This $1 Billion Deal Is Garbage
BY BUDDY NEVINS
It’s perhaps the biggest no-bid deal that this county has seen in a long time — worth about $1 billion.
But few are paying attention.
The deal involves handing Wheelabrator, part of the huge Waste Management garbage empire, a 10-year extension of a contract to recycle waste and turn waste into energy.
As they say on TV, here is the take away:
No bid! Ten years! $1 billion! You pay!
Now here are the details:
The cost of the new no-bid contract would be more than other options, which include cities handling their own disposal, according to a study done by Kessler Consulting for the City of Fort Lauderdale.
A supporter of the no-bid deal say the Kessler firm in Fort Lauderdale is either incompetent or political.
There are opponents, mostly from cities. Fort Lauderdale and Oakland Park have expressed skepticism. Sunrise Commissioner Sheila Alu has misgivings.
Who’s to blame for this nobid deal?
A repot on file at Oakland Park City Hall name County Commissioner Ilene Lieberman.
How It Came Together
The waste disposal for most of the cities are handled through an agency called the Resource Recovery Board. The Board has had a contract since 1987 with Wheelabrator to operate two waste-to-energy plants.
Under the contract which expires in 2013, Broward now pays the highest fees in Florida, states the Oakland Park report.
During 2007 and 2008, the Board asked for proposals from refuse firms for future disposal. They got 27 responses.
A subcommittee of the Board consisting of refuse experts and city officials then recommended a year ago that competitive bids should be taken.
“Instead, in March 2009, the RRB Chair (Lieberman) assigned an RRB member (Weston Mayor Eric Hersh) to negotiate an extension of the current agreement, states the Oakland Park report.
Hersh argues that the Board “did look at alternatives and we decided negotiating an extension of the existing contract was the best.
Under the new contract, Broward residents will pay 30 percent less and cities will get a $12 million bonus, split among all of them.
Something doesn’t smell right to me about this.
First of all, no-bid deals go against every fiber of my being. It makes sense to at least see what other firms have to offer. Most people go to more than one car dealer when buying a vehicle. A car doesn’t cost $1 billion.
Second, the contract was negotiated outside of the sunshine by Hersh, who got “advice from Lieberman.
Third, cities are being rushed into signing the deal. In Sunrise this week, Alu said that commissioners were told they had to give it initial approval before Jan. 1.
Sunrise commissioners approved the deal when they were assured by Resource Recovery chief Ron Greenstein that Sunrise would have a second vote on the proposal in the future.
“I want to know more before I ever vote (again). I’m suspicious, said Alu, who keeps an eye on solid waste issues since clashing with the city’s waste disposal firm a few years ago.
I also have watched solid waste issues since doing the stories about Alu while at the Sun-Sentinel. When I did a Browardbeat.com story about Greenstein living in Tallahassee while running the Broward waste agency, I came upon the information about the no-bid contract. That eventually led to the critical Kessler report.
A Fort Lauderdale Report Knocks Deal
Hersh says criticism of the deal in the City of Fort Lauderdale’s Kessler research is wrong.
“Either the report is incompetent or there is a political motive, Hersh said.
Kessler stated that Fort Lauderdale residents could save between $1.4 and $1.7 million if they reject a Board deal and use an alternative waste disposal methods — hauling waste to another disposal plant or having another private firm do the hauling and disposal.
Hersh said Kessler was flawed becauase it didn’t include the $12 million that the cities would get as a signing bonus or that the rates would be cut by a third starting in 2011.
The Weston mayor said rejecting the Wheelabrator plan would require cities to build transfer stations — storage areas for garbage to be kept until it is hauled away for disposal.
Garbage is now generally delivered directly to the two Wheelabrator plants in Broward.
“Nobody wants garbage transfer stations near them. It would be almost impossible to build one in Broward, Hersh said.
That might be true.
However, garbage could be hauled out of Broward to transfer stations in other counties. New transfer stations could be build in out-of-the-way places, like industrial zones or Port Everglades.
There is a deal lurking in the background in Sunrise to build a transfer station near the Sawgrass Expressway. That proposal could have more value if the Wheelabrator no-bid contract was scuttled.
Bottom line:
Because $1 billion of your money is involved, watch your wallet. Because it is being pushed by politicians frantic to close the deal quickly, take your wallet and put it in a lock box.
——
*
December 10th, 2009 at 4:04 pm
Business as usual, with the usual suspects. Oy.
December 10th, 2009 at 5:11 pm
Buddy, I guess after 16 years in public office I should come to expect this type of reporting, but I still get frustrated, and for some reason I always expect better.
When we spoke on the phone, perhaps you were watching Oprah, and it distracted you from actually listening to what I said?
I don’t have the desire to respond in detail on this site, since we all know that it’s only politians that read it anyway, however, if any elected official would like to discuss, I’m delighted to do so.
A couple of important points however that need to be stated. First, I was appointed by the League of Cities to represent the cities on this board, and have spent over 2 years working on it. The board, made of of elected officials from various cities, all passed this agreement after months of discussion. The TAC committee approved it 20-1.
