COVER STORY

Dirty Little SECRETS

Something stinks in the contract to pick up recycling in Jacksonville Beach

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Blessed with stunning scarlet sunrises and a wide, white sandy beach that beckons, wouldn’t you think a seaside community where tourism is the No. 1 industry would lead the pack in protecting the Earth in every way possible?

But as the Gershwin brothers set to music in the legendary Broadway show Porgy and Bess, it ain’t necessarily so! At least, not in the city of Jacksonville Beach. Not these days.

Instead, city officials who preside over about 23,000 residents within the city limits have decided to flex their municipal muscles and draw lines in the sand that first effectively ended the opportunity for an uncounted number of residents to recycle their plastics and cans and bottles and such. And then, for a relative few residents who raised a ruckus, the city relented in a way that allows those residents to only partially recycle.

Jacksonville Beach claims a commitment to reduce the tons of garbage buried in a landfill “by maximizing the fullest recovery possible of recyclable materials,” yet the public works director and his key staff are actually doing little, if anything, to encourage greater recycling.

Backed by George Forbes, a city manager who’s run the town for 22 years, those same bureaucrats have now decided to let the city’s new trash-hauler ignore its contractual obligation to provide recycling dumpsters to multifamily buildings whose residents need them. Those larger containers are necessary to hold all the recyclables big condo and apartment communities generate.

Starting Feb. 6, that approach left my neighbors and me among those who still really wanted to recycle—as we’ve done for years—with no choice but to toss everything down a trash chute. It meant untold tons that could and should be processed at the nearby state-of-the-art recycling center were instead going into the landfill.

Public servants initially halted recycling in all multifamily buildings when they selected a new company to haul solid waste within Jax Beach. To those accustomed to recycling, this just didn’t smell right. This is 2017, after all, and recycling is not exactly some untested concept being pushed by a lunatic fringe.

So, what started out as simply a personal effort to resume recycling led to the discovery of some dirty little secrets that the municipal overlords—the city manager, the mayor, all but one or two councilmembers, and the Public Works staff, too—still refuse to discuss in any substantive way.

SMELLY SECRETS

Exactly what secrets can be found buried when one examines how the city of Jax Beach provides a service as basic as picking up the garbage?

Did you know it isn’t always the lowest bidder who wins a city’s garbage contract? That some cities require companies wanting to do business with them to throw into the municipal money pot what are euphemistically called “value added benefits”?

In the case of the company that just won the trash and recycling contract in Jacksonville Beach—the Nocatee-headquartered Advanced Disposal—it sweetened its extremely low rates by offering to kick in cash payments back to the city, totaling a whopping $300,000.

Why would any bidder, already confident his low rates would put him at the head of the pack, voluntarily toss an extra $300 grand on the table?

As in most cities, the Jax Beach garbage and recycling contract includes a long list of potential penalties and fines that can be levied for a contractor’s service failures—and officials have a wide leeway to do so. Advanced came to the beaches with a history of such fines in Jacksonville not so long ago.

While the terms of a contract are legally enforceable and refusal to perform a significant service could be cause for termination, going the extra mile to assure a friendly association with city officials could result in favorable interpretations of what a contractor is required to do. It could also persuade officials to turn a blind eye to enforcing the agreement.

You may also be surprised to learn that when many cities strike a deal with a trash-hauler, the city actually marks up the bill the trash hauler submits to the city to pick up your garbage and recycling. And by mark-up, we’re not talking an insignificant percentage in the name of “administrative costs.”

In Jacksonville Beach, citizens are billed $16.31 monthly, nearly 20 percent more than the city pays the contractor for that necessary government service. Up the road in Neptune Beach, the mark-up is closer to 40 percent.

At the Jacksonville Beach City Council meeting on April 3 when I stood up as a citizen to demand an explanation, if not an investigation, the mayor and two other councilmembers insisted they never knew a thing about any $300,000 offer. Shortly after that, interviews and official comments from City Hall became about as likely as a blizzard on the beach in August.
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BURIED IN GARBAGE

On average, every American generates about five pounds of garbage every day. To bury just one year’s worth of that in a landfill the size of a football field, we’d have to dig a hole at least 100 feet deep—for a waste disposal solution that can do serious harm to our ecosystem.

Reducing waste and using recyclables to reduce energy consumption is a solution Florida’s legislature embraced seven years ago, when the goal of recycling 75 percent of our garbage by the year 2020 was written into state law as a high priority.

