Advancing intelligent waste management
solutionsPerformance and Financial Audit
Preproposal Conference
June 24, 2008
Attendees: Russ Menke, Acting Director, Spokane Regional Solid Waste System
Suzanne Tresko, Recycling Coordinator, Spokane Regional Solid Waste System
Tia Tauscher, Secretary II, Spokane Regional Solid Waste System
Bill Wedlake, Regional Solid Waste Coordinator, Spokane County
John Maxwell, HDR
Ross Kelley, HDR
Tammy Erickson, Moss Adams
Theresa Jurotich, CDM
David Howe, HF&H
Peter Moy, FCS Group
Via Conference
Call: Bob Hilton, HF&H
Susan Van Huser, Clifton Gunderson
Kevin Ginger, Boldt, Carlisle & Smith
Walt Davenport, MSW Consultants
Q. Will there be an oversight board or steering committee?
A. There is an oversight committee which is comprised of 4 members of the Spokane Regional Solid Waste Liaison Board. The Liaison Board consists of 6 members: 2 City of Spokane Councilmembers, 2 County Commissioners, 1 Spokane Valley Councilmember, and 1 regional cities representative.
Q. What is the makeup of the oversight committee?
A. 1 Spokane City Councilmember, 1 County Commissioner, 1 Spokane Valley Councilmember, and 1 representative from the regional cities.
Q. What is the budget for the Spokane Regional Solid Waste System?
A. Approximately $50 million per year.
Q. Has the County identified specific issues or concerns about efficiency or cost allocations?
A. There have been concerns about having the garbage
utility and the Regional System managed by the same person and reporting to the
same person, and concerns about interfund transfers.
Mr. Menke explained that while the City
collection utility, department 450, is part of the System for purposes of
financing, originally they were managed by 2 different directors. The City
collection utility staffs the waste to energy and transfer stations on behalf of
the System, department 449, so a significant portion of the System budget goes
to the City collection utility for operations. Approximately 10 years ago the 2
departments were merged and a single director managed both departments. The
departments have now been separated and there are 2 directors, although both are
employees of the City of Spokane.
Q. The scope references maintenance and operation. Is the target more on
just the efficiency of which those are being conducted? The consultant needs to
evaluate whether it’s being maintained and operated to its utmost efficiency.
A. Yes, the issue is, is there a better way of doing
things within the confines of the interlocal agreement? Are there things that
should be done differently?
Q. Has the interlocal agreement been changed?
A. I believe the last amendment was approximately 1989, so it’s been the
same agreement since before the plant was built.
Q. Who audits interfund transfers?
A. The finances of the System are audited as part of
the audits of the City’s books. There was a finding about 1 year ago that some
of the transfers should have been done differently, and some changes were made.
Q. Are there federal or state grants operating, or could be in the
future?
A. Not that we are aware of. However, the primary reason that the City
of Spokane owns the facility is because of significant state grant funds that
were available for the construction of the System provided it was publicly
owned.
Q. When you talk about administrative services are
you talking about City overhead as well as departmental administration?
A. Probably yes, but we won’t know exactly what we want . He thinks that
as this project evolves the direction will probably change because if we see
problem areas, that is something we would focus on.
Q. Item # 2 in the scope says Review the System’s maintenance and operations and any other major services and programs funded by the System. Is this again where you are really looking for efficiency and effectiveness of that area?.
A. Yes
Q. Item #9 of the scope talks about the ebb and flow of communication to
and from the System, stakeholders and the public. Is the communication a
dysfunctional process right now, and if so in what categories?
A. Mr. Menke likes to think it is getting a little
better. We had a previous director for a number of years who considered this to
be “his” System and he felt he was responsible for it, and it wasn’t other
people’s business. As a result there were numerous occasions when communications
between the City and the County or between the System and the Solid Waste
Advisory Committee were dysfunctionalat best. What we are trying to do is to
reestablish communications. We are having a lot more meetings, and being a lot
more open with the information we have. Anybody who wants to look at the books
is welcome to look at the books. We are not trying to hide anything. That is
what this project is about. We want to be open and transparent. If the System
is doing something wrong or the City is doing something wrong, they want to do
it right.