Cities have had approximately 5 months to consider this resolution, and will have another 6 months to consider the ILA. Not sure how that’s “rushing it through”, except by some government standards. If we don’t put deadlines, nothing will ever get done. The fact that you and others haven’t taken notice until now, doesn’t mean it hasn’t been thoughtfully considered.
Further, you twisted the line about Lieberman giving me “advise”. What I told you is that Commissioner Lieberman did NOT have anything to do with the negotiations, except that at several different RRB meetings, Commissioner Lieberman and others had comments, suggestions, and input as to the agreement, and the progress we were making, as I contantly kept everyone informed. I took those comments, as well as those from the TAC committee, and incorporated many into the final agreement. She did have valuable suggestions, all of which were presented to me at public meetings. NEVER did I get any advise from her outside those meetings.
You also completely ignore that we took a facility that the taxpayers paid for, continued the ability to benefit from it, with substantial savings, yet we COMPLETELY ELIMINATED the RISK associated with the agreement, yet guaranteed capacity for the member cities. And we did it WITHOUT any capital committement from the County or member cities. In a day when everyone is complaining that government is spending too much, I would think that this would be welcomed.
At the end of the day, we have negotiated an outstanding deal that will save taxpayers millions of dollars. And as I told you, my motive it to get the cheapest price without risk to the residents of Weston, which is the model that has worked well for Weston. By cities coming together and using our combined buying power, we have accomplished the goal.
But if you and others want to blow it up, so be it. Everyone can just pay more, and then the public can just blame their public officials for not lowering their garbage bills when they could have. But have no fear, some private company who doesn’t have that business now will benefit, so someone will benefit afterall.
Eric Hersh
December 10th, 2009 at 6:41 pm
We know Eric Hersh very well and he can never be believed. If he was involved, I can believe the worst. The city is deterorating daily and we have inadequate schools.
December 11th, 2009 at 5:14 am
Hersh can justify it all he wants and he is wrong. The original Wheelabrator agreement was a horrible arrangement for Broward taxpayers and maybe this would help change it. Under this plan, we would never know if another company would have done better.
Lieberman and Greenstein have been working with Wheelabrator for years and are too close to the company to be objective. You don’t solve a problem by creating another one. No bid deals are no good.
December 11th, 2009 at 5:39 am
Buddy:
Who else other than Wheelabrator can do this job for us here in Broward? I don’t know of any other entity.
So, what bid? What appears here is a negotiated price in lieu of a bid because it really boils down to sole source. Am I seeing this incorrectly?
FROM BUDDY: We will never know if anybody else was interesed because they didn’t take proposals.
The idea that the garbage has to be processed in Broward is ridiculous. It could be sent outside the county. Unless actually proposals are taken, we’ll never know if this could have provided a savings.
What is the downside of taking proposals? The Wheelabrator contract isn’t up for three years.
December 11th, 2009 at 5:43 am
Mayor Hersh —
I’m not a politician, and I read this site. I don’t understand your ad hominem approach when launching your defense of the deal (Buddy watching Oprah? He seems more of an Ellen guy.)
You say that this saves cities money because it requires no capital outlays, but again, I think the overall point Buddy raises is how does anyone know that if the deal wasn’t put out to bid.
Interesting and good stuff Buddy. I’ll be following up.
mm
FROM BUDDY: Thanks Mike.
Mike Mayo’s column is must reading in the Sun-Sentinel and on the web.
December 11th, 2009 at 10:05 am
With Climategate on the forefront I think services will still be allowed to to burn the extra fuel to send waste outside the county. And check out the 63.39 acre Solid Waste Authority location at 1792 W. Lantana Rd. in Lantana sometime which I don’t think they pay TAXES on the property they are on according to the property appraisors office.
December 11th, 2009 at 10:45 am
Purchasing is an art. Sometimes you don’t bid because you know that a negotiated rate is better. While bid would seem many times to bring you a better offer, it can work against you.
Say you’re looking to purchase X and you get a price of $50 per unit. Now comes renewal time. You tell your vendor you want a better price. He comes back with $48. You say it’s not enough and go out to bid. He bids $55 and is the lowest bidder, or worse the only bidder.
Now what?
It is an art and not always going to bid is the right move. Many times yes, sometimes no.
December 11th, 2009 at 3:30 pm
As the Executive Director of the County’s Resource Recovery system, I was disappointed by the misinformation in your column. About 2 years ago, the Broward Resource Recovery Board (RRB) issued a “Request For Expression of Interests†(RFEI), which is a competitive purchasing process. Twenty-five solid waste professionals interested in providing waste disposal services to the system responded. Here is a link to RFEI that was issued by the system. http://www.broward.org/resourcerecovery/rfei3.pdf.
Next, the entire Technical Advisory Committee (TAC), which is made up of all cities that are members of the system, reviewed the RFEI responses. Then, the TAC committee selected 11 companies for oral presentations. TAC reported their findings at the March 20, 2008 RRB meeting. The following link is the executive summary of the RFEI done by Malcolm Pirnie Inc. for board. http://www.broward.org/resourcerecovery/rrbrfeipres031908.pdf.
