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Houston City Council Members Raise More Questions about Proposed Recycling Contract

Council members are still unhappy with how the contract is being awarded.

After questioning the process under which FCC Environmental had won the recycling contract for the city of Houston, three competitors were invited to submit a new round of final bids.

Now FCC has emerged as the winner again.

But still some city council members are unhappy with the result.

In July, the council delayed a vote on a proposed $48 million, 20-year recycling contract with FCC Environmental. This action followed Houston Mayor Sylvester Turner’s recent decision to turn down EcoHub’s One Bin project, despite the fact that Houston was poised to become the pilot city for EcoHub.

Council members questioned the length and price of the contract since it changed numerous times.

The Houston Chronicle has more on the latest developments:

If the commodities market remains sluggish, the city would pay no more than $19 per ton of recyclables, down from $26 in FCC’s prior bid. If the market recovers, the city would keep half, rather than a quarter, of the revenue left over after the company assessed its $87-per-ton processing fee; that fee is the same as was contained the firm’s prior bid.

FCC also would donate the new facility and the land on which it will sit at 9172 Ley Road to the city within a year of the facility’s opening, expected roughly 18 months after the contract is approved; there was no discussion Tuesday of how much property tax revenue the city expects to forgo as a result of that transfer, which has an estimated value of $23 million.

City officials did not release information about the competing three bidders’ processing fees, per-ton price caps or proposed revenue shares, saying some of the companies – which are Republic Services, Waste Management and Independent Texas Recyclers -- view that information as proprietary.

Steve Ragiel, CEO of ITR, does not. He said his firm had proposed a maximum price per ton of $14 and would give the city 60 percent of any revenue left over after the firm collected its $61-per-ton processing fee.

The city evaluators did rank ITR’s pricing structure the best of the four bidders, but ITR scored poorly in the categories of experience and financial capacity, knocking it out of the running; Ragiel said it was unclear to him why.

A lack of comprehensive pricing information led Councilman Dave Martin to storm out of Tuesday's committee meeting before it was over.

“This presentation is garbage,” he said. “This is ridiculous, guys. This gives us nothing.”

Read the full story here.

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