Company alleges mismanagement of Ann Arbor compost facility

Monday, October 2, 2017 - 7:15pm

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File Photo/Daily

 

LSA sophomore Jane Sheedy came to school this fall excited to start composting in her off-campus apartment. Her hometown doesn’t offer composting services and after learning about harmful methane release that results from putting organic materials into landfills last year, she was thrilled to learn Ann Arbor does.

“We’ve got some mixing bowls in our freezer and any time we’ve got something compostable, we put it in there,” Sheedy said. “So vegetable scraps or if something goes moldy… or something like that. And when that’s full, there’s a bin behind our apartment complex that we can just empty the bowl into.”

From there, the city of Ann Arbor takes over. A roadside pick-up service picks up the compost much like it picks up regular trash or recycling and takes it to the city’s compost facility located only about five miles from campus.

As it turns out, the facility is also the site of a local controversy.

In 2010, the city of Ann Arbor decided to award its compost facility to an outside source. It put out a Request for Proposal looking for a company to contract the compost management. WeCare Organics, which was then based in New York but since merged with Arkansas-based Denali Water Solutions, answered that call. In February of 2011, it took over the contract and has been managing Ann Arbor’s compost since then.

This summer, that contract was up and Ann Arbor once again put out an RFP for a composting contractor. WeCare submitted a request to renew their contract, but this time, the Holland, Mich.-based Cocoa Corporation also turned in a proposal.

It did not receive an interview or site visit from the city. 

According to Cocoa Corporation CEO Adam Brent, his company felt its case was persuasive. Not only did he think it was the best company for the job, but he also claimed WeCare was grossly mismanaging the site.

“From my perspective, there is mismanagement going on at the facility, and then the contract was awarded to a company who is certainly going to continue what I believe is business as usual, which is ‘we get paid for the tipping (service of accepting unsorted compost material), and we’ll just pile it up and leave it out back like everyone else is doing and maybe one day it’ll turn into compost,’” Brent said. “The city of Ann Arbor has an excellent compost facility … and the resource is being, in my opinion, squandered.” 

Brent and his CFO Richard Hornstein based their allegations on the fact that WeCare was not grinding large material or moving enough of their compost off the facility. Grinding is an important part of composting because it breaks down large woody materials so they can help along the composting process.

Grinding and moving compost is a big part of Cocoa Corporation’s business model — it sells most of the compost it accumulates to local farmers as soil fertilizer — and it claims it was part of WeCare’s original contract, too.

“The requirement is, in the contract with the city of Ann Arbor, is that the compost facility is supposed to grind all the woody material and remove all the contaminants,” Brent said. “If you go to the site, none of that is taking place. In the RFP, we requested through the Freedom of Information Act after we had been denied the contract their contract … it lists that they have two grinders. Grinders would be what breaks down the material. They don’t have two grinders there and the one grinder they do have has been broken two years, according to the employee that we spoke to back in August. So they’re not following through on their initial contract.”

Brent and Hornstein also expressed frustration that WeCare doesn’t seem to be giving back as much revenue to the city as its company would, if given the chance.

“We asked for the financial information from the city but they wouldn’t give it to us,” Brent said. “We don’t know how much WeCare has repatriated back to the city based on the tipping and the sale. That would be an interesting thing to compare because their original RFP said they were going to give back $36,000 a year. I’d like to know if they did that.”

For Brent, the most infuriating part of the whole debacle surfaced when he found out whom WeCare had listed as references on its proposal submission. One of its references was Christina Gomes, the Ann Arbor solid waste and recycling coordinator. To Brent, this seemed like a clear conflict of interest.

“The thing that upset me the most was that Ms. Gomes was listed as a reference on the WeCare RFP,” Brent said. “She’s one of the three people to make the decision as to who’s going to get the contract.”

Neither Gomes nor the city of Ann Arbor responded to requests for comment, but city communications director Robert Keller forwarded a memo sent by the city to Brent and Hornstein when the pair asked why they had not received consideration for the contract. 

In the memo written by Craig Hupy, public services area administrator, the city denied all the allegations Cocoa Corporation had brought against WeCare.

In response to the claim that WeCare was violating its contract with the city, Hupy wrote that Cocoa Corporation had misunderstood the contract and that the actual document does not require any tonnage quantities of waste removal be met. The city also denied WeCare has created a potential landfill problem at the facility.

“Cocoa’s accusations and assertions are incorrect, and also show a lack of understanding of municipal compost operations,” the memo read.

The memo goes on to explain why it decided not to interview Cocoa Corporation after receiving its proposal submission.

“Cocoa’s priority was third party waste, which did not fit within the program goals the City was looking to accomplish with the RFP. … Furthermore, Cocoa presented extremely limited previous experience in compost management, its experience being only at a single facility that processes compostable materials in large part from a limited, and consisted category of sources… and only since 2015,” Hupy wrote.

There was no mention in the memo of the potential conflict of interest raised by Gomes being a reference of WeCare and a member of the selection committee.

Mike Nicholson, WeCare’s senior vice president and development manager, also said he did not want to comment directly on the allegations made against his company. However, he said he felt the company was following all the rules it were supposed to follow.

“At this point in time, we are in procurement with the city as our client, and we are following what we believe to be the rules of procurement,” Nicholson said. “We’re kind of keeping our comments to ourselves at this point in time.”

In Nicholson’s eyes, WeCare, which is a founding member of the Composting Council of Michigan, is doing a great job in Ann Arbor. He said the company feels it’s been quite successful in its six years working with the city. 

“We’ve been very successful,” Nicholson said. “We view the city as a partner, and we have provided leadership in the state. … We are now providing services for the University of Michigan, for their zero-waste program for all their athletic facilities. And most importantly, we helped the city implement their residential food waste recycling program.”

That occurred about three years after WeCare took over the compost contract, Nicholson said, and it’s the reason Ann Arbor residents and students like Sheedy can compost at their homes.

Despite this, Cocoa Corporation is not satisfied with the answers it’s received from the city or WeCare. It’s already gone to a City Council meeting to share its grievances, and it plans on asking the council to look into the matter further.

And as for local composters like Sheedy? They’re unsure what to believe now.

“It makes me uncomfortable (to hear about the allegations),” Sheedy said. “I’d like to think this is a better alternative than just throwing these scraps out.”