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Controller trashes solar-compactor deal Sees plenty of waste in city's
BigBelly contract

By JOSH FERNANDEZ
Philadelphia Daily News

fernanj@phillynews.com<http://www.philly.com/philly/news/homepage/mailto:fernanj@phillynews.com>215-854-5880

THE CITY might have been better off keeping its old $100 wire trash baskets
- and throwing away the contract to buy 710 new solar-powered trash
compactors.

That's according to the City Controller's Office, which released a report
yesterday claiming the BigBelly compactors aren't as good a deal as city and
company officials promised, and that contracting rules were broken.

The purchase of 500 compactors and 210 recycling units for more than $2.1
million from BigBelly Solar - or about $3,700 each - were meant to reduce
collection costs by 70 percent.

A report from BigBelly cited by the city before the purchase said that the
compactors would reduce the number of weekly collections from 17 to five.

But City Controller Alan Butkovitz said that his office monitored BigBelly
compactor collections in March and April, and found that compactor
collections averaged 10 a week.

And instead of the promised one-man crew to make five collections per week,
Deputy City Controller Harvey Rice said, two people were needed for the 10
collections.

In a letter to Butkovitz, Streets Department Commissioner Clarena Tolson
said that the compactors have allowed the city to eliminate 24 positions and
cut collection from seven to five days per week.

"There is no question in my mind that the BigBelly compactor program has
saved taxpayer money, increased recycling and made for cleaner communities,"
she wrote.

The controller's report said that the city could have saved $200,000 or more
by purchasing the units from a distributor, rather than directly from the
manufacturer.

He said that the $2.1 million single-source contract was authorized because
BigBelly, based in Needham, Mass., misinformed the city that it was the only
company able to sell the solar compactors. Butkovitz said that distributors
"had the power and capacity to sell these items directly to the city."

"The city relied solely on the claims of BigBelly Solar without any other
verification," Butkovitz said. "This is a highly questionable business
practice, especially when dealing with a company that has never handled a
contract of this magnitude."

Richard Kennelly, vice president of marketing for BigBelly, said that the
report was "riddled with inaccuracies" about BigBelly and its deal with
Philadelphia, but he declined to elaborate.

Kennelly said that the solar trash-compactor manufacturer has been working
with large customers for years. He said that no distributor was authorized
to sell to the city at the time the contract was signed.

Butkovitz's report claims that BigBelly Solar's chief executive officer
admitted that a letter sent to the city stating that the company was the
only source able to sell the compactors was incorrect.

But the CEO later "denied that the letter was a material misrepresentation"
because he believed that a private distributor was aware that BigBelly was
pursuing the Philadelphia account.

Butkovitz said that his office would ask the city solicitor to seek
renegotiation of the contract and a refund, but would not yet utilize an
option to stop payments to the company. "We can't determine to what extent
it was just an error, to what extent it was more willful than that,"
Butkovitz said.

The compactors got solid reviews from residents in an unscientific poll by
the *Daily News* earlier this year.

"Honestly I think they've been a real boon to the street," said architect
Jim Campbell, a member of the South Street West Business Association. "They
seem to be working well. There seems to be less stuff outside them. We're
very happy."


Mike Muldoon

Rosemont Seneca Partners, LLC

1010 Wisconsin Ave., NW

Suite 705

Washington, DC 20007

(202) 333-1880

mmuldoon@rosemontseneca.com <eschwerin@obblaw.com>

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