A Hummel Report Investigation
We travel to Block Island this week, to investigate allegations of a no-bid contract for a lucrative trash-hauling business, which is recently getting a lot of attention. Jim Hummel finds island politics can be just as rough-and-tumble as they are on the mainland.
Hummel: ``We are back on Block Island this week - where there are allegations of conflict of interest and a no-bid contract for a lucrative trash-hauling business that suddenly... is getting a lot of attention.''
If you want to get rid of trash or recyclables on Block Island, this is the place you have to go: a transfer station that is run by BIRM - Block Island Recycling Management Inc. For 12 cents a pound they'll take your trash; recyclables are free.
The company has operated on a series of three-year contracts since it took over the operation in 1998. The town owns the facility and lets BIRM use it for free. And that has become the source of much discussion within the past several months after Mark Cullion - a businessman from the mainland who owns property on the island - learned the contract was up and offered to pay the town $189,000 over three years. BIRM, which is owned by Sean McGarry and Michael McGinnes, has paid nothing for the past 13 years.
At 12 cents a pound, BIRM is making $240 a ton to collect the trash. It has overhead that includes having to transport the refuse off island. But the state charges the company the municipal rate of $32 per ton, a seventh of what BIRM takes in from its customers.
Willis: ``If he can offer $189,000 over three years, why can't McGarry and McGinnes - why couldn't they - and if that's what we can get now, why haven't we gotten it for 10 years?''
John Willis is a retired doctor, who at an August meeting, questioned both the council and Town Manager Nancy Dodge - asking whether the trash contract had been properly advertised and why the town hadn't ever pressed for a usage fee.
Willis: ``If I didn't go to that meeting and say `Look it, enough is enough - 14 years with not a penny for our transfer station, when we know now that they're making big money, can't you just please ask for $25,00 before you vote on this tonight?' And it kind of fell on deaf ears.''
The council awarded the contract to BIRM on Aug. 1st. but Willis and others questioned why it was advertised only in the Block Island Times. Five weeks later Cullion made his contract offer with the $189,000 `usage fee'. The council then voted last week to re-advertise a new 55-page RFP - request for proposal, in the Providence Journal.
McGarry: ``Competition is always a good thing.''
Hummel: ``You don't have a problem with the competition, then?''
McGarry: ``No, I don't at all, you know the problem is the process and the way the town has handled this bid process, is just confusing to me.''
We caught up with Sean McGarry, who showed us pictures of the way the operation looked before he and his partner took over 13 years ago. He says the council voted unanimously - twice - to award BIRM a new contract, and last month his lawyers went to court to try and enforce it.
McGarry: ``We were the only person to put in a bid, and back on the 1st of August they voted to award us the contract and then probably two weeks later the town manager called me and said she was going to advertise again in the Providence Journal because someone had claimed it wasn't advertised in the Providence Journal and should have been.''
Hummel: ``What am I missing that a company comes in an says we'll give you 50, 100, 150, 170 thousand dollars over three-year contract period. How do they give that to the town, why wouldn't that be attractive to the town?''
McGarry: ``It would be attractive to the town.''
Hummel: ``You're saying you can provide a better job even though the town might be able to get $170,000 that you're not giving them over...''
McGarry: ``Well, they've never asked for it.''
Hummel: ``The town's never asked for it?''
McGarry: ``Never asked for it. But I guess now they're talking about putting that into a new bid proposal that they're putting out there.''
Town Manager Nancy Dodge gave us a copy of new bid specs, which were advertised last week, that now require a minimum $20,000 per year `usage fee' for the trash contract.
Hummel: ``Is it fair to also say though, in this really tough economy, tight tax dollars, you're trying to hold the line with everything, when you get an offer of money that you haven't had before, that grabs people's attention. Is it fair to say that?''
Dodge: ``Well, it grabs people's attention - the fairness issue is, the council has never looked at the transfer station as a money-making operation, it was an operation that ran smoothly, the prices were fair. There were never any complaints from the public. No issues really came across the table, you know, at my desk. That's a change in policy to start looking at it as a money-making operation.''
Hummel: ``Her argument was: `We never viewed this as a money-making operation. And, in effect, the trash is being taken care of, it's one less headache that we have, he takes care of it, he has his business model, but we never thought to be squeezing money out of it. If he does it for this price this price and make it work we'll let him do it.'''
Willis: ``Well she may not have been thinking about that, but we the citizens and taxpayers of this town have been thinking about it for a long time. Especially when it went from taking your bag of garbage to the dump for nothing, then when McGarry and McGinnes took over it was 5 cents, then it was 7 cents a pound, then it was 8 cents a pound, then 10 cents a pound, now it's 12 cents a pound.''
Then there's the issue of trying to operate a business on an island with a year-round population of a thousand people.
McGarry: ```If you were to look for every little conflict that existed I don't think you could have a governing body that didn't have some sort of conflict.''
BIRM is owned by Sean McGarry and Michael McGinnes, both well-known names on Block Island. McGarry is fourth-generation islander and a member of the School Committee. McGinness's father, Clifford Sr., runs the town's power plant and his brother, Clifford Jr., owns Ballard's Oil, as well as the only gas station on the island. Cliff Jr.s wife, Millicent, is vice president of Ballard's Oil - and doubles as the deputy town clerk.
And one of the five town council members who voted to award BIRM the most recent contract, works for Clifford McGinnes Sr. at the power plant. He did not recuse himself from any of the votes on the trash contracts.
Kim Gaffett, is the town's First Warden and head of the council.
Hummel: ``He works for Mr. McGinnes up at the power plant. Mr McGinnis's son is at the transfer station. Does that pose a potential conflict?''
Gaffett: ``The appearance, but not a true conflict, a conflict has to do with monetary investment.''
Hummel: ``So you don't think he should step aside on any of those votes?''
Gaffett: ``I don't think that there's been demonstrated conflict there. I think from his actions I think he's looking at it very fair-mindedly and I don't think there's any indication that he's taking a biased position.''
And what about the usage fee?
Hummel: ``Did the town ever think: Well, if he's making money, maybe we should get a cut of it?''
Gaffett: ``We had not until it was brought up at recent council meetings by members of the audience.''
We wanted to know if Sean McGarry will bid - again - with the new requirement of a usage fee?
McGarry: ``It's just a dollar-and-cents thing that I have to sit down with a pencil and calculator and take a look at their specifications and see what they're looking for and see if it works, you know, from a business standpoint. I'm not in business to lose money.''
The focus now shifts to Town Hall, where the latest round of bids will be opened on Oct. 14th.
On Block Island, Jim Hummel, for The Hummel Report.