Cantrell administration weighs options on remediation contracts after Metro filing for bankruptcy | Local policy


Uncertainty over new sanitation contracts continued to swirl Friday following Metro Service Group’s Chapter 11 bankruptcy filing, in which the garbage hauler leveled a litany of grievances against Mayor LaToya’s administration. Cantrell.

The U.S. bankruptcy court filing appears to be a last-ditch effort to stop the city from moving forward with two new contractors to replace Metro, plans that have been in the works for nearly a year amid complaints about the metro service. The new contracts are supposed to go into effect Nov. 7, but Metro lawyers say federal bankruptcy rules automatically prohibit termination of the company’s contract until a judge rules otherwise.

City spokesman John Lawson said the administration is evaluating its legal options and “will continue to expend additional resources” to ensure there are no disruptions in the service area. from Metro, which covers Lakeview, New Orleans East, Gentilly and downstream areas. The administration declined to make Sanitation Director Matt Torri available for an interview.

Metro, one of New Orleans’ two major waste haulers, accuses the administration of multiple breaches of contract and falsely slandering it in public. These complaints mirror those of the other main carrier, Richard’s Disposal, Inc., whose contract can also be renewed.

Richard’s struggles go beyond New Orleans. This week, the waste collector pulled out of Jackson, Mississippi, where he had been providing services for about six months under an emergency contract, saying he was not being paid for his work . Richard’s owner, Alvin Richard, did not respond to messages on Friday.

Richard’s and Metro say the Cantrell administration has not paid them for the extra tonnage during the pandemic, as required by their contracts, and that their contracts do not take sufficient account of the growth in the number of households they must serve. .

“We have been willing to honor our contract as long as it is honoured. We have to be paid for the extra tonnage in our contract when we have events like a pandemic or a major hurricane like Ida. This is specifically described in our add to this is the more than 5,000 homes we’ve salvaged and never been paid for,” Metro owner Jimmie Woods said in a statement.

According to owner Sidney Torres, one of the new contractors set to take over Metro’s service area, IV Waste, already handles about 45% of Metro’s routes under a separate contingency contract resulting of Hurricane Ida.

“We will continue to work under the emergency contract,” Torres said. “I do not care.”

IV Waste has taken on an increasing share of Metro’s workload over the past year. Torres’ calculation of the proportion is triple what it was six months ago. The IV Waste contract available on the city’s website lists a cap of $2.5 million, but Torres said compensation varies week-to-week depending on how many subway routes he has. are assigned.

The other contractor that will take over Metro’s service area next month, Waste Pro, is one of Metro’s unsecured creditors: it has a $190,000 claim. Metro’s filing shows 17 creditors with unsecured claims totaling $2.9 million. These include financial institutions, equipment suppliers and other businesses. They also include the Louisiana State Police, which is seeking more than $125,000 in unpaid fines. The record does not specify these fines.

The new contracts for IV Waste and Waste Pro represent an increase of 80% over the current Metro contract. In his statement, Woods said he was “concerned that all of a sudden there is money to pay so generously for garbage collection, as long as it’s someone else’s “.

Metro suffered no contractual penalties after nearly three years of scattered pickups, including a complete outage of service for several weeks after Hurricane Ida. The company is still paid about $11 million a year under a contract that includes twice-weekly collections and recycling service. Service was reduced to once a week after Ida, and recycling on Metro routes is on hiatus until new contractors start.

Yet Metro accuses the Cantrell administration of failing to pay its due compensation. And while the city paid IV Waste and other contractors to participate, Metro faults the administration for failing to enact emergency provisions in its contract that it says would have triggered federal funding for additional assistance. .

Douglas Draper, one of Metro’s bankruptcy attorneys, said he could not answer questions related to those claims.

The city can impose damages on Metro for service failures, but Cantrell and other officials said they’d rather not do so because it could further hurt the company’s performance. Draper said the administration’s decision not to hold Metro in default undermines repeated public criticism by city officials of the company.

“You can say whatever you want,” he said. “But if you put it in writing, then you have to prove it.”


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