Flush our economic development problems away?

by Mike Kroll

Patience is beginning to wear thin for a community that has been beset by bad economic development news in recent years and continually unfulfilled promises prior to that. Maytag and Butler are now gone for good. Some former Maytag and Butler employees have been successful getting new jobs at Caterpillar or John Deere or Mitsubishi and have either moved or now commute to these out of town jobs. Others are approaching the end of their extended unemployment and education benefits and more than ready to reenter the workforce. The problem is that the only new local jobs that pay a living wage (physically demanding entry-level jobs with the BNSF) are only suitable for a fraction of the remaining unemployed. For the rest their future employment prospects remain bleak unless they move or drastically reduce their employment expectations.

Despite millions of additional dollars devoted to economic development since the October 2002 Maytag announcement the Galesburg Regional Economic Development Association has yet to deliver a single significant new employer to the Galesburg area. The new logistics park along Interstate 74 between Galesburg and Knoxville remains farmed fields but with new signs proclaiming its suitability for development. Galesburg should be accustomed to years of promises that never materialized from GREDA but the consequences of continued non-success only makes it harder and harder to accept. If our faith in GREDA is to preserved then there must be some reason beyond GREDA's control that economic development success continues to elude us.

“One of Galesburg's biggest assets is our abundance of available water,” notes Galesburg Mayor Gary Smith. “But I'm becoming increasingly aware that having lots of water does us no good if can't dispose of it. The biggest limitation of our new logistics park is our currently limited ability to treat wastewater that may be generated there. I'd like to see the [Galesburg] Sanitary District get up to speed with a plan to increase their capacity, especially in the area of the new logistics park. It is my opinion that the Sanitary District has been less than proactive in dealing with the needs of economic development in Galesburg.”

Smith made these comments to me Tuesday but he acknowledged making similar comments to local audiences such as Rotary. As the newly elected mayor who unseated Bob Sheehan on a jobs platform it is easy to see why Smith might be frustrated. Gary Smith brings a combination of innate optimism and faith that GREDA will finally deliver what they have long promised. So when results continue to elude GREDA it is easy to presume them telling Smith him how close they are to landing new employers for Galesburg if only the sanitary district were more accommodating. GREDA and its methods certainly can't be at fault, somebody else must not be following the playbook.

It was just a few years ago GREDA and the Galesburg Sanitary District shared in the cost of a study by engineering firm Crawford, Murphy and Tilly that not only confirmed what the Sanitary District already knew, the sewer system was already near capacity in the southeast quadrant of the city and there were substantial limitations as to how much could be done to increase this capacity. To materially increase the amount of wastewater that could be handled from the logistics park would require either a very costly expansion of the system to transport the wastewater to the existing treatment plant or substantial upgrade of the Knoxville treatment plant (not part of the Sanitary District) or construction of a satellite plant costing upwards of $25 million.

“For a variety of reasons we really do not see construction of an additional plant to be a cost effective alternative and we face numerous engineering and cost challenges in significantly expanding our capacity to move the wastewater to our plant across town,” explains Steve Davis, director of the Galesburg Sanitary District. “It is fully understandable that the economic development people are frustrated by the limitations wastewater is placing upon them. The entire east side of town is currently served by the Bridlecreek lift station and that station is already near capacity during high flows. We are already committed to a project that will help correct this for our existing customer base and add limited additional capacity but as currently designed our system just can't handle any substantial increase in wastewater from that area.”

The handling of sanitary sewage is simultaneously a high-tech/low-tech operation. If the treatment plant adjacent to the Galesburg Municipal Airport is the high-tech portion the dependence upon gravity to cause wastewater to flow from homes and businesses to the treatment plant is the low-tech end. The geographic location of the logistics park poses substantial challenges because it is not only five miles from the plant but lower as well. Sewage does not naturally flow up hill. To compensate for such problems the Sanitary District must use a combination of lift stations and force mains to move wastewater toward the plant. While many communities our size might have four or five such lift stations the GSD currently maintains and operates 23 lift stations. The project Davis referred to is an upgrade of the force main leaving the Bridlecreek lift station toward the treatment plant.

