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2014, 02-27 Special Regional BOCC MeetingMINUTES Special Regional Meeting Spokane County Board of County Commissioners Spokane Valley City Council Thursday, February 27, 2014 5:00 p.m. — 8:00 p.m. CenterPlace Regional Event Center, Great Room 2426 N Discovery Place, Spokane Valley, Wa. Attendance: City of Spokane Valley Dean Grafos, Mayor Arne Woodard Deputy Mayor [arrived 5:50] Bill Bates, Councilmember Chuck Hafner, Councilmember Rod Higgins, Councilmember Ed Pace, Councilmember Ben Wick, Councilmember Staff: Spokane County Al French, Chair Todd Mielke, Vice -Chair Shelly O'Quinn, Commissioner Mike Jackson, City Manager Eric Guth, Public Works Director Cary Driskell, City Attorney Erik Lamb, Deputy City Attorney Morgan Koudelka, Sr. Administrative Analyst Mike Stone, Parks & Recreation Director Mark Calhoun, Finance Director Carolbelle Branch, Public Information Officer Chris Bainbridge, City Clerk Spokane County Staff Marshall Famell, Chief Executive Officer Kevin Cooke, Utilities Director Bill Wedlake, County Utilities Bruce Rawls, County Utilities Others in Attendance: Jim Wavada, Environmental Planner, DOE Ken Gimpel, Spokane City Regional Solid Waste Various Elected Officials and Staff Members Commission Chair French welcomed everyone to the meeting and called the meeting to order at approximately 5:10 p.m., and noted all three Commissioners were present. Self- introductions were given among those seated at the tables. Noting a quorum of Councilmembers present, Mayor Grafos also called the meeting to order at 5:20 p.m. Commissioner French stated that tonight is an opportunity to bring everyone up -to -date and to go over the history of the issue. Per his PowerPoint slides, Mr. French gave a quick look back leading up to how we arrived at our present position; said the bonds were paid off in 2011 at which time they entered into an agreement with the City of Spokane to provide enough time to evaluate how to move forward; he said the current agreements expire mid November 2014; said that for the past three years they worked on various approaches to determine the best way to move forward as a region; at the two -day summit (February 2011) it was decided to pursue the Solid Waste Alliance option; he said they spent about a year putting together a governance structure which was a result of everyone's input on what they wanted to see in this Alliance; and said it was determined that more of the jurisdictions wanted to be in the decision - making role regarding the future of solid waste; that from the County's standpoint, state statute directs Spokane County as the jurisdiction for solid waste and they wanted to pursue a regional governance model; but since more jurisdictions wanted to be involved in decision making, the agreement was not signed on by a majority of jurisdictions; he said they heard a variety of different reasons, but one thing they heard most was jurisdictions didn't want a system controlled by members that they didn't vote for. Mr. French said there were fourteen different people on the board and only one from their own jurisdiction, so there was Special Regional County Solid Waste Meeting: 02 -27 -2014 Page 1 of 10 Approved by Council: 03-11-2014 no way to change the direction or have a meaningful impact if system was going in wrong direction; he said they also heard that they wanted the County to take the lead on this since the Board of County Commissioners are elected by all, and that this way gave people a greater level of comfort; so the County stepped back ; and but the question was, if the County is taking the lead, how to do that and still allow jurisdictions to participate. Mr. French said the County, Spokane Valley and the City of Spokane hired the engineering firm of HDR to study options; and a new opportunity for all in terms of determining if the current system regarding the Waste -to- Energy Plant (WTE) is the best overall; or if there were other models to look at; and he said all agreed with the need to have someone with greater expertise; so they partnered to provide that study; and he said there was good debate about the different options in the study. Mr. French said the County selected the option of purchasing the transfer stations and continuing to use the WTE facility for at least a seven year period; and the reason for the seven years was that the City wanted the County to continue to direct its flow to the WTE; he said the initial proposition was we'd give you the transfer stations for $1 but they wanted a long -term commitment from the County that the flow would continue to go to the City. Mr. French explained that the County was not comfortable with that and felt they wanted flexibility to examine other options; so through negotiations they ended up reducing the time period from the original twenty years to seven, with a three year option for an early out. He explained that since the time period shrank, instead of getting the transfer stations for $1, they negotiated and agreed to purchase the transfer stations for $9 9 million amortized over the seven -year period; so every year the pay down would be the same as they looked to retire the cost of buying the transfer stations. Mr. French pointed out that in response to the underlying question of doesn't it seem as if we are paying for those transfer stations twice, he said the answer is yes. He said as noted in the interlocal agreement, when the City of Spokane agreed to carry the bond for the debt of the facilities, that was at the end of the term of the bonds, and the assets would be the property of the City of Spokane; so the City ends up with the WTE and the two transfer stations; Commissioner French said from