FORT WAYNE, Ind. (WANE) — Fort Wayne City Council unanimously approved a transition agreement between the city and Red River Waste Solutions at a special meeting Tuesday night.
The vote was 7-0. Councilmen Russ Jehl and Paul Ensley were not present.
Mayor Tom Henry called for the meeting one week ago, and his office provided the transition agreement. It can be read below:
To summarize the agreement, Red River agrees to decline its contract with Fort Wayne as part of its chapter 11 bankruptcy as of December 20, 2021, but will remain operating in the city through June 30, 2022 during a transition period.
The financials of the agreement are what made some council members disagree with the settlement between the city and Red River.
The agreement states that Red River’s insurance company, Argonaut Insurance, will promptly pay Fort Wayne $1.6 million over disputed claims, but then the city will pay Red River back the $1.6 million in installments throughout the transition period on top of a base salary and an additional $300,000 of city money.
Red River will still have to pay the city any fines incurred prior to January 30, 2022. The agreement says additional fines between February 1 and June 30 of 2022 can be withheld from payments to Red River by the city, but the first $50,000 worth of fines incurred by Red River from March through June will be waived by the city.
At the meeting, the city’s attorney Tim Haffner said that waiving the first $50,000 worth of fines was a concession the city had to make in order for Red River to agree to the deal.
An amendment was added to the agreement to put in writing that the agreement is subject to the approval of a federal bankruptcy court in Texas where Red River’s Chapter 11 Bankruptcy proceedings are taking place. The court also has the ability to make changes to the agreement.
Prior to the meeting, WANE 15 spoke to two city councilmen who’ve been vocal about the city’s handling of Red River; Russ Jehl (R, 2nd Dist.) and Tom Didier (R, 3rd Dist.).
Jehl, who said he had prior commitments before Mayor Henry called for the special session and wouldn’t be available to attend the meeting, said he believes the city is paying Red River “ransom money.”
“Make no mistake about it, the agreement that is going to be voted on tonight is a termination agreement, not a transition agreement,” Jehl said. It’s just for a few weeks of service and it pays out the Red River management $1.9 million. The proceeds of the performance bond should be given to the rate payers as restitution. It should not be given to the management of Red River as a ransom.”
Didier told WANE 15 that he’s taking an approach of looking at the agreement as a “light at the end of the tunnel” with Red River. Didier said the agreement isn’t pretty.
“You might not like what’s happening dollar-wise when you feel you have to expend dollars that you don’t feel they deserve,” Didier said.
Didier said the reality of the situation is Fort Wayne needs a trash collector through July, so the agreement seems necessary even though it may be a tough pill to swallow.
After the council approved the agreement, Councilman Jehl released the following statement:
“This special meeting was called with only a week’s notice by the Mayor. I regret that I was unable to move previously scheduled obligations and attend. Although tonight the City Administration stated this is a “transition agreement,” it is not. Make no mistake about it, the Mayor’s payout proposal is a termination agreement, with the City paying an unconscionable fee. The City Administration coddled Red River and justified its poor service for four years, allowing Red River to put us in this untenable situation. The Ratepayer, not Red River, is entitled to the proceeds of the performance bond.”
An additional part of the transition agreement calls for Fort Wayne resident Barry Pruitt to take over Red River’s Fort Wayne operation for the remainder of the transition period. Haffner said Pruitt has already been on the job for roughly a week.
WANE 15 reported on Pruitt’s background and experience in the waste management industry here.