Spokane utilities director Romero innovative, transformational

Looking out of Rick Romero’s Spokane City Hall window is like looking into a children’s book. People walk through Huntington Park as traffic flows across the Monroe Street Bridge. A crane dredges the riverbed. Gondolas zip by right outside and planes fly in the distance. The city bustles.

It’s hard to say what Romero sees when he looks out the window, but clearly it’s different than most. In the two years since Romero took over Spokane’s utilities department, he’s transformed the city’s fortunes. In that time, he’s saved the city tens of millions of dollars, devised a way to buy $26 million in new fire and police vehicles and equipment without going to the voters, and found a solution to the costly, decades-long feud between the city and county over urban growth.

One idea, however, has had a bigger impact than all the others. It came when he was told to look into the contentious $450 million plan to stop sewage from entering the river. Even before becoming the head of utilities, he had come up with a much more affordable alternative, in the process beating environmental regulations and leading to a cleaner river than anticipated.

From City Council members to his fellow department heads to union leadership, many at City Hall credit him as the architect behind the mayor’s most innovative projects.

“He has this ability to fly at 80,000 feet, see a pattern, drop down and define the technical details of that pattern and explain it to everyone else,” said Gavin Cooley, the city’s chief financial officer who hired Romero in 2008.

“When Rick came in, he was replacing people who had a strong background in engineering or public works or public utilities,” said Joe Cavanaugh, president of Local 270, the city’s largest union. “He was an unknown quantity so there were concerns. He’s succeeded beyond what people had expected would happen.”

“Everyone should be very, very happy that Rick is head of utilities,” council President Ben Stuckart said. “He is what every citizen should want in a public employee.”

Romero doesn’t quite agree.

“Whatever I’ve contributed, it takes an awful lot of people to do these things,” Romero said. “And every single one of them has bought into the idea that this is the way to do things and every one of them is committed to figuring out how to make this work.”

In the coming months, his plan – the largest public works project in Spokane’s history – faces two tests that could spell its success or failure. The first arrives in November, when city voters will consider a 20-year street levy, delivering funding integral to the project. The second comes in the new year, as legislators decide which water quality projects to fund. Spokane is seeking $60 million in funding from a process that usually hands out less than $10 million in state cash per project.

Saving his alma mater

Rick Romero was born in the spring of 1956 in Newport, Washington. His father, Manny, also a Newport native, was inducted into the Army during World War II before working as a construction contractor and excavator. His obituary said he walked 90 blocks a day before he died in 2003. He was still married to Romero’s mother, Mary Ellen, who died in 2012.

After high school, Rick Romero left Newport for Cheney, where he eventually earned a master’s degree in business administration from Eastern Washington University. Then he spent 28 years working for the university.

In the late 1990s, the university faced its own demise, as dwindling enrollment brought calls from Olympia about a potential merger with Washington State University. The idea was discussed publicly by Gov. Gary Locke, a Democrat, and state Sen. Jim West, a Spokane Republican who would become the city’s mayor.

“You literally, and quite frankly, had a public institution that was on the verge of failure,” Romero said.

At the time, Romero was the university’s director of business and contract services and was tasked with coming up with ways to help save his employer. Some of Romero’s ideas were acted upon. EWU offered rebates to students who signed up early for on-campus housing. It partnered with a private company to build an off-campus dormitory with ground-floor retail space. In an echo of what’s happening at City Hall now, the university refinanced $4.5 million in bonds, saving $600,000 over 10 years.

It was a do-or-die moment, and Romero now credits this work as instrumental to how he operates as utilities chief.

“For everything you do as a university, you have to compete with the private world. There are private competitors for the education itself,” Romero said. “I run a utility operation. Nobody else can come in and sell water service. Still, what we were doing (at the city) was unsustainable. We weren’t at the point of failure as an institution, but it was pretty clear things had to change.”

New role ‘too small for him’

By 2008, EWU no longer faced extinction and Romero had left for greener pastures. He and his wife, Nancy, had a cabin on Lake Pend Oreille and enjoyed a quiet life.

It wouldn’t last.

Cooley, the city’s finance officer, needed an internal auditor and he was referred to Romero by John Pilcher, the city administrator under Mayor Dennis Hession.

Romero told Cooley he was interested in the job but didn’t want a full workweek, Cooley said. Cooley agreed.

“Immediately, the auditor role was too small for him,” Cooley said. “Hardly anything we did during that time didn’t have his fingerprints on it.”

