The conversion of Spokane’s solid waste fleet from diesel fuel to compressed natural gas met some resistance in City Hall this week, as City Council President Ben Stuckart said the “emergency” request for $2.8 million to buy new trucks stemmed from unrealistic promises he and other city leaders made regarding utility rate increases.
“If we can’t afford, under this current rate structure, to buy this product we need, then we need to re-evaluate it,” Stuckart said. “We all made this promise, and I’m not just blaming this on (Spokane Mayor David) Condon. Maybe we need to evaluate the promise.”
The “promise” to hold the annual utility rate increase at 2.9 percent led to Stuckart opposing this week’s funding request for 12 new trucks. About $1.7 million was budgeted for new trucks in November, but the department asked the City Council for permission to take money from its reserves to pay for the $4.5 million purchase.
The request was approved by a 5-2 vote. Stuckart and Councilwoman Candace Mumm voted against the request, which is called an “emergency” because it was not in the annual budget approved by council late last year.
Stuckart said the unbudgeted funding request is the result of the city’s goal to not increase utility rates by more than 2.9 percent, which he said is “backing us into a corner. We’re actually not living within our means by dipping into our reserve account.”
Stuckart said the rates may need to rise to 3.1 percent to protect the department’s reserves, which is essentially its savings account. The recent request depleted the department’s reserves to about $9 million. Reserves for solid waste should be between $9 million and $12 million, said Ken Gimpel, assistant director of the city’s utilities department.
Brian Coddington, the mayor’s spokesman, said Condon would not raise utility rates above the cost of inflation, which has been determined by the city to grow annually by 2.9 percent. He added that the department’s reserves will be back to $12 million in 10 years, based on “the current commitment of 2.9 percent growth.”
“The mayor is committed to directing excess revenues from 2015 into reserves to rebuild them and keep budget growth to the cost of inflation,” Coddington said in an email.
Purchasing the new trucks has been part of an “open discussion about how many trucks were needed and how to pay for them,” Coddington said. “The city is trying to be efficient and economical with the purchases as it steps into a manageable fleet replacement strategy. It is anticipated that future purchases will be budgeted. … Converting the fleet to CNG trucks is environmentally responsible and fiscally responsible. The city expects to save about $1 million a year once the entire fleet is converted.”
While Stuckart supports the fleet’s conversion to natural gas, he said this is the third year in a row the department has come to the council asking for extra funds to pay for the purchase of new trucks.
By 2026, the city’s entire solid waste fleet will be converted, and 80 trucks will run on the clean-burning fuel. Currently, 20 trucks have been replaced, and the recent funding request will purchase 12 new trucks. Gimpel and others say the plan is to buy 10 new trucks a year until the fleet is entirely converted. Stuckart said recent budget projections from city staff include no new truck purchases until 2019.
Aside from environmental benefits, the new trucks are under fewer regulations than those that run on diesel, and they will reap fuel savings over their 10-year life spans, Gimpel said. A 10-year projection estimates each truck will save $20,000 in fuel costs every year.
“One of the obvious reasons is the fuel cost savings, which we’re not recognizing right now with the fuel pricing dropping the way it is,” Gimpel said, adding he expects fuel costs to switch course and rise again. “There are less emission controls because it’s a clean-burning fuel.”
The conversion is part of a larger city plan that’s already in progress. The anticipated savings are already part of the city’s financing for the Central Service Center in the Chief Garry neighborhood, which opened in August and will eventually house and maintain the city’s entire fleet.
The solid waste department is also working with a consultant in a “route optimization” study, which will conclude with computer tablet technology being installed in the vehicles, guiding drivers and allowing them to report missing bins and blocked streets, among other issues. The department is also looking into reworking how to collect residential and commercial waste more efficiently, but Gimpel said the city is committed to remaining on a five-day schedule.
Councilwoman Amber Waldref, who leads the city’s Public Works Committee, said she supported the emergency request for funding, but wanted next year’s purchase to be written in the budget and not come from the department’s reserves.
“It wasn’t exactly clear that this is what we were going to do at the beginning of the year,” Waldref said. “I understand that we have some trucks that need to be replaced. I’m comfortable with this purchase, but I do think that we need to have a plan moving forward.”
Councilwoman Lori Kinnear echoed Waldref.
“That’s a lot of money, and I know that in the past this has not been budgeted for but taken out of reserves,” she said. “It is my understanding that reserves are rainy day exceptions, not something that we routinely take money from to pay for capital or, in this case, trucks. I have severe concerns about this. In the future, I would like to see this budgeted for in the beginning of the year.”
Stuckart has expressed support for the work being done in solid waste, but he has bristled at the finances before. His concerns came into sharper focus Monday.
During the vote, Stuckart twice said he would support the funding request. But after detailing his opposition to the request for more than two minutes, he switched his vote.
“I am tired, and this is the last time I’ll dip into reserves to pay for vehicles that should’ve been budgeted,” Stuckart said. “It seems like the story shifts and shifts every single year when we’re buying capital items. If we are going to be stuck continually depleting our resources, then maybe the 2.9 percent that everybody keeps sticking to is not enough. When you try to make things fit and dip into your reserves in order to stick to a promise that was made four years ago, maybe you shouldn’t have made that promise. I’ll vote for this, but I am not dipping into reserves to pay for these kind of expenses …”
Stuckart paused before adding, “It really sounds like I should vote no.”
Moments later, he voted no.