Covanta gets 'stay of execution' as economic development panel sends plan to keep it open to City Council
PITTSFIELD — In an effort to save dozens jobs and city taxpayers hundreds of thousands of dollars, the City Council next week could approve $562,000 to keep Covanta open.
The council's Committee on Community and Economic Development on Wednesday night voted 4-1, Councilor at large Melissa Mazzeo against, in support of using Pittsfield Economic Development funds so the waste-to-energy and recycling facility to make much needed upgrades to stay open for at least four more years.
If the 11-member council on Tuesday backs Mayor Linda M. Tyer's proposal by the required two-thirds majority, the city would avoid a huge increase in trash disposal costs, a significant lost revenue from the Hubbard Avenue plant closing that would send 25 people to the unemployment line.
"If we can keep them open ... that's the best strategy," Tyer told the council subcommittee.
The mayor has said she has assurances Covanta would remain open four more years until the city can develop a long-range waste disposal plan.
"I feel like we got a stay of execution," she said.
Covanta announced in early July that it planned to close the Hubbard Avenue facility because the high operating costs and the size of the plant has made it unprofitable. The New Jersey-based company has planned to shutter the facility in March.
"This is one of the oldest [plants] we have in the country and one of the smallest. We couldn't continue to run it, economically," Covanta's Pittsfield Business Manager Ken Ryan told the councilors.
The city money would pay for a state-mandated recycling enclosure and upgrades to the fossil fuel boiler to help keep the facility afloat. The financial package includes state energy tax credits and would allow Covanta to continue to sell steam energy to Crane Currency in Dalton and Neenah Technologies of Pittsfield.
"We're saving more jobs here than just those at Covanta," said Councilor at large Peter White, whose father worked at Crane for nearly 40 years.
The shutdown of the plant would put 25 people out of work and force Pittsfield to have its trash and recyclables hauled out of county at an estimated first-year price tag of $462,000, according to city officials. In addition, the closure, over the first four years, would cost Pittsfield $960,000 annually in property taxes, water/sewer user fees and host community fees, the latter allowing Covanta to take solid waste from surrounding communities.
Despite the numbers, Mazzeo said she was having a hard time supporting the city investment in Covanta, especially for a short-term return on that investment.
"Before I approve this I need more guarantees ... a more viable business for more than four years," she said.
"Our goal is to stay here long term," Ryan replied.
Covanta's contract with Pittsfield was recently extended to June 30, 2020.
Should Covanta close before the four-year period, the company would have to pay back a portion of the economic development grant, depending on when they closed. For example, if it shut down in two years, half the $562,000 would be returned to city coffers.
Currently, the economic development fund has $5.2 million, almost half of the originally $10 million General Electric paid Pittsfield as part of the corporate giant's PCB cleanup of the Housatonic River.
The Hubbard Avenue facility, built in 1981 by Vicon Construction Co., has been run by Covanta since 2007. Covanta took over the structure when it purchased Energy Answers, which bought the facility from Vicon in 1994. Pittsfield's energy-from-waste facility is one of the oldest such plants in the country. Covanta operates 45 total energy-to-waste plants
Contact Dick Lindsay at 413-496-6233
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