Company claims Ann Arbor's compost site has become a 'quasi landfill'

ANN ARBOR, MI - A Michigan-based company hoping to land a contract to manage Ann Arbor's municipal compost operations alleges an out-of-state firm currently overseeing the 60-acre site off Platt Road has badly mismanaged it.

Adam Brent, CEO of Cocoa Corp., a composting company in the Holland area, spoke at this week's Ann Arbor City Council meeting, raising concerns about competitor WeCare Denali.

"This callous disregard for composting is turning Ann Arbor's compost site into a quasi landfill," he told council members, making allegations about broken equipment and contaminants on the site.

WeCare denies the claims made by Brent and his company, calling them utter nonsense.

"I can't even fathom why they're saying what they're saying and it's all inaccurate. I think they're trying to compete for a municipal job, and how they conduct their business is their call," said Michael Nicholson, WeCare's senior vice president and development manager.

Cocoa is now formally protesting the city staff's tentative decision to award a new five-year contract to WeCare.

The contract has yet to go to City Council for approval.

Cocoa Corp. included this photo in a Sept. 12 complaint to the city of Ann Arbor, saying it was taken at the city's compost site in August and shows "WeCare has turned the site into a landfill" full of contaminants such as metals, plastic, concrete, glass and other non-compostable materials. WeCare, the company that operates the site for the city, says Cocoa's claims aren't accurate.


City officials declined to comment on the matter, saying it's still an active procurement matter and Cocoa, as the unsuccessful offeror, has initiated a formal bid protest.

WeCare has been managing the city's compost operations for the last seven years.

The City Council voted 9-2 in late 2010 to approve the deal to outsource compost operations to what was then a New York-based company called WeCare Organics.

WeCare has since merged with Denali Water Solutions and is now called WeCare Denali, based in Arkansas.

The decision to outsource to WeCare in 2010 came despite concerns raised by several residents who said it was a mistake to put composting in the hands of a private company. The city's AFSCME labor union wasn't happy about losing the work.

The Ann Arbor compost site is currently a two-person operation overseen by WeCare's Don Butynski, a former Recycle Ann Arbor employee. The other employee on the site previously worked there and WeCare kept him on, Nicholson said.

"It's been a very positive experience for us," he said. "We view the city of Ann Arbor as a partner. I will tell you they are at the forefront around the country."

The city recently put the contract out for bid again and solicited proposals, receiving offers from Cocoa and WeCare.

The city tentatively awarded a new contract to WeCare, and Cocoa is complaining it didn't get a chance to interview and is raising concerns about what it saw when it visited the site in August. The company also calls the city's bid-selection process "suspect."

Colin Spencer, the city's purchasing manager, explained the protest process. He said all bid/proposal protests must be provided to the city in writing within five days of the award action and the vendor must clearly state the reason for protesting the decision.

Once the written protest is received, Spencer said, the city will consider the arguments presented, determine if they're justified or actionable, and then issue a written response.


Richard Hornstein, Cocoa's chief operating officer, sent an email to city officials on Sept. 12 to protest giving the contract to WeCare.

He said he considers the current state of the Ann Arbor compost facility a potential environmental problem.

In his email to the city, he included a photo of a large pile of materials that he said was from August at the city's compost site, saying "WeCare has turned the site into a landfill" full of contaminants such as metals, plastic, concrete, glass and other non-compostable materials. Brent reiterated those same concerns when he addressed the City Council this week.

When WeCare was hired, Brent said, a few of the main obligations to operating the facility included grinding all yard waste and wood waste, removing and disposing of all contaminants from the compost, and potentially giving back to the city about $36,000 per year from third-party waste-stream tipping revenue and compost sales.

In addition, he said, WeCare had to comply with all Michigan Department of Environmental Quality regulations, and WeCare was expected to increase composting volumes.

"As part of the new RFP process, we visited the compost operation in early August and discovered that, according to WeCare's employee, their grinder has been broken for almost two years, and the facility's windrows resemble a beaver dam with nothing more than unground material -- a clear violation of their contract with the city," Brent told council members.

He said the windrows, which are long piles of yard waste and food waste laid out in rows to dry in the wind, are inundated with contaminants such as glass, metal, plastic and concrete.

"And their 'overs' pile would cost about $100,000 to sort and grind or send to the landfill," he said.

"According to the DEQ's records of composting volumes, and despite no net increase in annual volumes, WeCare has increased the amount of organic material on site from 11,000 cubic yards in 2011 to over 61,000 cubic yards at the end of 2016, a clear violation of DEQ rules that would make paying the city its $36,000 per year unlikely based on the rates listed in their contract," Brent said.

