Delray Commissioners and Concerned Delray Citizens:
Below is an excellent editorial from Mr. Schultz with the Palm Beach Post re Delray’s No Bid $65M contract extension granted to Waste Management last August. He also wrote two editorials on the matter at that time (8/21 and 8/22/12) which I suggest you also read. One sentence in the editorial below pretty well sums it up:
“When there is no good reason, there’s usually a bad reason.”
The editorial does not inform you that Delray trash customers will overpay $12.5M over the 8 years because it failed to get competitive bids. As a former businessman, I know what would happen to City Attorney Shutt for rendering such questionable legal advice that Mr. Schultz dwells upon below. $12.5M overpayments have severe consequences in private industry.
Fortunately, the new Commission has engaged an independent outside attorney (Mr. Cole) selected by our new City Manager (Mr. Chapman) to determine (1)- if the City violated its procurement Ordinances requiring getting competitive bids and (2)- if so, can the Waste Management contract be justifiably terminated? Maybe Delray trash customers can salvage $12.5M after all!
– Kenneth MacNamee
Editorial: New Delray Beach manager correct on trash-hauling contract
By Randy Schultz – Editor of the Editorial Page
Delray Beach City Manager Louie Chapman expects the outside legal review of the city’s trash-hauling contract to be completed “soon.” Whatever that second opinion is, the city’s official position already has changed, just not soon enough.
Last August, the city commission extended until 2021 the contract that Waste Management has had without competitive bidding since 2001. Palm Beach County’s Office of Inspector General had recommended that Delray Beach seek bids.
Since the contract was for $65 million, it should not have required an outsider to make that recommendation.
Yet then-Mayor Nelson “Woodie” McDuffie and commissioners Adam Frankel and Angeleta Gray ignored that recommendation. Whatever their motivations, they could cite as a defense the opinion from City Attorney Brian Shutt that the contract was not subject to the city requirement for competitive bidding on any contract of $15,000 or more. Mr. Shutt made the odd argument that because the money comes from residents in the form of trash-hauling fees through the city to Waste Management — as opposed to property taxes — such a “pass-through” contract was exempt from the rule.
When he wrote the opinion, Mr. Shutt reported to City Manager David Harden, who resisted oversight by the inspector general. Mr. Shutt now reports to Mr. Chapman, who said this week that he disagrees with Mr. Shutt. Mr. Chapman said the term “pass-through” is a “made-up contract.” He added, “We have half a dozen contracts paid with user fees” that go out for bids. Should the Waste Management contract have been put out for bid? “Absolutely,” Mr. Chapman said. He doesn’t understand why it wasn’t. When there’s no good reason, there’s usually a bad reason.
At its May 14 meeting, the new commission — against the wishes of Mr. Frankel and Ms. Gray — asked Mr. Chapman for that second opinion. Mr. Chapman commissioned Fort Lauderdale attorney Jamie Cole, who does legal work for several South Florida cities. If Mr. Cole agrees with the inspector general’s office, the commission will have to decide whether to challenge the contract.
Mr. Chapman doubts that the city could prevail, but Mr. Cole’s opinion may give the commission some guidance. If all this seems too much after the fact, we would disagree. The decision last August showed that special-interest politics had become established in Delray Beach, which long has fostered a good-government image. It may be too late to change the contract, but the new attitude since elections in March is the start of wider change.