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City to negotiate with Balcones, TDS, and Greenstar for recycling services

Friday, June 25, 2010 by Michael Kanin

Texas Disposal Systems is officially back in the hunt as a contender for Austin’s much delayed residential Single Stream recycling contract. On Thursday, the City Council instructed city staff to begin negotiations with that firm, Balcones Resources, and Greenstar over short term and long term deals that could, all told, garner signees up to $35 million over an extended period of time.


The move came after Council Members Sheryl Cole and Bill Spelman tried to re-open the competitive bidding process that had, until two weeks ago, been the method that the city was using to determine its recycling contractor. That effort failed on a 5-2 vote. Cole and Spelman then voted against the resolution that called for straight negotiations, which eventually passed 5-2 also.


Among her concerns, Cole cited the possible implications of undoing the competitive bid. “The sanctity of the procurement process is on the line,” she said.


Greenstar’s inclusion came after an amendment from Council Member Chris Riley. Riley told In Fact Daily that he felt that the negotiation process would allow for more flexibility in putting together a deal. The company’s recent history with the City of Austin has included two rejections: One came when the Council declined to extend its current relationship with that organization, the other when it failed to qualify as a finalist in the bidding process that ended just two weeks ago.


City staff was reluctant to outline what the negotiation process might look like—or even confirm their interpretation of what Council’s instructions had been. Council Member Randi Shade offered her take on the action.


“The motion – as I understood I – it was to have staff negotiate long-term and short-term options with both Balcones and (Texas Disposal Systems) while also taking into consideration the opportunity to leverage the existing Greenstar contract,” she wrote via email. She noted that the current Greenstar deal still “has exercisable extensions already in play but not yet exercised nor negotiated to achieve better terms in the near-term.”


Neither Texas Disposal Systems nor Balcones would rule out the possibility of some level of cooperation between the two firms.


Allied Waste Services Austin General Manager Lee Kuhn issued a plea for Council members to include his firm in the new process. Allied was the winner in the city’s now-tossed-aside bidding process. Those results were thrown out after Council members signaled their dissatisfaction with the crop of proposals they received.


Kuhn argued that Allied’s proposal was “by far, the most financially beneficial to the city,” of those received via the bidding process. He then repeated his defense of the company’s environmental record, and insisted that it had plenty of local bona fides.


“It’s…been stated that the city wants to give preference to local companies as a reason to negotiate directly with Balcones and (Texas Disposal Systems),” he said. “I’d like to point out (that) our company has been providing local services here in Austin for over 30 years. We’ve been paying local wages and local taxes and our 170 employees live, work, and shop in and around (the city).


“We do believe we are local.”


As part of his testimony, Kuhn said that Allied’s record had been “distorted and smeared by only a vocal few,”  adding that “those vocal few do appear to have” what he termed “a very close relationship” with Texas Disposal Systems (TDS). “I assure you that this is less about environmental compliance and more about financial gain,” he said.


Texas Campaign for the Environment Executive Director Robin Schneider, who has vocally supported Texas Disposal, said Kuhn’s reference was directed at her group. In response, she noted that the two sides were not always in agreement, and that, in fact, they had “raised questions…about a provision to burn materials” included in a contract extension proposal that TDS has offered to the city.


“We call it as we see it, and there’s a reason why the TDS facility has won numerous awards,” she said. “There’s a reason why people from East Austin were here today talking in favor of Balcones as a good neighbor, and there’s a reason why there’s no Northeast Travis County neighbors here today talking about how great a neighbor (Allied) has been to them over the last 20 years of their operation.”

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