State bureaucrats seem to be going after Burlington's Intervale Compost owners with zeal, but are running afoul of a bill signed into law by Gov. Jim Douglas, a key lawmaker told "Fair Game" this week.

In response to an ongoing regulatory brouhaha involving compost operations, solid-waste violations and Abenaki artifacts buried in the area, lawmakers passed a bill last session that exempted all compost operations in the state from regulatory action until 2010.

"This was supposed to be a time-out, a hiatus on all regulatory action to allow folks to get together outside of any specific issue and look at how best to regulate compost in the State of Vermont," said Virginia "Ginny" Lyons, (D-Chittenden), chairwoman of the Senate Natural Resources Committee.

However, after two months of closed-door negotiations, it is now clear Douglas administration regulators are seeking fixes costing more than $375,000 along with undisclosed fines in order for the compost project to continue operations for the next two years. The state has indicated it may agree to lower fines if the Intervale makes some sweeping changes in how the land is used, according to a July 3 memo obtained by "Fair Game."

The memo reveals that state officials want archeological, rather than agricultural, concerns to govern Intervale farming activity. Under this scenario, the Division of Historic Preservation would be the arbiter of how the land is used - from installing a fence to tilling soil - not Act 250, the agencies of Natural Resources or Agriculture, or farmers. The DHP is part of the Agency of Commerce and Community Development, led by former homebuilding exec Kevin Dorn.

These changes could spell the end of the Intervale as we know it: 200 community garden plots, 12 small farms, the compost operation, 70 full-time and 44 part-time jobs, and 1 million pounds of local food produced annually. The loss would ripple out further, affecting restaurants, schools and other institutions, as well as farmers who consult with the Intervale on organic practices.

Lead attorneys in the Intervale case - former ANR General Counsel Scot Kline and the Intervale Foundation's Brian Dunkiel - refused to comment on the private talks between the state and the Intervale. Both sides hope to reach an agreement this month. *[see correction below]

Kline defended ANR's actions, saying the exemption passed by the legislature applies only to Act 250, not to solid-waste permits or historic preservation.

Lyons said Kline is missing the law's intent. "This was not an opportunity to find another loophole to go after a very important business in our community," said Rep. Lyons about the bill. "I look at what's going on and it absolutely confounds me. Why wouldn't they be solving a problem rather than making it worse?"

A good question. Is it politics? Democratic House speaker and gubernatorial candidate Gaye Symington was the center's development director. She resigned after the GOP tried to make hay of her dual roles. Progressive David Zuckerman, who chairs the House Ag Committee and farms in the Intervale, was singled out, too. Coincidentally, he's in the process of moving his farming operation to Hinesburg.

Is it the environment? It's compost, not nuclear waste.

Archaeology? Since when has the state given a damn about the Abenaki?

Whatever the reason, the Intervale wants the talks to end soon.

In the memo obtained by "Fair Game," Dunkiel tells Mark DiStefano, the top environmental lawyer in Attorney General Bill Sorrell's office, that the Intervale is willing to make amends and pay reasonable penalties - up to $50,000 total - to keep running through 2010.

For comparison, ANR imposed the following fines for solid-waste miscreants in the past: eight fines totaling $27,500 in 2007, and 12 fines totaling $12,260 in 2006. For Act 250 violators, the tally was one fine of $65,000 in 2007 and zero in 2006. This makes the Intervale's counter-offer of $50,000 generous - and the $375,000 in proposed reparations downright absurd.

"We are not trying to avoid any environmental compliance or regulatory issues," said Don McCormick, the Intervale Center's interim director. "That's not the battle we're fighting. We're fighting for sensible regulation appropriate for an innovative agricultural resource that is building a sustainable food system."

The state, however, may put the Intervale on the hook for damage it did not do. In the memo, Dunkiel asks the state if it plans to hold the Intervale responsible for all past archeological damage by allowing the DHP to identify all land "compromised" by past uses and deemed as "more sensitive."

Decades prior to the arrival of the Intervale Center and its agricultural activities in 1988, industrial agriculture, pesticide use, an unlined city landfill, abandoned cars and municipal sewage pits depleted the soil. The Intervale's activities work to counter that damage and bring the land back into balance, said McCormick.

Ironically, current ANR Secretary George Crombie was Burlington's public works director during the 1980s, and oversaw the dumping of tons of municipal sewage into the Intervale. Some might say Crombie should be held responsible for damaging the land rather than the Intervale Center.

Though the state has proposed sweeping land-use changes to the Intervale, it has yet to inform a key landowner: the City of Burlington. But Mayor Bob Kiss has heard the news, and he isn't happy.

"I thought progress was being made on these issues. If some of the values the city holds in terms of local food mixed with the history of the Intervale are being compromised, then perhaps it's time for us to be involved," said Kiss. "I had hoped we would be able to balance all of these values . . . with these negotiations."

