NORFOLK — Michael’s Cantina has been serving Tex-Mex food to the residents here for more than 30 years. Softball trophies crowd the top of a dresser in a dining room, old signs line the walls and regulars visit multiple times a week. Some of the employees have worked at the restaurant for decades.

It feels timeless, except for an unwelcome newcomer: the stench.  

For the past two years, the restaurant and nearby residents have been bothered by the stink, which owner Heath Henery describes as a “sewer smell with almost a vomit smell.” 

He blames the odor on the dairy processing plant across the street, a company long known as Milk Specialties Global that recently rebranded as Actus Nutrition. Actus makes milk and whey protein ingredients at processing plants around the country, and recently expanded in Norfolk, growing its daily processing capacity by millions of pounds of milk.

Around the same time the plant expanded, it started to encounter outsized problems that have caught the attention of neighbors, local regulators and even Nebraska’s governor. 

Strong odors. Dairy spills. And repeated violations of local and state rules.

“I do feel that whatever they’re doing in the last two years, they’re not doing it properly,” Henery said, “and I think the city should be very aggressive at solving the problem.”

Since its expansion, the Actus plant has been a blessing for local dairy farmers, some of whom say that they wouldn’t be in business without it. But during that time, it has violated its agreement with the city wastewater treatment plant nearly 300 times, according to city staff. 

That hurts the city’s ability to treat wastewater coming from residents and other industrial users, wears down the staff that maintains the plant and, the plant’s leader says, opens up the possibility that Norfolk’s wastewater could harm public health and wildlife. 

Despite encouragement from Gov. Jim Pillen and U.S. Rep. Mike Flood to work with Actus, the Norfolk City Council this month passed an amendment that drastically increased the fines Actus must pay if it continues to violate local wastewater rules.

In a July email obtained by a public records request, Norfolk City Administrator Scott Cordes detailed the city’s predicament to a member of Flood’s staff.

“We do not want to fine them, we do not want to shut them down, we want to be good partners, but as of right now, the clear consensus is that we have been placed in a situation where we have no choice but to communicate the seriousness of this matter,” Cordes wrote. “Protecting our infrastructure and this community and our legal duty in enforcing the federal, state and local requirements are far too important to allow this situation to continue.”

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For milk producers like Mike Guenther, Actus Nutrition’s Norfolk expansion came just in the knick of time. Guenther, a third-generation dairy farmer in Beemer, said that the future of dairy farming in Nebraska had looked bleak for a while. Just a few years ago, his family operation sold about a quarter of their milk cows to be processed for beef — the milk wasn’t bringing in the money the farm needed.

“The dairy farm, with all the buildings and stuff, too, it costs a lot of money to put that in, but it's worth almost zero dollars,” Guenther said. “Because no one's going to come and buy a used dairy farm.”

The numbers confirm his account. Only 73 licensed dairy farms remain in Nebraska, says Kris Bousquet, executive director of the Nebraska State Dairy Association, down from 650 in 1999.

One of the reasons for the dairy industry’s struggles, according to Bousquet: A lack of nearby processing plants. When the Norfolk plant expanded, Guenther said his farm’s fortunes started to turn around. 

Actus offered a better price for milk. Its proximity lowered transportation costs. Nearby dairy farmers, including Guenther, formed a cooperative so they could jointly provide the volume of milk the processing plant needs each day. 

Thanks to Actus, Guenther’s dairy farm started to seem viable long term.

“We finally had money, we could pay some of the debt,” Guenther said. “That’s a great shot in the arm that we received.”

The dairy farmer said he doesn’t know the details of Actus Nutrition’s dealings with the City of Norfolk. But he does know Actus changed his life.

“We would not be dairy farming today if that market did not open,” Guenther said.

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The problems started in earnest in 2023, according to public records and interviews.

When the Actus expansion throttled up, odors and levels of pollutants the dairy plant sent to the city wastewater treatment facility also increased. It got so bad that City Engineer Steven Rames told Actus in December 2023 that its wastewater permit would be terminated in 90 days.

Then, in March 2024, Nebraska’s Department of Water, Energy and Environment (DWEE) — the state’s environmental regulator — responded to a white liquid in a gulch that drains into the Elkhorn River. Actus ultimately accepted responsibility for spilling dairy into the tributary, state records say, though their representative claimed it was from a previously reported spill resurfacing.

At the end of that month, Rames followed through and suspended the facility’s wastewater permit — effectively shutting down the dairy plant until the company and the city could reach a new agreement.

During that shutdown, he said, he became aware of the positive impact the plant is having on dairy producers and the Norfolk-area economy.

“The pressure was, how do we work with them, to get them where they want to be, without impacting where I have to be?” Rames said. 

New plans were agreed upon. Actus resumed operations. And the problems returned almost immediately, state records show.

In May, a spill of skim milk into the gulch. In June, another spill, this one killing hundreds of fish.

In September 2024, state regulators joined an inspector from the U.S. Environmental Protection Agency for a look at Actus Nutrition’s Norfolk facility.

According to an emergency complaint order, during the inspection the regulators learned that Actus had been transporting “high strength waste” off site by truck to unspecified destinations. The resulting order from DWEE was clear: Dispose of this hazardous waste legally.

In December, the EPA referred potential violations to the state for follow-up, a spokesperson said. 

