A $6.6 million hitch has arisen in the plans of Ramsey and Washington counties to buy a trash processing plant and stop dishing out millions in annual subsidies.
That's the amount a consultant is suggesting it will cost to run the processing facility in suburban Newport properly, beyond the $26 million purchase price.
And now county commissioners, none too pleased with the price itself, are seeking concessions before committing to a purchase from Resource Recovery Technologies, the owner.
"I've got to believe no private company would purchase this plant for $26 million and then put $6 million more into it," said Washington County Commissioner Karla Bigham.
The two counties' appraiser valued the plant at just $16 million, far less than the owner's claim of $39 million. A three-person arbitration panel settled on the $26 million price tag.
All that happened late in 2013, said Judy Hunter, senior program manager for Washington County's Department of Public Health and Environment. As the sale neared, though, she said, "we have realized in trying to work out the operating costs that there are still some capital improvements that the company hasn't made yet."
The difference between the values had to do with how to approach the issue of value for a firm so interwoven with government, according to staff-produced documents.
If subsidies are needed to keep it viable, the appraiser said, then the value is much lower.
A two-county entity known as the Resource Recovery Project Board on Thursday voted to move forward on the deal, but only after resolving "all material issues and liabilities." Said Ramsey County Commissioner Rafael Ortega: "I've supported public ownership from the beginning, but we also have to be good stewards" of the public purse; "we have to lower the price."
Two commissioners dissented. Washington County Commissioner Gary Kriesel said it makes no sense to resolve to buy it but insist on more negotiations. "You've got no negotiating leverage left, is my opinion."
The plant opened in Newport in 1987 as a way of making energy out of trash. It processes raw waste into a substance that can be burned for generating electricity.
Increasingly over time, however, commissioners have grown weary of the subsidies they pay to get haulers to use it. They can require trash to be taken there, but not to a private firm's plant; it must be publicly owned.
In objecting to the fees, Ramsey County Commissioner Victoria Reinhardt said, "We are the customer no matter who owns it. The private owner made a profit out of public subsidy. We have paid for this many times over already. How many times do we want to pay for it?"
The board asked its staff to return with a purchase agreement its July 23 meeting.