Local officials acknowledge that a giant sewage-cooking machine in west suburban Stickney is a waste of money, but they have decided to move ahead anyway with a project that could cost Chicago and Cook County taxpayers $217 million.

Once billed as an innovative way to turn the region's sewage sludge into fertilizer, the project is a decade behind schedule.

The Tribune first reported in May 2009 that the Metropolitan Water Reclamation District had concluded that the 60-foot-tall sludge ovens aren't needed. After several attempts to block it, district staff recently determined they couldn't escape the contract and its steep price tag, which keeps growing as consultant fees and other costs pile up.

"You have to remember this contract was signed a decade ago," said Richard Lanyon, the district's general superintendent, who inherited the troubled project when he took office. "If we were confronted with the same situation today, we would say we don't need it. But we have a contract, and we have to live with it."

The district's elected commissioners are expected to grant final approval early next month.

The sludge cooker, nicknamed the "Black Box" even though its corrugated steel walls are white, was unveiled a decade ago when district officials feared they were running out of disposal options. Turning a quarter of the region's sludge into tiny pellets, they said, would make the dried human and industrial waste more marketable to sell as fertilizer to farmers or soil conditioner to park districts.

But the project has been plagued with problems and cost overruns since commissioners awarded the lucrative contract to a company partly owned by the district's former superintendent, Bart Lynam, raising questions about Chicago-style cronyism and insider politics.

District officials also have found other ways to safely dispose of the region's sludge — the industry prefers to call it "biosolids" — without sending it through the ovens. Most of it already is being shipped to farmers and park districts, according to water district records.

Attempts to walk away from the contract hinged on the results of four tests conducted last year to determine if the machine works properly.

In documents obtained by the Tribune under the Freedom of Information Act, district officials argued that the contractor failed to follow the letter of their agreement during the tests. Some of the equipment ended up emitting more air pollution than allowed under a state permit, the district wrote in several memos, and a foul stench wafted through the area from a manhole that was supposed to be odor-free.

The contractor responded by obtaining a permit modification from the Illinois Environmental Protection Agency, which concluded that overall levels of air pollution from the machine were well below state limits. It turned out the stinky manhole could be traced to district officials who inadvertently removed a special cover designed to tamp down odors.

"Technically, they have passed the tests and they are complying with their permit," said Osoth Jamjun, the district's chief of maintenance and operations.

Until now, the project's construction costs and other expenses have been covered by the company and bonds floated by the nearby village of Hodgkins.

The options for the district are limited because of the way the contract was written. District staff have concluded the least expensive scenario involves buying out the contract in five years for $188 million. If the district allows the machine to operate for 20 years, it would cost taxpayers at least $217 million.

The district's decision to move forward with the sludge cooker comes two weeks after top officials condemned a federal proposal to make the Chicago River clean enough for swimming. Citing their "wise stewardship" of tax dollars, they reiterated their opposition to disinfecting partially treated sewage poured into the river, a project federal officials estimate would cost $242 million.

"It's unbelievable that they would enter in to this wasteful contract when they are trying to avoid making the river cleaner for the people," said Henry Henderson, Midwest director of the Natural Resources Defense Council, an environmental group that has been sharply critical of the district.

Supporters boast that the machine will reduce odors from the 150,000 tons of sludge produced each year at the Stickney plant. The thick gray muck is stored in massive lagoons and later left out to dry before it is shipped to farmers, park districts and landfills.

But independent auditors hired by the district concluded the project is more than $15 million over its $54 million construction budget. The auditors also questioned more than $800,000 in overhead billed by a Lynam-owned company, Biosolids Management Inc., and his corporate partner, Veolia Water North America.

Lynam served as the district's general superintendent from 1973 to 1978, leaving about a year after a federal grand jury acquitted him of corruption charges. He then moved to Seattle and formed a series of companies that bid on government and industry projects.

The Tribune reported in 2007 that Chicago officials awarded the contract to Lynam's firm even though Seattle officials had shut down a similar plant operated by the venture years earlier. Soon after it opened in the early 1990s, the Seattle plant was cited with multiple air-pollution violations and neighbors complained about odors.

If commissioners in Chicago grant final approval to the Stickney project, the sludge machine's operators will need to find a market for waste that currently is given away for free.

Lynam declined to comment and directed questions about the project to Veolia, a subsidiary of a French conglomerate that describes itself as the world's largest water company. Full-scale operation of the sludge ovens will "open a positive new chapter for the community in the environmentally safe reuse of these materials as fertilizer," the company says on a Web site devoted to the project.

"We have every confidence that we have completely and effectively met the standards, both in quality and quantity, as set up in our agreement," said Lou Ann Baker, a Veolia spokeswoman. "We very much look forward to the district's decision-making process."

mhawthorne@tribune.com