County's standpoint, was there was the option of engaging in the essential public facilities process and trying to find a new site for new facilities, which would have cost $22 to $25 million; or instead does the County agree to purchase the existing facilities for $9.9 million; and said that due to timing and keeping in mind the cost to ratepayers if the public facilities process were followed, the County agreed to purchase the transfer stations from the City of Spokane; so the new agreement would be effective November 17, 2014; and at that point the County would take over the operation of the transfer stations. Concerning the operation of the transfer stations, Mr. French said they have issued an RFP (request for proposal) to bid on the operation of the transfer stations. Commissioner O'Quinn went over some of the current activities; she mentioned the RFP is due the end of March, which will be followed by proposal review and then selection of a contractor, which is anticipated to occur about July; she said a draft interlocal agreement was sent to all jurisdictions and the Board is open to meetings with municipalities and suggested any that are interested in such a meeting to please contact her. She mentioned last Monday's meeting with the City of Spokane Valley; and said that last night she met with the five smaller jurisdictions in Southeast Spokane County, as well as with Mayor Rushing. Ms. O'Quinn said the process is underway for them to select a consultant to complete the Comprehensive Solid Waste Management Plan which is required as part of this process; said they are looking at the development of the required programs to be included in this such as recycling and education, and along with all this, she said they will be conducting a rate study; she said they will be retaining a financial rate consultant who will examine alternative rates. Ms. O'Quinn went over the "pie chart" showing the different gate fee components (see attached). She mentioned the current gate fee is $103.00, and based on all their current estimates, they will be able to beat or meet that price; she said the gate fees at the transfer stations account for about 25 -30% of the cost of outside garbage service, so a $10.00 difference in the price for the gate fee would only result in about a 50¢ difference in a monthly bill. Special Regional County Solid Waste Meeting: 02 -27 -2014 Page 2 of 10 Approved by Council: 03 -11 -2014 In looking ahead at the next twenty years, Commissioner Mielke stated that we all share the same goals, which he explained are (1) to provide a seamless transition to the new system; (2) retain a region wide solution for the management of solid waste, which means keeping the cost down and maintaining predictable and consistent customer service; (3) in the future, other transport disposal options will become available (4) the agreement between the County and the City of Spokane has an early out provision giving an added measure of flexibility; i.e., it is a seven year agreement with the option of termination after three years; and (5) the City of Spokane will likely consider evaluating other disposal options in the future. Mr. Mielke said that there is great bargaining power with 300,000 tons per year; that it is a complex system and to his knowledge, the City of Seattle is the only city that has gone on its own. Mr. Mielke said he feels they can leverage more benefits as a group than alone. Mr. Mielke compared this draft interlocal with an interlocal between Spokane County and the City of Spokane Valley concerning wastewater, whereby a committee was formed to study rate setting based on a set criteria, which is specifically designed to protect our general funds as no one can afford to tap those funds should miscalculations occur; and that both the County and Spokane Valley participated in rate setting. Mr. Mielke mentioned that a committee was formed specifically to address the rates for the community based upon set criteria; he said the objectives of the advisory committee for wastewater it to make sure that it sets rates to make sure there are sufficient funds to make all the bond payments, to have a bond reserve, and to meet the operational needs of the entity. Similarly, he said the state law mandates a SWAC (Solid Waste Advisory Council), and they talked about reconfiguring that committee so it shares some of the responsibilities of the wastewater advisory committee. Mr. Mielke said the goal is to see if there is philosophical alignment on how to move forward and to work out those details, and while working under a very tight deadline. Mr. Jim Wavada, Environmental Planner with the State Department of Ecology (DOE) Spokane Office, emphasized that collection and disposal is a very small part of this large system, and it is his job to ensure that every plan meets the very specific objectives, some of which deal with recycling, diversion of household hazardous waste into a separate system, and an on -going education program; he said that the Department of Ecology is required to direct the technical assistance; that according to RCW 70.95.010, "state, city and county governments must fully implement waste reduction and source separation strategies to dispose of remaining wastes in a manner that is environmentally safe and economically sound; and that County and City governments assume primary responsibility for solid waste management and to develop and implement aggressive and effective waste reduction and source separation strategies." Mr. Wavada said this is a challenge for anyone wishing to undertake their own solid waste system; and a typical plan could cost between $80,000 and $200,000 depending on the complexity of any one system. He stressed that none of