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Wednesday, June 24, 2015

Washington County's $20 million dollar Public Works North Shop

The controversial Washington County Public Works North Shop renovation project is in the spot light. The initial budget was $17.5 million, approved in December 2014. Costs rose to over $20.5 million in February and came down the next month to what is a price tag of $19.7 million as of the Spring of 2015. This article is a running update on the project with posts on our Facebook page to notify you of updates in this article that was first posted in March (also posted below updates here).

April 20th update: Finally received response to request to view the plans with an offer to pay $1,313 dollars for copies to review. 

April 24th update: We opted to go in under for a supervised visit with the plans. 

May 26th: The County board voted 5-0 to approve the first mid project upgrade that is all too common in Washington County. This one is a 29% cost over run for a concrete apron on the Warm Storage building
to "reduce debris coming into the building"... a cool $15,444. 

June 23rd: (passed 5-0)
They forgot to include "general conditions" in the planning contract for the Public Works North Shop Construction Management services contract with Kraus-Anderson Construction. The oversight collectively nearly doubling the contract cost eats another $595,050 from the contingency fund.  

On July 14th
It wasn't in the approved budget or plans... Hold on to your wallets tax payers the County is discussing putting in a Solar Garden at the Public Works North Shop... Judging by the lack of solar gardens (locally) outside Government, rest assured these are a bad idea wrapped with good intentions and big price tags. No cost estimates yet. Stay tuned.

On July 21st
For some reason we got a massive $22,000,000 dollars from the State to take over just 8.3 miles of road from MNDOT. Instead of putting the money into road projects the public works department recommends spending most the funds on the Public Works North Shop. 

Not sure why we're getting that much money when the State is increasing County State Aid for the added mileage too.

Putting all this money into the North Shop instead of directly into roads may not make sense when our County Pavement Condition Index is an all time low as of the most recent rating:

There is no doubt the aging facility that houses public works vehicles and a small office needs to be replaced. What is of concern to tax payers is: why does it need to cost nearly $20 million dollars? Almost the same price as the newly constructed $22 million dollar Bielenberg sports Center in Woodbury that is by far larger in size and complexity with 320 acres, 36 ball fields, a splash pad, an outdoor refrigerated rink, two indoor ice rinks; 90,000 sq/ft  indoor field, plus 20,000 sq/ft two story lobby with future restaurant and lounge, plus 7,000 sq/ft training facility, plus 15,000 sq/ft playground; solar panels and geothermal heating etc... all designed to please the eye and safety needs of the general public (ie: landscaping, automatic doors, flat panel TVs everywhere, locker rooms, etc) Compare pictures and specs side by side from Pope Architecture and you can instantly understand why one would be confused with why these two projects are so similar in cost. (Granted many of the outdoor fields already existed)

we questioned the North Shop spending in 2013 when it was introduced in the now approved Capital Improvement Plan (CIP). we wrote about the shop as one of the contributors to the County debt (that has tripled in just those seven years): 

County Debt Tripled in the Last Seven Years, the Board Undeterred: Budget Passes

At that time, in 2013, the Public Works Northshop had a price tag of $17.5 million. The price was still $17.5 million when the County Board approved the 2015-2019 CIP in Mid December (p. 60 county source). Again at the January 20th County Board meeting when the final design was presented the cost was still $17.5 million (p. 291 county source) Yet in February we find out from the Star Tribune the cost peaked at $20.5 million. After the budget was reviewed and passed and after the Final design was approved. 

we emailed the Public Works Director Don Theisen inquiring why the costs for the project were so high in July of 2014 and he responded that the details of the design hadn't been made. we emailed the County Deputy Director of Engineering Wayne Sandberg how his department came up with the estimate... however, he refereed me to Theisen. We were stuck in the dark. Tax payers had nothing to gauge the North Shop Project budget on even if we wanted to voice concern at the December 2014 "Truth and Taxation budget hearing." The massive mysterious project passed in the budget unanimously the same month. 

One of two things happened: either tax payers were subjected to bate and switch by the Public Works department when they waited to include the known increased cost until after the project and bonds were approved.  Or the County Board was also willing to overlook the facts so it would pass the public in December when we could have spoke up. Whether this was a convenient oversight or intentional is unknown at this time.

