Wa$te War: Was RSWA's own trash partner to blame?
For over two years, the Rivanna Solid Waste Authority publicly branded Peter Van der Linde a cheat and attacked the recycler with an anti-mafia statute as part of a $20 million lawsuit, based largely on the unsubstantiated testimony of a disgruntled former Van der Linde employee, now serving jail time for attempted extortion.
But a curious thing happened when the Authority dropped its lawsuit on January 20. As Van der Linde agreed to pay $600,000 to settle it, the Authority’s corporate partner in trash, BFI/Republic, also agreed to pay a six-figure sum.
"The big question,” says vocal lawsuit critic Betty Mooney, "was why BFI agreed to pay when RSWA had never named them in their lawsuit. Is this now an admission that BFI owed funds to the community?”
The Hook asked BFI, RSWA board members, and City Councilors why BFI agreed to pay $300,000 and give up its 12-year deal, but the only response came from Authority director Tom Frederick.
“The terms of the settlement,” Frederick explained, "include an agreement by the parties to the lawsuit not to make any statements to third parties on subject matter related to the settlement."
As previously reported, the Authority discovered in 2005 that BFI personnel at the company’s Zion Crossroads transfer station were “completely unaware” of their duty to collect a $16 service contribution fee for the Authority.
However, documents recently obtained by the Hook in a Freedom of Information request suggest that problems at the transfer station were more widespread.
In a 2004 letter to BFI brass, Authority finance director Lonnie Wood expressed concerns about the “scale and ticketing operations.” For instance, the weight of one customer’s truck hadn’t been updated since 2002, resulting in BFI over-billing the customer $11,500. Wood also pointed out that each month the area's biggest hauler, Waste Management, was receiving “gross misstatements.”
“Many other problems have been experienced over the last year or two,” wrote Wood. “We have tried to fix this with no success.”
A year later, Wood says the Authority was having to correct 70 to 80 billings each month, with an “especially hard time" with City of Charlottesville and Waste Management accounts.
In September 2005, RSWA accountant Miranda Baird documented 74 ticketing errors in which Waste Management loads were charged to the City. In addition, there were 12 incidents of Waste Management loads getting charged to other customers, and six incidents in which companies were being charged for the loads from other companies. In one, Southland Homes brought in a load with a one-ton truck, but the scale attendant allegedly charged for 15.62 tons of trash.
These errors appear “repeatedly each month,” wrote Baird, complaining that she “tried to get this addressed many times with no success.”
In late 2005, BFI managers promised to deploy better procedures, but when the problems persisted in late 2006, it was Van der Linde, the area’s largest trash hauler, whom the RSWA would sue.
“If BFI was mismanaging their contract to collect fees, how could RSWA possibly know which haulers were at fault?” asks Mooney, “and why did they then go after only one hauler?”
Indeed, the Authority's Wood expressed concern that Van der Linde was “not the only" hauler putting BFI "in violation of the contract," and the Authority’s lawsuit concedes that “several” haulers were improperly reporting trash origins.
In 2008, after years of planning well known to Authority officials (though they deny the harassment of Van der Linde that the DEQ later revealed) Van der Linde opened an $11 million recycling facility.
“His new plant was taking their revenue," says city resident Downing Smith. "That’s why Van der Linde was the only hauler sued."
Frederick and RSWA board members have always denied that allegation and defended the suit that cost them $388,000 in legal fees.
During the course of the lawsuit, the Authority appears to have decided that its trash partner deserved some blame for the lost fees, as on June 23, 2009, the two sides signed a “tolling agreement” in which they agreed not to sue each other on any claims that might arise out of the Van der Linde lawsuit until after the tolling agreement expired on December 23, 2010.
The goal of a tolling agreement, say legal experts, is to maintain the ability to sue, as it "tolls," or stops the clock, on any statutes of limitation. That gives both sides time to see if the matter could be settled or learn whether an insurer will cover any damage awards. In the end, the two sides chose to settle.
“I think the settlement was a win for everybody,” says citizen Smith. “BFI paid a small price to possibly avoid a large lawsuit; RSWA got $900,000, stopped paying attorneys’ fees, kept the truth under wraps, and avoided embarrassment. And Van der Linde for his $600,000 can now drive the final nails in RSWA’s coffin, stop paying attorneys’ fees, and eliminate the very small possibility that he could lose the lawsuit.”
“This case is about right and wrong,” Authority director Tom Frederick wrote in an October 2009 memo defending the lawsuit, in which he clearly pinned blame on Van der Linde. “Is it okay for a business to not pay a lawful fee and let the resulting shortfall of revenues fall upon the taxpayer?”
Mooney, however, wants to know how much the RSWA’s corporate trash partner burdened taxpayers.
“One has to wonder if the settlement is an admission that BFI was at fault and that there may have been many millions lost and many haulers not paying the correct amount over the years,” says Mooney.
Unfortunately, citizens like Mooney are unlikely to get answers anytime soon. Not only have the Waste Warriors muzzled themselves in the settlement, they’ve also released each other from admitting any wrongdoing.