The rate for traditional recycling in all of Duval County stood at just 47 percent at the end of 2015, according to the most recent state records available. And in Jax Beach? A document included in the city’s 2017 budget claimed the 2015 rate was only 35 percent, falling down to 30 percent by March of last year.

That same document shows city officials continuing to drive recycling on a downward path, shooting for a recycling rate of only 25 percent in 2017.

A closer look shows that somebody at City Hall must be fooling around with some very fuzzy math.

Based upon the city’s own, most-recent data from 2015 and using the state’s formula to interpret those numbers, the residential recycling rate was actually only a pitiful 4.4 percent.

Leaders in this coastal resort town publicly profess to being environmentally in tune with recycling efforts, but you won’t find recycling bins in their own municipal offices. Nor in city parks, nor at tennis courts, nor at the city golf course. And nowhere on or near its four miles of beaches, where another contractor picks up daily loads of empty plastic cans and bottles that also escape getting recycled.

Yet when officials set out to award the latest garbage franchise, they insisted to bidders that greater recycling was a key to the comprehensive waste and recycling program they wanted.

“Improve public education of all city residents and customers about recycling services, so as to increase participating and recovery rates,” was another goal on the list.

They may have expressed the right idea of the direction they said they wanted to go, but it seems nobody cared enough to map the best route to get there.

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FAILURE TO FOCUS?

Lined up and down the city’s oceanfront are dozens of condominium and apartment buildings, some of which house 100 families or more. Doesn’t it stand to reason that anyone who truly wanted to promote recycling would aggressively promote it especially at high-density locations?

But when city leaders fired the company that had held the contract to pick up trash and recycling for the last 14 years, they initially took away access to recycling from every multifamily dwelling.

The new franchisee, Advanced Disposal, didn’t sign up to continue free recycling services to those dozens of multifamily dwellings, something the previous contractor started in 2011 to entice the city to renew its contract.
Advanced also boasts a strong commitment to recycling and insists environmental stewardship is of utmost importance … but it’s also a corporation that recently went public and needs to impress Wall Street. A company that carries a $2.5 billion debt load can’t generally impress investors by giving away services.

And, of course, city officials never intended to permanently cut off condo and apartment dwellers from recycling. In fact, when they prepared the specifications upon which trash haulers could base their bids, all were specifically required to provide recycling services to all participating customers in multifamily dwellings.

City Public Works Director Ty Edwards has said he and his staff temporarily pulled the plug at the multifamily locations back in February, just to see how many citizens wanted to continue recycling since they now had to pay for it.
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EVERYONE TAKE A TOTER

Like most companies, Advanced cuts costs and increases efficiency by using trucks with automated arms that reach out and grab, then lift and empty the toters, those garbage and recycling bins that you wheel to the curb.

But at large multifamily locations, large dumpsters are required to hold all the garbage. And to lift and empty those behemoths, it takes a different kind of truck, one with front-end forks to pick up, lift and empty.

Even though the city always made it clear and the contract Advanced signed specifically requires the hauler to provide “recycling toters or dumpsters,” the company apparently decided its profit margin was such that it just didn’t want to comply with the agreement and send a front-end loader to the beach to service recycling dumpsters after all.

To its credit, Advanced did suggest that my own residence, Costa Verano, home to 100 families, could hire a competing company to provide the dumpster service for recyclables. The company also says despite what was required in the contract, it is the city that has decided all multi-family residences will be serviced only with toters, not dumpsters.

While another company was willing to provide a dumpster at Costa Verano as Advanced suggested, it was the city officials who said no. Their denial was based on the fact that only Advanced is authorized to serve all residential locations in Jacksonville Beach.

Responding to a letter to the City Manager from the president of the Costa Verano Condominium Association, Edwards made it clear if any of us wanted to continue recycling, multiple toters would be the only option.

A building this size doesn’t have the space to store 100 toters. Or even 27, which the condo president has said would be the minimum needed for what he calls “a baseline program.”
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VALUE ADDED BENEFITS?

Remember those extra, valuable goodies Advanced Disposal offered the city as “value added benefits”?

Company executive Bill Stubblebine advised officials in an earlier meeting that executives at the corporate headquarters targeted Jacksonville Beach as “a piece of the puzzle we wanted” on the heels of losing the bid for another contract nearby.

To get the franchise in Jax Beach, Advanced offered rates so far below those of two competitors that the city’s procurement chief felt compelled to ask during a final meeting with the contractor, “Can you do the job at those prices with superior service?”