Brent raised other concerns about WeCare's management of the city's compost operations.

"WeCare only employs two people, and the list of equipment they put on their RFP do not exist at the facility," he said. "In fact, WeCare subcontracts their screening operations to another company and hasn't bothered to spend the money to fix their grinder. What makes this so unpalatable is that Cocoa was never interviewed in the RFP process, and what appears to be a blatant conflict of interest: Christina Gomes, the city's solid waste and recycling program coordinator, was listed as a reference on WeCare's proposal, and she's one of three people on the selection committee."

Nicholson, the WeCare vice president based in Ohio, said none of Cocoa's claims about WeCare are accurate and he considers the city a satisfied customer.

In response to the claim that the compost grinder is broken, he said it might not have been in operation when Cocoa was on site last month, but it works and the city was out to see it this week.

"We don't operate it 24-7. We just operate it when we need to grind," he said.

"We have operated that site for seven years in full compliance with the state," he added. "We are active members of the Composting Council of Michigan, actually founding members. We are members of the Michigan Recycling Coalition. We are active members of the U.S. Composting Council, where one of our vice presidents is a sitting board member. We are an original partner on the Compost Manufacturing Alliance."

Nicholson said WeCare also helped develop and initiate Ann Arbor's residential food waste program. As of a few years ago, residents are able to throw food scraps into their compost bins now.

"We have initiated, in cooperation wth the University of Michigan athletics, their zero-waste program for all of their athletic facilities," Nicholson added, noting WeCare also is actively working with the state to develop new compost regulations.

He said WeCare is processing between 12,000 and 14,000 tons of yard waste and food waste per year in Ann Arbor and the company is proud of the end product it produces and then sells.

"Our client, the city of Ann Arbor, delivers the material to us. That's what the contract calls for -- to take the material they collect from their residences," he said.

"That's the business, that's what you're required to do, and that's what we've done successfully for seven years."

The city gets a revenue share from compost material coming in from outside sources, as well as from sales of the end product.

Nicholson said he wasn't able to say off the top of his head how much that equates to per year.

He said WeCare actually did the the compostability testing for Glad's first-ever compostable zipper bag in Ann Arbor.

He said WeCare also has fought alongside the Michigan Recycling Coalition and Composting Council of Michigan to protect the state's ban that prohibits yard waste from being disposed in landfills, fighting off multiple attempts to eliminate the ban.

"We've been in Michigan and we've been strong in Michigan, and that's my humble opinion," he said.

The City Council still has to approve the new contract and Brent said Cocoa is asking for a level playing field.

"We would like the City Council to make this process open and transparent to the public, visit both facilities, check our references and make an informed decision," he said.

In the Sept. 12 email to city officials, Hornstein argued WeCare is not converting the majority of the waste that comes into the site into compost usable by the community or local farms.

"So, effectively, WeCare has transformed the Ann Arbor site into a landfill, which has never been its intended purpose and makes it very environmentally dangerous for the community," he wrote.

Hornstein said Cocoa offers a unique value proposition, transforming organic waste into high-quality humus compost that is used by farmers to produce better crops and higher yields.

"Our waste provider clients include some of the premiere corporations with sustainability initiatives, including Kraft/Heinz, Mars, Honee Bear Canning, Pinnacle Foods, US Gypsum, and many others," he wrote.

"Our commercial farmer clients who purchase our high-quality compost include some of the largest commercial grain farms in the state of Michigan, including Drobny farms and Drozd farms. We are composting experts. We take waste, we make high-quality compost, and we sell ALL our compost to commercial farmers and residents, and have no remaining inventory left."

Hornstein said Cocoa submitted its proposal to the city before the Sept. 1 deadline and found out on Sept. 8 that the city tentatively decided to re-award the contract to WeCare.

"However, nobody from Ann Arbor ever contacted Cocoa, we were never interviewed, nobody came to visit our nearby Holland, MI site, nobody spoke with any of our 9 Michigan references (including people representing some of the most prestigious farms and manufacturers in the state), nobody called to negotiate with us if certain terms in our RFP proposal needed discussion, and nobody contacted us as composting experts to ascertain and understand the implications of the mess currently residing on the Ann Arbor site," Hornstein wrote, appealing directly to City Council members to allow both WeCare and Cocoa to present in an open forum to the citizens of Ann Arbor and the City Council.

The existing contract with WeCare expires on Jan. 28, 2018. The proposed new contract, which is expected to go to the City Council for approval in November, is a five-year term with the city reserving the option to extend it for up to two additional five-year periods.

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