Lawsuit over Covanta recycling center plan set for hearing

March 6, 2015

A lawsuit prompted by Indianapolis Mayor Greg Ballard’s controversial recycling-plant deal is set for hearing March 10.

The plaintiffs – two paper companies and a local citizen – hope Marion Superior Judge Cynthia Ayers will halt the city's long-term contract with incinerator operator Covanta, which plans to build a recycling facility on Harding Street. The plaintiffs allege the city violated Indiana law requiring public bidding when the Board of Public Works voted Aug. 6 on the contract, which is worth $112 million to Covanta.

Covanta agreed to build the $45 million recycling facility in exchange for exclusive rights to burn all residential trash through 2028. Under the deal, the city may continue its existing curbside recycling program, which residents sign up and pay for on their own, but the city may not pursue any other recycling contracts.  

The question in the lawsuit is whether a state law on the collection and disposal of solid waste in Indianapolis applies to the Covanta deal. Graphic Packaging International, Rock-Tenn and Indianapolis resident Cathy Weinmann say the fact that the contract covers construction of a recycling facility means there should have been an open bidding and public-hearing process.

The city argues that the deal with Covanta is a professional-services contract, so the law doesn’t apply.

“It is a supplement entered into for waste disposal services by Covanta and permission from a landlord to its tenant to construct the [facility],” city attorneys said in a briefing.

The plaintiff’s attorneys, Spalding and Himes PC of Indianapolis, say the Legislature created a detailed law for solid-waste management in Indianapolis to increase public involvement and competitiveness. The contract is “an example of the abuse of power that was meant to be prevented” by the statute and that it’s “disproportionately advantageous” to Covanta, they argued in a brief.

“With no competition or public input, Covanta walked through a contract that provides it with the right to all the city’s waste for its disposal, either in its incinerator or through the ARC Facility, for the next 13 years, at great cost to recycling efforts in the city and to the defendants who rely on the recycled materials stream for their operations,” the plaintiffs’ attorneys said.

Meanwhile, Covanta continues to seek the necessary permits to build its “Advanced Recycling Center” and plans to break ground in the fall, spokesman James Regan said.


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