these elements are inexpensive. He said the deadline for any jurisdiction to make a decision about going their own way is March, or right about now; he encouraged all jurisdictions to make a decision this month; and said he is available to meet with any jurisdiction should they like more information; and said if a jurisdiction is planning to do their own plan, that plan should be on his desk by now. At the request of Mr. French, Mr. Wavada went over the requirements of having one's own plan, and the prerequisites are for such a plan, and what a plan must include; including documentation in the plan of contracts with an entity that will be moving the waste; he said the plan must also cover a five year implementation plan as well as a twenty -year long term look; an entity must have adequate facilities, and the plan must be submitted to the Department of Ecology for a 120 -day review, after which he sends any question back for further clarification; and then he has another 90 days for further review to determine if it meets the state law minimum requirements, and if so, a letter is issued for approval or denial; so at the latest, said he needs a preliminary plan prior to November 17. Mayor Rushing said that he has a problem with the transfer stations and the purchase of them; and he asked what incentive does the City of Spokane have to be on this system because now they have the Waste to Energy Facility, they do their own collection and can set their own fees within the City of Spokane, plus they get $9.9 million for two facilities they really didn't need. Mr. Ken Gimpel explained that the City of Spokane is committed to a regional system; the City of Spokane has built this system and Special Regional County Solid Waste Meeting: 02 -27 -2014 Page 3 of 10 Approved by Council: 03 -11 -2014 has provided nationally - awarded service for 23 years; he said this system is probably the most sophisticated and has the nicest, largest, and most accommodating facilities between Seattle and Minnesota; he said they are committed and that's why they worked so hard to come up with a system that is seamless, and that they worked diligently with the County to make sure the system continues in the future; and in the interlocal agreement, he said they set a mandate to make sure they provide similar rate structures; he said they want the system to remain identical, and that on November 18, 2014 they don't want any citizen within the County to realize that anything has changed; he said the City of Spokane is fully on- board. Mayor Rushing asked if the commitment level is so high, why the $9.9 million to purchase a facility that the residents of Spokane County have already purchased; why didn't the City of Spokane simply maintain ownership and do what the County's going to do, and contract out for an operator; he said that would have saved the county residents $9.9 million. Mr. Gimpel said that the City does not have that unilateral authority outside its jurisdiction; he said that authority that was granted to the County was delegated to the City of Spokane to the regional solid waste system, which he said is his department; which they accepted; and said when that interlocal agreement ends, that is no longer their decision; he said someone has to have their name on that title, that the City of Spokane owns those assets; he said that the City of Spokane equates to half of the County, and everyone is subsidizing everything to have a unified system. Again Mayor Rushing asked why not have the City of Spokane authorized to contract out for these services, and thereby save the citizens the $9.9 million purchase price. Mr. Mielke said that would be going against what was determined in this room in 2011, when all the jurisdictions got together and said they wanted to have a bigger role in the daily operational decisions and rate setting oversight of the solid waste system. Mayor Rushing said that was when the City of Spokane said that they owned everything. Mr. Mielke said that was what the agreement of twenty years ago stated, that it's important to reflect on the history of the community at the time; the issue was there were landfills in this region declared a superfund site, and landfills that were being used were about to capacity; the public support for locating a new landfill was extremely low; so an alternative had to be found; so those electeds investigated waste to energy technology; and with that technology came a big price; and the City of Spokane was the only jurisdiction in this region with the financial ability to fund that technology. At that time, Mr. Mielke stated, those elected officials signed an interlocal agreement where the County was no longer the lead in solid waste management, but rather authorized the City of Spokane as that authority; he said the meeting that was held in 2011, jurisdictions loudly voiced their desire of having more involvement and say in these operational decisions. Mr. Mielke said the message the Board got was that the jurisdictions did not want to continue another twenty -year period under the same structure; he said they have been working for three years to devise a different structure; and that the deadline wouldn't allow starting over from scratch for another option, even if the Board wanted to. Mayor Rushing asked, which he said he asked three years ago, if we have paid off the assets, why aren't the tipping fees decreasing; so now we're going to justify keeping the same price or maybe a bit lower because now we have to pay another $9.9 million for something that was already paid for. Mr. French replied that at the two -day summit three years ago, a thorough presentation was given about the structure of the system, as well as a projection of what