Greensboro city staff seems determined to stay with ReCommunity, the recycling vendor that has been ripping the city off for years.
But it is difficult to tell where the Greensboro City Council is on the issue. Mayor Robbie Perkins appears to favor ReCommunity, but he may not have the votes to approve a contract.
According to Greensboro Field Operations Director Dale Wyrick, the city has paid ReCommunity between $10 million and $15 million for recycling services since 1992, despite the fact that many cities make a profit on recycling.
ReCommunity's current offer in response to Greensboro's 2012 Recycling request for proposals (RFP), which would pay the city for recyclables instead of the city paying them, received the recommendation from Joe Readling of HDR Engineering. He gate the city his report at a special work session of the Greensboro City Council on Monday, Sept 10 in the council chambers at city hall.
The City Council selected ReCommunity and Waste Management Inc. to advance into a "best and final offer" phase of the RFP after throwing out two other bidders. Representatives from the two companies were scheduled to give 10-minute presentations to the council.
However their presentation time was extended when Perkins made the unusual suggestion that the companies each have additional five- and two-minute rebuttal rounds to address each other's criticisms and Readling's analysis.
Perkins cited the strange "no contact provision" that City Attorney Mujeeb Shah-Khan included in the RFP – which prevents prospective vendors from having any communication with councilmembers – as a reason for extending the debate to allow the council to hear as much as possible from the company representatives.
"I see these two gentlemen here and one's got the podium, the other wants the podium, and I think we need to kind of figure that out, and that way we can have some clarifications," Perkins said after the initial presentations, as ReCommunity Executive Vice President Jeff Fielkow of ReCommunity stood behind Waste Management's community and municipal relations manager Stan Joseph of Waste Management at the podium.
The meeting began with a presentation by Readling, who claimed that ReCommunity's offer, which included both a per-ton payment to the city as well as a share of net revenue, provided more revenue potential for Greensboro. Joseph strongly disagreed with that conclusion.
Readling's analysis focused on the transportation costs associated with Waste Management's offer, which would involve trucking recyclables to the company's materials recovery facility (MRF) in Forsyth County.
Although Waste Management offered to pay the city more for recyclables than ReCommunity, Readling claimed that the cost of transporting the materials, which he estimated at $10 to $11 per ton, would cut significantly into the potential revenue of the Waste Management contract.
During his presentation Joseph said the transportation costs that Readling assigned to Waste Management were far above industry standards and unfairly burdened his company's offer.
Joseph calculated the transportation cost to the city of hauling recyclables directly to the MRF in Winston-Salem at around $7 per ton.
He also said that Waste Management could likely revamp Greensboro's collection routes, allowing the elimination of one truck. By Joseph's calculation Waste Management's offer had an annual value of $1 million to the city, while ReCommunity's would only yield $634,000.
Readling also left out several of Waste Management's monetary incentives in his calculations, including an education center at their MRF and the "Recyclebank" program, saying that he felt some of them were "inappropriate" to include in his model. He stated that the reason he left out the education center was because it was something that Waste Management already had, independent of the contract.
Readling also threw out the value of the facility tours and public speaking events included in the Waste Management offer. However, Readling included in his model ReCommunity's offer the cost of a "Recycling Educator" that they estimated to be $35,000 to $40,000 per year.
Joseph said there was no reason to throw out the monetary value of Waste Management's education center or the Recyclebank program, stating that both would bring value to the city in terms of public outreach and participation in recycling.
Fielkow took a different view. Fielkow, who at an earlier meeting said his company doesn't own any trucks, agreed with Readling's transportation cost assumptions and said they were actually on the conservative side, especially when factoring in the cost of fleet maintenance.
Joseph later pointed out that Waste Management was the largest solid waste provider in North America, and was experienced with the costs of transportation.
Fielkow also touted ReCommunity's Greensboro MRF, which he said not only saves the city on transportation but provides employment to about 65 people. His associate, Bill Leonidas, estimated the average salary of those positions to be around $20,000 a year including benefits, when asked by Councilmember Dianne Bellamy-Small.
Fielkow also made a point of the roughly $4 million ReCommunity would invest in upfitting their MRF if they received the contract. "Its world class state can pretty much best any facility," he said of the facility the upgrades would produce. The upfits would allow the company to accept a wider range of recyclable materials.
Joseph pointed out that Waste Management's MRF is already able to accept a wide range of recyclables, and was already state of the art. "I'm confident in saying it's probably one of the best recycling facilities in the United States today," he said. ReCommunity has said that they would need until April to complete the upfit of their facility, and until that time the current contract where Greensboro pays ReCommunity for recycling services would remain in place.
Before the meeting Shah-Khan had handed councilmembers a memo that stated the city interpreted the present contract, negotiated during the reign of former City Manager Mitch Johnson, to require the city to pay ReCommunity a $598,000 fee to get out of the contract early. However, ReCommunity said the fee would be $1.3 million.
Councilmember Trudy Wade expressed concern over the city's current contract, and asked why ReCommunity couldn't do better than a start date of April 1, which would still leave the city paying for recycling until then.
"This is like asking us to go back into business with someone that's been making money on you and not coming forward and saying, "Hey, let's share here or we've got a better way of doing it,'" said Wade. Although ReCommunity did lower its per ton fee in 2007 from $60 per ton to $21 per ton, Waste Management was already paying Winston-Salem in the late 1990s. Joseph said his company had never charged Winston-Salem a fee for recyclables.
Wade also questioned why, if the contract start date was April 1, that a vendor couldn't be selected after the November election, which may have an effect on the markets and thus the value of recyclables. Fielkow of ReCommunity said that was something his company would be willing to work with if it was awarded the contract now.