What started out in 1996 as a system that could turn sewage into money for Amherst has become an expensive maintenance nightmare that may be reaching the end of its troubled life. A grant is providing new incentive to dismantle the town’s $8 million pelletization system, designed to convert sewer sludge into marketable fertilizer.

Few programs have cost Amherst as much money or embarrassment.

From the very beginning, the plant created more drama than revenue. More than 900 tons of pellets, which resemble smelly peppercorns, were thrown away last year alone, according to town data.

“How far do we keep investing dollars into a product that we aren’t successful in marketing out?” said Council Member Guy Marlette, board liaison to the town’s Solid Waste Committee. “At some point we have to face the reality the whole program is not providing us what our intention was.”

In a go-green era promoting recycling and reuse, the pelletization program would seem to have a brighter future ahead — but the opposite is true.

Amherst received a major grant last month that would cover the capital costs associated with trucking town sludge to the Buffalo Sewer Authority for incineration and shutting down the town’s pellet operation.

Town officials estimate a net savings of more than $1 million a year through this arrangement with Buffalo. They also say that while it is possible to sell most of the town’s pellets to a Virginia Beach-based fertilizer producer, it would be far cheaper in the long run to truck town sludge to the city.

“It, to me, does not make much sense to continue to pelletize,” said Jeffrey Angiel, the town’s assistant municipal engineer.

He and other former town engineers also said it would be wrong to call the pellet program a failure. Because the pelleting process removes most of the moisture from the town’s sewer sludge, the product is far cheaper to landfill.

Over the past few years, pelletization has saved the town between $800,000 and $1 million a year in skyrocketing landfill costs. That amount is roughly equal to or greater than the annual amount to run the pellet program, according to a breakdown of data from the Wastewater Treatment Plant.

But the Town of Amherst never made back its original, multimillion-dollar investment, and few deny the project is a failure in terms of expectations.

Instead of producing $400,000 in revenue each year, as originally hoped, “AmEarth” pellets have brought in less than $100,000 during the past five years combined, and less than $1,000 so far this year because of system breakdowns.

The possibilities seemed much greater when the equipment was installed 13 years ago.

Following in the footsteps of larger cities like Milwaukee, big plans blossomed to produce different AmEarth products by combining the pellets with material from the town’s compost facility and selling the product locally and nationally.

Supervisor Satish Mohan said that while hindsight is 20/20, the system was based on technologically sound principles at the time. But glitches in the pellet-producing process surfaced right away. There were odor problems. Foaming problems. Digester and capacity problems.

The town spent millions on consultants to try and get the project working, and more money in legal fees when half a dozen suits and countersuits erupted as all sides tried to reassign blame for who was responsible for the stinking mess.

While the pellet program is an $8 million system by town calculations, it’s roughly double that by Buffalo News calculations, after adding in bond interest, annual maintenance costs and associated consulting and legal fees over the years.

One consultant, Elma-based Micro-Link, still has an unresolved suit against the town for roughly $300,000. Legal expenses associated with the firing of former plant superintendent Anthony Canna in 2003 cost town taxpayers a record $1.2 million and generated 22,000 pages of transcripts before the State Court of Appeals ended matters by refusing to hear his case in January.

The aging pelletization system now breaks down monthly, Angiel said. He also estimated the machinery could cost more than $2 million to overhaul.

“If the plant is going to keep it running, we’re going to have to sink some serious capital improvements into the system,” he said.

Meanwhile, the Buffalo Sewer Authority has upgraded its incinerators and has more than enough capacity to handle all of Amherst’s sludge. The state awarded a $414,615 grant to the Sewer Authority and the town.

Amherst would spend its half of the money decommissioning its pelletization system and purchasing a truck and trailer to transport sludge cakes produced by the town’s Wastewater Treatment Plant to the city for incineration.

Marlette acknowledged that after the huge investments the town has made in keeping the pelletization program going, it’s hard for some to consider abandoning it now, especially when the potential for marketing the fertilizer still exists.

The Virginia-based fertilizer producer Nutrients Plus has wanted to buy up, transport and market most of the town’s pellets since 2005.

But previous boards have refused to approve a contract with the company — even though the town would see a modest net profit—because the town would need to purchase insurance to cover environmental product liabilities associated with the transport and use of the pellets.

The insurance issue is expected to resurface soon for board consideration. Without a contract or guaranteed supply of pellets, Nutrients Plus has been allowed to truck away tons of town pellets for free.

Marlette said the town would not completely abandon its environmental principles by having the pellets incinerated. The Buffalo Sewer Authority would capture the methane gas produced in the incineration process and use it to help power its operation, he said.

Town officials await a consultant’s recommendation, due in three months, regarding whether it would be smarter financially to enter into an arrangement with Buffalo.

“If it proves there are savings for the town, Solid Waste would probably endorse that maneuver,” Marlette said. “Until we get that final report, until we get that analysis, there’s no decision one way or another.”