Austin American-Statesman Op-Ed, December 28, 2009 By Robin Schneider
Schneider: City shouldn't rush to extend Greenstar deal
Imagine you agreed to a contract with expected earnings of $3 million over two years, but instead you were in debt over $2 million after only one year. You are then told that this "deal" can be extended for an extra year with continued losses of $90,000 to $290,000 per month for a discount of $15,000 a month. Would you take it?
This is the "deal" being offered to the City of Austin by Greenstar, the recycling company that is sorting Austin's paper, cans and bottles. The city shouldn't take it. Our goal should be to end this contract as soon as possible.
On Dec. 17, the City Council told staff to negotiate with Greenstar. However, that isn't the end of the story. Any contract must come back to the council for approval. The council needs to hear from Austinites to "just say no."
This single-stream recycling program should be making the city money. Ideally, when the original Greenstar contract ends next September, the city will be able to sign a new and better contract with a company that will sort our recyclables locally. Austin should then be making at least $60,000 per month instead of losing an average $180,000 monthly. This would put us in line with what Dallas and San Antonio have been making for the past year, even with the market downturn for recyclables.
In about two months, Austin will be in a much better position to evaluate our options than we are now. Feb. 1 marks the date when Robert Gedert, Austin's incoming Solid Waste Services director and national "zero waste" leader, reports to work.
On Feb. 9, firms that want a long-term contract to build a sorting facility for Austin must submit proposals. Gedert will be able to expeditiously assess whether Austin will have good options to have a sorting facility up and running next September.
If nothing is available, Austin could extend its contract with Greenstar under the current terms for another six months. However, the city would still be losing less money without "the deal" as long as a local sorting facility can be running by March 2011.
If the supposed discount is so puny — $400,000 for an estimated $14 million in expenditures, why is there such pressure to pass this before mid-February when the new director can get a handle on what our options will be? Why did Greenstar hire Carole Keeton Strayhorn as a lobbyist?
Perhaps it's because the proposed revisions would require Austin to pay Greenstar over $2 million now instead of at the end of the contract under current provisions.
Perhaps Greenstar would like to tie up Austin's recyclables because the contract — even with the minor discount in the proposal — is so biased in Greenstar's favor. Additionally, Greenstar benefits if it can put the brakes on any competition in the region, as it has the only single-stream sorting facility in the Austin-San Antonio region.
To be fair, Austin city staff is concerned about being over a barrel with the companies that want to build a local sorting facility. The city should obviously seek the best long-term contract for that critical part of the local recycling infrastructure and refrain from having a shotgun marriage just because the current short-term contract is such a stinker.
Installing a sorting facility is not rocket science. As the biggest source of recyclables in Central Texas, it is vital for the entire region that Austin focus efficiently and effectively to green light a local sorting facility. The city should prioritize that task so that our recyclables begin to earn revenue, not cost us millions a year.
Schneider is executive director of Texas Campaign for the Environment and vice chair of the Central Texas Zero Waste Alliance.