City poised to sue over sewage

The Lebanon City Council has authorized its legal team to pursue a lawsuit against CH2M Hill, OMI and Jacobs Engineering Group should ongoing mediation break down in connection to the “Cannibal System” the city uses in its wastewater treatment process.

“We had been working for a long period of time with the lawyers from CH2M Hill to participate in meetings called mediation,” said attorney Kerry Shepherd of the Portland law firm Markowitz Herbold PC.

Lebanon and CH2M Hill were set to meet March 11, which didn’t happen. CH2M Hill wanted to delay the meeting, Shepherd said, which upset everybody involved.

Following a closed executive session March 20, Lebanon councilors authorized Shepherd’s firm to proceed with a lawsuit if it determined CH2M Hill was not working in good faith with Lebanon.

Since that council meeting, CH2M Hill and the city have agreed to meet again on Aug. 28, Shepherd said, noting that the negotiations are closed to the public, and the process is confidential.

The fact that the two sides are in negotiations means they’re making a good-faith effort, Shepherd said. But if they fail to reach an agreement, Lebanon will “undoubtedly switch over to the same status as Albany.”

According to CH2M Hill’s website, the Cannibal Solids Reduction process consists of three basic elements: a mixed liquor recycle rotating screen (physical component of the process); a conventional activated sludge secondary process; and interchange bioreactors (biological component of the process).

The process is intended to reduce the amount of hauled biosolids. CH2M Hill says Cannibal technology has been incorporated in “relatively few U.S. water reclamation facilities to date.”

Shepherd also is representing the City of Albany in a case involving the Cannibal System. He said that case is broader, incorporating issues around wetlands as well. Albany is seeking $84.2 million in the case.

CH2M Hill removed the Albany case from Linn County Circuit Court to federal District Court in Eugene in January 2018, citing its multiple locations because it is a Florida corporation doing business principally in Colorado.

Federal District Judge Ann L. Aiken ruled in favor of Albany’s motion to remand it to Linn County Circuit Court in March 2018, but CH2M Hill has appealed the ruling to the Ninth Circuit Court. A hearing in front of the Ninth Circuit is set for early May.

According to the Albany lawsuit, Siemens Industry Inc. guaranteed that its Cannibal System would reduce the amount of solids left over from wastewater treatment by 90 percent compared to conventional waste treatment systems, resulting in millions of dollars of savings on handling and disposing of the solid waste.

Albany had contracted with CH2M Hill to design and build upgrades to Albany’s wastewater treatment plant. The company recommended the Cannibal System to replace Albany’s conventional treatment process.

Contrary to claims by Seimens and the recommendation of CH2M Hill, the Cannibal System was not a proven process or technology, according to Albany’s complaint. Rather, it was experimental, and neither Siemens nor CH2M Hill had a reasonable scientific bases for recommending that the system could “virtually eliminate” the biosolids produced at Albany’s wastewater treatment plant.

Albany’s plant went online in 2009 and delivered no better than a 7-percent reduction in annual biosolids yield, according to the complaint, more than 830 percent more solids than promised. Albany resolved the ensuing legal dispute with Siemens for $4.75 million in 2012.

During the course of Albany’s legal dispute with Siemens, according to the complaint, CH2M Hill represented that it could improve the performance and that the settlement from Siemens would adequate to pay for alternative solids handling.

CH2M Hill also represented that the same Cannibal System sold by Siemens was performing per specifications and representations in Lebanon, the complaint said. Contrary to that, “Lebanon’s Cannibal System was not successful as represented and in fact was failing its specifications.

“In fact, on information and belief, virtually every Cannibal System installed throughout the United States has failed, including the Cannibal Systems in Albany, Lebanon and Oak Lodge, Oregon.”

Lebanon awarded a contract to CH2M Hill in 2007 to install its Cannibal System. It began operating around 2009.

The City Council’s motion named CH2M Hill and OMI, which operated the treatment plant as a subsidiary of CH2M Hill, as well as Jacobs Engineering, which purchased CH2M Hill and OMI in 2017 and now operates the treatment plant.

CH2M Hill recommended the system to both communities at around the same time, Shepherd told the Lebanon Local. “It has failed in both communities. Both are trying to figure out what to do with the volume of sludge being produced not reduced.”

A team of wastewater experts is working with Lebanon on solutions, Shepherd said, although no decisions have been made yet.