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Brouhaha over recycling program, allegations continue

Tuesday, February 2, 2010 by Michael Kanin

Although he was cautious about weighing in on a contract so fraught with controversy, Mayor Lee Leffingwell said Monday that the Purchasing Department’s decision to eliminate two of the most likely bidders to build the proposed city materials recycling facility (MRF) could mean a longer temporary contract with one of those potential bidders – Greenstar.


Purchasing Office employees have notified both Texas Disposal Systems (TDS) and Greenstar (Mid-America Recycling) that they have been accused of violating the city’s anti-lobbying ordinance. The allegations relate to statements TDS made concerning whether Greenstar’s current recycling contract should be extended beyond September and Greenstar’s complaint to city officials about TDS’ comments.


If the lose their appeals, they will be prohibited from participating in the request for proposal (RFP) process for a new MRF.


“It is my opinion that that (accusation) changes the picture with regard to the Greenstar extension. It may call for an extension . . . which would give us the lowest price, also give us the maximum flexibility, that would be my guess,” said Leffingwell.


Greenstar has offered to continue recycling city materials on a short-term basis, for either six months or 12 months, beginning when its current contract expires at the end of September 2010. City officials are worried that elimination of Greenstar and TDS from the pool of those bidding to build the city MRF could mean further delays in building the city facility. That uncertainty could influence the Council to pick the longer extension with Greenstar.


Assistant City Manager Robert Goode removed the pending contract extension from this week’s City Council’s agenda, noting that he hopes to bring it forward on Feb. 11. According to an email from Goode to Council Members, he took that action because the city has yet to complete its negotiations with Greenstar.


Goode also plans to share the “renegotiated contract” with members of the city’s Solid Waste Advisory Commission (SWAC) at their next meeting on Feb. 10—so long as negotiations have been completed. If passed, the deal would keep Greenstar as the party responsible for the processing and selling of recyclables for the City of Austin.


SWAC’s Vice Chair, Rick Cofer, says that he expects to get the new deal “three or four days” before it comes before his committee. According to Cofer, this will be plenty of time to review the content therein. “We’ll take action on Wednesday, (Feb. 10)” he says.


According to Goode, one advantage of moving the date of the contract approval to Feb. 11 is that staff will have had a chance to look at bids to build the MRF. That’s one thing that TDS and SWAC have argued should happen all along. But Goode says he won’t be able to tell Council which companies have bid or many other relevant factors. “Forgive the analogy, but it would be similar to asking someone to predict the winner of the Super Bowl at the beginning of the season,” he wrote.


However, Goode says he will be able to tell Council if any of the proposals indicate that they could have a MRF up and running before March 2011—six months into the Greenstar extension. TDS has argued that it can have its own MRF ready to go in September, so that no extension of the Greenstar contract is needed. Greenstar, of course, has been providing recycling services for more than a year at its own plant, but it has to haul the paper, cans and plastic to San Antonio.


Other solid waste issues remain unresolved. TDS and Greenstar will both have a hearing on their anti-lobbying charges on Feb. 5. As In Fact Daily reported (see In Fact Daily, Jan. 29, 2010), both outfits – two major players in Austin’s solid waste services – stand accused of having prohibited contact with city officials during the no-contact period affiliated with the bidding process for the proposed MRF. TDS maintains that its contact was not in violation of the city’s anti-lobbying rules, and that its First Amendment rights protect any such communication. Greenstar has yet to comment on the situation.


TDS’ alleged violation came when Bob Gregory, its Chairman and CEO, delivered a scathing presentation to the SWAC and the Acting Director of Austin’s Solid Waste Services Department, Tammie Williamson. In it, he outlined the negatives he saw in the pending Greenstar extension, including what he says is a provision that he alleges cost the city millions of dollars between November 2008 and September 2009.


Gregory said, “I believe the city staff is creating a crisis, which will beg for the city to be the only choice to operate its own MRF.”


Austin’s Purchasing Office notified Greenstar that it was in violation of the Anti-Lobbying provision when its attorneys emailed city officials, including Austin City Attorney David Smith, about TDS’ possible infraction.


Both firms look to go forward with their respective MRF bids, which are due on Feb. 9. Gregory reiterated that his company would move the issue to U.S. District Court of it loses its appeal.


In an interview on Monday, Gregory expressed his concern over his company’s predicament, and wondered whether or not he could offer any comment to any city official on any subject that had to do with solid waste. He called the city staff’s interpretation of the anti-lobbying legislation “restrictive” and noted that there will be “a number of issues that will come before SWAC and the City Council” before the MRF RFP process is completed.


“The city staff…should stop this nonsense of trying to silence the input of experts and service providers,” he said.


City officials did not return calls for comment. Greenstar is also declining interviews.


Gregory’s interpretation of the 30-year contract that TDS currently holds with the city for waste disposal and yard trimmings processing is that it could be expanded to include other waste-related services. Because of this, he is concerned about the ramifications that a three-year ban from bidding for city services – the result of a loss of his current appeal, and one other like violation—could produce. “This is a very serious deal when you work to build up a business for 30 years and the city can take it away from you just like that,” he said.

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