BALANCE SHEET BLOG – HOLLYWOOD, FL


Schwing-Bioset Procurement: 2005
April 18, 2005, 5:50 PM
Filed under: City Commission, City Staff, Water-Sewer-Sanitation

Biosolids Mess Spreading

Taxpayers Beware: Problems have recently surfaced with respect to the cost of moving treated biosolids (i.e., sludge) from Hollywood’s Wastewater Treatment Plant to its current disposition site in Hendry County.

Update: In response to questions at a meeting of civic associations on April 18, Whit Van Cott, Hollywood’s Director of Public Utilities, said that we were no longer working with DX5 trucking company. He was enthusiastic about how well the biosolids treatment plant is performing, but said that we are still “working out the bugs” with trucking out the sludge. Although asked, he declined to say what company was currently hauling the sludge or the nature of the bugs to be worked out, we subsequently learned that Hollywood’s Peter Hernandez was transporting the sludge. His company is Govea Trucking.

Dx5, a trucking company that has been transporting Hollywood’s sludge out of the city reports that the parties responsible for paying for this operation have (1) failed to execute an agreement with the hauler four months into the year, (2) failed to pay the price agreed upon for the hauling, and (3) failed to secure proper insurance for the trailers in which the sludge is hauled. In addition there are questions about the legitimacy of one of these parties.

Background: Last spring, Hollywood staff and elected officials touted the proposed agreement with Schwing-Bioset Technologies (SBT) to build a biosolids treatment plant as particularly beneficial because of a side agreement between SBT and a company called Bio-Native Technologies (BNT). This side agreement was described as providing for the Seminole Tribe to haul Hollywood’s sludge to native land in the Everglades where it would be spread as fertilizer, all of this at no cost to the city.

Larry Wakinyan who identified himself as a Native American from Oregon represented BNT before the City Commission and was the chief advocate for the Seminole hauling arrangement once Commissioner Wasserstrom absented himself from that role amid a storm of impropriety allegations. Although members of the public inquired about the provisions of this hauling agreement at the time, City Commissioners and staff responded that the City was not a party to it and therefore had no interest in its provisions. Our elected officials’ apparent lack of curiosity on this point is coming back to haunt us now.

Shortly after the City signed off on the design-build contract with SBT, the Seminole Tribe notified the City that it had never agreed to haul and receive Hollywood’s sludge and would have no part of such an enterprise. And there went the promised sludge disposition “at no cost to the city.”

Meanwhile the SBT plant has been built and is in full operation at the wastewater treatment plant in the Lakes.

Newly Reported Developments

Absent free hauling by the Seminole Tribe, DX5, Inc. — a small company run by a husband and wife team in Virginia Gardens, FL — is hauling Hollywood’s sludge under a new contract that took effect January 1, 2005. For the first month of the new contract, the city was responsible for paying the hauler and the payment was proper. After that, under the city’s agreement with SBT, responsibility for paying the hauler shifted to SBT and BNT.

A letter from DX5 dated April 11 states that SBT and BNT have delayed signing a contract for the hauling and that BNT refuses to pay DX5 the rate that was agreed upon during a telephone conference call with SBT, BNT and others. They report that in their attempts to collect payment, Mr. Wakinyan is “very disrespectful and antagonistic.”

DX5 sent copies of its letter to SBT and Larry Wakinyan of BNT as well as numerous other parties including Hollywood’s Director of Public Utilities and our Mayor and Commissioners under the rubric “all parties directly or indirectly involved.”

Also copied was Arnold Goldman, the husband of Commissioner Wasserstrom’s aunt, who represented Schwing-Bioset last spring in its effort to secure the Hollywood job. At the time, Mr. Goldman’s role was never fully explained but it did cause both Commissioner Wasserstrom and Mayor Giulianti to recuse themselves from participating in the biosolids vote. We do not know Mr. Goldman’s current “direct or indirect involvement” with the project.

The DX5 letter also states that BNT has yet to secure “trailer interchange” insurance coverage for the trailers used to haul the sludge. Trailer interchange covers physical damage to non-owned equipment (containers, chassis, and trailers) while in the carrier’s care, custody and control. As DX5 points out, this lack of coverage “can become a problem in the event of an accident for Schwing-Bioset or Biosolid Distributing Services since they are the owners of said trailers.”

And to muddy the waters further, DX5 raises questions about BNT. The letter states in part: Mr Wakinyan “is a businessman out of Oregon. He is a buffalo farmer. Is his corporation, Bio-Native Technologies, registered in the state of Florida?”

Not only is it not registered in Florida, but an online check WE did before the City Commission even voted on this matter last July showed no registration in Oregon or Washington either — the states where BNT claimed to be most active.

The process by which Hollywood selected a company to design and build the city’s biosolids plant has been fraught with misfeasance and apparent malfeasance from the beginning. The decision to select SBT was made by three Commissioners (Anderson, Bober and Oliveri), with two opposed and two others not voting due to conflict of interest.

While ordinarily Commissioners would be justified in relying on the recommendations of city staff on a technical issue of this sort, a due diligence analysis of any contract is always required. This case required even more analysis on the part of our elected officials because the objectivity of the Director of Public Utilities was clearly compromised by early missteps involving non-transparent dealings with both SBT and Commissioner Wasserstrom who was pushing SBT from the beginning, as well as an overly restrictive RFP and badly flawed RFP process. In order to sway a majority of the Commissioners to the side of SBT, the Public Utilities Director harangued the Commissioners repeatedly in a highly emotional, unprofessional tone at city commission meetings, once going so far as to threaten to resign if they did not select SBT.

Where are we now? Will DX5 continue hauling without a contract and adequate payment, or will it cease operations unless its complaints are addressed? If it stops hauling, who will take responsibility for moving the sludge out of the city? Will our sewer fees be raised to cover the rising cost of sludge hauling? Will the city be drawn into yet another expensive lawsuit to be funded by the taxpayers?

And to think this never-ending, costly mess could have been avoided altogether had the elected officials from the beginning exercised the due diligence the public trust requires of them. Only one of them did (Commissioner Furr) and with only Commissioner Russo joining him, he was handily out-voted by the others.

How much incompetence from our elected officials are we, Hollywood’s residents, willing to underwrite with our taxes? Have we reached our limit yet?

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