[StBernard] St. Bernard Parish garbage contract up in air as judge weighs suit

[Westley Annis]

St. Bernard Parish garbage contract up in air as judge weighs suit

Print By Benjamin Alexander-Bloch, NOLA.com | The Times-Picayune 
Email the author | Follow on Twitter 
on June 06, 2013 at 4:22 PM, updated June 06, 2013 at 4:23 PM

Progressive Waste Solutions has sued St. Bernard Parish government, claiming
the parish breached its contract with the garbage hauler when it recently
sought proposals from other companies. Progressive, formerly SDT, seeks $11
million in damages in its federal suit.

Spurred by projections earlier this year of a $500,000 shortfall in the
parish's sanitation budget and some government officials' concerns that
Progressive was too expensive, the parish last month issued a request for
proposals hoping to find cheaper curbside garbage collection. Progressive,
in turn, sought a temporary restraining order and an injunction to prevent
the parish from requesting proposals from other contractors, and ultimately,
from accepting one.

While the parish government already had requested and received the
proposals, St. Bernard Parish Judge Jacques Sanborn did sign a restraining
order, essentially putting a hold on the process. The judge is currently
considering a permanent injunction, a ruling expected next week.

Parish attorneys have argued that the contract with Progressive does not
give the company an "exclusive franchise." They referred to a line in the
contract that states that all payments under the contract "shall be made
only for services requested and approved" by the parish government, which
the parish interprets as its ability to discontinue services.

The parish attorneys point out that while Progressive had charged the parish
$20 per address until recently, that Progressive only charges St. Charles
Parish $9.75, St. John Parish $11.60 and Jefferson Parish $13.48. The parish
states that the parish government had issued and opened the recent request
for proposals "to determine if it can obtain better prices that will save
taxpayers of St. Bernard and provide budgetary relief" to parish government.

But Progressive countered in a filing Thursday that "the Louisiana Supreme
Court has repeatedly explained that it is not within the authority of the
courts to relieve parties of what they perceive to be their bad bargains."

"St. Bernard cannot opt out of its contractual obligations simply because it
no longer likes them," Progressive argued in the filing.

Meanwhile, the parish has backed off on its dire projections about its
sanitation budget shortfall. On Tuesday, a parish official told the Parish
Council that recent higher-than-expected tax collections will keep the
sanitation budget in the black.

"St. Bernard cannot opt out of its contractual obligations simply because it
no longer likes them." - Progressive Waste Solutions' suit
"But we still believe we have an issue with sanitation going forward and so
we still need a long term solution," said Jerry Graves, chief administrative
officer for Parish President Dave Peralta.

Regardless, the parish's review of the proposals from waste collection
companies has been put on hold due to restraining order from Progressive's
suit, Graves said. 

The current contract with Progressive dates to February 2007, when then
Parish President Henry "Junior'' Rodriquez signed a contract with the
company, then called SDT, agreeing to a fee of $20 per house collected, per
month. While that 2007 contract specified a Jan. 24, 2014 termination date,
it gave SDT the option to extend that contract through July 26, 2016, simply
by giving the parish "written notice of the exercise of its option at least
90 days prior to the expiration" of the contract.

On May 3, Progressive exercised that renewal option.

Progressive services 14,700 homes a month in the parish. Based on the $20
fee, the company's lawsuit states that it should be owed $294,000 a month in
damages from the time of the alleged breach of the contract through July 26,
2016.

That comes to about $10.6 million.

On top of that, Progressive states that it is owed an additional $4.50 per
unit each month since January 2013, because the parish only has been paying
Progressive $15.50 per house since then. That additional money would bring
the total sought to around $11 million.

Peralta has said that he and Progressive had a verbal agreement for $15.50
per house during the past six months while the parish and Progressive have
continued to negotiate a potential new contract. Richard Passler, one of the
attorneys representing Progressive, said on Thursday that was conditioned on
the them both signing a new written agreement.

In an interesting turn - seemingly hedging its bets - Progressive was one of
the three companies to respond to the request for proposals. The company
stated it would provide the current twice-a-week pick-up for $15.50 per
household each month.

Graves assured residents that despite all the recent filings, and regardless
of who eventually holds the contract, that garbage pick-up services would
continue and would remain twice a week.

Parish Councilman Guy McInnis said on Wednesday that "the administration
needs to do everything in their power to bring garbage pick-up to the
residents of St. Bernard Parish at the cheapest cost possible and I would
hope that Progressive will partner up with us."

"I feel that Progressive is a very good company and they have been serving
our parish for a number of years and I hope we can work in partnership,"
McInnis added.

Progressive's proposal was the highest of the three received. Metro Disposal
and Ramelli Waste, both of New Orleans, submitted proposals for $14.35 and
$15.49 respectively.