Trash takeover negotiated for months By Sara McDonald The Daily News Published November 24, 2007 LEAGUE CITY AmeriWaste executives spent nearly three months planning the takeover of League City s garbage contract during a time no other companies knew it was up for grabs. By the time the city told recently ousted IESI that its contract might not be renewed, AmeriWaste had already negotiated the purchase of an estimated $2 million of equipment and met with city officials. City records, interviews with IESI executives and a timeline released by AmeriWaste President Janell Marin partially reconstruct the move said by two council members to be an orchestrated deal aimed to favor AmeriWatse. Galveston County District Attorney Kurt Sistrunk s investigation into whether the council violated the open meetings law is in its fourth week. Marin did not return phone calls seeking comment for this story. Summer Negotiations AmeriWaste appears to be the only prospective company the city talked to in July and August. During that period, AmeriWaste got copies of the city s documentation about IESI, met with city employees, developed a plan to move into League City and met with vendors from whom it would soon buy an estimated $2 million of trash bins and garbage trucks. http://galvestondailynews.com/story.lasso?tool=print&ewcd=4d5fba1c762f142e (1 of 5) [4/5/2009 1:31:18 PM]
Visitor logs, staff e-mails and appointment books, all released through open records requests, don t turn up discussions with any other prospective garbage company during those months. Mayor Jerry Shults told The Daily News to examine communication with other companies and not just AmeriWaste. He replied to an e-mail seeking comment but did not answer a question asking whether discussions with other companies were taking place and were not documented. It s not clear who AmeriWaste first negotiated with. In the first two weeks of August, AmeriWaste Vice President Mike Clawson, a former interim city administrator close to Shults, discussed the contract with League City professional staff, the timeline says. It does not say who he talked with, but City Administrator Chris Reed, in response to an e-mailed question, said it wasn t him. Soon after AmeriWaste s first meeting, city council was supposed to vote on whether to extend the IESI contract. Reed said he pulled the item from the Aug. 14 meeting because it was in the wrong format. AmeriWaste executives said they learned a week later that IESI didn t get its contract extension. They then developed a business plan in case League City went out for bids. Equipment Inquiries In late August, AmeriWaste started calling vendors to ask whether garbage trucks and trash bins were available, the timeline says. By the time AmeriWaste executives met with Reed on Sept. 11, Marin had met with garbage truck representatives to discuss pricing, the timeline says. Clawson visited city hall the day of that meeting and signed the visitor log soon after Marin, but he didn t come to visit Reed, Reed said. http://galvestondailynews.com/story.lasso?tool=print&ewcd=4d5fba1c762f142e (2 of 5) [4/5/2009 1:31:18 PM]
The weekend after the meeting, Marin went to Minnesota to visit a garbage truck factory. That truck company visited AmeriWaste s Alvin office the following week. IESI s Negotiations Meanwhile, IESI officials only had an inkling something could be wrong. After the contract renewal wasn t voted on in August, Reed asked for an audit into 144 of the city s 700 commercial accounts. IESI vice president John Gustafon said the company complied with the audit, although reasons for it weren t explained. Shults claims the company wouldn t allow auditors to copy down route or trash bin locations. The audit came back in late September. It found the city was missing out on about $150 a month from 30 accounts with mailing addresses outside the city. On Oct. 1, IESI officials met with Reed to discuss the contract extension. Gustafon left the meeting thinking the council would vote on extending the contract, he later said. But one week later, the city told IESI that it would go out for bids for a new trash company. IESI responded by sending a letter that Shults later called confrontational. In the letter, IESI questioned why the city was considering switching companies at the last minute and said it would only service the city if its contract were renewed. Assisting An Emergency The day the council received the letter, AmeriWaste made a refundable deposit for eight garbage trucks. That came before the city asked AmeriWaste for help, according to the timeline. The day after the deposit, Shults called AmeriWaste to ask if it would be http://galvestondailynews.com/story.lasso?tool=print&ewcd=4d5fba1c762f142e (3 of 5) [4/5/2009 1:31:18 PM]
able to help the city in the emergency, the timeline says. It s not clear if other companies were called at that point. On Oct. 11, Reed and council member Tommy Cones called Marin to discuss the emergency situation, the timeline says. The company placed the order for the garbage bins that day, because we could only step in and help the city if we had the necessary resources, the timeline says. Cones did not return repeated phone calls asking for comment. 11th Hour Offers In an effort to keep the contract, IESI chief executive officer Mickey Flood said he cut his vacation short to meet with city officials. Flood offered a temporary extension in the meeting. The same day, the city called AmeriWaste and other companies asking for emergency temporary bids. In a letter Shults wrote, he said IESI s offer at the 11th hour meeting came after the city had received two other bids, one from AmeriWaste and one from a third company, Red River Waste Solutions. The bids were submitted after that meeting, copies of e-mailed offers show. AmeriWaste started receiving its order of trash bins the next day, Oct. 16. A week later, the council voted 4-3 to switch to AmeriWaste. Since then, Shults said there have been no disruptions in service. Copyright 2009 The Galveston County Daily News http://galvestondailynews.com/story.lasso?tool=print&ewcd=4d5fba1c762f142e (4 of 5) [4/5/2009 1:31:18 PM]
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