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Zumbrota, Dairy Farmers of America reach settlement

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ZUMBROTA — The city of Zumbrota and Dairy Farmers of America Inc. have agreed to a settlement that ends a lengthy legal dispute that landed in the Minnesota Court of Appeals.

The agreement affirms the city's January 2015 decision to increase the dairy facility's sewer usage rates for Biochemical Oxygen Demand, or BOD, for the next two years. The rates were increased from $15.25 to $20.25 in 2015 and will jump another $5 per 100 pounds in 2016.

However, the Zumbrota City Council's January decision also was amended in the settlement to impose a $4.50-per-pound penalty for wastewater violations in months where five or fewer are reported. If the plant exceeds five violations, the penalty rate jumps to $7.50 per pound.

The council previously approved a penalty rate of $6 per pound.

"I think it's a fair settlement, and we're going to move on," Zumbrota Administrator Neil Jensen said. "We protected our wastewater plant, and I believe the lower BODs will make our town smell a little bit better."

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The dairy plant has had multiple compliance issues since 2009, which has resulted in repeated fines and increases in the fee and fine schedule. The issues came to a head in 2014 when the plant was fined $90,000 and another $18,000 for violations that prompted some citizens to complain to the city council about the smell.

Those situations led to the creation of a study group that ultimately learned the city's fee and fine schedules were well below market rate, said Zumbrota Mayor Rich Bauer. That determination led to the unanimous approval of increased rates for DFA.

However, DFA cried foul in its March legal challenge, claiming the city had acted without formally alerting the plant to the changes or allowing it a chance to comment.

The settlement requires the city provide DFA with any future studies or reports, allow 60 days for review and comment and hold a public hearing before approving any future changes to the fine or fee schedule as they relate to the dairy plant.

"As we have, and continue to strive to be good corporate citizens in the communities in which we live and work, DFA is pleased to come to resolution with the city of Zumbrota in this matter," DFA Senior Vice President of Corporate Affairs Monica Massey said via email. "We believe the settlement to be fair to all parties.

"Our farmer owners and employees are proud of the work we do across the U.S. where we provide jobs, invest in local communities and produce safe, wholesome foods for consumers around the world," she said.

DFA employs more than 100 at its Zumbrota facility and has an annual economic impact of about $100 million, according to a recent city study.

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