Richard Clark - Council President

To many who practice their professions outside the walls of a courtroom or a landfill, this week’s filing of a lawsuit to invalidate Waste Management’s recent contract settlement with the City may seem mundane.  However, in actuality it’s the most important legal action Jacksonville has seen since a Grand Jury was convened to examine City Council’s evasion of Florida’s Sunshine Laws.  The suit goes beyond the legal challenges and differing auditor reports; it raises serious questions on how special interest lobbyists influence Council Members and exposes the lengths some Councilmen go to hide that fact.

Looking back; a year ago City Council rejected the same contract they just agreed to, but this time around it will cost Duval County taxpayers $37 million more. City Council and the General Counsel’s office caved to the threat of continued litigation by Waste Management and their chief lobbyist, Paul Harden.  While doing so, they left gaping holes in the public record and fought multiple requests to provide an unfettered view into the negotiations that brought Jacksonville residents doubled garbage-fees and their most expensive no-bid contract in City history.

City Council’s pattern of behavior to ignore competitive bidding and shun procurement rules was consistent and almost predictable.  Days before the recent contract settlement vote, it was revealed Councilman Ray Holt’s 2010 campaign coffers were stuffed with Waste Management money.  Last April, Holt voted against the same contract he now supports, but only with a larger price tag.  Under the guise of Sunshine Law exceptions for pending litigation, City Council and The Office of General Counsel hid behind so called “shade meetings” and attorney client privilege to conjure up reasons why settling would make sense for the taxpayers of Duval County.

Weeks after the Trail Ridge vote, a Paul Harden led coup of Council leadership almost succeeded in putting Stephen Joost in charge of Council, after outgoing Council President Richard Clark mysteriously yanked his support for Jack Webb, literally overnight.  Jack Webb stayed the course and saw the disadvantages of Waste Management’s contract through both votes, making his unwavering sensibility a huge threat to Waste Management and their special interest lobby.  Instead of receiving accolades for his fiscal prudence, Jack Webb was greeted by the cold reality of a powerfully invisible hand sent to punish him for his misdeeds of not toeing-the-line for Waste Management.

When the complex legal pleadings of the latest chapter in the Trail Ridge saga are boiled down, the suit isn’t necessarily about the waste of taxpayer dollars; instead it’s about how City Council really operates.  It exposes an old pattern that City Hall observers are all too familiar with.  Special interests dictate the bending of procurement rules and Sunshine Laws are tossed out the window in a vain attempt to portray transparent government.  If City Council is to do its job as effectively as voters hope, serious sanctions need to be implemented for ignoring these laws and strong regulations need to be placed on Hemming Plaza lobbyists.  Open and sensible government is really what is at stake as this suit plays out.

A summary of the complaint filed earlier this week is available for download.

JACKSONVILLE, Fla., June 1, 2010 -

Specifically, they have amended the complaint filed last year against the City of Jacksonville and the City Council to request that the Court declare the passage of Ordinance 2010-217 to be both illegal and void.  The several grounds asserted include multiple City and Council violations of Florida’s open government meeting (“Sunshine”) law.

The lawsuit further seeks to protect the public interest by asking the Court to force the City to correct violations of the public records law, which require government and officials to make records available to every citizen for review and copying.  The City has failed to create and provide minutes of a public meeting (related to Trail Ridge), and refused to make a Council member’s records of the official business use of his cell phone available to the public.

A press conference will be held at 12:00 noon on Thursday, June 3, 2010, in front of the Jacksonville City Hall, 117 West Duval Street, Jacksonville, Florida, by Victor Wilhelm, President of the CTDC, and John Winkler, lead attorney for the Plaintiffs.

The Concerned Taxpayers of Duval County Incorporated (CTDC), is a not for profit corporation and nonpartisan political committee dedicated to serving the community as a watchdog group, using public information to oppose corruption, waste, and “Sunshine Law” violations in government. Additional information is available at www.jaxtaxpayers.org as well from the author of this press release, immediate past President John Winkler, 904 384 9918.

The first 2010 campaign treasurer report of Mr. Ray Holt, Jacksonville District 11 City Councilman, for the quarter ending March 31, 2010 shows compelling reasons why he might be in favor of settlement.  This report includes contributions from Waste Management, Waste Management's attorney-lobbyist Paul Harden, individually, and from "Five H, LLP," a real estate development firm in which Mr. Harden is one of the two partners, all in the maximum amount of $500.  Mr. Holt voted on April 19, 2010 in committee in favor of Ordinance 2010-217, which the City Council Auditor estimates would cost the City's taxpayers $54 million more over the next 26 years than if the City wins its present litigation with Waste Management (which City attorneys state at an 85% to 90% chance of success).