The city retained 1 percent ownership when it sold land to the Intervale Center in 2007. The 199 acres it sold are governed by conservation easements that include an ongoing archaeological assessment. The Vermont Land Trust and Vermont Housing and Conservation Board, parties to the sale, require such covenants.

However, as Seven Days reported in April, state historic-preservation officials deny they signed off on the city's sale, and last fall imposed further restrictions on the land: The DHP quietly designated Burlington's side of the Intervale (which also spans Colchester and Winooski) as an area of archaeological significance in the state register of historic places - known Abenaki heritage sites are scattered throughout the area. The DHP allowed little, if any, input from the City of Burlington. The designation means any new Act 250 permit for activity in the Intervale would automatically start with the presumption that archaeologically significant items are on-site and might be disturbed.

Funny thing is, Abenaki leaders don't have a problem with the Intervale's operations. Chief April St. Francis Merrill of the Abenaki Nation of Missisquoi St. Francis/ Sokoki Band is supportive and has been consulted for years on the project.

Abenaki activist Judy Dow of Essex, on the other hand, has a different view. A major critic of the Intervale Center's operations, she spurred the original state reaction in early 2007, and used her clout as the governor's appointee to the Vermont Commission on Native American Affairs to push the DHP designation.

Last month, noted food author Michael Pollan told a Burlington audience that Vermont was "30 years ahead of the rest of the country" in producing local food for its residents. Given current actions, Vermont's officials appear to be 30 years behind the curve.

Case in point: Agriculture Secretary Roger Albee, who, ironically, introduced Pollan at his talk. Albee seems to be fine with ignoring the federal Clean Water Act's rules to stop phosphorous runoff from large farms, but he has no problem imposing Federal Emergency Management Agency floodplain rules on small farmers who want to put up hoop houses in Burlington's Intervale. Hoop houses that are key to growing food year-round.

That'll really help the "Buy Local" movement the governor claims to support.

Outside the state, the Intervale has received nothing but kudos. It's been named one of six national enterprises worthy of "sustainability stardom" by the Kellogg and Gates foundations, and is the focus of an upcoming U.K. documentary on sustainable food systems. Pollan also appears in the film, as does famed chef and local-food proponent Alice Waters.

The author of Fast Food Nation, Eric Schlosser, offers some choice words on the subject in this week's food section.

"The Intervale, along with others outside of government, are providing leadership, moving forward on this issue of energy and our local food supply," Gardener's Supply founder Will Raap told "Fair Game." "Yet, the place we find ourselves stuck in is, the government can't seem to get out of its way in order to provide leadership the way it ought to and accommodate innovation."

One final irony: Last week ANR released a report called "Life After Garbage." It was crafted by 60 citizen stakeholders who recommend, among other things, that the state divert more organic waste from our garbage to compost and energy, and "manage unused organic materials in a manner that helps to maintain food security in Vermont."

Now, there's some food for thought.

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You Wouldn't Hit a Guy with Glasses, Would You? - Speaking of food and silliness, Gov. Douglas got a cream pie in the face during Montpelier's Fourth of July parade.

The pastry perp, Matthew Manning, 22, of Northfield, is keeping quiet on his pie's political purpose. He's due in court next month on assault and disorderly conduct charges.

The response has been a bit over the top, from Barre Mayor Tom Lauzon's tough tackle of Manning to a follow-up news report by Sue Allen, editor of the Times Argus and former spokeswoman for Gov. Howard Dean, who had the chutzpah to put "9/11" and "pie throwing" in the same article. WCAX News headlined its story "Douglas attacked."

And here we've been worried about Al-Qaeda getting its hands on yellow cake uranium, when they've really wanted banana-cream mix.

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And Then There Were Two - After struggling to find a candidate to challenge Republican Lt. Gov. Brian Dubie, the Democrats have two.

Nate Freeman, a school board member, upholsterer, and blogger from Northfield, jumped in two weeks ago.

Now comes Thomas Costello, a lawyer and former state rep from Brattleboro.

"By rolling up our sleeves and working hard, using our God-given skills and can-do attitude, together we can make Vermont a better, safer and more productive place for us and for our children," Costello said.

Freeman welcomes the primary, undeterred by Costello's support from Senate President Pro Tem Peter Shumlin (D-Windham).

"I look forward to a vigorous primary as our Vermont grassroots campaign challenges Montpelier politics-as-usual," Freeman said.

Should be a fun summer!

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Correction - The pay for Auditor Tom Salmon's principal assistant went from $33.07 to $34.47 per hour last February, after a 4.23 percent increase. "Fair Game" had the wrong pay rate in last week's column. We also erroneously attributed that wage to state Medical Director Scott Strenio, who now earns more than $62 an hour after a $5000 bonus last August. Good thing those folks in the auditor's office are good with numbers.

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Correction - Scot Kline is the lead environmental attorney at the Attorney General's office, and is the former general counsel at the Agency of Natural Resources. His current position was incorrectly identified in this week's "Fair Game."