Now if GREDA and its president Eric Voyles were blindsided by this sanitary district limitation after the siting of the new logistics park finger pointing would be understandable, but Davis says the Sanitary District was very candid with Voyles early on. “They asked us about our capacity along Grand Avenue and we told them it was extremely limited. When they were more specific about the siting of the logistics park it became clearer yet that the topography of the site itself would pose major problems for us. We said from the very beginning it would be necessary for Knoxville's treatment plant to handle the southern-most sections because of a ridge located in the middle.”

Mayor Smith has apparently been convinced by Voyles or others that the Sanitary District isn't enough of an economic development team player, that they aren't sufficiently prioritizing the needs of economic development. “Building additional sanitary sewer capacity is critical to our economic development needs,” says Smith. “The sanitary district could sell revenue bonds to cover for the expense and pay those bonds off with the fees generated by the additional flows.”

I pointed out to the mayor that until GREDA lands a new business that demands the extra sewer capacity there wouldn't be any new revenues for the sanitary district to pay for capacity added on speculation. Apparently this is a proverbial chicken and egg problem. “We can't wait until the businesses come because we need to be able to show them our ability to handle their wastewater before they will commit,” explained Smith. “Sure it is a leap of faith just as it was a leap of faith for the city to fund purchase of the logistics park. There must be some creative thinking that will enable us to accommodate the needs of developers quickly. This is really a bigger problem than just the logistics park. We are talking about two critical entities that just aren't working together to make economic development successful.”

Not surprisingly Davis sees the issue somewhat differently. “The legislation that created sanitary districts envisioned a narrowly focused entity that would place its attention on transporting and treating wastewater. We can and will work together with other agencies to assist economic development efforts but cannot do so at the expense of fiscal prudence or the best interests of our existing customer base. I really don't think people really understand our capacity issues and which factors are within our control and which are not. The hydrolic capacity [amount of wastewater that can physically be handled] of our treatment plant is not an issue. We have a permitted design flow of 11 million gallons per day and last year we averaged slightly less than 7.5 million gallons per day. In terms of the sheer amount of water our treatment plant is nowhere close to capacity.”

Wastewater poses two sets of challenges to sanitary districts. The first is the need to transport the waste from its point of origin to the treatment plant. Like much of Galesburg's utility infrastructure the sanitary sewers are an aging system posing problems of capacity and deterioration. “Our system is old and requires substantial continuing maintenance,” noted Davis. “There are some massive rehabilitation needs on our immediate horizon and very real financial limitations unless we raise rates or taxes or both.” The second is the capacity and effectiveness of the treatment plant itself. The logistics park poses a major wastewater transportation challenge but most warehouses generate small quantities of relatively easily treated wastewater. However, if something other than warehouses were constructed there...

From a treatment perspective the real limitation on the GSD's plant is not the quantity of wastewater but the amount and types of waste within the water to be treated. All of the water treated by the sanitary district must be discharged into the Cedar Fork Creek and the Environmental Protection Agency puts strict limitations on the “organic loads” of the discharge due to the “impaired status” of this stream.“Our treatment process 90-some percent efficient and cost effective in most respects despite the age of our plant,” said Davis. “Thanks to careful operation, good maintenance and continual upgrades we have been very successful in performing well below our discharge limits. However, if we were hypothetically asked to handle a food processing plant that used substantial amounts of water with lots of organic solids this would pose a major problem. Our organic discharge limits are etched in stone and pretty much beyond our control. We would need to mandate prohibitively costly pretreatment.”

It seems clear that there are indeed wastewater limitations posed on economic development. But is is also clear that many of those limitations can be addressed by acknowledging that types of industrial operations are simply not a good fit for Galesburg. Also that greater consideration of the practical constraints on the Sanitary District's ability to transport wastewater must be factored into the siting of future manufacturing operations or industrial parks. Expecting the Sanitary District to invest substantial dollars on speculation alone is fiscally irresponsible, doubly so given the GREDA track record.