I want this French Quarter trash contract insanity to be put to rest and for the most responsible, qualified contractor to handle the collection. It's exhausting. But here we are, as councilmember JP Morrell puts it, having another episode of “Trash Talk.” Because, ladies and gentlemen, things just keep coming up.
Many tuned into last week's interview with the central figure of the trash controversy, Troy Henry. During that interview, he told me his side of the story, including how the negotiation process went down, and how he created his initial contract with city officials, none of whom were Mayor Cantrell. Turns out, that was a lie.
Members of the New Orleans City Council led a public meeting yesterday where representatives of the Cantrell administration were questioned, under oath, about the Henry Consulting trash contract and the reasons behind cancelling the contract with IV Waste. The underlying intent was to reveal how we ended up agreeing to a contract that is so disturbingly awful for the city and favorable to Mr. Henry.
Can't hear the audio player above, click here to access Newell's full interview with JP Morrell.
So, who was questioned at this meeting? Chief Administrative Officer, Gilbert Montaño; Head of Public Works, Joe Threat; Head of Sanitation, Matt Tory; and attorney Andrew Gregorian, who drafted and negotiated the Troy Henry Contract.
I’ll tell you who wasn't there: Mayor Cantrell.
I watched this meeting in its entirety. The first thing I noticed was that the information conflicted with Henry's account on my show.
JP Morrell, who helped lead the meeting, came on my show to explain what went down. He confirmed that not only had Troy Henry met and negotiated with Cantrell, but he also took part in meetings where the city discussed cancelling Sidney Torres’ (owner of IV Waste) contract.
“What was confirmed is that there was a meeting about terminating Mr. Torres’ contract,” says Morrell, “...Where the only people in the room were Mr. Henry, Clifton Davis (the Mayor’s Chief of Staff), the mayor, Gilbert Montaño, Matt Torri, and somebody from the city’s attorney office.”
“Let me be clear: That is unusual as hell,” Morrell continues. “If the city is concerned with figuring out how they’re going to segway from one contractor to another, Mr. Henry should not be directing that meeting. There should be a meeting with city leadership that decides what's in the best interest of the city. Not for a contractor, who's currently suing the city, to dictate what the city should do.”
To be clear, this is only what’s on record. Indicators point to there being additional meetings between Henry and Mayor Cantrell.
Morrell says, “We have at least 2-4 witnesses who have confirmed under oath that he was in a meeting with the mayor discussing the trash contract…recently. They also implied there could have been other meetings advocating for a contract, which everyone has stated publicly, he has no contract.”
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How the questionable contract came to fruition in the first place
It’s taken a lot of effort to begin uncovering the roots of how such a rank contract could exist in the first place. Now we see there's a developing pattern.
Essentially, Mr. Henry, the Cantrell administration, and some say specific members of the city council, are manufacturing ‘trash-pocalypses’ to strongarm the whole council, city officials, ruling courts, FQ businesses, and FQ residents to rush a trash contract. They did this last year, and they’re doing it again now.
First, it happened with the Super Bowl.
As Morrell puts it, “The contract was awarded as an RFP, granted to Mr. Henry in late June, early July. But the council was presented with the contract in late November, early December. One of the things that came out yesterday was that Mr. Gregorian was under tremendous pressure to get a contract done in time for the Super Bowl, because there was an artificially manufactured fear that if Henry didn't have the contract, the trash apocalypse would happen. That pressure led to a lot of poor decisions.”
Now it’s happening again, this time using a self-made deadline by cancelling the contract with IV Waste. Morrell says, “The only reason to end Mr. Torres' contract prematurely is to create a second artificial crisis to try to force the council into giving Mr. Henry a contract he isn't yet entitled to.”
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Troy Henry’s absurd contract stipulations
Henry’s trash contract has many issues, issues made more troubling after comparing them to additional New Orleans trash contracts.
What exactly are these issues? As I discussed in the interview last week with Troy Henry, there’s the troublesome nature of negotiating the insurance bond down to 50%. Then, there’s also the fact that he wiggled out of the convenience clause, which allows the city to terminate the contract with ease if problems or disagreements arise.
Morrell says, “As far as the bond issuments: The RFP required a full bond, yet somehow Henry Consulting was granted the ability to move forward with half a bond. Now, on its face, that was a terrible decision because the bond is there to protect the city from non-performance.”
Morell explains the illogical nature of this, saying, “There are four other trash contracts, all of which require a 100% bond…It's in the city's best interest not to lower bonds. It's literally the last line of defense if a contractor goes belly up. There was plenty of established authority; four out of five contracts had 100% bonds, no contracts with half a bond, and Mr. Gregorian never had the authority to lower the bond.”