the cost would be; he said when he was with the City, he too heard that once the bonds were paid off, the tipping fees would be lowered; and he said that was what he expected but in fact, Mr. French said, they lost their renewable energy credit, and when that happens, the revenue they were making by selling that electricity, went away; and he said now the revenue is half of what it was; he said that cost had to be reflected in the tipping fee; he said that the projection three years ago was that we would be paying $143 a ton tipping fee; but through the City re- organizing its fees; it has been able to maintain a $103 a ton tipping fee at the transfer stations; and the County has entered into a seven year contract with the City of Spokane that provides for incremental increases based on the CPI (Consumer Price Index) over that period of time so it will be a long time before we hit that $143 a ton. Mayor Peterson asked what would be the benefit to the partners in seven years once the transfer stations are debt free. Mr. French acknowledged the benefit at that time would be a reduction in rates. Mayor Special Regional County Solid Waste Meeting: 02 -27 -2014 Page 4 of 10 Approved by Council: 03-11-2014 Peterson asked if that reduction in rate of about $40 a ton would be included in the interlocal agreement, and Mr. French said yes; he said he understands the authority of the SWAC in setting fees; and said if there were ten or sixteen people on the board, and those partners in the minority said they wanted to pay $40 less while the others said they would collect the extra $40 and put it wherever they want to, then those in the minority are out and won't get the benefit; and said he doesn't want to fmd himself in the same situation as years ago with not owning anything. Mr. Mielke said the objective for the SWAC is to achieve the lowest possible cost, provided that the bonds are paid for, there is a bond reserve, have sufficient maintenance and operation cost as well as a maintenance and operation reserve; and the purpose of those objectives is, if you ever come up short the partners do not want to have to access their general fund; and similarly, the current draft interlocal agreement is an opening discussion point; and said it needs more specificity concerning the role of the SWAC when it comes to rate setting, and make sure that the role of the SWAC is to achieve the lowest possible rate. There was a question if all the funds would be considered enterprise fund, and Mr. French replied that is correct; that it will not be part of the general fund of the County but would be a separate e enterprise fund, which is a completely stand -alone fund. A question was asked about how administration and overhead would be addressed. Mr. French said he would have to get back to the group regarding what is the most efficient way to structure the administrative side of this; and he gave human resources services as an example, and of the possibility of contracting out for those services; and said that philosophically, we all want to get the best service for the best price; and that is why they issued an RFP for the operation of the transfer station and will be putting out the RFP on several other elements in order to test the market and validate the pricing. In response to a question of why couldn't the City just continue to do this and contract out the work and thereby save money, Mr. Mielke said they can't because the Supreme Court rules that is not permissible; he said it was in response to a conflict with the Community College and janitorial work; and the Supreme Court ruling found that any work that has been traditionally done by the employees of that jurisdiction, cannot be contracted out; therefore, he said the City of Spokane doesn't have that option; but because Spokane County has never had employees engaged in this type of work, the County can contract out for these services. Mayor Rushing asked if the commitment was so great by the City of Spokane, knowing that the transfer stations were already paid for by all county residents, why didn't they just sell it to the County for $1 each, instead they are now putting a $9.9 million bill on the backs of county residents again. Mr. Mielke said he sat through some of the City of Spokane's meetings, and he feels they believe that in the last years, they took on the financial risk to finance the system on behalf of all the jurisdictions, and that the compensation for that risk is ownership of the asset; and he said that was the understanding 23 years ago when the interlocal agreement was signed by the elected officials; and was the understanding of all those elected officials who signed that agreement. Mayor Rushing said that the City of Spokane was taking on the risk and they therefore benefitted from the $3 million a year that they were getting from the renewed energy sources. Mr. Mielke said the issue is, at the end of the day, one jurisdiction has the assets that they didn't have to sell; from the County's perspective, the county's options according to law are to be the lead organization on a solid waste plan and have transfer stations in place; and said if they had to go through the essential facilities process, it would cost between $20 to $25 million to build two transfer stations. Mayor Grafos said he feels the $9.9 million is water over the bridge; that during the discussions held three years ago, everyone said if we want to continue this system, we want it to be competitively bid and that the City of Spokane's WTE plant would become a vendor; so now the County because of the stance of the City of Spokane insisting that they are a vendor as well as the exclusive agent and will control the system, the County has no