Soon enough, Romero hatched his first big idea at City Hall, according to Cooley. In 2009, voters had turned down an $18.5 million bond to buy a new police evidence facility. Within months, Romero came up with a plan for the city to buy two buildings – a $2.8 million warehouse in East Central Spokane for storing police evidence and the $1.8 million Gardner Building – by borrowing from the city’s $300 million investment fund. The city would pay back the fund over 20 years using money it saved by moving two police investigation units to the Gardner Building from Monroe Court, space it leased near the Spokane County Courthouse.

Mayor Mary Verner put her weight behind the proposal, saying the plan “was the kind of thinking that our citizens are demanding.”

But her support wouldn’t matter for much longer.

In November 2011, Cooley and Romero were in the Tri-Cities looking into the idea of sending local inmates to the Benton County Jail when Cooley got a text message from Tim Dunivant, the city’s budget director. Verner had lost re-election.

“We were stunned,” Cooley said. “Like now, we very much craved a re-elected mayor for continuity. At the time, we didn’t know enough about David (Condon).”

Romero said that when Condon took the mayor’s office it was “a huge surprise” that he wasn’t more partisan, considering Condon had come from his position as district director for U.S. Rep. Cathy McMorris Rodgers. As a Republican in Congress, McMorris Rodgers is a participant in what is considered one of the most partisan arenas in the country.

“Whenever there’s a change, everybody expects the worst so you tend to ‘awful-ize,’ and you invent all these things that are going to go wrong and be a problem,” Romero said. “When (Condon) put a Cabinet together, he didn’t care about political affiliation or personal philosophy. He wanted people who were going to challenge assumptions and get things done. He just started out of the chute with that.”

A trip to Indiana

It’s no wonder Condon was looking to challenge things. Sitting in his inbox on his first day of office were two $30 million contracts to separate the city’s sewage and stormwater, just the beginning of a project mandated by the U.S. Environmental Protection Agency to clean the river, a plan estimated to eventually cost the city almost $450 million. Under Verner, the city was anticipating asking ratepayers for double-digit wastewater rate increases, year after year, to pay for the expensive upgrades to the city’s system. Condon had campaigned against rate increases, and found the contracts waiting for him unpalatable.

“Right out of the gate, the mayor was staring at these contracts,” said Theresa Sanders, the city administrator under Condon. “He handed them to Rick.”

As internal auditor, Romero had been able to look across the whole city as one organization, as opposed to department by department, each with separate budgets, rules and regulations.

“One of the first things (Condon) did was hand me those contracts and say, ‘Have you looked at utilities?’ ” Romero said.

The answer was yes. “I had looked at the data enough to know that we could do this without double-digit rate increases,” he said. “I knew there was too much cushion and fat injected into it.”

At that point, Romero thought he’d just trim the fat from the plan. But in April 2012, while he was still auditor, he went to a U.S. Conference of Mayors Water Council meeting in Indianapolis with Sanders and Councilwoman Amber Waldref.

The three heard a keynote address by Susan Hedman, the EPA administrator of the Great Lakes region. She talked about the regulatory agency’s untested, 6-month-old idea hatched in an October 2011 memorandum.

The memo is short in length and detail, perhaps intentionally. Briefly, it said that one of the most basic objectives of the EPA is keeping sewage and pollutants out of the nation’s waterways, and that objective was being stymied simply because local governments couldn’t afford the upgrades to keep them out, much like Spokane. The memo encouraged “integrated planning,” collaboration and flexibility in how cities address those problems.

“The three of us had dinner that night,” said Romero, referring to Sanders and Waldref. “I remember very distinctly, we all sat down and said, ‘EPA is handing us a tool here.’ We need to figure out how to use it.”

Sanders agreed.

“The timing was incredible,” she said. “We took back a one-page memo … and it was pretty clear (the EPA) had no idea what it meant. That was fine because it meant we would define what it meant.”

Romero said he was driven to figure it out.

“That was the genesis of the mayor appointing me as the utility director,” Romero said.

Romero’s willingness to find a solution was only part of his promotion, Sanders said. It’s also his optimism.

“His ability is almost faith-based,” she said. “He knows we can get there even before he knows how we can get there.”

Romero echoed this. “When we left Indianapolis, I didn’t know how we were going to use (integration), but I knew we were going to use it.”

He knew soon enough, and his idea had two parts.

First came the collaboration. Romero adopted an idea City Engineer Mike Taylor called the integrated design studio. He took all the city’s principal engineers out of the wastewater, water, stormwater and streets departments and made them figure out how to plan projects as one, rather than representing their one department with its own planning and funding mechanisms.

“We said, ‘No, your job is to figure out how your piece fits into the whole,’ ” Romero said.

