SAN ANGELO,TX — Republic Services may hold some of the cards, but not all of them, as the City embarked on a series of public forums as a precursor to answering Republic Services request to eliminate or modify the citywide curbside recycling program.
The forums could be seen as a stall tactic by San Angelo Mayor Brenda Gunter to obtain better negotiating ground for the City. Republic has asked for the contract terms to be renegotiated. Every day the city council delays answering Republic Services’ request to eliminate curbside recycling or approve for a trash price hike to keep it, Republic loses about $2,000.
The contract, ratified by the San Angelo City Council in 2014, contains an agreement for Republic to provide a curbside recycling for all residential trash pickup customers. Republic, separate from the City, made a three-year agreement with a locally owned recycling vendor to sort and sell the usable (or non-contaminated) recyclables. That contract ended in August.
City Director of Operations Shane Kelton explained at the opening of last night’s forum, first by showing a CBS News television report, and then summarizing news reports from Fort Worth and Longview, that the bottom of the market for recyclables has fallen through the floor.
There is nowhere to take most items traditionally recycled, the reports stated.
Previously, Republic Services told us that they were now paying $150 per ton to drop off unwanted recyclables at their contractor for recyclables, Butt’s Recycling. Butt’s manager told the audience during the Q&A Wednesday night that he had to make a business decision about renewing the recycling contract with Republic because his company decided it wasn’t profitable. Republic is on a week-to-week arrangement with Butt’s for their handling of San Angelo’s recyclables. Republic complained it is losing $55,000 per month on the deal, and most of the recyclable pickup tonnage is contaminated anyway. To dump the recyclables into the landfill here costs less than $40 per ton, for a comparison.
Wednesday night’s citizen reaction varied from unrealistic calls to action to have San Angelo solve the global recycling markets to statements and questions on how to keep curbside recycling going even in a recyclable material market downturn.
Kelton agreed with many in the audience that eliminating a recycling program today will lose the knowledge and desire to recycle for a generation.
Republic area manager Joe Spano said he sent a letter to the City last week demanding a quick resolution to the curbside recycling problem as his corporation is losing money. We have not seen the letter, and City Public Information Officer Anthony Wilson said he had not seen the letter.
During a presentation by Republic requesting action on the recycling program at a city council meeting on Sept 4, Councilman Tommy Hiebert asked that the since the trash contract was negotiated by both sides in good faith why does the City taxpayer have to change the terms of the deal to help Republic stop bleeding cash?
City Attorney Theresa James shut down that line of questioning at that council meeting before any answers were given, citing contract issues not yet explored. City Manager Daniel Valenzuela agreed that it was too early to openly discuss the exact terms of the contract.
Also at the Sept. 4 meeting, Mayor Brenda Gunter strongly suggested that her fellow councilmembers not instruct City staff to do anything about the trash contract until a series of public town halls were held. Wednesday evening’s forum was the first of three.
At Wednesday’s forum, Mayor Gunter telegraphed her position on a possible new trash deal. She wants to end curbside recycling and she wants citizens to pay less for residential trash collection in any renegotiated deal. She said if a citizen still wants to recycle after Republic’s curbside service ends, that citizen can contract for recycling pickup from a private company. The City will handle just the trash and Kelton stressed several times that recyclable pickup is an open market in San Angelo, meaning there was no exclusive arrangement with Republic for the service.
Not answered clearly at the forum was what are the terms of the contract. Can Republic ask council for a rate hike? Yes they can, according to the contract, if market conditions change. What if council doesn’t grant a change of terms or a rate hike? The contract states that Republic can give 180 days notice before ceasing all residential trash pickup and end the contract.
Will Republic announce they are moving out of San Angelo? Not likely. In order to finalize the 2014 contract, Republic Services gave the City of San Angelo a $16,613,000 package of upfront money and promised future payments. Included in that package was a one-time $3.6 million payment to the City of San Angelo and the purchase of the installation of a new cell at the landfill costing just over $1 million. Of the $16.3 million package, $6.3 million was promised in annual landfill lease payments, where 40 percent of that money has already been paid. More here.
As each day passes, the pressure for Republic to stop the bleeding of profits on residential curbside recycling pickup increases. However, critics of Republic can claim that the corporation is making more than enough money on the City contract with its high commercial dumpster fees and landfill management earnings to more than make up for the loss. As Hiebert said at the Sept. 4 council meeting, both sides negotiated the deal in good faith.
For now, the mayor and the City are in a standoff with Republic over curbside recycling. Everyone is polite in public so far. Behind the scenes, however, both sides are positioning for leverage for what could become a very public fight.
Two more forums will be held the following dates:
- Tuesday, Oct. 2, at Southland Baptist Church, 4300 Meadow Creek Trail.
- Thursday, Oct. 4, in the Lincoln Middle School cafeteria, 255 Lake View Heroes Drive.
Kelton urged all taxpayers in San Angelo to complete the City’s online survey. So far, only about 1600 have taken it. That survey is here.
Subscribe to the LIVE! Daily
Required
Post a comment to this article here: