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Posted on Tue, Jul 19, 2011 : 6 a.m.

City Council giving second thought to Recycle Ann Arbor contract after single-stream miscalculations

By Ryan J. Stanton

The Ann Arbor City Council voted unanimously Monday night to reconsider the recent defeat of a proposal to boost payments to Recycle Ann Arbor by about $107,000 annually.

The council will take up the issue at its Aug. 4 meeting, and it appears likely an outcome will be reached that will prove favorable for Recycle Ann Arbor, the nonprofit organization responsible for curbside collection of recycling carts in the city.

Earlier this month, city staff reported that expectations for Ann Arbor's new single-stream recycling program — launched in July 2010 — had proven overly optimistic.

Thumbnail image for John_Hieftje_July_2010_candidate_forum.jpg

John Hieftje

A consultant had projected the city would collect 18,425 tons of recyclables for fiscal year 2010-11, but the actual number is closer to 10,800 tons, a 40 percent shortfall.

The number of recycling carts deployed as part of the single-stream program also turned out to be 9.2 percent lower than initial projections that anticipated 32,779 carts being deployed.

As a result of those miscalculations by the city's consultant, Recycle Ann Arbor received $337,527 less than it expected from its contract with the city this past year.

To partially offset those losses, the City Council was asked to consider a contract change to increase the fees it pays to Recycle Ann Arbor earlier this month. But the proposal to change the per-month tipping fee from $3.25 to $3.55 per cart failed to garner enough support.

But it had the support of five council members, including Mayor John Hieftje, former chairman of the volunteer board for Recycle Ann Arbor.

And so all Recycle Ann Arbor needs is one more vote.

That could easily happen if one of two council members who were absent — Margie Teall and Sandi Smith — vote yes. Or if any of four council members who opposed it — Stephen Kunselman, Carsten Hohnke, Mike Anglin and Sabra Briere — change their mind.

Briere and Hohnke made clear Monday night they're giving serious consideration to changing their votes. Hohnke, who made the motion to reconsider the contract, said he wants to take a hard look at all the data available and then make up his mind at the next meeting.

Briere said she could be swayed if the city did away with a $200,000 annual contract with a company called RecycleBank, which operates the city's recycling rewards program. The program incentivizes recycling by rewarding residents with points that are redeemable at retail outlets and restaurants, but Briere thinks the program has been ineffective.

Hieftje, who supported the contract change the first time around, said he appreciated that council members were willing to give it reconsideration. He said he thinks there are some changes the city can make involving RecycleBank that could "even things out" financially.

"I thought it was unfortunate that the Recycle Ann Arbor resolution wasn't successful the first time around," he said, adding he thinks there's a misperception that somehow Recycle Ann Arbor had done something wrong. "And they haven't. The numbers their contract was based on were incorrect estimates of the number of carts that would be out there."

The main reason for the lower-than-expected numbers of carts, city officials said, is that many of the smaller, multi-family residential units that were previously using the 11-gallon recycling totes are able to share recycling carts. In addition, they said, it was discovered there was inadvertent double-counting of some residential units in the original projections.

City officials said those projections were based on per-household generation rates provided by RecycleBank that were from communities that had a much larger percentage of single-family homes than Ann Arbor, which is almost 50 percent multi-family housing.

Recycle Ann Arbor started as a volunteer organization in the 1970s, providing monthly curbside collection to a limited number of homes on the Old West Side. It since has grown into a service that provides weekly collection to every home and many businesses in the city.

The city amended its curbside collection contract with Recycle Ann Arbor in March 2010. The previous contract paid $19.30 to $102.58 per ton depending on the annual tons, as well as $2.41 per service unit, with a total of 48,886 service units.

With the amendment, the city now pays a revised rate of $18.74 to $30 per ton, as well as $3.25 per cart, which replaced the per service unit fee.

Hieftje said he didn't think it was a conflict of interest that he's voting on contracts with Recycle Ann Arbor when he served on its board throughout the 1980s and chaired the board from 1989 to 1990. He also accepted $150 in political contributions during his last mayoral campaign from David Stead, a Recycle Ann Arbor board member, and $100 from Mike Garfield, who is director of the Ecology Center, Recycle Ann Arbor's parent organization.

"I would just like to see them get a fair shake," Hieftje said, recalling his past involvement with the group. "It's a wonderful organization that, particularly back in those days, brought recycling to Ann Arbor. It started with people in their own pickup trucks going out and picking up recycling. It was a grassroots organization and it's grown into a premier recycling company."

Hieftje said he was never paid by Recycle Ann Arbor for his service on its board and hasn't had any affiliation with the group since then.

Ryan J. Stanton covers government and politics for Reach him at or 734-623-2529. You also can follow him on Twitter or subscribe to's e-mail newsletters.


Seasoned Cit

Wed, Jul 20, 2011 : 6:12 p.m.

Did you ever calculate how many people put out their recycle cart when it is empty or only partially full. You get your points every time it is dumped, not by how much is in it. Hence you might as well put it out every week (making for more stops by the pick-up truck). Was the cost of additional software and retrofits of the truck to allow for measuring the weight of material vs just the emptying, the reason we encourage more carts out each week. Why not limit recycle pick up to every other week ?


Wed, Jul 20, 2011 : 11:40 a.m.

If either of my City Council representatives (Sandi Smith or Sabra Briere) change their votes on this issue, I will donate money to anyone who opposes them and work for their campaigns to ensure that they are defeated next time they are up for election. There is absolutely no reason in my mind for endorsing RAA, which is incompetent at best and appears to be corrupt at worst.


Wed, Jul 20, 2011 : 2:12 a.m.

Well, isn't that just great! In addition to his many other shortcomings, the Hieftje is corrupt! I wondered why his nose was so brown... and then I saw Mary Sue moving smartly in the opposite direction. Nice that you two work so well together! Johnny gets a nice, "no-show" job at the U, and Mary gets a shiny, new parking structure for the Med Center.

Patricia Lesko

Tue, Jul 19, 2011 : 6:58 p.m.

Finally. You ask Hieftje about his potential conflicts of interest. He's not the only one with a conflict (<a href="" rel='nofollow'></a>. That you didn't put the question to an expert in ethics is a glaring omission. Here's one: Judy Nadler—Senior Fellow in Government Ethics. Nadler was formerly mayor of the city of Santa Clara, Calif., where she worked with the Ethics Center to develop a code of ethics and values, as well as an award-winning program, &quot;Infusing Political Campaigns with Community Ethics and Values.&quot; She conducts ethics workshops for local elected officials on issues such as conflicts of interest, &quot;pay to play,&quot; sunshine laws, and access. Phone: 408-554-7892. To see how the cozy relationship between Hieftje and Garfield works go to Hieftje's campaign web site (<a href="" rel='nofollow'></a>. Hieftje co-sponsors a resolution to move to single-stream recycling. He votes to extend a no bid contract for RAA, and votes for a significant increase in pay to RAA. Then, he ends up with an endorsement from Garfield that claims Hieftje has &quot;the strongest environmental record of any Mayor in the Midwest.&quot; Wonder how U of M is getting Fuller Road parkland assessed a $4 million for a five-figure token lease amount? For years, U of M VP Dr. Paul Courant endorsed Hieftje. Courant burbled about Hieftje's "remarkable leadership and skill in a tough budget environment." Dr. Courant wasn't identified as having hired Hieftje, or as having set Hieftje's salary well above what U of M normally pays temporary lecturers. These conflicts have cost taxpayers dearly. The RAA contract should be bid it out. Council should not give a company that is being mismanaged a taxpayer bailout. Over the past three years, RAA has lost over $700,000, and its Board has given Ms. Uerling, who runs the operation, successive hefty raises, according to tax documents. There is a link to the RAA tax documents here: <a href="" rel='nofollow'></a>


Tue, Jul 19, 2011 : 5:59 p.m.

If there is even a perception of conflict of interest there is a problem. The Mayor's prior association with RAA and the campaign contributions is more than enough to raise the perception. I agree he should not vote on these issues and also in regard to business with UM if he is on their payroll.


Tue, Jul 19, 2011 : 5:43 p.m.

To KJMClark I did read the article. I did see that the rewards program had the same or similar source as the consultant. But, based on my understanding, this is two separate issues. One contractually, their projections and original consulting contract. The second being how they are being paid on the incentive program. I faulted to the safe side and did not assume that this might be one contract. Thanks anyway for the suggestion to read the article before commenting because had I not followed this course of common sense, I might have offered a suggestion on football for tots.

Mr Blue

Tue, Jul 19, 2011 : 2:13 p.m.

Why are only low level workers always held accountable and not managers and administrators in city hall? Politicians accountability begins and ends at the ballot box.


Tue, Jul 19, 2011 : 1:52 p.m.

This is one of those things that discourages me so...I thought at the time that the project was ill-planned, but it was a done deal before I had noticed. The assumptions used were for &quot;typical&quot; cities, not Ann Arbor. I feel like the council was &quot;sold&quot; by the consultants into purchasing something that we didn't need. But that's water under the bridge, so the question is what do we do now? Back to the drawing board.


Tue, Jul 19, 2011 : 1:49 p.m.

ok, let me get this straight. Heiftje, the mayor, is paid to be mayor also gets a salary or is paid by the UofM is also on the DDA and votes on money issues between the DDA and the city and then turns around and votes on them from the city/DDA side, and then also helps decide who will sit on the DDA then takes money from recycle ann arbor, used to be involved with recycle ann arbor and votes on those issues (with blinders on). city, mismanaged DDA, mismanaged Recycle A2, mismanaged I sees a common theme.

Ron Granger

Tue, Jul 19, 2011 : 1:38 p.m.

The consultant was off by 40%? Who is the consultant? What other work are they doing for the city? How much did we pay them for this work? Can we get 40% of that money back?


Tue, Jul 19, 2011 : 1:16 p.m.

&quot;I thought it was unfortunate that the Recycle Ann Arbor resolution wasn't successful the first time around,&quot; he said, adding he thinks there's a misperception that somehow Recycle Ann Arbor had done something wrong. &quot;And they haven't. The numbers their contract was based on were incorrect estimates of the number of carts that would be out there.&quot; Couldn't this same exact reasoning be used by the fire and police departments? That is the budget shortfall is not are fault it is based on bad fiscal management by the city?

Tom Whitaker

Tue, Jul 19, 2011 : 1:01 p.m.

If Recycle Ann Arbor collected 40% less tons than expected and emptied 9.2% fewer carts than expected, why were their costs not reduced by a proportional amount? The City covered the cost of new trucks, MRF improvements, and the carts, so RAA's costs should be mostly variable based on the amount collected. I wouldn't be crazy about the idea of bringing in a multi-national operator to replace our local RAA, but I also don't think Council should be making financial decisions based on nostalgia. And the other side of this story that has yet to really be explored is how much material Ann Arbor is taking in for processing from other communities. Is the City making money off of that (including covering the enormous capital costs of upgrading the Materials Recovery Facility)? If not, why not suspend offering that service? If so, are we getting our fair share of the profits or are they all going to the private operators and consultants that we're also paying out-of-pocket fees to? It might be one thing if Ann Arbor citizens received discounts or free service in exchange for providing a MRF for other communities, but in fact, our rates keep going up. What's going on here?

glenn thompson

Tue, Jul 19, 2011 : 12:51 p.m.

In the case of the single stream recycling contracts there are many conflicts of interest, or at the very least the appearance of many conflicts of interest. The consultant that recommended the program was Resource Recycling Systems Inc. (RRSI) One of the owners is David Stead. Mr. Stead is also a member of the city's Environmental Commission and a member of Recycle Ann Arbor's (RAA) board of directors. As a member of the Environmental Commission Mr Stead advocated single stream recycling. Then he (RRSI) was awarded a contract to consult on the project. Then as the consultant he recommended awarding a large contract to RAA to collect the single stream materials. Now the program is in failure. While I believe that it is desirable to terminate the contract with Recyclebank, it is hardly fair to place all blame on that contractor. The city should terminate all related contacts with Recyclebank, RRA, RRSI and remove Mr Stead form the Environmental Commission.


