Aug. 24, 2011 08:18

Vendor selection in landfill decision questioned

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Critics call out rushed process, lack of due diligence and transparency

(l-r) Representatives of Gate City Waste Services, DH Griffin’s Hilltop Road scrapyard, Councilman Danny Thompson with community leader Goldie Wells, and Councilwoman Trudy Wde. (photos by Jordan Green)

Executives with Gate City Waste Services had been sitting near the podium since the beginning of the meeting. They looked confident.

Before the vote to reopen the White Street Landfill came up at its Aug. 16 meeting, the Greensboro City Council wrestled with a request for $15,000 to support an event commemorating the 10th anniversary of the Sept. 11, 2001 terrorist attacks that struck the World Trade Center and the Pentagon, and downed an airliner in rural Pennsylvania.

DH Griffin Sr., a Greensboro businessman who is one of the majority partners in Gate City Services, seemed caught by surprise when Councilwoman Trudy Wade called his name.

“I think we have real ties to Greensboro,” she said. “After all, we have a businessperson who was instrumental in the aftermath. Mr. Griffin, I think you should stand. You did such a good job, your company did, in the aftermath of 9-11. You probably haven’t been appreciated the way you should have been for all that hard work up there. So would you mind standing? I’d just like to give you a round of applause for what you did.”

Mayor Pro Tem Nancy Vaughan appeared to be taken aback by the recognition, too.

“And let’s not forget the family of Sandra Bradshaw,” she said. A flight attendant from Greensboro, Bradshaw was aboard United Flight 93 when crew and passengers overpowered hijackers to prevent it from being turned into a missile that could be used to attack and destroy American people and assets.

Gate City Waste Services, which was incorporated five months ago, had been rumored to have an inside track on the contract to operate the White Street Landfill.

The city received six proposals from private companies on Aug. 5, and met to select a vendor 11 days later.

At-large Councilman Robbie Perkins, who opposes the move to reopen the landfill, said he had never before seen the council take action on a major policy decision on the same day the information was presented. Typically, a briefing session is held to allow members to digest the information, and then a vote is scheduled for the following council meeting.

Under questioning by Councilwoman Dianne Bellamy-Small, City Manager Rashad Young said, “Typically, what my experience has been in issuing a [request for proposals] is that it is broadly defined what you are trying to accomplish or the service that you want. You issue that with par ticular things that you want to see. Those come in. There usually is a team of individuals that score and rank and rate those RFPs against the criteria that is established, and then a recommendation is forwarded. That’s how we issue RFPs typically in the city of Greensboro. That’s how we issue RFPs typically in other jurisdictions in which I have worked.”

“So, if I understand you correctly, I think I counted at least five steps,” Bellamy-Small said, “and it appears we are only doing two steps.”

Consultant Joe Readling outlined two scenarios. In one, the city would send all municipal solid waste that currently passes through the city’s transfer station — 240,000 tons per year — to Phase III of the White Street Landfill, giving the landfill an estimated lifespan of about four and a half years. Under a second scenario, the city would extend the life of the landfill to seven and a half years by limiting the waste stream to residential and commercial garbage picked up by the city’s fleet — a total of 140,000 tons per year.

Under both scenarios, Florida-based Advanced Disposal offered the greatest cost savings. Readling explained that as the size of the waste stream goes up, the cost typically comes down. Gate City, which offered a fixed rate, ranked fourth for cost savings for the larger volume, but as the size of the waste stream diminished the company’s bid became more competitive.

After hearing dozens of residents speak about health concerns, sharply depressed home values, discouraged business growth and environmental and economic racism associated with the decision to reopen the landfill, Wade made the motion.

“I move that we direct the city manager to begin contract negotiations with Gate City Waste Services to conduct landfill operations on Phase III of the White Street Landfill,” Wade said. “I further move that we restrict the volume of waste to be received at the White Street Landfill to the cityonly waste….”

