Fine Print: $4M annual penalty through 2028 for improved service; city pays 70% of firm’s taxes
Indianapolis – Mayor Ballard’s proposed city recycling contract with Covanta has already drawn criticism as a step backward in efforts to improve recycling. It does not include glass, makes paper nearly impossible to recycle, and estimates show only an 18% recovery rate for recycled material, far below other Indiana cities and leading cities nationally. But there are some stinging financial burdens that make this a doubly bad deal for Indianapolis.
“Review of the contract fine print shows if the city finds a better way to recycle more material Indianapolis will have to pay Covanta $4 million a year through 2028 as a penalty,” said John Barth, Council Vice President. “Personally, I believe in our city and its residents – and I am confident we can find new ways to improve recycling in Indianapolis. But under this contract, our achievement would come with a penalty. We should reward ingenuity and innovation, not penalize it.”
And if that wasn’t enough, the city will also be obligated to pay 70% of Covanta’s property taxes for the life of the contract – in addition to the 100% we already pay for their current facility.
“The mayor’s proposed contract with Covanta is ‘lose-lose’ for the people of Indianapolis. To pick up the tab for 70% of Covanta’s tax bill on top of being penalized for performing well on recycling is a bad deal.”
The contract also discourages promoting recycling by reducing the city’s profit sharing if recycling curbside collection goes up more than 5% from the year before.
The Public Works Board will vote on the Mayor’s recycling proposal on August 6, 2014.
“I urge the mayor to hit the pause button on this backward looking contract that could cost the people of Indianapolis $4 million per year for improved service. I know we can do better – for taxpayers and for the environment,” said Barth.