options and had to buy the transfer stations; and said there really isn't any option for any of the other municipalities to give a lower cost; the HDR study had about five options; and the difference between using the WTE and long haul was about $30 million over ten years; and said that option is no longer available. Mr. French said that isn't correct. Mayor Grafos said that the County is not going to bid this because the only way the transfer stations were sold was if the system used the WTE Special Regional County Solid Waste Meeting: 02 -27 -2014 Page 5 of 10 Approved by Council: 03 -11 -2014 plant for three years. Mr. French said what the County did in negotiations with the City was that they negotiated for a three year period for an early out; so alternative disposal systems could be bid out and challenge the numbers for long haul to see if that would be cheaper; said they bought that three -year window of time in order to be collaborative and not rush to judgment; and said if long -haul is going to be the best, then at the end of three years, they'll have the ability to go long -haul; and the contract they have with the City is, that they fully expect to be able to go out with RFPs for long haul as an ultimate solution as well as the opportunity of maybe doing long -haul for the by -pass in a different configuration than the one used currently, which all that goes through the valley now. Mr. French said that the Burlington Northern Railroad informed them that if we tried to direct all the County's solid waste through the valley's facility, the railroad would get stressed and wouldn't be able to handle 135,000 tons; so how do we put in the necessary infrastructure to be able to handle 135,000 tons; and said that is what they are committed to and negotiated into the contract; said they don't differ regarding where they want to end up; just getting there incrementally. Mayor Grafos asked about options if the City did opt out after three years. Mr. French replied that we would be bidding out that 135,000 tons that come from the rest of the county; and that's what we'd be bidding out to go long haul; he said they'll test those numbers; and said he feels the City would be interested in testing those numbers as well and that the City told them that having the option, forces them to be competitive because they know the county will bid long haul, and if they can't be competitive with long haul, then the County deserves to go; and said that would then create another conversation with the City of Spokane and their rate payers; he said if they can prove that long - haul is the more financially cost - effective method, then the City rate payers would be questioning why they'd be paying more for a facility that they already retired the debt on. Mr. French said if partners want to include a timetable in the interlocal, to make sure it gets bid out, then he is open to that conversation; and said that's what they wanted to do anyway. Mr. French said the agreement the County has with the City is a public document, and that they will distribute copies to everyone tomorrow; and said he feels fundamentally they want to go in the same direction and end up at the same place. Mr. French said the goal is to have one uniform interlocal agreement; and hope there will be commonality in terms of concern which can be addressed; and if not, we'll deal with that as it appears; he said the City of Spokane Valley had some suggestions to add to that agreement; they hope to get further suggestions and have another rendition to distribute, and then get final agreement that everyone can embrace; with a reminder that time is critical, and he would need comments as soon as possible in order to distribute the next version; and in this way, allow jurisdictions time to determine whether or not they will participate. Councilmember Hafner stated that one of the things that came up at their joint meeting with the County, was that an operations contract wouldn't be in place until late summer; said he feels that should be addressed by the County as Spokane Valley was asked to sign a contract without knowing what that's going to be. Commissioner French said they spent a year debating and trying to create the governance structure for the alliance, and he said that everyone was excited until they got to the end; so they had to step forward and try to fmd a way to challenge the figures; he recalled they put out an RFP for someone to come in and give them an analysis of all the different options as identified as a group, but there were no responses to the original RFP; and he said they lost about six to eight months of time in that process. Mr. French said they had hoped to have the interlocal with the City of Spokane completed last summer; and now they are here to meet the Department of Ecology's deadline. Councilmember Hafner asked what the penalty would be should the November 17 deadline not be met. Mr. Wavada said there is no penalty amount set in the legislation, but the statute 70.95.010 simply states that the service must be provided, and the next step would be the Attorney General filing suit in Supreme Court to compel you to either join a plan or write your own. Councilmember Hafner asked if the operations contract isn't back and we don't know the price, could the whole thing be postponed knowing that we'll have that data at a particular date, as there are some who would be hesitant to sign without knowing those costs. Mr. Wavada replied that he feels those are the type of issues that get addressed in interlocal agreements. Special Regional County Solid Waste Meeting: 02 -27 -2014 Page 6 of 10 Approved by Council: 03 -11 -2014 Mayor Grafos stated that we have a wonderful working relationship with