To add insult to injury, when "the details of the design" were made and presented in the January 20th County board meeting we asked Theisen for the plans again. This was after the February Star Tribune article explained the cost was now up to $20+million. On March 4rth he kindly responded: 
"Project bids were opened yesterday.  When they are presented to the Board for consideration this will provide detailed, current, and accurate figures."

How comforting for us to finally be able to see the details of what we're paying for... AFTER the budget passes; AFTER the final design is voted on and approved; and now AFTER the bid to construct the project is accepted and locked in. 

We have a department of local government buying themselves a nice fancy building with (for all we can tell) a blank check signed and delivered by the rubber stamp of the County Board; we were not allowed to view the January 20th approved design under the excuse it is not current or accurate; and we'll only be able to see what we're paying for now that the contractor is locked in for the job to build the thing. 

We're beyond the point of no return on the North Shop Project with any hopes of scaling it back. Even if the building is scaled back in any way the contractor could sue for breach of contract... as they rightly could, for the interest of not wanting to have less income on a smaller project. There would have to be a completely new design that would cost literally hundreds of thousands in planning and new bids etc. 

Perhaps what's most frustrating for tax payers is the seemingly out of touch County Board:

“I have no concept at this point what the final cost of this build out is going to be,” said Commissioner Gary Kriesel in a Star Tribune Article

Again, the building does need to be replaced; however, that doesn't give you free license to build yourselves God knows what, refuse to show us the details, and get away with simply ignoring our honest concern.

It costs zero dollars to copy and paste the itemized costs etc into a pdf or power point... Just ask Cory Slagle the Washington County Roads Engineer. He does an amazing job of putting every road project detail online from bids to final payment online. He also arranges many open houses and public forums for the road projects he plans along the way. We've posted about this common sense service with thanks.

Please contact the County Commissioners to increase transparency and fiscal responsibility on this project. 651-430-6211 651-738-2425 651-430-6213 651-430-6215 651-430-6214

Sewer for the North Shop, from February 2015:

Tuesday, June 23, 2015

Washington County Projects Exceeding Approved Budget: Costing Millions a Year

Over the years we've covered over a dozen projects that have far exceeded the contracted amount. Costing tax payers millions a year to pay for what appears to be rubber stamped approval for the contract raises and changes. This is a running article adding discovered projects over budget to the list.

We covered this hard in the seven months leading up to the County's eventual response which was a "Workshop" on March 17th, 2014 to deal with the problem. It was reported in the March article:

Cost Overrun Workshop Reveals Cure is Worse than the Disease

In addition to forgetting the majority of problem projects... solutions for the under reported problem were equally disappointing. Ideas such as limiting public involvement and changing the amount needed for a contract change vote from $50k to $100k.

Apparently the problem persists as Washington County projects continue to run hundreds of thousands, if not millions above the contracted amount. This running article will keep you updated on what appears to be reckless approval of any raise request. Evidenced by no record of a single County commissioner vote against the changes. Yes some projects have work order changes for things like wider sidewalks than described in the contract; however in habit, these are equally disturbing. If projects are getting changed and upgraded as they go than design and planning costs escalate far greater than if they were in the original design. Showing evidence of a poorly planned project advertised as affordable and responsible. The practice has contributed to the:

County Debt Tripled in the Last Seven Years, the Board Undeterred: Budget Passes

A great example of this mid project cost hiking is the story we did on the

County Parking Lot Repave Goes $1.1 Million Over Budget in May

Also costing tax payers in May was: 

County Mistake Leads to $165,000 Settlement Paid by Forest Lake

For June is the County Road 19-20-22 project in Cottage Grove:
The nearly million dollar raise was approved by a vote of three to zero. Commissioner Weik, Bearth, and Miron voting yes. Commissioner Kriesel and Bigham were not present.

