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THE CITY REBORN FROM THE ASHES OF AMERICA'S MOST DISASTROUS FOREST FIRE
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Peshtigo, BPM, Inc. Access Dispute May End Up In Court

Issue Date: April 1, 2020

For well over a year, BPM Inc. and the City of Peshtigo's Water and Sewer Committee have been at odds over amounts the city-owned Water and Sewer Utility charges the paper mill for handling its discharges to the wastewater treatment plant. It now appears that dispute could end up being settled in court rather than in a City Hall meeting room.

The wastewater treatment plant was constructed years ago as a joint project between the city and the Badger Paper Mill, predecessor to BPM, Inc., which was and still is the city's largest employer.

The Wastewater Treatment Plant was operated cooperatively by the city and the paper mill for many years. After that partnership was dissolved the city assumed full operations. Rates for treating BPM Inc sewage increased, and requests from BPM Inc. for a reduction in those rates were refused.

That led to announcements by BPM Inc. over a year ago that the paper mill would begin constructing its own wastewater treatment facility. Since then engineering work on that project has been in progress.

Meanwhile, the city's utility, managed by Public Works Director George Cowell under the direction of the Water and Sewer Committee, has been faced with overflow problems with Peshtigo River Crossing main sewer line that lies at least partly on paper mill property.

Replacing the line requires access to BPM, Inc. property. According to a letter from BPM Inc. General Manager Jim Koronkiewicz to the City of Peshtigo dated Friday, March 27, that access was requested by the city on or about Monday, March 16 and was subsequently denied by BPM Inc. and its parent company, ARATH XXXIII LLC.

Apparently in response to that denial, the Water and Sewer Committee met in closed executive session for about an hour and a quarter on Tuesday, March 31 before returning to open session to approve a motion "...to recommend to Council to direct the City to research its records to determine if a written easement agreement exists. Absent finding such a written agreement, that the city attorney be directed to take all necessary legal actions, including the legal establishment of the easement and/or eminent domain proceedings, to obtain the necessary access for completion of the sewer improvement."

The motion was made by Water and Sewer Committee Chair Tom Gryzwa, with a second from Fred Meintz, and approval by Dan Seymour, making the decision unanimous. In an explanation preceding the motion, Gryzwa presented a written summary stating: "Jim Koronkiewicz, general manager of BPM, Inc., has refused the request of the City of Peshtigo to enter upon BPM property to complete necessary boring samples for the planning and replacement of the sewer river crossing which has been (in) existence on the BPM property since approximately 1903. Despite repeated requests, Mr. Koronkiewicz has refused to negotiate with the City on this matter." The announcement went on to say that the subsequent motion was being made because of that refusal.

Once the motion was made and approved the meeting was adjourned without further discussion.

Present for the closed session in addition to the three Water and Sewer Committee were City Attorney David Spangenberg, Mayor Cathi Malke, Cowell, and Alderman Mike Behnke.

Copies of a letter from Koronkiewicz that apparently led to the closed session discussion and subsequent action were also distributed by Gryzwa. After the meeting copies of the letter were also shared by Koronkiewicz.

That letter stated: "This letter is in reference to a proposed Access Agreement that was presented to BPM Inc on or about March 16, 2020. The Agreement is between ARATH XXIII LLC (BPM Inc. parent company) and the City of Peshtigo. This is to provide the City access to property to perform work on a sewer line located there. Both the city and BPM Inc. have failed to find/identify an easement to the property regarding this sewer line."

"At this time access to the property is DENIED," the letter stated, and continued, "Several factors need to be considered/addressed before any type of agreement may be accepted. BPM Inc. submitted a letter to the City on December 11, 2018 requesting a rate reduction on its water and sewer services provided by the City.

"The City denied this request in April 2019. On April 16, 2019 at the Water and Sewer Committee meeting the Committee "Acknowledged' a letter from BPM Inc. dated April 8, 2019 regarding options being reviewed. A disclosure letter was sent to residents/businesses who are users of the City of Peshtigo Water and Sewer Utility explaining BPM's position. This letter was also published in the September 4, 2019 issue of the Peshtigo Times," the letter stated.

It continued, "To date there has been NO ACTION taken by the City of Peshtigo with regard to negotiating an amicable resolution with BPM Inc. This inaction has driven BPM Inc to pursue construction of our own Water Resource Recovery Facility and severing ties with the City of Peshtigo treatment facility."

The letter stated that BPM Inc has been working with ISG (engineering firm) and the Wisconsin DNR on obtaining a WPDES permit to construct its own Water Resource Recovery Facility. The letter goes on to say that the permit application and attachments were confirmed received by the Wisconsin DNR on March 12, 2020, and it is in the review process at this time.

"Preliminary surveying has been completed," the letter states. "Site location has been identified. At this time we are waiting for the Draft Permit from the Wisconsin DNR to identify plant requirements regarding the discharge into the Peshtigo River. This is needed so final plant construction design drawings can be completed to include location of the discharge pipe. At this time we anticipate this pipe to be within 80' of the existing sewer line."

The letter goes on to say that to date BPM Inc. has invested over $150,000 into this project. "It is moving forward. The inability of the current City leadership to actively address the issue in a timely manner has played a major role in these decisions," the letter continues, and then concludes, "Again, I reiterate - NO EASEMENT - NO ACCESS AGREEMENT - NO ACCESS."

The Sept. 4, 2019 letters and Peshtigo Times ad that Koronkiewicz referred to stated that during all the years that the paper mill had operated in Peshtigo they had worked closely with the city to maintain low cost wastewater treatment, and over the past five years the mill management has "openly discussed our concern over the ever increasing costs of our effluent disposal as the City owned and operated Wastewater Treatment facility."

The ad stated that the Sewer utility expenses for the entire community, including BPM, totaled $566,155 in 2013, and estimated expenses for 2019 would total $1,090,196, a 92% increase. As the utility's only Class C customer, BPM was paying nearly half the total cost of operation, according to the ad.

The ad also said that the BPM plans were to continue to grow manufacturing processes in Peshtigo, but a new $4 million printing press that was being considered for the Peshtigo mill had gone instead to a sister company's facility in Plymouth, Ind. due to uncertainty over the sewer rates.

The ad also showed average household annual sewer charges ranged from a low of $321.44 for Peshtigo to a high of $717.54 in the City of Oconto Falls, and said had the rate reduction requested by BPM Inc. been granted the annual increase for the average household would have been 11 percent, or $36 a year. If BPM Inc. discontinues its use of the city's wastewater treatment plant the average household rate will increase about 80 percent - to $562.40 per year.

The ad expressed regret that an amicable resolution to the issues could not be worked out, and expressed belief that expanding the mill's current manufacturing processes in Peshtigo would have been "a much better way to spend dollars and build the economic environment of the City of Peshtigo. Unfortunately, we have exhausted our negotiation efforts with the City to no avail."


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PO Box 187
Peshtigo, WI 54157
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