After taking ownership of the former Farmland fertilizer plant several years ago, the city of Lawrence has now found that the contamination cleanup will be more complicated and more costly than originally thought.
City Manager Tom Markus told city commissioners at their meeting Tuesday that the city is preparing to hire an outside contractor to help with the cleanup. At the same time, he said that the trust fund transferred to the city to pay for the remediation of nitrogen-contaminated groundwater is dwindling.
“We’re facing a lack of funding, planning and maybe some foresight to anticipate some of this stuff,” Markus said. “So it’s all coming to a head very quickly.”
The city took ownership of the former Farmland Industries fertilizer plant in 2010 with the plan of using part of the 467-acre site for its new business park. Although the city paid nothing for the property and received an $8.6 million trust fund to pay for the cleanup, it also accepted full responsibility for remediating decades of nitrogen fertilizer spills that contaminated the groundwater.
The site's water storage system is approaching capacity, and Markus said an outside contract — expected to cost hundreds of thousands of dollars — is needed to truck nitrogen-contaminated groundwater elsewhere.
The cleanup was projected to cost at least $13 million. At the time, the city’s plan was to mitigate the costs with the land sales from what would come to be Lawrence VenturePark, interest generated from the trust fund, and savings from using city crews instead of contractors to run the water system.
Markus said it was originally projected that the trust fund would generate about $4 million in interest. He said those estimates were “extremely optimistic,” noting that in the time period where the trust was supposed to generate $1.3 million in interest, it only generated $150,000. Taken together, Markus said the trucking contact and unrealistic trust fund earnings make the remediation a big challenge for the city.
“So you have things going in two directions, right,” Markus said. “You have a very aggressive, expensive mitigation plan, and you have an overly optimistic revenue expectation on the trust fund that was transferred to us.”
The current balance of the trust fund is about $5 million, Markus said, and that amount will likely be insufficient to contain the polluted groundwater and remediate the nitrogen contamination as ordered by the Kansas Department of Health and Environment.
Commissioners mostly listened to the information presented by Markus, apart from Commissioner Matthew Herbert noting the interest projections were "a big miss" and asking how they could have been so off. Markus said that those projections were made in the era of the 2008 economic recession, around 2009, and that interest rates have remained low.
The trucking will be in addition to other efforts to distribute the nitrogen-contaminated water, which can be used to fertilize farm land. Markus said the city has been using a pipeline that runs from the site to the other side of the Kansas River to distribute millions of gallons of the nitrogen-contaminated water to farmers north of Lawrence. He said the problem is that improvements to the collection process mean the city is collecting more nitrogen-contaminated water while changes in land use mean there are fewer farmers using it.
As a result, Markus said the storage system is nearing its 22.5 million-gallon capacity. He said the city is going to recommend a contract next month to truck the excess water to farmers in the region. The city has a meeting with KDHE on Thursday, and Markus said he will provide more information to the commission as it is known.
“I’m trying to get this out there and let you know that this is a problem and that we’re going to have to take action and we’re going to have to take it swiftly,” Markus said.