Houston trash deal vote delayed amid questions over transparency, pricing

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HOUSTON — The vote to approve a controversial $48.4 million recycling proposal was delayed by the Houston City Council on Wednesday amid questions over how Mayor Sylvester Turner’s administration scored the winning bid and concerns about the secrecy surrounding the deal.

“It smells, it stinks, it’s rotten,” Councilman Dave Martin said. “I’ll keep on going.”

Turner defended the process by which the winning bidder — Spain-based Fomento de Construcciones y Contratas or FCC — came before city council.

“The process is sound and we’ve operated the process with integrity,” Turner told council members, noting that the process was ok’d by the city’s legal department, its procurement office, and the city controller.

Four city council members “tagged” the proposal, a method by which the council can punt voting on an issue to a following meeting.

Among the problems the council cited:

  • Pricing. Some council members wondered why FCC scored high marks for cost when its per-ton recycling processing fee was the second-highest compared to the other finalists. “The pricing category is totally screwed up and off,” Martin said. “It doesn’t smell right to me. It’s totally off base.”
  • Inequity in the proposals. When the city put its recycling collection out for bid, documents suggested the contract would run for 10 years, with the possibility of two five-year extensions. FCC’s winning proposal shows that the firm submitted a deal with a 15-year initial term, with one five-year option. Some competing vendors said at a Tuesday committee hearing that if they had known that was allowed, they would have submitted a similar proposal — which would allow them, like FCC, to propose a lower price.
  • Confusion over numbers. Two of the losing bidders say the costs Solid Waste Director Harry Hayes presented Tuesday aren’t the numbers they submitted in their bid paperwork. “It’s the first I’ve seen it,” Independent Texas Recyclers president Dean Gorby said, pointing out that he proposed a $63-per-ton fee and had no idea why the city had represented his bid as $76-per-ton to the council. Hayes responded that the bid had been adjusted to reflect other fees in its proposal, but he declined to elaborate.
  • Lack of transparency. Several council members said they were unhappy with Turner’s team keeping information about the proposal from the council. One council member said he was insulted at having to sign a nondisclosure agreement before reviewing information about the deal. Turner backed off on that requirement on Wednesday.

Turner spent much of Wednesday’s council meeting defending the deal and debating down critiques of the proposal.

For example, Turner said that other cities have long-term recycling contracts.

“The average length on these contacts is 20 to 25 years,” he said. “In one city I think it may be 30. And I’m talking Texas cities… That’s not unusual.”

Turner also said that FCC promised to build a new recycling facility, create 75 to 100 new jobs and “continue to utilize state-of-the-art technology.”

Councilman Greg Travis was not soothed by Turner’s arguments.

“Maybe I’ve got the wrong documents, maybe I’ve got the wrong contract, maybe I’ve got the wrong request for proposal, maybe I’ve got the wrong scoring sheets, and if I do someone needs to give me the right ones,” he said. “Because when I look at this, I’ve got problems.”

There were suggestions from council members that Turner scrap the proposal and start anew. Turner dismissed that idea. The vote will come before city council next week.

“If I believe the process is sound, I’m going to stand by it,” Turner said. “And I’m standing by this one.”

The controversy comes in the wake of the chairman of a recycling firm calling for an investigation into how the city made its recycling decision.

George Gitschel of Eco-Hub said he was close to a deal with the city when Turner scrapped the “One Bin” plan.

“One Bin” was a proposal to collect all trash, recycling and yard waste in one can and recycle as much as 75 percent of it. The company proposed reducing garbage trucks routes from three to one and putting all trash and recycling in just one bin. The company would then sell the recycling materials for new products.

“I invented this system and I did it to try to eliminate garbage on earth,” Gitschel said.

The savings to taxpayers could have been as much as $40 million with zero cost to taxpayers, according to Gitschel. At a Tuesday meeting before a city council committee, he accused city trash boss Hayes of being “in bed” with the giant trash and recycling firms, an accusation that raised the ire of some council members who said such claims were inappropriate.

Read more here: Houston’s trash deal smells, wants probe into possible bid rigging, recycling inventor says

See other news coverage leading up to Wednesday’s council debate here:

Trent Seibert can be reached at [email protected] or 832-258-6119.

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Trent is an award-winning editor and reporter, who has previously worked The Denver Post, The (Nashville) Tennessean, and the San Diego Union-Tribune. Most recently, he was the investigative producer for Houston’s KTRK-TV ABC-13. He was also the editor and founder of Texas Watchdog, a ground-breaking news group that paved the way for this project. Trent is a teacher of journalism skills, and has shown hundreds of reporters and citizen-journalists how to use public records, databases and journalism tools to keep a watchful eye on their own local government.

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