December 21, 2010 in City

Waste system reorganization sought

Apple, Rush split on vote of temporary extension
By The Spokesman-Review
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Background and the latest updates

City and county leaders tried this week to buy some time for reorganizing the Spokane Regional Solid Waste System.

A committee of member governments voted 5-1 for a stopgap measure to discourage Spokane – which currently controls the system – from potentially undermining a new agreement.

City Councilman Bob Apple dissented, but Councilman Richard Rush joined the majority in supporting a three-year extension of a contract for operation of the Waste-to-Energy Plant if no long-term debt is incurred.

The extension allows Spokane to resolve a dispute with the plant operator, Wheelabrator Spokane Inc., on terms that could reduce future costs of burning garbage.

As part of a tentative settlement, Wheelabrator would be paid for some $15 million worth of capital improvements and repairs.

In exchange for the improvements, the contract extension and a fee increase, Wheelabrator would abandon a contract provision that Spokane City Administrator Ted Danek said would effectively prevent competitive bidding for a new contract.

The contract says Wheelabrator may take over another company’s winning bid – leaving other companies little incentive to bid. Spokane officials argue the clause is unenforceable, but want to avoid litigation.

“I can’t believe they put that (clause) in there,” Cheney City Councilman Doug Nixon said.

It’s not the only dubious provision negotiated in the late 1980s, when the Solid Waste System was put together in the face of strong environmental opposition to its centerpiece incinerator.

Spokane County’s contract to direct garbage to the regional system automatically renews in April 2014 unless Spokane agrees to let it expire. That also is unenforceable, Commissioner Todd Mielke said.

The county and other member governments have long chafed that Spokane owns as well as controls the system even though everyone in the county helped pay for it.

The 14-jurisdiction system’s contracts with Spokane County, Cheney, Medical Lake and Airway Heights all expire in 2014. Except for Spokane Valley and Liberty Lake, whose contracts are up next December, all the other contracts expire in 2015 or 2016.

Wednesday’s Solid Waste Liaison Committee action – proposed by Mielke – calls for the system to negotiate three-year extensions with Spokane Valley and Liberty Lake.

That would allow the system’s largest contributors to approach reforms with a clean slate. If Wheelabrator’s contract is extended as proposed, it also would expire by the end of 2014.

County commissioners want an independent solid-waste organization controlled by member governments, similar to the Spokane Regional Health District.

The liaison committee vote calls for Solid Waste System Director Russ Menke to refine his cost estimate for the proposed incinerator improvements and to present options that don’t require debt payments beyond 2014.

Menke presented a scenario Wednesday that would have required $2.5 million annual bond payments for 10 years.

If not for his city of Spokane “hat,” Danek said, “I couldn’t agree with you guys more” about limiting new payments to three years.

Liaison committee members were optimistic that, even without taking longer to pay new debt, the $98-a-ton cost of processing garbage could drop more than $20.

Rush said bond payments account for $51.61 of the $98-a-ton “tipping” fee the system charges the public for garbage disposal.

However, Menke said in an interview that Rush’s number seemed “a little high.”

Menke calculated about $46.50 for 2009 and said the system was using reserves to supplement the no-longer-adequate $98 fee.

He said he will analyze actual costs in the scenarios he was asked to prepare, but there are a couple of imponderables.

One is the value of the electricity the Waste-to-Energy Plant produces.

The other is the possibility that Spokane will apply a utility tax to the plant when it annexes part of the West Plains in January 2012.

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