the County with numerous negotiated, fair contracts, but said Spokane Valley is hesitant because it was our understanding that in three years time the City of Spokane would be the vendor and that competitive bids were going to be sought; but now we're up against the clock, and we're being pushed and being asked to "trust us." Commissioner Mielke said he hopes people recognize that they negotiated the best deal available to them. Mr. Gimpel stated that the neither the County nor the City has any legal responsibility to provide services to any municipality which is not a participant of their plan; the City of Spokane has committed by interlocal agreement to provide service at the Waste -to- Energy plant as a third transfer station for the county, for any participating jurisdiction. Mr. Gimpel said he wanted the City of Spokane Valley to understand that according to a report, last year there were 58,000 self - hauled transactions from Spokane Valley citizens; so when you are considering it's not just about garbage trucks but about citizens as well; and said you don't want to have interruptions for those citizens and that's what we're trying to eliminate; that's the thing about the decisions you're going to make, or if no decisions are made, whether those citizens have someplace to take their garbage. Deputy Mayor Woodard said it doesn't help any of tonight's situations to hold a threat; and asked if we going to have citizens that self -haul be refused at the transfer station; he said those kind of intimidations or threats don't aid in getting to an agreement. Mr. Gimpel replied that he didn't mean that to be a threat; that the City of Spokane and Spokane County will make their own decisions; he said it is not a matter of "won't" but more a matter of "can't." Mr. Gimpel said the garbage trucks pay the bills and they subsidize all those other individual services; and if those trucks go elsewhere so will the revenue; and said the City can't afford to give free services to people who aren't paying into that system; and said this isn't a threat but more of a matter of economics and how the system is paid for. Deputy Mayor Woodard said the fee to take something to the transfer station in Spokane Valley is $103 a ton; which he said isn't subsidizing. Mr. Gimpel said there is a minimum fee; and for every transaction, which averages 300 pounds, they receive $15.00 for that transaction, which is no way near paying for that transaction; he said when an eight -ton garbage truck comes in, the City gets $800; he said it is cheaper to handle that professional garbage truck driver than it is for someone pulling a trailer or truck, and helping them off -load. He said there is a fixed cost to provide all those services; and mentioned that there is no cost to drop off household hazardous waste, so that service is subsidized and most of that is being borne by the garbage trucks that deliver the waste to the transfer stations. There was a comment about not allowing people to drop off waste at the transfer stations; and the question arose, why can't they drop off and be charged a fee for doing so. Mr. Gimpel said under the current model, they couldn't afford to let them in, but could do so with perhaps a surcharge or a higher rate for those services; adding that free drop -off of household hazardous waste would not be offered. Mayor Rushing mentioned the $9.9 million purchase price, and Mayor Grafos added that the City of Spokane Valley offered to buy the transfer station but was told it wasn't available. Mayor Peterson asked what would be the long -term benefit to them; said he likes the deal the County structured with the City of Spokane for the facilities, as those facilities will continue to be an asset in the future; said concerning the interlocal agreement, he asked: what's in it for the City. Mayor Peterson said he spoke with Kevin Cooke and said that the small cities represent 10% of the garbage that is going to the transfer stations; and said he believes those cities share within that benefit; but when we're talking about real money available and a 10% interest into the facility; he said they are more than happy to participate, but clarified that he is not making a decision today; but said he wants some cash benefit for the city, because something will be done with those facilities at some point. Mr. French replied that if they put the transfer stations in the enterprise fund, so that if they got sold in the future the revenue from that sale would benefit the ratepayers within the enterprise fund, that would address Mayor Peterson's issue in terms of making sure that the ratepayers participating in the system get the benefit; and Mayor Peterson agreed. Commissioner Mielke said it is not the County's desire to turn anyone away; but they recognize they are not in a position to delay their decisions and wait endlessly for others as there would be liability for them to do that; that they have to come up with a business model effective November 18; and that regardless of Special Regional County Solid Waste Meeting: 02 -27 -2014 Page 7 of 10 Approved by Council: 03 -11 -2014 who shows up at the transfer station, we will know how much to charge them; and that there will be people to weigh them in and take the fee; so they have to build a business model and an entity that is running by November 18; and said they cannot wait indefinitely. Commissioner Mielke said he recognizes that many times in the past the County has delayed important decisions waiting for someone else and has suffered because of that; he said there is no attempt to make any threats, but if anything, they are pleading for understanding of the County's position in trying to meet the deadline. Deputy Mayor Woodard