Also for June 2015, the County Road 10 project in Lake Elmo, $113,630 over budget for "additional milling". Fair to argue the contractor who perhaps underbid to win the job should absorb this 14% project cost increase... not the tax payers who were told the project contract was secured on a low bid process for the best value. Again, what's the point of the Contract if the County doesn't hold contractors to the price? (Approved by a vote of 5 to 0)

Tis the season, here's another June approval. This one for the CSAH 9 and County Road 9 project. The final cost over run for the project was approved on June 9th for a total of $161,952 over budget. (Approved by a vote of 5 to 0)

On June 23rd (passed 4-1, kriesel voted no... will follow up):
The rush to approve the $26 million dollar Resource Recovery facility buyout out was massively underestimated... we heard mention of the option for years and even wrote about it in a February 2014 article. In November 2014 we were the only ones to report that the Counties spent $850,000 tax dollars  on lawyers to fast track the process smooth as possible. The Cost has now doubled to $1.5 million for these consultants. Read the full article series starting with

On July 7th:
 Third time this "not to exceed" contract has "exceeded" it's original contract amount to ensure County back up systems have uninterrupted power for a supposedly flat labor rate. However, they need an additional $9,103 for "completing the additional corrective maintenance work"... What's the point of a contract?

August 11th, passed 5-0:
The original design contract with SEH for the (CSAH) 17/Old Lake Elmo Village project was $321,000, now it's $369,000 for a $48,000 raise. What's the point of a contract?

September 22nd:
The engineering contractor, SRF Consulting Group, for the County road 15 project in Lake Elmo received a $112,850 raise for no additional work. Work the County Engineer could have done. A 37% bonus.

October 6th:
Forest Lake Contracting for the County State Aid (CSAH) 17/Old Trunk Highway (TH) 5 signal project in Lake Elmo. 

Since the original contract in April they've had $42K in added costs for original contract items such as:
-correcting slopes (known cost)
-stripe work (known cost, not tax payers fault it had to happen over two days) 
-signal pole (if you quote "X" amount for signal pole, it's not the tax payers all the assumed pole locations would work... moving one two feet should be on the contractor)
-grade match walkways (again, not tax payers fault)

Contact your county commissioners to demand better oversight: 651-430-6211 651-738-2425 651-430-6213 651-430-6215 651-430-6214

Friday, June 19, 2015

The $170 Million Dollar Washington/Ramsey County Plan to Take Over Private Sector Garbage Processing

3-8-16: Washington/Ramsey County Garbage Processing Plant, 6 Months In; Failing? Counties Refuse to Answer.

9-22-15 update:
The County board passed the plan to begin organizing "waste designation" which is a county ordinance to force trash haulers to deliver to only the county run processing plant  p.272 of 9/22/15 board meeting (yes commissioner Kriesel voted in favor of it and the rest of the purchase package at the 9/22 board meeting. Just going to show his vote on 8-30 over cost concern was purely political pandering. 
See approval of 9-22-15 County board minutes at the October 20th board meeting.)
Even environmentalist are being ignored and lectured to. Check out Alan Muller: 

Here's where garbage is burned from Washington County:
In Red Wing and in Mankato. Local environmentalist and writer Alan Muller did the math and found over 3 million tons of the most harmful pollutants are put into the air every year from this according to the MPCA. No wonder why this harmful practice is being phased out everywhere... except here. The County weighed no other option and jumped in both feet with this:

8-30 update: The board passed the plan with the buyout of Newport plant for a slightly reduced price of $24.4 million instead of the supposedly "binding" $26.4 million from the two year long arbitration battle in court. RRT and their financier Merced Capital have not responded to state how this was possible. The vote passed 6-1 with Washington County Commissioner Gary Kriesel being the only no vote. Aside from his vote here and on May 28th he's never voted against the plan before ie: funding the over $1.8 million (latest figure) to pay for planning the buyout. Kriesel is up for election in 2016 and always campaigns that he's a fiscally responsible with tax dollars. Also note County Debt has Tripled under Commissioner Kriesel's term with not a word, let alone a plan to do anything but apparently kick the can down the road. So be cautious to interpret these votes as anything more than political pandering. 
Kriesel has not responded to to inquiry regarding these votes for us.