The RRB board found that any new waste system would cause expenses in excess of $300 million dollars to the residents of the system. The Board decided to see if the current rate could be lowered before the expiration date of the current agreement by discussing a possible extension with the current provider of Municipal Solid Waste Disposal. The Board setup a committee of Mayor Eric Hersh of Weston, Troy Gies Vice Chairperson of the TAC from the City of Tamarac, with Eugene Steinfeld attorney for the system and myself to meet and return with any possible findings from Wheelabrator. After negotiation meetings, which took place over the course of 1 year, there was considerable discussion at several RRB meetings before the current proposal was adopted.
The final extension agreement lowers the tipping fee by 36%, 2 years before the expiration of the current agreement. It also removes the current put and pay clause which makes this a no risk contract for the partner cities. In the City of Fort Lauderdale alone, the savings is over $7 million dollars annually to residents and businesses. The draft of the Agreement was sent to the Cities six months before it had to be adopted, giving plenty of time for review and discussion by the Cities. The interlocal agreement does not have to be adopted until June of 2010. This is hardly a rush situation.
Buddy, it is wrong for you to single out the Chair of the RRB for decisions that passed TAC 20-1 and the RRB unanimously. It is totally inaccurate for you to state that the Chair advised Mayor Hersh in his negotiations. Every member of the RRB heard the presentations from Mayor Hersh at their RRB meetings. At these meetings, every member of the RRB was free to offer suggestions. In fact, it was Commissioner Roy Gold of Coral Springs who suggested a signing bonus for all members that renew the agreement. You can’t possibly be objecting to the Cities getting more money to reduce their costs? RRB meetings are sunshined, so they are open to the public. They are well attended and you can attend as well.
I recognize this is a difficult issue and complex issue. Please feel free to contact me in the future if you have any questions about the Resource Recovery System.
FROM BUDDY: Thanks for your imput.
There was no misinformation in my post. It just wasn’t the angle that you, Eric Hersh and others wanted me to take.
A no-bid deal is a no-bid deal. You did not take firm bids from anybody but Wheelabrator. In fact, the so-called “Expression of Interest” process you conducted specificially contained the following statement:
“This RFEI shall not constitute a solicitation or procurement document for any design, construction, operation or service relating to the District’s solid waste management infrastructure.”
The Expression of Interest presentation also specifically states that a number of firms were interested and they might have offered lower cost.
Malcolm Pirnie, your consultant, has had a stake in the current system for years and actually won an award for it. Here is a statement from their own company report:
Malcolm Pirnie headed the project team in a major effort to develop a comprehensive solid waste management program. This complex privatization project – which was awarded the Grand Conceptor Award for Engineering Excellence by the Florida Institute of Consulting Engineers – includes the world’s largest resource recovery project:
two mass burn resource recovery facilities with a combined
capacity of 4,500 tpd, expandable to 6,000 tpd, a 50-acre
ash monofill, and a 700 acre contingency landfill. This is
believed to be one of the world’s largest privatization project
for solid waste management services. Malcolm Pirnie
assisted with all phases of the project, from the vendor
procurement process through construction and operations
monitoring.
The information about Lieberman advising Hersh in the negotiations come directly from him. He said he did the negotiations except for “advice” from Lieberman. If the two of you want to modify that comment now that you see it on the Internet, fine. I’ve posted both your statements.
Wheelabrator has had the contract for more than two decades. They want another 10 years and there is a renewal built-in.
Does anybody know what the state of solid waste will be in 10 years? Does anybody know what federal and state laws will be enacted that could change this?
Wheelabrator might very well be offering the best deal. But as I wrote: What is the downside of accepting bids?
December 12th, 2009 at 4:09 am
This is the biggest deal in history of broward and there is alot of behind the scenes stuff going on. Glad you picked up story its been going on for two years. THE CITY AND RESIDENTS ARE GETTING SCREWED!!!!
Hersh is a Greenstein and Liberman PUPPET!!!
December 12th, 2009 at 9:41 am
Hello Buddy:
I suggest you send your column to the FBI. Oh yes, and to Gov. Crist’s recently constituted Grand Jury.
December 12th, 2009 at 4:27 pm
Its a scam and how can Greenstiens NEW contract be approved by a coconut creek official isn’t he a lobbyist for that city…hmmmm
December 14th, 2009 at 8:34 am
Dear Mayor Hersh,
I read this blog, along with several others, including the Sentinel’s “Broward Politics,” the New Times’ “Daily Pulp” and “The Juice,” the Herald’s “Naked Politics,” Jaablog and Broward Bulldog every day. The corruption and the entitlement that the elected officials of this county exhibit is sickening. You and Commissioner Stermer are the worst of the worst. The incestuous relationships between county commissioners, school board members, city electeds, lobbyists, developers, contractors, bond salesmen, and law enforcement are about to become a thing of the past. Wash your hands.
June 1st, 2010 at 5:12 am
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