However, Morrell explains that yesterday’s meeting revealed even deeper issues with the contract. “The two we focused on in yesterday's meeting were the bond issue and the prepayment of services," he says.
JP Morrell breaks down the bonds and prepayment
Henry negotiated a contract that allows him to get pre-paid for trash pickup, which, again, flies in the face of all the other contracts already in place.
Morrell says, “With the four other contracts, at the end of the month with which you have performed work, you are allowed to, in a ten-day period, submit a bill under net-30, which is an ordinance that Mr. Giarusso passed where we have to pay our bills in 30 days.”
Troy Henry’s contract is not like this, says Morrell, “In this contract, they turn it on its head. Mr. Henry… can begin billing at the beginning of the month. This means that if his work is supposed to be done in September, he can bill us on September 1st for work that he hasn’t done yet. Then he has ten days between September 1st and 10th, which he can bill us. Then, we are required to pay him within thirty days, which would be between October 1st and October 10th. There is no logical reason why the city would ever agree to that.”
“It’s not the best business practice to prepay for anything, let alone trash pickup,” says Morrell. “Two, as a city that has repeatedly used the excuse of financial trouble and cash flow to get out of work, why would we impact our cash flow negatively for the advantage of a contractor?"
Why is the city favoring Troy Henry?
One of the most concerning elements about this case is that the contract isn’t small. It’s seven years and over $70 million, meaning it would saddle the next administration, basically through its entire term, with a contract that would be near impossible to terminate.
So why give such massive privilege to Troy Henry? And why is the city negotiating against itself, when there are companies like IV Waste who are willing to commit to the cancellation for convenience clauses, and payment-after service?
And maybe you think, Well, there’s still a performance clause in there. At least the city can terminate the contract if he fails to uphold his end of the work. Morrell explains that it really isn't as simple as that.
“No administration should saddle another administration or a new council with a multi-year contract they cannot exit,” says Morrell. “Bear in mind, performance in a contract is construed literally. If the trash is picked up in a minimal amount, if the streets are cleaned minimal amount…”
Basically, if Henry does the bare minimum, there’s no way the city can fire him. He needs a failing grade, not a D-, D+, D, or C-...he needs an F. And we are trying to award him this contract when others have been given stellar grades by businesses and residents of the French Quarter, and have performed marvelously through our city’s most important events.
Morrell says, “Once you realize that if there is a mechanism for Mr. Henry to do the minimal amount of service to maximize profit, that is their operating model…This is a vehicle to lock the city into a contract that may not be in their best interest….Remember, had he not fallen out with Mr. Richard, we wouldn't have given the contract this much scrutiny.”
The funny thing is that you can’t really blame Troy Henry as a businessman for trying to negotiate a contract favorable to him. When it comes down to it, it's those who are negotiating on behalf of the city who need to acknowledge how ridiculous and dangerous it is and to argue tooth and nail for the tax prayer.
But no. That’s not how things work around here. I think Morrell explained very well just how disastrous this could turn out to be when he said that under this contract, “The city is now the working capital loan for Henry Consulting; he doesn't need to have working capital to fund and finance the project because the city is doing it for him. I don't know why anyone in the administration would stand for this, other than maybe they wanted to give Mr. Henry some privilege.”
Where’s this all headed?
The message needs to remain upfront and in bold lettering: Henry doesn't yet have a contract, but he could soon.
At the end of the day, it’s just extremely evident that the finger is on the scale. There’s no logical world where you award a contract with such an unstable structure. And no one’s even tried to explain why a Troy Henry contract makes sense because they can’t.
What we’re doing is setting up the next administration for a true trashpocalypse, one where their hands will be tied because they’re in a seven-year contract with a facilitator who doesn't even own a garbage truck.
Do we realize what’s at stake here?
This city has had so many wins despite the obscene behavior from city hall, and we might be months away from undermining all of that success.
In terms of the ability to be a world-class host to world-class events, trash collection and sanitation are a vital part of keeping our success and momentum going. If we fail to do that, we fail to win bids to bring more events and tourism, and the money coming into the city dries up. Businesses flounder, jobs become scarce, and people continue to leave.
We’re already undergoing a population crisis, and if our leaders continue to build the foundation on sinking sand, we’re surely to fail. So again, as usual, I tie this back to the upcoming election. Pay attention. Ask questions. And vote. We need a government with its head screwed on straight. Because right now, what’s going on is as crooked as a barrel of snakes.
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