Mayor Chris Beutler today said the City's plan to generate up to $4 million a year in revenue by upgrading its biogas technology is good for the environment and offers the best return to Lincoln wastewater ratepayers. He also said City Council member Roy Christensen's suggestion to delay the project and issue an RFP (request for proposals) could cost the City up to $1 million.
Since 1991, the City has used the biogas produced at its wastewater facility to generate electricity for the treatment plant, but the generators now need to be replaced. Turning the biogas into vehicle fuel instead of electricity will generate up to $4 million annually in additional revenue that can be used to hold the line on rates. The construction cost is estimated at $8 million, so the project has a payback period of as little as two years.
Beutler disagreed with Christensen's suggestion that having a for-profit company operate the project is in the best interest of Lincoln ratepayers.
"During my time as Mayor, we have engaged in dozens if not hundreds of public-private partnerships," Beutler said. "We analyze each situation to determine what is best for the community. In the case of the biogas project, none of the information indicates that having a private company build and manage the facility would benefit ratepayers. City staff also held several meetings with those private management companies - one of which Councilman Christensen attended himself. Certainly, he would have heard what we heard: City management of the facility keeps the dollars generated in the pockets of Lincoln ratepayers."
Mayor Beutler recently approved a $727,800 contract with HDR, Inc. to finish the engineering and design of the facility. The Mayor has the authority to sign such contracts when a firm has already done the preliminary work and when the best interests of the City warrant immediate selection of a consulting firm. In this case, the generators are reaching the end of their useful lives, and having HDR finish the work shortens the process by nearly 12 weeks. Having the product on the market 12 weeks sooner could generate $200,000 to $1 million.
In a letter to the Mayor, Christensen said the contract "sets the city on a path" to spend $8 million on the project without a public hearing, City Council vote or competitive bid. Mayor Beutler said his letter is full of inaccuracies about how City government actually works.
The biogas project was recommended for inclusion in the City's Capital Improvement Program (CIP) in 2015. In 2016, Council members toured CIP projects, including the biogas project, and the City-County Planning Commission held a public hearing on the CIP. The CIP is part of the City budget, and the City Council's public hearing on the budget included testimony on the CIP and the biogas project. City staff also held seven meetings with private enterprises to look at potential partnerships. An RFP on the $8 million construction project will be issued and will be open to all qualified bidders.
"We owe it to the citizens of the community to do our homework and present an accurate depiction of the issue being discussed," Beutler said. "Doing any less is an abdication of our responsibility as elected officials. We have done our homework, and the facts are crystal clear: the biogas project is a huge win for both the environment and Lincoln ratepayers."