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City staff to recommend one-year extension of Greenstar contract

Tuesday, March 23, 2010 by Michael Kanin

Austin’s Solid Waste Services (SWS) department is prepared to recommend a one-year extension of Mid-America Recycling’s contract to handle the city’s residential single-stream recycling. If approved by the City Council on Thursday, the new deal would run through the end of Sept. 2011. The company, which does business as Greenstar, is involved in what has been a contentious debate over the future of solid waste in Austin.


SWS Director Robert Gedert told In Fact Daily that despite its recommendation, his department remains ready take whatever direction the City Council chooses. “City staff is recommending the approval of the extension…(but) we recognize that conditions have changed recently,” he says. “I think the Council wants to discuss this…and explore options.”


At immediate issue is single-stream recycling processing for the city of Austin. That program began in 2008, even as the city lacked a sorting facility for those materials. As a result, Austin contracted with Greenstar to haul the materials to other Texas-located Materials Recovery Facilities (MRFs), first in suburban Dallas, and then in San Antonio. Though that deal was supposed to generate revenue for the city, Austin taxpayers ended up losing north of $2 million dollars in the process. Greenstar’s current deal with the city expires at the end of September but the city has several extension options.


In late 2009, the city announced a request for proposals (RFP) to build a local MRF. This February, it received eight responses to its RFP, including one from Greenstar.


Instead of a traditional response to the MRF RFP, Greenstar rival Texas Disposal Systems (TDS) chose to include its MRF proposal in a total reframing of its 30-year Waste Disposal and Yard Trimmings processing contract with the city. The proposed restructured deal included short- and long-term options for a MRF, a path to a “Commercial Food Waste Recycling Ordinance,” and a handful of other ideas that would have extended the company’s reach to nearly every corner of the solid waste industry in Austin.


City Attorney David Smith has ruled that city staff could not consider the portions of TDS’ proposed contract amendments that dealt directly with the MRF. (See In Fact Daily, Feb. 24, 2010.)


Gedert’s recommendation comes amid new activity in the ever-extending recycling drama.


On Monday, TDS chairman and CEO Bob Gregory issued another missive in his firm’s battle against the Greenstar extension. This volley came in the form of a nine-page memo addressed to the members of the City Council. In it, Gregory again requested that the Council not extend the Greenstar deal, and reject “staff’s attempt to bar from consideration by the Council the 2/9/10 TDS proposal to amend its existing 30 year solid waste services contract with the city.”


He also elevated his cost savings estimate by an additional $1.1 million, which would account for the savings the city would receive for not using the transfer station it employs in shipping recyclables to San Antonio. And, for the first time, Gregory confirmed that his MRF would be built in the Village of Creedmoor, outside of Austin’s Extraterritorial Jurisdiction (ETJ). That means the facility would not subject to the city’s permitting process.


Gregory also noted that the city’s Public Works Department had submitted its own response to its MRF RFP. If correct, this fact would go a long way toward proving Gregory’s assertion that Austin officials plan on building the city’s facility themselves.


Gedert confirmed that the city had submitted a proposal of sorts, but he insisted that its only purpose was to serve as a measuring stick for the other RFP responses. He said that Austin would explore both private and public-private MRF options, but that there would be no wholly public city MRF.


The TDS short-term MRF solution promised the city that the firm could handle the city’s residential single-stream recycling free of charge. TDS insists that this would save the residents of Austin between $2.4 million and $7.6 million “over the term of the contract” (see In Fact Daily, Feb. 10). If the city had agreed to the TDS deal, it would have had short-term contract length options of 12, 24, and 36 months.


The city has also sought to redress the shortcomings in its contract with Greenstar. The change would lower the cost to $86.50 a ton, with Greenstar hauling 100 percent of the city’s recycling until March 2011, and 50 percent until Sept. 2011 to allow the Austin MRF an opportunity to get up and running. It would save the city $405,000.”


Gedert says that SWS has “negotiated terms with Greenstar” for this specific option. “(This) fits like a glove with the proposals that we’ve seen (for the MRF),” he added.


Gregory has told In Fact Daily that TDS will build its MRF regardless of the outcome of the city’s RFP process.


Greenstar did not return a call for comment. It may believe that doing so would put it in violation of the anti-lobbying ordinance.


Gedert would not comment on the remainder of Gregory’s email. He said he hadn’t yet had a chance to read it. As for whether any segment of this saga might be resolved this Thursday, he said that he couldn’t be sure.


SWS spokesperson Jennifer Herber said that Gedert had been in interviews with MRF RFP respondents on Monday. 


For his part, Gregory said that he thinks Gedert is “a good guy.” Still, he sees something sinister in the process that’s dragged on for nearly two years.


Gregory maintains that, yardstick or no, the city’s MRF proposal represents an effort to, through the use of Austin’s anti-lobbying ordinance, keep TDS and their competitors quiet about the city’s solid waste issues. “I think (Gedert) went to work for a city that already had something in motion,” he says.


“What I resent is their effort to try and silence everyone.”

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