FORT WAYNE, Ind. (WANE) — Per its contract with Fort Wayne, Red River Waste Solutions is required to post a performance bond at the beginning of each year of the deal. That means, for 2022, Red River and its surety, Argonaut Insurance Company, would have had to have paid that by January 1, 2022.
Monday, when asked if Red River and Argo made that payment, a spokesman for the city of Fort Wayne told WANE 15, “At this time, we have no indication that they have.”
In December, local officials told WANE 15 Red River/Argo had to pay about $800,000 total by Jan 1: $500,000 (10% of the trash contract) and another $300,000 (10% of the recycling contract) to honor its deal with the city.
Not paying the bond is technically a breach of contract, but it’s also still tied up in bankruptcy court after Red River filed for Chapter 11 in October 2021.
“The City would have the right, but not the obligation, to make a claim for a breach of the contract [if the bond is no paid]. It would be up to the Bankruptcy Court to schedule a hearing on the matter. The City is more interested in securing a long-term solution, not a short-term claim,” John Perlich, a spokesman for the city of Fort Wayne, said.
Despite the bond apparently not being paid, Red River is still collecting trash in Fort Wayne. A WANE 15 employee confirmed his trash was picked up on January 3, noting it was three days late.
Perlich added the city is still in talks with Red River to find a solution to the company’s poor performance.
“Over the holidays, the City, legal counsel for Red River and legal counsel for Argos (Red River’s performance bond provider) had frequent and constructive dialogue. Much progress has been made. Given the constraints of the bankruptcy process and until a final agreement is formally approved by all parties, we cannot comment further at this time,” Perlich said in an email to WANE 15. “We expect to be able to provide an update to the public in the coming weeks. Continued, reliable, and uninterrupted waste collection and recycling services is the highest priority of the City, and we remain confident in our ability to achieve those goals.”
A hearing requested by Argonaut in Texas federal court would have asked a judge to compel Red River to accept or reject the Fort Wayne contract? It was first scheduled for December 20, 2021 and was moved to the 23rd and then canceled.
“We are aware that it was rescheduled twice already, and may well get rescheduled again in light of progress being made,” Perlich said.
In the case of Red River not being able to continue the contract or choosing not to, in December, the Solid Waste Advisory Board voted to “accelerate the search” for Red River’s replacement by looking into emergency contracts with three companies currently operating in Fort Wayne. Those companies are Waste Management, Republic, and GFL Environmental. WANE 15 also asked Perlich for an update on those emergency back-up plans.
“I’m not in position to speculate on what provider(s) would be part of a theoretical contingency plan. It’s our duty to be prepared if something goes wrong,” he said in the emailed response.