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Council approves changes to anti-lobbying ordinance

Monday, June 18, 2018 by Jack Craver

Early Friday morning, City Council approved what supporters described as a temporary solution to an ongoing battle between Texas Disposal Systems and other waste contractors over city lobbying rules.

The measure approved by Council makes a few small changes to the anti-lobbying ordinance, which is designed to prevent companies seeking contracts with the city from privately trying to influence city employees to choose their bids.

First, the new measure sets up an appeals process for companies that have been found in violation of the ordinance by city staff. Under the old process, bidders could appeal, but the person hearing the appeal would be the same city staff that accused the company of the violation in the first place.

An amendment offered by Council Member Leslie Pool and approved by Council shifted the power to decide an appeal to a subcommittee of the ERC.

The other main change is that companies will no longer be punished for illegal contact with city officials if the communication was initiated by the city official. The proposal drawn up by city staff said that the city would be able to waive a violation in such circumstances, but an amendment proposed by Pool and approved by Council changed the language so that a company would never be found in violation.

“I can’t imagine a circumstance where we’d want to hold somebody responsible for something a city official did,” reasoned Council Member Ann Kitchen.

Asked in what instance a company should be held responsible if a discussion were started by a city employee, James Scarboro, who leads the city purchasing office, which oversees contracts, suggested that a city employee might initiate a correspondence that does not relate to the contract but that the bidder could then redirect the correspondence into illegal territory.

Before Council adopted the amendments, representatives for TDS denounced the staff proposal as doing little to correct the underlying flaws in the existing ordinance.

Adam Gregory, who runs TDS alongside his father, Bob, highlighted the company’s long-standing argument that city staff has a conflict of interest when it comes to waste contracts because the city has its own trash service, Austin Resource Recovery. The Gregorys have alleged that the city has contemplated having ARR take over services that the city currently outsources to private haulers such as TDS.

“The industry is unique,” said Adam Gregory. “The city has the power to seize full control of the industry.”

TDS has a number of waste contracts with the city, notably a 40-year deal to receive and dispose of the trash collected from single-family homes by ARR – the city garbage collector – at the TDS landfill in Creedmoor.

However, there are plenty of other waste-related contracts up for grabs relating to the disposal or processing of waste or recycling generated by city facilities, whether it’s wastepaper baskets at municipal buildings or sewage sludge from city wastewater treatment facilities.

TDS has suggested that the ALO’s “vague” language might be used to characterize the regular communications between TDS and city employees regarding its existing business with the city as illegal lobbying. A provision of the ALO allows the city to bar repeat violators from city contracts for three years.

Citing the threat of debarment to its existing 30-year contract, TDS has refused to bid on other waste contracts in recent years, instead showing up to Council to argue against other contractors being awarded them.

In 2016, in response to TDS’ objections, Council voted to temporarily exempt waste contracts from the ALO until changes to the ordinance could be made.

TDS’ objections to city ordinances go back many years. In 2010, the city disqualified TDS from a recycling contract after Bob Gregory, without submitting a bid of his own, emailed city officials criticizing a bid submitted by another company. TDS sued the city in 2011, and in 2014 a federal judge ruled in the company’s favor, finding that the city had violated Gregory’s constitutional right to voice his opinions on an issue.

Others in the waste industry have bristled at TDS’ behavior, accusing it of bullying and trying to overturn lobbying rules so that it has an advantage over smaller competitors that have fewer connections in city government and less money to hire lobbyists. Council Member Alison Alter has also objected to what she has described as a process to rewrite ethics rules driven entirely by one influential company.

Nikelle Meade, a lobbyist who has represented Synagro, another waste contractor, told Council that none of the other stakeholders in the industry had a problem with the ALO or staff’s proposed changes.

“We need to keep these procurement processes on an even-level playing field,” she said.

The new appeals process that was adopted on Friday, however, is being framed as a temporary measure. Scarboro said that his staff is hoping to develop a proposed comprehensive procurement policy that will be presented to Council in the fall that will include a more permanent appeals process.

The measure was approved 8-1, with Alter opposed. Council members Ellen Troxclair and Delia Garza had left the meeting by the time the vote was taken.

Correction: This article previously incorrectly said that city staff offered a proposal to have appeals heard by the Ethics Review Commission. In fact, an amendment to have the commission hear appeals was included in an amendment by Council Member Leslie Pool, who later changed it to a subcommittee of the commission. The article also incorrectly stated the length of time a company can be “debarred” from city contracts. The article has been clarified to note that it is strictly the appeals process in the new ordinance that is being described as a temporary measure, rather than the whole ordinance. Photo by John Flynn.

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