TAMPA — If all goes as planned, Tampa’s solid waste division could double the amount going into its reserves next year, continuing an effort to put the agency back on sound financial footing.
The projected $30 million in reserves — part of Mayor Bob Buckhorn’s proposed 2015 city budget — represents a rapid turn-around for a city utility that was on the brink of defaulting on its debt two years ago.
The Great Recession emptied many Tampa houses, reduced the solid waste division’s customer base and cut into its income. The department made up the difference with reserves.
In 2012, seven years after the last rate hike, the solid waste division had enough reserves to cover nine days of operations, about a third of what of what it should have had.
Without some quick action, the entire city’s credit rating was a risk.
At the urging of the department’s then-director Tonja Brickhouse, the Tampa City Council approved a series of rate hikes — the last one comes in 2015-16 — to avoid insolvency.
City Councilman Mike Suarez, chairman of the council’s public works committee, said those rate hikes had a lot to do with pulling the department back from the financial brink quickly.
The department’s turn-around plan also helped convince Moody’s Investors Service, one of three credit-rating agencies, that the department still deserved its favorable bond rating. In July 2013, when the city refinanced a chunk of the department’s debt to lower its payments, Moody’s upgraded its outlook for the solid waste department from “neutral” to “positive” and gave the department 24 months to demonstrate its creditworthiness.
Suarez credited Brickhouse with righting a listing ship. She instilled discipline in a department where it was lacking, he said.
“She brought up many people for things we don’t see any more,” said Suarez, who saw those disciplinary actions as a member of the city’s Civil Service Board before winning a seat on the city council.
Brickhouse, a retired Air Force colonel and logistics expert, spent the last year or so of her five-year tenure at the solid waste department making changes to streamline the city’s trash-hauling routes. She began buying trucks powered by compressed natural gas instead of diesel and replaced thousands of hand-carried blue recycling bins with larger roll-out carts to increase recycling.
Mayor Bob Buckhorn had a different take on Brickhouse’s tenure.
“It was a department that was floundering,” Buckhorn said. Brickhouse was in charge when the department “was headed to the brink,” he said.
Under Brickhouse, the department’s budget went south and an internal audit found the city had overpaid Waste Management Inc. by $1.5 million on a five-year commercial hauling contract. The audit cited poor record keeping by both the city and the hauler as one cause of the overpayment.
The city got back all but $300,000 after lengthy negotiations with Waste Management. Brickhouse quit abruptly soon after in late 2013.
Buckhorn give credit for the department’s renewed financial health to his appointments, Public Works Administrator Mike Herr and Mark Wilfak, the solid waste department’s new director. Buckhorn appointed Wilfak in March. Herr ran the department directly in the six months between Brickhouse and Wilfak.
“The new leadership has been energetic about technology and turning the department around,” Buckhorn said.
The department plans to move ahead next year with the addition of another 10 natural-gas trucks to its fleet and building a $500,000 natural-gas fueling station on Spruce Street. With natural gas’s lower cost, the addition of more CNG trucks will continue to save the department money on fuel, Wilfak said.
Wilfak said a variety of factors, from higher rates to lower debt payments, have combined to pull the solid waste division out of its nose-dive.
“I think we’ve turned it around,” Buckhorn said.