Arbitrator's ruling ends legal battle over Mount Trashmore methane collection system
Solid Waste Agency to pay contractor more than $3 million in settlement
A four-year legal fight in state court over the methane collection system at the Mount Trashmore landfill near downtown Cedar Rapids has ended with an arbitrator’s ruling.
The ruling will require the Cedar Rapids/Linn County Solid Waste Agency to pay its contractor, Envirogas LP of Chicago, $3,027,066, an amount that arbitrator Dale Peddicord of Des Moines determined was the value of Envirogas’ assets at the landfill when the legal dispute began.
Karmin McShane, the agency’s executive director, said the agency had offered Envirogas $2.7 million two years ago to settle the lawsuit that the agency started, and she said Envirogas initially had sought $5 million or more.
James Brick, an attorney at Brick Gentry LC in West Des Moines who represented Envirogas in the proceedings, on Monday said the company "was comfortable with the decision and believes it’s fair."
At one point in the negotiation, Envirogas has agreed to settle for $3 million, Brick said.
McShane said the binding arbitration hearing featured expert witnesses on both sides of the litigation to make the case about the value of Envirogas’ physical assets at the landfill site and the value of the sale of methane.
McShane, who will report the arbitrator’s ruling to the Solid Waste Agency’s board of directors at their meeting today, said the ruling was acceptable and will enable the agency to put the dispute behind it.
"The bigger thing is we have control of the (methane collection) system, and we can move forward," McShane said.
The central purpose of the landfill’s methane collection system, she said, is to ensure that the agency complies with government regulations to capture and control methane that is created by decomposing solid waste.
Back in 1995, the agency signed an agreement to directly pipe methane about two miles from Mount Trashmore, which the agency calls its Site 1 landfill, to Alliant Energy’s coal-fired electric plant at C Street SW. By 2005, Envirogas LP of Chicago contracted with the Solid Waste Agency to send the landfill methane directly to nearby Penford Products Co. However, problems prevented Penford from using the methane, and then the flood of June 2008 impacted the piping system.
McShane said Envirogas sought a new contract with the agency, but the company and the agency couldn’t agree on it. The agency wanted environmental compliance assurances, she said.
In January 2009, the agency filed a lawsuit against Envirogas in Linn County District Court. Since then, the agency has been operating a flare system at the landfill that burns off the collected methane. In the near-term, the flaring will continue.
The Solid Waste Agency is currently building a generator system at its Site 2 landfill north of Marion that will use Site 2’s methane gas to create electricity to feed into the local power grid while creating heat to heat a building on the landfill site.
Some new option to use methane from the Site 1 landfill likely will be explored in the years to come, McShane said.She said the agency will use reserve funds from its capital equipment account to cover the cost to the agency spelled out in the arbitrator’s decision.