If passed, Ordinance 2010-217 is estimated by the City Council Auditor to provide Waste Management with $459,243,375 in Duval taxpayer revenue through 2036, versus $93,719,589 in revenue to Waste Management if the City were to win the lawsuit and operate the landfill itself after 2017.  Ordinance 2010-217 is still scheduled for a final vote on Tuesday, April 27, 2010 despite public requests that the vote be postponed to a special meeting later in the week in order to more fully debate the alleged merits of the legislation.

While Mayor Peyton thinks he has the best deal he can get to expand and run Trail Ridge landfill, the bad economy could turn out to be good for the Trail Ridge contract as well - if City Council puts it out to bid.   Sarasota County just found that out for themselves with their proposed landfill expansion. (The Sarasota County landfill is projected to run out of space in the next year to year-and-a half.) 

"Not only are the bids coming in at lower amounts, but we are getting more bids," says Commissioner Jon Thaxton.  Original estimates put the cost at more than $24 million, but because of the decline in the economy those prices have dropped [to $18.5 million].  The county was unable to find any local suitors to do the work.  The job will go to a North Carolina company.  Only a small portion will go to local workers.  "While we do want to emphasize the need for local contractors, we are not going to pay excessive money to get there.  That would be counterproductive and not good stewards of the tax payers money."

Btw, Sarasota County was able to extend the life of their landfill by three years with an aggressive recycling program.

From the Jacksonville Business Journal:

According to a recent TU article, Alan Williams and Doug Wood, former City employees involved with the original Waste Management deal, were approached a couple of months ago by Alan Mosley, the mayor's chief administrative officer. According to Williams, Mosley told him the original Waste Management contract was for the entire site and suggested that Williams sign an affidavit supporting that assertion. A few days later, Williams says he received an affidavit in the mail from Paul Harden.

At the same time that was going on (and as posted on Jaxpolitics before), the Mayor's staff, including Adam Hollingworth and Alan Mosley (among others), were involved in regular meetings with Paul Harden, Waste Management's representative.

So given that, does the following explanation in the TU make sense?

During an open forum at the First Coast Tiger Bay Club on Friday, Peyton was asked whether Mosley was acting on his own or under the mayor’s direction.

“He didn’t do it at my request or my direction,” Peyton said.

Peyton said he didn’t know Mosley had called Wood and Williams but did not see anything wrong with his aide trying to better understand the city’s legal risks.

Harden said that no one from the city directed him to follow up on Mosley’s conversations.

“I’m not acting on behalf of the city,” Harden said on April 11.

Of course, Harden's original letter that accompanied the affidavit stated that the men's signing of the affidavit would really "help Mayor Peyton."  So, why do I feel like we aren't exactly getting the whole story here?

For those looking for insight on the issue, the Times-Union has provided good coverage of the ongoing debate.  You can view it by searching their archives.  Or, for my analysis, simply click here.  Whatever your point of view, do make sure that your voice is heard in this process.

The first questions the Mayor asked are ones that I’m asked frequently: “Why do I blog?” and “Am I getting paid to do it?” I explained to the Mayor that I’m a believer in open government, in accountability, and in ethics. And no, I don’t get paid. There are no advertisers on this site and I receive no compensation for anything I write.  

The Mayor then began talking about the Waste Management no-bid contract. A little history: Trail Ridge is a 900-acre site off US 301.  There is currently one cell on the site which encompasses 144 acres.  That cell is managed by Waste Management, who had the winning bid in the early 90’s—the last time the City bid out the landfill contract.  The dispute between Waste Management and the City of Jacksonville boils down to a disagreement over the term “life of facility.”  The specific word “facility” appears to be the center of the dispute.  Waste Management alleges that they hold the rights to the entire 900-acre site, while the City contends that the term “facility” is strictly limited to the 144-acre cell currently in use.  As we have discussed before, the City's general counsel at the time the original agreement was initiated, a Florida Coastal Law School professor, and the City’s current general counsel have all stated that the the contract is limited to the current operating cell.  And both the law school professor and the City's current general counsel have stated that they believe the City is standing on firm legal ground.