Tue, Jul 19, 2011 : 11:56 a.m.

Not a conflict of interest? I'm beginning to think our mayor is delusional. He's comfortable with cuts to public safety, doesn't think there is crime or fires in Ann Arbor, and thinks his numerous conflicts of interest don't exist. All while taxpayer dollars are wasted on unnecessary consultants and wasteful studies. Stand firm Sabra, it's time to cut bait with RecycleBank.


Tue, Jul 19, 2011 : 11:47 a.m.

Our city council at work: &quot;As a result of those miscalculations by the city's consultant, &quot;who hired the consultant?

Bob Carlin

Tue, Jul 19, 2011 : 11:36 a.m.

Why throw good money after bad? The whole project is too expensive. Now, when the first of what will be a long series of problems comes to light, the council just wants to spend more money on it.


Tue, Jul 19, 2011 : 11:16 a.m.

Sometimes the city is in dire straits and sometimes it isn't. Same old. Same old. We can find the money when we want to and otherwise we need to make draconian cuts. I think cutting the incentive program is a good start, but the projection model is still flawed. It is a very naive model. Collecting x number of carts does not translate into Y dollars of recycling revenue. This has not been addressed. So, my prediction is that next year, even without the recycling bank dollars, this contract will have a shortfall. They will find that the labor costs for re-sorting are higher than expected and that the market for recyclables is more variable/lower than expected.


Tue, Jul 19, 2011 : 6:13 p.m.

In regard to the incentive program, I would recommend that some research studies have shown that new policy/program initiatives do much better with an active promotional campaign. Maybe it is a good idea if enough people get on the bus, which is what one of those studies found in re to a mass transit proposal in Japan.


Tue, Jul 19, 2011 : 10:32 a.m.

Mr. Hieftje: I would consider your actions to be a conflict of interest based on the facts revealed in this article. You must remove yourself from the process to allow others to make unbiased decisions. City Council: The waste of tax payer money has to stop. Get money back from the consultant that blew the projections or drive cost savings plans to make up for the revenue shortfall. Also, please dump the rewards program as it really does nothing to encourage recycling.


Tue, Jul 19, 2011 : 6:10 p.m.

Consultants consult. They take info and try to make an estimation. I highly doubt any guarantee their estimates. I would expect their contracts cover this and thus getting back money from them is barred by the contract. What bugs me is the constant hiring of these consultants. I would prefer the city have administration that can make their own decisions. And that a significant amount of money is not being wasted due to some social agenda thinking.

glenn thompson

Tue, Jul 19, 2011 : 12:59 p.m.

The consultant was Resource Recycling Inc, not recycle bank. It is now convenient to blame Recyclebank. Recyclebank will go away quietly because the city's contract requires the city to pay them an extra $150,000 if the contract is cancelled.


Tue, Jul 19, 2011 : 11:41 a.m.

Goober - go back and re-read the article. Recyclebank, the rewards program company, *is* the consultant that blew the projections. They *are* considering dropping that service. Never hurts to *read* the article before commenting.

Alan Goldsmith

Tue, Jul 19, 2011 : 10:26 a.m.

&quot;Hieftje said he didn't think it was a conflict of interest that he's voting on contracts with Recycle Ann Arbor when he served on its board throughout the 1980s and chaired the board from 1989 to 1990. He also accepted $150 in political contributions during his last mayoral campaign from David Stead, a Recycle Ann Arbor board member, and $100 from Mike Garfield, who is director of the Ecology Center, Recycle Ann Arbor's parent organization.&quot; How much does Mike Garfield make from his contribution to Recycle Ann Arbor? It should be in the financials. Hieftje is being less than honest about his relationship with Garfield and his past support of the Mayor's political campaigns. And the Mayor IS paid for his feather bedding job as an employee of the U of M. Of course he doesn't think THAT is a conflict either, with his push for giving away city parkland for a new University parking structure. He should abstain from voting for ANY issues involving Recycle Ann Arbor, the Ecology Center AND the University.