Mobile’s Solid Waste Disposal Authority (SWDA) voted to permit the city to enter into two contracts making recycling easier for residents. As a result, the board has also agreed to work out some of its legal issues stemming from a 2015 lawsuit with Waste Management Mobile Bay Environmental Center (WM).
The sides will now meet before the issue returns to the City Council agenda June 20 to discuss it and the city’s continued diversion of yard waste away from the WM-managed Chastang Landfill, for which the company already received a multimillion-dollar judgment against SWDA.
The judgment stems from a 1993 contract SWDA entered into with TransAmerican for management of the city’s Chastang Landfill. The contract gave TransAmerican, which later became Waste Management, control over the city’s entire waste stream, including yard debris. In addition to yard debris, the contract also mentions recyclables as being part of the waste stream. SWDA was concerned that if the city entered into new recycling contracts, WM would sue them again for breach of contract.
The city currently sends yard waste to Dirt Inc. because it would be more expensive to haul yard debris to the Chastang Landfill, City Attorney Ricardo Woods said. As an alternative, Woods offered a solution proposed by acting Chief of Staff Paul Wesch that could work through some of the many contractual issues, including the disposal of yard waste and recycling.
The city, Woods said, would pay WM a diversion fee to allow it to use the Dirt Inc. landfill instead of the Chastang Landfill, without risking further legal action. Woods said paying the diversion fee to use Dirt Inc. would be roughly half as much as hauling the debris to the WM-managed landfill and paying tipping fees.
“We know the city will have to do something,” Woods said. “It costs everyone more money to transfer [yard debris] to the landfill.”
While Jaime Betbeze, an attorney for WM, said his client is not interested in renegotiating the 1993 contract, they are interested in discussing the parameters of the deal that would allow the city to continue using a different landfill for yard debris and also allow the city to update its recycling program. Betbeze later explained the diversion fee would be negotiable based on volume.
“It’s very beneficial to all parties,” Betbeze said. “We would like to work toward a solution to wrap up all the issues. We are willing to sit down with representatives of the Solid Waste Disposal Authority to sort through contractual issues.”
SWDA attorney Chuck Miller said the authority was willing to reach a solution.
“We’ll just have to see what Waste Management proposes,” he said.
If the sides reach an agreement on those issues, the City Council could finalize the recycling contracts by the end of next month, when they’re due to reappear on the agenda. One contract the council will be considering would allow for the acceptance and processing of recyclables by Emerald Coast Utilities Authority for $125,000 over nearly three years. The second contract would allow for the rental of equipment to collect and transport the recyclables for $900,000 over a three-year period.
In a previous interview, Don Rose, the city’s procurement officer, said the $900,000 contract represents a “high-end” aspirational goal of collecting 8,000 tons of recycling. Right now, the city sees about 2,000 to 2,500 tons of recyclables. The city would only be charged in the contract per ton.
The contracts also represent a possible savings over the recyclables ending up in the waste stream. Emerald Coast Utilities Authority does not charge a tipping fee and the city will pay $35 per compressed ton to transport the recyclables to Cantonment, Florida. Due to the commodity price, Emerald Coast will pay the city $15 per ton for the recyclables. However, if the commodity price drops low enough, the city would instead pay Emerald Coast a handling fee, Rose said.
The sit-down will most likely not solve all the issues between WM and SWDA. The two entities still have active lawsuits against one another. SWDA is currently suing Waste Away Group for more than $1 million, claiming the company gave the entity indemnity from the lawsuit WM brought against it. In addition, the suit argues Waste Away Group, not SWDA, is responsible for gas management and capital improvement costs at the landfill.
At the same time, WM has filed complaints stemming from SWDA’s failure to reimburse the company for those costs. Betbeze said similar arguments were rejected by the federal court during the entities’ initial court battle. He also claimed Waste Away Group was a parent company of WM Mobile Bay Environmental Center. Miller, however, called them separate “sister corporations.”
Betbeze brought up the latest reimbursements at the meeting. SWDA Chairman Pete Riehm told Betbeze the considerations of the March reimbursements would be on the regular meeting agenda in July, after a consultant reviews them. Riehm said the special meeting was planned on short notice.
“We don’t have the review,” he said. “The report did not come.”
Betbeze called the situation “disappointing.”
Miller said SWDA rejected WM’s request for reimbursements in 2015, on the advice of consultants.
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