Feature

What we know about Flint's erupting waste controversy

While Republic, Rizzo and city council settle contract chaos, we outline need-to-know points of the dispute.

UPDATE, Oct. 25: The Flint City Council voted unanimously to support a new $3.74 million contract with Republic Services on Oct. 24, as reported by MLive. Councilman Eric Mays, who had sided with Mayor Karen Weaver in support of Rizzo Environmental Services, abstained from the vote. The one-year contract would begin on Nov. 12 with the option to extend into 2018.

Rizzo's involvement in an ongoing federal corruption investigation was cited as a factor in this decision by Councilman Scott Kincaid. He and seven other council members also agreed to withdraw their lawsuit against Weaver and her administration related to the contract negotiations.

Final approval of the contract is still required from the Receivership Transition Authority Board. No date has been set for their next meeting

UPDATE, Oct. 20: Flint city officials are preparing to offer Republic Services a one-year contract, as reported by MLive. The new contract would cost $3.74 million per year and run until Nov. 12, 2017, with the option to extend.

City Council President Kerry Nelson told MLive that the council came to a "tentative deal" and is expected to vote on a resolution at their next regularly scheduled meeting on Oct. 24. Final approval from the city's Receivership Transition Authority Board will then be required.

Representatives of Mayor Karen Weaver's office didn't say whether Rizzo Environmental Services' involvement in a federal corruption investigation had anything to do with this decision. Both companies have been collecting Flint's waste for more than two weeks now and it's still unclear whether Rizzo will be paid for its services during that time.

UPDATE, Oct. 13: Judge Joseph Farah declined to grant an injunction request filed by Republic Services last week to prevent the city from terminating its contract which runs until Nov. 11as reported by MLive. Both Republic and Rizzo Environmental Services technically have contracts to collect the city's waste and have been doing so concurrently, though Mayor Karen Weaver believes a prior ruling from the Michigan Court of Appeals says otherwise.

While Farah said he couldn't grant an injunction to prevent contract breach, he did disagree with Weaver's interpretation of the other ruling and said Republic would likely be successful against the city if it voided the company's contract. Farah also had strong words for the politicians on both sides of this dispute.

No settlement has been reached yet.

UPDATE, Oct. 12: Disagreements have broken out among the Flint City Council over how to resolve the contract issue. At a council meeting on Oct. 10, Councilman Eric Mays called his fellow members "stupid" for their stance in the negotiations, as reported by MLive.

Mays is the only council member to side with Mayor Karen Weaver's support of Rizzo Environmental Services, while the others support Republic Servcies. Though Mays asked for an update on the negotiations, the other members said it would be inappropriate to say anything in public due to ongoing litigation with Weaver. Both Republic and Rizzo continue to collect Flint's waste and no resolution has been announced.

UPDATE, Oct. 6: Councilman Scott Kincaid indicated he may withdraw the lawsuit against Mayor Karen Weaver and her administration, as reported by MLive. He noted, however, that he will continue to table items from her office while the contract issue is worked out.

"The court can't order (the city to hire anyone) and we couldn't get a resolution. If the administration wants to do an emergency purchase every couple of weeks ... that's on them," Kincaid said to MLive.

Eric Mays, the council member supporting Mayor Weaver in the battle, noted he is asking for a public meeting to discuss the trash issue. Overall, an agreement has not yet been reached.

UPDATE, Oct. 4: As of Oct. 3 a state-appointed arbitrator has been brought in by Judge Joseph Farah in an attempt to resolve three days of stalled negotiations in court. Both Rizzo Environmental Services and Republic Servcies were collecting waste again yesterday and, as reported by ABC12, at least one resident waited to put the trash out until her preferred hauler arrived. The dispute has even spilled over into the faith community, with a group of local pastors calling for Councilman Scott Kincaid to apologize to Mayor Karen Weaver for comments he made about her position in the negotiations last week.

Republic said no update was currently available and Rizzo could not be reached for comment.

UPDATE, Sept. 30: Both Rizzo Environmental Services and Republic Services plan to collect Flint's waste again today after a ruling from the Michigan Court of Appeals reversed an August filing by Genesee County Circuit Judge Joseph Farah. Mayor Karen Weaver has claimed this as a short-term victory.

"I am pleased that the State Court of Appeals has again ruled that I indeed had the authority to utilize my power as Mayor when I asked Rizzo Environmental Services, the lowest responsible bidder, to start collecting trash in Flint and requested that Republic discontinue its services. In light of today’s developments, I have asked that crews from Rizzo temporarily resume collecting trash in the city," said Weaver in a statement.

The Court of Appeals has yet to rule on a temporary restraining order that was filed by Farah on Sept. 26.  

"It is our understanding that today's Court of Appeals ruling does not impact the Temporary Restraining Order on interim collection service, which remains in effect. We plan to provide normal waste collection service on Friday, and remain optimistic that we will soon enter into a long-term service agreement with the City," said Russ Knocke, vice president of communications and public affairs with Republic Services, in a statement.

Weaver, members of her administration and select council members are set to meet again in court today to continue negotiations for a long-term contract.

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Background

Flint, MI has been in the news for many reasons in 2016, though the recent ongoing dispute over the city's waste contract may the hardest story to follow yet.

Republic Services has been collecting Flint's waste since early 2013. The decision to continue with Republic Services or start a new contract with Rizzo Environmental Services first came before the Flint City Council in June. While eight of the nine council members supported Republic, Mayor Karen Weaver and the ninth member supported Rizzo.

Since June, this dispute has led to collections being temporarily canceled, calls for a state investigation, a public records lawsuit, multiple legal motions by elected officials, an attempted termination of Republic’s temporary contract, one day where both companies were collecting the same routes and much more.