It was reportedly Advanced Disposal District Manager Todd Strong who wrote the company’s bid. In addition to slashing rates, the strategy was for the company to try to seal the deal by offering $300,000 in cash payments back to the city of Jacksonville Beach over the six-year life of the contract.

Advanced promised to write a check for $50,000 every year “to pay the salary of an additional Jacksonville Beach police officer,” or “if this is not logistically possible, then we are still committed to the annual amount of $50,000 each year for necessary tactical equipment.” They suggested maybe body cameras, or bulletproof vests, or “whatever the police department deems necessary to enhance their safety and protection.”

If the cash didn’t go to the police department, Advanced offered to revise the offer to the city to spend the cash on any other first-responder needs its $300,000 could cover.

And as if that wasn’t enough extra value to sway the vote, Advanced made yet another offer.

If it were to be selected, the company would give special training to all its sanitation workers so, as they traveled their routes through the city, “our employees will provide another level of surveillance that can assist the police.”

Your garbage man as some kind of undercover agent for the police? On top of $300,000 in cash payments back to the city? “Kickback” might not be technically accurate—but that’s exactly the word that came to the mind of at least one city councilmember after I first questioned the proposal.

At the meeting just before the committee recommended that the council award the contract to Advanced, Jason Phitides, then the city’s property and procurement officer, warned the selection committee, “I’m not sure if that’s legal.

“If it is legal, great, we’ll make sure we follow all the channels and for that reason I don’t think it should come into consideration,” he said, suggesting there was something about accepting the offer that just didn’t quite smell right.
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JUST A MISUNDERSTANDING?

In his only comment for this report, Public Works Director Edwards has admitted it was the city that actually required all bidders to “detail value-added services and public benefits” they’d throw in to enhance their rate proposals.

But, he says now, the city’s request “may not have been clear” and no such offers were ultimately considered or included in the contract.

“The purpose of the value added benefits section of the RFP (Request For Proposal from bidders) is for items related to the services requested,” Edwards wrote in an email. He, City Manager George Forbes, Mayor Charlie Latham and virtually every member of the council have refused to discuss the matter in any real detail.

Individuals willing to provide information for this report on a background basis all painted a picture of elected officials who may want to do the right thing in Jacksonville Beach but are always mindful of clashing with the city’s powerful and entrenched city manager.

While it is true that, ultimately, the extra benefits were not written into the contract itself, the mayor initially told me that if Advanced ever actually submitted them in writing (which it did), “it’s possible the city could still get them.” But even though the now-tight-lipped mayor has made no effort to walk back that comment, getting all that money seems unlikely, now that this particular cat is out of the bag.

And before you swallow the official explanation that the whole “value added benefits” thing was just some honest miscommunication of a city request that wasn’t entirely clear, you might want to ask yourself a couple of key questions that city officials are avoiding like the plague:

    •    If a contractor like Advanced had an extra $300,000 to entice the city, why wouldn’t it have just reduced its bid by that much?
    •    And if the city was hesitant to accept a cash payback, why didn’t the selection committee just negotiate a rate reduction with all or some of that $300,000 so the taxpayers could get a break?

Says one industry veteran who has years of experience with deals like this: “Somebody left $300,000 on the table by not getting a better deal. Logic says that’s what they should have done but they didn’t.”
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CONTRACTOR INTEGRITY

Contractor integrity is supposedly a cornerstone in evaluating which companies should get government contracts. Here, the few who were aware of the controversial offers apparently never revealed them to councilmembers and so there is no way to know what impact, if any, that disclosure might have had.

Instead, Mayor Latham, who happens to be an executive with Waste Management, the nation’s biggest garbage company, not only voted for Advanced, but openly endorsed its leadership before the Council voted.
“I’ve worked with these guys and they’re a good company with a good reputation,” he vouched to the council.

Latham’s employer did not bid on the Jacksonville Beach contract.

After he joined other councilmembers in the unanimous vote for Advanced, Latham told me he just wasn’t so sure the unusual offers should have been disclosed. Neither he nor anyone else has yet to explain how “it just never came up” at three public meetings, nor in the staff’s written recommendation.

But another councilmember concedes, “Sure, as a person voting, I should have known.” Two others members agree. The rest are still ducking the question.
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THE "EVERYBODY DOES IT" DEFENSE

It should be pointed out that it’s not altogether unheard of for contractors to sweeten a bid with some little extras related to the service they will perform.

