The Journal Gazette
Sunday, May 15, 2022 1:00 am

Trash contract this time set up to avert trouble

DEVAN FILCHAK | The Journal Gazette

Fort Wayne's contract with GFL Environmental for trash and recycling services is the culmination of months spent by local officials trying to prevent another situation like the last few years with Red River Waste Solutions.

City Council approved an eight-year contract with a two-year option last week for trash and recycling hauling services with GFL, which was the lowest of three bidders. The Toronto company will take over service for the city's 83,400 customers on July 1.

The current provider, Red River, signed a contract with the city that was to last through 2024. Red River and the city entered into a transition agreement after the company filed Chapter 11 reorganization bankruptcy in October.

Tim Haffner, the city's corporation attorney, on Tuesday outlined the layers of protection worked into the contract with GFL. The company can be fined for eight specific offenses, and the city has clearly defined what constitutes default.

Malak Heiny, city attorney, said Fort Wayne's legal team was forced to look for applicable case law when determining whether Red River had defaulted on its contract.

“Four years ago, I was sitting before you discussing the terms of the prior contract, discussing when would Red River would be considered in default,” Heiny said Tuesday. “We really didn't have great answers.”

The legal team, and the local officials they advise, will have much more clarity going forward, he said.

GFL can be found in default if the company doesn't buy a performance bond, provide insurance or make required payments to the city, such as assessed fines, the contract says. Any type of bankruptcy filing is also grounds for default.

GFL can also be found in default if violations are assessed three times in six months or five times in 12 months. Haffner and Heiny agreed the violations would have to be major, such as failing to maintain a 97% daily completion rate of pickups on a rolling six-month basis.

Haffner said the city will randomly choose days to test the completion rate. The city can fine GFL 5% of the more than $900,000 monthly payment, which would be at least $45,000, for the first offense, and each subsequent fine could be double, or $90,000.

The contract spells out several smaller violations for which the city can assess fines.

If GFL drivers miss a house for collection, the company can be fined $100 per household if the mistake isn't remedied by 5 p.m. the following day. Carts must be at the curb by 6 a.m. on collection day.

If GFL misses the same house three times in three months, the city can fine the company $50, even if the misses are corrected by 5 p.m. the following day.

GFL is required to submit a daily miss report and can be fined $50 for each day that it doesn't do so.

GFL vehicles will have to be maintained in “a reasonably clean and safe working condition,” the contract said. The company can be fined $25 per vehicle if that isn't the case. GFL also has to replace any carts it damages.

A couple of fines can also be assessed by the city for commingling of trash and recyclables – $500 for each incident or $2,500 for a truckload if it makes it to the landfill.

Councilman Paul Ensley, R-1st, asked Haffner for assurance that the city will fine GFL every time it is able to and “in the best interest of ratepayers.”

Haffner said he could not assure Ensley of that. Mayor Tom Henry's administration will use its discretion when assessing violations and fines and when determining whether the contractor has defaulted.

“It's not our prerogative to insist that every fine under every instance on every occasion will absolutely be levied,” Haffner said.

Lou Berardicurti, GFL's area vice president, said company officials have already spent time in Fort Wayne and are confident they can handle every challenge workers will encounter.

Sam Caramagno, GFL's director of municipal affairs, accompanied Councilman Geoff Paddock, R-5th, Thursday on a tour of some of the city's alleys that are the most difficult to navigate. Caramagno said GFL drivers will use a mini packer truck in alleys that are too tight for larger garbage trucks.

In the event GFL can't complete the contract, Fort Wayne will be in a better position than it was with Red River, Haffner said. The contract includes a clause that allows the city to take possession of GFL's equipment for up six months if the company doesn't fulfill its obligations.

“That would help us, as a community, prevent the challenges we faced with Red River, where we didn't really have an alternative because we didn't have the equipment,” Haffner said. “(Like in) a lot of businesses and industries, the person who controls the equipment largely controls whether or not we have a remedy.”

Councilwoman Sharon Tucker, D-6th, said she is optimistic about GFL and hopes the company delivers the service that city residents are due.

“The bar is low,” Tucker said, “but the expectations are out of the roof.”

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