Wasting away
Southern Sanitation owner says plan will put him out of business

LAWRENCEVILLE - Going, going, gone.

That description of a home run is probably a lot how Southern Sanitation's owner Buddy Johnson feels these days about his garbage business. That's because come Jan. 1, when the new countywide waste management plan takes effect, his business in the county will be gone. And he said that will put him into bankruptcy.

Johnson, who has lived in Gwinnett his entire life, is upset at how the proposal process was conducted and he said he's devastated that he'll no longer be able to service the roughly 5,000 homes he serves.

"I had to go out and earn those customers one at a time," Johnson said.

Simply put, he said the process of trying to work in Gwinnett in 2009 was conducted unfairly with the upper hand given to the larger companies that eventually won the contracts.

"We were all led to believe that none of us would be put out," Johnson said, referring to his firm and Sanitation Solutions, which both lost out on the county contracts to firms Waste Pro of Georgia and Advanced Disposal Services.

"This is my livelihood. Ninety percent of my business is in this county. I just don't understand, because garbage service is not a complicated ordeal. But this whole thing was done to put us out of business."

For starters, Johnson said the performance bond required of haulers who wanted to work in Gwinnett in 2009 was increased too much. A performance bond is like an insurance policy, said Kevin Byrd of Sanitation Solutions. Haulers pay a premium to a company that writes the bond to be covered for a certain amount. If the haulers underperform or renege on their service contract, the county can call that bond in to collect the amount of the bond. The county can then use that money to finish the trash collection.

Johnson said when he first started working in the county nearly eight years ago the bond required was $50,000. He said in 2007 that amount increased to $150,000. He said to operate in the terms of the new waste plan, haulers had to provide a performance bond equal to the annual revenue stream they'd receive from potential customers for the zones they wanted to serve. Johnson said for the smallest zone he proposed to service, his performance bond would have been equal to $2 million.

"They set the bar way up there and it just looked like they were trying to kill us before we even got started," Byrd said.

Sanitation Solutions also submitted bids to service three zones in the county and lost out. Waste Pro and Advanced Disposal Services submitted proposals to service every zone and were each given three. Both firms are headquartered in Florida, and according to the Gwinnett County Quarterly Solid Waste Franchise Report for the third quarter of 2008, Waste Pro currently services 12,117 residences. Advanced Disposal Services services zero homes, although they do serve commercial businesses.

According to Connie Wiggins, director of Gwinnett Clean and Beautiful, the decision to select Waste Pro and Advanced Disposal Services came because Gwinnett Clean and Beautiful had to stay true to its guiding principle, which was "to give the citizens of Gwinnett County the best value." She also said the increase in a performance bond required to work in the county was necessary and justified.

"The wholly new solid waste plan required new procedures," Wiggins wrote in an e-mail. "We talked with other local governments throughout the country and consulted with solid waste specialists at the state level and national level and as a result retained Gershman, Brickner and Bratton, an independent company and nationally recognized solid waste consulting firm, to develop and conduct the request for proposals process.

"We followed their advice and recommendations to ensure that the necessary financial resources would be in place to provide residential garbage and recycling services to 180,000 homes."

When the proposals were submitted and evaluated, both Southern Sanitation and Sanitation Solutions "did not meet the minimum required criteria nor did they offer competitive pricing," according to Gwinnett Clean and Beautiful.

"The pricing offered by both firms was almost double that of other companies," Wiggins said. She also said that the minimum criteria required to submit a proposal included demonstrating that a performance bond could be obtained, that the hauler could provide earnest money or a proposal security to demonstrate commitment and that they could also provide "reviewed" or "audited" financial statements compiled by a licensed CPA.

Johnson said his accountant told him that it would take a minimum of eight weeks to compile such records dating back three years and said only large companies have audited financial statements. Gwinnett Clean and Beautiful released the request for proposals in late July and they were to be submitted by the haulers in early September. An evaluation of the proposals was released in late September, roughly eight weeks after the announcement came.

Both Johnson and Byrd also said that they could obtain the performance bond with outside help from investors, and said they noted that in their exceptions tab of the proposal. But they also said that to submit the earnest money - a check of $100,000 for each zone they were proposing to service - that meant that if they couldn't obtain the performance bond after being awarded the contract, they'd lose the $100,000.

So both Sanitation Solutions and Southern Sanitation would have had to submit a check in the amount of $300,000 along with their proposals, and if something prevented them afterwards from obtaining the performance bond, they'd lose that money.

"It would have cost us an arm and a leg," Johnson said.

Both Byrd and Johnson said they were under the impression that they would have been able to come in and negotiate anything left unanswered after their proposals were submitted.

Wiggins disputes that notion.

"All proposers that submitted proposals were contacted to acknowledge receipt of their proposals and were asked if they would come in for clarifications if questions arose or for possible negotiations based on pricing offered in the proposals," she said.

She also said the announcement of the selected haulers two days following the election was merely coincidental and that no commissioner or Chairman Charles Bannister had anything to do with the delay.

"All proposers were officially notified on Oct. 27 that the process was still on-going," she said. "The entire process from receiving the proposals to executing the contracts required much more effort and took longer than we had anticipated. We made the announcements as soon as we completed the process and had executed contracts."

At the Board of Commissioners meeting Nov. 18, Johnson accused Chairman Bannister of lying to him in December 2007 at a public hearing to discuss the new waste plan.

"You assured me my company wouldn't be put out of business and that's the reality I'm facing now," Johnson said.

Bannister was contacted for this story and asked to comment on those allegations; he refused, citing a lack of time prior to the holidays.