said he understands the County's position; as noted in the County /City joint meeting last Monday, the City of Spokane Valley wants to know what the rates will be, but they know the rate is $103 per ton; but also suggested the County needs to continue moving forward while Spokane Valley gets the final answers to some questions they have been researching and are pursuing; and that they would like the County to supply the information on what the rate would be with Spokane Valley, and what it would be without Spokane Valley; and those figures will be combined with their other research to help in Spokane Valley make a decision; and he said they can't make a decision without all the facts. Concerning the outstanding RFP, Commissioner Mielke said one of the things they have proposed all along is that the committee that will review those RFPs and ultimately assist in negotiating an agreement should include Spokane Valley's utility director; but if Spokane Valley is not part of the coalition, then there would be no need to have that director on the selection committee. Mr. Mielke said they have "penciled in" key people who are very knowledgeable to help us go through the process and reach those philosophical goals. Mr. Mielke said he hasn't heard anyone here tonight disagree with those goals; and he said he believes everyone is working toward the common goal. Mr. Mielke also noted that the majority of jurisdictions in this region do not have mandatory garbage pickup; and have a significant number of their residents who self -haul; he said if those people went to the transfer station, they would not be turned away; but there are other components of the system which cost money, and he mentioned the free drop off of household hazardous waste, and recyclables; and said we can't continue to provide those for free and someone not in the coalition to simply drop off their garbage at no cost; as that could jeopardize the general fund, or create larger fees for everyone else who would be subsidizing those who didn't have to pay for dropping off their materials. Commissioner French also noted that jurisdictions have the right to decide to go with this system, or another direction that meets the needs of their citizens. Commissioner O'Quinn explained Kevin Cooke and staff will take another look at addressing these issues brought up and will create a second draft interlocal; and she asked if there were any additional comments, to please make sure to call or e-mail Mr. Cooke so the second draft can be circulated the week of March 10t. Mr. French said the preference is to send an e -mail so the concern can be given in writing. There was some discussion about the various required elements of the plan, and of the ability to negotiate some prices; that just because all the elements are required, doesn't mean everyone must participate or use those elements; and there was additional discussion concerning the duties of the SWAC in recommending the minimum levels of service for the entire county; which costs gets defined in the planning process. Commissioner Mielke said they are now trying to edit the plan, to determine a minimum or base level, and to know how expansive the list of partners is; he also noted that each jurisdiction's relationship with their haulers and franchisers is not altered by this discussion as that remains under the authority of that legislative body. Concerning a previous comment about adjusting some of the elements, Commissioner French said that one of the cost factors is the independent hauler; said he knows that now the transfer stations are open a long time, and he said that we probably don't need them open that long so those hours can be adjusted to meet the needs of the patrons; and said that is just one example of something that can be discussed by members of the SWAC. Mayor Rushing asked who makes up that committee. [It was noted that Councilmember Hafner left the meeting at about 7:20 p.m.] Mr. French said one of the things considered in the interlocal, is to change the composition of the SWAC to include more elected officials. Mayor Rushing noted that in the past, some of the small cities wanted more input and to do that by means Special Regional County Solid Waste Meeting: 02 -27 -2014 Page 8 of 10 Approved by Council: 03-11-2014 of being on the SWAC. Mr. French said there must be representatives from certain sectors, as well as elected officials; and Mr. Wavada added that the statutes indicate a minimum but not a maximum; and that those meetings are open to the public. Mr. French noted that the legislative body that will make the decisions will be the Board of County Commissioners; however, they clearly want to expand the role of the SWAC in order to get better input from the jurisdiction partners. Mr. French said for example, in looking at this from the perspective of being in the system if there are eight partners and the system has been ongoing for three years; and we bid out long haul and determined that this is the best method and so we move in that direction which will mean a cut in rates by 20 %; for those jurisdictions not in the system for this first three year period, if they decide then to join, out of fairness to those already in the system, those not in the system would need to buy -in because the others would have retired the debt on the purchase of the transfer stations, while those not in the system initially, would not have done anything to contribute to paying off that debt; and said he is contemplating adding this to the interlocal agreement. He continued by explaining that the new partner coming in after three years, would have to pay their proportionate share as a means of catching -up, much like a late- comer's agreement; and the