Council Gives Recycler Notice It Might Terminate Agreement

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Published: July 29, 2013 @ 9:58 PM EDT

At the July 18th Mayor & Council meeting, after a closed session that was called at the start of the meeting, the governing body voted on and approved a resolution to authorize council to terminate the contract with Equipment Rental Services if the contractor fails to meet the requirements set forth in the recycling contract at the next scheduled pick-up, which is set for July 30th and 31st. The termination is to take effect on August 1st.

Recycling material – sometimes cardboard/paper, sometimes aluminum/plastics/glass, sometimes both – was still on the front lawns of some residences that Thursday night. Ever since the contract took effect on July 1st there have been issues borough-wide that started with people not knowing they had to separate their fiber recycling (cardboard, newspapers, magazines, etc.) from their other recycling, and continued with the contractor being delayed in its pick up which was finally completed on almost a week after it was scheduled. Confusion and frustration from residents as well as the governing body were further compounded when – for the second time – people did not have some if not all of their recycling material  picked up.

Mayor Joseph Accardi explained that Equipment Rental Services (ERS) was the lowest responsible bidder, coming in at $129,000 for the complete three (3) year contract, according to Chief Financial Officer (CFO) Ken Blum. At $43,000 per year, ERS’s bid was half the next highest bidder who quoted a price of $258,000 for the contract.

“Since we had no basis to turn down that bid,” Mayor Accardi continued, explaining the reason for awarding the contract to ERS, “Members of council voted unanimously to approve the bid of Equipment Rental Services and our understanding was that they had done a dry run through our community and everything was set to go and then through a number of errors along the way, the recycling was not picked up properly. And now it’s happened a second time. It’s a little better this time but it’s happened a second time.”

According to N.J.S.A. 40A:11-4a, a bidder may be deemed “not responsible” by the municipality only if the bidder meets the statutory criteria for “prior negative experience” as specifically defined within the LPCL. N.J.S.A. 40A:11-4b. In order for a municipality to disqualify a bidder because of prior negative experience, the criteria set forth in N.J.S.A. 40A:11-4c must be satisfied. Mayor Accardi commented that there was no track record or factual basis to for the governing body to reject the bid.

A review of ERS with the New Jersey Business Gateway showed that the company was formed in Delaware in 2001 and filed to do business in New Jersey in 2004, listing its business as “Heavy Construction Equipment Rental”. Michael J. Fago was listed as the President and its location was filed at 110 Main Street in South Amboy, NJ. According to the state records known as COGS (Certificate Of Good Standing), ERS had its charter documents revoked for failure to pay annual reports in 2007; ERS was reinstated in 2008.

The night before the meeting, ERS had sent a letter to the municipality providing their explanation as to the reasons for the delay with recycling pick-up which included cleaning out Sunrise Village and Woodside Gardens, temperatures exceeding 95°, the inclusion of unrecycleable material, ‘more than half’ of the residences still bundling their recycling material together, and calls to return to areas already collected.

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One aspect that is of concern to residents for this upcoming collection will be whether to use the blue containers for their paper-related recycling or to bundle and tie their paper products.

The letter from ERS stated that residents should “flatten, bundle, and tie cardboard.”

1st Ward Councilman Andrew Casais’ statement to his constituents differs, stating, “Some residents have voiced concerns and questions about the use of the blue containers made available by the Borough. Please feel free to continue using these containers. Despite what you may have heard their usage completely complies with contractual requirements. Please just be sure to breakdown all cardboard boxes before placing them in these receptacles.”

In the event that the agreement is, in fact, canceled on August 1st, Mayor Accardi stated that the municipality will have to enforce the performance bond and that the contract would have to go out for another bid. Such a measure is rare; so rare that, at this point, it is unclear to what extent the performance bond would cover the municipality. The general understanding from Borough Hall is that a contractor would be hired temporarily to perform the services and the municipality would use the bond that was part of the contract to have Equipment Rental Services pay the difference between what we agreed upon and whatever the other company charges until such time that the contract is put out to bid again.

This scenario does not take into account if litigation is started which could delay the performance bond issuance.