The bid from Republic Services offered free tours and an educational program at its impressive recycling center in Jacksonville. The other bidder, WastePro, said its crews would be alert and instructed to say something if they see something amiss while on their rounds. It’s also not uncommon for cities to require the selected hauler to provide free trash services at city locations and at community events.

Although Mayor Latham suggested totally unrelated incentives are also fairly common in the industry, neither he nor virtually any other municipal official or industry insider I’ve spoken with has been able to name even one.

Investigating this story, I discovered only two other examples that smack of a pay-to-play policy where, in order to stand a chance of getting a city contract, a business has to cough up money the city can use for some totally unrelated expense.

In Broward County, the city of Coconut Creek squeezes its trash hauler for $30,000 a year “to sponsor annual City events.” Down there, for more than the last dozen years, that means if you want the city’s garbage hauling service, you’ve got to first agree to pony up $30 grand to help pay for the Butterfly Festival.

The other example is a piker by comparison … but it’s right here on the First Coast in the little city of Neptune Beach, which, ironically, seceded from Jacksonville Beach in 1931.

The trash contract in Neptune Beach includes a requirement that the franchisee make an annual “community contribution” to the city. The contract actually requires “a cash donation to the City of not less than $8,000” every year.

The donation is earmarked for a community event in the park at Easter and another at Christmas for which the company that was awarded the trash and recycling contract is now contractually obligated to pay, that is, donate.

Asked if such a deal isn’t an example of pay-to-play, Neptune Beach City Attorney Patrick Krechowski bristled.

“I was never consulted on the purpose of that,” he said. “And I’m not a spokesman or a decision-maker.” He referred me to City Manager Andy Hyatt.

“When I got here 19 months ago, it was in there for years, negotiated as a bargaining tool,” Hyatt said. “We think it’s a great idea!”

Faced with the question of pay-to-play, he took a very long pause. None of the bidders had a problem and anyone could have objected, but nobody did, he insisted. “They could have said no.”
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STALEMATE

Advanced Disposal widely promotes itself as “always looking for ways to increase recycling participation.” And its pitch for business from other cities sometimes includes the claim that “We’ve never faltered on a municipal contract, ever.”

In this case, despite its obligations agreed-to and written into the contract, Advanced is relying on the city’s decision not to enforce every term and condition of the signed agreement.

Mark Nighbor, vice president of marketing and communications for Advanced, refused to discuss the Jacksonville Beach issues. “We are complying with the city’s decision to have multi-family residences serviced with carts for recycling,” he wrote in an email.

His written response also repeatedly dodged all questions about what actually motivated the company to offer $300,000 in “value added benefits.”

“The city did not contract for any of the value added benefits,” was his same answer to seven different questions.

John Spegal, the company’s chief operating officer with responsibility for oversight, and Nighbor’s boss, Tammy Wilson, a senior VP in charge of marketing, both failed to respond to inquiries.

As you may read in the sidebar, after company and city officials became aware this story was about to appear, a special deal was struck. With the city’s blessing and again contrary to the written contract with the hauler, Advanced agreed to provide a dumpster at Costa Verano, but only upon two conditions—both of which are also not in compliance with the contract.

Asked for an objective view of the current stalemate in Jacksonville Beach, one industry veteran drew a clear conclusion that focused on Mayor Charlie Latham’s lack of leadership in this case.

“Your mayor would understand that Advanced is obligated to provide the service and would be in a position to make them do so. For the city to say the company won’t provide the service but you still can’t get it elsewhere? That’s something you would expect from a pointy-headed bureaucrat, not somebody with common sense.”

But whatever his reason, the mayor is mum on this issue and City Manager George Forbes is backing his public works boss and showing no signs of standing up to Advanced on behalf of residents.

And as for cities finding new and novel ways to make money picking up garbage and recycling, a consultant who advises them spoke candidly on the condition his name would not be used.

“The big picture is [that] local governments are all squeezed. They’ve got caps on taxes and property tax cuts mandated by the legislature and funding cuts all over.” In Duval County, the property appraiser estimates that if the homestead exemption were doubled, for instance, Jacksonville Beach would lose about a half-million dollars in property tax revenue.)

“These totally unrelated ‘value added benefits’ some cities are pushing may be understandable because no politician wants to raise your taxes—but they are certainly hard to justify,” the consultant says.
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Steve Wilson is a veteran investigative journalist who resides in Jacksonville Beach. Among numerous honors for his work mostly on local and national television, he is a former recipient of the Goldman Environmental Prize, sometimes called the Green Nobel.

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