Later, at-large Councilman Danny Thompson clarified the motion. “As I look at the chart here, and the ranking of the companies, just to get clarification, under Scenario B — ‘City Collected MSW Only’ — the company that she mentioned, Gate City Waste Services, down at the bottom — their rank is second,” Thompson said.

Perkins protested before the vote: “No one can look at the process that we have been through over the past 18 months regarding this landfill situation and say that it has been anything but a disaster. Every single

piece had an element of manipulation that was designed to go to a defined outcome.”

Bellamy-Small made a subsidiary motion to table the decision until an investigation could be conducted into why the city was preparing to initiate contract negotiations with a company that had not offered the lowest bid. It failed along a predictable vote of 3 to 4.

“What I heard in Ms. Bellamy-Small’s motion was clearly an indication or a questioning of propriety of the motion based on the selection of the contractor,” Perkins said. “And that, in my mind, is a very serious accusation or charge. If we’re going to be transparent about this decision, then I’d like to hear from the folks that are considering voting for this motion why and how they can justify it.”

None of the four council members supporting the decision offered any explanation of the selection. As to the basis for reopening White Street, Mayor Bill Knight remarked that he had grown up near the landfill, that he had visited landfills in other cities and that he had met with members of the human relations commission. And that was about it.

State law on solid waste facilities provides that local governments may make a contract award “based upon a determination that the selected proposal is more responsive to the request for proposals.”

The request for proposals asked the proposers to provide information about staffing, experience, project approach, financial stability, litigation history, criminal convictions and environmental violations, conflicts of interest and cost of service.

Under questioning from Bellamy-Small, Young said, “The makers of the motion are responsible for articulating that rationale, not [staff], so that response does not fall on us. That response falls to the body making the decision and that vote.”

Councilman Jim Kee, who voted against reopening the landfill and entering contract negotiations with Gate City Waste Services, remarked later: “Based on what I read in the record, Waste Industries has a lot more experience, and so does Advanced Disposal, in landfilling. And they also have a much better financial record.

“We normally go with the lowest responsible bidder,” he added. “It’s a deviation from the norm. It has to be for reasons I’m not aware of.”

After the meeting, Wade declined to state a reason for selecting Gate City Waste Services, adding that this reporter always misquotes her, is never fair to her and apparently does not like her.

Moments later, a visibly exhausted Thompson noted that Gate City is local in response to the question of why council did not choose the company that was the lowest bidder. In an earlier round of proposals that was short circuited by a court order blocking the reopening of phases IV and V of the landfill, Thompson had justified eliminating Advanced Disposal by saying that the company did not outline an attractive contingency plan in the event the landfill could not be utilized and did not express interest in using waste-to-energy technology at a future date.

Mayor Bill Knight and Councilwoman Mary Rakestraw, who also voted to reopen the landfill and initiate contract negotiations with Gate City Waste Services, did not return calls for this story.

A public hearing on the city’s proposed contract award to Gate City Waste Services is scheduled for Sept. 20 at council chambers in the Melvin Muncipal Building.

Interim City Attorney Tom Pollard has issued an opinion that Mayor Pro Tem — previously conflicted out because of her husband’s work with Waste Industries —may vote. With a 4-4 vote, the motion would fail.

From the outset, dating back to 2008 when former Councilman Mike Barber argued that the city should explore the possibility of reopening the landfill, cost savings has been the stated rationale. Alternative technologies were considered, and then discarded. In contrast to a previous request for proposals, the current round did not ask to proposers to state how they would address environmental and community concerns.

None of the cost models prepared for the city by HDR Engineering have addressed the cost of adverse health effects to residents — to the extent that a price can be placed on human life — or, for that matter, the opportunity cost of lost tax revenue as a result of diminished property value. Numerous residents who live in the area of the landfill have complained about cancer and respiratory ailments, and no studies have been completed that rule out the landfill as a contributing factor.

