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Consultant: CES financials “didn’t pass the sniff test”


This news story was published on January 13, 2012.
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By Matt Marquardt –

MASON CITY – A consultant told the North Iowa Landfill (LNI) Board Thursday night that the financial figures he looked at for the proposed Creative Energy Systems (CES) plant “didn’t pass the sniff test.”

The consultant, Curt Hartog of Foth Infrastructure & Environment, LLC out of Lake Elmo, Minnesota, gave a presentation to the board (pictured) and outlined some of the pros and cons that the LNI could expect if it entered into a contractual agreement with CES.

Hartog pointed out during his presentation that the LNI would only be able to supply CES with 90 to 133 tons of trash (sometimes called municipal solid waste) per day. CES has said repeatedly that it will run 7 days per week and need 250 tons of trash per day. CES would convert the trash to syngas using a process called pyrolysis. The gas powers turbines that create electricity that is then sent to an Alliant Energy substation located adjacent to the proposed CES plant location on 43rd Street in Mason City.

Watch Hartog’s presentation to the LNI Board:

 

When asked for clarification on the statement “didn’t pass the sniff test,” Hartog told NorthIowaToday.com that he had done a “basic financial analysis of the CES operation based on the stream of trash the LNI could offer CES. “They (the LNI) don’t have the amount of trash they (CES) need. That, and no tipping fees are collected by CES. They are borrowing $35 million. It doesn’t add up. They would be running deficits every year.”

CES has said they need 250 tons of trash per day to generate the 10 megawatts of power they intend to sell to Alliant Energy.

A question and answer session ensued after Hartog’s presentation. Several anti-CES project citizens asked questions of Hartog. They pointed out that the LNI would not be able to supply the amount of trash that CES was requiring.

Larry Elwood of Mason City said that the “hill” at the landfill was getting bigger. “It really is one of the biggest hills in Mason City,” he said, and urged the board to take a good look at the project.

Newly-appointed LNI Board member Scott Tornquist urged the LNI Board to move forward and make a decision on the agreeement with CES on or before January 26th. “If the (CES) project fails, there’s no risk to anybody in North Iowa,” he said. “It’s not our problem if we can’t supply enough trash.”

“The environmental concerns have been addressed,” Tornquist continued. “I don’t see where there is any risk or any genuine concern that we should have at this time.”

Watch Scott Tornquist address the LNI Board before more discussion of the contract takes place:

 

Tornquist urged the board to look over the agreement during the meeting, and give any concerns it had to LNI’s legal counsel, James Locher. The ensuing discussion turned testy at times, and Tornquist became visibly agitated as some board members expressed concern over the contract.

One board member said “we just got this.” Another said “you can’t even buy a house in two weeks.” Another said “I just feel like this is being shoved down our throats.” LNI attorney James Locher said “I would prefer to have several months for something of this magnitude. There will be considerable backing and forthing on this… that’s a difficult thing.”

Watch video of board members discuss the CES contract:

 

One of the key terms in the agreement is for a contract term of ten years and CES has an option for another 10 year term. So, the LNI could be bound to CES for a period of 20 years. Some board members pointed this out as a concern.

As some board members began to ask if they could be given more time to look over the contract, and if their legal counsel could also be granted more time to negotiate terms, Tornquist said “Look. There is no two or four month option here. There is a two week option or no project.”

All agreed that CES should have brought the agreement to the landfill board much earlier for consideration, if time was of the essence, as Tornquist stated.

Yet more concerns were voiced with the CES contract. Locher had misgivings about an LNI employee working at the CES plant due to liability reasons. Another board member had concerns about rates for trash collection going up. Another questioned who would pay for various expenses, like hauling the residue from the CES plant to the LNI. Another board member questioned whether communities would enforce the 28E agreements that say that those communities should bring their trash to the LNI. Still another board member said “I don’t want someone sorting through my trash. What if I forget to shred an important document?”

