The MLive Media Group, Lansing, Michigan, reports that Ann Arbor, Michigan’s recent decision to terminate its contract with ReCommunity, headquartered in Charlotte, North Carolina, may have been motivated by a lack of financial returns. However, the city claims it’s terminating the 26-year contract in its 20th year because of performance and safety issues.
ReCommunity’s President and CEO Sean Duffy claimed in an interview with MLive Media Group that Ann Arbor used a downturn in recyclables markets as an excuse to terminate the revenue-sharing agreement with the material recovery facility (MRF) operator, which was willing to renegotiate terms.
“In over 30 years of our operations, we have never had a contract terminated early,” ReCommunity stated in a news release about the contract termination. “We have proposed numerous compromises, but all efforts have been rebuffed by the city. They appear more willing to let the city’s recycling assets sit idle than to work out a solution.”
While the city has chosen not to respond to the company’s allegations, city spokeswoman Lisa Wondrash told MLive that Ann Arbor is reexamining the existing business model and contract structure for the MRF’s operation.
“Ann Arbor, as a community, believes and has put in place policies that have generated programs that reduce waste and push us to behave in a sustainable manner,” Craig Hupy, Ann Arbor public services administrator, says in a statement, MLive Media Group reports. “This set of values is why recycling is popular in Ann Arbor and continues to be a service the city provides.”
City officials claim ReCommunity’s operation of the MRF endangered employee safety, saying they put the company on notice in a letter dated June 10, 2016. The city and the company both had the authority to terminate their contract in the event of contractual breaches, the article states.
“They wanted to get out of this contract and start fresh and not have a commitment to take in third-party tons and just recycle their own [material],” Duffy argues in the article. “They made it clear they didn’t want to subsidize other people’s volumes. On their own products, they got 80 percent of the commodity revenue. It was a very good deal for them when markets were above the threshold.”
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