money they paid would benefit the others in the system; so the money stays in the enterprise fund but benefits those ratepayers who have been paying for the last three years; and he asked everyone to think about that from both sides: those in the system initially, and those who might want to buy in later. The question arose that if, conversely, a member who is in the system initially decided after a few years to leave, would that member be compensated, i.e. "bought- out." Mr. French said he doesn't have an answer right now; that it would be something to discuss; and at the present, the number of jurisdictions joining is still unknown; the desire is to make sure everyone gets treated fairly initially and throughout the process. Commissioner Mielke said that the transfer stations are amortized equally monthly over a seven -year period; and if we choose to end the partnership, we would owe the City of Spokane the balance of the cost, much like a balloon payment. A question came up about the gate fee, and if at the last minute, several larger cities such as Spokane Valley and Cheney decided not to participate, what would that do to the gate fee. Mr. Mielke replied that there are fixed costs as well as variable costs, which are dependent upon the volume of the system; and that it is difficult to calculate the price until we know the volume coming into the system; and with smaller volumes, the fixed costs are more expensive. Mr. Gimpel mentioned another possible source of funds are coordinated prevention grants; he said in Spokane County this is a two -year grant cycle; and currently, they are receiving $1.8 million, a part of which includes a base fee that every County gets, and the remainder is based on per- capita; so whether grants or tipping fees, there are the funds that they use to provide the services in the County; so as an analogy, the more cities that drop out, the less grant money is available to the County. [It was noted that Deputy Mayor Woodard and Councilmember Wick left the meeting at approximately 7:40 p.m.] Again, Commissioner Mielke said that once they have an idea of who is interested in being a part of this coalition or partnership, so once the scope and scale is known, then figures can be determined more definitely. Mayor Rushing said he realizes all concerned want the best services for the least cost; and said we would start searching for who can give the best price, but if we don't know how much the tipping fee will be, how would we know what the best price would be without having that tipping fee to compare with; or how would we know the tipping fee from the County is the lowest fee which would encourage entities to go with the system. Mr. French said he would not characterize the County and the City as vendors but as partners; he said the City of Spokane has an asset they can market as a vendor; if we end up coming in with a $104 price instead of $103, they would have the ability and flexibility to change the level of service to decrease that price; but until that partnership is formed, they won't know what all the prospective partners would expect in terms of level of service; and if they can collectively determine some economies of scale through the SWAC and define the level of service, and take advantage of any cost savings that might be available; then he said owning those transfer station gives them that flexibility. Special Regional County Solid Waste Meeting: 02 -27 -2014 Page 9 of 10 Approved by Council: 03 -11 -2014 Concerning the transfer stations price, that disposal component is a fixed established amount; and what the City of Spokane will charge at the Waste -to- Energy Plant, Mr. Gimpel said they are not anticipating any rate change whatsoever other than whatever annual escalation may be needed; and said again, this is a matter of trust. Commissioner Mielke said that every jurisdiction has the ability to issue their own RFP to see what the best price they can get; he said Spokane County issued an RFP, secured transfer stations, issued an RFP for the operation of those transfer stations; and the question that remains, if the City will issue its own RFP or join with the County; he's not sure why any jurisdiction would think their own RFP would result in any better price than what the County received; and said we tend to get a better price from the RFP with volume; and he said the process they followed under the law is supposed to get them the lowest possible price. Mr. French said as this new relationship develops, the question remains of what will we do with the ongoing liability of the landfill closures; that we all still have a share in that cost; so even if a jurisdiction pursued this individually, they would still have that ongoing liability to consider in any internal cost structure. Commissioner French said he has appreciated today's dialogue; and he thanked everyone for attending tonight as well as for attending the ongoing discussions over the last three years; and he asked for comments on the interlocal agreement as soon as possible in order to get everything wrapped up as soon as possible, and said if any entity wants to be part of the bid openings, or interviews, or any other part, to please let him know; and he closed the meeting. It was then moved by Mayor Grafos, seconded and unanimously agreed to adjourn. The meeting adjourned at 7:45 p.m. ATT Christine Bainbridge, ity Clerk Special Regional County Solid Waste Meeting: 02 -27 -2014 Page 10 of 10 Approved by Council: 03 -11 -2014 Spokane County's New Regional Solid Waste System Gate Fee Components • Some Components have not yet been determined • Disposal E71 Transfer Station Purchase • Transfer Station Operations Administration Landfill Closure 11=1 System Programs