The cost-savings imperative driving council’s decision was clearly on northeast Greensboro resident Eldred Hopkins’ mind on the eve of the vote as he asked Thompson during a community meeting at Laughlin Memorial United Methodist Church: “Do you know how much it costs to take care of five cancer patients?” The 55-year-old Hopkins had been released from the hospital three days earlier for treatment for colon cancer, and he said the procedure left him with a bill for $350,000.

The figures tossed out to represent the direct cost savings of reopening the landfill over the past couple weeks have proven to be a shifting kaleidoscope, with council members and staff often finding themselves at odds over the exact amount of cost savings.

“I don’t think we should vote on proposals that the council doesn’t understand,” Kee said during the Aug. 16 hearing.

Thompson had been telling people at Laughlin Memorial the night before that reopening the landfill would save the city $8 million. And yet council

members and the public had access to HDR Engineering’s cost analysis three days earlier showing the maximum cost savings under any scenario was $5.3 million per year, which could have been realized by hiring Advanced Disposal to operate the landfill with the higher tonnage amount.

Instead, council voted to initiate contract negotiations with Gate City Waste Services, with an estimated cost savings of $3.1 million.

Despite his earlier statement before the vote, Thompson argued two days after the meeting that Gate City Waste Services was, in fact, the lowest responsive bidder.

Because Gate City’s rate per ton is fixed, its offering is lowest if the monthly tonnage falls between 5,000 and 10,000 tons. City staff and consultant Joe Readling agree that city-collected municipal solid waste amounts to 11,600 per month, or 140,000 tons per year. Thompson noted that residential waste only accounts for 60,000 tons per year, with the remainder being commercial waste collected by the city. Dale Wyrick, the city’s field operations director, confirmed that businesses that use the city’s commercial waste collection services are free to go with a private service if they choose. If the city were to lose 1,600 tons of commercial waste per month, the volume would be such that Gate

City would have the more competitive bid.

But Wyrick and Young said the motion that was approved indicates a tonnage rate of 140,000 tons per year.

In terms of experience, Gate City Waste Service doesn’t have a record to compare with Advanced Disposal and Waste Industries. As a new company incorporated in March, Gate City Waste Services has not operated any landfills.

As the company’s submittal explains, “The majority partners of Gate City Waste Services LLC include longtime Greensboro residents DH Griffin and David Griffin Jr. of the DH Griffin Companies, and Edward I Weiseger Jr. of Charlotte, who is the owner of Carolina Cat, Caterpillar dealership.”

Under the proposal, Gate City Waste Services would maintain a partnership with a subsidiary of Texas-based WCA Waste Corp., which in turn “will provide landfill operational expertise.” The proposal lists five landfills in Texas, Arkansas and Missouri that are currently owned and operated by WCA Waste Corp.

Competitor Advanced Disposal operates two municipal solid waste landfills in Georgia and Alabama, along with a transfer station in Marietta, Ga. that serves Cobb County. Waste Industries lists three landfills in its submittal, including two in North Carolina.

None of the three companies holds a stellar environmental track record.

Waste Corporation of Missouri, a subsidiary of the company that will be providing landfill expertise to Gate City Waste Services, entered into a settlement agreement with the Missouri Department of Natural Resources in December 2009 to resolve “various violations” at the Black Oak Landfill, Central Missouri Landfill and Eagle Ridge Landfill “relating to the following: litter control, land disturbance, leachate management, daily and intermediate cover, sloping and working face configurations,” as stated in Gate City’s submittal.

And in 2006, Gate City acknowledged, WCA of High Point was caught by the NC Department of Natural Resources accepting waste that was not from a construction and demolition site, which did not conform with its permit.

At first blush, Advanced Disposal’s environmental record looks envious.

“Advanced Disposal Services Carolinas LLC has never received an environmental violation,” the company wrote in its submittal. A wholly owned subsidiary of Florida-based Advanced Disposal, Advanced Disposal Services Carolinas was incorporated in November 2009.

HDR Engineering, the city’s consultant, noted in an evaluation of a former round of submittals that the new limited liability company listed no violations but did not mention its parent company.

