SIOUX CITY -- Big Ox Energy owes the city of Sioux City $77,500 in fines levied against the company for dumping excessive amounts of suspended solid waste into the city's wastewater treatment plant and other violations, a review of city records shows.
While the city awaits payment, it's also waiting for answers from the Wisconsin-based biofuels company about what has caused its South Sioux City plant to exceed daily limits of solids sent to the wastewater treatment plant at least 33 times since June.
"They have referenced equipment failures, but beyond that, we haven't been given any solid indication what caused the increased loadings," assistant city attorney Justin Vondrak said.
Those increased loadings, sometimes more than twice the allowable limit included in Big Ox's industrial user wastewater discharge permit with the city, have caused damage at the wastewater treatment plant and place the city at risk of violating its own wastewater treatment permit with the Iowa Department of Natural Resources.
State regulators indicated that they are far from clamping down on the city or Big Ox because of the overloading issues, but the city could face eventual litigation concerning Big Ox's wastewater permit. At the very least, the city may be forced to take legal action to collect the unpaid fines.
"We're probably going to end up in court, which is pretty unfortunate, but what else are you going to do?" Mayor Bob Scott said.
Vondrak declined to comment on whether the city can terminate Big Ox's permit, a move that likely would result in litigation.
"If Big Ox continued to operate the way that it had, I believe that revocation of the permit would be a possibility," he said.
Big Ox spokesman Kevin Bradley declined to comment on the fines the company owes. He said Big Ox is working with the city, the DNR and the Nebraska Department of Environmental Quality to resolve the issues, which he said have improved in recent weeks.
"The plant and water cleanup has worked better than ever since startup," Bradley said.
The city has not issued any citations to Big Ox since Jan. 23, when it cited the plant for five separate days in which it exceeded its suspended solids limit.
"The amount of solids we've seen from their discharge is sometimes at extreme levels," city utilities director Mark Simms said. "We actually had a good month in February."
In May 2016, the city issued an industrial wastewater discharge permit allowing Big Ox, which converts organic waste from local industries into methane gas for commercial use, to send its waste across the Missouri River to the city's treatment plant.
The city has similar permits with 32 other metro area industries, including notable companies such as the Seaboard Triumph pork plant, Cargill and Interbake Foods. The majority of those companies produce food waste, Simms said.
Big Ox falls into the biological waste category, taking animal byproducts from meat plants and other waste materials, breaking down that waste and drawing off the methane before discharging much of what's left into Sioux City's wastewater sewage system.
Because the plant increasingly operates near its designed limit of 17.6 million gallons per day, it's beneficial to have a consistent flow of waste. Simms said most of the city's industrial contributors produce at consistent levels, but Big Ox, which is one of the top two or three contributors to the treatment plant's daily load, has had wide fluctuations at times.
Under terms of its permit with the city, Big Ox agreed to a limit of 48,509 pounds per day of total solids discharged into the system. That permit was amended in November to also include a monthly average of 20,000 pounds per day.
For nearly two years, after it began operations in September 2016, Big Ox appears to have had little trouble meeting those limits. Its only citation since its startup was a $1,000 fine for a reporting violation during its first month of operations.
Simms said that in March and April last year, the city began to notice problems with Big Ox's discharges. Those discharges took a drastic turn over the last half of 2018, when the city issued 13 separate citations containing 33 violations to Big Ox. The company is not the first ever to face city fines for discharge permit violations, but, Simms said, he had not seen these types of violations in his four years with the city.
The excessive loading began on June 29, when Big Ox's load totaled 122,000 pounds, more than twice its limit. In July alone, the plant exceeded its loading limits 11 times for daily loads ranging from 51,044 to 407,300 pounds, resulting in a $1,000 fine per violation.
From August through October, Big Ox was cited three times for exceeding its load limits in addition to citations for failing to meet reporting requirements.
Violations ticked up again in November and December, when daily loading limits were exceeded six times each month. In addition to the $1,000 fines for exceeding load limits, heftier fines were levied for reporting violations.
In an eight-day period on January, Big Ox exceeded its daily load limits five times. The company also was notified it had exceeded its monthly limit for December at 29,406 pounds per day, above the 20,000-pound limit.
The city brought the issue into the public on Jan. 29, when Simms issued a press release informing the media that the wastewater treatment plant had experienced an upset condition because of excessive loading of wastewater solids, causing the city to exceed the level of suspended solids allowed under its permit from the DNR. The city self-reported the violation to the DNR.
Simms said at that time that it didn't appear any equipment had been damaged, though the wastewater treatment plant has sustained damage from excessive solids loading in the past. Even if damage doesn't occur, solids overloading can cause the treatment plant to function poorly and, as was the case in January, result in DNR permit violations.
The city will receive a notice of violation for the January overloading in April, said Tom Roos, environmental specialist senior in the DNR's Spencer office. No further action will be taken because the city had a correction plan in place. The city has received no other notices of violation for exceeding its total suspended solids limits since Big Ox began overloading the system in July, though the city has received three notices for exceeding oil and grease limits.
However, if the city were to repeatedly exceed its suspended solids limit, the DNR could take action against the city and Big Ox, Roos said.
"If it becomes a chronic thing, and we're seeing that those problems aren't being addressed properly, then we can step in and take action," he said. Though located in Nebraska, Big Ox falls under the Iowa agency's jurisdiction for wastewater dumping because it has a permit with Sioux City, which must meet DNR guidelines. DNR actions could include bringing in a consultant, requiring equipment repairs or plant expansion or issuing fines.
The DNR has not reached that point yet, Roos said, and continues to facilitate discussions between the city and Big Ox.
"We tend to try to work with people before we put an iron fist down," Roos said. "They've (Big Ox) had some issues with equipment at the facility, and they're working to resolve it. It's not like they're giving the city the cold shoulder."
That's not the message Nebraska regulators have received, said Shelley Schneider, water permits division administrator at the Nebraska Department of Environmental Quality, which issued notices of violation to Big Ox in June and August for sludge spills caused by an issue with plant disgesters. A Jan. 25 sludge spill has not resulted in any citations.
The NDEQ also cited Big Ox in January for stockpiling solid materials on its property in violation of its state permit.
The company also is involved in more than a dozen lawsuits filed by local homeowners who claim that odors and gases released from the plant have caused health problems and made their homes uninhabitable.
Schneider said the NDEQ is aware of Sioux City's citations and fines issued to Big Ox, yet the company has not given the state agency any explanations for them.
"The cause of the issues Big Ox are dealing with is something we have been asking Big Ox to share with us," Schneider said. "They have not yet shared that information with us."
Bradley, the Big Ox spokesman, declined to comment on whether there was a mechanical difficulty at the plant. He declined to answer further questions about the plant, saying there are many ongoing discussions and he'd leave it at that.
NEW PERMIT, CITY CODE
Big Ox's wastewater treatment permit with Sioux City expires on April 30, and the company has filed for a renewal.
Simms said the request is under review.
In the meantime, the city is facing other potential changes to its wastewater code sections and agreements with other cities that could affect local industries.
The city in November notified North Sioux City, South Sioux City and Sergeant Bluff that it may terminate its sewage treatment agreements with them. If a termination notice is given, it becomes effective four years later. The city council has yet to take action on the potential terminations.
Scott said the city's action had nothing to do with Big Ox.
"Not really," he said. "It's just more because these agreements are old."
Negotiations with those cities are ongoing, and Sioux City's action has led South Sioux City to consider building its own wastewater treatment plant.
The city also has proposed changes to its wastewater treatment ordinances pertaining to industrial users. The proposed changes would give the city greater authority to impose limits on how much each industry can discharge into the system.
Simms said the changes are being considered with all industries in mind.
"We've worked on this longer than we've had the Big Ox issue," Simms said. "We feel it's the best thing we can do to protect the city's treatment works and stay in compliance with our federal permit."
The city conducted a series of public meetings earlier this month, and the code changes could go before the city council for a vote sometime in April, Simms said.
Vondrak said the city continues to focus on making sure its wastewater treatment plant is in compliance with DNR permit requirements. What role Big Ox plays in that effort remains to be determined.
"The ultimate goal from the city is for Big Ox to be in compliance with their permit and for the city to be in compliance with its (DNR) permit," Vondrak said.