A company affiliated with Dirt, Inc., a landfill at the center of a lawsuit between the city’s Solid Waste Authority and Waste Management, appears to have had a contract with the city since at least 1995.
Documents obtained by Lagniappe show a contract award to Gulf Hauling and Construction in 1995 for the removal of the city’s yard waste, starting on Oct. 2 of that year. The contract appears to be the result of a Request for Proposals issued on July 21 of that year, which was signed by John Bell, the city’s former public services director.
In January, a U.S. District Court jury awarded Waste Management Mobile Bay Environmental Center, the operator of the Chastang Landfill, more than $8 million at the end of a week-long breach of contract trial against the city’s Solid Waste Authority.
In the judgment, the jury awarded $3 million to Waste Management for breach of contract, specifically related to the SWA entering into a contract with Dirt, Inc. for the disposal of yard waste, which attorneys for Waste Management said should have gone to the Chastang Landfill.
The jury also found the SWA in breach in the amount of $1.7 million for not allowing Waste Management to increase the $20-per-ton rate it charged the city as a tipping fee, save a three-year period, despite a clause in the original 1993 contract allowing for such a change.
The jury found an appropriate tipping fee to be one set at $27.38 per ton.
Waste Management was also awarded $3.5 million because the jury found the SWA didn’t properly reimburse the operator for specific, regulation-based upgrades to the landfill.
According to a contract from October 1997, the city entered into a three-year deal with Gulf Hauling and Construction for the disposal of yard waste at the Dirt, Inc. landfill for a little more than $1.6 million. The contract states Gulf Hauling had the lowest bid, offering the disposal work at $1.49 per cubic yard.
In the bid proposal from the same year, Gulf Hauling Owner President Steven J. May said the company was born out of a 1987 expansion of Dirt, Inc., owned by Lamar Harrison. May stipulated the 1997 proposal would be for three years, with an opportunity to renegotiate the price at the end of the contract.
Records show the contract was extended for another three years in 2000. Bell explained in a letter to Gulf Hauling Vice President Mike Eubanks that the city would be interested in increasing the unit price to $1.64 per cubic yard, citing a consumer price index adjustment of 10 percent.
Waste Management attorney Jaime Betbeze argued in the January trial that an adjustment of WM’s tipping fee was appropriate based on the consumer price index, but it was never made.
The estimated total cost of the 2000 contract was actually less than the 1997 deal, at $1.5 million for three years.
An undated bid document obtained from the city shows Gulf Hauling at $3 per cubic yard outbidding Midway Material at $3.16, although Gulf Hauling estimated a larger quantity of yard waste per month at 23,900 cubic yards, as compared to 22,000 for Midway.
The latest contract between the city and Gulf Hauling was signed in July 2013 by former Mayor Sam Jones, City Clerk Lisa Lambert and Harrison. Once again the contract was for three years, but records show the price was set at $3.28 per cubic yard and estimated the three-year cost to be $2.8 million, almost double the contract value in 2000. The 2000 contract was signed by former Mayor Mike Dow, the city clerk and Michael Eubanks.
During the trial, attorneys and witnesses made repeated claims to indicate the breach of contract occurred in 2008. Those references referred to the first year MW could seek judgment based on a statute of limitations. Michael Bass, a financial analyst for WM, estimated the city diverted more than 277,000 tons of yard waste to the Dirt, Inc. landfill, which resulted in more than $8.7 million in lost profits.
Waste Management took over the original 1993 contract from TransAmerica in 1998.
The documents do show an increase in the rate the city paid to Gulf Hauling, while the $20-per-ton rate the SWA paid in tipping fees was never permanently increased. The only increase came during a period between 2005 and 2009, when the tipping fee charged to the city was raised to $23.50 per ton.
SWA Attorney Jim Rossler has filed post-trial motions in the case asking U.S. District Judge Kristi DuBose to rule in favor of SWA, arguing attorneys for the plaintiffs never provided to his office any documents related to Bass’ calculations on the profit and loss statements. Rossler’s motion also asks for an amendment to the judgment awards so they fall more in line with evidence presented at trial.
Rossler will have 30 days after DuBose rules to file an appeal.
Solid Waste Authority origins
Documents provided by City Clerk Lisa Lambert’s office show the SWA was organized in 1985. It had three original appointees — Rodger Tew, B.J. Heggeman Jr. and Edward Morris Jr. — who were required to own property in the city.
The certificate of incorporation was amended in 1994 to increase the number of people serving on the board from three to seven and to appoint them through districts. The move was made in a resolution sponsored by Councilors Bess Rich and Mabin Hicks.
At the time, the four new appointees were Odell Hose, Art Slack, John Thomas and Thomas Lightcap. The members were appointed to staggered terms.
The current members of the Solid Waste Authority, the body that oversees operations at Chastang Landfill and sets the tipping fee are: District 1 representative Lawrence Carroll, District 2 representative Rae Richardson, District 3 representative Wesley Young, District 4 representative Pete Riehm, District 5 representative Tim Morris, District 6 representative Les Barnett and District 7 representative J. Michael Druhan Jr.
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