UPDATE: Houston recycling contract vote further delayed, but resistance wavers
UPDATE: Jan. 4, 2018: The Houston City Council did not vote on a $36.8 million recycling contract with FCC Environmental Services at its Jan. 3 meeting because multiple members "tagged" it for a one-week delay.
Discussion of this contract was more limited at the latest meeting and previous opponents to the deal were less vocal. One member said he reached the conclusion that FCC was the best choice because they would offer a cap on recycling costs, unlike Waste Management, though he also recognized why Waste Management might not want to set that precedent. Another member raised questions about transparency in the procurement process, which drew a characteristic rebuke from Mayor Sylvester Turner.
The vote will now on appear on the council's Jan. 10 agenda.
UPDATE: Dec. 20, 2017: The Houston City Council will not be approving a $36.8 million recycling contract with FCC Environmental Services until Jan. 3 at the earliest, due to ongoing questions about the deal.
City Controller Chris Brown certified the contract earlier this week, as reported by ABC 13. Though the item was "tagged" by two council members during the Dec. 19 session, meaning consideration is automatically delayed until the next scheduled meeting.
The city's contract assessment process continues to be the main point of confusion among members. Waste Management was also present to question how it was ranked lower than FCC in multiple categories and make an entreaty for reconsideration.
"We just don’t understand as the world’s largest recycler how we could be surpassed by someone that doesn't even have a facility here in Houston," said Shanna Lopez, a municipal solutions manager with the company.
Mayor Sylvester Turner was dismissive of these arguments and said the company's refusal to include a price cap was problematic. He cited China's new scrap import policies multiple times as a reason to lock in the FCC contract as soon as possible.
"The market is falling and is falling dramatically, and that’s why the cap is so important. If you don’t include a cap the city is at risk," he said. "We are now paying Waste Management for recycling instead of Waste Management paying us."
UPDATE Dec. 12, 2017: The Houston City Council is no longer expected to vote on a 15-year, $36.8 million recycling contract with FCC Environmental Services at its Dec. 13 meeting. This latest delay comes after Controller Chris Brown sent a memo to Mayor Sylvester Turner, the city's chief procurement officer and all council members stating this his office could not certify the contract in time due to multiple outstanding questions, as reported by ABC 13.
Brown's office cited concerns about transparency, including an "unusual" requirement that his staff had to sign non-disclosure agreements before reviewing the proposals in "a proctored environment" with no legal justification. Efforts to review scoring sheets and other original paperwork have also been hindered because much of the original documentation was ruined during Hurricane Harvey.
The memo also raised questions about pending litigation against subcontracted staffing firm Taylor Smith Consulting. Multiple lawsuits involve alleged overtime violations under the Fair Labor Standards Act. One is a class action suit with more than 140 named plaintiffs.
In response to ABC 13, FCC noted that Waste Management — Houston's current recycler — also uses Taylor Smith Consulting. FCC said it would find another qualified vendor if the company was found guilty of any labor violations.
Last week, a judge ordered the city to produce all responsive emails regarding prior contract negotiations with the company EcoHub by Jan. 5. Following that, EcoHub held a press conference calling on council members to delay the vote until these emails could be reviewed. As the council's holiday recess approaches, it appears more likely this may happen.
- After months of speculation, Houston Mayor Sylvester Turner's administration has once again selected FCC Environmental Services for a new 15-year collection and processing contract. This proposal was presented at a Nov. 27 city council committee meeting, where many members expressed frustration with what they felt was a lack of transparency, as reported by the Houston Chronicle.
- Under the new proposal, FCC would charge no more than $19 per ton for recyclables if market values remain low and split any revenue after an $87 processing fee. These terms are more favorable to the city than FCC's previous bid. FCC would also donate a planned material recovery facility and the land it will be built on, worth an estimated $23 million, within one year of opening. The new contract would be worth an estimated $37 million, as reported by ABC 13.
- City staff also reviewed best and final offers from Waste Management, Republic Services and Independent Texas Recyclers, though didn't release specific details on those proposals. After an unsuccessful tie vote to delay the presentation, one council member left the meeting and another said the deal felt "predetermined." The contract decision is expected to be on the agenda at the council's Dec. 13 meeting.
The procurement process around Houston's recycling contract has been a long and often contentious one. Turner initially announced his support for FCC in June, when the contract was valued at $57 million for 20 years. Following weeks of discussion, the terms were eventually changed to $48.4 million for 15 years before Turner postponed the vote later that month.
Soon after, the city reopened the bidding process due to ongoing questions from council members and competitors. Hurricane Harvey then hit the city in September, suspending recycling service entirely and putting new contract considerations on hold. Now that a sense of normalcy has returned, along with recycling access earlier this month, this discussion is back with many of the same fault lines as before.
In some ways, the political climate is already sensitive due to years of debate over recycling contracts that go back to Turner's predecessor Annise Parker. During her tenure, Parker began negotiations with mixed waste start-up EcoHub for a "OneBin" proposal that were left unresolved after her term ended.
Turner also considered the proposal when he took office in 2016, but ultimately decided to renew the city's contract with Waste Management. The details surrounding the EcoHub negotiations are complex and remain a sensitive subject for the Turner administration. EcoHub has filed a public records lawsuit with the city to gain more information, which has continued to play out this month.
Another element in the debate is FCC's status as a relative newcomer to the U.S. market, where the company has been competitive and often successful against some of the industry's largest players. The company now has multiple contracts in Texas and Florida and has pledged to move its headquarters to Houston if awarded this latest deal.
All of these factors have created one of the most unpredictable large municipal contract decisions of the year and will make the potential Dec. 13 vote a key one to follow.
- Houston Chronicle Houston council members again question proposed recycling contract
- ABC 13 Recycling plan meets controversy with city leaders again
- City of Houston Recycling memo
- ABC 13 Controller slows controversial recycling contract citing transparency concerns
- ABC 13 City controller clears final hurdle for troubled recycling contract
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