On the positive side, Hartog said lowering the amount of waste buried at the LNI would extend it’s life a number of years, perhaps up to 30. It was also said that the LNI would not lose any tipping fees. Tornquist said no LNI employees would be let go. CES has promised over 50 new jobs at its plant. Eventually, CES would pay taxes on its property and benefit Mason City with those dollars.

It was finally agreed by the board that at a meeting in February (instead of January 26th) the LNI Board would meet and decide on the CES contract.

More details to come on this developing story.

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49 Responses to Consultant: CES financials “didn’t pass the sniff test”

  1. Avatar

    MrEastSide Reply Report comment

    January 15, 2012 at 7:33 pm

    How could they get a loan to build this if they can not supply enough energy to show a profit? I bet Bookcryier and Turdquest made their money

  2. Avatar

    Jerry Reply Report comment

    January 15, 2012 at 3:33 pm

    Where will the extra trash come from? That can be our new industry. We can get a big marketing campaign going (let’s use taxpayer dollars). We will solicit trash, what a deal, maybe we can be the new YUCCA Mountain since that got canceled in 2009. Talking like that is irrational, well hmmm who would ever think Mason City would be in this position, with having this CES plant shoved down our throat before the proper scrutiny?

    • Avatar

      Observer Reply Report comment

      January 15, 2012 at 4:12 pm

      Jerry, what is the proper scrutiny? How long should it take? Is there some sort of universal expectation?

  3. Avatar

    Concerned Citizen Reply Report comment

    January 15, 2012 at 3:22 pm

    You can tell Tornquist is lying, his lips are moving.

  4. Avatar

    Concerned Citizen Reply Report comment

    January 15, 2012 at 3:21 pm

    There is enough garbage coming out of Tornquist’s mouth to supply enough electricty for whole United States. Just let him keep talking. LOL

  5. Avatar

    Concerned Citizen Reply Report comment

    January 15, 2012 at 3:13 pm

    Everyone knows Tornquist is a dumb ass, ask anyone on the streets.

  6. Avatar

    wow Reply Report comment

    January 15, 2012 at 9:47 am

    Ces says it needs 250 tons of trash seven days a week to produce the 10 megawatts of power they intend to sell to Alliant. LNI says it can only supply 135 tons and our trash routs run five days a week. Where will all the extra trash appear from.

  7. Avatar

    wow Reply Report comment

    January 15, 2012 at 8:48 am

    The stupidity of Tornquists statement is almost beyond comprehension. Your telling the taxpayers to invest money in infrastructure and countless city employee man hours in a project that is doomed to fail. It is our money and our problem. And how could you ever get an investor to risk his money knowing this. The only answer is what our mayor and his sidekicks are becoming known for. Backdoor politics. This whole project is like a rerun of the movie dumb and dumber.

    • Avatar

      Observer Reply Report comment

      January 15, 2012 at 9:06 am

      Why is the CES project doomed to fail?

  8. Avatar

    Anonymous Reply Report comment

    January 15, 2012 at 7:55 am

    His highness Tournquest says the project is no risk to us if we cannot supply enough trash thats their problem. I suppose you and bookmeyer could supply the missing tonage from the garbage you two produce.

  9. Avatar

    Longtime Mason City resident Reply Report comment

    January 15, 2012 at 7:14 am

    Does the mayor and some counsel members think the people of Mason City are that stupid? This whole ces deal has stunk from day one. They have been saying this is so great for the city, maybe great for the mayor and the newly appointed landfill board member tornquist. The way they have been trying to pass this deal through so quickly is so obvious and bypassing anyone who has legit questions, Pam Myre and Max Weaver. Sounds like they both have legitimate questions that the mayor and others don’t even want to listen to. Listening to Mr. Hartog’s presentation on waste to energy on YouTube was very informative. He said there is 175 vendors that do this in the country and we pick the first one that approaches us? Who in they’re right mind buys the first car they look at without looking or considering another possibility? Especially something of is magnitude. Can you blame ces? They just knocked on the door, the mayor and others just opened it without looking threw the peephole.