A spokesperson for DWEE told the Flatwater Free Press that the “matter is being evaluated” by the agency’s legal division.

They didn’t say when this evaluation began or give any specifics on the underlying investigation, citing state law around potential litigation.

David Domina, a well-known Nebraska lawyer who has represented opponents to the Keystone Pipeline, pointed to two similar cases where Nebraska companies faced serious penalties after producing amounts of waste that exceeded the capacity of their local wastewater treatment plants. The first involved an egg processing plant in Wakefield, Domina said. The second was a dairy processing plant in West Point.

After investigation, he said, both cases “resulted in consent decrees with substantial fines.”

A representative from Actus Nutrition declined an interview but provided a written statement saying the company is committed to working with Norfolk to develop a long-term solution.

“The company has made considerable investments to implement wastewater improvements recommended by city officials and will continue to do so,” the statement said. “We look forward to continued collaboration with city leaders.”

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Norfolk’s water treatment staff are used to occasional violations by industrial users.

Actus, said Robert Huntley, the plant’s superintendent, is not the normal company. 

“All industries go over from time to time, it's just a part of it, we understand that,” Huntley said. But: “70%, 71% violation of a permit is crazy.”

According to numbers kept by the wastewater treatment staff, from July 2024 to July 2025, Actus violated its wastewater agreement with the city 284 times. 

One of the primary ways that Actus’ wastewater violations have caused problems is through going over their permitted levels of Biochemical Oxygen Demand, or BOD. When loads with higher than expected BOD reach the wastewater treatment plant, they can kill the microorganisms that break down waste. 

“Let’s say they hit us one day with a super heavy load, we might kill 20% of our ‘bugs’ (the microorganisms). Then if we get another day, then we kill 40%,” Huntley said. “It just cascades.” 

This happened in March 2024, when Rames, the city engineer, shut Actus down. According to records of phone calls between Norfolk and DWEE, it took weeks for the biological processes at the wastewater treatment plant to recover, requiring regular monitoring from the plant’s operators to re-grow the microorganisms.

Something similar happened again this July. 

“When those things happen, if we were to miss it and weren’t able to recover it, it could be bad downstream,” Huntley said. “Bad for fish, bad for public health, definitely bad for odors.”

Huntley said that he has been proud of his team at the plant — overtime hours and stress levels have been high. Huntley is regularly at the plant on weekends, sometimes eating breakfast with his wife in his office between checking up on things at the plant.

He said that he felt he needed to be around in case of surprise problems related to Actus. Last year, when he took a day off for his birthday, it was interrupted by one of the company’s dairy spills into the gulch that flows into the Elkhorn River.

“I don’t feel like I can walk away from it,” Huntley said. “It’s just never ending.”

***

Earlier this year, when Cordes was considering leaving his job as the state fire marshal to return to Norfolk and become city administrator, he said that Mayor Shane Clausen mentioned ongoing difficulties with Actus as one of the challenges he’d be walking into.

When he had decided to accept the job, Cordes said that he mentioned Actus to Pillen.

“His comment was, ‘I hope you guys can find solutions to make things work better,’” Cordes said.

Laura Strimple, Pillen’s communications director, said that “Governor Pillen is hopeful that representatives with the city and Actus Nutrition will continue to work together to come up with a solution that will allow the company to continue its operations, while at the same time, ensure the safety and quality of city wastewater treatment.”

Pillen wasn’t the only elected official to take notice of the friction between the company and the city. Cordes said that Flood and State Sen. Robert Dover, both of whom represent Norfolk, contacted him and other city leaders about Actus.

In a July 30 email sent to Flood’s office, Cordes said that the levels of waste Actus was discharging to the Norfolk treatment plant had escalated despite repeated warnings from the city.

“So, my message to Congressman Flood is clear. We want to be good partners, we want to help them succeed … But it must be reciprocal, and right now, the failures to adhere to repeated requests for voluntary compliance have not been heeded in our opinion,” Cordes wrote in the email.

In a statement, Flood said that Nebraska had long worked to add dairy processing capacity, and that the Actus Nutrition plant in Norfolk provided what dairy producers need.

“I believe that the City of Norfolk and Milk Specialties (Actus) will find a way to address these concerns and move forward while ensuring that wastewater is appropriately handled,” Flood said.

Jeff Jensen, a Norfolk City Council member who represents the area around the Actus processing plant, said that federal and state leaders had given little direction on the best way to move forward.

“It just got to a point where we as the city had to say enough is enough,” Jensen said.

In early August, the City Council considered new, far more serious penalties. Previously, Actus paid a $1,000-per-day penalty for exceeding one of its wastewater limits. The new proposal would have spiked that fine to $20,000 a day.

During the council meeting, an Actus representative said fines that high would force the Norfolk plant to shut down. 

Further meetings between city leaders and Actus yielded a compromise series of fines, including $5,000 paid by Actus to the city for each daily violation and higher penalties for loads that dramatically exceed their permitted amounts of BOD.

City staff and elected officials said they are cautiously optimistic that the new, heftier fines will help. Communication between the city and Actus has already improved in the past month, Jensen said.

“I don’t want industry to say that it’s a bad place to come, but I especially don’t want citizens of Norfolk saying our city is a bad place to work,” Jensen said.

The new fines had one immediate effect. The week after the council amended the permit, Huntley, the wastewater superintendent, took some days off.

It was his first vacation in more than two years.