Council says Balcones to get at least 60 percent of recycling deal

The long-standing question of who will handle the City of Austin’s single-stream residential recycling program has been 60 percent answered.

 

The City Council voted unanimously on Thursday to award at least that portion of the program to Balcones Recycling. They gave city staff and Balcones’ competitor Texas Disposal Systems (TDS) another week to work out any remaining differences over their agreement. The action came over the objections of TDS CEO Bob Gregory who again asked for a delay in the proceedings.

 

Gregory remained concerned about contract language for both his company and Balcones, and the fact that TDS hadn’t had a chance to adequately review it. TDS holds the current agreement to process Austin’s residential single-stream recycling.

 

Should TDS and staff reach an agreement, up to 40 percent of the residential program could go to that company. If issues continue to plague that effort – as they have for many weeks – the Council could decide to award the entire program to Balcones.

 

Solid Waste Services director Bob Gedert told In Fact Daily that he felt “a bit of relief that we are moving forward.”

 

“To proceed with the zero waste plans of the city, as well as our department master plan, these contracts really need to be signed and progressing along,” he added. “There has been history on these negotiations prior to my arrival. My commitment when I was hired last year was to finalize this – get the deals done in the fairest way possible, and (by) the most equitable means possible and get us on the path of a secure 20-year path of processing our recyclables. We’re almost at the finish line.”

 

The final agreement is a 20-year covenant that leaves space for renegotiations at various intervals.

 

Council action came after several members of the body tried to illustrate that staff had dealt with TDS’ issues. Concerns about burning some portion of the city’s recyclables for energy production, what might happen if one of the participating companies was bought by another firm, the much-debated most favored nation clause of the deal, and the potential of the need for a transition plan, should Balcones’ still unconstructed facility on Johnny Morris Road not be ready in time all came up.

 

Gedert told Council Members that burning had been eliminated as a potential method of disposal, that the Council could approve the continuation of the deal should one of the companies face a buy-out, that an acceptable version of the most favored nation (community) clause had been included for both TDS and Balcones, and that the council would also have final approval of any transition plan.

 

Mayor Lee Leffingwell explained his desire for a split contract by referencing comments he’d made two weeks ago. “I made remarks the last time we talked about this about the desirability of having two different competitors in this business – two different recycling locations – both for proximity to where … the recycled materials (are) and also to reduce the vehicle miles traveled,” he said. “But the main thing is the redundancy that is provided.”

 

A split of the deal will likely divide Austin’s recycling at roughly the Colorado River. Anything collected south of that line would be hauled to TDS’ Creedmoor facility. The city’s larger northern section would be handled by Balcones’ future Johnny Morris Lane facility.

 

The resolution of the city’s long-term residential single-stream recycling contract represents the conclusion of a process that began several years ago. Plans to build a city-owned Materials Recycling Facility, or MRF – scheduled to open when the city’s single stream recycling program began in 2008 – were canceled after spending $1 million on design work.

 

Shortly thereafter, the city signed Greenstar North America to transport and handle the materials. As commodities prices matched the poor performance of the broader markets, questions began to surface about that deal, which found the city paying a substantial sum to Greenstar. Greenstar hauled Austin’s recyclables to facilities in Irving and San Antonio.

 

Throughout 2010, the city entertained bids for a new recycling program that would offer officials a locally available processing option. That process was eventually thrown out, and TDS took over the program on a short term basis.

 

The council, meanwhile, instructed city staff to negotiate a long term deal with TDS and Balcones. That effort took seven months.

 

And it continues. Gedert hopes to successfully conclude negotiations with TDS in time for further council action next Thursday. However, Gregory worries that with the holiday weekend there will not be enough time to complete a deal.

 

The contract(s) will take effect on October 1, 2012.