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SWAC to review Greenstar contract before Council vote

Monday, February 8, 2010 by Mark Richardson

Members of the Solid Waste Advisory Commission, who spent an extended time back in December and January debating what should be in a renegotiated contract with Greenstar, will get a chance this week to review the terms recently agreed to by city staff and Greenstar prior to a scheduled Council vote on Thursday.


The contract was put in place in 2008, when the city began its single-stream recycling program but then canceled plans to build its own Materials Recycling Facility. Greenstar was hired to haul Austin’s collected recyclables to its facilities in suburban Dallas, and then San Antonio, for processing.


The general terms of the renegotiated contract stipulates that Greenstar would shave $3.50 off each ton of processing and extend the contract through March 2011, then scale back to 50 percent processing from then until September 2011. It would also allow four six-month extensions. SWS staff estimates that the city would save $400,000 over the course of the non-extended contract.


The original contract came under severe criticism after it was discovered that the city was losing a significant amount of money. The proposed contract includes an agreement for the city to pay Greenstar $2.64 million in transportation and other fees that accrued between October 1, 2008 and September 30, 2009.


The commission will review the particulars of the renegotiated pact, which will include some specific elements requested by SWAC members at their Dec. 9 meeting. Those elements, included utilizing the current contract’s audit procedures, having Greenstar specify a definition of market prices for recycling materials, and obligating Greenstar to recycle all materials sent to them by the City of Austin.


New Solid Waste Services Director Bob Gedert sent a copy of the proposed contract to SWAC members last week ahead of their meeting on Wednesday. In his memo, Gedert pointed out the parts of the contract which had been revised to meet SWAC’s (and subsequently the Council’s) requests:


  • Clause 9.5 “Contractor agrees that the City, or other authorized representatives of the City, shall have the right to examine any pertinent books, documents, papers and records (electronic or otherwise) of the Contractor involving transactions relating to this contract. Audits shall be conducted at the discretion of the City.”
  • Section 10 – The Contractor shall provide specific and detailed market information/ documentation to support the Contractor’s monthly reports on the sale prices for each recyclable commodity delivered to the Contractor by the City. The sale and revenue of all fiber grades including Mixed Paper, Old Corrugated Containers, and Old Newspaper provided by the City shall be based on the Official Board Market Southwest Region, High Price.”
  • Section 11 – “As long as the City continues to compensate the Contractor for processing of recycling material, the Contractor shall be obligated to process all single-stream material received from the City. Regardless of the profitability of such processing, the Contractor agrees to reclaim, insofar as possible, all recyclable/reusable material and it will continue to transfer or sell recyclable/reusable material to third parties for reuse or resale. Under this Contract, the Contractor shall not place City recyclable material in a landfill or transfer recyclable material to a third party for disposal in a landfill.”

At the January meeting, members of the SWAC were divided over the renegotiated contract. Two members, J.D. Porter and Maydelle Fason, were adamantly opposed to renegotiating the contract, saying the city should cancel it and find another company to handle its materials. However, a majority of the commission disagreed, and sent a recommendation to the Council in December to have city staff renegotiate.


It is not clear that the commission will be able to reach agreement on a recommendation this week, since Chair Jerry Acuña, who has a recycling business, will have to recuse himself and Porter and Fason could continue their opposition. That leaves the four remaining members of the seven-member board to come up with a consensus recommendation.

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