Texas Disposal Systems unhappy with proposed new lobbying rules

City Council is scheduled to take up a recommendation from city staff at its meeting on Thursday that will make changes to the longtime Anti-Lobbying Ordinance in response to problems the city has encountered with its waste contracts.

The main problem is that Texas Disposal Systems, which currently is under a 30-year contract with the city to collect waste and yard trimmings and a 20-year contract to process recycling, has claimed that the city’s lobbying rules prevent it from bidding on any other waste hauling contracts. If TDS did submit additional bids, the company claims that its regular back-and-forth communications with city officials might constitute a violation of the ordinance and put it at risk of losing its existing multimillion-dollar contracts. That’s a risk the company is not willing to take, its representative, Michael Whellan, told the Ethics Review Commission on Oct. 11.

Even though TDS is no longer bidding on the contracts, it has dispatched Whellan to argue against the city awarding contracts to other companies, a practice that some of its smaller competitors have denounced as bullying.

As a result of TDS’s complaints, Council voted in April to temporarily waive the ordinance for waste contracts while the Zero Waste Advisory Commission and city staff explored potential rules changes that would address the concerns expressed by the company.

The proposal that staff has presented to Council loosens restrictions and penalties in a number of ways, most notably by removing a current “debarment” rule that allows the city to bar contractors from bidding on solicitations as a punishment for violating lobbying rules. It also shortens the “no contact period” during which contractors are not allowed to discuss a potential solicitation with city employees.

Nevertheless, the proposal remains far from satisfactory to TDS. In fact, the company argues that it would be best to permanently exclude waste contracts from the Anti-Lobbying Ordinance, pointing out that there are a number of other issue areas that are exempt from the ordinance, including arts and culture contracts, and, perhaps most notably, real estate contracts. Furthermore, it argues that the city is a direct competitor and could always opt to have its own garbage division take over services that have historically been outsourced to private companies.

Nevertheless, Whellan conceded in an interview with the Austin Monitor that permanently excluding trash contracts from anti-lobbying rules “does not seem to be Council’s appetite right now.”

But at the very least, the company insists that Council remove provisions of the current proposal that it says jeopardize its First Amendment rights by too vaguely defining what constitutes prohibited communications. It also demands that contractors be allowed to appeal violations determined by city staff. If those changes aren’t made, said Whellan, the company will continue to not bid on contracts.

Meanwhile, Council Member Leslie Pool, who has been leading the effort on Council to rewrite the rules, has suggested she is conflicted about some of the changes in staff’s recommendation. Speaking to the Ethics Review Commission at the meeting, she suggested that although the city has never invoked the debarment provision, it may serve to deter bad behavior.

She said she was eager for waste contracts to once again be subject to typical lobbying restrictions.

“I’m a bit concerned that we’ve gone a number of months without the Anti-Lobbying Ordinance in place,” she said. “There have only been two waste contracts approved in that period, but a half dozen are coming up in the coming months.”

Nikelle Meade, an agent for Synagro, a company that the city currently contracts with to process biosolids, offered a rebuttal to TDS, arguing for stricter lobbying restrictions.

Meade urged for a longer no contact period and dismissed claims that current lobbying restrictions run afoul of the First Amendment. She noted that courts have ruled in favor of certain levels of speech restriction if there is a “compelling interest” to limit corruption or the appearance of corruption.

Members of the Ethics Review Commission appeared to struggle to make sense of the competing narratives and where and how the city should draw the lines when trying to limit influence peddling.

Commissioner Brian Thompson was sensitive to the constitutional implications raised by TDS, noting that courts in recent years have not been friendly to restrictions on political speech. He worried that the city might be setting itself up for legal challenges from TDS or others.

Commissioner Donna Beth McCormick wasn’t impressed with TDS complaints that the rules were overbearing. And the concept of debarment struck her as intuitive.

“It doesn’t have to be as difficult as you’re making it sound,” she said, in response to city purchasing officer James Scarborough, who was explaining why the staff recommendation did not include debarment. “These are the rules and if you don’t follow the rules then you’re out.”

Commissioner Ben Stratmann, however, was incredulous to learn from staff that a business had once been found in violation because one of their employees responded to a question that he’d received from a city staffer.

“I would probably be very unhappy if I were in the shoes of that business,” he said.

The commission voted unanimously to refer the matter to its own working group that will explore the issue and come up with a recommendation in the coming weeks. Pool said that she wants Council to have input from the commission before it acts on the proposed ordinance change, so she will ask to postpone a vote on it at the Thursday Council meeting.

Photo by John Flynn. This story has been corrected. McCormick was directing her comments to Scarborough, not Whellan, as was originally reported.

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