Fort Wayne City Council approves transition agreement with Red River, opens door for new hauler
Fort Wayne City Council approved a transition plan between the city and garbage hauler Red River Waste Solutions during a special session of the body Tuesday night.
The agreement will effectively release Fort Wayne from its contract with Red River and allow for a new agency to take over.
Per the agreement, Red River will continue to serve Fort Wayne until June 30, 2022. This is to allow for the selection of a new hauler and time for them to transition to city routes and bring in their equipment.
There were stakes related to passage of the measure Tuesday night. If the measure failed, it would result in the seizure and liquidation of all of Red River's assets, which would likely lead to about 85% of waste not being collected between now and June 30.
City attorney Tim Haffner began his remarks by expressing gratitude towards members of the body for their patience during the process.
Haffner says even if some of the details of the settlement are not ideal, it's the best course if Fort Wayne wants to move forward.
"This allows us to proceed with implementing a new contract with a new provider," Haffner said. "But for that, we don’t have the right to implement it because we’re stuck under the current contract. So this gets Red River out of the way."
But for as promising as a new hauler sounds to Council and city residents, some members are concerned the next contract could be "Red River 2.0." At-large Democrat Glynn Hines likened it to a divorce, worried that the 90-day rush to bring in a new provider might lead to another flawed contract.
City attorney Carol Helton says some of the contract language has been adjusted to ensure Fort Wayne has a little more control.
"That language in the bid specs very clearly outlines what is an active default. Before there was language in there regarding default, but it wasn’t as clearly defined," Helton said. "This very clearly defines what is considered a default under the contract and what triggers that performance bond."
The measure passed 7-0.
Red River's bankruptcy proceeding requires Fort Wayne to pay the company $1.9 million to help it remain solvent during the transition period. The bulk of that – $1.6 million – will be paid by the legal agency ARGO, Red River's performance bond holder, leaving Fort Wayne on the hook for only $300,000.
In a statement, 2nd District Republican Russ Jehl expressed his disappointment in that part of the agreement.
"The City Administration coddled Red River and justified its poor service for four years, allowing Red River to put us in this untenable situation," Jehl said in the statement. "The Ratepayer, not Red River, is entitled to the proceeds of the performance bond."
Jehl was not present for the meeting, citing a prior commitment and short notice; the meeting was called six days ago.
Bids for a new service provider opened at the beginning of March. Even though many bids have been submitted to this point, that discussion will be held for another time.
Employees for Red River will continue to serve the area the next several months. It is assumed they will be brought on by the next provider as a mutual benefit: they remain employed and working, while the new hauler will have drivers that know and understand the area.