But Paul Harden’s [the local attorney representing Waste Management] previous statement of “suing until the cows come home” to resolve the dispute is one of the Mayor’s most frequently used arguments in his efforts to convince the City Council that the Waste Management deal is the best option for the City.  (This same attorney has also been in the Mayor’s Office strategy meetings to get the Waste Management no-bid contract passed by City Council.) In any case, the Mayor contends that the City’s Office of General Counsel is not equipped to handle a legal battle with Waste Management and the City would be forced to hire outside counsel.  A fine vote of confidence in our General Counsel and his staff, don’t you think?

In addition, the Mayor has argued that all designing and permitting for a new cell at Trail Ridge would be frozen during a legal battle, and there would be a chance that there would not be adequate time for the designing and permitting stage of the new cell before the old cell reaches capacity.  If this were to happen, the Mayor contends that the City would pay roughly $30 million a year to ship its trash out of the county.  But would the design and permitting in fact be frozen? A permit for construction of a new landfill can’t be challenged and held up before it is issued, can it? And the City is the owner of the land, isn’t it? What harm is there in the City doing that work while the parties fight out the interpretation of “facility” in court? As an aside, I stumbled upon an interesting press release for a landfill that was built in Osceola County. It took only five months to get the landfill permit approved, and a year to construct the 1^st Phase of the landfill. So it seems that the Mayor is being extremely conservative in saying that it would take longer than 5 years to go through that process. Of course, the Council Auditor believes that the current landfill has another 7 years of life. Certainly that should be enough time to get another cell permitted and constructed. But if not, Peyton’s argument is also weakened by the fact that another landfill, or even new technology, such as a waste to energy processing site, could be built on a new site - other than at Trail Ridge.

Many have said that Mayor Peyton was unfairly left with a Courthouse that the previous administration knew couldn’t be built within the budget that had been allocated for it, and the Mayor has expressed that he shouldn’t put his predecessor in the same position with the landfill.  But, this contract would leave the next generation with a 35 year unequivocable “life of the site contract” – with no opportunity for further review according to the Council Auditor. In addition, there are no rate caps in the contract either. So, as pointed out by the Council Auditor, one or two bad years of inflation could result in exorbitant costs to the City for disposing its trash at Trail Ridge, with no recourse but to pay them.

Of course, the case has also been made that the two issues—the new Courthouse and the Trail Ridge Landfill—are completely infused.  As that line of reasoning goes, the Mayor needs the up-front savings afforded by Waste Management’s proposed contract to fund the construction of the new Courthouse before he leaves office.  If the contract were put out to bid, the Mayor would need to convince the winning bidder to pay a lump sum up front to match the $85 million that Waste Management has promised to deliver during the period remaining in the current contract.  (For the curious, the $85 million number comes from the $20 million in savings that Waste Management is promising in reduced operator fees and avoided escrow costs [the city currently has to put money aside in escrow to cover post-closure costs] for the remaining capacity of the current cell.  There is also $30 million in cost avoidance associated with the closure of the existing cell.  Additionally, Waste Management is promising $35 million in savings by utilizing approved soils from City projects (that includes ash from the City’s cleanup of ash sites)for daily cover at the current cell.) My question is: if Waste Management can operate the landfill under the terms of the new contract so cheaply (and evidently still make a handsome profit), why isn’t the City pursuing the renegotiation of Waste Management’s current contract? Of course, I would hazard a guess that the answer to that question may be dependent upon the terms of the current contract and any reopener clauses it may contain.

Republic Services is Waste Management’s chief competitor, although Advanced Disposal and Waste Industries have also made overtures to the City.  But Republic has pursued the concept of bidding out the Trail Ridge contract rather aggressively, even funding advertisements that cast both Waste Management and the Mayor in a rather unflattering light.  And, Republic Services might have reason to harbor ill will towards Waste Management.  They do, after all, frequently clash when bidding on landfill contracts as the #1 and #2 largest waste companies .

One of the Mayor’s main contentions with having two operators on the Trail Ridge site is his expressed concern over a potential breach of the liner.  If there were to be a breach and toxins were to leak into the aquifer, he said he could envision years of legal battles where the two cell operators battled it out in court over which cell was at fault and had produced the leak.  In a letter delivered to City Council President Ronnie Fussell; however, Republic Services Area President Guy Thompson says that Republic Services would be willing to assume environmental liability for the existing cell built by Waste Management.

