County wants audit, not trash talk

Frustrated county commissioners are demanding an independent audit to restore their confidence in the Spokane Regional Solid Waste System as it prepares for a future that might not involve a garbage incinerator – or management by the city of Spokane.

City officials are moving to placate commissioners and other critics with an audit as well as an ongoing study that suggests it would be cheaper to close the system’s waste-to-energy plant when construction bonds are paid off in 2011, and use a landfill.

A preliminary report by the CH2M Hill consulting firm says opening a new landfill southwest of Medical Lake in 2018 generally is the cheapest of six alternatives.

Continued use of the waste-to-energy plant – which was opened amid controversy in 1991, at a cost of more than $100 million – becomes the cheapest option only by replacing electricity rate projections by CH2M Hill economist Dan Pitzler with more optimistic rates city officials suggested.

However, Pitzler warned that “it’s very difficult to say which is the low-cost scenario” until more information is gathered. Political and environmental issues might make a landfill much more expensive than predicted, or even impossible, he said.

County Utilities Director Bruce Rawls agreed: “Having a new landfill in Spokane County may not be the best solution even though it’s the cheapest.”

The county hired its own consulting firm, FCS Group, to review Pitzler’s work. FCS identified some concerns, but concluded Pitzler’s assumptions and methodology were “reasonable and applied consistently to all alternatives.”

The $41,500 CH2M Hill study was requested by the Solid Waste Advisory Committee, whose 15 members are appointed by county commissioners.

Committee members and commissioners want more information about how the city of Spokane manages a system in which nonresidents have an almost equal stake. Spokane residents contribute 50.6 percent of Spokane County’s garbage; Spokane Valley, 23.1 percent; unincorporated portions of the county, 20.6 percent. The rest comes from small cities.

The advisory committee has no power, and elected officials outside Spokane are limited to approving the Solid Waste System’s budgets. The contract that established the system gives city officials complete control over operational decisions.

Spokane officials exercised that power in 2001 to place the regional solid waste system under the control of city solid waste director Dennis Hein. County Commissioner Mark Richard said that’s one of the main reasons he and others distrust the system.

Part of the problem was Hein’s reluctance to share information, Richard said. Also, he said, combining the positions created a conflict of interest because the city sells services to the Solid Waste System.

Richard’s distrust was so great earlier this month that he was willing to consider dipping into the county general fund to pay half of the $300,000 to $500,000 cost of the combined performance and financial audit he and his fellow commissioners want. Richard doubted he could have confidence in an audit arranged and paid for by the Solid Waste System.

“If the audit is going to be influenced by staff, you might as well not do the audit,” Richard said. “You don’t gain anything.”

He cited a dispute over last year’s selection of a consulting firm to prepare a new state-required solid waste management plan. Richard and others wanted to avoid CH2M Hill, which had just hired Spokane Public Works Director Roger Flint as vice president, but Richard said city officials “became very entrenched that the city was going to pick the consultant of their choice.”

SCS Engineers was selected, but CH2M Hill was hired as a subcontractor. The completed plan now is under review by the state Department of Ecology.

Another example Richard cited was a recent “oh, by the way” revelation that the city had refunded $519,993 to the Solid Waste System after the state auditor’s office challenged the city’s $1.1 million charge in 2004 for customer billing and trash pickup services.

Spokane had no documented justification for the charges.

Spokane Public Affairs Officer Marlene Feist said the city Utilities Division had billed the regional solid waste fund and the city’s own utility funds according to the amount of money they collected.

After the audit challenge, though, city officials decided it would be better to charge the funds according to how many customer accounts were being serviced. The amount of a customer’s bill has little to do with the labor required to process it, Feist said.

Based on the new formula, the city refunded the excess it charged in 2004 and 2005.

“What about the previous 20 years?” Richard complained. “And what other types of transfers are taking place? … Why did it take a year and a half for that to get divulged to the Board of County Commissioners? That just doesn’t pass the smell test.”

Richard said he would have wanted to be involved in developing the new billing formula.

Molly Mangerich, who took over in February as director of the regional and Spokane solid waste operations, agreed with Richard that county officials should have been consulted when auditors questioned the city’s fees.

“Good example, absolutely,” Mangerich said. “I’m very positive that all these issues will be resolved.”

County officials give Mangerich high marks for efforts to make the system more open and accountable. It was she who told them about the billing issue, Richard noted.

John Pilcher, the city’s chief operating officer, said Mangerich’s political skill was one of the reasons she was hired – with input from county officials.

Pilcher said Mayor Dennis Hession has directed him and Mangerich to “look at options that might address the areas of concern.”

For starters, he promised the “arm’s length” audit commissioners want.

“We’re really committed to a trusting and fruitful, productive relationship,” Pilcher said. “If there are things that we are not doing right, I hope we will get a chance to fix them.”

Failure to resolve the system’s political problems could result in its disintegration after the waste-to-energy plant’s bonds are paid off in 2011 and contracts with the county and smaller cities expire over a period of several years.