MIDDLEBURY — A Middlebury recycling firm is drastically downsizing its operations and selling its building after months of sparring and a court battle with the Vermont Agency of Natural Resources. Good Point Recycling’s president points to the ANR for some of the firm’s problems, alleging that agency official misrepresented to potential customers the cost of doing business with Good Point.
“We got thrown a nasty curveball Dec. 19 by ANR,” Robin Ingenthron said. “They sent an email to the corporate clients that misrepresented the cost of the standard plan by 25 percent.”
The state standard plan is part of the Vermont E-cycles program, an electronics recycling initiative by which the state bills manufacturers of electronic products (such as Sony, Panasonic and Canon) for the cost of disposing of electronic waste. The bills are based on their national market share.
The goal of the program is to keep landfills free of materials that are commonly found in electronics and are dangerous to the environment, such as lead, cadmium and beryllium.
The state hires an outside company to administer the program, which does not use any taxpayer funds. For the first two years of the program, which began in 2011, the state contracted the Northeast Resource Recovery Association, a New England non-profit organization that subcontracts its Vermont business to Good Point Recycling. The ANR awarded the 2014 contract to Casella Waste Management of Rutland, and approved an “independent plan” by which Good Point/NRRA could operate outside of the state standard plan as a competitor to Casella.
The email to which Ingenthron was referring was sent Dec. 19 by Kimberly Lutchko, an employee of the ANR who participated in the negotiations for the state standard plan, to the electronics manufacturers. It contained an excerpt and amended contract between ANR and Casella that changes how Casella is compensated for its service.
The amendment mandates that Casella will be paid 36 cents per pound of recycled waste, up to 2 million pounds. In the original contract, Casella was to be paid 30.1 cents. The document notes that the rest of the 26-page contract will remain unchanged.
Ingenthron, who was copied on that email, told the Independent he was concerned because he believes that the price presented to the manufacturers in that document was misleading, since it did not include administrative costs. Casella’s contract with the ANR includes an administrative fee of $191,806. Ingenthron estimated that this added cost makes the true cost per pound about 45.7 cents per pound, not 36.
Good Point/NRRA’s price of 34 cents per pound includes administrative costs.
The problem, Ingenthron explained, was that he had explained to manufacturers why his “independent” plan was a good deal, but when state officials reiterated a per pound fee that did not include Casella’s administrative costs he said manufacturers began to doubt him. As a result, he believes they backed away from doing business with Good Point even though its published rate was slightly lower.
After Lutchko’s email, Ingenthron said, many of the manufacturers that had signed up for his company’s plan jumped ship, resulting in a loss of much of his business. Ingenthron said he had planned to process 46 percent of the state’s e-waste, but the loss of these clients cut his share to 18 percent. The email was sent 12 days before Good Point/NRRA’s independent plan was set to start, and Good Point/NRRA was prohibited, per its contract with the ANR for the independent plan, from seeking clients that weren’t signed onto the original application.
As a result, Ingenthron said he has been forced to cut his weekly payroll from $26,000 to $17,000, and will likely have to get it down to $10,000. Ingenthron plans to honor the independent plan contract, which runs through the end of 2014, but plans to put the company’s building on Pond Lane in Middlebury up for sale in August.
According to Ingenthron, the amended contract mandates that Casella be paid 36 cents per pound by manufacturers. In its original bid, Good Point/NRRA offered to bill 26 cents per pound. Casella’s original bid came in even lower, at 25.1 cents per pound.
Ingenthron said that in his company’s negotiations with the ANR throughout the spring and summer, a fee of 36 cents per pound was never discussed.
“We would have given everyone on the staff a major raise if we got 36 cents per pound, and paid local governments 10 cents per pound instead of five cents,” Ingenthron said. “Thirty-six cents was never on the table.”
The ANR’s final offer to Good Point/NRRA, on July 3, was 30 cents per pound. The original contract between the ANR and Casella included a fee of 30.1 cents per pound, not to exceed a total of $2 million.
Ingenthron said he believes Lutchko intentionally misled the manufacturers so they would join the state standard plan.
“I think they’re biased toward the standard plan because they have three salaries tied to it,” Ingenthron said, referring to ANR employees Kimberly Lutchko, Cathy Jamieson and Karen Knaebel, who help manage the E-cycles program.
Reached for comment Wednesday, Lutchko declined to immediately comment on her Dec. 19 email. Knaebel declined to comment and referred questions to the Department of Environmental Conservation Commissioner David Mears.
Mears said the contract was amended to rearrange the payment structure to better serve both the ANR and the state. While Casella will initially receive a higher rate for its services, the price per pound compensation will drop over time — thus, Casella will be paid the same amount as in the original contract.
Mears said the initial per-pound fee was raised to compensate for costs associated with starting up the program. He also stood by the performance of his employees.
“It’s unfortunate that (Ingenthron) makes very specific allegations against these people,” Mears said. “At every point I’ve found they’ve had the utmost integrity.”
Mears added that the budget of the department and the salaries of his staff are in no way tied to how many clients sign up for the state standard E-cycling plan.
The commissioner said he took no joy in learning that Good Point was scaling down its operations.
“I am disappointed to hear that Good Point has announced layoffs as a result of (Ingenthron’s) apparent inability to obtain sufficient commitments from electronics manufacturers to collect used electronic waste for recycling,” Mears said. “It is always a concern when we lose jobs in Vermont.”
months of uncertainty
The last nine months have been rife with uncertainty for Ingenthron and Good Point. In a report to the Legislature, the ANR called Good Point/NRRA’s administration of the state standard plan “a huge success.”
After the ANR put the contract renewal out for competitive bid, Good Point/NRRA was rated as the most qualified bidder and preliminarily awarded the contract. When negotiations between Good Point/NRRA and ANR broke down over the summer, the agency dumped the Middlebury company and began negotiations with rival Casella Waste Management of Rutland. The ANR signed a contract with Casella on Sept. 24.
That same day, the agency rejected an application by Good Point/NRRA. After a drawn out court battle in which a state judge admonished the ANR for failing to respond to Good Point/NRRA in a timely fashion during the failed negotiations over the summer, the ANR reversed course and awarded Good Point/NRRA an independent plan contract.