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Plant bid choice disputed

Sat., Dec. 6, 2008

Some argue proposal by CH2M Hill competitor better for county

New questions are emerging over Spokane County’s desire to build a $142 million sewage treatment plant that would remove less pollution but cost about the same to operate as another proposed facility rejected by a selection committee.

County officials defend the move, saying the bid submitted by CH2M Hill Constructors Inc. to build and operate the plant remains the best choice even though a competitor, Veolia Water North America, proposed a facility that would leave about 50 percent less phosphorus in treated water and, some argue, cost slightly less in the long run.

Although there’s disagreement over whose long-term costs would be lower, no one disputes that Veolia’s proposal would remove more phosphorus, one of the key pollutants that government agencies – facing regulatory pressure – are trying to keep out of the Spokane River. But while the percentage difference may sound impressive, the actual reduction in terms of parts per liter is minimal, said Dave Moss, the county’s water reclamation manager.

Besides, the phosphorus level of treated water was just one of thousands of issues the selection committee considered when evaluating each company’s bid, he said.

“It’s not that it’s not important to get down to low phosphorus levels. It’s a huge driver of the project,” Moss said. “One offered to get a bit lower. But CH2M Hill intimated that they could get lower if they needed to.”

Moss noted that Veolia’s bid to build was $30 million higher than CH2M Hill’s.

But Veolia project manager Sean Haghighi said his company’s proposal beat CH2M Hill’s yearly operating costs by more than $1 million. “They have their own formula. But based on our analysis, it’s a flip of a coin. We thought it was the same price … over 20 years,” Haghighi said.

The new round of questions, raised by environmentalists and others, follow earlier concerns voiced during a public hearing over why the county is pushing ahead with construction of a multimillion-dollar facility when state and federal regulators have yet to determine precisely how much pollution will need to be removed from treated water.

The proposed plant would be built on 20 acres on the old stockyards at Freya Street and Boone Avenue. County officials say the plant is necessary because the county will exhaust its allotted capacity at Spokane’s existing wastewater treatment plant in about four years.

The project’s details are complex.

Moss, for example, said environmental regulators may require phosphorus levels in treated water to be reduced to 10 micrograms per liter before allowing it to be discharged into the Spokane River. If that happens, neither of the proposals submitted would be sufficient without changes.

Veolia promised to remove all but 25 micrograms per liter of phosphorus compared with CH2M Hill’s guarantee of 50 micrograms per liter.

“All along we tried to say that with the lower phosphorus guarantee, we should be given some credit. But we were told that they did not consider it, and the environmental impact was not significant,” said Veolia’s Haghighi. “They probably have a higher level of comfort with (CH2M Hill), I guess.”

County Utilities Director Bruce Rawls, who worked 17 years for CH2M Hill before coming to the county 14 years ago, said in a November interview that the proposals differed in price by only 1 percent over the 20-year contract, including the costs of designing, building and operating the facility by the private, for-profit companies.

“You select the most advantageous proposal. It might be that the better proposal is most expensive,” Rawls said. “The one we picked is actually a little less expensive.”

Aside from the arguments regarding price and phosphorus levels, Spokane County Commissioner Todd Mielke said he was told by some experts that Veolia’s design, which incorporated a series of seven barriers, was too complex and relied on a largely untested technology. Mielke worked as a lobbyist for a subsidiary of Veolia before he was elected to the county commission.

The plant as proposed by both companies would cost about $142 million to build. However, the county expects to spend another $30 million on pipes and other infrastructure. The plant would cost about $6.8 million to operate each year.

The impact on ratepayers is expected to be significant. No current estimates have been made, but last year – when the estimated cost of the project was about $65 million less – officials warned that ratepayers would be spending, on average, $40 a month more.

In case the county doesn’t get a discharge permit for the river, county leaders are exploring a $40 million proposal to pipe treated wastewater to Saltese Flats. The idea would be to convert farmland into reclaimed wetlands to naturally filter the water while providing more recharge to the Spokane River during summer.

That $40 million does not include land acquisition or site preparation, Mielke said.

And if regulators don’t sign off on the Saltese Flats plan, the county may be forced to go to a third option, reverse osmosis. Under that scenario, the county would have to pay for technology that would essentially convert the wastewater into potable water that could then be injected directly back into the aquifer, Mielke said.

Apart from debate over technology costs, the Sierra Club sent a letter to the county complaining that officials did not do a cost study that should explain why it would be cheaper to let a private company operate the utility than to use county employees.

Mielke said he didn’t know whether such a study was performed.

“That’s the sales pitch they give you, is we can bring more highly trained people with more experience to your community at a much lesser cost,” he said.

Rachael Paschal Osborn, who wrote the Sierra Club letter, said the county’s actions are financially irresponsible toward ratepayers, who mostly live in Spokane Valley.

“Private corporations are not public servants,” Osborn wrote. “Their allegiance is to their shareholders, not the public, and their primary motive, some would say duty, is profit. Clearly, no private corporation would enter into this contract without a guaranteed profit.”

Mielke said he’s willing to put his political future on the line to forge ahead with CH2M Hill.

“I think some of the best national experts have been involved in this dialogue in selecting this technology,” he said. “I think this community needs to move forward with advanced technology.”

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