Thursday, May 5, 2011
County, RES talk issues
By SUE WATSON
Steve Horton and Ronnie Ketchem with Resourceful Environmental Solutions recently met with the Marshall County Board of Supervisors to raise two issues – the recent advertising for requests for proposals for a possible new contract and money the county has held back since January.
RES has been the provider of household solid waste collection and disposal for the county since 2006.
Asking to go into executive session to discuss the issues, attorney Kent Smith told Horton there was no legal way to do it. The discussion then took place in open session.
“That being said, first we have not received payment in the last four months. As a company there is no way we can continue to operate,” Horton said.
Chancery clerk Chuck Thomas said in a separate interview that the county held the November payment until December due to cash-flow problems. Then the county has held $117,918 (total billing for January, February and March 2011) while it reviews its garbage contract with R.E.S.
Horton said he does not believe the county withheld payment because of lack of service.
Smith said he believes service has been good, but an audit going back to 2008-09 raised some questions about accurate can (garbage container) counts. The contract with R.E.S. calls for the county to collect delinquent bills for R.E.S. It also guarantees payment to the company based upon a certain number of containers in circulation.
The county has determined that the actual can count is just under 10,000 but the contract calls for the county to guarantee payment to R.E.S. for 11,200 cans, Smith said. The county has been billed for as many as 12,500 cans and for 12,461 cans more recently, he said.
“We are in a position where we think we have approved payment of an overage amount,” Smith said. “So, the county has been keen to do it. We're in a pinch.”
Horton said the contract should have been amended to say that the can count the two parties are operating off of as of September 18, 2006, is 11,200 cans. That number could increase or decrease as new customers were added or customers closed their accounts, he said.
Then the parties could operate off the 11,200 from a date forward, by agreement, he said. The February 2011 billing from R.E.S. came to 12,461 cans, Horton said.
The contract says that the county and R.E.S. can go back and make a can count at anytime, he said.
“We are fixing to find out how many cans – scratch them out,” said supervisor Ronnie Joe Bennett.
“We have no legal right to go on property except to knock on the door,” Horton said.
Smith asked if Horton was still favorable to a county and an R.E.S. employee riding the routes to get a can count. The contract is in effect until 2012, but either party can give notice and be released from the contract. The roll-over for the contract is set for June 15, 2011, if both parties were satisfied with the current contract.
Horton expressed concern that the actual can count would take longer than 20 days and cannot be completed before the opening of bids on a new contract May 9.
“You may award the contract to someone else and the can count may be different,” he said.
Supervisor Keith Taylor said the bids could be tabled and the board can opt to continue with R.E.S. He motioned for an immediate can count, which passed unanimously.
“I am saying the can count has nothing to do with the bids,” Taylor said after supervisor George Zinn expressed opposition to postponing rebidding the contract.
“We need a can count for our audit,” said supervisor Willie Flemon.
Ketchem said bidders need to know the can count.
Smith suggested the can count has never exceeded the contracted 11,200 figure.
Ketchem said R.E.S. had met with the auditors and the board and wants to work out the problems.
“As we talk about the money issue, we realize part of those funds are delinquent (accounts),” he said.
The county collects as many of the delinquent accounts as it can and, up until recently, has paid R.E.S. for all accounts 90-days past due whether it has collected the bills or not. It takes the county time to recover the delinquent bills and in many cases the county recovers about half of the $650,000 a year R.E.S. bills the county through a guaranteed payment clause in the contract.
Horton explained that his company operates off work orders, whether it is a new account or a cancellation of an account.
Conway Moore, zoning director, asked what is done when no one lives at the address that is being billed.
“It is set up that, if they move, the county pulls them off the account,” Horton said.
Horton then provided some background information. Eleven people from Marshall County are on his company’s payroll. The company has disposal fees and fuel costs subject to fluctuation. The board of supervisors has always paid the agreed upon figure on time until Thanksgiving 2010.
“This board has always paid perfectly,” he said.
Taylor said auditors question the fact that the county pays for cans that are not emptied.
“The service is better. We don't have any problems with that,” he said.
Auditors said it looked like the board of supervisors were making a donation to R.E.S. by paying for cans that were not being emptied, he said.
“That is absolutely it,” Smith said. “The difference since February and March between 11,200 and actual is a big number (1,200 plus). I understand the contractual obligation, the bid per container. The board does not know whether it is supposed to pay 11,200 when (that many are not being serviced). We are anxious to get a final finding and to move forward. It is a garbage problem for this board, not an R.E.S. problem.”
“We cannot continue to operate without being paid,” said Horton.
“We have paid for an extra 1,200 to 1,400 cans that do not exist,” said Smith. “The auditors say if you have 100 percent participation and 100 percent collection, you would still owe R.E.S. $14,000 a month. We can’t bill citizens (the general public) You can’t bill and collect for customers who do not exist. Ultimately, when the audit department comes down on us, it is for a resolution (of the discrepancy).
“We want to establish the can count so we can rebid the contract. We want to know what the number of cans are so everybody will be on the same page.”
Horton said companies that pick up for municipalities can get a close container count by using the number of utility customers as a guide.
“In this situation, we count cans,” he said.
When a new count is verified, then the contract can operate on that new figure forward, he said.
“This board has never requested a can count. It could have been requested in 2006,” Horton said.
Bennett said the original figure of 11,200 was derived by a consultant.
“Did you all count 11,200 cans or not?” he asked.
“We took on faith that 11,200 was the number,” said Horton.
“And now we are billed for 12,461 and have been since 2006,” said Bennett. “So the count increased to 12,461? The audit came up with 9,785 cans. We want a count now. There is a lot of difference between 9,785 and 12,461.”
Bennett said the number of residences have not increased by 1,461 since 2006. ‘”Y’all have done a good job,” he said. “It’s not like y’all are not getting any money.”
Smith reviewed the process.
“When we hold a car tag (until payment of past due garbage bill), the county has already paid (R.E.S.). The current money the county collects should be sent to R.E.S.”
“I can’t imagine that’s a big amount,” Taylor said.
Chancery clerk Chuck Thomas asked what R.E.S. would do with money paid in advance to R.E.S. by customers who pay up to a year in advance, if R.E.S. does not get the contract next time around.
Ketchem said R.E.S. would refund it to the customer.
Horton said his company has received only positive letters from customers regarding service.
“I guess we agreed to do a house count and revisit the money owed,” he said.
Smith said the audit department would be informed of a can count and the county would push for a can count by the first meeting in May.
Horton then said he lacked manpower to follow all four trucks each day for a week.
“This board is going to do a can count,” Bennett said. We are going with this board’s can count. We gotta count cans.”
Thomas suggested the county establish a payment plan so those with past due accounts could get their tags renewed more easily.
“As it is, in many cases we are not getting the garbage bill or the tags renewed,” he said.
“We have three mechanisms to collect delinquent bills,” said Smith.
“We can take partial payment and release the tag when all is paid; this board can flag the tag and sue for payment in justice court; or this board can assess their past due to their property tax as a lien.”
“There’s a lot of money sitting there,” said Horton.
The parties agreed to work together on establishing the actual number of containers in circulation .
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