting has been scheduled for tonight. “Rick (Councilman Rick Johnson) and I have had overwhelming support for what we did. I have taken a ton of calls,” says Councilman Dana Gates.

Under the new two-year agreement, they will be charged $2.18 effective Oct. 1 and will see another 50-cent increment added on July 1.

Gates, chairman of the utility committee, says the rate hike is an issue of fairness.

“Corn Plus might be having issues. So are the folks on fixed incomes who see increases,” says Gates.

For the past 15 years, Corn Plus has been paying a rate lower than that charged to residents and other business.

Currently, the ethanol producer pays $1.68 per 1,000 gallons, compared to $2.18 for everyone else.

The boost in rates follows a recommendation by the city’s Utility Committee, however, it goes against Feely’s suggestion the council renew a current contact with the company for one year.

In a memo to the council, Feely cited high corn and natural gas prices for keeping the user rate “as is.”

Feely says she met with Keith Kor, general manger of Corn Plus, to discuss the matter. Their current wastewater treatment agreement with the city expired July 9.

“I was just concerned about implementing a $1 increase in a year. I don’t know if that is a little steep,” Feely told the council..

Councilman Paul Loomis says the city’s annual financial report included an indebtedness of $520,000 for bonds issued for the sewage treatment plant.

He says a healthy fund must be built up in case repairs are needed at the sewage treatment plant.

“That equipment is wearing out and we’re going to have to replace it sometime,” Loomis adds.

Feely says some cities charge high-usage industries a lower rate.

Gates countered by saying “larger contributors” could be the reason why the city has needed to make capital upgrades.

“The additional repairs and expenses should be taken into consideration,” says Gates in explaining why rates for Corn Plus should go up.

In other business, Fire Chief Todd Enger will put together specifications for a primary pumper truck.

Enger says the current pumper is in bad need of repair, having failed to work in training sessions and at a recent house fire.

When the fire department responds to a fire there are two pumper trucks on site for the safety of the firefighters.

“That’s not a good thing to have people second-guessing their equipment,” he says.

Enger says the 1980-model truck was purchased in 1996 for $125,000. He says the latest estimate he received for a truck was $300,000.

To repair the truck would cost $20,000 and Enger doesn’t think that would be money well spent.

Although the truck is slated to be replaced next year, Enger says new safety requirements could add as much as $10,000 to the purchase price if the city waits.

Enger says if the council signs a purchase this year, they would be exempt from the mandates.

“I would like to get something going by this fall,” says Enger.