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TDS pushes city to audit recycling materials handled by Greenstar

Thursday, February 11, 2010 by Michael Kanin

Texas Disposal Systems brought its campaign against recycling competitor Greenstar back to the Solid Waste Advisory Commission on Wednesday. This time, the company included a request for the city to audit the composition of the materials that Greenstar has been collecting in Austin. TDS officials maintain that these amounts could be incorrect, and that this could be costing the city money.


The discussion came as SWAC was scheduled to consider whether to recommend an extension of Greenstar’s contract to the City Council. Commissioners instead decided to postpone that decision until SWAC’s next meeting.


“It seems that…Council’s probably going to pull this item tomorrow,” said Commissioner J.D. Porter. “So I’d like to suggest that we table this with the provision that if the item does go back to City Council, that we have a special called meeting…so that we can have input.”  


Ryan Hobbs, director of operations for TDS, kicked off the firm’s presentation. Hobbs presented the commissioners with a document that detailed three basic issues that TDS has with the proposed extension of Greenstar’s contract. “What I’ve provided the commission tonight are a few high points that we have observed in reviewing the amended and restated contract,” he said.


Hobbs claimed that Greenstar was using what he termed a “loose definition of newspaper.” According to the TDS-provided document, the proposed Greenstar extension “fails to clarify the grade of newspaper Greenstar will use to determine prices to pay the city of Austin.” TDS predicted that this potential discrepancy could cost the city nearly $2 million. “We believe (this) allows Greenstar enough flexibility to totally eliminate the estimated savings that are associated with lower processing fees.” 


Hobbs’ said his estimates were based on 2009 numbers. The lower processing fees are a reference to the charge per ton reduction that Greenstar would take if their contract were extended.


The city currently owes Greenstar $2.6 million for transport and processing fees.


Hobbs also claimed that the city had yet to conduct an “audit (of) the composition of the city’s residential single stream recycling material.”


“We think that if an audit was done on (the materials Greenstar is collecting), it would yield different numbers than what are currently being used to calculate payments,” Hobbs said.


SWAC commissioner Rick Cofer later confirmed that the city has not done an audit of the recycled materials.


Hobbs concluded by restating the position that his firm thinks, “Council shouldn’t amend this contract at all and should reject any amendment of this contract.”


TDS CEO Bob Gregory also addressed the SWAC meeting. In his remarks he echoed the concerns he’s publicly expressed about the proposed extension since last year. He also reiterated that he was prepared to collect city recyclables at no charge.


“This could have been done in 2008 (when the city began its current relationship with Greenstar)…we sought to do the MRF, but the city chose not to,” he added.


TDS and Greenstar have been locked in a battle over Austin’s request for proposal for a materials recovery facility. Bids for the MRF were due Tuesday. Greenstar was expected to respond to the RFP. TDS did not, and instead offered the city a reworking of its existing contract. That included a “short term” MRF proposal that was designed to compete directly with a proposed extension of Greenstar’s contract (See In Fact Daily, Feb. 10).


City Manager Mark Ott confirmed Wednesday that seven companies responded to the RFP.


Both Greenstar and TDS were also subjects of anti-lobbying charges associated with the project. TDS had its disqualification dismissed after it was established that the firm wasn’t going to submit a MRF RFP. A decision in the Greenstar case is expected by Feb. 18. Each firm has been accused of violating the no-contact provision of the ordinance. (See In Fact Daily, Feb. 8.)


Greenstar officials did not return multiple attempts at contact. They may be under the impression that doing so would violate Austin’s anti-lobbying ordinance.


SWAC members agreed unanimously with Porter’s request to table the Greenstar contract with a 5-0 vote. Citing conflicts, Gerry Acuña and Bob Schafer recused themselves from the deliberations. Cofer later told city staff that he “would especially like to hear something…on an audit of the composition of material” that Greenstar is collecting.”


Cofer suggested that the city should re-start its MRF RFP process. “I think we need to look at the RFP and reissue it with a different no-contact provision,” he said. “Obviously, I’m not for lobbyists crawling all over city hall…but there has to be a (balance).”

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