  10. Avatar

    Gail Dierks Reply Report comment

    January 14, 2012 at 12:14 pm

    This situation is ridiculous! These people from CES, or wherever they are from, do not care how this impacts not only the LNI but the north Iowa area in general. Why the rush? Is it because if it is looked into too much it will be discovered these are fly by night folks? AND that the Mason City mayor and his henchman: Tornquist are dishonest and unethical? Why are they trying so hard to force this down the throats of the LNI board? There has to be a reason. And if Tornquist is saying this is time sensitive then why does he not share with the other members why it is time sensitive? Once this plant is operational they will not need to adhere to any new EPA standards, they will be grandfathered in. Ask any employee of the LNI if they want this plant placed, I will bet it is a resounding NO. Watch Mr. Tornquist in the video’s, is this how he conducts business? His physical and emotional agitation is quite obvious, he believes he is “right” when much of his information is skewed or comes directly from CES. Another question becomes what does Mr. Bookmeyer and Mr. Tornquist get from this if it is passed? Tornquist is saying it should be passed even if the board knows ahead of time that the operation will fail, as he puts it “what does it matter” to the LNI if it doesn’t stay operational. Why vote for a project ahead of time that is most likely to fail? Don’t let the board be bullied by Tornquist or his puppet master, Bookmeyer.

    • Avatar

      Anonymous Reply Report comment

      January 14, 2012 at 10:02 pm

      Gail, they will not be grandfathered if new regulations are adopted. The Zoning Board of Adjustment, at the direct request of those opposed to the plant, imposed a condition that they meet any new EPA regulations, even if the EPA doesn’t require it. They will be shut down if they don’t. Please stop spreading this lie.

  11. Avatar

    free enterprise Reply Report comment

    January 14, 2012 at 6:33 am

    I have always been a believer in the free enterprise system which created this great country of ours. People willing to take chances. But along with this came the system of corruption. This project is quickly falling into a pit headed up by our overinflated mayor and his side kick Tournquist. The removal of personal who may question this project and replacing them with organ grinder monkeys is the visible action. One can only imaging what is being done behind closed doors. With out a doubt Bill Rowland is being put under heavy pressure now. A truley sad day for every resident of our city.

  12. Avatar

    Anonymous Reply Report comment

    January 13, 2012 at 10:57 pm

    Interesting. At the public meeting and at the ZBA, CES said that they would increase the lifespan of the landfill “by a factor of 5”. There is 50 years of capacity left; if the CES plant is built it should extend the life of the landfill to 250 years. The landfill’s consultant says that it will extend it by 30 years. That’s 80 years total. Something doesn’t figure here.

    • Avatar

      Observer Reply Report comment

      January 15, 2012 at 6:14 pm

      I think it is key to understand the two numbers were arrived at using two different methodologies. I noted from my transcript of the videos, that the Consultant failed to include many inputs from the waste stream. He also failed to mention include the addition of tires in that same characterization.

      Also in my notes here was no mention by the Consultant of the income from recyclables. In any process plant, either ethanol or in this case, MSW, byproducts of the process are key to profitability. A byproduct in the case of CES, must meet a basic threshold of exceeding it’s value as a fuel versus it’s profitability. Obviously metals are excluded.

  13. Avatar

    After Deliberating the Pros and Con's of CES? Reply Report comment

    January 13, 2012 at 8:28 pm

    I vote NO.

    Send em packing down the road.

  14. Avatar

    randy Reply Report comment

    January 13, 2012 at 5:51 pm

    For full disclosure what are the true facts on why this must be decided in January? No one has looked into CES financials right? A council member tells us that this must be done in January so he apparently knows the details of their issues. Does anyone think he should share them with us? Or is he just one of the elites who understands such things and the rest of us are too stupid to comprehend that type of information?

  15. Avatar

    Carol Patnode Reply Report comment

    January 13, 2012 at 3:33 pm

    Nice job Matt. Because I was not able to make it to the meeting, I really appreciate the videos along with the text. It allows the citizen to draw their own conclusions rather than being manipulated by others. Your reporting of all topics (includng this one) is much appreciated – especially since the “other paper in town” is negligent in their reporting. Thanks, Carol

    • Avatar

      Ed Florsheim Reply Report comment

      January 13, 2012 at 7:51 pm

      Started following this issue after the zoning meetings. Seems that this Tornquist fellow believes he is the only intelligent person in the room and the others are hayseeds that need a good lecture. That is a disappointment.