Republic currently has a temporary contract to continue collections until Nov. 11. Genesee County Circuit Judge Joseph Farah has signed a temporary restraining order preventing Weaver from hiring Rizzo or ending Republic's agreement. Farah required Weaver, city officials and council members to report to court this week until an agreement can be reached.

In an effort to clarify details around contract costs — the main point of contention — Waste Dive spoke to both Rizzo and Republic about information their bids contain. Republic also provided a Sept. 13 memo which was sent by the company’s legal counsel to Derrick Jones, Flint’s purchasing manager, for further information.

Mayor Weaver's office could not be reached for comment. Councilman Scott Kincaid, who has been a leading proponent for Republic, could also not be reached for comment.

Terms and costs

According to the memo, Republic, Rizzo and Emterra Environmental USA submitted bids for a five-year contract with the city in the spring. The city administration had these bids evaluated by three officials: Purchasing Manager Jones, Transportation Director Kay Muhammad and Waste Services Coordinator Heather Griffin. They evaluated these bids between late May and early June based on multiple factors. Republic and Rizzo received the same score for cost, but Republic came out on top with a total of 80 points. Rizzo received 76 and Emterra received 69.

Republic bid $19.52 million, Emterra bid $18.51 million and Rizzo bid $17.42 million. Weaver backed Rizzo as the "lowest responsible bidder," citing the $2 million difference as the main factor in a city with dire financial constraints.

"We're offering a $2 million savings over five years, over the next lowest bidder," Joseph Munem, director of government affairs at Rizzo, told Waste Dive. "'Lowest responsible bidder' is a very narrowly defined descriptor, of which we are."

Republic and the eight council members dispute this claim.

"There really is no $2 million savings with Rizzo," Gary Hicks, municipal services manager for Republic told Waste Dive. "When you read the city's own purchasing ordinance and you look at the bids that were submitted you find that Republic is the lowest responsible bidder."

Republic's Sept. 13 memo argues that Rizzo’s bid was "deficient in several ways" due to multiple factors.

Landfill access

The city's invitation to bid requested that the selected hauler allow residents with a city permit to dispose of up to one ton of debris for free at their landfill. According to a cover sheet in the memo, dated May 5, Rizzo noted that its list of services "does not include free dumps for residents."

Based on an assumed value of $35 per household, Republic says its landfill service is worth $1.34 million annually. The company argues that, in fact, this makes their bid less expensive.

"It is a true differentiating factor between everyone that bid," said Hicks.

Rizzo argues that it is now willing to offer unlimited bulk pick-up.

"Why in the world would anybody want to load up stuff in a truck and take it to the dump when we're going to pick up from them at the curb?" said Munem. "This is a specious argument."

Republic told Waste Dive it will also offer unlimited bulk pick-up at the curb.

Providing a blight plan

The city asked bidders to provide a blight remediation plan for dealing with large amounts of illegal dumping and waste from abandoned homes.

Republic proposed dedicating a collection truck and crew full-time to working with Flint's blight elimination division. The truck would have special identification and the crew would have special uniforms. Hicks says this was inspired by challenges crews currently face because they can't enter private property to collect illegally dumped items. Republic hopes that advertising this truck's special status and coming through neighborhoods regularly will encourage residents to bring their waste to the curb instead. City officials valued this at approximately $155,000 per year, though Republic argues that its true value is approximately $238,000.

Rizzo's original bid offered two 40-yard roll off containers per month at an estimated value of $12,000. The company has since said it would also include a clam truck and rear-load packer, along with staff. As Republic’s memo notes, the city's purchasing ordinance doesn't allow for bids to be altered or corrected once submitted. Rizzo says the change was a clarification as requested by the city, and not a modification. Rizzo also notes its experience dealing with illegal dumping in Detroit as another reason why it has the better plan.

"This is a fantasy that Republic is selling," said Munem. "By offering that clam truck and also by picking up bulk items unlimited we are offering the only truly significant blight remediation."

Ripple effects of the lead crisis

Based on these two factors, Republic argues that the true cost of each bid is different than has been reported.

"While Rizzo's base pricing is slightly lower, this is not surprising for a base bid that is missing several minimum bid requirements," reads the memo.

Since this process began in June, the city and council members have gravitated toward negotiating a contract for three years rather than five. According to Republic, when free landfill access and blight remediation are factored in it has the lowest bid for either timeframe.

For a three-year contract the company says that its total bid would be $11.59 million as compared to Rizzo’s $11.89 million. For a five-year contract, using this logic, Republic’s total bid would be $19.52 million as compared to Rizzo’s $22.12 million.

This question of which bid is in fact lowest matters more in Flint than most other cities. The city is still under the guidance of a Receivership Transition Advisory Board and is dealing with major infrastructure costs and consequences related to lead-tainted water.

Weaver cited this as the reason for her stance at a town hall meeting on Sept. 28.

"If you want to know what I’m fighting about, some money, I thought about $2 million for more lead service line replacement, and $2 million is a lot," said Weaver, as reported by East Village Magazine. "I don’t know why nobody’s mad that they [Republic] have been charging us $2 million more."

While the majority of council members disagree with this reasoning, Rizzo sides with the mayor's connection to the lead crisis.

"You have an irresponsible city council that is in a power struggle with the mayor," said Munem. "One would think that responsible elected officials would be looking to find every spare penny to sink into resolving that problem."

Hicks noted that Republic played a large role in assisting with the recycling of water bottles by increasing collection frequencies and other services.

"We continue to go out every day and try and provide the best service for the residents of the city of Flint that we can," he said.

Waste Dive will update this story as the situation develops.

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