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Thursday, February 25, 2016

Ind. Decisions - "Court of Appeals voids Indy recycling deal"

Brian Eason of the Indianapolis Star reports today on yesterday's Court of Appeals decision in Graphic Packaging Int'l, Inc.; Rock-Tenn Converting Co. and Cathy Weinmann v. City of Indianapolis and the City of Indianapolis Public Works (see ILB opinion summary here). Some quotes:

The Indiana Court of Appeals on Wednesday found that the city of Indianapolis violated competitive bidding laws when the Ballard administration awarded a long-term recycling contract to Covanta in 2014.

The 19-page decision reversed a lower court ruling and ordered the Marion Superior Court to void a deal that would have brought a $45 million commingled trash-recycling center to Indianapolis. * * *

Barring an appeal, the decision likely represents the final nail in the coffin for the disputed facility, which had long been opposed by environmentalists who disparagingly referred to it as "dirty recycling." Mayor Joe Hogsett had already announced a temporary suspension of the deal, which he said needed additional public review, even as the city continued to defend the contract's handling in court.

The decision was a stinging rebuke to Ballard's administration, which had long insisted the contract was legal.

The deal extended Covanta's existing contract to incinerate the city's trash, locking Indianapolis into a $112 million commitment through 2028. But the Court of Appeals found that the contract violated the state waste disposal statute on two fronts:

• The amendment had the effect of extending the contract beyond a 40-year maximum term set by law. The original deal was struck in 1985, but the city had argued that it didn't begin until 1989, when the trash facility was fully operational.

• It should have been publicly bid as a separate contract, rather than negotiated as an extension of an existing contract. The city had argued that the public bidding requirements set out in section 4 of the waste statute didn't apply, because it was an extension.

The court disagreed.

"When a contract goes well above and beyond the provision of services by requiring the construction of a massive facility, it walks and quacks like the proverbial section 4 duck we deem it to be," wrote Judge John Baker.

Recycling advocates, who had long opposed the commingled trash pickup, cheered the court's decision and said they hoped it would open the door to a more robust curbside recycling program. * * *

While the Hogsett administration had already signaled a willingness to walk away from the deal, it remained unclear how the administration would proceed on the legal matter. The city could still appeal the matter to the state Supreme Court, and it may have reason to do so. If the ruling that Indianapolis mishandled the contract stands, Covanta could have a legal claim against the city. Until agreeing to a contract suspension, the company was acquiring permits and had expected to begin construction later this year.

Posted by Marcia Oddi on February 25, 2016 08:45 AM
Posted to Ind. App.Ct. Decisions