Charles City Council delays action on Valero water usage increase request

By Bob Steenson, bsteenson@charlescitypress.com

The Charles City Council delayed taking action Monday evening, March 18, on a request from Valero Renewables to increase the amount of water it would be allowed to draw from the municipal water system, after council members and people in the audience raised questions about the impact the increase might have on future water supplies, for the city and other users.

In addition to agreeing to pay a higher price for Charles City water in each year of a new three-year agreement, the ethanol producer requested being allowed to increase its maximum flow allowance from the current 1.3 million gallons per day, or 35 million gallons per month, or 420 million gallons per year, to a new maximum of 2 million gallons per day, 58 million gallons per month or 470 million gallons per year.

The council took no action on the request and agreed to get some experts on the topics of water use and availability to talk with the members before making a decision.

Council member Phoebe Pittman said that given the area is in an extended drought, “Do we feel really confident at this point that drawing this excess water isn’t going to have a negative impact on our current or potentially future water resources?”

City Water Superintendent Cory Spieker said his evaluation that the city’s system could handle the extra usage was based on the ability of the city to provide that amount of water, but he didn’t have specific information on its impact on the city’s supply of water.

Spieker did say the level of water the city is drawing from is about 10 feet lower than it had been in previous years.

Council member DeLaine Freeseman said he had a real concern about water use.

“I’m getting real sketchy with the irrigation of crops and everything else here because we can all go a long time without some things, but water is not one of them,” he said.

Council member Patrick Lumley said he would like to hear from the Iowa Department of Natural Resources (DNR) or other authorities about the condition of the aquifer the city draws its water from, and at this point he wasn’t ready to approve the Valero request.

City Attorney Brad Sloter said the Valero contract includes a clause that says the city can request a reduction in use “if there’s a public emergency,” but the city may want to clarify the conditions under which it could request a reduction.

After Mayor Dean Andrews invited public comment on the discussion, Mark Kuhn, chair of the Floyd County Board of Supervisors, said the reason Valero was asking for the increase was because two weeks ago Summit Carbon Solutions had added the Valero ethanol plants to its proposed carbon dioxide capture and sequestration pipeline project.

The plants had previously been part of the Navigator CO2 Ventures pipeline project proposal that Navigator had discontinued.

The 50 million extra gallons of water is to cool the equipment that condenses the supercritical carbon dioxide at the plant site so it can be added to the pipeline to be transported to North Dakota and be stored underground, Kuhn said, adding that the additional Valero plants in the pipeline project could use 500 million gallons of water drawn from the Devonian Aquifer that supplies the area’s water.

“You’re agreeing to go up to 2 million gallons per day, and from what I understand the highest rate that you’ve ever used was 887,000,” Kuhn said.

Summit Carbon Solutions CEO Lee Blank later told the Press that much of the water used for cooling CO2 capture and condensing equipment at ethanol sites will be recycled and reused over and over, and the extra water requested is mostly for extra production.

George Cummins, a landowner, retired ISU Extension crop specialist and consistent opponent of the pipeline projects, said at the council meeting that the plants are trying to get their extra water from municipal sources, because it is easier than getting a permit from the DNR to withdraw the water.

At the end of the comments, Sloter said the agreement with Valero is conditioned on council approval, so if the council isn’t comfortable with the information it has, it could simply not take action on the agenda item that night.

An initial agreement with ethanol plant helped pay to extend the city’s water system to the plant located about 2 miles south of Floyd, then the city and Valero agreed to a three-year contract, which is expiring.

In addition to the request for increased water use, the company agreed to increase the price it will pay the city for water from $2.05 per 1,000 gallons currently, to $2.80 per 1,000 in the first year of the new contract, $3.20 per 1,000 the second year, and $3.60 per 1,000 gallons in the third year.

Also at the meeting, the council:

• Set a public hearing for 6 p.m. Monday, March 27, regarding issuing of up to $180,000 in general obligation bonds for short-term borrowing including acquiring vehicles and equipment for the Police Department; acquiring equipment for the Fire Department; and nuisance abatement including acquiring, demolishing and/or restoring dangerous, abandoned and/or dilapidated properties. The actual amount expected to be used is $173,000, City Administrator Steve Diers said.
• Approved a request to close two blocks of South Iowa Street for a truck show on Saturday, March 23, organized by Kayden Barnish. Barnish was at the meeting and said he is currently expecting about 80 trucks. He said he is being very clear with participants in the show that they need to behave, for example, not doing “burnouts,” so the show gets a good reputation and can be held again in the future.
• Reappointed Krista Noah to the Board of Adjustment.
• Approved leasing about 15 parking spaces in the city parking lot in front of Hy-Vee, to Hy-Vee, for no more than four months, at $125 per month, for use for a garden center.
• Agreed to hire T.P. Anderson for the next three years to do the city’s annual audit, for $23,000, $27,600 and $33,120. City Clerk Trudy O’Donnell said the company, which has audited the city the last couple of years, was the only one to bid on the service.
• Approved the city’s insurance coverage renewal with EMC.