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Council tosses out bid results for recycling facility

Friday, June 11, 2010 by Michael Kanin

The Austin City Council has thrown out the city’s most recent attempt to bid out a contract to handle the management and construction of a local single stream recycling facility. With the action, Council members put off a decision on the next steps in building a recycling facility until at least June 24.


In keeping with what has been a contentious process, the vote came after strong protest from Allied Waste Services, the company set to win the bidding contest.


In the end, however, the Council’s concern with the results they had seen from city staff’s call for proposals on the project won out. Council Member Randi Shade made the motion.


“I don’t believe, with all due respect to the speaker (from Allied), that this current…process resulted in proposals that I’m ready to support,” she said. “I would like to see that we begin some sort of different process and we’ll have the most options if we close this current…process today and move forward in future weeks with whatever other options might be out there.”


Neither Shade nor any of her colleagues confirmed what these might be from the dais. City Hall sources told In Fact Daily that the Council could decide to re-start the competitive bidding or simply instruct city staff to negotiate with a firm, or firms, of their choosing. In addition to the three finalists in this last process, Allied, Balcones Resources, and Waste Management/Recycle America, the city received bids from four other firms.


Another company, Creedmoor-based Texas Disposal Systems, maintains that it can offer the city a better deal than any of the proposals put forward by the seven firms considered in the now-halted process. (In Fact Daily, June 8, 2010). That claim has yet to be officially vetted because Texas Disposal was disqualified from the proceedings on the grounds that it had violated the city’s anti-lobbying restrictions.


At the hearing, Allied General Manager Lee Kuhn defended the process under which his company had been selected as “very fair and thorough.” Turning to address concerns that his institution would be a poor choice from a community relations standpoint, Kuhn tried to downplay such issues. 


“We are not the bad actor that a few vocal folks, including a local competitor, asserts that we are,” he said. “We have operated locally and have been faithfully paying Austin taxes and fees for 25 years.”


As far as a 2001 incident at Allied’s Sunset Farms landfill, Kuhn said that “a perfect storm” of events “caused increased leachate.” He called the run-off “an operational issue that had to be addressed,” and added that it was, immediately. He noted that “since that time…(Allied) has not received a single violation from the (Texas Commission on Environmental Quality) or the city.”


He called claims of other poor operations at the landfill “unsubstantiated.” Kuhn then read from an administrative judge’s ruling on the matter that cited Texas Disposal CEO Bob Gregory as a party to Allied’s troubles.


“As we’ve gone through this process, and evaluated, it’s clear to me that there are many similarities here,” he said.


Kuhn declined further comment to In Fact Daily. It is likely that Allied is under the impression that doing so could be a violation of the city’s anti-lobbying rules.


Balcones CEO Kerry Getter also addressed the Council. He also called the process his firm had taken part in “fair,” and vowed to “respect the process and respect (the Council’s) decision, regardless of the outcome.”


But Getter then suggested that city staff had miscalculated the monetary value of his firm’s offer, noting that “the net present value…(of his proposal) would yield roughly $2 million not a negative $13 million, as stated.” In a memo to the Council that detailed the process by which Allied had been selected, the director of the city’s Solid Waste Services department had indeed reported that Balcones’ offer would cost the city $13.4 million over 10 years.


Solid Waste Services Director Bob Gedert told In Fact Daily that the discrepancy was thanks to a staff attempt to equalize the value of each of the proposals that they had received. “It’s normal to have different evaluations of economic impact,” he said.


“For us to make a fair evaluation, apples-to-apples, with all of these different proposals, we took a market index price. That may be quite different than the market value that they are selling at today,” Gedert added.


Getter told In Fact Daily that Balcones had indeed “proposed a different pricing model,” and he called the city’s mistake “innocent.” He said, “It was a great team building exercise for our folks,” adding that should the city restart some sort of bidding competition, Balcones would be involved.


The vote to kill this round of proposals was 5-2, with Council Members Sheryl Cole and Bill Spelman voting no.


If the Council doesn’t take action on June 24, it would have to wait until its July 29 meeting, or later.

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