Next, Romero sought flexibility from environmental regulatory schemes. Under the previous plan, the city dealt with pollutants one at a time, starting with whichever one the EPA and state Department of Ecology deemed most important. First to be mitigated was phosphorus. The city was expected to find every source of that pollutant and stop “every last ounce” from entering the river, Romero said. Only then could it move on to the next pollutant, polychlorinated biphenyls, also called PCBs. And so on.

“We were going to spend a lot of money chasing that last 1 percent of that one problem,” Romero said. With integration, Romero said, “the whole idea was, step back and look at everything you’re discharging, look at all the different toxics and impacts on your water quality. Only then do you focus your dollars.”

In effect, the plan widened the focus of Spokane’s cleanup effort from individual pollutants to the entire water system.

‘First in the nation’

The result is now called the Integrated Clean Water Plan. Every time a street is rebuilt, not only will the city upgrade everything beneath the pavement, it will remake the surface with green infrastructure that will divert stormwater from the Spokane River – where most of it currently flows untreated. Then it remakes everything above the street. The plan, more specifically, relies on a combination of improved sewage and wastewater treatment, greater use of strategically located swales and vegetation to naturally soak up more rainfall, and installation of gigantic underground tanks to hold millions of gallons of stormwater until it can be processed through the city’s treatment plant.

Romero’s plan cut $150 million from the project – a third of its original cost – and is expected to stop more pollutants from entering the river than the previous plan.

Grant Pfeifer, director of the state Department of Ecology’s eastern regional office, called the city’s integrated plan “cutting edge,” and said if Spokane succeeds at its effort it could set a precedent others will follow.

“Spokane might be the first in the nation that’s doing this as a smart government approach to planning – rather than by court order,” Pfeifer said. Seattle and King County are pursuing integrated strategies as a result of legal action.

“I think it could evolve into the normal way of doing business.”

Pfeifer especially supports the plan because it leads to a cleaner river.

“Under Rick, the city not only meets (pollution-cutting) requirements, but beats them,” Pfeifer said. “It gets out in front of future regulatory requirements.”

The primary obstacle to the plan’s implementation is funding. Right now, the state funds projects, not plans. Or as Pfeifer puts it, the funding is “designed around one project at a time. Not a big, shoot-for-the-stars plan.” Every two years, the Legislature ranks projects on importance, need and price, and then funds them according to how much legislators had budgeted to spend. Pfeifer said most projects range from $4 million to $10 million. For Romero’s plan, the city wants $60 million.

“It’s a big chunk,” Pfeifer said. “It’s not unprecedented. It’s just not common.”

According to Sanders, the mayor has talked to state legislators and the region’s congressional delegation about the project. He’s lobbied the EPA and the state Ecology Department.

Still, Romero was taken to task by council members at a Public Works Committee meeting earlier this month. With so much riding on the funding, council members wanted to know about the city’s lobbying strategy, demanding at one point to include all elected officials at the city in strategy talks.

Romero told members he had talked to Gov. Jay Inslee about the plan, and tried to make the case that the plan could be funded “administratively” by putting it in his budget, thus bypassing the Legislature.

Councilman Jon Snyder erupted. “That’s why I’ve been asking to meet about this,” he said. “We are not on the same page at all.”

‘Missing the whole point’

Before a decision by the Legislature, city voters will have a say.

This November’s ballot will have two city measures, one for a bond to revitalize Riverfront Park, the other asking voters to support a 20-year street levy. The levy would bring in about $5 million a year for street projects.

Romero’s plan is to take that $5 million and match it with $5 million from the utilities department. That $10 million will be used to bring in matching grants, which typically draw two or three times the local match. If the levy passes, Romero said, the city can expect up to $25 million a year in integrated projects.

Which leads to the question: If the levy fails, is integration dead?

“Heck no,” Romero said. “It makes too much sense to do this. We’re committed to do it. We need the levy, honestly, if we’re really going to do what we need to do with our street system, but we aren’t going to stop integrating if it doesn’t pass.”

Still, it’s not hard to see that a lot is riding on the decisions of both the voters and legislators. Romero, for all his financial acumen and technical ability, couldn’t stem his frustration at the challenges the plan faces.

“We’ll fund 80 percent of this plan,” Romero said. “But we’re going to ask the state and federal government to help with the other 20 percent. We’re going to go above and beyond. We’re cleaning up the river at a far greater level than we ever would have if we had just done what was regulated, and we’re not asking for any more time. If you can’t see the value of committing to and funding something like that, you’re missing the whole point.”