County OKs $200,000 for bid loser

Without discussion or fanfare, the Spokane County Commission on Tuesday approved a $200,000 payment to the company that came in second on the bid to design, build and operate a new $170 million wastewater treatment plant.

State auditors last year questioned the legality of the “honorarium” paid to Veolia Water North America. Yet Commissioners Mark Richard and Bonnie Mager approved the payment Tuesday. Commissioner Todd Mielke was absent for the vote.

The 2006 decision to offer the honorarium was intended to increase competition by persuading companies to submit bids to one of the most expensive public works projects in county history. In the end, only two companies submitted bids, and the county chose CH2M Hill Constructors Inc. over Veolia.

“Of course in a situation like this you will never know whether it worked. We don’t know if one of these bidders came or didn’t come because of the honorarium,” Richard said. “Certainly it’s easy to second-guess. But … I’m still committed today that it was the right thing to do.”

Mager said she questioned the decision in 2006 and remains conflicted. “Would I do it again? No, I would not. I would basically go with my instincts that a huge project like this would attract those who could compete,” she said. “However, I did rely on staff. We were told that this was basically how it was being done now … to encourage a bigger group of contractors to bid on this.”

Utilities Director Bruce Rawls, who worked 17 years for CH2M Hill before coming to work for the county 14 years ago, said the $200,000 for Veolia Water will come from utility fees paid each month by residents, mostly in Spokane Valley.

Those rates, now about $35 a month, could go as high as $56.50 a month by 2012, depending on how the county finances the wastewater treatment plant and where it discharges the water.

Mielke once worked as a lobbyist for a subsidiary of Veolia before his election in 2004. Mager said she was not concerned that Mielke’s former client received the money, because the decision on the honorarium came before commissioners began soliciting bids.

But in December, the state auditor’s office sent county leaders an e-mail questioning the legality of the honorarium, because the county can’t legally give away public money without getting something in return.

“Our staff, since that letter, has reviewed those comments and we have made some adjustments to make sure that we are in total compliance with the law,” Richard said. “And, for the ratepayer, this wasn’t done without an extreme amount of investigation and thought on our staff’s part. We believe in the end it did provide a more competitive bidding environment.”

Mager said she doesn’t buy the argument that the honorarium will be inconsequential to ratepayers. “I think $200,000 is a lot of money and we should be very fiscally conservative when we do these types of things,” she said. “You won’t find me voting to provide incentives on big capital projects like this again.”