  16. Avatar

    Anonymous Reply Report comment

    January 13, 2012 at 3:08 pm

    Your outnumbered on this issue concerned. Were not all puppets of the Mayor.

    • Avatar

      Say What? Reply Report comment

      January 13, 2012 at 8:25 pm

      The hell you arn’t puppets of the Mayor?

  17. Avatar

    sandy Reply Report comment

    January 13, 2012 at 2:04 pm

    It was so refreshing to see people finally standing up to tornquist! Last night he was on the board for the first time and let everyone see how it works. I sit there last night and watched the faces of people on the board and they had the same look I’m sure I must have had on my face…what in the world! He comes into a meeting DEMANDING what he wants! Who is he? I was so proud of how the board handled themselves! They were not going to be bullied by him or those that are behind him! I am glad the board is allowing time to see what this company is about. A very good point was made last night. The people that are going to be sorting through your garbage will find information you may or may not what out their for them to see. I know their are such this as shredders but does everyone use them? You may have one but what if someone has your information and gets careless or lazy and just puts in the round file. Something to think about……….

  18. Avatar

    kelly Reply Report comment

    January 13, 2012 at 1:21 pm

    O M G !!!!

  19. Avatar

    Randy Reply Report comment

    January 13, 2012 at 12:02 pm

    Tornquist in the video reminds me of a rabid dog. What in the world is going on with him? He likes to present himself as the voice of reason. How is what he is doing reasonable? What dog does he have in this fight? Really bizarre behavior.

  20. Avatar

    b Reply Report comment

    January 13, 2012 at 11:57 am

    Yes! we need to rush the world is ending this year, Remember!

  21. Avatar

    nancy Reply Report comment

    January 13, 2012 at 11:57 am

    THIS NEWS WEBSITE IS AMAZING !!! I hope people appreciate what this site brings to our community.

  22. Avatar

    Peter Reply Report comment

    January 13, 2012 at 10:30 am

    I’m not sure NOT being able to meet the 10 Mega Watt target amount is adequate reason to shut this down. Isn’t it possible the plant can provide less megawatts to Alliant and still take care of the trash problem? If they operate at lesser capacity, how is that a concern of the people of Mason City? I probably need more information. To me the only real concerns here are 2 matters. 1. Is it going to cost taxpayers anything to subsidize it? 2. Is it going to affect environmental air quality?

    I suggest that Air Quality tests be conducted by independent air quality testing companies (several of them not affiliated with CES), as well as the EPA and any State, County, or local agencies that may provide such services BEFORE the plant is built…and then after the plant is running…begin taking air samples again and see what contaminants were added as the result of CES. Then provide a clause in the contract that forces CES to either correct the emission discrepancy with a fine, and/or shut them down temporarily while they correct the issue, or shut them down permanently if they cannot correct the issue. Safeguards must be worded into the contract AHEAD OF TIME. I’m willing to take a risk with CES providing they can assure me that air quality will not be affected, and that it is not a subsidized operation. Although technically, you’re going to have to start dealing with trash sooner or later. My personal belief is we should be paying sorters and recyclers NOW, to begin allocating our trash BEFORE it ends up in the landfill. Think pre-emptively people. IN fact, you may want to forget about the CES thing altogether and just spend the money building major recycling facilities to process all of the existing trash and build up a new staff of workers. People then would no longer need to sort recyclables themselves, but could rely on the refuse company to do it for them. That’s what I’d like to see. And don’t ever forget about Tornquist withholding the workers $10,000 bonus for Mechanical Air, when he told them they were disqualified from receiving it because they didn’t always wear their hard hats when he told them to.