Additionally, Thompson stated that Republic would be willing to “maximize landfill capacity”—another key selling point that Waste Management says should help make their case.  (“Maximizing landfill capacity” is something that is achieved by using the V in between the existing mound and the mound that will be constructed.) Please note however that the City and Waste Management have left the site location of the new landfill cell undecided in the proposed contract until after the contract is approved – leaving no guarantee that the new mound will be constructed close enough to ensure a V construction maximizing landfill capacity.

The Mayor contends that the proposed price of $10.21 per ton is less than other counties are paying throughout the state.  For example, Hillsborough County pays $13.91 per ton and Indian River pays $10.66 per ton.  (Indian River’s cost do not include closure costs that are incurred outside of the contract term.)  Waste Management’s proposed price includes closure and post-closure costs in it—something the Mayor believes makes it a very attractive offer.  As pointed out by a City Council member recently though, it turns out that closure and post-closure costs being included in operators' bids is now a regular industry practice. (The Council Auditor also argues that if the Mayor wishes to include closure and post-closure costs in a bid from other companies, he simply needs to write up a bid spec that asks for companies to bid on these exact services.)  

The Council Auditor sees the cost per ton issue a bit differently from the Mayor, as well.  In his [the Auditor's] opinion, the City should have secured an even lower rate per ton, specifically because the City agreed to provide fuel for landfill operations—something that the Auditor argues was not fully acknowledged.  In his opinion, the City has now assumed the risk of future price increases in fuel and Waste Management did not adequately lower the price to acknowledge that.  Fuel is relatively inexpensive now, but it certainly wasn’t a year ago and who knows what the price of fuel might be in twenty years.  

Assuming the liability for the cost of fuel is something the City Council should consider carefully when considering this proposal.  In JEA’s recently released report, they comment on the fact that the cost of petroleum coke has gone up by 292% over the past five years, while the cost of diesel oil has increased by 277%.  Who will the City contract with to provide the fuel?  Will it be a separate contract from the one the City currently holds with Gate Fuel Services, a company owned by the Mayor’s father?  How will the City effectively guard against fluctuating costs?  

Finally, one of the options that hasn’t received a tremendous amount of attention is the Council Auditor’s suggestion that the City manage the landfill itself.  While there are up-front costs associated with that avenue, the long-term costs were not too different from the proposed Waste Management contract.  The benefit, obviously, would be that the City would be in complete control of the Landfill and able to pursue any new technologies that came along, without being subjected to legal battles with a contractor. The City would also be free to adjust its costs as inflation tracks up and down, unlike the current Waste Management proposal.

I didn’t come away with the impression that the Mayor exactly relished his role in regards to the landfill issue and who could blame him?  After all, he will have already left office by the time the current contract expires.  And few should envy the position the Council finds itself in as they hold their Committee of the Whole meetings on April 9 and April 23.

There are savings with Waste Management that are “guaranteed” up front.  While Republic (and a few other companies) have said they can provide even more savings.   And so that’s the question the City Council will have to answer—Do they want the benefit of up-front “savings” and run the risk of long term increased costs or would they rather put in the conditions they want in the bid spec, bid the contract out, and see even more savings in the long run?  Are they willing to enter into a contract that has the potential to run for over three decades with a company that appears to have already demonstrated bad faith by carrying out protracted litigation with the City over noise violations and threatening to sue the City if they put the contract out to bid? It currently appears that the majority of Council members favor putting the contract out to bid.

But the Council’s final decision should be interesting. For some, it may be the opening salvo in their own campaign to succeed the Mayor.  They are faced with what seems to be an overwhelming tide of public opposition to the perception that another City contract is being rewarded on the basis of political connections.  They must also decide whether or not the legal threats being bandied about by Waste Management are reason to abandon their commitment to following the City’s procurement policy in putting contracts out to bid. 

Yes, risk exists.  While we often try to do everything within our power to minimize risks, it is something that can never be completely eliminated.  In the end, what remains is one’s conscience and one’s commitment to the long-term financial future of the City.  Each Council Member will have to answer that question for him or herself.

The Council had been waiting to hear the recommendation of their Auditor, Kirk Sherman.  As we reported, Mr. Sherman released his report which called for the contract to be bid out.  The moment of truth, as they say, is now fast approaching as the Council will be forced to choose between following the advice of their own Auditor or allowing themselves to be steamrolled by the Mayor who negotiated a contract without bothering to seek their input.

For those unable to make a 2pm or 4pm meeting, their input is no less crucial than those who will be there in person to speak.  Vist our "Government Contacts" page to find the contact information for your Council Members.  (Remember that, in addition to your District Council Member, you are represented by all five At-Large Members.)