The Journal Gazette
Wednesday, November 10, 2021 1:00 am

Council invites Red River CEO

Wants answers from bankrupt trash hauler

DEVAN FILCHAK | The Journal Gazette

Fort Wayne City Council will consider investigating Red River Waste Solutions if its CEO does not come to next week's meeting.

Councilman Russ Jehl, R-2nd, raised his concerns with the city's trash hauler, which has filed Chapter 11 bankruptcy, at the end of Tuesday's meeting. Because Red River is trying to reorganize through the bankruptcy, it can decide whether to continue trash service to the city or transfer the contract to another trash company.

City Council has complained about service, such as frequent missed collections, since Red River took over Fort Wayne service with a seven-year contract in 2018.

Jehl, who is on the Solid Waste District advisory board formed earlier this year, said his impression after the board's last meeting is that the city hasn't had any “high-level” discussions with Red River in the last two years. Because of the bankruptcy filing, all conversations now have to go through attorneys, he added.

After the advisory board meeting last week, Jehl asked John Bonahoom, the council's attorney, about the legality of issuing a subpoena to speak with James Smith, the Texas-based company's CEO.

“If he doesn't show up for the subpoena, we'll learn something,” Jehl said, “and if he does, we will have our answers.”

Bonahoom explained that the council needs to invite Smith to a meeting first, and if he doesn't show up, the members can pass a resolution to open up an investigation into the company. Then, the CEO could be subpoenaed to council as part of the investigation.

Jehl said the issue is urgent because a provision meant to protect the city from any financial issues the contractor is having could be gone at the end of the year. Red River enters a roughly $5 million bond, which is equal to a year of service, annually that the city would receive if the company enters default or stops picking up the trash.

“If Red River does not intend as part of its bankruptcy reformation to continue, they can simply not re-up the bond,” Jehl said. “That is very problematic because we could just be sitting around, waiting for more bad things to happen.”

Red River released a statement last month that said it will continue business “as usual” as it goes through bankruptcy.

Councilwoman Michelle Chambers, D-at large, noted that no Red River representatives showed up to an October meeting to which they were invited. Councilman Paul Ensley, R-1st, who is also the council's president, said Red River wasn't invited directly to the last meeting because the invitation went through the Solid Waste District, so this will be the first time the council has invited Red River directly.

Councilman Tom Didier, R-3rd, said he thinks Jehl's urgency is warranted, especially because the city has looked at rate hikes because of Solid Waste's financial state. Jehl said Solid Waste is expected to have a $1.6 million deficit at the end of the year.

Councilman Jason Arp, R-4th, suggested the council look at the ordinance concerning trash removal and remove the prohibition on neighborhoods independently contracting for trash collection. He added that it would help people help themselves.

Councilwoman Sharon Tucker, D-6th, said she would not support that because not all neighborhoods are in a position – organizationally or financially – to set up their own trash collection if Red River defaults.

The members agreed to invite Smith to the next council meeting, which will be at 5:30 p.m. Tuesday. Bonahoom said he estimates an 80% chance that Red River's attorneys will advise the company to ignore the invitation.

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