Administrators favor FCR for city collection contract

By Ray Gronberg

gronberg@heraldsun.com; 419-6648

DURHAM -- Administrators are standing by their advice that the City Council award to a plant in Greensboro a contract to sort and resell the recycled goods the Solid Waste Management Department collects from residents.

Council members are scheduled to decide the matter Monday night. Though four companies have bid for the contract, the leading contenders are FCR Recycling and Tidewater Fibre.

Solid Waste Management Director Donald Long and his staff favor giving the contract to FCR, which has offered a revenue-sharing deal that could yield the city up to $156,000 a year when recycling markets are strong. If markets are bad, the city would have to pay up to $270,000 a year.

Tidewater -- which until July handled curbside recycling collections for the city -- is offering revenue sharing and better numbers. Its quotes translate into a promise of up to $204,000 in annual revenue for the city when markets are good and costs of no more than $237,000 a year when demand for recycled goods is off.

Long and his staff favor going with FCR partly because they don't really trust Tidewater's figures.

The reason: The per-ton average market prices the Virginia company says it received for paper, plastics, metals and other goods in fiscal 2008-09 are quite a bit higher than what Durham officials know, from the company's own reports, that it got strictly for the city's goods.

Over the year, Tidewater usually only received about two-thirds the price for Durham goods than the figures it claims as the overall average for material from all its customers.

The Solid Waste staff also notes that Tidewater's sorting plant is set only to handle goods that have partly sorted before arrival, either by residents or by collection drivers.

FCR, by contrast, has already processed unsorted goods for Durham. It did the work as a Tidewater subcontractor, while Tidewater and the city were experimenting with so-called "single stream" collection in several neighborhoods.

Key officials appear to be on the fence about the contract decision. Councilman Eugene Brown said Friday he had to study the issue over the weekend, and Mayor Bill Bell said he's "still looking at all the information I can get."

Bell added that if administrators have qualms about Tidewater, they need to make the case with data.

"When you say they don't think they can market [goods], or they don't have the capacity to market, that's subjective," the mayor said. "You need to come back and say why that's not true."

The mayor also has sought information on the decision's effects on local employment and tax revenue.

Tidewater's lawyers say the company paid $64,599 in local taxes of various kinds between the spring of 2008 and the spring of 2009. But they didn't break out how much of that money was attributable to Tidewater's collection operation and how much to sorting efforts.

Almost 41 percent of its tax contribution to the city and county was in the form of vehicle taxes, the bulk of which presumably stems from the collection operation.

FCR Regional Vice President Sean Duffy wrote council members recently to urge them to pay closer attention to the numbers for recycling markets, which he said would matter more over time.

Doing otherwise, he said, "would risk throwing away hundreds of thousands of dollars over the life of the contract."

The contract Long and his staff propose has a four-year initial term and rollover clauses that could take it up to a 10-year deal.

The issue is further clouded because Tidewater got into the battle for the sorting contract late, after it became clear the council would take away the collection business.

FCR officials maintain that Tidewater undercut their price by taking unfair advantage of information about their own bid that had already reached the public domain.