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Barrel O'Fun snack producer fined for wastewater discharges, has agreed to pay penalty

PERHAM, Minn. -- Barrel O’Fun, which produces potato chips and other snack foods in this town of 3,000 and employs 900,  has agreed to pay a $45,000 penalty for not effectively pre-treating wastewater from its production plant here before sending it to the now improved city treatment facility.

Most of the problems occurred from 2009 to 2013, when growth at Barrel O’Fun outpaced the city’s ability to process wastewater, according to Kenny Nelson, the company’s founder and CEO.

“What really happened is we’ve grown a lot,” Nelson said.

Faster-than-expected growth caused the city to fall behind in its treatment capacity, said Perham City Manager Kelsey Klemm.

The city had applied for a federal grant to upgrade its wastewater treatment system in those earlier years, but the grant didn’t come through in time to prevent the wastewater problems from causing a stink.

The Minnesota Pollution Control Agency received numerous complaints beginning in April 2012 that odors from the city’s wastewater treatment ponds prevented residents from opening their windows or hanging clothes outside, and that the odors made them sick.

The MPCA found the city had, since 2009, failed to adequately regulate discharges to the wastewater treatment facility from four industrial users: Barrel O’Fun Snack Food, Kenny’s Candy, Tuffy’s Pet Foods and Perham Egg.

Through a combination of pre-treatment by the companies and an expanded city treatment facility that cost about $4.8 million, the issue has now been resolved.

After the MPCA required the city to enforce all discharge agreements with local industries after the complaints were filed, the city took several steps, including assessing Barrel O’Fun surcharges for exceeding pollutant limits.

Last year, the MPCA found enough corn pieces in the company’s wastewater to obstruct flow in the city’s wastewater treatment facilities. During upgrades to the facilities, a mound of corn more than 3 feet high was found and removed from an area around inlet pipes.

In addition, wastewater discharges of total suspended solids and organic material from Barrel O’Fun were often very high between 2009 and 2013.

During June 2013, the company discharged a certain type of organic material at a rate more than 2½ times its daily limit, and at a level that exceeded the design limit for the city’s entire treatment system by more than 30 percent.

Along with paying a $45,000 fine levied by the MPCA, Barrel O’ Fun was assessed surcharges from the city of more than $850,000 for exceeding maximum limits on wastewater discharge in 2011, 2012 and 2013, according to city records.

The city was also handed a $70,000 MPCA fine, but KLN Family Brands, Barrel O’Fun’s parent company, agreed to pay that fee.

As part of the same agreement, the city agreed to waive more than $850,000 in penalties it had assessed KLN for exceeding its wastewater limits in those three years.

KLN had already made the necessary pre-treatment improvements to its plant.

“We put about $800,000 into our pre-treatment system,” involving large settlement tanks in the plant designed to collect solids prior to treatment, Nelson said.

That, combined with the major upgrade to the city wastewater treatment system, has solved the problem, he said.

“We (the city) now have a much bigger holding pond and new high-powered aeration equipment,” Nelson said. “We’ve eliminated all the odor.”

The pond is filled during the cold-weather months and, after particles have settled, the wastewater is used to irrigate corn, soybean and wheat fields in the spring, he said.

Nelson said Barrel O’ Fun pays about $1 million a year to discharge its wastewater into the city system, along with so-called “sewage” made up of potato waste, corn starch and other food waste.

In that $4.8 million upgrade project finished last year, Perham effectively doubled the volume of wastewater it can treat to 1.2 million gallons a day from about 581,000 gallons.

A federal grant, finally received, covered half the cost.

Also as part of the project, a  20-acre, 83 million gallon aeration-holding pond was added to the city’s wastewater treatment system on the south side of Highway 10, near the overpass of Highway 78.

The city also renovated existing 26-year-old equipment and removed sludge from its treatment ponds, which include two primary aeration ponds  of 2.5 acres each, three holding ponds totaling 31.7 acres, and seven rapid infiltration basins totaling 10.5 acres.

Klemm said the city had been planning to upgrade its wastewater treatment system before the Barrel O’Fun problems surfaced.

“We responded based on what we thought their growth was going to be, but it occurred faster than anyone expected,” he said. “The positive side is Perham is growing and KLN is growing.”