Terre Haute cashing in on sewage

In an effort to shore up the city’s strained finances, Mayor Duke Bennett has entered the city into a number of agreements that generate new revenue by converting sewage into diesel fuel.

For months, Terre Haute elected officials have been asking the mayor where he was going to find several million dollars for the city’s cash-strapped budget. Bennett, promising about $3 million in new revenue this year and another $3 million in 2015, had said he could not reveal specifics about where the money would come from, citing ongoing negotiations with private companies.

Negotiations are still underway, but city officials have this year signed several contracts with private companies that make up the broad outline of the mayor’s plan. The contracts are public records, opening the agreements to public scrutiny; they can be requested through the city legal department in City Hall.

Mayor Bennett, speaking with the Tribune-Star last week, confirmed that four contracts approved by the Board of Public Works and Safety in May and July make up the framework for the expected multi-million dollar influx of revenue.

“I was trying to find ways to generate new revenue,” Bennett said, seated in his City Hall office. “We’ve been working on this for a couple of years now.” If all goes as hoped, this could make Terre Haute a model for other cities to follow, he said.

Briefly, the four contracts state the City of Terre Haute will provide “sludge” from its wastewater treatment plant to a company known as Powerdyne Terre Haute Holdings, which will convert the sludge into diesel fuel. Powerdyne will then sell 12 million gallons of that fuel to Terre Haute for $2.46 per gallon, and the city will then sell that fuel to Sodrel Fuels, an Indianapolis-based company, for $2.50 per gallon.

Terre Haute is essentially a “middle man” in this, Chou-il Lee, city attorney, told the Board of Public Works and Safety in July, when the board approved the contracts.

“This is just a pass-through contract,” Bennett said when discussing the arrangement. The city is “not going into the fuel business,” he said.

The “pass-through” arrangement amounts to $480,000 in income for the city per year, but officials indicate much more income is likely. The city can provide more sludge than the contracted minimum, said Mark Thompson, director of the city’s Waste Water Utility. That will produce more income because the city will be paid for that extra sludge, he said. Also, the city expects to be paid by other cities to take their sludge, he said.