Also don't forget the real cost of the facility has many strings attached: ie:
***Upfront cost: before anything can begin the RRF needs immediate facility improvements ($6.65 million) to replacing aging equipment and pay for basic renovations. (Under the RRPB document Titled Achieving the Scope through Public or Private Ownership under "Financial Analysis of Options" p. 31 of adobe file)***  (posted this in The $170 Million Dollar Washington/Ramsey County Plan to Take Over Private Sector Garbage Processing)

In June you were informed about the May 28th 7 to 2 vote of the Washington/Ramsey County Resource Recovery Project Board (RRPB) decision to proceed with the take over of garbage processing. That Part 1, article explained a brief history on the Newport Resource Recovery Facility (RRF) that is likely being bought out for $26.4 million tax dollars and the Counties plan to invest in this declining 80s technology. They believe a rebound in trash incineration will occur if they end hauler rebates and replace with a County hauler mandate to deliver garbage to it. 

This plan relies on ignoring the constitutional right of haulers to deliver to Wisconsin to avoid this new costly plan. Yet the Counties plan to watch it all play out as another wonderful Government program. This part 2 piece will elaborate on this plan and explain it's true $170 million dollar price tag.

Picking up where we left off, the Counties have a bold $170 million dollar three phase plan called "the Scope". It all hinges on a presumption it can succeed where the private sector has failed for the last 28 years despite the multiple owners the facility has had over the years. 

***Upfront cost: before anything can begin the RRF needs immediate facility improvements ($6.65 million) to replacing aging equipment and pay for basic renovations. (Under the RRPB document Titled Achieving the Scope through Public or Private Ownership under "Financial Analysis of Options" p. 31 of adobe file)***

The Timeline:

1.) The base plan 2016 (Scope cost not included): to make the Newport facility not only self sustainable (never been done), but also pay for it's own $26.4 million dollar facility in addition to the $21.6 million dollar yearly running costs (p.20 of the May 2015 Newport Facility Operating Costs Estimate)

2.) The base plan 2018 (Scope cost not included): Not only pay for the Newport facility ($26.4 million), running costs ($21.6 million/yr), but also do it all without subsidizing haulers with rebates as it has always had to motivate delivery of trash (last year $8.4 million/yr). "Hauler rebates are needed in the first two years of public ownership until designation takes effect, and then are no longer needed." (Under the document Titled Achieving the Scope through Public or Private Ownership under "Financial Analysis of Options" p. 32 of adobe file)

3.) The Scope 2016 and beyond (pictured): The complete $170 million dollar plan to massively expand the "waste to energy" facility through the "Scope for Resource Management" (previously adopted 9-2014, see source below*). (The $170 million dollar total was calculated by Eureka Recycling in their article titled "Say No to Newport")

 "Phase 1" is immediate and implements "Source Separation" This increases the annual operating expenses by $3.3 million at the Newport facility (p. 18 of Life Cycle Financial Analysis).  With a massive capital start up cost of $47.1 million tax dollars to pay the 20,000 businesses and the assumed 30% of residents who will set up the system. Total annual running cost for promotion and management is $6.1 million! *(p.6-7).

 "Phase 2" is in 2016 implementing Mixed Waste Processing (MWP) with the construction of a processing facility ($12.7 to $19.7 million) able to add sorting ability to the Newport Facility by 2018. Running cost is $5 to $7 million/yr. Predicted decrease in incinerated waste by at most 5.9% *(p.8-9)

 "Phase 3" is  in 2018 for "Gasification" which has an unknown cost because no public facility in the United States is operating (if that doesn't tell you all you need to know). They also were unsuccessful to find a publicly funded Gasification facility efficient enough to source worldwide. They reached out to eight companies in America that possess the ability to build us a Gasification system to turn waste into bio-fuel and only one responded to the question stating they're not interested (p. 17 of Summary of Responses to Request for Expression of Interest) For any cost estimates the Counties conveniently assume a private company is going to pay for and build a Gasification plant at their cost and risk and then pay $3.7 million a year to the Counties for processed garbage (see Alternate 1 - Procesing and Gasification - Summary). 