    • Avatar

      Observer Reply Report comment

      January 15, 2012 at 9:31 am

      Peter, I suggest you sit down and read the DNR permitting process, and examine a few existing permits from businesses in our area. It’s not hard stuff, and it already covers most of what you say.

      Inspection and testing is very appropriate here as it validates any Statistical Process Control in place. Oh wait, I’ll bet you will think that Statistical Process Control is “untested” and “Theory” because no one uses a pure version of that concept.

      What I am going to say may ruffle a few feathers, but in reading comments for the past few months about CES, it is quite obvious. People here seem to believe that If it does not exist currently in Mason City, then it cannot possibly exist. News Flash: there is a whole big world out there, just because you never heard of particular scientific concept, does not mean it is not-viable, or proper. And more breaking news: This is not the first gasification plant Mason City has had.

  23. Avatar

    Larry Reply Report comment

    January 13, 2012 at 10:16 am

    It’s an old high pressure sales technique to rush someone into making a hasty decision so they don’t have time to find out all of the details and requirements. Anytime someone does this they are trying to hide something. We need to get rid of these clowns and get someone who will do what the people want. Not special interest.

  24. Avatar

    craig servantez Reply Report comment

    January 13, 2012 at 8:35 am

    does the word impeachment come to mind for Bookmeyer and turncoat, it does here!!!!!!

    • Avatar

      Yes on Impeachment Reply Report comment

      January 13, 2012 at 8:19 pm

      How do we go about impeaching these idiots?

      I am all for this getting started. It is long overdue!

  25. Avatar

    Butts Reply Report comment

    January 13, 2012 at 8:31 am

    Of course there are kickbacks. Tornquist is dirty as hell.

  26. Avatar

    Sick of it Reply Report comment

    January 13, 2012 at 8:27 am

    Calling anyone “inept” when you cannot spell the word “video” correctly doesn’t really make your point. Turn off your computer and go back to yelling at people on your lawn Peter.

    • Avatar

      Peter L Reply Report comment

      January 13, 2012 at 10:17 am

      All of the letters to spell v-i-d-e-o were present, with the E and the D being switched around, suggesting to me a typo…not an ineptitude at being able to spell the word.

  27. Avatar

    Peter Children Reply Report comment

    January 13, 2012 at 7:51 am

    First things first; This article was nicely written. It states what took place and offered viedo to back it up.Turquist lied on camera to this entire city on matters concerning the HR office…so we already know what he really is. Now he wants you to buy a cat in the sack because he says time is running out. Is he selling aluminiun siding here or representing Bookmeyer’s agenda because he sure in the hell doesn’t give a rats ass about you and what is best for your family. He’s a bad joke and he’s bad for this city but this is what you get when you don’t vote.

    Turnquist’s appointment further validates my belief that Bookmeyer is inept and does not know what he’s doing; who else would appoint this guy to any board. I’d put him in charge of all the latrines in the park system where hopefully no one would ever see him.

  28. Avatar

    Sherlock Reply Report comment

    January 13, 2012 at 7:45 am

    These are the questions I find most interesting as I view the scene of the crime. Will Tournquist be involved with any aspect of the construction of the facility? What actually happened with the Library incident? Is there a conflict of interest with ANY of Our elected officials? Such as working for companies that will profit during construction. What LIABILITY does the NIL have when supplying GARBAGE to CES? What liabilty does NIL have with the employees working at the CES facility? Will NIL employees be employed by CES and how does that effect them? What happens, should this technology eventually be proven and Our GARBAGE begins to have value? Locked into a 20 year contract….how do the voters/citisens recieve full value for our GOLDEN GARBAGE?
    How will our neighboring communities respond when submitted to the highhandedness and DEMANDS of MC’s young CARPETBAGERS?

    All questions that absolutely should take longer than the end of January…..If the responsible elected officals perform the pertinent due diligence and fulfill their fiduciary responsiblities.

    All questions that absolutely should take longer than the end of January…..If the responsible elected officals perform the pertinent due diligence and fulfill their fiduciary responsiblities.

