Heat rising on Calmetha, consultant

One of two corporate giants portrayed as the money behind a proposed methanol plant that holds the promise of Colusa's economic future has said it has nothing to do with Calmetha.

"Bechtel is not, and has never been, part of Calmetha," Michelle Michael, with Bechtel Corporate Communications, said in a statement.

However, the economic development consultant working on the project on behalf of Colusa, and with a job-performance contract for Calmetha, said Bechtel was part of early discussions and could very well still become a player once the project gets to the engineering and construction stages.

Mark Mayuga, who has become the center of a political storm in recent weeks, said the confusion was over some miscommunications and not any intentional effort to deceive anyone.

He is also troubled with what he described as misinformation that has been circulating around town, some of which came out during a City Council meeting on Tuesday.

He insisted the project is alive and well.

"The only thing that is holding us up is the feedstock (contracts)," Mayuga said Thursday. "No one is going to build an $800 million (methanol) project if they do not have the feedstock. Why would they?"

Mayuga has declined to say publicly who is sitting at the table now, but has been reporting consistently over the last two months that negotiations are close to being finalized.

He said rice straw producers are out of the mix for the time being, except perhaps as a supplemental source. The issue was money.

"We have found other feedstock in the ag industry and livestock waste," Mayuga said.

Not everyone convinced

Detractors point to the consultant's testimony before the state Energy Commission in which he stated he had feedstock contracts and letters of intent signed and ready to go.

"We did; they are just sitting fallow," said Mayuga, explaining that a key party backed out and is no longer in the industry.

That testimony was given about four months before Mayuga was hired by the city in March 2011, but still working on its behalf.

Additionally, Mayuga reaffirmed Thursday that the deep pockets of Siemens, the international mega-company based in Germany, is part of the project through a British Columbia, Canada, energy firm.

Mayuga was not certain of the name during the interview, and that information could not be confirmed in time for print by the Siemens energy division out of Florida.

Mayuga said that, once the feedstock contracts are finalized, the project will move forward, and more details will be available to the public.

Mayuga said there are four sites under consideration, each at least 500 acres, and all of which can be annexed into the city. One of those, he said, is connected to Colusa Industrial Properties.

Ed Hulbert, chief executive officer of CIP, confirmed he has had discussions with Mayuga, and that there is land associated with CIP potentially available.

However, he said there is no deal in place, or even a letter of intent, and so as it stands, it is simply another of nearly two dozen prospects, including another energy firm, that is looking at the properties.

The land is being redesignated as industrial through the current Colusa County general plan update.

Hulbert has reservations, however, that the land being discussed would be right for annexation, but admitted that is a different issue.

Contract under fire

Other doubts about the project, and a growing opposition to the city's consulting contract with Mayuga, have percolated to the surface.

"I don't believe the contract is in the best interest of the people (in Colusa), and way expensive," said Gary Teragawa.

His comments were reflective of the half-dozen people who spoke at the City Council meeting.

Some suggested that the council has failed to look independently at the information they are being provided by Mayuga and City Manager Jan McClintock.

The issue reached a boiling point last week when Councilman Kirk Kelleher made public his lack of confidence in Mayuga, and called for the end of a contract that pays as much as $7,875 per month, plus 5 percent for direct contractor expenses such as travel and hotel costs, and 15 percent of staff overhead.

That contract will be reviewed in April.

But much of the conflict may be less about what Mayuga has said, or has even written in his reports to the City Council, and more about what has not been said.

Detractors said the lack of transparency and lack of direct answers to questions have raised considerable doubts.

"No, this has not been out in the public," Mayuga said. "It is business, and people's business is people's business."

And since this project would be privately funded, that secrecy has been conspicuous.

However, detractors said it goes well beyond that.

They note that the corporation papers at the state Secretary of State office for Calmetha, a limited liability company, are incomplete at best, and other documentation does not appear to be filed at all.

Add the Bechtel confusion, the fact Caltrans has been in and now out of the project planning with regard to a rail spur that is proposed from the California Northern lines east to Colusa, and they claim the picture is just too murky to justify Mayuga's contract.

Project questions persist

Don Bransford, a local farmer and former president of the Rice Commission, said he has been told by industry sources that the technology necessary to produce methanol from rice straw does not exist.

Mayuga said that is simply wrong.

He said the technology is sound, and not only is Calmetha looking at Colusa County as a methanol plant location, but at several other California sites and in other Western states — all with the intent of using ag waste as the feedstock.

As for the rail spur, Mayuga said the intention is still the same, to run a spur from the Northern California lines to Colusa, and the preferred location is still north of Highway 20.

He confirmed Caltrans is no longer part of the discussion, and like other development projects, land or easements will have to be acquired.

McClintock said the spur is not Calmetha-specific, and the fact it would benefit Colusa Industrial Properties is why the USDA is interested in the project, which has an estimated cost of $10 million to $20 million.

The majority of the City Council has expressed support for Mayuga.

The council last month even adopted a nonbinding resolution indicating it would buy steam from the plant, a valuable byproduct of the production process, and then sell the power through its municipal utility company.

And McClintock said the concept that the redevelopment money used to pay Mayuga can simply be placed back in the city's general fund, as stated by some opponents, is inaccurate.

She said it was a loan from reserves, and if it sits there it will get 0.01 percent interest, rather than being used to promote economic development where it will at least eventually come back to the city from the state in the natural tax increment increases.

Add the prospect of what has been reported as 300 year-round, full-time jobs for the methanol plant alone, plus the industrial and commercial firms that could follow, and the project holds the promise of being the biggest economic boon in city history.

Still, the detractors just think there are too many questions, too many mixed messages and uncertainties to make this a viable prospect, especially at the price of Mayuga's contract.

Mayor Pat Landreth on Wednesday said he would be responding to many of the questions and issues raised at the council meeting, some of which were not directly linked to the methanol project, in a statement to be posted on the city's website.

He believes there is a lot of misinformation out in the public, but needed some time to collect the correct information.

"We heard what people had to say (Tuesday) night, and I want to sit down and see if we can ... provide the best information we can get to people," the mayor said.