The Walton Tribune reported that in November 2009 the Georgia Environmental Protection Division issued a violation to Advanced Disposal in relation to odors emanating from its Caruthers Mill construction and debris landfill.

Waste Industries disclosed in its submittal that subsidiary Sampson County Disposal LLC “received a July 30, 2010 finding of noncompliance by NCDENR alleging that the company had failed to maintain adequate erosion controls, had allowed leachate to escape the waste boundary, and had failed to keep certain asbestos waste adequately covered.”

The company reported that a subsidiary in Georgia was cited by that state’s department of natural resources for similar alleged violations.

All three companies pledge to take measures to mitigate adverse impacts at the White Street Landfill, but Advanced Disposal and Waste Industries go a step further by promising to meet with community leaders to address concerns. The latter company also proposes to establish a permanent community advisory group to monitor its efforts.

In its independence affidavit, Gate City Waste Services states that officers know “of no relationships with the city of Greensboro, its elected officials or staff that would affect this proposal in the form of a conflict of interest.”

The submittal adds, “DH Griffin through its leadership has had some contacts with the city or city council over the years but none are related to this proposal and none involve conflict-of-interest relationships sought to be disclosed by this section.”

Councilwoman Trudy Wade received a total of $4,500 in campaign contributions from DH Griffin and his wife Marylene to help finance Wade’s NC Senate campaign last year. The councilwoman recently transferred $1,789 left over from her unsuccessful Senate campaign into a campaign account for her city council reelection effort this year.

Mayor Bill Knight received a total of $1,000 from DH Griffin Sr. and DH Griffin Jr. in campaign contributions in 2009, while Councilwoman Mary Rakestraw received a $500 campaign contribution from Marylene Griffin during the same campaign cycle.

Not all the Griffin family’s political expenditures have gone to landfill supporters.

At-large Councilman Robbie Perkins, who is challenging Knight for mayor this year, received a campaign contribution of $2,500 from DH Griffin Sr. in June.

Council members routinely vote on rezoning matters involving developers, builders and real estate lawyers that have contributed to their campaigns. The practice is not considered a conflict of interest under city ordinance or state law.

A strong donor relationship with a politically active business such as DH Griffin could prove helpful to Wade next year. A Republican, Wade was unable to overcome the disadvantage of running in a Democratic-leaning Senate district last year. But that’s no longer the case.

Wade’s residence near the Grandover Resort is in the new District 27 approved by the Republican-controlled General Assembly in July. The voting history of the new district has tended to favor Republican candidates, with a few exceptions. Billy Yow, another local Republican politician with aspirations to higher office, also lives in the new District 27. A contest between the two for the party nomination would likely result in an expensive primary.

Two other council members have held associations with DH Griffin through business dealings. Neither cast a vote in the recent decision and there is no evidence that either has done anything to help the company land the solid waste contract, but their proximity to the company has raised questions.

Former Councilman Mike Barber, whose advocacy since 2008 for reopening the landfill set recent events in motion, insisted during a briefing in October 2009 that the city issue a request for proposals as opposed to a request for qualifications, before retiring from the council at the end of the year.

The website Barber’s law practice, which was wound down before the former councilman moved his family to Spain for a sabbatical, once advertised: “Mike offers professional legal services for real estate closings, land zoning and planning, assistance with variances and government affairs.”

Barber is listed as registered agent for DH Griffin Real Estate LLC, which was incorporated in March 2010. DH Griffin Sr. is listed as the manager/member of the company.

Asked on Sunday evening if he has given representatives of DH Griffin or Gate City Waste Services any advice on solid waste matters, Barber responded, “None whatsoever.”

Campaign finance reports going back to 2005, when Barber first ran for city council, show no contributions from members of the Griffin family.

Councilman Zack Matheny announced he would not vote on the landfill decision in late April. Bell Partners, Matheny’s employer, and DH Griffin are both equity investors in an

Atlanta development project. Matheny said he is not involved in the project and does not receive any income from it.