    CES. Thank you for your consideration of Mason City as your testing ground for this newly developed propietary technology. Yes, Thank you, BUT NO Thank you! We must pass on your generous offer. However, When the technology and process have been proven, we will welcome you with open arms

  29. Avatar

    Anonymous Reply Report comment

    January 13, 2012 at 7:17 am

    it looks to me like bookmeyer is loading as many positions on as many boards with his puppets, so he can shove this down the throats of Mason City citizens. him & all his puppets need to be removed.

  30. Avatar

    concerned Reply Report comment

    January 13, 2012 at 7:12 am

    To anonymous Mr Hartog in his presentation said he felt confident that ces could build the plant to epa standards with no emmisions or quality problems. so that point is moot. Also Mr Hartogs sniff test wasn’t passed because they were using the wrong figures for the project which Mr Marquardt forgot to put in his article. Brent Willet from the edc pointed that out. Funny how Matt forgets pertinent information in his articles.

    • Avatar

      Wrong on EPA standards Reply Report comment

      January 13, 2012 at 8:15 pm

      They will not be able to meet the “NEW” EPA standards.

      This is one the purposes of the fast track.

      I say wait for the new EPA standards!!!!!

      North Iowa Landfill, ARE YOU LISTENING?

    • Avatar

      anonymous Reply Report comment

      January 13, 2012 at 8:59 pm

      They will be required to meet the new EPA standards when and if they are issued. It’s part of their conditional use permit.

    • Avatar

      Anonymous is lying Reply Report comment

      January 14, 2012 at 2:25 am

      You are full of it or just plain lying. CES will be grandfathered in and not be held to the new EPA standards.

      Look up the administrative rules that apply to the EPA and ruled on by the Supreme Court. The attorneys will eat the cities lunch if they tried to hold them to new standards.

    • Avatar

      Anonymous Reply Report comment

      January 14, 2012 at 10:04 pm

      You need to read the Conditional Use Permit that was issued for this project and read the minutes. The City’s permit says they have to meet the new requirements and CES agreed to that condition. Stop spreading lies.

  31. Avatar

    Anonymous Reply Report comment

    January 13, 2012 at 6:50 am

    On one side we have the Cerro Gordo Board of Health and several Mason City doctors raising concerns about potential health hazards and advising to proceed with caution. All very qualified individuals. On the other side we have two wanabee politicians trying to fast track the project and removing any individual who stands in the way. Let the project take its natural course with all the time it needs.

    Our health could be at risk.

    • Avatar

      Observer Reply Report comment

      January 14, 2012 at 12:59 pm

      Well, you are subjecting yourself to the same kinds of hazards by using natual gas or propane.

    • Avatar

      Anonymous Reply Report comment

      January 14, 2012 at 10:06 pm

      The State’s expert on the subject, the Iowa Department of Public Health’s Environmental Toxicologist stated at the Zoning Board of Adjustment that if the EPA standards in place now were met, there would be no threat to public health. This is the guy who was hand picked by Joann Hardy, Maxine Brinkman and Carol Patnode and the Cerro Gordo County Department of Public Health to give an opinion on the application.

  32. Avatar

    comment Reply Report comment

    January 13, 2012 at 6:05 am

    Bookmeyer has Pam Myre replaced because she was voicing concerns raised by many citizens of our community. He than places Tournquist on the landfill board and we can see how that is going. He also replaced the two members of the environmental stewardship commitee with his people. Anyone see a ram it down our throats patters emerging. Would guess Tornquist will also head the multipurpose center fast track project. Thank you nit for keeping all the public informed.

  33. Avatar

    Quick, quick, quick Reply Report comment

    January 13, 2012 at 2:43 am

    Tornquist comes of as one of them questionable used car sales men, hurry and buy, hurry and buy, my way or no way!!

    35 Million dollars to get 10 mW a year? Yet a Wind Turbine with the same life expectancy costs 1.5 million dollars from build start to production and produces 1.5 mW avg a year. This adds up to 1 million per mW from wind energy, as apposed to 3.5 million per mW from an unproven theory. Am I missing something here?

    Are there some kickbacks we are not seeing??