Q. When was that director overseeing the System?
A. He was overseeing the System for a number of years until about a year
or twoago.
Q. Within Item #5 you want to be compared to other
facilities. Do you have a number of facilities you have in mind that you want
to be compared to?
A. Two or three. If we are looking at facilities of this size within the
U.S., there are probably not more than 2 or 3 of them.
Q. Do you have an organizational chart?
A. We do have an organizational chart. We can distribute it with the
answers to today’s questions.
Q. Of the 98 people at the collection utility that work on behalf of the
System, is all their time dedicated to the System, and if not what is the
procedure for allocating their time?
A. He believes all those people are full time allocated to the System
budget. It is pretty clearly delineated which people work for the System and
which work for the solid waste department. There are a very few exceptions.
For example there is an accountant whose time is allocated 45% to the System,
45% to the collection utility and a small percentage allocated to other
utilities.
Q. Why was the decision made to have those people operate the facilities?
A. The reason was that the Solid Waste Management Department was
operating since probably the 1940’s. As we phased out the landfill and started
up the facility, they had the people, and the people with truck driving
licenses. They basically were an operating entity. The decision was made that
we would never staff the System, but be a core group that administers
contracts. So while we do things like the recycling education programs, we the
System, do not operate any of our facilities. All of the operations are
contracted. Wheelabrator operates the waste to energy plant. Rabanco operates
the landfill that we use. With the exception of those contractors, all the
other operations are done by Department 450 on our behalf.
Q. Is the System officially a department of the City of Spokane?
A. Yes, it is officially a department of the City of Spokane.
Q. Are you primarily looking at the System itself and separating the
collection Activities, or do you want to look at both together? How are you
visualizing that process?
A. The collection side won’t be a part of this at all, only to the degree
to which those who work for that department charge our budget numbers. So they
are doing work on behalf of the System. The collection system itself is not
part of the evaluation.
Q. You said you don’t want this to be an audit or classified as an audit,
but you said you want the same methodology, can you elaborate?
A. We don’t intend for this to be a typical financial audit where you
review financial statements and see that the results have been presented
fairly. It is not that type of audit. It really more of a review to see if
there are things that should have been allocated differently?
Q. It is more of a performance audit?
A. Yes.
Q. Do you want us to adhere to government auditing standards, or is this
more like a consulting engagement?
A. It is more of a consulting engagement. It is not to replicate, for
example, efforts made by the State auditor’s office that audit the records of
the City. It is not meant to be a duplicate of that. We are not looking to
assign blame. The purpose of this audit is to make sure that everyone is
comfortable with the way it is being operated and to make sure that if we are
doing something wrong, that we do it right in the future.
Q. Has old landfill remediation all been completed and are those costs
being paid through the System.
A. The
County and City each had their remediation costs. The County got the
maximum allocation they were allowed under the interlocal agreement and the
City, he believes, still gets a periodic payment to make it equal to the
payments the county received, but for the purposes of the System the preexisting
landfill costs for the City and the County were specifically excluded from the
responsibilities of the System.
Q. Are there any page limits on the proposal?.
A. No we have not put any formatting restrictions on the proposals.
Q. In addition to the organizational chart, can we get some financial information related to the System.
A. He can get the budget presentation that was given at the end of last year that will show what the budget is for this year.
Q. Will you be distributing that to everyone on the list?
A. He will distribute that to everyone electronically. We also have on our website our annual report. It is not like a typical financial annual report, but it is a summary of activities of the System. It will give people a flavor of what the System does and what services we provide. www.solidwaste.org.
Q. Outside of that are there any other documents that you feel would help people get a better understanding of the System?
A. He can’t think of any, but he is sure eventually whoever wins the contract will want to get into the City’s budgeting process.
Russ Menke will be the primary contact for this project. If you still have any further questions, you can send them to Thea Bremer at Spokane City Purchasing, or you can send them to Mr. Menke at Rmenke@spokanecity.org
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