“Council member Matheny… is in the position of an employee whose employer may have a significant interest in the success of its business partner,” UNC School of Government professor Frayda S. Bluestein wrote in an analysis for the benefit of the city legal department dated May 2. “In this situation, he might reasonably be concerned that a vote against DH Griffin’s interest would be viewed negatively by his employer. As noted earlier, the issue is not whether he is personally involved in the joint venture between the two companies, but instead, whether he might be personally at risk financially if his vote displeases his employer. Of course, there may be no way of knowing whether this risk is present, but the possibility that it could exist seems, in my view, to present a conflict as a matter involving the member’s own financial interest.”

Matheny refrained from contributing to discussion during an April 26 briefing session on the landfill, explaining, “[If I can speak,] that means I can taint the process, I can guide the process, I can lead the process all the way up to the finish line; I’m just not carrying the ball across the goal mark. I don’t feel it’s appropriate for me to sit here and guide the process although I can’t vote on it.”

Nonetheless, about three weeks later Matheny joined Mayor Knight for a meeting with members of the human relations commission who were tasked with drafting a resolution in opposition to the reopening of the landfill. During a meeting of the full commission earlier in the month, residents had passionately spoken out against plans to reopen the landfill. Human Relations Director Anthony Wade had cautioned the commission against taking immediate action, citing a memo from the legal department which he said was held at his office. Adding to suspicions of political pressure to discourage the commission from going on the record in opposition to the landfill, the two commissioners who had pushed the hardest for the resolution — Michael Roberto and Marikay Abuzuaiter — were denied a place on the committee and were not invited to the meeting with the mayor.

“I listened,” Matheny said of his role in the May 16 meeting. “I did not offer any advice.”

Maxine Bakeman, one of the commissioners present at the meeting, corroborated the conflicted-out councilman’s version of events.

“That was right around the time of the briefing session in open chambers,” Matheny added.

“At the time I thought it was appropriate for me to participate. Right after that meeting I put together some thoughts about the White Street Landfill and some options. I was advised by our legal council I needed to step away. Towards the end of May I took myself out of it.”

Matheny discounted the notion that even if he only listened, attending the meeting might be perceived as unethical.

“I didn’t lobby for or against anything,” he said. “I didn’t do anything unethical. It would stand up in a court of law. Perception — I would call six or seven witnesses to say that I didn’t lobby.”

Putting aside whether Gate City Waste Services compares favorably with other vendors, the cost savings of reopening the landfill appear to be questionable, at best.

City staff met with Randolph County leaders and toured the site of a planned regional landfill about a year ago. David Townsend, public works director for the county, said he expects to have a landfill with at least 30 years of capacity open in 18 months to two years. In contrast to the White Street Landfill, with about 8,000 people living within a mile radius, Townsend said about 25 houses are located near the planned Randolph County landfill.

The Randolph County landfill closed in the mid-1990s for economic reasons.

“In ’95 the decision was that we didn’t want to take out-of-county waste, and that’s the only way you could make it cost effective because Randolph County doesn’t produce that much MSW,” Townsend said. “We’ve realized that we have a very valuable asset that we could develop for a good long time in the future.”

Townsend said it’s too early to estimate what tipping fee the city of Greensboro would be charged to dump its trash in Randolph County, but Greensboro city staff and its outside consultant estimate that the city would save $1 million per year on hauling costs compared to what it spends currently to take the waste to Montgomery County.

The Greensboro council also put aside a proposal from Republic Services that could save the city an estimated $3.5 million per year — compared to the $3.1 million in savings realized by contracting with Gate City — by closing the transfer station to municipal solid waste and improving recycling.

“If you have truly done your due diligence in this particular aspect,” Robbie Perkins asked during last week’s meeting, “how can you not postpone this and do a meaningful amount of research on a letter that you got from one of the largest haulers in the country saying you can save $3.5 million per year without putting this community through this level of stress?”

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