6-23 clarification: Yes, only one company responded to the "question" in the September 2014 
Request for Expression of Interest for:
"The RFEI was sent to eight (8) potential providers of MSW gasification technologies. Foth followed up with the potential vendors to determine their interest, one of which (Fulcrum BioEnergy) indicated that the Project Board’s opportunity was too small for them to consider and did not fit their business plan. " [emphasis added]
Experimental small scale technology is what the Counties are banking everything on to phase out incinerating trash. 

*These approved steps were adopted by RRPB on 9-25-14 from the Joint Staff Committee meeting from 9-18-14

Assuming all the stars align for this approved three phase plan the price tag skyrockets from the publicized $26 million dollar cost to over $170 million dollars when you account for capital costs and interest. ie: the $26 million for the Newport facility actually costs tax payers $40 million dollars when taking till 2030 to pay off the loan (see Procesing Only (Base Case) - Summary)

As explained in Part 1, the haulers delivering waste to the Newport facility lose their rebate match incentive and are assumed willing to absorb the cost by force of a mandate.  Also reviewed is the problem with this plan being haulers have the constitutional right of interstate commerce to haul to Wisconsin to avoid the oppressive increased cost. Currently 36,000 tons of the 400,000 tons of MSW produced in the Counties is sent out to Wisconsin according to a September 17, 2014 letter to the Counties from their lawyers. This waste is only recorded from Advanced Disposal delivering to their landfill in Eau Claire Wisconsin. 

It's plausible to think other major waste haulers like Waste Management will also transfer MSW out of State to compete with Advanced who's tipping costs are around the current market average of $50/ton. The Newport Facility currently charges $86 a ton 

It will be an obvious choice for the thousands of residents and dozens and dozens of housing associations in the Counties who will cost compare on what company to use. 
That is: 
A.) Advanced Disposal who is able 
to keep their rates flat being unaffected 
by the sudden 50%+ increase in 
tipping fees caused by the mandate to 
use the Newport facility. Doing this by 
hauling to their Wisconsin landfill.
B.)Their current hauler who chooses 
to comply with the mandate and pass 
the 50%+ increased tipping fee cost 
on to their customers.

The Counties are aware of this massive $30+/ton difference in tipping fee so they came up with a wildly low number of just $65/ton to process waste. They reported this to haulers to soften the difference to avoid haulers from justifying transferring waste out of state for a tipping fee of about $50/ton. 

One massive problem with this wild $65/ton claim: None of the 5 remaining public owned facilities in the State have been able to run at such wildly low tipping fee without taking on hundreds of thousands a year in losses:

Minnesota 2013 Public Facilities Tipping Fees: *(according to the RRPB Feasibility report)
*Olmsted Waste to Energy Facility (OWEF).............  $83/ton (losing a $1 million/yr)
*Perham Renewable Resource Facility..................... $100/ton
*Pope-Douglas Resource Recovery Facility............ $ 82/ton
*(closed in 2014) Red Wing Solid Waste Management ..... $72/ton (was losing $500,000/yr)
Polk County Resource Recovery Plant .............. $83.64/ton in 2014 (p.46 of Todd Co report)
*Hennepin Energy Resource Co. (HERC).......... $60/ton (loses $1.8 million/yr)    

So either the haulers are going to get slammed with increase tipping fees just like the other government run RRFs or the Counties are refusing to realize their scheme will not only be unable to pay for itself, it'll run massive debt. Leaving tax payers to not only pay for the yearly losses of the Newport facility; but also be stuck paying the $170 million dollar debt. 

The Ramsey/Washington County Resource Recovery Project Board appears to be: 
-Down playing the true cost of the buyout 
-Over playing the ability to operate and pay off debt at just $65/ton revenue  
-Completely disregarding the hauler's right to deliver out of state. 
-All while claiming this 80s technology of incinerating trash is what's best for the environment despite clear evidence of the contrary.

Contact your legislators: 

Ramsey County Commissioners:   651-266-8362 651-266-8356 651-266-8360 651-266-8364 651-266-8361 651 266-8365 651-266-8363

Washington County Commissioners: 651-430-6211 651-738-2425 651-430-6213 651-430-6215 651-430-6214